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Obama Reforms ‘Greedy’ Financial System

From the Agence France-Pressee:

Obama unveils biggest regulatory overhaul since 1930s

by Stephen Collinson

WASHINGTON (AFP) – President Barack Obama Wednesday proposed the most "sweeping" regulatory overhaul since the 1930s, vowing to stop future meltdowns in a financial system humbled by lax oversight, greed and huge debts.

The reforms, which must be approved by Congress, will inject the government deeper into financial markets and industries in a bid to tame the recklessness which saw a mortgage meltdown tip the world into deep economic crisis.

"We did not choose how this crisis began. But we do have a choice in the legacy this crisis leaves behind," Obama said in remarks released by the White House ahead of his formal announcement of the reforms later on Wednesday.

"So today, my administration is proposing a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression."

Some Obama critics, hoping for a top-to-bottom reconstruction of the greed-laced financial system, have complained the overhaul did not go far enough, but he argued his action would restore the power of the market.

Obama blamed a "culture of irresponsibility" a Great Depression-era regulatory system, reckless executive compensation, excessive debt and markets awash in new and risky financial products for sparking the crisis.

"An absence of oversight engendered systematic, and systemic, abuse," Obama said.

"Instead of reducing risk, the markets actually magnified risks being taken by ordinary families and large firms alike.

"There was far too much debt and not nearly enough capital in the system. And a growing economy bred complacency."

The proposals, which must be approved by Congress, would give the Federal Reserve new powers to clamp firm regulation on all finance firms or banks that pose a significant systemic risk to the wider financial infrastructure.

The White House said the reforms would also introduce new discipline and transparency into financial markets and would enable investors to better ride out the failure of one or more large financial institution.

As previously announced, the reforms will include the creation of a Consumer Financial Protection Agency to shield Americans from the extremes of credit, savings and mortgage markets…

Obama took sharp aim at some of the exploitative asset products and mortgages offered in those markets that lured American investors into trouble.

"These schemes were built on a pile of sand," Obama said.

"This wasn’t just a failure of individuals. This was a failure of the entire system.

"The actions of many firms escaped scrutiny. In some cases, the dealings of these institutions were so complex and opaque that few inside or outside these companies understood what was happening

The goal of his plan was to "restore markets in which we reward hard work and responsibility not recklessness and greed."

Officials said a "national bank supervisor would be set up under the plans to supervise and regulate all federally charted depository institutions and federal branches and agencies of foreign banks.

Obama is also proposing stringent capital and liquidity requirements for the largest and most "interconnected" financial firms.

Most of the reforms will have to be approved by Congress and officials said Obama was bent on implementing them this year.

What a tiresome pack of lies.

As usual, Mr. Obama blames ‘greed’ for all of our problems. Whereas history has long since shown us that ‘greed’ is what fuels capitalism and improves life for everyone.

"There was far too much debt and not nearly enough capital in the system. And a growing economy bred complacency."

So sayeth the man who has sucked trillions of dollars out of the free market and into government.

The man who hates capitalism and is out to destroy it.

This article was posted by Steve on Wednesday, June 17th, 2009. Comments are currently closed.

34 Responses to “Obama Reforms ‘Greedy’ Financial System”

  1. Reality Bytes says:

    That’s Right! America had a choice in 2008, Ignoramous’ or Liars. With Obama We Got Both!

  2. texaspsue says:

    Yeah, Obama and all of his cronies greed. We figured that one out already. :-)

  3. electionhangovervictim says:

    First of all, I hate that picture. Just looking at it makes me wanna slap that smug look off his face with a 2 x 4.
    Secondly, I wonder why this journalist felt the need to tell us 3 times that Congress has to approve the reforms. ? As if they’re not gonna… and then we’re REALLY going to be in trouble.
    It’s all very frightening.

  4. Georgfelis says:

    “So today, my administration is proposing a sweeping XXXXXXX takeover of the financial regulatory system, a transformation on a scale not seen since the reforms that XXXXX caused the Great Depression.”

    Fixed it for ya. (darn, cant do strikethru)

  5. proreason says:

    Obama blamed a “culture of irresponsibility”

    Yep. Barney Franks, Chris Dodd, Franklin Raines, Alan Greenspan, Barack Obama, Nancy Pelosi, Reaper Reid.

    And the list goes on.

    And the greed that is involved is the greed of voters who trade their freedom for a handful of silver……and revenge against people who have more silver than they do.

  6. bronzeprofessor says:

    I saw this speech on CNN at the gym. It was like a very bad nightmare, because the speech droned on and on, and CNN wouldn’t interrupt a minute of it. I had to leave and cut short my back workout.

  7. Rusty Shackleford says:

    His words will fix it.

  8. BannedbytheTaliban says:

    “Obama critics, hoping for a top-to-bottom reconstruction of the greed-laced financial system, have complained the overhaul did not go far enough”

    I love how they infer that the only critisms would be that the plan doesn’t increase government enough, nor completely do away with capitalism. And they completely ingore the underpinnings of class warfare:

    ” reckless executive compensation”

    Yes, the executive branch of America has been recklessly compensated with too much power.

  9. Freebies says:

    It is about time. Well the present financial situation put some sense into those guys. I hope now, Obama would make the sense sink deeper into them.

    • proreason says:

      The guys that need the sense “put..into them” are the guys in the government.

      The financial services businsessmen did what any rational people would do when faced with insane government edicts……they spread the risk as much as they could and grabbed as much silver as they could before the house burnt down. Meanwhile the government idiots and criminals ratcheted up the risk to the point where the entire system came tumbling down.

      The financial crisis was 100% government induced.

      And now the worst of the idiots get to make the new rules.

      Orwell would say he was a naive child.

  10. canary says:

    This is so bad. The problem is the OIG Over-Sight Committee over the Federal Reserve, has been presently holding hearings over the Federal Reserve finances, and according to the portion I watched, no one, the OIG heads, can not figure out the Federal Reserves finances or spending in the last monthes. spefinances in the last few monthes. The OIG has “no” answers and is dumbfounded and baffled as to any financing records. She even had the audacity to say, even if she did know, would it be good to let the public know????

    “These schemes were built on a pile of sand,” Obama said.

    So, ollah Obama’s precise timing in this recommendation, to let the Federal Reserves takeover the sandbox, whose schemes were built on a pile of sand to add more sand.
    Obama really loves sandy countries, and the sandy state of HA.

  11. Media_man says:

    Thought this post on Powerline was relevant to the above thread. The cartoon discussed was from the 1930’s and the subject was Socialists running the economy into the ground and than blaming Capitalism for the subsequent failure.

    http://www.powerlineblog.com/archives/2009/06/023830.php

  12. GetBackJack says:

    “Tiresome pack of lies”

    I cannot imagine a time when I would disagree with Steve Gilbert but this is that time.

    Having toiled at the highest levels of American Finance before running screaming for the exits to take up ranching, I say without hesitation or equivocation that my experience with the American capitalist financial system was one of stunning mind bending greed, corruption, crime and total heartlessness let alone moral debauchery unparalleled except perhaps by the Turks. Just being around these cretinous people put me in fear of my soul.

    Obama’s ‘solution’ is worse than the disease, but the disease itself was fatally cancerous. Capitalism is suited ONLY to a moral people adhering 100% to the Biblical commands laid down by God. It is fatal to any other.

    And brother, Wall Street is everything opposite of God. It’s a wonder He hasn’t utterly destroyed us with fire and wrath for the sins committed Every Damn Day by our financial system. The corruption and vile defilement I’ve witnessed across $190,000 board room tables would curl the toes of a dedicated Satanist.

    In other words … Obama’s attempts would find no traction if his charges were utterly groundless.

    They’re not.

    Ergo …. he’s beating you with the Truth.

    Which is our failure writ so large the stench of it chokes Heaven.

    • Media_man says:

      GetBackJack: I agree to a certain extent the banking industry & wall street made lousy business decisions & deserves what every poorly run business or industry receives, namely bankruptcy. Regulations aren’t the answer. You can’t regulate unlawful behavior or poor business models out of existence.

      The gov’t also played a key role by politicizing mortgage lending and reducing the risk of lending money to unqualified applicants vis-a-vis Fan/Fred. No Fan/Fred, no meltdown.

      The only thing these regs will do is slowdown or prevent any type of recovery through discouraging private investment in the financial sector and thus lending generally, and create fodder for trial lawyers to feast on for years to come, further damaging the economy.

    • JohnMG says:

      …..”Ergo …. he’s beating you with the Truth……”

      Which has to be an accident of monumental proportions for Obama. On the other hand, it’s probably an honest (pun intended) mistake for him since he never deliberatly tells the truth in deference to a lie since he can’t tell the difference. That thought not withstanding, his solution is to put a different set of crooks in charge. There’s some change you can believe in!

    • proreason says:

      The mortgage industry was rock solid, and had been for 60 years.

      The government destroyed it by forcing bankers to make bad loans. The mortgage bankers did what any rational people would do with a gun to their head. The government also strongly encouraged the derivatives that hid the problems for several years.

      The industry’s greed is a separate and lesser (by far) issue. And greed has existed forever. The toxic loans occured during a relatively short timeframe and are directly tied to government actions.

      There may have been other issues with credit cards and leveraged investments. But nobody can say those problems would have brought the economy down without the bad mortgage loans.

      Obama wants people like you, GetBack, to line up behind his designated fall guys. That takes the heat off the real perpetrators of the crime. It’s classic misdirection that magicians use all the time.

      Here’s a good analogy for what happened. A dog owner buys a big dog and trains it to be vicious. He puts the dog outside on a weak chain and hides some red meat in a box that the dog can see but can’t get at. A pedestrian comes along, picks up the box, takes out the meat, and the dog breaks the chain and ravages the pedestrian as well as the meat. Then the dog owner kills the dog for being vicious, and declares that he can’t figure out why the dog acted like it did.

    • A Mad Pole says:

      Someone once (do not chastise me for not remembering who and when) said that the U.S. Constitution had been written for a moral and faithful people and it will disintegrate when the people forget the morals and faith. Look around today and say it isn’t so.

      “Capitalism is suited ONLY to a moral people adhering 100% to the Biblical commands laid down by God. It is fatal to any other.”

      Amen to that. The mess the U.S. and the rest of the world are in has nothing to do with the economic collapse. It has everything to do with moral and ethic degeneration all around.

  13. wirenut says:

    Well said JohnMG. For now, I can’t quite get my index finger far enough down my throat to “Obamet”. The urge to spew is by his hand I guess.

  14. GetBackJack says:

    Sorry, you’re 100% wrong.

    I was there. I saw it. I participated in it.

    The mortgage business was never rock solid. I was in it from 1969. It’s been a pack of lies since it began. I’m sorry you don’t know that. You want crime, investigate the auto loan business and the portfolios of both lending institutions and dealerships that carry their own paper to create asset backed securities. I helped write that Plan for the nation’s top dealerships. The banking business is cancerous to it’s core. Wall Street is staffed by good people in the trenches but those who steer the ships are rotten. The stories I could tell about the mortgage business alone (having owned a large independent) would scare you speechless. I watched it all unfold.

    The boutique investment bank I owned and was Senior Managing Partner of bought, sold, traded and aged commercial paper throughout the nation and we dealt with every major institution. To say it was crooked and cooked to its very marrow is to mock the severity of it. You simply have no idea what you’re talking about, but I’m accustomed to that on this Forum. All emotion, no experience.

    I was there in the thick of what caused the Savings and Loan debacle and how it was manufactured out of thin air to benefit a cabal of leading banks that wanted the mortgage business. I was there in the thick of it for the Resolution Trust, as criminal an enterprise as the mafia could have ever rigged. I was there for Prudential’s monumental screwing of its clients. I’ve dealt with the top portfolio managers of pension funds and the Russian Mafia has nothing on those guys. I’ve been personally bankrupted to the tune of $63 million by one of our recent administrations because my insurance plan through the private sector threatened their health care plans. But you never saw THAT on the front page.

    You simply do not know. Which is why I say Barry Otero COULD NOT proceed in this manner were there no traction for the emotional, unthinking response of ordinary normal people who SENSE and KNOW in their gut something is exceptionally corrupted at the center of what we roughly refer to as Finance.

    Hell, if you don’t understand the Fed and how wrong that monstrosity is and what filth it spawns there’s no sense proceeding further.

    That said, all Barry Otero can do is make a Very Bad Thing a whole lot worse. Which is what he’s doing.

    But it would have no Resonance if Financial Matters hadn’t been raped and pillaged to begin with. The government already has all the authority it needs to regulate the criminal behavior and stupidity of the Financial Sector. That it does selectively, and otherwise does not says everything we need to know. Power corrupts.

    It is the corruption that the world and our own people sense, and it is this AND THIS ALONE which gives the Obama Administration traction on this faux issue.

    • proreason says:

      “Sorry, you’re 100% wrong”

      So the Community Reinvestment Act, Fannie Mae, government protection of loans to deadbeats had nothing to do with it.

      It’s all about greedy business people. Banking, finance, auto industry, oil industry…..the greedy bastards are bringing us all down. If only they would be more honorable.

      Got it.

      I’ll let Thomas Sowell know. He’ll probably want to recant his book.

      Thanks.

    • Not Always Right says:

      GBJ:
      While I have no doubt you were involved in the industry as you say you were, it would be far more helpful if you gave specific examples of the corruption that you state exists. It is all too easy to claim expertise on the internet; just one specific example with real links and verifiable facts would be very useful.

    • proreason says:

      As a followup, it should be relatively easy to prove that I’m 100% wrong in saying government intervention is the dominant factor in the recent economic crisis (along with many other observors). Since it’s well accepted that the toxic loans caused the crisis, we should be able to see clear patterns in foreclosure percentages that aren’t linked in any way to the Community Reinvestment Act (CRA), and Congress’s insistance on Fannie Mae buying the bad loans, starting in the late 90’s.

      Since the CRA was passed in the late 70’s, I would expect a very small and gradual increase in the foreclosure rate from that point, and a much stronger increase in foreclosures starting a few years after the late 90’s when Congress malfeasance occured. If something other than that occured, then I would be more willing to believe the crisis results purely from greed.

      But since I’m not an expert in the industry, and GetBack says he is, perhaps he knows of better metrics to prove his contention that I’m 100% wrong in saying that the problems are due primarilly to government intervention in the mortgage market.

      And since he is the expert, I’ll be interested to look at the data he points to, even if it isn’t the metric I suggested.

  15. canary says:

    The point is that Obama wants the Federal Reserve (in it’s present untransparent state) it’s the same as putting it and any green stacks printed off, in Obama’s own piggy bank. No accountability. It will never be seen again. This is really bad, what Obama wants to do. We are being hijacked.

  16. bronzeprofessor says:

    Hey guys, the really good news is what came out of the Wall Street Journal today. A poll they did with the Wash Post found Obama’s approval ratings have slipped to 56%. Moreover, only 48% of Americans “like him personally and support his policies.” It’s a good read. This with the recent Gallup Polls showing that now 40% of Americans are conservative and 51% of Americans are pro-life all indicate that the opposition has an opening, if only the Republican Party is wise enough to move on it.

    • Rusty Shackleford says:

      Rush just spoke of this and….AND….he mentioned that the poll is also reported in the NYT, noting the information isn’t all that historical but that the NYT reporting it is.

    • electionhangovervictim says:

      Can you post a link to this article? I tried to find it but only found one that WSJ did with NBC News.

    • bronzeprofessor says:

      This link should work. Let me know if it doesn’t. I’ve been bogged down with research and haven’t been able to post a lot of links to my website the last few days, but I have dozens of awesome articles on O’s domestic policies. I hope to have a bunch up by the end of today.

      http://online.wsj.com/article/SB124527518023424769.html

      Best,
      Robert O. Lopez

    • electionhangovervictim says:

      Yeah, that’s the one I saw…just wondered if it was the same article (NBC News vs. Wash Post). Thanks!

  17. canary says:

    Obama’s brain has some damage, from the 5 years straight of drinking, drugging, and blowing during a long experiment. And then are those rumors.

    • tranquil.night says:

      Once a worthless druggie myself, I did ecstasy 7 times and sometimes feel I have a grip on the president that some might not. Obama does carry the profile (and 5 years is a hell of a lot of damage to be done with as much money as he might’ve had): self-absorbed misplaced sense of empathy, false sense of enlightenment, purely emotional, non-rational, no ability for depth in foresight, constant use of “I” ironically because one is physically incapable of seeing how they are responsible for anything – E yields this behavioral pattern over any other drug. Oh, and he just flat out loses his train of thought constantly when he’s not reading from TOTUS and can’t answer a single public question that isn’t orchestrated. He has an obsession with talking ideology: utopia, peace, love, sacrifice, perseverance; can’t do or find a single one himself (without the drug or whatever replaces the drug, maybe hate). I could go on and on and on..

      E is also highly popularized in pop-culture. The #1 movie for the past two weeks ‘Hangover’ is set on the premise of one of the main characters secretly drugging his group with roofies thinking it is ecstasy.

    • Rusty Shackleford says:

      Dain Bramage. You know, that could explain a lot.

    • Liberals Demise says:

      Take me drunk, I’m home!


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