Angle: BP's $20B Escrow Fund a 'Slush Fund'

Angle: BP’s $20B Escrow Fund a ‘Slush Fund’

WingnutsJuly 2010 • Views: 3,224

It’s obvious why Nevada Tea Party candidate Sharron Angle’s GOP handlers try so hard to keep her away from inquisitive reporters: she’s nuts. Really, honestly nuts. Don’t want her talking to journalists, oh no. That’s no way to get elected.

Today she’s back in the news for echoing reptilian Rep. Joe Barton’s bizarre defense of BP, calling the $20 billion escrow fund set up by the Obama administration a “slush fund.” Her interview on the Alan Stock radio show featured a special guest appearance by one of the right wing’s boogeymen, Saul Alinsky and his book “Rules for Radicals.”

MP3 Audio

A caller said that Obama had “basically extorted $20 billion from a private company,” and asked Angle what she thought of “the $20 billion slush fund.”

“Government shouldn’t be doing that to a private company,” Angle replied. “And I think you named it clearly: It’s a slush fund.”

Angle then criticized BP, saying we do need some sort of “management” agency in there to monitor the company, claiming it “cut corners.”

But she then said government was in the process of overreaching in its response.

“It’s an overreaction by government for not the right reasons,” Angle said. “They’re actually using this crisis if you will, because they never waste one — Saul Alinsky’s Rules for Radicals — they are using this crisis now to get in cap and trade, and every crime and penalty, and slush fund.”

Jump to bottom

115 comments

iceweasel Thu, Jul 8, 2010 10:50:19am

Angle’s rapidly become one of my least favourite people.

Nice Alinsky shoutout there too. Typical.

sagehen Thu, Jul 8, 2010 10:50:50am

Obama’s vulnerable on so many issues right now, it’s too bad the GOP can’t bring themselves to offer up a sane alternative.

As long as we’re stuck with a choice between the mostly useless party and the batshit insane party, I’m reluctantly hanging in there with the mostly useless. Even if I have to hold my nose when I vote.

Please, somebody, give me another option.

reine.de.tout Thu, Jul 8, 2010 10:50:54am

Has Angle offered an alternative for ensuring that people’s claims get paid?
No?
Does she think folks should just suck it up and deal with the loss of their businesses and homes as a result of BP’s actions, while BP gets a pass?

BP did cut corners, of course, and we know what the result of that is. Her criticism of BP for cutting corners means nothing if she is unwilling to make sure BP compensates those who have been deeply harmed by its actions.

Lidane Thu, Jul 8, 2010 10:51:07am

She truly is nuts. Not everyone calls incest a lemon situation that should be turned into lemonade.

And this fetishization of Alinsky by the loons makes no sense. It’s like they’re still stuck in the 60’s rhetorically and literally.

jamesfirecat Thu, Jul 8, 2010 10:51:33am

Siding with BP I’m sure that’s gonna play real well with the public!

Kragar Thu, Jul 8, 2010 10:53:00am

Just don’t quote her on that, she’ll sue.

BTW, Congratulations Senator Reid

Interesting Times Thu, Jul 8, 2010 10:53:02am

Oh, Sharron, you’re such an…

Kragar Thu, Jul 8, 2010 10:55:22am

Think about all the money Reid is saving by having Angle campaign for him.

iceweasel Thu, Jul 8, 2010 10:55:27am

re: #4 Lidane

She truly is nuts. Not everyone calls incest a lemon situation that should be turned into lemonade.

And this fetishization of Alinsky by the loons makes no sense. It’s like they’re still stuck in the 60’s rhetorically and literally.

Oh god, she is disgusting!

The Nevada Republican earlier discussed her beliefs on the topic during an interview with the Bill Manders in which she called pregnancy in cases of rape and incest, “God’s plan.”

UGH!

theheat Thu, Jul 8, 2010 10:57:12am

Meanwhile, Angle, you dumb cow, the oil keeps pumping into the ocean. Yeah, that great, no-interference, let the adults sort it out style of capitalism… it’s worked out pretty swell so far. But that uppity Obama character, that Nigerian commie bastard, he just couldn’t sit by and watch unfettered capitalism succeed.
//

Might have something to do with the southern part of the US slowly being blanketed in oil, ya think?

Angle stores old coins and ratshit in the space a brain usually inhabits.

Feline Fearless Leader Thu, Jul 8, 2010 10:57:19am

Given how these particular talking points crop up here and there you can tell that there’s a messaging network back there distributing them. Also apparent is that it is quite poor at issuing corrections and processing feedback well…

Alternately, there are simply a lot of nodes in that network that have a very “good” filter on their data input. If “good” is simply accepting things that fit the node mindset and refusing to process any data (or corrected data) that does not reinforce the desired outcome.

Cannadian Club Akbar Thu, Jul 8, 2010 10:58:05am

re: #3 reine.de.tout

Has Angle offered an alternative for ensuring that people’s claims get paid?
No?
Does she think folks should just suck it up and deal with the loss of their businesses and homes as a result of BP’s actions, while BP gets a pass?

BP did cut corners, of course, and we know what the result of that is. Her criticism of BP for cutting corners means nothing if she is unwilling to make sure BP compensates those who have been deeply harmed by its actions.

Ya mean this?
wdsu.com

KingKenrod Thu, Jul 8, 2010 10:58:52am

Hey, BP wants the fund, they didn’t have to be extorted. The fund gives them cost certainty (for a time) and is helping their stock recover. The price of their stock may be the only thing BP truly cares about.

As far as “slush fund”, I know Obama said that there would be independent oversight. But the fund will likely outlast Obama, shouldn’t there be some ongoing bipartisan legislative oversight?

Kragar Thu, Jul 8, 2010 10:59:15am

re: #9 iceweasel

Angle should never go to the Doctor or take medications of any kind, and if she were involved in some kind of accident, she must not receive medical treatment.

To do so would interfere with God’s plan.

Lidane Thu, Jul 8, 2010 10:59:17am

re: #8 Kragar (Proud to be Kafir)

Think about all the money Reid is saving by having Angle campaign for him.

No kidding. What are the odds that Reid and his folks are setting aside money to send her a fruit basket, some wine, or some flowers when it’s all over, just for making their jobs that much easier?

Mad Prophet Ludwig Thu, Jul 8, 2010 10:59:33am

“Government shouldn’t be doing that to a private company,” Angle replied. “And I think you named it clearly: It’s a slush fund…

In other words, private companies that she deems politically important should not be held accountable for the damage they do. Let’s just that clear. Barton and Angle, and all the pet Republicans honestly feel that certain corporations deserve a protected status above the law.

Now is that right?

Is that moral?

Does any sane person believe that a corporation should have the right to pollute or destroy lives and other businesses without legal redress for damages they cause?

Understand the the GOP thinks so if it is one of their benefactors.

KingKenrod Thu, Jul 8, 2010 11:00:29am

re: #9 iceweasel

UGH!

One of the worst things I’ve ever heard a politician say.

jamesfirecat Thu, Jul 8, 2010 11:01:41am

re: #14 Kragar (Proud to be Kafir)

Angle should never go to the Doctor or take medications of any kind, and if she were involved in some kind of accident, she must not receive medical treatment.

To do so would interfere with God’s plan.

Maybe she can bring that to the table as the GOP’s new plan for resolving the healthcare crisis in America, prayers for pastemakers!

Aceofwhat? Thu, Jul 8, 2010 11:02:22am

re: #3 reine.de.tout

Has Angle offered an alternative for ensuring that people’s claims get paid?
No?
Does she think folks should just suck it up and deal with the loss of their businesses and homes as a result of BP’s actions, while BP gets a pass?

BP did cut corners, of course, and we know what the result of that is. Her criticism of BP for cutting corners means nothing if she is unwilling to make sure BP compensates those who have been deeply harmed by its actions.

So true. And she defeated a relatively sensible R who would have shined running against Reid, whose opposition to Yucca mountain is as unforgivable as it is hypocritical, and breathed new life into his candidacy.

Mad Prophet Ludwig Thu, Jul 8, 2010 11:02:51am

re: #3 reine.de.tout

Has Angle offered an alternative for ensuring that people’s claims get paid?
No?
Does she think folks should just suck it up and deal with the loss of their businesses and homes as a result of BP’s actions, while BP gets a pass?

BP did cut corners, of course, and we know what the result of that is. Her criticism of BP for cutting corners means nothing if she is unwilling to make sure BP compensates those who have been deeply harmed by its actions.

Which is everyone. For decades.

Don’t kid yourself that 20 billion will come even remotely close to the true cost of this.

I stayed out of the debate that Bagua was having last night on this, but it was much much more than cutting corners. There was also a corrupt aspect to the various government agencies that approved all of this in the first place without demanding any sort of emergency planning.

There is a corrupt aspect to the pet politicians of the oil companies. Everyone knows which party most of those folks belong to.

Feline Fearless Leader Thu, Jul 8, 2010 11:02:58am

re: #18 jamesfirecat

Maybe she can bring that to the table as the GOP’s new plan for resolving the healthcare crisis in America, prayers for pastemakers!

I think the AMA might get upset at the catastrophic loss of income to their members…

Cannadian Club Akbar Thu, Jul 8, 2010 11:03:07am

re: #18 jamesfirecat

Maybe she can bring that to the table as the GOP’s new plan for resolving the healthcare crisis in America, prayers for pastemakers!

After we make the paste can we eat the paste?
///

Kragar Thu, Jul 8, 2010 11:03:59am

re: #19 Aceofwhat?

So true. And she defeated a relatively sensible R who would have shined running against Reid, whose opposition to Yucca mountain is as unforgivable as it is hypocritical, and breathed new life into his candidacy.

The same thing happened in CA, moderate Republican with a decent chance of ousting Boxer lost to the bagger who will be crushed in November.

alexknyc Thu, Jul 8, 2010 11:05:00am

Since Angle got the GOP nomination, I guess Harry Reid’s re-election was part of God’s plan too.

Mad Prophet Ludwig Thu, Jul 8, 2010 11:05:25am

re: #23 Kragar (Proud to be Kafir)

The same thing happened in CA, moderate Republican with a decent chance of ousting Boxer lost to the bagger who will be crushed in November.

And thank G-d really, because those seemingly moderate republicans have been all for deregulating everything under the sun, crushing and denying science , giving corporate welfare, and throwing bones to the religious right for decades.

Spare O'Lake Thu, Jul 8, 2010 11:06:28am

re: #4 Lidane

She truly is nuts. Not everyone calls incest a lemon situation that should be turned into lemonade.

And this fetishization of Alinsky by the loons makes no sense. It’s like they’re still stuck in the 60’s rhetorically and literally.

Ms. Angle is right out of the ball park, in foul territory of course.

reine.de.tout Thu, Jul 8, 2010 11:06:56am

re: #12 Cannadian Club Akbar

Ya mean this?
[Link: www.wdsu.com…]

No surprises there.
I’ve been following this for weeks, BP has been slow to pay and pays pennies on the dollar for claims filed.

Mad Prophet Ludwig Thu, Jul 8, 2010 11:08:30am

re: #1 iceweasel

Angle’s rapidly become one of my least favourite people.

Nice Alinsky shoutout there too. Typical.

Ohh that’s a good point:

OK everyone, least loved wingnut:

Angle
Barton
Inhofe
Palin
Boehner
RON PAUL!!
rand paul…
Hatch

Wow, there are so very many to choose from…

Aceofwhat? Thu, Jul 8, 2010 11:08:38am

re: #25 LudwigVanQuixote

And thank G-d really, because those seemingly moderate republicans have been all for deregulating everything under the sun

“deregulating everything under the sun”?

you need ice water. when you overheat, the rhetoric>facts.

Cannadian Club Akbar Thu, Jul 8, 2010 11:09:45am

re: #28 LudwigVanQuixote

Ohh that’s a good point:

OK everyone, least loved wingnut:

Angle
Barton
Inhofe
Palin
Boehner
RON PAUL!!
rand paul…
Hatch

Wow, there are so very many to choose from…

So, mixed nuts?

tnguitarist Thu, Jul 8, 2010 11:09:58am

re: #22 Cannadian Club Akbar

After we make the paste can we ~~eat~~ sniff the paste?
///

teleskiguy Thu, Jul 8, 2010 11:10:05am

Cue the roomful of cuckoo clocks.

jamesfirecat Thu, Jul 8, 2010 11:10:14am

re: #28 LudwigVanQuixote

Ohh that’s a good point:

OK everyone, least loved wingnut:

Angle
Barton
Inhofe
Palin
Boehner
RON PAUL!!
rand paul…
Hatch

Wow, there are so very many to choose from…

I demand a Recount, what about Michele Bachmann?

iceweasel Thu, Jul 8, 2010 11:11:36am

re: #28 LudwigVanQuixote

Ohh that’s a good point:

OK everyone, least loved wingnut:

Angle
Barton
Inhofe
Palin
Boehner
RON PAUL!!
rand paul…
Hatch

Wow, there are so very many to choose from…

There’s too many. :(

Angle though— wow. I keep thinking it’s not possible for her to be worse, and she always is. Plus she’s a new wingnut on the national scene (at least, i hadn’t heard of her before now. She sure does have a long and stinky trail though).

Kragar Thu, Jul 8, 2010 11:12:06am

re: #25 LudwigVanQuixote

And thank G-d really, because those seemingly moderate republicans have been all for deregulating everything under the sun, crushing and denying science , giving corporate welfare, and throwing bones to the religious right for decades.

Yeah, because who wants a guy who was the has a law center named after him for his work on promoting corporate responsibility and business ethics anywhere near a political office if he is a republican.

Mad Prophet Ludwig Thu, Jul 8, 2010 11:13:14am

re: #29 Aceofwhat?

“deregulating everything under the sun”?

you need ice water. when you overheat, the rhetoric>facts.

Hmmm SNLs, Enron and the energy crisis, Wall street, Air traffic controllers, ohh and teh EPA - shall we go into the clean water act of 2005 and the damages caused by the Haliburton loophole? Have you ever heard of Fracking? Ohh yes, and the present oil spill.

I have an actual case here writ very large.

Your calling what I wrote mere “rhetoric” is a silly and partisan attempt to ignore very large facts with a very definite pattern of grievous failure which have ruined many lives and can be blamed squarely on the actions of the GOP.

Aceofwhat? Thu, Jul 8, 2010 11:13:21am

re: #35 Kragar (Proud to be Kafir)

Yeah, because who wants a guy who was the has a law center named after him for his work on promoting corporate responsibility and business ethics anywhere near a political office if he is a republican.

exactly. we should no longer stand for such travesties.

Mad Prophet Ludwig Thu, Jul 8, 2010 11:13:47am

re: #33 jamesfirecat

I demand a Recount, what about Michele Bachmann?

Ohh good point! Like I said, so very many to choose from it is easy to miss one or two or ten.

Sol Berdinowitz Thu, Jul 8, 2010 11:13:53am

Blessed are the pastymakers, for theirs shall be the nipples of Venus…

reine.de.tout Thu, Jul 8, 2010 11:14:44am

re: #20 LudwigVanQuixote

Which is everyone. For decades.

Don’t kid yourself that 20 billion will come even remotely close to the true cost of this.

I stayed out of the debate that Bagua was having last night on this, but it was much much more than cutting corners. There was also a corrupt aspect to the various government agencies that approved all of this in the first place without demanding any sort of emergency planning.

There is a corrupt aspect to the pet politicians of the oil companies. Everyone knows which party most of those folks belong to.

The $20 Billion will not be nearly enough, nor the $100 million that BP is disbursing.

But discussions about which party was more “to blame” are silly at this point, and they are distracting from the current issues that need to be dealt with, IMO, and I have been very very careful to try to keep MY focus on the issues, not this or that political party or mind-set.

If we want to get into a “blame” game, there’s plenty to go around. I suggest it’s not a productive conversation at this point, given which party is currently in control and was when these exceptions were issued.

Aceofwhat? Thu, Jul 8, 2010 11:15:46am

re: #36 LudwigVanQuixote

Hmmm SNLs, Enron and the energy crisis, Wall street, Air traffic controllers, ohh and teh EPA - shall we go into the clean water act of 2005 and the damages caused by the Haliburton loophole? Have you ever heard of Fracking? Ohh yes, and the present oil spill.

I have an actual case here writ very large.

Your calling what I wrote mere “rhetoric” is a silly and partisan attempt to ignore very large facts with a very definite pattern of grievous failure which have ruined many lives and can be blamed squarely on the actions of the GOP.

let’s just pick one.

Wall Street? what the hell are you talking about? tell me you aren’t financially illiterate enough to think that “regulation” or the lack thereof had anything to do with the recent financial collapse, or that Democrats had been prescient enough to have been calling for the magic bullet that would have prevented said collapse.

You’re much more erudite when you aren’t leaking partisan out of your orifices.

Spare O'Lake Thu, Jul 8, 2010 11:16:14am

re: #17 KingKenrod

One of the worst things I’ve ever heard a ~~politician~~person say.

FIFY
How anyone with even an ounce of decency can deny an innocent rape victim’s right to end the pregnancy is absolutely incomprehensible. It can only be described as inhuman.

Mad Prophet Ludwig Thu, Jul 8, 2010 11:16:20am

re: #35 Kragar (Proud to be Kafir)

Yeah, because who wants a guy who was the has a law center named after him for his work on promoting corporate responsibility and business ethics anywhere near a political office if he is a republican.

Will he throw bones to the religious right and the gun nuts? Will he deny AGW? Will he be suddenly for gutting public education when he gets elected?

I am one of those who wants nothing to do with that corrupt, soulless and America destroying party.

And yes the Dems suck too. The Dems are deeply broken, but they are not broken on that scale or in that way.

Aceofwhat? Thu, Jul 8, 2010 11:16:51am

re: #40 reine.de.tout

The $20 Billion will not be nearly enough, nor the $100 million that BP is disbursing.

But discussions about which party was more “to blame” are silly at this point, and they are distracting from the current issues that need to be dealt with, IMO, and I have been very very careful to try to keep MY focus on the issues, not this or that political party or mind-set.

If we want to get into a “blame” game, there’s plenty to go around. I suggest it’s not a productive conversation at this point, given which party is currently in control and was when these exceptions were issued.

Ludwig…read and learn. Reine is both correct and right here.

Sol Berdinowitz Thu, Jul 8, 2010 11:17:05am

re: #25 LudwigVanQuixote

And thank G-d really, because those seemingly moderate republicans have been all for deregulating everything under the sun, crushing and denying science , giving corporate welfare, and throwing bones to the religious right for decades.

What we have seen is that there is a certain minimum level of government activity needed to avoid much greater damage through inactivity.

(btw, I believe that was Bush’s justification for invading Iraq. “The cost of inaction could be much higher”)

But with financial deregulation, we saw that the costs of subsequent government intervention in the form of a tax-funded bailout were many times greater than the costs of proper oversight.

Aceofwhat? Thu, Jul 8, 2010 11:20:02am

re: #45 ralphieboy

What we have seen is that there is a certain minimum level of government activity needed to avoid much greater damage through inactivity.

(btw, I believe that was Bush’s justification for invading Iraq. “The cost of inaction could be much higher”)

But with financial deregulation, we saw that the costs of subsequent government intervention in the form of a tax-funded bailout were many times greater than the costs of proper oversight.

Let me say this loudly and clearly, as someone with some small financial and economic education (mostly marketing, operations, and management though).

Regulation, or the lack thereof, had virtually nothing to do with the recent financial meltdown.

Period. End of story. Back to your regularly scheduled programs.

Fozzie Bear Thu, Jul 8, 2010 11:20:04am

re: #40 reine.de.tout

The $20 Billion will not be nearly enough, nor the $100 million that BP is disbursing.

But discussions about which party was more “to blame” are silly at this point, and they are distracting from the current issues that need to be dealt with, IMO, and I have been very very careful to try to keep MY focus on the issues, not this or that political party or mind-set.

If we want to get into a “blame” game, there’s plenty to go around. I suggest it’s not a productive conversation at this point, given which party is currently in control and was when these exceptions were issued.

Blame matters less than responsibility.

The blame is mostly on BP, but is partly shared among various parties. The responsibility is 100% BP, and BP alone.

Interesting Times Thu, Jul 8, 2010 11:20:39am

re: #41 Aceofwhat?

tell me you aren’t financially illiterate enough to think that “regulation” or the lack thereof had anything to do with the recent financial collapse, or that Democrats had been prescient enough to have been calling for the magic bullet that would have prevented said collapse.

The “magic bullet” that would have prevented said collapse (or at least made it far less awful) was for the US to have the same kind of banking system as Canada:

Safety and soundness

There have been very few bank failures in Canada, which is widely acknowledged as having one of the safest and soundest financial sectors in the world. Two small regional banks failed in the mid-1980s, the only such failures since 1923. The soundness of the Canadian banking industry was demonstrated when it absorbed the debt difficulties of the less developed countries in the early 1980s and the decline in real estate values a decade later without experiencing any systemic problems.

Kragar Thu, Jul 8, 2010 11:21:13am

re: #43 LudwigVanQuixote

Will he throw bones to the religious right and the gun nuts? Will he deny AGW? Will he be suddenly for gutting public education when he gets elected?

I am one of those who wants nothing to do with that corrupt, soulless and America destroying party.

And yes the Dems suck too. The Dems are deeply broken, but they are not broken on that scale or in that way.

He wont be doing anything because a nutball teabagger won the GOP nomination

Mad Prophet Ludwig Thu, Jul 8, 2010 11:21:57am

re: #41 Aceofwhat?

let’s just pick one.

Wall Street? what the hell are you talking about? tell me you aren’t financially illiterate enough to think that “regulation” or the lack thereof had anything to do with the recent financial collapse, or that Democrats had been prescient enough to have been calling for the magic bullet that would have prevented said collapse.

You’re much more erudite when you aren’t leaking partisan out of your orifices.

The only partisan here is you Ace - with another healthy does of willful blindness.

I’ll start by pointing out that the current Wall Street crash was presided over by a GOP congress and administration for eight whole years, where the GOP vigorously did none of the things that they accuse the Democrats of not doing.

Now that the Dems are attempting to enact better regulations to prevent a similar crash in the future, the GOP is filibustering.

The GOP so badly wants this fixed! They blame the Dems for not fixing it - even when the GOP was in power and their disastrous policies passed through a congress they controlled directly contributed, and in keeping with their desire to do nothing to fix it - because after all that might hurt the profits of their masters, they filibuster a fix!

Those are just the facts. There is nothing partisan to them, other than as a party, the GOP is lockstep in a certain disasterous dogma and too pussy to accept that it has caused disaster after disaster.

Lets talk about the clean air act of 2005.

What do you know about the Haliburton loophole and Fracking?

Mad Prophet Ludwig Thu, Jul 8, 2010 11:22:24am

re: #45 ralphieboy

What we have seen is that there is a certain minimum level of government activity needed to avoid much greater damage through inactivity.

(btw, I believe that was Bush’s justification for invading Iraq. “The cost of inaction could be much higher”)

But with financial deregulation, we saw that the costs of subsequent government intervention in the form of a tax-funded bailout were many times greater than the costs of proper oversight.

My point exactly.

Fozzie Bear Thu, Jul 8, 2010 11:25:35am

re: #46 Aceofwhat?

Let me say this loudly and clearly, as someone with some small financial and economic education (mostly marketing, operations, and management though).

Regulation, or the lack thereof, had virtually nothing to do with the recent financial meltdown.

Period. End of story. Back to your regularly scheduled programs.

That’s just a ridiculous assertion. Things were done which, had they been illegal, would not have been so easily done. If they were illegal, then better enforcement could have prevented disaster.

To say that this wasn’t a failure of regulation is frankly absurd, unless you are going to assert that it’s really a great idea to bundle subprime debt into mixed securities the value of which cannot be accurately assessed, that people who have no income should have been given loans, and that the firewall between investment and savings banking should have come down.

Of course it was a failure of regulation.

Aceofwhat? Thu, Jul 8, 2010 11:26:51am

re: #48 publicityStunted

No, Canada guarantees mortgages and so lending standards have remained very tight…the opposite policy of the US Government (republicans and democrats alike).

However, it seems to me that with looser standards in the past year or so, it is quite possible that you are headed towards a bubble of your own.

Don’t confuse broad governmental lending practices with wall street regulation. They’re entirely unrelated.

McSpiff Thu, Jul 8, 2010 11:27:42am

re: #53 Aceofwhat?

Source on the looser standards claim?

Spare O'Lake Thu, Jul 8, 2010 11:28:18am

re: #40 reine.de.tout

The $20 Billion will not be nearly enough, nor the $100 million that BP is disbursing.

But discussions about which party was more “to blame” are silly at this point, and they are distracting from the current issues that need to be dealt with, IMO, and I have been very very careful to try to keep MY focus on the issues, not this or that political party or mind-set.

If we want to get into a “blame” game, there’s plenty to go around. I suggest it’s not a productive conversation at this point, given which party is currently in control and was when these exceptions were issued.

The $20 billion will probably turn out to be a bargain for BP if it represents a firm and binding cap on liability. Having said that, it’s at least 26 times better than the previous $75 million cap, if the $20 billion is in fact a done deal.
Has the money actually been secured yet?

McSpiff Thu, Jul 8, 2010 11:29:04am

re: #55 Spare O’Lake

The $20 billion will probably turn out to be a bargain for BP if it represents a firm and binding cap on liability. Having said that, it’s at least 26 times better than the previous $75 million cap, if the $20 billion is in fact a done deal.
Has the money actually been secured yet?

I believe the payment schedule is $5 billion a year over 4 years.

Aceofwhat? Thu, Jul 8, 2010 11:29:21am

re: #50 LudwigVanQuixote

The only partisan here is you Ace - with another healthy does of willful blindness.

I’ll start by pointing out that the current Wall Street crash was presided over by a GOP congress and administration for eight whole years, where the GOP vigorously did none of the things that they accuse the Democrats of not doing.

That is one of the most pathetic descriptions of the recent meltdown that i have ever heard. Seriously, I’ve seen deniers do a better job with AGW.

Can you even accurately describe, in five sentences or less, what exactly went down in the past few years?

I have a bottle of Bombay Sapphire saying you can’t.

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 11:30:16am

re: #46 Aceofwhat?

Regulation, or the lack thereof, had virtually nothing to do with the recent financial meltdown.

.

Very, very, very deeply wrong.

Interesting Times Thu, Jul 8, 2010 11:32:23am

re: #53 Aceofwhat?

Don’t confuse broad governmental lending practices with wall street regulation. They’re entirely unrelated.

Not just lending practices:

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada’s more risk-averse business culture, but it is also a product of old-fashioned rules on banking.

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 11:34:25am

re: #59 publicityStunted

It wasn’t even that we deregulated stuff so much as we never regulated it in the first place.

And the fucking Commodity Futures Modernization Act.

Ericus58 Thu, Jul 8, 2010 11:35:47am

re: #41 Aceofwhat?

You’re much more erudite when you aren’t leaking partisan out of your orifices.

And that’s when the fight started….

I have to say, that is a funny line ;)

Aceofwhat? Thu, Jul 8, 2010 11:36:09am

re: #54 McSpiff

Source on the looser standards claim?

how about your own government?

relevant bits:

# MLI on mortgages with a loan-to-value ratio of up to 95%;

# MLI for homeowners providing eligible borrowers with financing of up to 100% of the value of the property, meaning that no down payment is required (under certain conditions);

# extended eligibility for self-employed workers and employees paid by commission;

# extended MLI in cases of refinancing and credit consolidation;

# extended coverage for a second home, vacation properties and factory-built homes;

# lower premiums (30%) and elimination of homeowner high-ratio MLI application fees (CMHC);

# extended amortization periods of up to 40 years on homeowner loans under certain conditions;

# MLI for homeowners with payment of interest only;

Aceofwhat? Thu, Jul 8, 2010 11:36:59am

re: #58 Obdicut

Very, very, very deeply wrong.

Let’s do this. Sum up for me, in five sentences or less, the key components of the meltdown. I will do the same for you.

Aceofwhat? Thu, Jul 8, 2010 11:37:59am

re: #61 Ericus58

And that’s when the fight started…

I have to say, that is a funny line ;)

i don’t like to be mean for mean’s sake…so i try to lighten up my sarcasm a bit.

i hope it helps. a good debate can get snarky but need not cross the line into mean. i’ll take feedback from outside parties on my performance in that regard at any point!

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 11:38:43am

re: #63 Aceofwhat?

Let’s do this. Sum up for me, in five sentences or less, the key components of the meltdown. I will do the same for you.

No, let’s not, Ace. I have shitloads of work, and furthermore, you can’t really sum it up in five sentences or less. You can’t even sum up the Commodity Futures Modernization Act in five sentences or less.

Aceofwhat? Thu, Jul 8, 2010 11:39:34am

re: #52 Fozzie Bear

That’s just a ridiculous assertion. Things were done which, had they been illegal, would not have been so easily done. If they were illegal, then better enforcement could have prevented disaster.

To say that this wasn’t a failure of regulation is frankly absurd, unless you are going to assert that it’s really a great idea to bundle subprime debt into mixed securities the value of which cannot be accurately assessed, that people who have no income should have been given loans, and that the firewall between investment and savings banking should have come down.

Of course it was a failure of regulation.

perhaps this is a matter of terminology. those aren’t regulations. those are widespread, fundamental market practices.

Fozzie Bear Thu, Jul 8, 2010 11:40:14am

re: #63 Aceofwhat?

Let’s do this. Sum up for me, in five sentences or less, the key components of the meltdown. I will do the same for you.

Please, in five sentences or less, tell the complete story of you life. Make sure not to leave anything out.

Aceofwhat? Thu, Jul 8, 2010 11:41:22am

re: #65 Obdicut

No, let’s not, Ace. I have shitloads of work, and furthermore, you can’t really sum it up in five sentences or less. You can’t even sum up the Commodity Futures Modernization Act in five sentences or less.

then i will assert my credentials as a stopgap until someone actually wants to have a pithy discussion on the topic. surely a Master’s degree is enough to take my word for it until you have time for a debate.

Interesting Times Thu, Jul 8, 2010 11:42:35am

re: #63 Aceofwhat?

Let’s do this. Sum up for me, in five sentences or less, the key components of the meltdown. I will do the same for you.

I prefer to do it with pictures (name of company in cartoon sheer coincidence ;) )

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 11:44:07am

re: #68 Aceofwhat?

then i will assert my credentials as a stopgap until someone actually wants to have a pithy discussion on the topic. surely a Master’s degree is enough to take my word for it until you have time for a debate.

No, it’s not, Ace. I can cite economists with more than a masters who think that lack of regulation contributed, so your appeal to your own authority is weak as hell.

Sheesh.

badcreditloancenter.com

A nobel prize in economics kind of surpasses a Masters, so by your own criteria, Krugman is now the stopgap.

This is why appeal to authority is a fallacy.

Aceofwhat? Thu, Jul 8, 2010 11:47:13am

re: #67 Fozzie Bear

Please, in five sentences or less, tell the complete story of you life. Make sure not to leave anything out.

I was born a precocious geek to wonderful parents. Having lived in Europe for a few years in pre-adolescence, i learned to love Europe. Having attended an excellent Catholic school as a protestant, i learned to love others. I majored in Biology and French, almost triple-majoring in Chemistry at Case Western Reserve in Cleveland, but decided that i didn’t really want to be a doctor and began a career in operations, inventory and logistics management. I married, bred, received an MBA at the Kellogg School of Business and eventually ended up taking a less visible position with my company here in Jacksonville to be closer to my parents and to add Sales Management credentials to my CV.

How was that?

Aceofwhat? Thu, Jul 8, 2010 11:49:03am

re: #70 Obdicut

No, it’s not, Ace. I can cite economists with more than a masters who think that lack of regulation contributed, so your appeal to your own authority is weak as hell.

Sheesh.

[Link: www.badcreditloancenter.com…]

A nobel prize in economics kind of surpasses a Masters, so by your own criteria, Krugman is now the stopgap.

This is why appeal to authority is a fallacy.

Krugman can be a real hack when he goes partisan.

From your link.

A major reason of the real estate bubble, the paper said, was that there was irrational exuberance among the consumers. Although real estate prices were already at their historical highs, people refused to believe that prices could fall significantly. This led to continued demand for property, further inflating the bubble. And when the nasty price shocks came, most people were taken by a surprise. At the same time, there was too much cheap money in the system. The interest rates were low, and the Chinese were practically funding U.S. consumer demand by buying treasury bonds.

So Krugman agrees…it wasn’t regulation, or the lack thereof. Like i said.

Aceofwhat? Thu, Jul 8, 2010 11:51:41am

re: #69 publicityStunted

I prefer to do it with pictures (name of company in cartoon sheer coincidence ;) )

LOL

I blame the government, republicans and democrats, for playing an overlarge role in pushing lax lending standards by appealing to “home ownership”.

Let us not forget how many decades we touted the percentage of americans who owned homes as some sort of metric by which we should judge ourselves.

That is not a regulatory failure, though. It is a failure of a central government philosophy.

Perhaps i need to redefine the term “regulation” for the crowd? This could all be much ado about an ill-defined term…i’m open to that…

Aceofwhat? Thu, Jul 8, 2010 11:52:56am

re: #60 Obdicut

It wasn’t even that we deregulated stuff so much as we never regulated it in the first place.

This is a true statement. However, it’s very broadly true and not at all something that can be leveled at either party in partisan fashion.

Fozzie Bear Thu, Jul 8, 2010 11:53:24am

re: #71 Aceofwhat?

I was born a precocious geek to wonderful parents. Having lived in Europe for a few years in pre-adolescence, i learned to love Europe. Having attended an excellent Catholic school as a protestant, i learned to love others. I majored in Biology and French, almost triple-majoring in Chemistry at Case Western Reserve in Cleveland, but decided that i didn’t really want to be a doctor and began a career in operations, inventory and logistics management. I married, bred, received an MBA at the Kellogg School of Business and eventually ended up taking a less visible position with my company here in Jacksonville to be closer to my parents and to add Sales Management credentials to my CV.

How was that?

You left out you birth weight, the size of your winky at age 10, and the dimensions of your left earlobe.

Therefore, your answer is insufficient.

Aceofwhat? Thu, Jul 8, 2010 11:54:14am

re: #54 McSpiff

Source on the looser standards claim?

So…no props on the American being enough of a FT and WSJ geek that he remembers the significant MLI rules changes in Canada circa 2006-2007?

I ain’t playin’!

Abdul Abulbul Amir Thu, Jul 8, 2010 11:54:35am

My understanding (or perhaps misunderstanding) is the the funds will be dispersed by a political appointee as he sees fit. That sure sounds like a slush fund,

Aceofwhat? Thu, Jul 8, 2010 11:55:40am

re: #75 Fozzie Bear

You left out you birth weight, the size of your winky at age 10, and the dimensions of your left earlobe.

Therefore, your answer is insufficient.

They are not ‘key components’, as i initially required. One of them is irrelevant and the other two are just going to piss you off…

_{come on…that’s funny stuff right thar}

kirkspencer Thu, Jul 8, 2010 11:55:48am

1) Regulatory failure in that effective preventive regulations, dependent upon applicable laws such as the Glass-Steagall Act, were eliminated by acts such as the 1999 passage of the Gramm-Lach-Bliley Act.

2) This allowed holders of money to completely sidestep reserve requirements and push virtual money in forms such as CDSs beyond reasonable expectations of returns.

3) A slowdown in housing sales plus the realization that significant numbers of people would be unable to refinance their mortgages led to the recognition of this overextension.

4) This recognition in turn caused banks, investment agencies, and other monetary agencies to hold a defacto suspension of convertibility resulting in a defacto $1.2Trillion decline in the total money supply.

5) To summarize, the regulatory brakes meant to prevent banks from overextending to the point of credit failure were pitched, whereupon banks overextended to the point of credit failure.

Aceofwhat? Thu, Jul 8, 2010 11:56:45am

re: #77 Abdul Abulbul Amir

your misunderstanding is that “as he sees fit” does not include funds for earrings, ski trips, or cocaine.

so…not a slush fund.

anything else i can help with?

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 11:56:59am

re: #72 Aceofwhat?

Krugman can be a real hack when he goes partisan.

Immediately rejecting an appeal to authority after having appealed to your own authority is strange as hell.

Some thing you argue so weirdly I can’t even figure out.

Krugman wants an entire new regulatory agency, and your conclusion is that he didn’t think lack of regulation was a problem.

Aceofwhat? Thu, Jul 8, 2010 12:02:28pm

re: #79 kirkspencer

1) A slowdown in housing sales plus the realization that significant numbers of people would be unable to refinance their mortgages led to the recognition that MBS pricing assumed liquidity, which was not an unreasonable assumption.

4) This recognition in turn caused banks, investment agencies, and other monetary agencies to hold a defacto suspension of convertibility resulting in a defacto $1.2Trillion decline in the total money supply. Exactly. this can’t be overstated. when psychology turns a trillion dollars into a trillion pieces of paper, regulation will not save you. this was a psychological failure.

5) To summarize, while regulation can be crafted to force CDO’s to hew to a minimum price level to prevent future meltdowns of this sort, no one party or group predicted how quickly and completely the CDO market could freeze based on psychology alone.

there, i did it in fewer than 5. we COULD have put regulation in place to stop it. saying that we foresaw this and simply chose NOT to put the regulation in place is fantasy. no one thought that a bubble burst would cause a total liquidity failure.

Aceofwhat? Thu, Jul 8, 2010 12:05:52pm

re: #81 Obdicut

Immediately rejecting an appeal to authority after having appealed to your own authority is strange as hell.

Some thing you argue so weirdly I can’t even figure out.

Krugman wants an entire new regulatory agency, and your conclusion is that he didn’t think lack of regulation was a problem.

Let me say it as clearly as I can. He did not foresee this outcome. Therefore, his claim that something or other should have been in place is partisan, because he is included in the 99.9% of people who didn’t see this around the bend and prescribe solutions before the illness.

I don’t reject PhD’s lightly…only when their own words belie their headlines. This was mostly about a bubble. The executive compensation stuff is just meat for the lefty pits (to which, i should add hastily, you do NOT belong).

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 12:09:02pm

re: #83 Aceofwhat?

Let me say it as clearly as I can. He did not foresee this outcome. Therefore, his claim that something or other should have been in place is partisan, because he is included in the 99.9% of people who didn’t see this around the bend and prescribe solutions before the illness.

That doesn’t make it at all partisan, no. Again, a really weird thing to say. What possible connection is there between those two things?

Aceofwhat? Thu, Jul 8, 2010 12:09:05pm

re: #81 Obdicut

Krugman wants an entire new regulatory agency, and your conclusion is that he didn’t think lack of regulation was a problem.

Let me attempt to clarify my position when i say this was not a regulation failure.

There COULD have been regulation (≠ entirely different market practices, mind you) that MAY have prevented this.

No one was calling for it. Therefore, this is not a regulation failure as I would define it. Perhaps my definition is in the minority here, but i define ‘regulation failure’ as ‘failure to regulate a thing which will somewhat predictably break in expensive fashion without said regulation’.

you can’t regulate an outcome that no one is predicting.

Spare O'Lake Thu, Jul 8, 2010 12:09:27pm

re: #62 Aceofwhat?

how about your own government?

relevant bits:

# MLI on mortgages with a loan-to-value ratio of up to 95%;

# MLI for homeowners providing eligible borrowers with financing of up to 100% of the value of the property, meaning that no down payment is required (under certain conditions);

# extended eligibility for self-employed workers and employees paid by commission;

# extended MLI in cases of refinancing and credit consolidation;

# extended coverage for a second home, vacation properties and factory-built homes;

# lower premiums (30%) and elimination of homeowner high-ratio MLI application fees (CMHC);

# extended amortization periods of up to 40 years on homeowner loans under certain conditions;

# MLI for homeowners with payment of interest only;

My two cents:
The CMHC downpayment rules have been tightened up somewhat since 2007. However leaving that aside, three of the main positive differences in Canada are:
1. It is mandatory for all institutional high-ratio residential mortgages to be insured by CMHC (a government agency), which means that in case of default the government would ultimately repay the loans.
2. In almost all Canadian jurisdictions the defaulting homeowner remains personally liable for any deficiency suffered by the lender after realizing on the home.
3. Institutional and CMHC lending guidelines require that the borrowers demonstrate sufficient income(s) to be able to afford to comfortably pay the loan.

In the US, I understand that FM2 were mandated and even ordered to make mortgage loans to people who had no demonstrated ability to service the loans.
Furthermore, the loans were not insured by the government, but rather by AIG. When the loans defaulted in droves the owners were able to simply walk away from the properties without any residual liability.
Then, when AIG was swamped with claims and unable to pay the loans,
the Wall Street investment houses and the derivative holders were suddenly left holding the bag.

Apparently the tighter Canadian lending practices and government backed insurance, were sufficient to avoid the loss of confidence which led to the US crisis.

One caveat: Home values in the Canadian real estate market did NOT go down the way they did in the US, so we cannot know for sure what would have happened if values had crashed up here. Presumably the Canadian government would not have allowed CMHC to fail and would have bailed out the lenders.

Aceofwhat? Thu, Jul 8, 2010 12:10:07pm

re: #84 Obdicut

That doesn’t make it at all partisan, no. Again, a really weird thing to say. What possible connection is there between those two things?

the ‘executive compensation’ thing is sooo partisan. as if regulating bank executive bonuses would have averted a housing bubble.

like i said…red meat for the lefties. partisan.

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 12:10:42pm

re: #85 Aceofwhat?

Let me attempt to clarify my position when i say this was not a regulation failure.

There COULD have been regulation (≠ entirely different market practices, mind you) that MAY have prevented this.

No one was calling for it. Therefore, this is not a regulation failure as I would define it. Perhaps my definition is in the minority here, but i define ‘regulation failure’ as ‘failure to regulate a thing which will somewhat predictably break in expensive fashion without said regulation’.

you can’t regulate an outcome that no one is predicting.

You can’t regulate an outcome, period.

Your definition of regulation failure is nutty as hell to me, yes.

Aceofwhat? Thu, Jul 8, 2010 12:11:29pm

re: #86 Spare O’Lake

hey, i’m just proud that i pulled that bit of Canadian knowledge out of thin air in front of Canadians…not bad for a yankee, right?

Abdul Abulbul Amir Thu, Jul 8, 2010 12:12:22pm

re: #80 Aceofwhat?

Are those “funds for earrings, ski trips, or cocaine.” all barred as a matter of law, or only that you feel certain that the the administrator will not see fit to reimburse related claims?

Would a ski resort not be entitled to some compensation if a crew of now laid off oil well workers canceled their reservations?

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 12:13:10pm

re: #87 Aceofwhat?

the ‘executive compensation’ thing is sooo partisan. as if regulating bank executive bonuses would have averted a housing bubble.

like i said…red meat for the lefties. partisan.

Executive compensation— and the rest of the structure of the reward system in our financial system— is a huge part of why there was a housing bubble— and many other risky strategies, for that matter.

It is not simply red meat for lefties, but a very reasonable observation of forces at work in capitalism; if someone can personally profit from a decision that places risk on others, then it is very reasonable to assume that will occur. That is the current system we have; there is very little risk to the people making the risky decisions that they will actually suffer. They will still be incredibly wealthy, privileged people. They still are, after the financial meltdown, while ordinary Americans lose their houses, jobs, and lives.

Aceofwhat? Thu, Jul 8, 2010 12:16:58pm

re: #88 Obdicut

You can’t regulate an outcome, period.

Your definition of regulation failure is nutty as hell to me, yes.

Ok. I’m going to try to use a nutty analogy in an attempt to show you what i mean and be sorta meta at the same time. I may fail…

Let’s say that there is some compound (fictional) required to make ethanol. Let’s say that there is a bubble and an unforseen consequence is that the mfrs decide that it’s more profitable to idle their plants than pay the increased price of the compound. All of a sudden, we have no more ethanol on the market.

We COULD have mitigated that scenario if we had been able to foresee the consequences. Not having regulated something that couldn’t reasonably be forecasted is not a regulation failure, it’s life. We can’t predict every outcome, and we can’t protect against every outcome.

Let’s assign the blame to ‘regulation’ when it really really ought to have been present and wasn’t.

Aceofwhat? Thu, Jul 8, 2010 12:19:03pm

re: #91 Obdicut

Executive compensation— and the rest of the structure of the reward system in our financial system— is a huge part of why there was a housing bubble.

That is as false as a tube sock in a jock strap. The housing bubble occurred independent of executive compensation.

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 12:19:46pm

re: #93 Aceofwhat?

That is as false as a tube sock in a jock strap. The housing bubble occurred independent of executive compensation.

Cool how you made an argument that demonstrated that and all.

Aceofwhat? Thu, Jul 8, 2010 12:20:27pm

re: #90 Abdul Abulbul Amir

Are those “funds for earrings, ski trips, or cocaine.” all barred as a matter of law, or only that you feel certain that the the administrator will not see fit to reimburse related claims?

Would a ski resort not be entitled to some compensation if a crew of now laid off oil well workers canceled their reservations?

a slush fund is a fund to be distributed as the responsible party sees fit. that precludes things like “laws”.

if the administrator is going to follow silly things like “laws”, then it isn’t a slush fund.

get it?

Aceofwhat? Thu, Jul 8, 2010 12:21:21pm

re: #94 Obdicut

Cool how you made an argument that demonstrated that and all.

I’ll link to one, if you have the time. I appreciate your warning me that you were busy, so i’m sorta letting the sarc out first and then will follow with actual links upon request!

Aceofwhat? Thu, Jul 8, 2010 12:21:38pm

re: #94 Obdicut

Cool how you made an argument that demonstrated that and all.

it was funny, though, right?

kirkspencer Thu, Jul 8, 2010 12:23:06pm

re: #82 Aceofwhat?

there, i did it in fewer than 5. we COULD have put regulation in place to stop it. saying that we foresaw this and simply chose NOT to put the regulation in place is fantasy. no one thought that a bubble burst would cause a total liquidity failure.

Wait, what? Please look at my point one, not the edit you created. We HAD regulations, we REMOVED those regulations, and the problems happened. That’s regulatory failure, period. “No one could have predicted” fails because some senators and economists were predicting EXACTLY this at the time Gramm-Lech-Bliley was passed.

Now as to addressing your points, “MBS pricing assumed liquidity, a not unreasonable assumption” ignores the fact that the holders of the notes had leveraged well past reasonable reserve levels EVEN IF THE LIQUIDITY EXISTED. 30:1 leverage on assumed mortgage values even before slowdowns were absurd, yet that’s what Lehman was using — and general testimony is that Lehman wasn’t the most overextended, just the one who got caught. Had GS still been in place the extension would have been capped at 10:1, and even with the slowdown and fear the loss would have been significantly more manageable.

The second point feeds from the first. Had the regulations been kept in place it would have cut the credit overextension by AT LEAST a third based solely on Lehman’s overleverage. Given that many of the deep pockets of banks would have been able to contribute to the extended investments (one of the critical elements eliminated) it’s likely this would have been even less - possibly even having no significant overleverage at all.

Your final point has nothing to do with the argument. “No one could have known” does not show how failure of regulation did not exist, nor does it show that failure of regulation did not contribute to the collapse.

I will note a definitional point. It appears you are trying to restrict “failure of regulation” to “failure to enforce existing regulations.” I am using the definition that includes neutralization and elimination of regulations. A major impetus to the passage of GLB was the 1998 declaration by the fed that such regulations were wasteful and unnecessary. Again I note that economists such as Krugman and Roubini plus politicians such as Dorgan and Feingold objected, making the claim nobody could have known false on its face.

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 12:24:23pm

re: #97 Aceofwhat?

it was funny, though, right?

I assume it was.

re: #96 Aceofwhat?

I’m just about to dive into my stuff. Probably got nine hours ahead of me.

Anyway: I made a short, but coherent argument about the way compensation and decision-making tie in in capitalism. If you have an argument that refutes that, feel free to link it or write it. But please make sure the argument actually addressed it, and doesn’t just make an argument with a different explanation for the meltdown.

100

Aceofwhat? Thu, Jul 8, 2010 12:27:38pm

re: #98 kirkspencer

hang on. this is going to take a second.

101

Aceofwhat? Thu, Jul 8, 2010 12:29:37pm

re: #99 Obdicut

I assume it was.

re: #96 Aceofwhat?

I’m just about to dive into my stuff. Probably got nine hours ahead of me.

Anyway: I made a short, but coherent argument about the way compensation and decision-making tie in in capitalism. If you have an argument that refutes that, feel free to link it or write it. But please make sure the argument actually addressed it, and doesn’t just make an argument with a different explanation for the meltdown.

Ok. In short, i am not deaf to the plea that trader compensation may need to change. I think traders did far more damage here than executives. There are a whole lotta well-paid executives around the world…their pay is not correlated with industry-wide failure.

Dive in, and i’ll try to be funnier next time. You’re a tough crowd…

102

Aceofwhat? Thu, Jul 8, 2010 12:30:58pm

re: #98 kirkspencer

I will note a definitional point. It appears you are trying to restrict “failure of regulation” to “failure to enforce existing regulations.” I am using the definition that includes neutralization and elimination of regulations.

No, i’m trying to restrict it to “failure to address reasonably foreseeable problems.”

Working on other parts of your post now.

103

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 12:31:17pm

re: #101 Aceofwhat?

There are a whole lotta well-paid executives around the world…their pay is not correlated with industry-wide failure.

I didn’t say it was correlated with industry-wide failure, though, so I’m really not sure what that has to do with what I’m saying. I’m saying that executive compensation does not take into account the amount of risk they’ve introduced into the broader system, at all.

Dive in, and i’ll try to be funnier next time. You’re a tough crowd…

When you don’t try to be funny is when you’re really funny, and I don’t mean that in a mean way.

104

Aceofwhat? Thu, Jul 8, 2010 12:38:45pm

re: #98 kirkspencer

Wait, what? Please look at my point one, not the edit you created. We HAD regulations, we REMOVED those regulations, and the problems happened. That’s regulatory failure, period. “No one could have predicted” fails because some senators and economists were predicting EXACTLY this at the time Gramm-Lech-Bliley was passed.

So this is an incorrect interpretation of what happened. Note, please, that the independent banks failed in this crisis and the GLB-affected banks (BoA, JPMorgan, etc) were actually free to purchase other failing institutions, possibly softening the effects of the crisis.

Here’s a Clinton economist who teaches at Berkely
delong.typepad.com

Here’s Clinton himself

Bill Clinton (Sept. 24): Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.

It wasn’t GLB.

105

Abdul Abulbul Amir Thu, Jul 8, 2010 12:39:28pm

re: #92 Aceofwhat?

Let’s assign the blame to ‘regulation’ when it really really ought to have been present and wasn’t.

Well thirty years ago you needed 20% or so down, proof of employment, and a positive credit history to get a mortgage. However, those requirements which the banks had in place did meet the goals of the “affordable housing” crowd. So regulations were tightened to require lending to less credit worthy applicants. The CRA played a part in this, but only a part. Thus the highly risky no money down loan. Congresswoman Maxine Waters was much in favor of the “100% loan” (no money down) and “desktop underwriting” (Liar Loans).

Under the outstanding leadership of Mr. Frank Raines, everything in the 1992 Act, has worked just fine. In fact, the GSE’s have exceeded their housing goals. What we need to do today is to focus on the regulator. And this must be done in a the manner so as not to impede the affordable housing mission. A mission that has seen innovation flourish, from desktop underwriting to 100 per cent loans.

The regulators would have held such highly risky loans on a bank’s balance sheet at a cause for great concern. However, if they were rolled into a Fannie or Freddie mortgage backed security, the regulators considered the junk to be pure gold.

The housing bubble was in large part the creature of regulatory policy rather than deregulation.

106

Absalom, Absalom, Obdicut Thu, Jul 8, 2010 12:40:59pm

re: #104 Aceofwhat?

You’re right about that bit.

107

Aceofwhat? Thu, Jul 8, 2010 12:42:04pm

re: #103 Obdicut

I didn’t say it was correlated with industry-wide failure, though, so I’m really not sure what that has to do with what I’m saying. When you don’t try to be funny is when you’re really funny, and I don’t mean that in a mean way.

dang. i wish i was funnier. then again…
Youtube Video

I didn’t say it was correlated with industry-wide failure, though, so I’m really not sure what that has to do with what I’m saying.

I read Krugman as having said it was. That’s why i called him partisan. So i need you to tell me whether you think it is, or is not, correlated with industry-wide failure so that we can finish that particular point of debate.

108

Aceofwhat? Thu, Jul 8, 2010 12:42:50pm

re: #106 Obdicut

You’re right about that bit.

thanks-

what does it say about me that i love the song i just put up in #105?

109

Amory Blaine Thu, Jul 8, 2010 1:58:25pm

re: #105 Abdul Abulbul Amir

The regulators would have held such highly risky loans on a bank’s balance sheet at a cause for great concern. However, if they were rolled into a Fannie or Freddie mortgage backed security, the regulators considered the junk to be pure gold.

The housing bubble was in large part the creature of regulatory policy rather than deregulation.

Most of the subprime loans were made by mortgage lenders that fell outside of CRA rules. I.E. Countrywide. You can blame democrats all you want, republicans held chairs in all committees since 1994 till Jan 2007.

110

darthstar Thu, Jul 8, 2010 2:16:44pm

Heh…she walked it back today:

Having had some time to think about it, the caller and I shouldn’t have used the term slush fund; that was incorrect.

Let’s see how long the honest Sharron Angle lasts.

111

kirkspencer Thu, Jul 8, 2010 3:59:09pm

re: #104 Aceofwhat?

You posted a deLong article that is mainly a quote from Justin Fox. Shall I quote the first few sentences here? Yes, I shall.

Was deregulation a factor in bringing us to our financial system to its current teetering state? Yeah, sure.

The article says the repeal is good in that it allowed Bank of American to buy Merrill Lynch. Of course, if it hadn’t been repealed Merrill Lynch may not have needed purchasing.

Regulatory failure (removal of regulations) contributed to the financial collapse. That the same removal allowed a partial save does not negate the premise. That other factors applied does not negate the premise. It was a simple enough contribution that I explained fairly comprehensively in four sentences (five or less) and used the fifth for a basic summary.

The removal of regulations meant to prevent overextension of financial institutions allowed financial institutions to overextend, and that was a critical element in the financial crisis.

112

kirkspencer Thu, Jul 8, 2010 4:16:31pm

(General note to Aceofwhat?): Don’t feel you have to rush in response. For a lot of reasons I don’t keep a constant watch, but instead check back at irregular intervals. I appreciate and enjoy the conversation, it’s just I’m not in a situation of being able to keep the pace of some of the more typical back and forth deals I see around here.

113

Vambo Thu, Jul 8, 2010 5:34:46pm

re: #28 LudwigVanQuixote

Ohh that’s a good point:

OK everyone, least loved wingnut:

Angle
Barton
Inhofe
Palin
Boehner
RON PAUL!!
rand paul…
Hatch

Wow, there are so very many to choose from…

Boehner. His complexion is obnoxious.

114

abdul abulbul amir Fri, Jul 9, 2010 7:17:02am

re: #109 Amory Blaine

Most of the subprime loans were made by mortgage lenders that fell outside of CRA rules. I.E. Countrywide. You can blame democrats all you want, republicans held chairs in all committees since 1994 till Jan 2007.

It does not matter one whit who origonated the loans to less creditworthy borrowers. Fannie and Freddie made a market for them and bought them. Making those loans was regulatory policy, not some form of deregulation. Fannie and Freddie making a secondary market for high risk mortgages is at the root of the problem.

As Congresswoman Waters clearly stated:

Under the outstanding leadership of Mr. Frank Raines, everything in the 1992 Act, has worked just fine. In fact, the GSE’s have exceeded their housing goals. What we need to do today is to focus on the regulator. And this must be done in a the manner so as not to impede the affordable housing mission. A mission that has seen innovation flourish, from desktop underwriting to 100 per cent loans.

Emphasis added.

Those risky mortgages were in fact policy.

115

kirkspencer Fri, Jul 9, 2010 9:03:58am

re: #114 abdul abulbul amir

CRA failures were no worse than non-CRA failures. In fact, recent reports are that failures of lower income people are at LOWER rates than those for higher incomes.

I submit that if CRA was to blame, CRA failures would be disproportionately high.

Spy Mode Auto

This article has been archived.
Comments are closed.

Jump to top

Angle: BP’s $20B Escrow Fund a ‘Slush Fund’

► LGF Headlines

► Top 10 Comments

► Bottom Comments

► Recent Comments

► Tools/Info

► Tag Cloud