Wall Street got burned badly because of the secondary housing market, not because of shorting to hedge their investments. Hedging is a way to minimze the risk. This financial reform is a joke because Fannie and Freddie, which are the main culprits of our current ecomomic situation, aren't even discussed in the bill. If you get rid of Freddie and Fannie guaranteeing crappy loans, banks will start underwriting better since they will be accountable for them.
But they don't lose anything regardless of what goes down.. this 8K home buyers credit is a joke as well... they recoup that in interest the first year of a loan.. the whole point of making these home loans and stuff is to create financial slavery.. get tired of seeing 3 or 4% of your money go towards the principle of your house? no problem.. there;s always another sucker ready to take your place..
This is not even to mention it's money that doesn't even exist until it circulates through the system and RETURNS to the Fed..
Baaa.. I don't feel like getting started... they shouldn't be gambling with the bail out money.. they should be loaning it to people to create business and jobs... the whole thing is a big circle jerk at the end of the day anyhow
Being in the banking industry (a community bank), I can tell you that forcing banks to loan money is not a good idea. The economy needs to stop being held up artificially by the government and needs to hit the bottom and then start to work its way back on sound lending and investing principles.

The plan presented by the Republicans is a much more comprehensive plan and will not penalize the taxpayers as much.

Read below:

"The Republican plan would prohibit the use of taxpayer money to bail out failing financial giants in the future and impose federal regulation on many but not all trades of complex investments known as derivatives.

Unlike in the Democrats' bill, large banks would not have to help pay for the failure of their peers. It also calls for consumer protections that are narrower than what Democrats and the White House seek, and it would place restrictions of financial assistance to mortgage giants Fannie Mae and Freddie Mac."
Shorting allowed the banks to minimize risk and protect their investors. They might be sued for failing to do so.

Allowing Fannie/Freddie to issue $6.5 trillion of derivatives based on the mortgages they bought provided a market, backed by the taxpayer, for subprime mortgages. And, drove up the cost of housing to unrealistic limits.
quote:
Originally posted by Fighting Illini:
Wall Street got burned badly because of the secondary housing market, not because of shorting to hedge their investments. Hedging is a way to minimze the risk. This financial reform is a joke because Fannie and Freddie, which are the main culprits of our current ecomomic situation, aren't even discussed in the bill. If you get rid of Freddie and Fannie guaranteeing crappy loans, banks will start underwriting better since they will be accountable for them.


So your position is Wall Street is a victim in all of this?

Did you watch any of the Goldman Sachs hearings yesterday on Capitol Hill?

Senator Levin dropped the S-bomb four times (I think) for effect - and it worked - to describe the internal Goldman Sachs memo.

So Goldman Sachs sold a Timberwolf investment to a client and said in the memo: "Boy, that Timberwolf investment was one S-bomb deal."

No, clearly they didn't put profit ahead of clients' interests at all. The Goldman Sachs employees are the victims.

I wonder if I was trying to sell you such an investment and described it to YOU as "one S-bomb" deal, would you still want to buy. I'm guessing no.
GS didn't help their reputation with the investments products that are being investigated. However, the amount is a pittance next to that lost throughout the market.

GS, aka Government Sachs, is a sideshow. Obama's administration is filled with GS employees and lobbyist, including Oba-one, himself.

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