House Banking Committee
The United States House Committee on Financial Services (also referred to as the House Banking Committee) oversees the entire financial services industry, including the securities, insurance, banking, and housing industries. The Committee also oversees the work of the Federal Reserve, the United States Department of the Treasury, the U.S. Securities and Exchange Commission, and other financial services regulators. It is chaired by Barney Frank (D-MA).
Now you would think this committee, given their jurisdiction, would be very interested in the actions of the Federal Reserve and the Treasury. We were told each and every bailout would come with taxpayer protections, transparency and oversight. However when it came to voting for an audit (Paul-Grayson Amendment) here is how concerned the heads of the Committee/Sub-Committees were:
CA-35 Rep. Maxine Waters nayOk, so now we have some back-scratching going on. Barney's biggest interest is using Fannie/Freddie to provide endless entitlements for homeowners (or would-be) at the expense of the Taxpayer. The Federal Reserve benefits from this by using the GSEs as a magic carpet to sweep the toxic assets under. This is all in the name of restoring the bank's balance sheets - not yours. It's a win-win situation for them and a lose-lose for the taxpayer.
NC-12 Rep. Melvin L. Watt nay
IL-04 Rep. Luis V. Gutierrez nay
NY-06 Rep. Gregory W. Meeks nay
KS-03 Rep. Dennis Moore nay
MA-04 Rep. Barney Frank nay
PA-11 Rep. Paul E. Kanjorski absent
If we could just modify some mortgages, postpone foreclosures, let people squat without paying, give $8,000 home buyer credits or refinance the underwater homeowners into an OptionARM with Fannie/Freddie we could effectively put a floor under home prices. Bullshit. These endless attempts to prop up housing will prove futile. Stop thinking the method is failing and realize the entire idea is not reasonable. Please consider this New York Times piece on exactly how well this is working.
The Federal Reserve/Treasury are very interested in using Fannie/Freddie for several reasons. The modus operandi being to transfer liabilities from the bank's balance sheet to that of the taxpayer. The second will be "quasi-mortgage interest rate tool" in case the bond vigilantes demand 7% for their money resulting in an immediate 25% haircut on home valuations. Now keep in mind the GSEs own or guarantee nearly half of the entire $11T mortgage market with 1 in 5 homeowners underwater, 1 in 5 GSE loans delinquent and nearly a 1 in 5 "real" unemployment.
I would like to post some thoughts here that I commented on in another forum. Hopefully these questions will get you to look at things a little differently:
[slightly edited]
In closing, it is high time the public's anger move from that of the banks to the various branches of our corrupt government that are the true enablers of this cluster fuck. The American People have expressed outrage, voted against the various bailouts, health care, etc... yet Congress continues to answer the needs of Wall Street at your expense.Who enabled/allowed this to happen? What political agenda was pushed by Clinton and later Bush? What is regulatory capture? What asset bubble was directly responsible for fueling additional leverage through fictitious wealth?
Who pushed HUD and every single housing entitlement since? Do homes really become affordable by giving people cheap money or does this actually make home less affordable thereby creating instabilities in the entire financial sector? Were Americans using their home equity to bring on additional leverage (debt)? Peel back the many layers of the onion and you will cry. Consider how every sector/state/municipality were directly influenced by the housing boom which only added to the instabilities of the system (budgets etc...)
Who passed the "Modernization Act"? Who changed the bankruptcy laws? Who is bought and paid for?
Which committee oversees the entire financial services industry ? What is the mission statement of said Committee with respect to housing?
Who is using the GSEs as a magic carpet in which to sweep the feces under? Who oversees the GSEs?
In short, placing the blame solely on the financial services industry is misguided. I'm just as angry as the next guy when it comes to bankers but there is plenty of blame to go around. 1) Government Enabler/Entitlements 2) Banks/Wall St providing liquidity for said entitlement and 3) Dumb Borrowers. Without 1 and 3 this would be a non-issue. We have the GSEs owning or guaranteeing 5T, with 1 in 5 delinquent...Do the math
Yes, bankers are a "Den of vipers and thieves" but the government has run this country into the ground. The Federal Reserve is just there to facilitate the agenda of the ruling party. Do not blame the crack dealer for the user's addiction when the Government is complicit. They are the true enablers.
[afterthought] Who put the Federal Reserve at the at the epicenter thereby allowing for the micro-mismanagement of the economy through the expansion and contraction of credit?
It's your turn to be the whipping-post Congress. It's time the American People rout out the Legislative Branch (on up). It's time to reform the reformers. So go ahead and put Pelosi on a microphone crying about people at the steps of the capital. We are tired of this bullshit. We are coming.
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