45. Repeal S. 900 [106th]: Gramm-Leach-Bliley Act of 1999: Amends the Banking Act of 1933 (Glass-Steagall Act) to repeal prohibitions: (1) against affiliation of any Federal Reserve member bank with an entity engaged principally in securities activities (securities affiliate); and (2) against simultaneous service by any officer, director, or employee of a securities firm as an officer, director, or employee of any member bank (interlocking directorates). (Gramm, 1999) This bill legalized bank fraud. This was not the intent of this legislation but was the result. This made collateralized-debt-obligation (CDO) and credit-default-swaps (CDS) legal. The creation of CDO’s spurred a massive explosion of irresponsible and predatory lending. The really astonishing aspect of these securities was that they were able to get AAA bond ratings. “Rolling Stone” writer, Matt Taibbi, wrote “The Big Takeover” spells out the history of this financial mess very well. The question that you the citizens must ask now is who passed this bill and why are they still in power. One senate and one house representatives from my district of Iowa signed this bill in the affirmative.
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One idea proposed to deal with the bank securities problem was to institute a bad bank program where the United States pools all of these securities together. This is a good idea. Once all of these securities are pooled, they then can be pulled apart. The asset pool created can then be better assessed as to value. Large holders of these securities can wait out the valuation or take hard assets as repayment. Valuations must be based on fair value coupled with future valuation estimates.
Comments (3)
Prosecute both Phil Gramm and his wife for treason and then hang them.
Did he or his wife die?
With Passage of S. 900 [106th]: Gramm-Leach-Bliley Act of 1999, being still intact, bankers can still buy, sell, and create securities. The banker bailout money can be used to artificially prop up DJIA and NASDAQ stock exchanges. The people see that the current stabilization of the markets as an opportunity to reinvest. Then the bankers pull out the money and clean up on the suckers. This boom and bust cycle is what Glass-Stegall Act of 1933 was created to prevent. Whenever there is a centralization of money and the freedom to gamble is allowed, it will occur.
An article I found recently hints as to this happening now; link: http://www.marketskeptics.com/2009/06/dark-pools-and-insider-trading-growing.html