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Conclusion of the FCIC (Financial Crisis Inquiry Commission)

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Helsworth
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Post: #1
Conclusion of the FCIC (Financial Crisis Inquiry Commission)

You can read it the whole thing here http://c0182732.cdn1.cloudfiles.rackspac...usions.pdf

WH E N T H I S COMM I S S ION began its work  months ago, some imagined that the events of  and their consequences would be well behind us by the time we issued this report. Yet more than two years after the federal government intervened in an unprecedented manner in our inancizal markets, our country inds itself still grappling with the aftereffects of the calamity. Our financial system is, in many respects, still unchanged from what existed on the eve of the crisis. Indeed, in the wake of the crisis, the U.S. financial sector is now more concentrated than ever in the hands of a few large, systemically significant institutions.
While we have not been charged with making policy recommendations, the very purpose of our report has been to take stock of what happened so we can plot a new course. In our inquiry, we found dramatic breakdowns of corporate governance, profound lapses in regulatory oversight, and near fatal laws in our financial system.
We also found that a series of choices and actions led us toward a catastrophe for which we were ill prepared.
These are serious matters that must be addressed and resolved to restore faith in our financial markets, to avoid the next crisis, and to rebuild a system of capital that provides the foundation for a new era of broadly shared prosperity.
The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again.
This report should not be viewed as the end of the nation’s examination of this crisis. There is still much to learn, much to investigate, and much to fix.
This is our collective responsibility. It falls to us to make different choices if we want different results.


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This post was last modified: 17.02.2011 13:09 by Helsworth.

17.02.2011 13:07
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RichardAWilson
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Post: #2
RE: Conclusion of the FCIC (Financial Crisis Inquiry Commission)

Here’s an idea;

[Preventing Another Crisis]

Privatize Fannie and Freddie. {Main contributors to the housing bubble & crisis}

Auditing of Rating Agencies. {Contributed to the crisis by failing to assign appropriate risk ratings to those mortgage-backed securities. Audits should be conducted to find conflicts of interests that contributed to those failures of assigning risk ratings.}

Auditing of the Federal Reserve. {This is called transparency and it is required for the smooth and efficient functioning of capital-markets}

Instituting the “10% rule.” {If homebuyers don’t have 10% down, lenders shouldn’t be lending to them} In Denmark, this “rule” is closer to 20%. This would have prevented the origination of a majority of the sub-prime mortgages and securities that have led to the housing bubble and the financial crisis that followed.

Abolish the Federal “Mortgage Interest Deduction,” as it has led to inflated demand and inflated values. {This should, of course, be applied to future mortgages, while being maintained for today‘s homeowners}

[Resolving This Crisis]

Suspending “Golden-Parachutes,” otherwise known as Severance Packages, for those Board Members and Executive Officers that served during the housing bubble. {Which would have to be 2004 through 2008}

Suspending bonuses in the financial-sector until TARP is repaid to the Treasury. If your firm didn‘t need TARP funds, you wouldn‘t be affected. If you did, well, you shouldn‘t be expecting a bonus until the cash is paid back to the taxpayer. {TARP funds shouldn’t be used to provide generous bonuses}

13.03.2011 19:57
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Lord Weasel
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Post: #3
RE: Conclusion of the FCIC (Financial Crisis Inquiry Commission)

I have another idea:

keep the state banks as state banks and use them to invest in areas of the economy such as green technology.

As Richard says raise the deposit on houses. I also agree with Richard when it comes to bankers bonuses, although I'd probably tax them in the highest bracket of income tax.

Separate high street banks, insurance providers, commercial banks and investment banks. So if one stops working there is no knock on effect on the others.

Create a more powerful financial regulatory and investigation service.

Introduce legislation regulating derivatives.

Drop this strange inane notion that market forces, like some benevolent hand of god, are going to deliver mankind to a better future.

This post was last modified: 15.03.2011 02:47 by Lord Weasel.

15.03.2011 02:45
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VincentNikolai
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Post: #4
RE: Conclusion of the FCIC (Financial Crisis Inquiry Commission)

I on the other hand, agree with both solutions.

Market forces accelerate development through rational means of supply and demand when regulated correctly. I give the example that market forces are an arrow which is being shot and going at the same time, you need to guide that arrow in the right direction. Market forces isn't a physical thing or even matter, so it doesn't and shouldn't be defined by the physical properties we define the rest of the world, and this is where speculation (regulated regulators) can work.

I think GSEs should just in general be very exclusive situations. VERY EXCLUSIVE. As in NASA could be made into a GSE, but Fannie Mae and Freddie Mac should be let loose as GSEs. Smile

I've always wondered, what's the point of the government having NASA and a "secret" space agency? I mean they have two, the truly confidential matters stay in the former which is operated by the air force. NASA is just the civilian research center which most recently has the extrodianary job of being, SPACE ARCHEOLOGIST!!!! YAY!!!11!!1!11 Basically, the government makes GSEs to give private investors a fail-safe company to exploit. Soooooooo why allow that to continue? Whatever the government truly needs it does without general knowledge anyways. Daumen2


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The Prince- A dedication and political maneuver by Niccolo Machiavelli to prove his advice's value to the maintenance of the ruling Florentine Medici Political force.

This post was last modified: 15.03.2011 10:42 by VincentNikolai.

15.03.2011 10:41
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RichardAWilson
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Post: #5
RE: Conclusion of the FCIC (Financial Crisis Inquiry Commission)

"The government makes GSE(s) to give private investors a fail-safe company to exploit." - Vincent.

There's the problem defined in a single sentence. As Fannie and Freddie were viewed as being not much riskier than T-Bonds, private-investors, institutions and speculators plowed tons of capital into them at rather low rates of interest, thus enabling them to borrow cash that was then used to acquire mortgages from the portfolios of the commercial-banks. This, of course, resulted in lower interest rates on sub-prime mortgages than would have otherwise been possible, thus contributing to the housing bubble and the crisis that has since followed.

Did you know:

Fannie and Freddie are allowed to maintain a capitalization of under 3%, which is much lower than the mandated ratio for private banks? (Even though Fannie and Freddie were both private and shareholder owned before the financial crisis)

Fannie and Freddie are exempted from state and local taxes?

Fannie and Freddie are exempted from SEC filing requirements?

This post was last modified: 15.03.2011 16:42 by RichardAWilson.

15.03.2011 16:40
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VincentNikolai
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Post: #6
RE: Conclusion of the FCIC (Financial Crisis Inquiry Commission)

If I ever become President I'm making you guys Chief of staff through Helsworth and Vice President through Richard. Only because Helsworth can't be Vice President by law. Lachweg

Seriously, this whole government has just become such a charade. Politically there are several solutions and they know it, but they are bought and paid for not to implement them.


Politics has no relation to morals.
The Prince, Niccolo Machiavelli
The Prince- A dedication and political maneuver by Niccolo Machiavelli to prove his advice's value to the maintenance of the ruling Florentine Medici Political force.
16.03.2011 02:23
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Anthonie
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Post: #7
RE: Conclusion of the FCIC (Financial Crisis Inquiry Commission)

I have been reading this thread and wondering that an ordinary man have so many ideas about solving financial problems while our government officials and technocrats have no real approach to solve these problems.I think the over all system of selecting people to govern us is not right and there must some new system which can make right selection of the people to solve problems of general public.

29.03.2011 05:39
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