Posts Tagged ‘Barney Frank’
Posted by Larry Doyle on May 14th, 2009 3:18 PM |
I find it embarrassing that our country is subjected to the leadership of the likes of Barney Frank. In a 7 minute interview on Bloomberg News this morning, I was initially shocked at Congressman Frank’s selective memory. As I watched the interview further, I got increasingly perturbed and upset that our country is subjected to a Congressional leader with such little appreciation for his own mistakes. From there, thinking that Barney and his colleagues are likely to impose their will and vision upon our economy makes me more concerned about the long term risks for our market and capitalism itself.
I am not blinded by the will of the free market. For a market to remain free, there needs to be strong regulation and real discipline. If the market does not impose the discipline, the government can and should provide guidance, incentives, and if need be hard rules. For the regulation to be effective, though, it is imperative that the regulators themselves are unbiased and unaffiliated within the industry. I would say that both FINRA and the SEC have fallen woefully short on these fronts. I would also say that Congress has fallen woefully short. Against that backdrop, to see none other than Barney Frank trying to make the case for the way forward on compensation reform and municipal insurance is VERY HARD TO SWALLOW.
In regard to compensation reform, I am all for empowering shareholders. I would begin by asking, though, when did shareholders lose the ability to influence compensation? Shareholders should regularly review compensation practices and figures and if they find them problematic, they should voice their opinions and if need be sell their stock.
As Barney was raising the risks embedded in the private profit and social loss model, I wanted to scream and ask him where he was as Franklin Raines was plundering Fannie Mae with Barney’s support on the Hill. Finding religion on these topics after twenty years and hundreds of billions of dollars may appease his constituents, but it does nothing for those who cherish free market capitalism.
Make no mistake, government was a large part of the problem then which makes me leery to think that it can be an effective part of the solution now.
To also hear Barney offer his opinion on the relative value of municipal debt versus corporate debt made me want to change the channel. The link to Barney’s Bloomberg interview is provided below. Let me know if you were able to stomach it before changing the channel.
Barney Frank, September 25, 2003 on the topic of sub-prime lending:
“I want to roll the dice…”
LD
Tags: Barney Frank, Barney Frank about pay, Barney Frank addresses compensation, Barney Frank interview, Barney Frank on bank pay, Barney Frank on bonuses, Barney Frank on Wall Street compensation, Barney Frank talks about private profit and social loss, Barney frank talks about risk and reward, BArney Frank's interview on Bloomberg, Barney Frank's selective memory, did Barney Frank forget about Franklin Raines, FINRA's affiliation with Wall Street, I want to roll the dice
Posted in General | 3 Comments »
Posted by Larry Doyle on April 28th, 2009 12:15 PM |
The intrigue involved in Bank of America’s takeover of Merrill Lynch goes well beyond standard Wall Street negotiations. Did Fed chair Ben Bernanke and then Treasury Secretary Hank Paulson break the law in the process of pressuring BofA CEO Ken Lewis to complete this bank merger? Bloomberg’s Jonathan Weil has easily distinguished himself amongst all journalists in aggressively addressing this topic. Weil pulls no punches in writing One Nation, Under Banks With Justice For No One.
Lewis, as CEO of Bank of America, possessed material non-public information about Merrill Lynch and was obligated by law to release that information to his shareholders. Lewis unequivocally maintains Bernanke and Paulson pressured him not to release that information which would have potentially derailed the merger. Why didn’t Lewis get Bernanke’s and Paulson’s position in writing? Did Lewis ask for it in writing? Did Paulson and Bernanke knowingly avoid a legal quagmire by not contractually committing in writing to increased government support for Lewis’ acquiescence?
Weil provides a clear expose of this situation. I commend him! He writes:
The spectacle of Ben Bernanke and Henry Paulson running roughshod over Kenneth Lewis and his minions at Bank of America Corp. raises a pivotal question for all Americans: Is the U.S. a nation of laws, or a nation of banks?
Let’s start by examining the facts disclosed last week in a letter by New York Attorney General Andrew Cuomo while taking pains to present the actions of each player in this drama in the fairest possible light. (more…)
Tags: Andrew Cuomo's investigation of Bank of America's takeover of Merrill Lynch, Bank of America takeover of Merrill Lynch, Barney Frank, Ben Bernanke, Christopher Dodd, Hank Paulson and Ben Bernanke pressure Ken Lewis, jonathan Weil, Mary Schapiro, Merrill lynch taleover by Bank of America, New York AG Andrew Cuomo, SEC
Posted in Bank of America, Banking Institutions, Barney Frank, Ben Bernanke, Christopher Dodd, Economy, General, Henry Paulson, Moral Hazard, Wall Street | 5 Comments »
Posted by Larry Doyle on April 26th, 2009 9:04 AM |
Barney Frank may try to rewrite his Congressional record on housing finance, but he will forever be linked to supporting the activities of Freddie Mac and Fannie Mae which drove irresponsible sub-prime lending. A review of a WSJ article, What They Said About Fan and Fred, is truly damning. I strongly recommend your reading it. Who can ever forget back in 2003 Barney Frank stating in Congressional testimony addressing Freddie and Fannie specifically and housing finance:
House Financial Services Committee hearing, Sept. 10, 2003:
Rep. Barney Frank (D., Mass.): I worry, frankly, that there’s a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .
Tension? Threat of safety and soundness? Financial losses? Fundamentally sound? Disaster scenarios? With a “watchdog” like Barney is there really any surprise how and why Freddie and Fannie were plundered by their own executives and the sub-prime lending industry? It is not a stretch in stating that Barney had the welcome mat out and held the door open.
I am not stating that Barney was directly complicit in the fraudulent sub-prime lending, but he certainly defines naivete and incompetence on this front. His Democratic sidekicks – Dodd, Schumer, and Waters -were complicit and also drinking from the same punch bowl.
What about Barney’s comment regarding oversight of Freddie and Fannie:
House Financial Services Committee hearing, Sept. 25, 2003:
Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .
Again in 2005, Barney continued to stand his ground on the housing front despite rampant signs at that point of irresponsible lending and incipient fraud:
Well now that Barney and our entire country have “crapped out” on his roll of the dice, Barney decides homeownership may not be the best thing for all concerned. In a height of pandering well beyond the Washington norm, Barney offers the following in this excerpt from an interview on the Tavis Smiley show on PBS on April 20, 2009:
Is there any doubt that the burgeoning wind power industry in our country should engage Barney as their spokesperson? In so doing, Barney’s hot air may actually become a source of revenue for our great country rather than such an enormous expense.
Barney’s hot air should come with a warning, though, “Don’t Be Downwind!!”
LD
Tags: Barney Frank, Chris Dodd, Chuck Schumer, Congressional testimony on homeownership, Fannie Mae, Freddie Mac, Maxine Waters, oversight of Freddie Mac and Fannie Mae, sub-prime lending
Posted in Barney Frank, General | 1 Comment »
Posted by Larry Doyle on April 21st, 2009 1:14 PM |
How does our economy and country move forward after having experienced rampant abuses throughout our financial industry? It is disheartening that we have not already seen an aggressive pursuit and prosecution of many involved in these financial improprieties. Bloomberg releases a story today indicating House Speaker Pelosi Wall Street Probe Modeled on Pecora After Wall Street Crash.
While a thorough investigation is critically important to improve the health and well being of our markets and economy, I would propose we employ an independent investigation. Why?
Our financial industry is intertwined with the regulatory and political oversight which is supposed to monitor it. If we employ a currently sitting legislative body to investigate Wall Street, can or will we receive a truly unbiased analysis? Do we recall Franklin Raines of Fannie Mae being questioned by members of Congress who had received significant campaign contributions from Fannie? The “investigation” of Freddie and Fannie was certainly more theatre than true investigation. Will we get the same with Ms. Pelosi’s probe? Bloomberg offers:
House Speaker Nancy Pelosi plans to push for a comprehensive inquiry, saying that three-quarters of Americans want to know what led to the bankruptcy of Lehman Brothers Holdings Inc. and the collapse of Bear Stearns Cos. and Merrill Lynch & Co. She favors one patterned after Senate Banking Committee hearings led by Ferdinand Pecora starting in 1933, according to her spokesman, Nadeam Elshami.
The Pecora review “was probably the single most important congressional investigation in the history of our country, except perhaps the Watergate hearings,” Donald Ritchie, associate historian for the U.S. Senate, said in an interview. (more…)
Tags: Auction Rate Securities, bankruptcy of Lehman, Barney Frank, campaign contributions by Wall Street, Center for Responsive Politics, Charles Geisst, Chris Dodd, Chuck Hagel, collapse of Bear Stearns, Donald Ritchie, Fannie Mae, FINRA, FINRA's investment portfolio, Franklin Raines, Freddie Mac, historian of U.S. Senate, independent investigation of Wall Street, Legalized Bribery, Leon Panetta, Mary Schapiro, Pecora investigation, SEC, SRO, Wall Street, Wall Street oversight, William Black
Posted in Banking Institutions, Barney Frank, Congress, FINRA, Franklin Raines, Freddie Mac, General, Government funds, Wall Street | 5 Comments »
Posted by Larry Doyle on March 25th, 2009 9:46 AM |
Like it or not, Goldman Sachs is widely considered to be the preeminent risk manager in the world. I would never blanketly endorse Goldman Sachs nor every one of their transactions or employees. Anything but. I am sure Goldman, like every institution in every industry, has some bad apples who will and have made some bad, if not outright illegal, moves. If so, the proper regulatory authorities should address, investigate, and if need be prosecute. I am here to write on a different topic. Goldman Sachs does not want Uncle Sam as a business partner. Whether Goldman wanted government money last Fall via the TARP (Troubled Asset Recovery Program) or not, the firm very clearly wants to return those funds soon.
Goldman Sachs is currently working with government officials to return $10 billion in TARP funds by late April. The firm will look to make this return after the U.S. Treasury completes its first round of bank stress tests. Other smaller banking institutions are looking to do the same. (more…)
Tags: Banking Institutions, Barack Obama, Barney Frank, Chris Dodd, Chuck Schumer, counterparty risk, Goldman Sachs, Harry Reid, Joe Biden, Nancy Pelosi, TARP, Warren Buffett
Posted in Banking Institutions, Christopher Dodd, Congress, Democratic Party, Obama Administration, Wall Street | 7 Comments »
Posted by Larry Doyle on March 19th, 2009 12:36 PM |
Senator Dodd did not exactly fall on the sword for the Obama administration as Bloomberg reports, Senator Chris Dodd Blames Obama Administration for Bonus Amendment.
The very legislators who rushed through the Stimulus Bill, which included provisions to prevent AIG-like bonuses, are now railing and pandering as never before. Who are these politicians? Nancy Pelosi, Harry Reid, Barney Frank, Chuck Schumer, and many more. Treasury Secretary Geithner Vows to Recoup AIG Bonuses as Lawmakers Express Fury. Geithner himself feigned ignorance of his knowledge of these AIG payouts.
What do we learn from this sort of political circus? (more…)
Tags: AIG, AIG bonuses, Barney Frank, Chris Dodd, Chuck Schumer, Citigroup, Harry Reid, IMF, JP Morgan, Nancy Pelosi, Northern Trust, Obama Administration, stimulus bill, Tim Geithner
Posted in AIG, Bailout, Barack Obama, Barney Frank, Christopher Dodd, Citigroup, Commerce, Congress, Economic Stimulus, Economy, JP Morgan, Nancy Pelosi, Obama Administration, Wall Street | 6 Comments »
Posted by Larry Doyle on March 16th, 2009 4:17 PM |
A loyal reader shared with me a recent posting from former Clinton Labor Secretary Robert Reich. Earlier today I cross posted a piece from No Quarter in which Reich was less than complimentary of Secretary Geithner. Well, let’s see what Mr. Reich has to say about President Obama’s economic program: Is Obamanomics Conservative or Revolutionary?
Prior to delving into my thoughts and commentary on Reich (or anybody), I always find it useful to consider the perspective of the writer. In regard to Mr. Reich, let us not forget that Robert Reich Excludes White Male Construction Workers from Obama Stimulus Plan. Utilizing that perspective, Mr. Reich would be considered to be more than slightly left of center. Additionally, in considering the Obama economic plans, I think it is critically important to incorporate the economic plans and agenda of the Democrats in Congress. These Congressional leaders have a major influence in this process. These Democrats, including David Obey (D-WI), Nancy Pelosi (D-CA), Harry Reid (D-NV), Barney Frank (D-MA), Chuck Schumer (D-NY), Chris Dodd (D-CT), and Steny Hoyer (D-MD) amongst others are major players in the stimulus, budget, and Omnibus bill that have come down from Congress. It is not totally clear where the lines are drawn between the White House and Congress on all the economic issues. That said, let’s see what Mr. Reich has to say and then critique his assessments of Obamanomics. (more…)
Tags: Barack Obama, Barney Frank, cap and trade, Chris Dodd, Chuck Schumer, David Obey, Democrats, Education, Harry Reid, Nancy Pelosi, Obamanomics, Reaganomics, regulatory structure, Robert reich, Steny Hoyer, taxes, Tim Geithner, universal health care, vouchers
Posted in American Consumers, Barack Obama, Christopher Dodd, Chuck Schumer, Commerce, Congress, Current Affairs, Democratic Party, Economic Stimulus, Economy, Education, Employment, Equity Markets, Nancy Pelosi, Obama Administration, Real Estate, Republicans, Risk | 4 Comments »
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