DUers need help refuting, did Sarbannes-Oxley cause this crisis?

dittohead's response to my comment linking Gramm's 1999 bill


Oh for heavens sakes..the FSMA of 1999 which repealed Glass-Seagall act was a very good thing for the banking industry and consumers. Only a couple Leftest economic professors have written opinions accusing the subprime mess on this because Republicans crafted this bill.
Nice try but it had/has nothing to do with the economic history leading up to this bailout!
Many of the chief culprits of this fiasco are standing together at microphones lecturing us about how they are working overtime to help America..LOL
Frankin Raines was a thief pure and simple...he accepted a plea bargain last week. Barney frank..Chris Dodd....Chuck Schumer...and lots of others ALL DEMOCRATS pushed this whole mess all the way back from the 1990's when Cuomo changed the lending rules of these 2 institutions and forced banks to offers these loans in order to get favors such as consolidation and such.
Since Bush took office he and republicans tried several times to address this issue. The Wall Street Joutnal warned about it almost weekly for America. In 2005...The republicans crafted a bill that would have prevented this but your DEMOCRATS blocked it!
The Sarbanes-Oxley bill another Democratic law did help lead to this mess.
These Democrats should be the ones sitting there answering questions and then removed from office.

Had there not been the controls imposed upon corporate America via SOX, it would have already all come crumbling down.

on this MSM newspaper aite in SW Ohio.

If you needed to prove it in 1000 characters or less.

I started googling but I am only getting freeper tpe links

Republican.

But his district was just north of Boehner's.

could walk to grocery store and ride a bike to work as long as I could get a pull up Ravine St.

Big Butter Jesus
Trader's World
Flagship Hustler Store
Ikea

and my only serious one:

Jungle Jim's

Market & Mediterranean Imports both who carry ethic food lines outside of their store names, with fresh produce, meats, chesses & fish.

Saigon Market even has Jamaican and African

2002 was a nightmare year. People weren't certain of companies' books. In that environment, credit was freezing up and the markets plunged. Foreign investors nearly lost all confidence in our markets. Sarbanes-Oxley helped recover that.

the average Joe would think that your talking about some boxing match

this is not the first time a new user name appears suddeny, who is smarter tan he average freeper and tey ither spin or divert.

I beleive they are using RSS feeds to monitor MSM sites in swingstates.

is make it harder to run a data-center :rofl:

cara242 wrote:
"In true liberal fashion, the lefties believe that this stuff happened practically overnight. A little education in economics would benefit them"

Actually cara242 it is a history education, the GOP majority Senate in 1999 passed Phil Gramm's Financial Services Modernization Act on a party line vote dismantling regulations that had been in place since 1933, the Glass-Seagall Act.

Deregulation, John McCain was for it (he voted Yea on his buddy Gramm's bill) before he was against it just last week.

He also wants to deregulate health care and he wants to tax the value of your employer sponsored health care.


my other login earlier in the thread wrote this

citizenSmith wrote:
Though dittoheads like to spread erroneous info, it was McCain's economic advisor Phil Gramm and the Senate Republicans whose deregulation ideology led to the current liquidity & credit crisis.

No one made mortgage lenders write subprime loans to real estate investors in CA, FL, NV & AZ. Though dittoheads have been told it was all poor people's fault, the foreclosures in the 4 states with the highest rate are overwhelmingly not owner occupied units.

Morgage lenders wrote subprime loans for higher profits. They did it for greed.

Fact: In 1999, McCain supported Phil Gramm’s Financial Services Modernization Bill also called the Gramm-Leach-Bliley Act.

In 1999, McCain voted for passage of the Senate version of a bill that would eliminate current barriers erected by the 1933 Glass-Steagall Act and other laws that impede affiliations between banking, securities, insurance and other firms.

The bill S. 900 passed on a partisan (R) basis 54-44

McCain (R-AZ), Yea
McConnell (R-KY), Yea
Voinovich (R-OH), Yea
DeWine (R-OH), Yea
McConnell (R-KY), Yea
Bunning (R-KY), Yea

Here is the complete roll call.

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=106&session=1&vote=00105

And it is McCain's campaign manager Rick Davis who was paid $2 million over five years as president of an advocacy group set up by Fannie Mae and Freddie Mac, and Freddie Mac paid Davis's lobbying firm $15,000 a month up until last month. The firm was kept on the payroll because of Davis's close ties to McCain.

I say some, because I do taxes, so I have not had the exposure that by audit brethren have had. That said, I agree with an earlier poster the internal controls have been great and are exactly what was needed. The area that people are bringing up now is the requirement to "mark to market" investments held. Historically, financial statements have been kept on a historical basis. This means that an asset is kept on the balance at the price you paid for it and any gains/losses since then are only recognized when realized (i.e. sold). SARBOX required the companies to adjust the value of investments to market value on the close date of their financials. Many people don't like recording it at the market value on one given date, as the market is subject to short term swings. My understanding is that what we are seeing here is these companies are forced to mark their holdings down to what they are currently valued at. This, then decreases their net assets, which decreases what they are able to borrow and lend out. The argument is that these are long term assets which will rebound in value.

Thus, I can see how this has the potential to make the problem worse. However, I have a hard time believing it is the CAUSE of the problem.

The requirement to mark to market probably does cause some pain, but it mostly exposes likely causes of pain. If the assets were really 'long term' assets traded only in 'long term' markets then marking them to market would be far less likley to cause a problem. When long term assets value starts to be driven by short term market fluctuations that I think it's legitimate to start questioning the status of the asset. Mark to market helps make that question more pressing.

& by that I mean attacking & refuting is important because I am in SW Ohio.

Oh but Elias55, SOX passed in 2002 when all 3 branche were in Republican control. It was signed into law in 2002.

Surely you haven't conveniently forgotten Enron, Tyco, Adelphia & WorldCom?

It passed the Senate 99-0

So blaming democrats, funny how truthiness often turns out to not be truthful.

The Sarbanes-Oxley Act, widely known as SOX, was signed into law on July 30th 2002 by George Bush, who called its tough new rules the “most far-reaching reforms of American business practices since Franklin Roosevelt was president”. The hope was to restore public confidence in American business, which had been badly shaken by huge corporate scandals, such as those which led to the bankruptcies of Enron and WorldCom.

The act created a new regulator for the accounting industry: the Public Company Accounting Oversight Board. To address some obvious conflicts of interest, auditors were prohibited from doing a variety of non-audit work for clients. Firms had to establish independent audit committees, company loans to executives were banned, top executives had to certify accounts and whistleblowers were given more job protection if they reported any suspicions of fraud.

http://www.economist.com/displaystory.cfm?story_id=9545905

Glass-Steagall or its repeal via the FSMA were. Those acts actually controlled what banks and financial institutions can do. Sarbanes-Oxley (SOX) establishes rules on how the information about businesses (including banks) must be handled, stored, safeguarded, reported, etc., but to the best of my knowledge it doens't regulate the kind of business that can be done. It's requirements may de facto prevent certain types of transactions, but only because no one wants to have to provide SOX-compliant reporting on certain questionable kinds of business.

You might ask the 'experts' whether we would be facing the current problem if Glass-Steagall were still in effect (Hint: the answer is NO). They'll probably weep about all the wealth that wouldn't have been created in the last decade were that the case. If so, ask them just how much of that wealth remains today, and where the remaining wealth resides.

If you copied and pasted the text you might also ask them how to spell the name of the act; it's the Glass-Steagall Act.