Just got home from an interesting visit with my Republican financial adviser

I sat listening patiently as he tried to explain to me how the current financial collapse happened.

First off he said this is caused by Clinton's economic policies. I just kept listening. Then he got to the part how the reason the economy was so good under Clinton was because Reagan's financial policies were kicking in during his term.


Then he got to how the blacks were at fault for getting all these loans they couldn't pay.

Thats when I stopped him.

I asked him how many of those black people were involved in drafting their own loan agreements?

He thought about it for a second and said none.

So I asked how many of those agreements were written by trained and well schooled lenders?

He caught on and quickly said all of them.

I asked if that meant anything to him?

He meekly said yes as he realized he just made a big asshole out of himself in front of me.

I could see he knew at this point he was skating on thin ice and about to lose a client.

So I asked him if he could tell me exactly what did cause this problem and who were the culprits?

He admitted that yes Bush and the Republicans have caused this and went on to explain the details of how they did it.

Here is how they did it:

http://www.nysun.com/business/ex-sec-official-blames-agency-for-blow-up/86130/

Ex-SEC Official Blames Agency for Blow-Up of Broker-Dealers

'They constructed a mechanism that simply didn't work'

By JULIE SATOW, Staff Reporter of the Sun | September 18, 2008

The Securities and Exchange Commission can blame itself for the current crisis. That is the allegation being made by a former SEC official, Lee Pickard, who says a rule change in 2004 led to the failure of Lehman Brothers, Bear Stearns, and Merrill Lynch.

The SEC allowed five firms — the three that have collapsed plus Goldman Sachs and Morgan Stanley — to more than double the leverage they were allowed to keep on their balance sheets and remove discounts that had been applied to the assets they had been required to keep to protect them from defaults.

Making matters worse, according to Mr. Pickard, who helped write the original rule in 1975 as director of the SEC's trading and markets division, is a move by the SEC this month to further erode the restraints on surviving broker-dealers by withdrawing requirements that they maintain a certain level of rating from the ratings agencies.

"They constructed a mechanism that simply didn't work," Mr. Pickard said. "The proof is in the pudding — three of the five broker-dealers have blown up." snip

This alternative approach, which all five broker-dealers that qualified — Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley — voluntarily joined, altered the way the SEC measured their capital. Using computerized models, the SEC, under its new Consolidated Supervised Entities program, allowed the broker dealers to increase their debt-to-net-capital ratios, sometimes, as in the case of Merrill Lynch, to as high as 40-to-1. It also removed the method for applying haircuts, relying instead on another math-based model for calculating risk that led to a much smaller discount.



So there you have it. Right from the horses mouth.

Don

With all your finances? I would be looking for someone else.

:hi:

I agree wholeheartedly. The man as much as admitted that the first half of the conversation was nothing but lies.

Like, whether he himself was on the up-and-up with his other clients?

I agree- the OP should be taking their business elsewhere, pronto. If he lied during the conversation about how it all happened, how is the OP to know that he himself didn't have a hand in it, be his actions ever so small and innocuous?

He can not and should not be trusted with your money. Just the fact that he feels free to spew racist crap in front of a client repulses me.

I would not even think twice about it.

Drop this asshole -- he doesn't deserve your business.

All of them were inspired by greed and more greed. And I would bet that those that were involved in creating them are still very, very, very rich...and am sure that among those were members of the government....

and this is yet another reason why this "bailout" should not be passed.

I have to admit I'm a sucker for a happy ending!

sounds just like him. Glad you called him on it and that he finally fessed up.

No real value.
No real assets.
There is not enought money on the planet to buy out the mess.

n/t

to hear?

blame the people that didn't cause the problem, have no control over the cause, suffer the most because of the problem, but since they're the wrong demographic group, the GOP blames them for everything that goes wrong.

You should have fired your advisor on the spot. He's both a racist and a liar. :grr:

Every bad thing that happens to this country is Clinton's fault. :silly:

That's not good.

fuck him, pull everything and find a decent advisor. That bullshit cannot stand, no matter what business you're in.

Help! I'm not sure what this means?

"It also removed the method for applying haircuts, relying instead on another math-based model for calculating risk that led to a much smaller discount."

Thanks

Before 2004 for every dollar in deposits a bank held it could lend 12 dollars which is a 12 to 1 ratio.

In 2004 these big investment banks were allowed to begin using a 40 to 1 ratio which meant the bank could lend 40 dollars for every dollars worth of deposits.

That was the killer.

Don

I'm still trying to understand this mess!

I'm white and I know for a fact there are, in actual numbers, many more poor white families total than black families. :mad:

Completely dismantled a thoughtless talking point. Journalism students take note: That's how it can be done. You don't have to argue, you don't have to go through some long, convoluted questioning process. It's as simple as "Who wrote the loans, and were they presumably trained and qualified to do so?" Game over.

thanks for that.

Sid

Investments are generally locked in for a finite number of years. It can be three years. five years. Some of mine are 10 years.

The taxes and penalties I would have to pay for early withdrawal are excessive.

I will be searching for another adviser to take these investments over from him as soon as it becomes feasible.

Don

another person within the same organization. Say you can't work with him.

And if buying mutual funds with back end loads, get a different class of funds so you can sell out whenever you want.

Undoubtedly, many of his clients are vile Republics who would hate to admit that the current financial mess is all their party's fault. Sounds like your adviser was pleasantly surprised to find out you were not a blind and brainwashed free-marketeer.

What would make me uncomfortable is that, in the end, he did tell you what you wanted to hear. I want advisers who tell me the truth, whether I want to hear it or not.

Very interesting. Thanks for posting.

-Laelth

Minorites are to blame for the current housing crisis because of the CRA.

The GOV forced them to give out loans to people who were too risky, even though no one has shown what percentage of loans the CRA gave to minorities that went bad.

Also, gov intervention is the cause of this, if we had a TRUE free market, this would have never happened.

Conservatives will blame anyone but themselves for this.

to a greater extent than whites. Even if someone is blaming this mess on "dumb decisions by homeowners" then they can't blame minorities.

If African Americans make up 10% of our population then you might expect them to hold 10% of the toxic mortgages - but the truth is that they hold far fewer - only 3%.

My source: Thom Hartmann program. I don't have anything more specific. The next time a rightwinger says that minorities are the problem, ask them how many of the toxic mortgages were held by minorities.