House Passes Financial Takeover Bill

Just yesterday the House passed a financial reform bill in order to keep "too big to fail" corporations from wrecking the US economy. This mammoth 1200+ page bill was no different from any other our fearless leaders have passed in the last year. In other words, yes, a warehouse dolly was necessary to transport the bill into the house floor; yes, a propane fueled forklift was necessary to hoist it up to the table; yes, the House members were in the gym the night before lifting weights (the bill tied to the barbel was used in place of weights); and most importantly, NO, NOBODY THAT VOTED FOR THIS BILL HAS READ IT. It's unclear whether the phrase "too big to fail" is in reference to the companies posing systemic risk or simply referring to bill itself. (Joe, if you haven't read it, sign it, and if it's too large, pass it.)

Anyway, this bill still needs to clear the Senate, so don't be surprised if you see DC Senator's coming to a Gold's Gym near you very soon. Especially Harry Reid. Anyway, this bill gives the government unprecedented authority to simply break up any corporation, anytime, anywhere, anyway they want to if they feel it poses "systemic risk" to the economy. Is that confusing to anyone else? Worst of all, it doesn't even need to be a financial company. Any company period. (Joe government over-reach) So who decides whether a company poses systemic risk? They do. Most likely House Financial Services Committee chairman Barney Frank (D-MA) and Senate Banking Committee chairman Christopher Dodd (D-CN) will have a large say in this process as heads of financial regulatory committees, along with the Obama Administration.

Alrighty then, what you don't know is that these two Congressmen actually played a very large part in blowing up the sub-prime bubble in real estate which caused this very depression, or recession, or whatever we're calling it now. There will be much more on this on my next post when I publish a book review on one of the most fascinating books I've ever read. "Architects of Ruin", by Peter Schweizer. Simply an amazingly informative book. Barney Frank blocked several attempts by the Bush Administration to reign in Fannie Mae and accused Bush and several Senators from both parties of "not caring about affordable housing". Fannie Mae and Freddie Mac are quasi-government agencies that were hijacked by the liberal agenda of offering loans to anybody that wanted one.

Here's how they work:

1. Mortgage Lender or Bank originates a loan with a home buyer.
2. Mortgage Lender/Bank sells loan to Freddie/Fannie to free up cash to originate more loans.
3. Freddie/Fannie, then package loans and sell to investment/hedge/pension funds or banks or slice up the loans into derivatives and sell the pieces.

Fannie and Freddie created explicit goals to buy trillions of dollars of sub-prime loans (loans to people who wouldn't have otherwise qualified for a loan) from mortgage brokers and banks. Most of the time these sub prime loans required very little or even no money down, and were even offered to many jobless earning unemployment benefits! Lenders didn't care. They simply immediately sold the loans to Fannie and Freddie, looked the other way, and tucked the commission firmly in pocket. Anyway, Barney Frank covered Mae's Fanny and was defender #1 for this agenda-driven organization. Christopher Dodd was simply bought out by various groups represented by Fannie and Freddie (see attached Coutrywide Scandal) and refused to regulate these government agencies. Bottom line, Peter Schweizer argues that it wasn't runaway capitalism that took the economy down to the canvas, but rather runaway government with an agenda.

So what does this mean for Joe? Barney Frank and Christopher Dodd were supposed to be monitoring financial institutions already.......but they weren't.....so we're giving them more power and oversight.....??? (Joe Einstein, "the definition of insanity is to do the same thing over and over again and expect a different outcome") We'll see what happens, but Joe is skeptical. Speaking of skeptical, JoAnn is nervous because she believes Joe might be ring shopping. (She also caught him talking to his friend Joe Weller the other day.) If it doesn't stop soon, she's going to have to financially regulate him.