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Originally Posted by Jet Gorgon  The govt should have been regulating the mortgage lending biz more closely |
You're in favour of government regulations and bailouts/handouts using tax-payer money when it involves rich bankers but
not ordinary people losing their homes, right?
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Originally Posted by Jet Gorgon Took it a few years to pass the Glass-Steagall Act after the big crash back then |
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Clinton signed into law legislation that repealed Glass-Steagall in 1999. The repeal allowed the rise of universal mega-banks such as Citigroup and Bank of America. These institutions combine commercial banking, investment banking, merchant banking and even insurance under single holding companies, which further concentrates and centralizes finance capital.
This historical process continues on a global scale in the 21st century. The Federal Reserve-arranged takeover of the fifth-largest investment bank, Bear Stearns, by rival JP Morgan Chase is only the most recent example.
Both are international banking giants. JP Morgan Chase represents the merger of the old Morgan and Rockefeller financial groups. Bear Stearns was founded in 1923 and for many years was headed by Salim L. Lewis, who was included by the leading U.S. business magazine Business Week in its "Vulture Hall of Fame" in 2001.
In recent years, the company became one of the biggest players in the mortgage securities business on Wall Street. After more than 80 straight years of profitable operation, that move turned out to be its undoing with the onset of the mortgage crisis.
But before its demise, Bear Stearns paid out billions in bonuses to its employees, with the lion’s share going to its top executives. According to a Bloomberg financial website article, bonuses paid out by the top five brokerage firms in 2006 alone were estimated at $36 billion, a 30 percent jump from the previous year’s record. Bonuses paid out by Bear Stearns for 2006 were estimated to total $2.6 billion.
"Never in the history of Wall Street have so many earned so much in so little time," wrote Christine Harper for Bloomberg.com in 2006.
Bloomberg.com: Opinion |