LETTER TO THE EDITOR:

They didn’t see problem, now offer solutions

Roy Grosser, Las Vegas

Saturday, Aug. 15, 2009 | 2:04 a.m.

Remember a few years back when Sean Hannity and Rush Limbaugh warned that subprime mortgages would lead to big trouble? Remember when Glenn Beck and Laura Ingraham blew the whistle on mortgage derivatives and default swaps, forecasting a worldwide monetary crisis?

If you remember all this, you better schedule a visit with your analyst. There were no such predictions. The chattering class totally slept through the run-up to the economic story of the half century.

What in the name of P.T. Barnum have they been up to?

Well, suppose a town council in a little burg in Somestate, USA, passed an ordinance that says you can’t smoke in your house if you live 10 feet from another house.

There would be a three-hour show!

Of course the next morning the town fathers in the little burg wake up sober and rescind the ordinance. No further mileage on this one, on to the next one ...

Our republic is about to dissolve. A pox is called down on the “nanny state.” (In talk radio even nanny-staters get to rail against the nanny state — it’s complicated.)

You gotta love the chatterati, though.

After ignoring the buildup to the biggest financial meltdown in two generations, they’re ready and willing to take on the solution to the crisis. They’re 100 percent sure about what to do and what not to do to get things back in order.

You gotta love ’em.

Discussion: 22 comments so far…

By Houstonjac

8/15/09 at 3:35 a.m.

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What a load of crap! Did you forget the two stooges of Congress--Frank and Dodd?.These two idots are going to walk the plank for all their deeds. Change is coming, and it's not Obama style!
By even_better_than_the_real_thin

8/15/09 at 4:37 a.m.

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Houstonjac, wasn't there 3 STOOGES? so you forgot one.
By twinsdad

8/15/09 at 6:13 a.m.

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Now that the polls, and the will of the American people, are against Obama and the Democrats, poor Roy is crying. He is trying to blame nonpoliticians because Bush is known longer there to be the scapegoat. These letters just help create a bigger audience for Rush and Fox news so thanks for helping the other side Roy!
By jlb101

8/15/09 at 6:53 a.m.

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Yes I do remember Rush saying several years ago that the subprime mortgage would lead to big problems. Maybe you just missed those shows Roy. Do you listen to the four talk shows each and every day and take notes? Maybe if you did you could write a letter that makes a little sense. Obama maybe should listen to them and heed some of the things they say. Then he might not be such a failure as a President.
By Future

8/15/09 at 7:26 a.m.

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Roy Grosser says "After ignoring the buildup to the biggest financial meltdown in two generations,"

Roy Grosser is showing how he has no clue as to what happened - but as imporant as that is to rehash the past the real question is why is Obama not doing anything now.

Well Roy should have known that this goes back to Jimmy Carter in 1977 or 32 years.

It is with distress and dismay that an estimated 10% of homeowners have been subsumed by the failure of the property appraisers, mortgage brokers, banking, credit rating agencies, insurance, and securitization system and lack of direct or indirect government intervention (including mortgage regulators and Fannie and Freddie) to help us out.

The Community Reinvestment Act of 1977 was enacted by a Democratic Congress and signed by Democrat Jimmy Carter, but it was in 1995 that the real regulatory pressure by ACORN began to build on America's banks to meet "regulatory quotas" for loan-making to unqualified buyers in low-income communities.

http://articles.latimes.com/1999/may/31/....

The SEC forced SunTrust Banks, in 1998, to restate financials with regard to holding more the one year's worth of reserve, effectively causing them to reduce reserves to a limit of one year. The central bankers in Basel in 1988, agreed to worldwide reserves standards, and updated them in Basel in 1999, with no positive result.

From the late 90s, multiple audits showed a need to fix Fannie and Freddie. In 2000, Rep. Richard Baker proposed Fannie Mae and Freddie Mac reform and it failed.

The Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, failed to pass. All the Democarts request to let it go to a vote.

The Federal Reserve head Alan Greenspan feed the housing market with cheap interest rates far too long after 9/11.

The housing crises materialized in early 2007 and the recession started in December 2007. Yet the Federal Reserve monetary policy was still tight worrying about inflation and not jobs and homes. (5.25% in August 2007 to 4.25 in December 2007).

The financial companies are morphing into holding banks with specific reserve requirements. Monies going in support "deleveraging" are also being held to build reserves and face the next wave(s) of credit failure on their opaque holdings, and buy other banks. Are secretive trading tools like dark pools of liquidity (or virtual trading arenas) still being used?

The July 2008, a housing rescue law (Foreclosure Prevention Act of 2008 - H.R.3221) is an abysmal failure used for 100 homes, because the Act is too complicated and too expensive for the everyday homeowner to take advantage.

The September 2008, $700 billion TARP provided banks with liquidity, but has not bought any toxic mortgages.

So I come back to the real question that Roy Grosser should have asked what is Obama going to do.
By SgtRock

8/15/09 at 7:41 a.m.

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1st, you can apply the logic to the liberal kool-aid left. They were not warning about sub-primes either.

In fact, the Democrats starting with Jimmy Carter and then even pushed harder by Bill Clinton and in conjuction with Democrat legislative leaders like Barney Frank, have been promoting sub-primes for decades.

They all wanted every person to get into a house, especially poor minorities.

Yes, we all were asleep at the switch. Republicans who knew better kept their mouth shut.
Republicans, like Bush, who wanted to have a "compassionate" legacy, joined in the march to push sub-primes, should have been stopped.

The letter is dumb.
By henderson

8/15/09 at 7:56 a.m.

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This letter writer should have done a little research before he wrote such a stupid letter.

The flap about this crisis began many years ago, starting with the legislation that gave birth to the subprime market.
By Rooster

8/15/09 at 7:58 a.m.

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What this country needs is a King! The 435 congressmen and 100 senators could be the court jesters. Bring back King George. Or even King Barack.
By mred

8/15/09 at 11:05 a.m.

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All during the Bush Administration there was not a peep out of the gaggle of right wing nuttalk talk show hosts mentioned about mortgages. In fact, when Bush took office he complained about home ownership being "too low" for minorities. What legislation was proposed by the Republicans about raining in the mortgage industry when they controlled the White-house, the Senate and the House?

Let's see, Glen Beck a self-acknowledged alcoholic and drop out who was a disc jockey.

Hannity, who used a campus radio station (paid for by tax dollars) at U C Santa Barbara, to make a name for himself in Radio, but dropped out a ran a house painting business.

Limbaugh, another "recovering one" and college drop-out, who took so many pain-killers after doctor shopping in Florida, that he wrecked his hearing. The cochlear implant he has was developed by US taxpayer dollars by a scientist at NASA and and a Australian scientist at a Australian taxpayer funded institution: the University of Melbourne. This three times married and divorced family values man is know for his "blue-pill" jet trips to places of ill-repute.

Ingram is another unmarried family values moralist, who is "close friends" with mANN Coulter and is upside down in her house as well. Some "Experts."
By WillieTanner

8/15/09 at 11:36 a.m.

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Glenn Beck needs medication and counseling and seems to have fallen off the wagon, (seems to have hit his head on something too). Hannity the super patriot who never served a day in service to his country, is the most divisive terrorist this country has, and Limbaugh, the convicted drug abuser is all hot air. I can't understand what attracts people to these seemingly unbalanced, weak individuals. Dick Morris, washed up commentator and frequenter of prostitutes. Oliver North, convicted of lying to congress and suspected of drug smuggling to fund the Contras. Coulter just lies and then laughs about it later when she's called on her lies. What a glowing group of leaders for the small minded & ditto brains.
Writing to their sponsors as I did seems to have helped as Beck is losing advertisers pretty quickly and hopefully he will use his off time for psychiatric care, if he doesn't lose his health insurance!
News services have been running clips of Beck ranting of how poor health care is in America after he had surgery in a major hospital and then disparaged the hospital for weeks. How funny and typical of this guy who can contradict himself within a matter of seconds and not realize he's doing so. Unbelievable that his employer doesn't regard his mental instability as dangerous to himself and the listeners that take him seriously.
By KillerB

8/15/09 at 11:40 a.m.

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Although no fan of these talk show buffoons, they stay on the air because they tell people what they want to hear.

I hope at least one of them is pounding on the "the man behind the curtain" principle.

For the current foreclosure frenzy the frontline defense is the most obvious, the most effective, the simplest and the most ignored -- demand the forecloser exhibit the note and prove itself to be the holder. If it fails either test then it cannot foreclose, period! This is centuries-old law, you don't have to be an attorney to use it -- and it is a fact attorneys are part of the problem, not the solution.
By just_an_average_joe

8/15/09 at 12:52 p.m.

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mred,

so you're going to criticize people for dropping out of college, even though they worked hard and were still successful?

u say Hannity dropped out to run a house-painting business. sounds like good hard honest work to me. and it's a lot more than Obama the "community organizer" has ever accomplished. BHO hasn't even run a hot dog stand in his life. never been in charge of meeting a payroll and paying the bills on a business. and yet he sees small business owners in this country as a giant ATM to finance his social equality and redistribution dreams.

while your attacking those who dropped out of college, u should include Bill Gates. He dropped out of Harvard I believe. so he could work on starting a business u might have heard of. and along with becoming at one point the richest man in the world, he has also become the most generous philanthropist in the history of our great nation.

get a clue.
By jlb101

8/15/09 at 2:53 p.m.

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The postings today sound mostly like a bunch of jealous louser poking fun at successful people who are better than they are.
By Bigsky007

8/15/09 at 4 p.m.

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If medical costs continue to spiral out of reach of Folks, soon, most will not be able to afford either insurance or medical care. (The GOP and their supporters represent the anti-Christ in this matter, I suggest. The bible tells us that the devil is good at disguising himself as a beacon of light, right? That's exactly what we are witnessing today, but it started when they killed Clinton's efforts to do something in 1993. In the sixteen years following, they didn't do squat, except laugh diabolically. The uninsured, high infancy death rate and below average (compared to Canada) life expectancy be damned, as far as they are concerned.) Anyway, consequently, there will be desperate hoards of Americans seeking care primarily in countries to the south of the US. I predict that the amount of money Americans will spend/lose will make the cost of reforms seem like a fire sale.

Prescription drugs smuggling will become the next major problem, as Americans find themselves risking their lives to save their lives. As a direct result of this "do nothing since 1993", I see thousands of Americans being subjected to kidnappings, assaults, extortion, black mail with many disappearing abroad never to be seen again and criminal prosecutions at home. For the latter, the GOP will find a abundance of funds to build prisons (you will be able to count the "no" votes on one finger) to house the new GOP generated convicts.

Note, that in all the huffing and puffing, the fifty million uninsured are being virtually ignored; the unmitigated glaring inability of the touted free market/private sector/capitalism to effectively address the situation is totally ignored and the responsible CEOs, who can see nor plan no further than the reach of their closed golden parachutes is also ignored. The beat up on the government, the MEDICARE program of which has saved untold thousands of lives from being dumped in death (by the touted private sector/free market/capitalism) on the side walks of this country. People are appealing for relief from the non-performing private "your insurance has been cancelled" sector.

The GOP is telling us to shoot ourselves in the foot (again) and we are obligingly doing just that!! The fake medics, pill sellers, kidnappers, rapists and extortionists, who are waiting must be pleased.
By WillieTanner

8/15/09 at 6:46 p.m.

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jib101: "The postings today sound mostly like a bunch of jealous louser poking fun at successful people who are better than they are".
Successful whackos is what they are. They're successful because there's enough nut jobs stupid enough to watch or listen to them and financially reward them. The nations population is over 300 million. Just because Limbaugh on a good day gets 20 million blind "dittoheads" and KKK members to listen to his racist diatribes, doesn't mean he's influencing the masses. The mid-term election results will show the republicans who are still standing that they don't have to apologize to the fat man.
What's a louser anyway?
Glen Beck - Lobotomy or Electro-shock therapy? Vote Now! Get results here.
By getalife

8/15/09 at 7:23 p.m.

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Willie, where were all the liberals talk show hosts during this time????

Why weren't they shouting from the rooftops??

Oh, because there aren't any. I personally don't listen to Limbaugh, yet I find it interesting that you denigrate his numbers. You do realize in our pop culture world those numbers are huge.

You can trivialize this all you want, but you had better learn to deal with it, because the way things are going with your man Obama; Rush's market share is about to grow geometrically.

Homer, this is for you; was my hate speech dialed down enough for you. Did I type slow enough for a simpleton like yourself to be able to follow?

Freedom of speech baby. Speech is only free when the Libs use it. Conservatives pay a price for commenting.
By henderson

8/15/09 at 8:07 p.m.

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getalife,

Don't forget about Air America. Oh, wait, I think they went bankrupt. They might still broadcast somewhere. It is interesting and ironic that the libs can't keep a radio network in business.
By jlb101

8/15/09 at 8:22 p.m.

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Willie Tanner=You are a loser. You can't take care of yourself you need people better than you to bail you out via Obamacare . You depend on the government. Rush makes $38 million a year, he has a mansion on the beach in Florida, he has a Gulfstream to take him to his golf tournaments, he is a self made man. Rush worked his butt off in many low paid radio jobs because he loves what he does. He is ten times the man you are, you can't even provide health insurance for your family. You should seek out Obama end of life counseling. If you want to know what a louser is look in the mirror.
By WillieTanner

8/15/09 at 9:04 p.m.

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Yes, Rush is quite the man and what a role model for you. A fat, hypocritical, drug abusing racist. Does the fact that I have no felony convictions make me a louser?
It's terrible that I can't even provide for my family and Rush can take care of three wives. What a man! What an inspiration! Where have I failed? I'm a louser.
By odeman

8/16/09 at 12:14 a.m.

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The cause of the financial meltdown was not subprime mortgages. They were the first domino to fall. It was Wall Street that supplied the cash for the subprime junk. They packaged this junk into CDO's and sold it to suckers around the world. Fannie and Freddie were bit players as they were late to the party. Many of the banks did not do subprime so to say the government forced them too is not true. Many of the big banks now in trouble got that way from buying other banks that were heavy into subprime. CNBC did an excellent documentary on the this called "House of Cards".

There are all kinds of Wall Street engineered products like auction rate securities, interest rate swaps, collateralized debt obligations, and the ultimate killer, credit default swaps. Default swaps were "insurance" against debt going bad. Wall Street was so confident they would never have to pay out on these swaps they sold to anybody and everybody whether they held the debt or not. For example, GE has a few billion dollars of debt that "investors" took out $78 billion of "insurance" on. AIG is in trouble because they did a huge business in default swaps. There were quite a few hedge funds that made billions on those swaps while not owning any of the debt. Many of those same hedge funds call press conferences or spread rumors hoping the market will crash the debt so they can score a big payday.

George Bush and crew relaxed a lot of regulations on Wall Street, plus they allowed them to borrow at 40 to 1 leverage. When things went south that leverage allowed everything to hit the fan in record speed.
By cactusdan

8/16/09 at 7:36 a.m.

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This isn't an American problem, it's a global fiscal situation that has it's roots in every financial institution in the world, except for the pawn brokers downtown.We have been Fueling the dragon. Correct me if I am wrong, but didn't this start with Northern Rock, in England? That shook up some folk, then the Bank of England had to bail them out with pounds. Banks failed, cause the system ballooned,cause the loans were too loose, like my last girlfriend. The siva loans, then the viva loans. Then came the nina loans which were just like my last wife. no income no assets, just need a credit score, then came the bubble, banks tightened their screws, no more siva (stated income, verified assets)
By Gordon

8/16/09 at 5:15 p.m.

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For those seeking the truth on what caused the housing bubble watch Bush outline the plans on 5/17/2002 here: http://www.youtube.com/watch?v=kNqQx7sjo...

Then take a look at the graph here showing the spike in subprime and defaults: http://bigpicture.typepad.com/.shared/im...

Future your arguments are getting more and more incoherent.