We have written that the Act is vague in many respects. However, some of it is specific and some of it is good. For example, it puts an end to “Liars Loans” also called NINJA loans because you could get a mortgage with No Income, No Job and No Assets. Also good is the provision known as the Volcker Rule that puts limits on how far a bank can go in trading in derivatives and swaps for their own account, i.e, how much risk they may take in search of trading profits.

Anyone who listens to the excellent Howard Clark show knows there is need for reform in the credit card industry. We have no details, but the Act purports to bring needed reform here. Sounds good.

What the Act fails to do, and fails completely, is to fulfill its stated purpose. That is to take measures to prevent a recurrence of the financial collapse from which we are all still suffering. Can anyone deny the primary cause was too many sub-prime loans? Fannie Mae, Freddie Mac, Barney Frank, Franklin Raines, Andrew Cuomo and Jamie Garelick were the major players in designing, building, promoting and protecting the house of cards whose inevitable collapse created the crisis. It would be naïve to expect Barney Frank to censure Barney Frank but not to reform Fannie and Freddie is an unmitigated disgrace.

Space here does not allow a complete analysis of the causes and contributors to the crisis and the recession. Fortunately, some excellent, well written articles on the subject were published at Town Hall a year and a half ago. I urge you to click the blue links and read them.

Mortgage Mess Blame Game.

The Day the Democrats Brought Down the World

Pelosi’s Gall

(Confession: I wrote them)

Bob B

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