The Mortgage Crisis | 100 Years in the Making
The founding fathers of the United States wanted to create a financial system that would not allow private interests to impact national policy. Whether our current financial system represents that which the patriots of this
nation had in mind when creating the initial banking system, or whether it represents exactly what they feared is up to you. Welcome to 100 years of Banking & "The Mortgage Crisis".
Legend: National debt; Time; Event; Uptick Rule; Banking panic; Bailouts; Alan Greenspan.
- 1900 - $0.00.
- 1907. Banking panic - J. P. Morgan lends money to shore up banking system wealthy investors leverage the fact that banks never hold enough money and pull their money out at once.
- 1911. Senator Nelson Aldrich "Falls in love with taxes". Aldrich develops relationships with J.P.. Morgan, daughter marries son of Rockefeller. Writes initial draft of Federal Reserve Act.
- 1913. Federal Reserve Act: Creation of the Federal Reserve: "The Fed". Public outcry and fear from 1907 supports the creation of the federal serve - a private institution funded by private investors & investment banks
which lends to the government when in deficit.
- 1916. President Woodrow Wilson - "I am a most unhappy man; unwittingly I have ruined my country...". After signing into Creation the Federal Reserve via the Federal Reserve Act.
- 1929. Great Depression - Run on bank of New York & Stock Market Cause Crash. John D. Rockefeller "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone.
Prosperity always returned and will again".
- 1933. Glass-Steagall Act. The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control
- 1938. SEC Adopts Uptick rule - Protects against run on banks/public companies implemented by Joseph Kennedy, Sr. Prevents investors from pooling capital and purposefully driving down the stock price of a company.
- 1951. Treasury Department Give Fed Full Independence - "The Accord". Federal Reserve gains full independence from government oversight.
- 1987. "Black Monday". President Reagan Nominates Alan Greenspan to Chair Federal Reserve - "Black Monday". Greenspan served during the 1987 stock market crash "Black Monday": "Nice to meet you
President Reagan. I represent the wealthiest people in the world, and the investment banks".
- 1992. $6.17 trillion. Graham-Leach Bliley. Repealed part of the Glass-Steagall Act of 1933. Allowed combing oof insurance and securities companies - read: AIG, placed holding companies of big American brokerages
beyond SEC oversight.
- 1992. president clinton Reappoints Alan Greenspan to Chairman of federal Reserve. Greenspan served as a core member of Clinton's economic team.
- 1997-1998. Asian Financial Crisis. The Federal Reserve floods the global market with US dollars. Economists Stiglitz & Sachs compare the crash to a "classic bank run" prompted by a sudden risk shock.
- 2002. Fed cuts Rate to All Time Low - Greenspan says "be risky" - buy mortgages not treasuries. Fed Chairman Greenspan advisor for Deutsche Bank & J.P. Morgan. Holds positions on Council of Foreign
& Group of 30.
- 2003. Timothy Geithner - Appointed President of the Federal Reserve Bank of New York. Extensive resume: Treasury; Federal Reserve; Council Foreign Relations; International Monetary Fund; Federal Open
Market Committee; Group of 30.
- 2004. Goldman Sachs, Paulson, urge SEC to loosen up regulations. Releases the major investment houses for the net capital rule, the requirement that their brokerages hold reserve capital that limited their language and
- 2004. President Bush Reappoints Alan Greenspan to Chairman of Federal Reserve. In an unprecedented fifth consecutive term, Greenspan served as Fed Chairman from 1987 to 2007.
- 2005. SEC considers removal of uptick rule, experts concerned about "Blind shorts". SEC Chairman Bill Donaldson 2003-2005. Special adviser onto Nelson Rockefeller, Chairman and CEO of the New York Stock
- 2006. Paulson leaves Goldman. Appointed Secretary of Treasury. Paulson was nominated on May 30, 2006, by US President George W. Bush to success John Snow as the Treasury Secretary.
- 2005-2008. A "psychologic improbability". A Big Fat Failure. Subprime Lending. Congress, Fed, SEC, IMF fail to protect consumers and identity concerns expressed by experts.
- 2007. SEC removes uptick rule - stock market vulnerable.
- 2007. Bank/Finance panics - "Blind Shorts" create stock market panic. AIG, Bear Sterns, Lehman Brothers, Freddie Mac, Fannie May tumble as investors coordinate stock shorts.
- 2008. November - Taxpayer bailout and "Maiden Lane III" pay investment banks $60b on AIG bailout. Goldman, Deutsche Bank, J.P.. Morgan get full investment back, taxpayers own a dead AIG/ Investment banks
paid 100 cents on the dollar.
- TARP - Geithner negotiates $800b bailout of banks/AIG - taxpayers receive preferred stock to secure investment. 2008 Commerce Secretary Judd Gregg says great investment for taxpayers - return of 8% and secure.
- January 2009. Geithner appointed by Obama as Secretary of the Treasury. Former Fed Chairman hired by President to run the Treasury or National Bank.
- February 2009. Judd Gregg nominated as Secretary of Commerce. Judd Gregg withdraws nomination for Commerce Secretary - "irreconcilable differences" with Administration.
- February 2009. AIG Bailout - Press Leak, Media Blitz, Outrage and Populist Backlash. Despite billions of dollars in unnecessary bailouts to investment banks, media coverage explodes around $120m executive
- March 2009. Federal Reserve & Treasury Joint Statement - Fed wants Treasury's Safe investments - Gives Treasury Ricky investments. Fed suggests moving Maiden Lane III to Treasury balance sheet.
- May 6th, 2009. Bank Stress Tests indicate Bank of America needs $34b. Government says BofA needs more "equity".
- May 6th, 2009. $11 trillion. MSNBS/NY Times suggest Taxpayer's Should Take the Rick. Joe Kernan of Squawk Box and the NY Times suggest the BofA and the government can convert taxpayer preferred shares for
riskier common share.
- April 8. SEC Considers Reinstatement of Uptick Rule.