Barney Frank Returns!

Chris critiques the Dodd-Frank Act and the repeal of Glass-Steagall, arguing that both have contributed to the financial crises and the consolidation of power within Wall Street. He discusses the historical context of these regulations, the role of government in forcing banks to make risky loans, and the implications of these policies on the economy. www.watchdogonwallstreet.com

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader. Chris Markowski, Yes,
Barney Frank returns.

Speaker 2 (00:19):
Yes, Bonnie Flink sounded like Sylvester de Kat remember him
stop for in fuck path? Yeah, Bonnie Flink. He and
Chris Dodd, if you do, remember they put forth this
legislation was called the Dodd Frank Act.

Speaker 1 (00:33):
Oh.

Speaker 2 (00:33):
Yes, our fearless leaders in Washington, DC swooped in after
the financial crisis to save us. All. Yeah, that's like
the arsonists being the firefighters too, right. So they took
to the pages of the Wall Street Journal to defend

(00:55):
their CFPB, that Consumer Financial Protection Bureau, which is completely
unconstitutional anyway. They said that Trump harms consumers by weakening
the CFPB, and it's the usual clap trap, all the
wonderful things that these regulators are going to do. But

(01:16):
what got me? What got me besides you know again
the joke that is Dodd Frank. But they're not the
only ones. Sarbines Oxley. Another couple thousand pages of legislation
after the dot com collapse. Did nothing, did nothing. They've
just made matters worse the people in Washington when it
comes to the financial world, since they repeel Glass Stegel.

(01:37):
But we'll get to that in a bit. They end
their column. Had the CFP existed in nineteen ninety four
with a mandate to curb the growth of imprudently granted
mortgages as part of its core mission, instead of that
job being assigned to the FED, on whose list of
priorities it barely registered, our financial history would look a
lot less gloomy. You guys got a lot of freaking nerve.

(02:01):
I mean, these people, they don't care what they say
the bullshit. Nineteen ninety four, Bill Clinton was president. In
charge of housing and urban development was a guy who

(02:21):
might have heard of him. His name was Andrew Cuomo.
They pushed for all of these funky ass, crazy no
money down adjustable rate mortgages that all started under Clinton,
because we've got to get people into homes. We got

(02:42):
to make sure we've got to get everyone into a house.
Make it easier. Why huh, You're going to get people
into homes that they can afford? What could possibly go wrong. Again.
This goes all the way back, all the way back
to the nineteen seventies under Jimmy Carter, where you had

(03:03):
the consumer was the consumer protection you're again, and that
had to deal with redlining and marius different other issues.
And again was forcing in essence forcing banks, forcing banks
to make loans that they don't want to make. Yeah,
the government did that. The government actually forced banks to

(03:25):
make loans that they didn't want to make, and they
knew that they were going to lose money on. So
you as a banker saying, shit, I got to make
these loans. We're going to lose money on this loan.
So either that you know, I got, we got to
recoup these costs by raising our rates or making it
more difficult on somebody else. It's stupid. I want to

(03:50):
remind everybody Republicans saw and I get credits due Republicans
screws shit up all the time. They saw this coming.
Ian McCain, which again he actually was one of the
guys that was talking about this and going after Fanny
and Freddie and warning about all of this stuff. In
the Saturday Night Live skit, which basically parody was one

(04:12):
of the best serenate live skits when it came to
finance I've ever seen in my entire life. Next to
the Steve Martin one about not spending money. They made
fun of the whole financial crisis and laid it out.
And they had, you know, they had Will Ferroll playing
George W. Bush and he's getting pushed around and beat
up by Bonnie Flank and Nancy Pelosi and he steps

(04:34):
into the fray and he's like, wait a second, did
we warn everybody about all this stuff? And Pelosi's like, no,
you didn't, and Barney fans like, actually he did, Like
he doesn't know, he really doesn't know. He doesn't remember.
It was, you know, making fun of Bush as well.
But yeah, they called it. I remember remember Maxine Waters
like tat you know, they were trying to rain in

(04:55):
Fanny and Freddy. Oh no, you can't do that to you.
You know, they think it was ra because the head
of Fanny Freddy was a guy named Franklin Rains. Franklin Rains,
who happened again, you know, happened to be black. So
you couldn't criticize at the time, couldn't criticize going on there.
You couldn't question what was going on that was the
position the Democrats took. Okay, that's the position they took

(05:17):
at that time, Maxine Waters, that the wealth of information
right there. So again you got Barney Frank, you got
Chris Dodd coming out and defending their law, which is
a joke. Taking us back full circle. I've talked about
this before. Where were you when you know those moments?

(05:40):
Where were you when certain things happened. I remember exactly
where I was standing watching when they repealed. This was
under Bill Clinton, the waning part of his term, and
this was bipartisans as both Democrats and Republicans, and they
knew what was coming. They were ready to go. They

(06:00):
were ready to go. You know, it wasn't you know,
you have those things in case glass in case of emergency,
break glass, and you're gonna have this. All of the
investment firms were gearing up towards the repeal of Glass Stegel,
which separated commercial banks from investment banks. It was a
much better system. It was put in place back, you know,

(06:23):
after the Great Depression. Again it kept the various different
parts of Wall Street at a little bit more than
arm's length. They did away with that. Now Glass Steegel
was a piece of legislation that did a pretty good
job policing the financial markets for over seventy some years.
It was a simple piece of legislation. It was less

(06:46):
than seventy pages long. What do we get after that, Well,
we basically, basically, in my opinion, destroyed, destroyed a lot
of the animals. Spirits on Wall Street changed.

Speaker 3 (07:01):
It, changed it. It was a lot of small investment
banks doing really kind of neat and amazing things. Think
about all of the banks that existed back in the
nineteen nineties that we go.

Speaker 2 (07:16):
Down the list, first Boston, DLJ County. It was so
many out there competing, competing for various different deals, looking
to bring capital to companies. Some worked, some didn't. But
again it also offered the opportunity for average Americans to

(07:38):
get in at a lower price. They did away with
all that created financial supermarkets, told us that was all
for our own good, had massive consolidation within the industry.
You had securitization and financial engineering go wild. Where again,
let's start packaging up all these mortgages. Let's package up

(07:59):
all this and we had the financial crisis. They get
bailed out, and we've got too Big to Fail. That's
where we're at right now. Dodd Frank basically solidified Too
big to fail, and again Washington, DC loves Too big
to fail. Fantastic for them. Fantastic for them. They know
where you know, they can their bread is buttered. They
can go get checks from these guys. You know, they
shake them down from time to time, make them pay

(08:20):
a fine, you know, make it lex looks like they're
actually policing these outfits, but they don't. That's that's the
reality of Wall Street. So again Bonny Frank and Chris
Dodd coming out to defend their bullshit low Watchdog on
Wall street dot Com