As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Friday, March 13, 2009

In Charge And Mad You're Not Happy About It

Chris Bowers has the depressing details on the financial services industry, through their advocates in the Senate, continuing to hold up eminently sensible foreclosure reform.

A House-passed bill that would allow bankruptcy judges to modify the terms of troubled homeowners' mortgages has entered a holding pattern in the Senate, where the necessary 60 votes remain elusive.

The bankruptcy provision - often referred to as "cramdown" - is a key component of the Obama administration's housing initiative, but it worries moderate Democrats in both chambers.

Indiana Democrat Evan Bayh and Pennsylvania Republican Arlen Specter are leading a group of Senate moderates in an effort to limit the bill's reach in a way that could attract 60 votes.

Senate leaders had hoped to have the bill go straight to the floor as early as this week, but it may now have to go through the Senate Banking, Housing and Urban Affairs Committee as proponents of the measure search for a deal. On March 11, the bill was referred to the panel.

"There are still significant concerns with the bill on both sides of the aisle," said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a group that lobbies on behalf of the banking industry.

Lenders fiercely oppose the cramdown language, which would allow bankruptcy judges to reduce the principal owed on a primary-residence mortgage and order other modifications in mortgage terms.

These lenders lied on forms to get customers into loans, lied to their customers about the terms of those loans, sold these unstable loans around the world and caused a near-collapse of the global financial system.

In America, that not only means they still have a check on legislation, they think the lawmakers are being too mean to them as well.

“When I hear the constant vilification of corporate America, I personally don’t understand it,” (JP Morgan CEO Jamie) Dimon said in his speech. “I would ask a lot of our folks in government to stop doing it because I think it’s hurting our country.”

Jamie Dimon and all his buddies are lucky they aren't sharing the same cell right now. The audacity of these people, to have rewritten the rules of the US economy only to see it fail, and then demand courtesy!? We have paid you our tax dollars, given you the capital to finance your adventure (h/t Jon Stewart), and now you want a chocolate from us?

Oh, they also want all accounting laws changed so they can more easily fudge the numbers, too.

Before financial institutions have collapsed over the past several months, they have come to the Financial Accounting Standards Board, pleading for a change in mark-to-market accounting rules so that they can continue to appear to be solvent on their balance sheets.

Robert Herz, head of the FASB, told a panel of lawmakers Thursday that the loudest critics of fair market accounting practices have been the very same banks that have gone belly up when regulators would not let them adjust their accounting.

"There seems to be a clamoring for changing mark-to-market rules that seems to come largely from institutions that may be insolvent," Rep. Alan Grayson (D-Fla.) said to Herz at a meeting of the Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

Grayson said that, from Herz' testimony, it seemed that "there may be institutions that are insolvent and they haven't been forced to write down their books to the point [of insolvency] yet, and those are maybe the same institutions that are asking us to modify the mark-to-market rules so that they won't have to admit that they're bankrupt. Is that correct?"

Herz said that it was.

As Grayson says, "We have people who break every rule in the book and then they think that the answer to their problems is to break more rules."

I'm all for criticizing the Obama Administration for their failure to come up with a workable plan to fix the banks; heck, I've done it on occasion. But I save some special loathing for these criminals running major companies into the ground, lying to everybody about the inner workings of their companies, exerting the same power and influence over the legislative process as if nothing happened, and coming back for more changes and work-arounds so they can keep the Wurlitzer playing for just a few hours longer. I think trained chimps in the corner offices of every firm on Wall Street could do better. And they wouldn't ask us to stop being so mean to them.

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