Barack Obama

New Wall Street Scandal Threatens Romney

Brian Beutler | May 11, 2012, 12:11PM

Mitt Romney

A surprising development on Wall Street Thursday could magnify a little-discussed but key difference between President Obama and Mitt Romney -- one with enormous consequences for public policy.

On a conference call with analysts, JP Morgan CEO Jamie Dimon announced that his firm had lost $2 billion investing in the same species of derivative that exacerbated the 2008 financial crisis.

Dimon claims the company is prepared to absorb the loss, but it puts the reputation of one of the only big firms to weather the 2008 financial crisis directly on the line.

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S&P

Experts Question Ratings After S&P Gives Subprime Bonds Higher Rating Than U.S. Debt

Brian Beutler | September 2, 2011, 5:18PM

Influential investors are scratching their heads over a little-noticed development: After downgrading the country's credit rating, Standard & Poors is continuing to award AAA status to the same class of assets that nearly blew up the world economy three years ago.

From Bloomberg: "S&P is poised to provide AAA grades to 59 percent of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497 million lent to homeowners with below-average credit scores and almost no equity in their properties."

In other words: U.S. Treasuries -- widely believed to be the safest investment in the world -- don't make the cut, but subprime mortgage investments do? What gives?

Subprime mortgage-backed securities are the same class of assets that fueled the housing bubble and triggered the 2008 financial crisis. According to a 2010 report by the Senate Permanent Subcommittee on Investigations, the main ratings agencies fell over themselves to give these bonds AAA ratings, then abruptly downgraded them to junk status after mass mortgage delinquencies made maintaining the false ratings untenable.

According to the subcommittee's report, "In the end, over 90% of the AAA ratings given to mortgage-backed securities in 2006 and 2007 were downgraded to junk status, including 75 out of 75 AAA-rated Long Beach securities issued in 2006. When sound credit ratings conflicted with collecting profitable fees, credit rating agencies chose the fees." This triggered a collapse in mortgage-related securities leading to trillions of dollars in investor losses and a credit freeze that contributed to -- some contend caused -- the financial crisis.

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Health Care

DeMint: Obama Administration The 'Most Anti-American' In My Lifetime

Brian Beutler | August 11, 2011, 11:25AM

Jim DeMint

Conservative power-broker Sen. Jim DeMint (R-SC) ran through his litany of complaints about President Obama on Janet Meffered's Christian conservative radio show Wednesday, and concluded that of all the anti-American administrations in his lifetime, Obama's is the most anti-American.

"We saw within a few days that this President was going to be heavy-handed, he was going to implement his agenda and pay back his political allies, and it just went on from there to ObamaCare and then to Dodd-Frank," DeMint said.

It has been the most anti-business and I consider anti-American administration in my lifetime. Things that are just so anathema to the principles of freedom, and everything he has come up with centralizes more power in Washington, creates more socialist-style, collectivist policies. This president is doing something that's so far out of the realm of anything Republicans ever did wrong, it's hard to even imagine.

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Elizabeth Warren

Dems Press Obama To Recess Appoint Elizabeth Warren To Run Consumer Bureau

Brian Beutler | May 19, 2011, 8:28AM

Elizabeth Warren

With Senate Republicans committed to blocking all potential directors of the new Consumer Financial Protection Bureau, congressional Democrats are pressing President Obama to accept reality and offer Elizabeth Warren a recess appointment to head the agency she conceived of.

"Regretfully, Republicans in the Senate have now made it clear that they oppose reform," reads a letter from House Democrats that will be delivered to President Obama.

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Consumer Financial Protection Bureau

Republicans Make Power Play To Gut Consumer Financial Protection Bureau

Brian Beutler | May 6, 2011, 4:11PM

Sen. Richard Shelby (R-AL)

On Thursday, while House Republicans were dealing with a small Medicare privatization snafu, their Senate counterparts laid down an impossible marker. Forty four of their 47 members have signed on to a letter threatening to filibuster any nominee to head the new Consumer Financial Protection Bureau unless it is dramatically weakened.

"We will not support the consideration of any nominee, regardless of party affiliation, to be the CFPB director until the structure of the Consumer Financial Protection Bureau is reformed," reads a letter, co-authored by Senate Minority Leader Mitch McConnell and Sen. Richard Shelby (R-AL), ranking member of the Banking Committee.

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Rand Paul

Rand Paul: Banking Collapse Was Caused By Too Much Regulation

Jon Terbush | March 8, 2011, 9:30AM

On the Daily Show Monday night, Sen. Rand Paul (R-KY) blamed the government for mucking up capitalism, saying that the banking collapse was caused not by too little government regulation of the financial sector, but by too much meddling by the Federal Reserve.

By arbitrarily setting interest rates rather than letting those rates be determined by the free market, the Fed created an unsustainable financial structure, Paul said.

"I don't say that's a failure of capitalism," Paul said. "That's a failure of a central bank getting involved and messing up capitalism."

"We need less of the government manipulating interest rates," he later added. "So it really depends on which way you're gonna go. Did capitalism fail, or did central banking fail?"

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Financial Crisis

GOPers: The Best Way To Prevent Financial Crises Is Deficit Reduction

Megan Carpentier | December 15, 2010, 5:00PM

Former Congressman Bill Thomas (R-CA)

The four Republican members of the Financial Crisis Inquiry Commission split off and issued their own report on the 2008 financial crisis today, a full month before the Commission is scheduled to release its report. The GOPers' surprising conclusion: "We caution our nation's leaders to learn the appropriate lessons from history and take seriously the need to reduce our federal deficit." What?

Former Rep. Bill Thomas (R-CA), who once chaired the House Ways and Means Committee, joined with former CBO director and economic adviser to Sen. John McCain's presidential campaign Douglas Holtz-Eakin, AEI scholar and Reagan-era Treasury official Peter Wallison, and Hoover Institute fellow and former George W. Bush economic adviser Keith Hennessey to issue their report, which largely focuses on the what they see as the role of Fannie Mae and Freddie Mac in the crisis -- and the implications of moral hazard stemming from the government's implicit guarantees of the two institutions.

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Barney Frank

Bielat Campaign Produces Attack Ad Of Barney Frank As Hip-Swerving Disco Queen (VIDEO)

Brian Beutler | October 22, 2010, 12:01PM

This isn't running on TV, at least not yet. But the below web video, produced by the Sean Bielat (R) campaign is making the rounds anyhow.

You'll see why when you watch it. Bielat's running against Rep. Barney Frank (D-MA). Frank chairs the House Financial Services committee and is the most famous openly gay member of Congress. Bielat combines those two themes in the video to lay the responsibility for the financial crisis at Frank's feet... while portraying him as a hip-swerving disco queen in a rumpled suit.

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CFTC

Retiring Judge Accuses Colleague Of Corruptly Siding With Major Financial Firms Over 20 Years

Brian Beutler | October 22, 2010, 11:37AM

Is it possible that for nearly 20 years, one of the two administrative judges presiding over investor complaints at the Commodity Futures Trading Commission has followed through on a secret vow to rule on the side of financial firms and professionals against individual investors?

On his way out the door last month, retiring judge George Painter levied that very charge against his now-former colleague, Bruce Levine. "On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor," Painter wrote in an order. "A review of his rulings will confirm that he fulfilled his vow."

(Wendy Gramm, a Republican appointee, is the wife of former Senator, and financial deregulator, Phil Gramm, neither of whom would comment for this story.)

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Financial Reform

Frank: Abolish Fannie Mae And Freddie Mac

Brian Beutler | August 17, 2010, 8:47PM

Rep. Barney Frank (D-MA)

House Financial Services Committee Chairman Barney Frank is calling for the abolition of Fannie Mae and Freddie Mac, the government-sponsored enterprises with a public mandate to boost home ownership, and which were taken into conservatorship during the 2008 financial crisis.

In an appearance on Fox Business Network tonight, Frank said they should be replaced with new programs to support affordable rental housing.

"I think they should be abolished," Frank said. "The only question is what do you put in their place. This is a situation where given the importance they had come to play in housing, you can't tear down the old jail until you build a new one. And that's a process that we've started."

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Financial Reform

Administration Warms To Warren, The New Progressive Darling

Christina Bellantoni | July 26, 2010, 3:40PM

Chair of the Congressional Oversight Panel created to oversee the expenditure of TARP, Elizabeth Warren.

Even as the administration began sounding a more positive note on the potential of Elizabeth Warren earning President Obama's nod for the newly-created Consumer Financial Protection Bureau, she's emerged as the clear progressive favorite for the post.

Obama's team has recently seemed to warm to the idea that Banking Committee Chairman Chris Dodd splashed cold water on last week, with Press Secretary Robert Gibbs saying this afternoon that she's "terrific."

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Financial Crisis

Paulson Spox, Fratto Hit Back Against Pelosi Financial Crisis Allegations

Brian Beutler | May 3, 2010, 4:51PM

Hank Paulson

Michele Davis, spokeswoman for former Treasury Secretary Hank Paulson, now emails to say there was no pressure from the White House to keep crucial information about the looming financial crisis from Congress.

"[N]o one at Treasury ever felt in any way constrained by the White House from communicating with the Congress," she writes.

More adamantly, Tony Fratto, who served as Deputy Press Secretary to President George W. Bush, says Pelosi's claim is inaccurate. "No one was barred from briefing Congress," he emails. "Congressional leaders were briefed, at President Bush's direction, right after he was briefed. It's pretty clear from every account of that week that Paulson, Bernanke and Geithner were trying to prevent what eventually ensued. As soon as the fallout was clear -- and, in fact, in ways no one anticipated (like the money markets breaking the buck), they went first to the President, and then directly to congressional leaders."

Financial Crisis

Pelosi: Bush Admin Barred Officials From Briefing Congress On Impending Financial Crisis in Fall 2008

Brian Beutler | May 3, 2010, 2:39PM

Speaker of the House Nancy Pelosi (D-CA) speaks alongside Treasury Secretary Henry Paulson

Nearly two years after the Wall Street meltdown drove the U.S. economy to the brink of collapse, and forced the U.S. government to prop up major financial institutions with hundreds of billions of dollars, House Speaker Nancy Pelosi now claims that the Bush Administration prohibited its own top officials who were handling the emerging crisis from briefing Congress until a complete financial collapse was only hours away.

In little-noticed statements to reporters over the last few weeks, Pelosi has alleged that the Bush administration knew well in advance of its intervention that the financial crisis would hit, and that Congress would need to authorize a historic and unpopular bailout - but that top officials, including then-Treasury Secretary Henry Paulson, told her that they had been barred from briefing Congress about true extent of the crisis.

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Financial Reform

'No Next Year' -- Dodd Aims To Preserve Legacy With Financial Reform

Christina Bellantoni | April 29, 2010, 12:26PM

Sen. Chris Dodd (D-CT)

Sen. Chris Dodd was looking at an ugly reelection fight despite a three-decade Senate career, but with January retirement looming and a potential big win on financial reform, he's trying to leave the chamber on a high note.

"There is no next year for Chris Dodd," a top financial industry lobbyist told me in an interview.

A Republican leadership aide told me that the GOP believes Dodd keeps pushing for bipartisanship to make what will be a career-defining bill as strong as possible. "It's hard to have a good legacy bill when it passes by 60 votes," the aide said. Sources close to Dodd said cementing such a legacy is one reason Dodd repeatedly went back to Republicans in hopes of getting the bill to the floor, a task that finally prevailed last night. It's a long way before passage of the measure, but friends and colleagues told me they think Dodd's quest is about more than good legislation.

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Financial Reform

Bank Lobbyists See Writing On Wall -- Publicly Support Financial Reform

Christina Bellantoni | April 28, 2010, 5:08PM

A banker skit on Capitol Hill

Behind the scenes, there are stealth big business campaigns going on to block any major changes that would hurt Wall Street. But in the light of day bankers are flooding Capitol Hill with letters, ads and face-to-face meetings with a unified message even if they disagree on the specifics of financial reform: Do something.

Lobbyists for banks big and small and financial institutions that will be dramatically affected by reform told me today that it's pretty clear legislation imposing stricter regulations on Wall Street will pass the Senate. They said campaigning publicly against it is futile so they're pressuring individual lawmakers to tuck in here and there provisions that they think will make the bill fairer for the industry.

The tone of nearly all the television ads on financial reform -- now totaling $23 million in ad buys to-date -- has been to take action or to tinker on the margins. Beyond the front group called "Stop Too Big To Fail" and a U.S. Chamber effort, few are calling for the legislation to be scrapped or blocked entirely, in part because Wall Street is too easy a target and no one wants to be seen as a big bank defender. The banks instead are using a large firm that helped corporations fight health care to show "grassroots" support for their case, as Think Progress revealed yesterday.

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Financial Reform

No Deal Yet But Dems And GOP Sound Hopeful On Sunday Shows

Christina Bellantoni | April 25, 2010, 11:12AM

Sen. Chris Dodd (D-CT) speaks with Sen. Richard Shelby (R-AL) on Capitol Hill.

Despite round-the-clock talks between Sen. Chris Dodd and Sen. Richard Shelby there's no bipartisan deal on financial regulatory reform, but leaders on both sides said Sunday they are hopeful they can come together.

In a sharp contrast from the rancorous tone on last week's Sunday shows, Republicans and Democrats alike said today there is good momentum to agree on legislation soon, even though everyone agreed they aren't there "yet."

"It might be later this week, it might be next week, but the main thing is to get a good bill," Shelby (R-AL), the ranking member of the Banking Committee, said today on NBC's "Meet the Press." Shelby and Dodd made a rare joint appearance on the show, a move that Capitol Hill aides thought would lead to the announcement of a final agreement allowing the Senate to move forward Monday as planned.

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Financial Reform

In Reform Speech Today, Obama Will Talk About 'Failure Of Responsibility'

Christina Bellantoni | April 22, 2010, 6:00AM

President Barack Obama With Jon Favreau and Ben Rhodes

President Obama today in New York will call for five "key proposals" that must be included in strong financial reform legislation, the White House said. Obama will say taxpayers must be protected if a large financial institutions fails and will call for "new transparency" to the system of financial markets and consumer financial protections.

The White House said he will say any legislation must include the "Volcker Rule," which sets limits on the size of banks and the risks that banking institutions can take and he also will say the measure must give investors and pension holders a bigger role in saying who manages the companies via "say on pay" reforms.

TPMDC obtained a brief excerpt of the remarks Obama has planned for this morning's speech at Cooper Union, which comes as the Senate nears a bipartisan deal on a measure our sources say could net 75 votes when all is said and done. Read them after the jump.

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John McCain

McCain: Obama Suspended His Campaign Too!

Zachary Roth | February 24, 2010, 12:13PM

Sen. John McCain (R-AZ)

Sen. John McCain (R-AZ), under fire in a GOP primary for his support for the bailout, is now claiming, inaccurately, that Barack Obama joined him in suspending his presidential campaign to address the 2008 financial crisis.

As we told you, the Arizona Republic reported Monday on an interview its editorial board had conducted with the senator:

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John McCain

McCain Rewrites Own History On Bailout Vote

Zachary Roth | February 23, 2010, 6:18PM

Sen. John McCain (R-AZ)

It's no secret that in seeking to fend off a conservative primary challenger, Sen. John McCain (R-AZ) has been scrambling to his right faster than you can say "cap-and-trade." But now, in a bid to explain his vote for the bailout, the Arizona senator is flat out rewriting history.

McCain said recently that he only voted for the $700 billion package because Henry Paulson and Ben Bernanke misled him, by assuring him it would focus on the housing meltdown, rather than on Wall Street. But that appears to be directly contradicted by the record.

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