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Obama calls for a brake on Wall Street
Bahrain News.Net
Thursday 27th March, 2008
US Democratic presidential hopeful Barack Obama has called for Wall Street firms to be regulated, to combat an 'ethic of greed' among investors.
Mr Obama, in a major economic policy speech in New York, said greed had created an uneven economy and helped spark the current financial crisis in the US.
He said the housing bubble and subprime mortgage crisis, which may have already led the US economy into recession, were a predictable consequence of the failure to keep tabs on the practices of investment banks and unscrupulous lenders.
'We encouraged a winner take all, anything goes environment in the 1990s through deregulation in a time of economic prosperity,' Obama said and called for a new '21st century regulatory framework' in its place.
'Too often we've excused and even embraced an ethic of greed, corner cutting, insider dealing, things that have always threatened the long-term stability of our economic system,' he said.
His speech came after Democratic rival Hillary Clinton and presumptive Republican nominee John McCain had both laid out in recent days their plans for revamping the economy.
Treasury Secretary Henry Paulson Wednesday acknowledged there should be greater oversight and supervision of investment banks after the Federal Reserve earlier this month opened up emergency loans traditionally reserved only for commercial banks.
US banks have reported more than $200 billion in write-downs amid a sharp drop in the value of mortgage-backed securities since the summer of 2007.
Obama called for greater aid to ordinary Americans and touted his plan for a $10 billion 'foreclosure prevention fund' to combat a record number of homeowners threatening to default on their mortgages as a result of falling housing prices.
'Wall Street has been recently gripped by gloom over our economic situation, but for many Americans, the economy has effectively been in recession for the past seven years,' Obama said.
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Comments on this story
Anonymous
03-28-08, 08:55 AM |
Wall Street.
At last. Someone willing to take on the country stripers. We are all told time and time again greed is good. Oh no its not. Thou shalt not steal.
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Tejas Gunas
03-28-08, 02:48 AM |
Obama calls for a brake on Wall Street
incompetence of financial sector? or a last grab before retirement...matters naught 'cause they still get their 100 mill a year paycheck; must be nice to have a CEO’s slice...yeah! now they can buy up all the real estate..for a song (depression one that is)..cooool
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waltky
04-23-08, 05:50 PM |
Anybody got any info on the candidates voting record on banking issues over the last 5 years, i.e. whether they did anything to prevent or contribute to this crisis?
:confused:
GE’s Immelt: Housing Great Depression
April 23, 2008: General Electric CEO Jeff Immelt says the housing crisis is the worst since 1930s' economic depression.
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General Electric CEO Jeff Immelt said the U.S. economy is in the worst condition since the burst of the dot-com bubble and that housing hasn’t been in such dire straits since the Great Depression. Less than two weeks after the conglomerate shocked investors with a profit warning and revealed that its first-quarter earnings had unexpectedly fallen 6%, Jeff Immelt said things could get worse for the U.S. economy.
Immelt told shareholders at the company’s annual meeting that because of current conditions, GE will increase its planned cost cutting from $2 billion to $3 billion. “We are in the toughest economy since 2001 and the worst housing crisis since the Depression," Immelt said. “Banks have written off more than $250 billion... Days of easy credit have turned into months of no credit at all. While I am confident about the economy long term, we could see even more difficult times ahead."
GE’s first-quarter earnings report triggered a plunge that wiped more than $46 billion from its market capitalization and saw the company’s stock fall nearly 13%. Many investors felt broadsided because GE said as recently as March that the company would see profit and revenue growth of 10% in 2008. The company now projects earnings to be 5% or less. Immelt said GE executives are making changes in the company’s operations and planning, including more internal forecasts, with Immelt reviewing the reports weekly. “This will ensure that there are no time gaps between how we describe the company and what we deliver," he said.
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