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October 23rd, 2008
02:14 PM ET
Culprits of the Collapse – #2 Franklin Raines
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So who is to blame for this financial fiasco?
That’s the question we’ve begun investigating.
We’ve put together a list of the Ten Most Wanted: Culprits of the Collapse.
#2 on our list: former CEO of mortgage giant Fannie Mae, Franklin Raines. CNN's Tom Foreman reports.
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Filed under: Culprits of the Collapse • Tom Foreman |
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Roll out the wing-nut talking points:
"Blame Barney Frank and Chris Dodd"
You guys do realise that they have had their positions for 2 years right?
Prior to that the Republicans held the House/Senate and Whitehouse.
Am I saying that Frank and Dodd hold no blame? No, but seriously go and do some research instead of rolling out the lies propogated by Fox and the nut jobs on the rightwing.
I was surprised that the "MEDIA" wasn't on this list, adding to the hype of all of this speculative upside. Let's be fair.
Why not make a time line and go back to the origin of the current monetary mess? Start with President Jimmie Carter. He was the one who encouraged bankers to loan money to 'poor people' who needed the money but who didn't qualify for loans as they couldn't provide collateral. A noble idea.
One of our local banks took this to heart with car loans. Their President thought that young people just graduating from college or high school needed to be able to get a new car loan so they would have transportation to go to their new jobs. The slogan was, 'Your Signature Is Your Collateral'. Car sales boomed across town!! Reality also set in... Many new car buyers were horrified to find out they were actually required to make a 1st payment on the new car to drive it off the lot. For many of those cars, that was the last payment ever made. In following months, the bank kept the 'repo man' busy. Cars were returned from as far away as Washington State- many with ruined engines. Who bothers to maintain a 'free' car? The Wall Street Journal made fun of the bank by calling it the 'largest used car dealer' in the country.
Maybe this was all to the good for the bank. They learned their lesson, and took no part in the current housing sub prime mess.
Hey Anderson
Thank you for the list of the people TOP 10 banking and financial crisis.
But what now????Is there any chance to put them in jail????
Probable not!!There got their money,and they will get their money.There is no low and order for this poeple!!!!I think we have to except that,and learn not to trust poeple like that!!!!Shame on them !!!!!!
Having read all the comments and stories associated with the "Culprits" list I am a bit suprised in the who is to blame. Yes, all the people on the list contributed to the colapse and all the evil and greedy CEOs, corporations, and politicians are the ones at fault. There is only one problem with this blame game, everyone with a 401k, mutual fund, or stock up to this point were so happy with the money their investments were making under these now "greedy" people.
If these "Culprits" had proceeded in a safer or mor thoughtful risk manner, the same people blaming them would have sought more aggressive managers if they weren't getting the return they demanded from their investments. Everyone who tried to live beyond their means, wanted to "retire" at 40 (or younger) and demanded or sought out higher returns over resonsible investing and planning is at fault! Those who did not take the bait of "easy credit" and saved for what they wanted, should not have to PAY for the irresponsiblity of the "I want it now!" people.
Bailout only serves to help make people believe (reinforce) they are not going to be held responsible for their actions. It is not the addicts fault, it is the drug dealers fault! Same thing... both blame everyone else for their mistakes.
Well, i think ya'll just need to ban together and get something fixed. Even though i'm only 14...i still have to deal with the issues my parents have to face too. Basically when they're stressed, i'm stressed on top of all my school work and sports!
Christine M Matteson at 5:23am October 24
I wonder how Greenspan felt while he sat and predicted 'impending doom' for our nations economics? "self correcting" -Greenspan,
What?
Isn't it amazing that we only know a few of these people from the news. What is corporate media hiding the rest for, and why?
Seems to me that the major players only play with each other.
Thank you Anderson for outing these criminals. When does the trial start?
This is entertaining and informative, but as most comments indicate these people will hide behind lawyers and will not be held accountable.
CNN broadcasts to over 1.5 billion people in over 212 countries and territories. In this blog we only see culprits from the 'US' perspective and perhaps the imminent election is ratcheting it considerably.
Perhaps cnn could broaden this to the international view. all the major international financial institutions are affected by their own complicity.
People expect something of the media, who have the ability to dig and indeed have vast data bases to draw on, to inform them objectively and will also appreciate offering of some solutions (and preferably not from any financial advisor).
In the UK people who have lost savings, pensions, are offered paltry sums of compensation with the bail out packages and still even now (Northern Rock UK) the high level banksters receive their inflated salaries and bonus.
Raines is slimey and he undoubtedly saw an opportunity to feather his nest at taxpayer expense, but it was never in his power to bring down the financial system or to participate in a conspiracy to bring down the financial system. Even if he'd been party to concealing losses at Fannie, the issue isn't Fannie's failure and subsequent nationalization by the government but wholesale collapse of the system.
We're down to the last one and if Anderson Cooper doesn't name Barney Frank and Christopher Dodd as the number one culprits then he will lose all creditbility on this issue. They encouraged the trend of giving loans to people who couldn't afford them. They got Fannie and Freddie to back them for purely politicla reasons as well as the millions in campaign contributuions.
I'm frustrated that many seem to think that Frank and Dodd should be named. They've been chairmen of their committees only since the 2006 election, and it was less than 8 months later that the sub-prime meltdown began. Until the 2006 elections, the Republicans held the House of Representatives, the Senate, and the Presidency. President Bush's 2004 inaugural address specifically celebrated the new "ownership society."
There was no political will from January, 2001 until January, 2007 to rein in the ridiculous lending policies. That doesn't mean we should blame the Republicans, either. There was a strong, bi-partisan push toward improving home ownership opportunities. What went wrong wasn't the objective, it was the moral failures of those who thought they could ride this new policy to personal riches with zero risk.
It seems that virtually everybody in positions of authority knew something was wrong–how could they not know it when mortgage company advertising was shouting out that lending practices had gotten ridiculous–but even those who knew were afraid of doing what it would take to rein in these practices. They were afraid of the inevitable economic slowdown which would occur from credit tightening. Even today you'll hear on every financial channel that the pundits are hoping to see lower interest rates so the party can continue. Just today there was an article on CNN about how people who can't pay the bills they already have are being targeted by banks and finance companies to borrow still more. We're still acting like an economy with our collective heads in the sand.
De-leveraging our society will be painful, but we can't continue to encourage and promote borrowing as the way everybody can buy everything they need and most of what they want.
Last chance for Barney Frank and Chris Dodd.
Im with Sharon on this. The only time these men talk is when they summoned to the hill and only after their lawyer carefully edits their prepared statements. If you are a reporter doing your service for we the tax payers good luck getting anything besides no comment. Ive had it with the politicians and the high paid ceos. The FBI are the only people I trust and believe in. I know they are over worked and under staffed. They have had to pull agents from other divisions just to help with this mess. They cant even hire more because they dont have the budget for that. They in the end will give this country of ours the justice we are waiting for. If I wait for the politicians to reverse deregulation and all the rest I will be waiting a long time. I look forward to the FBI finishing their investigation. I would love to use those most wanted mugs as target practice. How about a dart throwing contest?
Dodd and Frank, even though they are not above criticism, were not in the committee positions long enough to effect policy decisions that led to the collapse. If anything you want to look at their predecessors who for the years leading up to this huge crisis had enacted the policy and practiced an economic philosophy that truly created the collapse.
Having said that, far more important to the string of events that led to the events of the last few months, there was clearly a tremendous lack of oversight and the turn of a blind eye to what was clearly coming down the road. Warren Buffett and Felix Roythan had predicted a massive explosion that would bring this economy to its knees.
Chris Dodd and Barney Frank had very little ability and influence to affect an outcome this catastrophic that was years and years in the making.
In regards to the Board of Directors......please. This is an elite club of individuals that either were friends, former co-workers or members of the same country club. There is no issue with offering the CEO's golden parachutes when board members are making 500k + to attend a few meetings a year.
And in terms of Mr Greenspan I have been in the banking industry for 20 plus years. This guy demanded that banks provide money to unqualified individuals because everyone deserved the "American Dream"......
Untill these people have all their money taken away and they are put in jail (with a large lonley cellmate named Bubba) things won't change. Wall Street greed continues to go on unchecked . The checks and balances need to be put in place or these types of disasters will continue.... Politicians and CEO's alike need to be held accountable for their actions or lack of action.
How about all those people who knowingly, willingly and greedily
ventured into mortgages they did not have a hope in hades of servicing.
As despicable as some of these corporate guys are (Bear Stearn, Lehman Bros, etc), I have a hard time blaming them for the collapse. CEOs are always going to be making obscene money and acting "greedily" on account of their shareholders.
Raines is an exception to this if he was hiding the beginnings of a collapse at FannieMae.
But I agree with your inclusion of Phil Gramm and Greenspan. Echoing some of the others here, I'm shocked that there's only one spot left, and you still have both Dodd and Frank out there...
Don't forget Barney Frank and Chris Dodd on your list of most wanted for the collapse. Please don't try to to give them a pass on this.
One word.., "Prison" .., and a large hefty 'fine' for him and his cohorts. Mike in Montana
All of you continue to blame CEO's about their "Golden Parachutes" .... and after working on Wall Street 25 years I think it is laughable no one understands it's the Board of Directors of each company that hires the CEOs and to get them to sign their contract these buyouts are put in place...and not yet has anyone mentioned the Board of Directors....
Lee in TX
Perhaps in the near future people will not let themselves be 'Fuld' into borrowing more than they're capable of paying back!
When will you add Barney Frank and chris Dodd to this list. Until you do, I don't find it completely accurate.
So........are any of your 10 most wanted going to be held accountable?
I was looking through the list of the Top 10 responsible for the banking and financial crisis and noticed that one person is absent.
What about these 2:
Senator Chris Dodd (D-CT), Chairman of the Senate Banking, Housing, and Urban Affairs Committee
Rep Barney Frank (D-MA) , United States House Committee on Financial Services
Why? The whole purpose of these two committees is:
"oversees the entire financial services industry, including the securities, insurance, banking, and housing industries"
So, that means that these are the "CEO's" who are supposed to be making sure that the industry is performing as it should.
The rest of the committee members should be held accountable too, but as the chairmen, they are ultimately responsible. This is proven by the fact that the industry heads have to testify to them.
I do feel bad for the people who are now in a financial crisis and on the verge of loosing their homes. I also feel that they should have realized they really could not afford these homes. I get up, go to work, and support my family, and know what I can and can not afford. I do not believe that my tax dollars should go to bail these people out. Everyone is having hard times with food, energy, and daily expenses rising. Is someone going to help me out? NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!,because I bought a sensible house I could afford, and have made my payments. Does Washington care about the rest of the country, who may not be about to loose their home, but are having economic hardships also?
Question--–when will the Ten Most Wanted:Culprits of the Collapse be charged,tried and sent to prision?