and his appointment shows that the Bush administration went in the opposite way they should of.
Here's an article that puts most of the blame on the Fed (Geenspan) and the
Bush administration regulators of whom they say:
"Ms. Bair was an exception, especially for the deregulation-minded Bush administration. As a former assistant secretary of the Treasury in 2001 and 2002, she had worked with Mr. Gramlich to raise concerns about abusive lending practices. Indeed, she tried to hammer out an agreement with mortgage lenders and consumer groups over a tough set of "best practices" that would have covered subprime mortgages.
But that effort largely stalled because of disagreement. Though some big lenders did endorse a broad code of conduct, she recalled, they soon began loosening standards as competition intensified.
The drop in lending standards became unmistakable in 2004, as lenders approved a flood of shaky new products: "stated-income" loans, which do not require borrowers to document their incomes; "piggyback" loans, which allow people to buy a home without making a down payment; and "option ARMs," which allowed people to make less than the minimum payment but added the unpaid amount to their total mortgage.
Fed officials noticed the drop in standards as well. The Fed's survey of bank lenders showed a steep plunge in standards that began in 2004 and continued until the housing boom fizzled in 2006.But the regulators found themselves hopelessly behind the fast-changing practices of lenders. In a bid to set new standards for exotic mortgages, the agencies waited until December 2005 to propose a "guidance" to banks and thrifts. They did not agree on the final standard until September 2006."
This squarely puts the blame on regulators who identified in 2004 that there were shaky products and took till near the end of the housing boom in 2006 to issue a standard to banks. Those 3 years seem to when many of these shaky loans were written. Dealing with that was primarily the responsibility of the regulators. (the House or Senate Committees were both Republican controlled - so any lack of oversight falls most on the Republicans.)
http://www.nytimes.com/2007/12/18/business/18subprime.html?pagewanted=3&_r=1Cox was appointed in mid 2005 - after it was already known that many "shaky" products were being sold. But, here is how he was portrayed:
"The Securities and Exchange Commission (SEC) is expected to adopt a more "laissez-faire" approach if Christopher Cox is confirmed as its new chairman."
<snip>
Current chief William Donaldson quit on Wednesday, raising doubts over whether the finance watchdog will stick to its tough stance on corporate misconduct.
Mr Cox, a former corporate lawyer, is seen as close to the finance industry.
<snip>
Some commentators have claimed that his SEC predecessor Mr Donaldson quit the post having come under pressure from Republicans who objected to his hard-line reforms.http://news.bbc.co.uk/2/hi/business/4607035.stmHe did what he was hired to do apparently.
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I am trying to understand this better, so I can more easily counter local (real life) Republicans if it comes up. (This is a huge issue and the republicans are already doing their finger pointing.0I did find the link to his confirmation hearings and will watch them to see if Democrats asked the type of questions they should have.
For anyone that wants it the link to that hearing is:
http://banking.senate.gov/public/index.cfm?Fuseaction=Hearings.Detail&HearingID=3119d6f3-0d0c-4f41-877a-d2e524349c52
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