Eminent Domain Mortgage Retirement or Replacement Plan
For a couple of years, an idea has been percolating within corporate-finance think tanks. The idea is to create special public/private partnerships with local government to selectively use the police power of eminent domain to condemn certain mortgage loans and facilitate a process to replace possibly worthless investments with government-backed mortgage notes. It can be heralded as a tactic to break through the quagmire known as zombie foreclosures.
Good idea. But the casino-capitalists disguised in savior's clothing have proposed a self-serving business model that, in my view, is not a good idea at all. Fool me once, shame on you. Fool me twice, shame on me. Not a great idea to have a fox guarding the henhouse. Aren't there regulations and agencies to enforce those regulations? Isn't that how we got into trouble 1929?
Who now is guarding the henhouse? Is anyone keeping watch or are they simply turning a blind eye to the banking industry?
The Glass-Steagall Act, a law enacted in 1933, prevents overzealous or improper banking activity, and has been under attack from finance capitalists in the decades since.
"In 1933, in the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the Glass-Steagall Act (GSA). This act separated investment and commercial banking activities. At the time, 'improper banking activity,' or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash." Investopedia
Finance capitalists' heavy capital investment in administrations (past, present and future), including the Clinton White House, finally resulted in its repeal.
"Consequently, to the delight of many in the banking industry (not everyone, however, was happy), in November of 1999 Congress, under Clinton, repealed the GSA with the establishment of the Gramm-Leach-Bliley Act, which eliminated the GSA restrictions against affiliations between commercial and investment banks. Furthermore, the Gramm-Leach-Bliley Act allows banking institutions to provide a broader range of services, including underwriting and other dealing activities." Investopedia.
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