PLEASE HELP explain the Commodity Futures Modernization, Gramm-Leach-Bliley Act and

[Pryderi]

the Commodity Futures Modernization Act of 2000. Are they all the same thing? Different? How do they relate to the financial crisis today?

[Lasher]

1. The Commodity Futures Modernization Act created the Enron Loophole.

The Gramm-Leach-Bliley Financial Services Modernization Act repealed part of the Glass-Steagall Act of 1933, removing finance industry regulations. In the former, think rolling power blackouts and high gas prices. In the later, think about the subprime mortgage mess that's destrying our economy right now.

Both are products of former Senator Phil Gramm, who was McSame's chief financial advisor until he called us all a bunch of whiners. Gramm would probably be Secretary of Treasury if McSame wins.

[Pryderi]

2. Thanks. Also, why did Democrats vote for the Gramm-Leach-Biley Act ? According to

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
passed in the Senate 90-8-1 and in the House: 362-57-15. It was signed into law by President Bill Clinton on November 12, 1999.

Is wikipedia inacurate?

[sinkingfeeling]

3. Read the sentences before that. The vote you quote is on the 'wording' worked out in conference.

[ROakes1019]

4. conference reconciliation vote

The 90-8 vote you're refering to was a conference reconciliation vote after the House had considered the matter. The original vote in the Senate was much closer and no, of a few only, Democrats voted for it in the Senate.

[Pryderi]

6. I don't understand what that means. Does it mean after rewording, democrats changed their

vote so that instead of 54-45 it was 90-8?

[Lasher]

15. I'm not satisfied with the explaination for that final vote.

I'm going to research this next week.

[Lasher]

16. What really happened with the Gramm-Leach-Bliley Act of 1999

OK I’ve looked into this a little more. The Gramm-Leach- Bliley Act of 1999 was introduced in the Senate by Phil Gramm (R-TX) as S. 900 and in the House of Representatives by James Leach (R-IA) as H.R. 10. S. 900 was passed along party lines 54-44 in the Senate by Roll Call Vote 105 on by May 6, 1999. H.R. 10 passed by a 343-86 bipartisan vote in the House 343-86 on July 1, 1999 by Roll Call Vote 276.

The bill was returned from conference for final votes in both Houses as S. 900. It passed 90-8 in the Senate on November 4, 1999 by Roll Call Vote 354 and passed 362-57 on the same day in the House by Roll Call Vote 570.

The Act had bipartisan support in the House from the beginning, but initially passed in the Senate virtually by a party line vote. What happened between May 6, 1999 and November 4, 1999 to convince Senate Democrats to support the bill? You might suppose that the final vote was just in regard to the changes that the Conference Committee had made and not on the overall substance of the legislation, but that argument doesn’t hold water.

The truth is, Senate Democrats supported the bill after Republicans agreed to strengthen provisions of the Community Reinvestment Act and address certain privacy concerns. This is why the bill was veto proof when it went to Clinton. But don’t be too quick to give Clinton a pass on this, since it’s likely that he would have signed the bill anyway. He and Congressional Democrats seemed interested in only these two issues, and were apparently unconcerned about repeal of the Glass-Steagall Act of 1933.

Republicans Propose a Deal on Financial Services - New York Times - October 13, 1999

The Commodity Futures Modernization Act of 2000 notwithstanding, Phil Gramm deserves blame because it is primarily he who introduced and sponsored the Gramm-Leach-Bliley Act of 1999. But nearly all members of Congress, Democrats and Republicans, were complicit when the Glass-Steagall Act of 1933 met its demise. The same is true of Bill Clinton and his administration.

[Ichingcarpenter]

5. This link and info will get you started

McCain advisor spurred $62 trillion derivatives market that will swamp global markets

Lurking in the background of this weekend's collapse of two of Wall Street's biggest names, is a $62 trillion segment of the $450 trillion market for derivatives that grew huge thanks to John McCain's chief economic advisor, Phil "Americans are Whiners" Gramm. That's because in December 2000, Gramm, while a U.S. Senator, snuck in a 262-page amendment to a government re-authorization bill that created what is now the $62 trillion market for credit default swaps (CDSs).

I realize it is painful to read about yet another Wall Street acronym, but this is important because it will help you understand why the global financial markets are collapsing. And it will give you information to consider when you vote in November. CDSs are like insurance policies for bondholders. In exchange for a premium, the bondholders get insurance in case the bondholder can't pay. As I posted, in the case of the $1.4 trillion worth of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) bonds, the government's nationalization last Sunday triggered the CDSs on those bonds. The people who received the CDS premiums are now obligated to deliver those bonds to the ones who paid the premiums.

Gramm's 262-page amendment, dubbed "The Commodity Futures Modernization Act," according to Texas Observer, freed financial institutions from oversight of their CDS transactions. "Prior to its passage, they say, banks underwrote mortgages and were responsible for the risks involved. Now, through the use of -which in theory insure the banks against bad debts-those risks are passed along to insurance companies and other investors," wrote Texas Observer.

How does this relate to Lehman's bankruptcy? " were a key factor in encouraging lenders to feel they could make loans without knowing the risks or whether the loan would be paid back. The Commodity Futures Modernization Act freed them of federal oversight," according to Texas Monthly. And it was due to these CDSs that Wall Street held an emergency session yesterday to try to minimize the damage of Lehman's CDSs and other derivatives. Unfortunately, this session did not produce much thanks to the built-in lack of knowledge of the risks in these transactions that Gramm's legislation ensured.

http://www.bloggingstocks.com/2008/09/15/100-year-crash... /

[Pryderi]

7. That's great information, but did Democrats vote for it 90-8?

[Ichingcarpenter]

8. The actual vote on the bill's passage took place in May of that year, 54-44

The actual vote on the bill's passage took place in May of that year, 54-44, with Ernest Hollings the only Democrat voting for passage; Biden voted "nay", McCain "yea". The 90-8 vote was for a standard "conference report" designed to reconcile differing language between the House and Senate versions of the bill; the bill's passage was already a done deal.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x7104110

[Pryderi]

10. Ok. I guess I had trouble understanding why there was a 2nd vote. It makes it look like dems voted

for it.

[Lasher]

9. No.

The Commodity Futures Modernization Act was slipped by Gramm into H.R. 4577, a $384-billion omnibus spending bill.

Few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted. In addition to the Enron Loophole, the measure gave us unregulated credit default swaps, which have played an important part in our 'subprime' demise of today.

Here is a very good article on the subject:

http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html

[Pryderi]

11. The final bill resolving the differences was passed in the Senate 90-8-1

So is wikipedia wrong? What does "final bill" mean????

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

[Lasher]

12. When a bill is passed in the House and Senate there are often differences between the two versions.

The differences are hashed out by conference committees, which are comprised of representatives from both houses, to produce two identical versions. They are then taken back to their respected Houses of Congress, where they come up for a vote before each full body. This is the vote on the 'final bill', which is then sent to the President.

You seem to be trying to find the truth about just who voted for this Act, with a bone of contention being the vote on the 'final bill'. I don't know if it is customary for members of Congress to vote almost unanimously on this version, but it might be useful to know why there was such a difference between the pre-conference votes and the final ones.

This hardly seems a fair question, however, because Gramm slipped it into the overall omnibus bill, with few members of Congress knowing it was there or understanding its implications. I believe the Act in question had been submitted separately to Congress that year in both Houses, and that it never came up for a vote. If I'm remembering correctly, and if we had the actual bill numbers, we could find out just who voted for and against it in that form, even if it only came up for committee votes. But in the last article to which I linked, it says everybody, including Gramm, thoght the initiative was dead.

Good luck,

Lasher

[Pryderi]

13. Thanks Lasher! I was having a conversation with a repub and he kept blaming dems for

the financial debacle. He kept citing the wikipedia article and "final bill". It just seems confusing. He also said that dems have been in control since 2006 and they "broke the economy.

[Lasher]

14. Well then, I'm not surprised.

Blaming others for their own collosal failures is part of the Republican genre. Arm yourself. Here is a Snopes article that refutes the ridiculous argument that the failures of the Bush administration and his Bush league lapdog GOP Congress are the fault of Congressional Democrats.

Keep asking those questions. I admire an inquiring mind.

Lasher