On November 22, 1991, Donald J. Trump testified before a Congressional Committee which was a Task Force created to solve the problem of banking liquidity. Link
Here is the whole link: https://duckduckgo.com/?q=Donald+Trump+1991+video+testimony+in+front+of+Congress&atb=v106-1&ia=videos&iax=videos&iai=Rksd80-FCAw
At that time, Construction and Real Estate, both residential and commercial, represented 20% of our GNP (it was Gross National Product – back in the day). Obscure changes to the tax law killed this segment of our economy. In 1991, there was not a single high rise crane remaining in NYC.
Construction had all but stopped in the USA, causing the loss of 600K jobs, which rippled through the economy to cause a serious recession. As Trump recalls in his testimony, he spoke to H&H Construction, the largest in NYC, and they did not have a new building planned for the next two years.
In 1991, our motto was “Survive ’til ’95”, but frankly, we didn’t see ANY end to the problems in the real estate industry. So, what caused the problem? At the time, we were looking for ways to right the ship. Banking was stagnant. The only solution had to come from Congress… because Congress caused the problem.
As the story goes, the tax code was changed in 1986, called TEFRA. As heated negotiations for changes in tax code took place, the committees needed another 7 billion dollars of revenue to make the CBO score come in “revenue neutral”. A STAFFER suggested grabbing the deduction for “passive losses” on real estate (meaning income from real estate was NOT taxed as ordinary income and the losses could be shared among investors) — because the numbers, 7 billion, matched the magical number needed in Committee. There is speculation the staffer belonged to Ted Kennedy, since Ted wanted Capital Gains Taxes lowered to 20%, but the identity of the staffer has been lost to history. Well, the Congress got their 7 billion, and revenue neutral CBO score, but it cost the economy well over 500 billion in losses. Here is why.
More specifically, in TEFRA, passive income and losses were no longer allowed and the ability to syndicate real estate (meaning I could gather together a group of wealthy docs/dentists/execs to invest in a project and the investors would receive income as PASSIVE income) was no longer allowed. Additionally, depreciation schedules were lengthened substantially. Wealthy people, to avoid higher tax brackets, would invest in REIT’s (Real Estate Investment Trusts), to build shopping centers, apartment complexes, etc. As group of investors, the risks were also minimized. I sold REITs back in the 80’s. With the change in tax law, the investors went away. All those slick brochures went into the garbage can.
Readers might recall, TEFRA was also the act which eliminated deductions for interest on consumer spending but DID allow deductions for HOME interest — that was when every homeowner took out a home equity line of credit. Remember?
Well, when the act was passed, the impact on real estate projects was like a Cat 5 hurricane. People who HAD invested in the project, no longer had an incentive to invest and investors which had their money invested were caught in the maelstrom. What investors THOUGHT would be the benefits of their investment evaporated overnight. As projects failed, and the snowball created an avalanche, banks tightened up their restrictions on lending for real estate. With no one to finance construction, the industry came to a dead stop. No one working, no one buying equipment, no one buying carpeting, refrigerators, tile, cabinets, couches, dining room sets……., and a recession was born….. all because an academic staffer, with no real world experience in business, no way to imagine the consequences of his actions, needed 7 billion dollars to make his spreadsheet match up for CBO.
It was the idiocy of government on full display, and a successful citizen, Donald Trump, traveled to DC, to speak to Congress. He wanted to correct the problem, not just for himself, but for all of America.
The testimony is fascinating. At about 39:40 in the C-Span video, Helen Bentley, a Republican from Maryland, questions citizen Trump about another concerning issue – American manufacturing and her attempt to keep manufacturing companies from going overseas. She mentioned a local bank, who offered a 1% discount on a car loan if the consumer bought an American Car. Trump like the idea. She talked about FREE TRADE versus FAIR TRADE………, and that was 28 years ago.
At about 43 minutes in the video, Congressman Jimmy Hayes, a Dem from Louisiana, begins to explain the real problem, with help from Donald Trump. All construction has interim financing, a construction loan. When the project is finished, the developer (even for our little B&B) searches out permanent financing. Projects which were in various stages of building – for a decade, sometimes, were NOT grandfathered. So, a project was planned, land acquired, zoned, engineered, built………, and suddenly, the rules changed. Everything STOPPED. Hundreds of thousands went bankrupt, because they were still on the hook for the stream of payments due and caught in the midst of a sudden and drastic change in tax law.
As Congressman Hayes continues to explain……, with the changes in tax law, and not allowing the benefit of tax consequences of rents as passive income (no income tax), a building which might be completed and occupied at 100% is suddenly WORTH LESS….. because it’s not producing the great income (now taxed as personal income), tax free, any longer. A 5 million dollar apartment house might now, in 1990, only be worth 1 million dollars… which meant banks then required additional collateral from the owners, for EXISTING loans. Sometimes these owners had additional personal collateral and sometimes they did not. Thus, an owner of an apartment complex, could, find himself in a situation where they DID NOT miss a single payment……. but had their loans called by their banks. Again, bankrupting successful projects, clean projects, on EXISTING properties. It was a nightmare. Do everything right, and still go bankrupt.
But it gets worse…….. The lowering of assessed value of apartment buildings/shopping centers/commercial space all over the country…… meant that owners sought their property tax evaluations to be lowered……. which meant LESS property taxes being paid all over the country….. which meant localities had to search for OTHER means to raise taxes to meet the shortfall. Again, all because some bureaucrat staffer, with no experience in the real world, needed 7 billion dollars in revenue to make his spreadsheet match up for CBO.
During the election of 2016, much was made of Trump’s 4 business bankruptcies, as opposed to the list of 515 companies where Donald Trump is a principal owner.
The Taj Mahal Casino declared bankruptcy in July of 1991 and others in March of 1992. All of these losses center around the problem with TEFRA, building, and financing of real estate development. Trump took the hit for the mistake of government. Again, the projects were started prior to the change in of TEFRA in 1986. Link
The Plaza Hotel and two casinos declared bankruptcy in March of 1992. Some media outlets list a total of 6 bankruptcies but it’s really only 4, depending on a complete understand of tax code (and common sense), which the media does not comprehend. Link
Trump has filed Chapter 11 bankruptcy for his companies six times. Three of the casino bankruptcies came during the recession of the early 1990s and the Gulf War, both of which contributed to hard times in Atlantic City, New Jersey’s gambling facilities. He also entered a Manhattan hotel and two casino holding companies into bankruptcy.Chapter 11 bankruptcy allows companies to restructure or wipe away much of their debt to other companies, creditors, and shareholders while remaining in business but under the supervision of a bankruptcy court. Chapter 11 is often called “reorganization” because it allows the business to emerge from the process more efficient and on good terms with its creditors.
To be clear, as the article fairly notes, President Trump has never filed for personal bankruptcy.
We can only speculate what these kinds of financial losses did to a man like Donald Trump. We know, there is no sunshine without rain. There is no happiness without sadness. There is no love without heartbreak…… but we choose to love, anyway. Prior to this time, Trump worked hard but was massively successful. As Fred Trump said, “Everything Donald touched turned to gold.”, but adversity was on the horizon.
During this time period, Trump had an affair. He divorced Ivana and the details of his personal life were splashed all over the news rags. Marla became pregnant and Trump, unlike other wealthy men, didn’t opt for an abortion. He married Marla and embraced Tiffany. I wonder, no, I believe, this time period is what made Trump the determined man he became. Trial by fire. Trump came out on the other side….. stronger.
One other note, another corporate bankruptcy came in February of 2009. Link If you were a regular homeowner in February of 2009, you were probably also struggling with foreclosure. Again, caused by bad government.
It’s an amazing coincidence, isn’t it? Congressmen never seem to lose their business or homes because of governmental failures. I recall Senator Chris Dodd even had a Countrywide Mortgage on his personal home. There’s never a consequence for a bad decision for a Congressman. No. It’s businesspeople who suffer the consequences of bad leadership and silly errors in governance.
I recall when I was transferred to Manhattan in 1984 and saw Donald Trump in a restaurant. He was larger than life but someone I would never consider being in my personal friend group. My aspirations in Gotham City were big but not quite as big as Donald Trump. Strangely, as I grew as a business person, I developed a great admiration for Trump as a businessman when the casinos went bankrupt in ’91-’92. It takes an extraordinary man to become a billionaire………. but to battle back……… and become a billionaire, again?
That’s one helluva man.
Think about it. In the Venn diagram of Earth’s population, how many of us become billionaires? In ’91-’92, Trump could have retired to an island, happy, and wealthy, with Marla and the kids. Yet, he didn’t. Trump battled back to the top of the heap……. again. Now, do the Venn diagram of those who become billionaires……. again, the diagram of those who reach a pinnacle….twice. Who has that kind of courage? Who has the tenacity, when quitting would be so much easier?
I can think of only one other such man who has a similar nature = Tiger Woods.
For both of them, Trump and Woods, there would have been no shame in retirement or quitting. Tiger reached an impossible dream, according to most men, and so had Trump. These men could have retired, rested, and the history books would have been effusive with praise. But they refused to rest……. When Tiger won the Masters in 2019, I had tears in my eyes. It wasn’t that he won the Masters, which is an extraordinary feat. Nothing about his win was ordinary. No, Tiger’s victory represented so much more. We all FELT Tiger’s win. He represented human determination. Similar to the way we felt when an American stepped on the moon. We were universally PROUD of Tiger Woods.
Tiger’s victory, and Trump’s battle back to the top of the heap in NYC, massive success in television, and winning the Presidency of the United States, represents a win for the human spirit. It says……,
“I’m not done, yet.
I want more.
I will not go quietly.
There’s more work to do.”
Yes, men like Trump and Tiger Woods are indeed rare men. These are men who inspire others. They are the very best of us. We wish we had more of them. We wish we were them. Men who don’t quit. We’re lucky and blessed to have one of them as President of the United States.
Gee, I wonder what Tiger Woods will be doing……. in twenty years……. when he’s 64?
End
I truly detest biz pundits, who are not old enough to remember historical events OR are too stupid to understand what we ALL KNEW during the time period.
Frustrating.
I REMEMBER!!!!!!!!!!
IKR?!?
EXCELLENT post, daughn! Thank you VERY much for explaining this so clearly.
Do you have a link to the video you reference? Is this it?
Posted at the top of the piece, but thank you!!!
AWESOME. Wow – this is truly eye-opening!
Now – this is interesting, and important. Your title:
“The TEFRA of 1986. How It Killed Construction, Caused the Recession of 1991-1992, and Created a President.”
Look at the TIMING on that, just like the economic HIT of 2007-2008, which was notably after the DEMS took the House and caused an economic MESS using “noble” motivations.
“Created a President?”
I thought that you were talking about BILL CLINTON.
Seriously, TEFRA created TWO PRESIDENTS.
I contend that the “stupid blunder” was no accident – that the Democrats KNEW what it would do, that it would cause a recession, that people would be READY to leave Republicans when continued economic mojo seemed to have fled them, and that “blame it on a staffer” is simply their standard M.O. of covering up. “Confess to a lesser mea culpa” is simply what they do. Hillary actually perfected that. The PATTERN of Democrat sabotage before an election that puts in a SOCIALIST is too apparent to me.
I know it looks like stupidity, but Democrats are master criminals, and pass off enormous amounts of EVIL as “stupidity”.
“WHOOPS – sorry. Now get out of the White House.”
TRUE – that Bush “Read my lips, no new taxes”, because of TEFRA, had to raise taxes, created Clinton.
Notice which VOTERS this TEFRA plot would have hit, too. The kind of union workers that Clinton needed back from Republicans. CREATE DISSATISFACTION. It’s the Democrat way.
We have to be very careful on infrastructure. Speaker Capone-Gambino-d’Alesandro-Pelosi will likely try some horrible corrupt trick like this.
I’ve got a bad feeling about where the puppetmasters want to take us all in the name of “infrastructure.” Yep, that same infrastructure that was NOT cared for during the days of maximized PLUNDER of America.
Triple T is right. We’re going to have to watch them like hawks.
I wish they would wait until we have the house back because there is no trusting pelosi or Schumer they both want something and will give nothing in return.Chuckie is like a rabid dog for his tunnel deal I say go piss up a rope dems.
I’ve seen Lenin (Vladimir, not John) quoted as saying, before 1917, “The worse, the better.” Meaning that the more people who are miserable, the better the prospects of bringing the regime down.
Hitler, too was hindered by good times and helped by bad times, during the growth and rise of the Nazi party.
I see it now up at the top of the post. Sorry. Wanted to include the video in a blog piece today. So easy to prove that the fake news people didn’t tell the whole story.
Thank you Daughn for this most important look back at what was going on during these times.
The reason POTUS didn’t want the DIMs to have his returns is 1) they’re not entitled 2) they’re too dumb to figure out what they mean 3) DMs and media will spin the narrative in a negative way.
POTUS’ base will support him, will grow bigger and stronger because of “dirty tricks”……….
Thanks for the in-depth explanation. We certainly wouldn’t get this kind of reporting from the mainstream media (even the conservative outlets).
Hey, We Are The News!!!!!!
I didn’t understand it until just recently.
We’ve been lied to soooooooo much.
Ding Ding Ding…. The winner!
Between the LYING “Media” and the CORRUPT and COMPLICIT Poly Ticks…
It is a wonder we even still exist as “AMERICANS”.
Times, they are a changin’
Hands Up; Don’t shoot = lie
Mexicans are Rapists/Murderers = lie
Muslim Ban = lie
Trump mocked disabled reporter = lie
Charlottesville ‘fine people’ = lie
Muh Russia = lie
I’m done with them all.
The communist FAKE NEWS is proof that LEGAL TREASON can be accomplished by enough perfectly legal lies for a long enough period of time.
So do I Daughn.
Both Hubby and I lost our jobs in the 1991-1992 recession. The company I worked for closed their doors as did Hubby’s we got other jobs and THOSE companies went under too!
That is when I said forget it! We left the Boston MA area and moved to NC Research Triangle Park area hoping for better luck.
….
Thanks to the 2008 foreclosure fiasco and Obama’s Home Affordable Modification Program DESIGNED TO FORCE marginal loans into forclosure, we almost lost our farm.
Washington Compost After helping a fraction of homeowners expected, Obama’s foreclosure prevention program is finally ending
The Government facilitator gets the banks to agree to a modified amount, several hundred less a month in our case. The bank keeps ‘losing the paperwork and needing ‘different’ paper work. This goes on for over a year. Then the bank turns down the modification AND promptly foreclosed.
For us they DEMANDED payment within 30 days BUT THEY WOULD NOT TELL US HOW MUCH!!!
😱 💩 😡
We LITERALLY HAD TO SUE to get the bank to tell us the amount owed!
We ended up with:
Our Lawyer:
Additional fee due to uncooperative bank:
BANK:
Accrued Late Charges:
Outstanding Attny Fees:
Refusal to name and amount led to:
Additional Attny Fees</b.
Attorney fee
Attorney fee
Attorney fee
Attorney fee
Attorney fee
Attorney fee
Total Attorney fees + Late Charges to bank + amount not paid over a year = Several Thousand + back amount owed.
We were lucky and could sell off a lot of antiques, livestock (at a major loss) and borrow from relatives to make the payment of $20,000 +
I recall it all, similar story here.
By 2009, I had 40K left on my mortgage but needed a 70K loan.
No loans moving, at all.
What? I had an 835 credit rating.
NEVER missed a payment.
If I didn’t get the credit line, my biz would have gone under, which would have meant the loss of the house.
No can do.
Finally, I brought 7 other large biz owners into the bank, met with Pres and board. We all knew each other. We figured out a way to stay alive. We had to keep the town employed. Cuz, if we went down, we would all be growing mushrooms.
Community banking! Way to go.
It was a Bailey Building and Loan moment.
We all struggled together but we made it through.
HORRIBLE times.
VERY HORRIBLE!
This is a write up about the guy who got us that loan. (That was another YUGE FRAUD — switched to variable from fixed AFTER we signed and NO LAWYER.)
This is the the law firm: Brock and Scott As you can see in this case brought against them it was their typical method of doing business so I am not making it up.
The lawyers kept canceling the closing. Then on the very last day, they had us SIT ALL DAY until they were headed out the door. One lawyer tossed the papers at a law clerk who had us sign the documents. The clerk THEN DISAPPEARED and the papers we got after that had the Adjustible Rate box checked.
We had been willing to pay a higher rate so we would have a fixed rate. Instead we got a higher rate AND an adjustible rate…. 😡
I wish I could PROVE that darn loan was a MAJOR FRAUD!
WOW – that is NASTY!
To go with my personal story of the 91-92 recession and Forclosuregate which hopefully will appear some time.
>>>>>>>>>>>>>>>>
No one ever reports the REAL STORY behind what happened to us and many others during Foreclosuregate:
>>>>>>>>>>>>>>>>
Remember during the Big Bank Bailout the FED told Ron Paul to go stuff himself when he wanted an audit. Only later did it come out that Ron Paul was correct to want to know WHERE the taxpayer bailout money was going.
September 2011 Federal Reserve to Bail Out European Banks (Again!)
How Ben Bernanke Saved Europe’s Banks – The Globalist
The story of an unprecedented effort by the U.S. central bank to serve as the lender of last resort to the world.
[…] in researching my new book on the efforts of the world’s leading central bankers to combat the crisis and the aftermath, a different narrative emerged.
You can’t understand the crisis, I found, unless you understand how a huge portion of the Federal Reserve’s work during this period—and off and on since then—was about propping up banks in Europe and across the globe.
To a degree that few people understood at the time, banks in continental Europe had bought vast sums of the very shaky mortgage securities that were rapidly losing value as U.S. homeowners defaulted in numbers that had once seemed unimaginable.
Their exposure to U.S. assets was a whopping $10 trillion. Those were the dollar assets on their books.[…]”
And NOW the US Tax payer is on the hook for… ‘a whopping $10 trillion’
Remember we bailedout AIG the company insuring those home loans. What many people did not know was there could be MULTIPLE policies on one house AND you did not have to be the morgage lender!!
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
This is why Obama’s Admin FORCED so many into bankruptcy. The banks AND OTHERS could collect one two, three or MORE insurance policy payouts AND also get the land so IT PAID VERY WELL to FORCE certain people into bankruptcy IF their mortgage was insured by AIG.
I should know since we were victims.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Absolutely TRUE.
European homeowners did NOT suffer the write down and declining home values as we did in America because we bailed out EURO banks FIRST.
Infuriating!
So Yes, Wolfie This MESS was ALL PLANNED to remove middleclass home ownership.
Remember AGENDA 21 WANTS TO FORCE US INTO APARTMENTS.
Any minority with their head on straight would figure out the ‘affirmative action’ actually means “We (the elite) think you are dumber than a brick but we want your vote so we can continue our plans for building slave quarters (aka “Smart Growth”) for you.” — stolen from Mike McMillan
They even come right out and say it!
And Bloomberg is putting it into effect in New York. He really must have LOVED Sandy since it means they can insist on Smart Growth housing as replacement.
*http://www.capitalnewyork.com/article/politics/2012/07/6173436/micro-unit-mini-apartment-building-coming-new-york-city
*http://inhabitat.com/nyc/5-super-efficient-tiny-new-york-apartments/unfolding-apartment-13-2/
And so is California:
So what does the California bureaucrats want?
California has declared war on the most popular housing choice, the single family, detached home—all in the name of saving the planet.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The attack on our freedom is multiple and “saving the planet” is the excuse.
1. Land-use regulations aka zoning.
This is a pre-packed deal from ICLEI.
“Smart Growth” even put out A Citizen’s Guide to LEED for Neighborhood Development: How to Tell if Development is Smart and Green
I found it at this planing board site: http://www.co.berks.pa.us/planning (Note: Smart Growth Alliance banner)
Someone commented Berk county within city limits, now requires you reapply for the zoning of your property after you buy it. Massachusetts did the same thing with septic tanks in 1994 when I got out of that state. The new code was no ground water within 10 feet down from the bottom of tank IF you want to sell. (Most ground water is within ~2 to 4 ft in the spring on the east coast) Once the testing is done and found not to meet ‘Standard’ the house is CONDEMNED and the owner can not only NOT sell the property but can no longer even live in the house. We picked a major drought to have our system tested plus a bit of dancing and got it ‘Passed’ This is a really good way for the government/banks to pickup property as the owners end up abandoning it.
2. The second attack is jacking energy costs so high no one can afford to live in anything but the 14ft X 14 ft Slaves Quarters being designed just for us.
http://www.capitalnewyork.com/files/Apartment400.jpg
New ACCCE Analysis Shows EPA Rules to Shut Down 30 Coal Units in Ohio: More than 200 units in 25 states scheduled to be shut down
This old, mostly coal powered energy was $16 permegawatt
The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt…. For the northern Ohio… the price is a shocking $357 per megawatt…. …. These are the actual prices that electric distributors have agreed to pay for new capacity.
So your normal Electric bill was $160/month, depending on how much of your energy was from a coal plant that is being shutdown your can be looking at an electric bill up to $1360/month at the same time that jobs are hard to come by and the actual wages in the USA are declining.
3. The third attack is brainwashing. I have actually met a professor (CAGW activist) who has no problems with the fact that his daughter will have a lifestyle of poverty and he said she has no problems with that. (The daughter then start talking to me about how she wants to buy a horse when she grows up and was bragging on Dad’s brand new SUV…)
Robin has this subject well covered at Invisible Serfs Collar:</b. “a group which desires to be strong has no use for the man who claims to think for himself.”
Agenda 21.
IMHO, it would be great if President Trump, “unsigned” the UN Agenda 21. 100% un-American.
That was my thought after hearing President Trump “unsigned” the UN Arms Treaty Pact.
BP goes up every time I read or hear about Agenda 21. An absolute attack on Freedom in America.
It is SLAVERY pure and simple.
SEE: https://www.postsustainabilityinstitute.org/the-post-sustainable-future.html
Rosa Koire is spot on. I had come to the same conclusions independently.
Daughn! Fantastic Post!! Had baby #3 in 1991 (3 kiddos under 5) so I quit work to be full time momma. Mr. Marica was a Full time builder of less than 3 years. Talk about belt tightening…
You are exactly right regarding the 2 geniuses of Tiger Woods and Donald Trump! I find the timing of the tax release coming the day after the Freedom Medal ceremony where President Trump lauds Tiger with his timeline of accomplishments and Come back Kid grit and determination–Well– It proves to me that our POTUS certainly mirrors Tiger!
I Literally posted to umpteen liberal blue checks that President Donald J. Trump is the Tiger Woods of Real Estate!!
Thank you for all the hard work you put into this post!!!
Can’t wait for the RALLY!!!!!!!!!!!!!!!!!!!!!!😊😊😊😍
You know exactly what it was like back then!
Mommas are mad.
WE REMEMBER!!!!!!!!!!!!
Time to kick some a$$$$$$ at the rally tonight!
Daughn anyone over 45 (with 1/2 a brain) remembers the horrors of the 1991 recession followed by the 2008 foreclosuregate and Food Riots.
My husband lost his job also and the company gave him 6 weeks to find a new job. He did in the university.
We lived two years apart and my husband drove 9 hours ever weekend to be home. I lived 4 months in NYC to take care of my father in law who died and we took my mother in law to live with us until she past away.
God knew what He was doing because for us this move was good when looking back.
He had a good courier as professor and he had many professional opportunities and afforded him to do the things he likes to do.
I also had a chance to grow and do things I never dreamed of doing. When one window closes another one opens and timing is everything.
Hard times are not bad. I believe in 7 good years and followed by 7 lean years and that is why we save when time is good for lean years. I grew up with that reality and my grandmother drilled that into me.
The problem is that evil people ruin people’s lives DELIBERATELY.
And it is for POWER, COMPLETE POWER over the entire world.
They already have all the money they could ever want but they are not satisfied. They have more power than 99% of us will ever have… they are not satisfied.
They WANT TO BE gods.
And yes there is a video of him actually saying words to that effect.
Gail Combs
“The problem is that evil people ruin people’s lives DELIBERATELY.”
___________________________________________
Yes that is true. Someone tried to ruin my husbands professional life because he told the truth what others were doing to cook the books.
Nothing is easy there are evil people in all jobs jealousy is a terrible sin.
People seem to have a habit to coved what others have .
That is the problem that POTUS is having his enemies want to covet his stuff his success and his success being the President. Hilary is the biggest offender we know off that is why she cannot pass.
You have the right attitude, Singing Soul, God Bless!
Wolfie here is the EVIDENCE that this crap is all PLANNED years ahead of time so as not to leave DemonRat fingerprints on the mess.
Again from my old notes…
Clinton bank laws that created the 2008 Foreclosuregate
The critical part of the scam was the Commodity Futures Modernization Act. This allowed CDSs to be placed on mortgages. If a bank has a couple of CDSs on your mortgage then the bank WANTS to force you into foreclosure See: How the AIG Bailout Could be Driving More Foreclosures
http://www.realtytrac.com/content/news-and-opinion/how-the-aig-bailout-could-be-driving-more-foreclosures-4861
Here are the other laws that set up the AIG Bailout – Foreclosuregate:
(I rearranged the order and added comments)
Great article Daughn, and a clear illustration of the evils of “advisors” and “staffers” who haven’t a clue of the real world.
This could easily be about the thousands of voles beavering away in the bowels of Brussels, or the UN, or any of hundreds of NGOs and government organizations.
There are too many nut cases running the insane asylums, erm, governments. Companies as well. I wasted an hour or so one time explaining to a fresh-out-of-school Indian why letting an inventory location go NEGATIVE is a bad idea, especially for the poor folks in the warehouse concerned. (I went and looked for a burn spot on the floor, but found stock on hand instead.)
He’d never been in a warehouse, or indeed on a factory floor, ever. Same program was almost used for a “Paternoster” (mechanical rotating shelf system, with an interesting history to its name), which would hang, stopping all work, until the location was corrected with a (dummy) receipt (which, of course, drove the auditors nuts). Stick that Paternoster into a bonded (customs-restricted) warehouse and there’s a disaster in the offing…
All because there are people with no idea of the real world giving input where REAL, experienced experts should have been consulted. Instead, we get wet-behind-the-ears “consultants”, from “do little”, et. al., who are bathed in the latest theories and one might say, scare stories, but no clue about “the bad old days”, i.e. when one learned by experience, and one’s (and others’) mistakes.
I also have to wonder where the NYT got those tayx returns. Seems like there’s a felony or two behind that. Over here, it’s the second-leading story behind “Baby Sussex”… Bread and circuses from the MCM… sigh…
“…Instead, we get wet-behind-the-ears “consultants”, from “do little”, et. al., who are bathed in the latest theories…”
When a corporation hires one of those and then several years later finds out JUST HOW BAD he was, Hubby and I say they have been Harvaaaad Business Schooled
Had a production manager like that at one of my first jobs. He would not let maintanance of production order parts…. The lead time on an extruder screw is TWO YEARS!!! They have to be custom built. You can imagine the mess left behind when a couple years later he took his GLOWING Resume to the next company showing how much he had ‘improved’ the bottomline. 😡
>>>>>>>>>>>>>>
Interestingly Lowes Home Improvement MAKES all potential management types spend three months in each of the critical areas like the warehouse, stocking shelves, customer help… General Electric and several other companies used to do that as general practice in the 50s and 60s. They would hire in bright young people and REALLY TRAIN THEM instead of hiring college airheads.
Yep. In the old days at HP, BC (Before Carly), development engineers and sales engineers would swap jobs for a while, so that the labbies got to meet the customers, and hear their problems, praise, and needs/ideas directly.
This helped in a number of ways, first by giving the labbies a taste of the real world; second, by having the sales engineers see what constraints the developes face (so they don’t promise the customer the moon when it’s only possible to realistically implement a golfball); and third, the customer sees the genuine interest that HP had (sad to have to say that in the past tense, though there are still good folks there) in their customers, employees, and products.
Yet another great part of the HP Way, gone but not forgotten…
I loved HP lab equipment. I bought new HP GCs and IRs for five different companies. 😁
We have a friend who worked for HP up in the Boston area.
Cuppa, I would bet every time we turned over the shovel in Brussels, we would find a scandal.
Disgusting.
I would much rather hire a high school graduate with 20 yrs experience than an educated idiot fresh out of college with a “degree”.
I gave up hiring anyone under 35 to work in the lab because I was hired to run a lab NOT a kindergarten!
lol
We “conservatives” Want to be LIKE the Donald or Tiger…….
Liberal Dumb Masses want to tear them down …..
for equality or some such bull shit.
That look on Donald’s face is the look of a father who is greatly proud of his son.
That look on Woods’ face is the look of a son who cannot keep the tears of joy from breaking out, because his father finds him worthy.
What a shame that all Americans can’t understand the depth of DJT’s soul. It’s completely permeated with God.
They talk to each other a lot, especially when Tiger had so much trouble and didn’t have his dad around.
Strange the way Trump tends to do that for others. He’s the guy who calls when no one else does.
Great read daughn.Brings back some bitter memories but our family made it through that decade and I really started to see those whacko Democrats were the sane peoples enemy.
I’m so ready for the rally tonight! VSG President Trump calms me down and it’s so much fun to watch!
pgroup LIKE!
What a shame that all Americans can’t understand the depth of DJT’s soul. It’s completely permeated with God.
I can just imagine citizen Trump doing a lot of praying to God in those trying times in his life and God heard his prayers.
Something Else that the Tax Reform Act of 1986 did, was eliminate the deduction for Consumer Interest, paid on credit cards and other loans.
This was another cause for the Recession of 1991 – 1992.
They phased out the Interest Deduction, making a smaller percentage deductible each year…until it was completely eliminated in the early 90’s.
It used to be great.
You could add up All the Interest that you paid throughout the year…on credit cards, car loans and any other loans…and then take that deduction against your Taxable Income.
Of course, if you owned a home and had a mortgage…that was deductible too.
But people who didn’t own a home, had something to deduct as well!
People didn’t mind buying things on credit…and even paying higher interest rates on those balances…Because they could take a direct deduction on their tax returns.
Lots of people got nice fat Tax Refunds too.
And they went out and spent that money!
There was a nice cash flow going on in our Economy, as a result of that Consumer Interest Deduction.
And the dreadful TRA1986 killed it.
The gears of our economy started grinding to a halt…because they took away the grease that had made it run smoothly.