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Panel to analyze financial collapse
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Byron Georgiou
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Heather Murren
LAS VEGAS REVIEW-JOURNAL
Updated: Sep. 8, 2010 | 8:21 a.m.
The federal financial crisis commission has questioned experts, executives and officials in the nation's capital and New York. It has studied their e-mails, transcripts of insider conversations and documents on practices that led to the near collapse of the American financial system.
However, today the Financial Crisis Inquiry Commission will walk down into the still rippling epicenter of the financial crisis, Las Vegas, which leads the country in unemployment, bankruptcies and residential foreclosures.
The commission will listen to Las Vegas leaders explain how the boom turned into possibly the worst economic collapse of any major city in the United States.
The hearing starts at 9 a.m. at the Student Union Building second-floor ballroom at the University of Nevada, Las Vegas. The city is one of four hosting field hearings for the commission.
Presiding at the hearing will be Heather Murren, chief executive of the Nevada Cancer Institute and a former Wall Street analyst, and Byron Georgiou, an attorney who led plaintiffs in lawsuits over Enron Corp., Worldcom and AOLTime Warner.
"Las Vegas has been hit hard, no question about it," Georgiou said.
Murren said, "I would like to hear what made Las Vegas unique in this crisis."
The collapse of the subprime residential mortgage loan market "was the first domino" to fall, Murren said.
However, analysts started seeing economic weakness nationally in 2005 and 2006 before the subprime implosion. Then, the financial crisis hit Wall Street and froze lending, she said.
The recession ultimately slowed tourism, the engine of the Southern Nevada economy.
Job losses, fears about job losses, a decline in home values and the stock market crash caused people across the nation to curtail spending on vacations in places like Las Vegas, she said.
The commission isn't charged with recommending legislative remedies, but Georgiou said some of its findings about the cause of the financial crisis will imply the need for new rules and laws.
Georgiou is encouraged that the Dodd-Frank financial reform law eliminates "spread premiums" that rewarded mortgage brokers who made risky loans. He also likes the requirement that firms originating mortgage securities must hold 5 percent of the total mortgage securities in their own portfolio. That way, they will have "skin in the game" and stand to lose money if borrowers default, he said.
"The Wall Street banks, it seems to me, shouldn't be permitted to pocket all the funds even if they wreak havoc on the financial system," Georgiou said.
Georgiou wants the government to boost capital standards for banks so that they have strength to survive market downturns.
The lawyer hopes the commission will provide insights that will lead to additional reform legislation next year. Murren said the panel's findings could guide government officials charged with implementing regulations under the Dodd-Frank legislation.
Speakers at today's meeting will include Philip Satre, chairman of International Game Technology and NV Energy; William Martin, chief executive officer and vice chairman of Service1st Bank; Steve Hill, founder of Silver State Materials Corp., chairman of Service1st and immediate past chairman of the Las Vegas Chamber of Commerce; and U.S. Attorney Daniel Bogden, who has overseen prosecution of 140 mortgage fraud cases.
Also speaking will be Gail Burks, chairwoman of the Nevada Fair Housing Center; Brian Gordon and Jeremy Aguero, principals of Applied Analysis; Andrew Clinger, chief of the Nevada Budget Division; and Jay Jeffries, former regional sales manager of Fremont Investment & Loan.
The hearing is open to the public and may be watched over the Internet.
Visit www.fcic.gov for more information.
Contact reporter John G. Edwards at jedwards @reviewjournal.com or 702-383-0420.
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Iray1979 wrote on September 09, 2010 12:12 AM:
Guru- The modern world uses money because they have faith in its value, even though nothing intrinsic backs it like gold, which it should if we want stability (otherwise you have a big crash like we experienced). Rome tried a fiat currency, and guess what happened to them? They collapsed much like we are about to (or already have anyways). True taking out a loan or getting credit cards is a choice, but the societal planners and engineers that run everything and set the rules make it extremely impossible to live without the use of credit. Try renting a place without having existing loans or credit, oh you want that $20,000 car to get back and forth to work but dont have the funds to buy it? Try to take out a car loan without credit. Some people are forced into that "choice" otherwise life becomes extremely difficult and unlivable without it, especially the way that society is engineered that it is the norm for working people to have a car. Also alot of jobs nowadaya hirs based on on your credit and if you dont have any active tradelines open, they might shy away from hiring you. Want to buy a house without tradelines (loans) already open? Good luck.
Our Central Bank, the Federal Reserve is neither "Federal" nor do they have "Reserves". They are a parasite that must be vanquished. They have private corporate banks as their board of governors and shareholders. It is private and run for private. It is everything that is wrong with out economic system since they artificially create inflation and deflation.
Guru wrote on September 08, 2010 11:52 PM: Graham- the modern world uses "fiat" currency. Most if not all countries print and use fiat currency. Most countries also have a central bank. Finally, people are not required to get a loan. It is a choice. Loans can be good or bad. So where are you going with your points? Bill.Kay wrote on September 08, 2010 10:08 PM: The crisis analysis made simple: Bank Self-Dealing http://www.propublica.org/article/banks-self-dealing-super-charged-financial-crisis Read and learn... Graham wrote on September 08, 2010 03:51 PM: BREAKING NEWS. Video has just come to light of a lion at the MGM attacking a man in the lion enclosure. It seems the lion thought he was a visiting Wall Street banker! Good lion. speaking.frankly wrote on September 08, 2010 02:46 PM: What a crock. Now we have a commission of "financial wizards" who were part of the system that facilitated these kinds of loans all over the valley, took home excellent pay, created new wealth by establishing new banks, and now want to sit around discussing what happened. Look in the mirror you blowhards. Graham wrote on September 08, 2010 01:48 PM: Reply to nevada7. You talk about money and loans? Don't you get it. It's all fictitious. It's all made up. Money as a store of wealth is Gold and Silver as set out in the Constitution. Not pieces of paper which is based on debt. Nor is money brought in to existence by loans as debt created by banks. Americans need to educate themselves fast. They're delusional about the reality of money. When they find out they'll be incontrollobalbe in their anger.Dont you feet it. an elite class of money masters feed off you. They're the international banksters. The shylocks. They use central banking as their vehicle for this scam of biblical proportions. Start your education by reading the 'Creature from Jekyll Island' by G. Edward Griffin. Americans have not only lost their homes, jobs and dignity. They are losing the Constitutional Replublic. It's happening right before their eyes whilst they instead watch football, eat GMO laced burgers and talk about the latest contestant on American Idol. nevada7 wrote on September 08, 2010 01:08 PM: Jeez, this is easy. As California's real estate frenzy ensued, people took the money and came here (or bought here)and AZ, driving up real estate here. Then, since there were so many non-primary homes, once it peaked, people lost their discretionary income and stopped gambling. OTher people walked away from their 2nd or 3rd homes here in NV, and the high unemployment rippled through the locals putting further downward pressure on the housing market here. What do they need to commission a panel on this for. The bottom line is, CONGRESS (not Bush or Clinton), changed rules on lending, encouraged fannie may and freddie mac to approve riskier loans, the banks took advantage of the situation and gave out government backed loans so they could get rich on the transaction fees, then when the loans soured, took billions from the Feds to secure their loans. Of course, it was really to help the people in their homes, but the Banks could care less about the people, they only want their money. Mac wrote on September 08, 2010 09:37 AM: Just remember what Harry said: IT'S ALL BUSH'S FAULT. TONY wrote on September 08, 2010 08:06 AM: THE BIG BOYS SOLD TOXIC PAPER WORLDWIDE........ EVEN HAD THE RATINGS COMPANIES GIVE AAA+ TO JUNK ..................WHAT A PARTY WE ALL MADE $$$$ ..........PS COMMENTS BY GRAHAM RIGHT ON Reality Bites wrote on September 08, 2010 07:27 AM: It started with the AIG bailout. Then we were 'told' TARP would help homeowners only to have the banks buy other banks. Obama's financial reform did NOTHING to curtail more Freddie and Fannie disasters. Avoid a replay? It wouldn't surprise me if they were looking for ways to get away with it again. Read More Comments |
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