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Senate Proceeding on Jul 14th, 2010 :: 6:59:10 to 7:07:20
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Johnny Isakson

6:59:09 to 6:59:31( Edit History Discussion )

Johnny Isakson: comes from having a job. mr. president, i note the absence of the presiding officer: will the senator withhold? the senator from mr. isakson: is the senate? a quorum calls mr. president? the presiding officer: no. mr. isakson: thank you, mr. president. i will be brief, but i come to the floor this afternoon in

Johnny Isakson

6:59:10 to 7:07:20( Edit History Discussion )
Speech By: Johnny Isakson

Johnny Isakson

6:59:32 to 6:59:52( Edit History Discussion )

Johnny Isakson: anticipation of a vote tomorrow on the financial regulatory bill. to express my concerns that i expressed before its passage on the floor originally, and my continuing concerns today in its final form as it's been agreed to, and i understand it will pass with 60 votes. mr. president, nobody has been more concerned about the economy

Johnny Isakson

6:59:53 to 7:00:14( Edit History Discussion )

Johnny Isakson: and the financial markets and the financial institutions of our country than have i. in fact, in part because of my lifetime in the residential real estate business, i have seen firsthand the sufferings our mortgage industry through, foreclosures have taken place and what the subprime lending industry did to the u.s. economy.

Johnny Isakson

7:00:15 to 7:00:36( Edit History Discussion )

Johnny Isakson: but before we rush to a re-regulation of financial institutions, i think we have to stop and reflect on some of the things we've already noted as members of this senate. senator conrad, a democrat from north dakota, and myself introduced a piece of legislation over a year ago called the financial markets crisis commission. we iroduced it because we felt

Johnny Isakson

7:00:37 to 7:00:57( Edit History Discussion )

Johnny Isakson: that he think e everything that had happened in late 2008 through march of 2009 that collapsed our markets on wall street, collapsed our securities and hurt our banks both community and national needed to be investigated. we needed to get to the root problem. we needed to try to correct it.

Johnny Isakson

7:00:58 to 7:01:19( Edit History Discussion )

Johnny Isakson: this senate passed the conrad-isakson amendment unanimously. the house passed it virtually unanimously. the senate and the house funded it to the tune of $8 million, and that commission is appointed, working today. it has subpoena powers that it can issue, and it's issuing subpoenas. it is dedicated by statute to report back to us by december 31 of this year.

Johnny Isakson

7:01:20 to 7:01:40( Edit History Discussion )

Johnny Isakson: so here we find ourselves in the position of getting ready to pass a financial re-regulaon bill on the floor of the senate tomorrow in the middle of the year in july, knowing that we're not going to have until december of this year the forensic audit of our financial system done by the system which we unanimously funded and demanded.

Johnny Isakson

7:01:41 to 7:02:03( Edit History Discussion )

Johnny Isakson: it's sort of like a doctor doing surgery before he does a diagnosis. it doesn't make a lot of sense. but in particular, there's one part of the bill i want to focus on for a second that i think is rife for continuing problems without any regulatory oversight, and that's freddie mac and fannie mae. i think everyone realizes that

Johnny Isakson

7:02:04 to 7:02:24( Edit History Discussion )

Johnny Isakson: the purchase of mortgage-backed subprime securities by freddie and fannie ni created the depository whereby wall street went to raise the money created by loans knowing they could sell them to freddie mac and fannie mae. those securities are going to be created to be funded or purchased by those entities. and that's precisely what

Johnny Isakson

7:02:25 to 7:02:46( Edit History Discussion )

Johnny Isakson: happened over the five or six years preceding the beginning of the collapse in late 2007. freddie and fannie went from zero holdings in subprime loans to as much as 13% of their portfolio. now, this was not jus because they decided to buy them but it was in part because of a congressional directive for freddie and fannie to have a

Johnny Isakson

7:02:47 to 7:03:07( Edit History Discussion )

Johnny Isakson: portion of their portfolio in what's known as affordable loans. so these affordable loans became subprime loans, and they were securitized on wall street, the securities sold around the world and the legitimacy of those securities bed in part on the fact that u.s. government-sponsored entities -- freddie mac and fannie mae --

Johnny Isakson

7:03:08 to 7:03:28( Edit History Discussion )

Johnny Isakson: were buying them but also because moody's and standard & poor's rated them triple a. then all of a sudden we had a tremdous collapse, a collapse of subprime securities that had devastating consequences not just for the united states, but for the world. just briefly i want to tell a story to make that point.

Johnny Isakson

7:03:29 to 7:03:50( Edit History Discussion )

Johnny Isakson: in august of 2008, i was in kazakhstan with leader reid and other members of the senate on a trip that later took us to afghanistan and finally to germany. when we arrived in kazakhstan and landed at the airport, we went into the city in a ambassador's vehicle. as we went by, i saw this beautiful city in asia;

Johnny Isakson

7:03:51 to 7:04:11( Edit History Discussion )

Johnny Isakson: beautiful countryside, large buildings being built, beautiful flowers. obviously a country of great wealth. and they do have most of the oil in the old soviet union, now the russian federation. but as we came into town, i kept noticing vacant, half-finished, 20- and 30-story buildings, chain link fence around them,

Johnny Isakson

7:04:12 to 7:04:34( Edit History Discussion )

Johnny Isakson: wire around the fence. padlock on the door. we got through the embassy, went to the briefing. when it was over i wassked if there were any questions. i said i have one. is today a hiday? the ambassador said no. why do you ask? i said we passed 15 or 20 buildings, 20 to 30 stories,

Johnny Isakson

7:04:35 to 7:04:56( Edit History Discussion )

Johnny Isakson: padlocks on the brigade, razor wire on the fence. what happened? he said u.s. backed subprime mortgage securities. i said i beg your pardon. he said u.s. backed subprime mortgage securities. three weeks ago merrill lynch in america wrote down their portfolio by 78 cents on the dollar. therefore, the bank of kazakhst which had bought a number of these securities wrote

Johnny Isakson

7:04:57 to 7:05:17( Edit History Discussion )

Johnny Isakson: down their portfolios as well. they stopped funding construction lns, they stopped making mortgages. mr. president, kazakhstan is 11.5 tim washington, d.c. the reverberations of the subprime security collapse affected not just the united states, but the world. and today what's happening in europe and other areas in part in our recession was a

Johnny Isakson

7:05:18 to 7:05:38( Edit History Discussion )

Johnny Isakson: consequencef what began with a mandate by congress for freddie mac and fannie mae to fund mortgage backed securities. i tell that story and make my statement to make my single important point on why this rush to judgment on the financial regulatory bill is wrong.

Johnny Isakson

7:05:39 to 7:06:00( Edit History Discussion )

Johnny Isakson: it's wrong because it excludes freddie mac and fannie mae from any scrutiny or increased regulation. let me repeat that. the two entities that created the market that bought the securities that fueled the funds for wall street to put them together and sell them, the two entities, freddie mac and fannie mae, are exempt from this financial re-regulation bill in

Johnny Isakson

7:06:01 to 7:06:22( Edit History Discussion )

Johnny Isakson: terms of scrutiny whatsoever. that just, to me, doesn't make any sense at all. and i think when the financial markets crisis commission reports back to us at the end of this year, it will make it clear that it's a mistake to rush to judgment. it is critical that we have all the players under scrutiny and all the players under regulation, not just try and

Johnny Isakson

7:06:23 to 7:06:45( Edit History Discussion )

Johnny Isakson: create a feel-good system where we reregulate those that are already regulated, saying we're doing something about the conditions in the market when in fact we're raising the cost of doing business, lowering the ability for banks and lending institutions to extend capital and in fact in som contributing to a procracks of the recession we -- protraction of the recession we experience today in america.

Johnny Isakson

7:06:46 to 7:07:07( Edit History Discussion )

Johnny Isakson: when i cast my no vote tomorrow on the financial re-regulation bill it won't be because i don't think we need to do some things in the marketplace but i will be because we listened to the people to come back with a forensic audit, rather than take a rush to judgment a a time we're in a precarious and difficult time in the current recession in the united states.

Johnny Isakson

7:07:08 to 7:07:21( Edit History Discussion )

Johnny Isakson: so, mr. president, i'm grateful for the time you've given me.?? my vote tomorrow on the financial re-regulation bill will be "no" and it's my hope that when the report of the financial crisis commission

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