The quote of the day comes from Damon Silvers, a member of the independent Congressional Oversight Panel:
We are faced with a choice here.
We can either have a rational resolution to the foreclosure crisis or we can preserve the capital structure of the banks. We can't do both.
In other words, we either let the giant mortgage and foreclosure crisis drag both the economy and the rule of law down, or we can rein in the giant banks.
Other great quotes from yesterday's Congressional Oversight Panel hearing:
- Now do you wish to retract your statement that there is no systemic risk in this situation? And the word is "risk" -- not "certainty" -- but "risk"? And I would urge you to do so, because these things can be embarrassing later. [COP Panelist Silvers]
- I hope that ... if the Treasury comes back to us and is discussing whether or not we need to deploy further public funds to rescue Bank of America, or such other institutions as might be affected by these events, that we get a similar kind of indifference to their fate after it's too late. Because it strikes me that in light of the mathematics I've gone through with you, it is not a plausible position that there is no systemic risk here. [COP Panelist Silvers]
- "So, I mean, it sounds like Treasury as of today has not done even a back-of-the-envelope sketch as to what the potential put-back rights could be to the TARP financial institutions," COP Panelist J. Mark McWatters said, referring to the risk big banks face from investors forcing them to buy back dicey mortgages.
- America does not have to continue in a "crisis." We do not have to tolerate abuse of the legal system, systematic errors, bloated fees, and chaos in the housing and financial sector. [Harvard and Iowa law school professor Katherine Porter]
Here's a video of the whole hearing.