Obama tells Wall Street: Curb greed for U.S. good

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Presidential contender Sen. Barack Obama yesterday said that Wall Street needs to temper its greed for the financial good of the country.

The Illinois Democrat said the public is losing trust in the markets — citing the predatory lending that has left millions vulnerable to interest-rate swings, as well as headline-grabbing corrupt chief executive officers — and called for more transparency in the financial markets.

Mr. Obama, in an address at the NASDAQ Marketsite, likened the current mortgage-lending crisis and its fiscal effect to the Depression era uncertainty that faced President Roosevelt.

"We certainly do not face a test of the magnitude that Roosevelt's generation did, but we are tested still. Here at the NASDAQ and all across America, the tickers are being watched with heightened anxiety and considerable uncertainty," Mr. Obama said.

He called on the mortgage industry to give flexibility to those seeking to refinance their mortgages. And he encouraged Wall Street to abandon the "what's good for me is good enough" attitude.

"Because the only thing that's good enough is what's best for America," he said.

Mr. Obama proposed updating the current mortgage rules to establish a federal definition of mortgage fraud and enact tough penalties against lenders who knowingly act in bad faith.

He also called for a model that would allow customers to easily compare mortgage products.

Recalling the Enron and WorldCom accounting scandals, Mr. Obama said the stock-ratings system needs to be overhauled — after the system is first investigated.

Many market analysts have complained that the current mortgage crisis and the Enron and WorldCom scandals occurred in plain sight because stock-rating agencies continued to give a rosy outlook for the companies despite their impending bankruptcies.

Mr. Obama blamed the Bush administration for fostering the environment that eroded the market's gains of the 1990s.

"The failure of government to exercise adequate oversight over the rating agencies will cost investors and public pension funds billions of dollars — losses we have not yet fully recognized," he said.

Mr. Obama, not avoiding a populist tone in a room full of capitalists, said that the new global marketplace has most benefited wealthier investors, increasing the gap between the haves and have-nots.

"If we are honest, I think we must admit that those who have benefited from the new global marketplace — and that includes almost everyone in this room — have not always concerned themselves with the losers in this new economy," the Illinois senator said.

He also called for a five-star credit card rating system to inform consumers about the level of risk for their credit card, including how easily the company can change the interest rate.