Wall street bailout plan defeated in the House.

[August]

http://afp.google.com/article/ALeqM5j9vXiWc_DC1Sjd_GwZo2DUsasMcw

Good. I don't see the value in bailing out those that caused this mess in the first place.

[Jimbuna]

So what do you reckon will happen to the value of the $ on the international currency market now :hmm:

[August]

So what do you reckon will happen to the value of the $ on the international currency market now :hmm:

Dunno, maybe lower it enough to bring back all those manufacturing jobs from overseas?

[AVGWarhawk]

All I can say is "Oh well". The banks created the mess and they should clean it up. Do you think the banks ever attempted to REASONABLY work with people who got behind with payments? Hell no. They were relentless with calls and letters to collect. They demanded thousands of dollars to get the balance even. If people could do that they would not be in foreclosure to begin with. Eventually they woke up a few days back and came crying to mamma (Capitol Hill) and put a gun to her head. If the banks attempted to make a reasonable effort to help those in distress, this could have been avoided. Unfortunate the greed gets the better of everyone. The bail out should fail. I certainly do not want to pay for the short comings of others.

[Skybird]

http://www.rgemonitor.com/blog/roubini/

http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html

It's a no-win-no-win situation. Accepting that package, does not enough, but still would come at a very costly price. not accepting the package, also comes at a costly price.

Well, that is karma, self-created. Occasionally, in the past 5, 6 years, we had discussion about such things, and when I pointed out that there is a logical trend leading to outcomes comparable to the ones we see today - I was laughed and mocked about. I hear no laughter anymore these days.

[AVGWarhawk]

http://www.rgemonitor.com/blog/roubini/

http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html

It's a no-win-no-win situation. Accepting that package, does not enough, but still would come at a very costly price. not accepting the package, also comes at a costly price.

Well, that is karma, self-created. Occasionally, in the past 5, 6 years, we had discussion about such things, and when I pointed out that there is a logical trend leading to outcomes comparable to the ones we see today - I was laughed and mocked about. I hear no laughter anymore these days.

Sorry Skybird, everyone had foresight into this problem. Many chose to ignore the issues including the greed driven banks and that part of society stuck in it. Many did not and it is these folks who used their heads that are taking it in the shorts.

Of course it is a no win situation. The banks have the government over a barrel AND THEY KNOW IT. Why do you think the banks ran to mommy on Capitol Hill to fix their big boo boo. Sick really. Not to mention this sets precidence down the road with other companies who make big boo boos. :down:

[AVGWarhawk]

Bailing out private businesses when they're sinking is so awfully french, I wonder what was GWB thinking on that one :D

I do not think Bush was doing any thinking here at all. He just wanted to cut a fat check and make everythink OKEY DOKEY. Unfortunate the tax payers see it in a different light. Bailing out this type of private business is not the way to go. It rewards greed.

[AVGWarhawk]

BTW, the banks will be tight with loaning money and everyone will be gone over with a fine tooth comb before one cent is loaned...then again, this should have done that a long time ago.

[Skybird]

Sorry Skybird, everyone had foresight into this problem.
Everyone? Should I laugh now? I remember some of the accusations I had been targetted with over the past years. Some of them were hurtful. Foresight into the problem they did not reveal - more outright ignorance, according to the motto: it cannot be what should not be - we are STRONG.

Of course, some people with a more open mind saw it coming. but by far not everyone. People headed for the cliff with thundering applaus. That with the masses pushing in your rear the only way down there is to jump, nobody wanted to hear. It's the classical Lemmings phenomenon. Lemmings do not jump off cliffs because they are stupid, as often is said. The ones up in front get pushed from the masses coming behind them. It does not need many to get the march of the Lemmings started, but once it's under way, it seems you can't stop it - everybody yells "Me to! and dreams of the cheap fortune, and pushes with all his strength.

[SteamWake]

The banks created the mess and they should clean it up.

To the banks 'credit' their hands were forced to in many cases to 'offer' these bad debt loans. Hell they had to to remain in buisness or be legislated out of existance.

As to the legislation failing all I can say is good. It needs to be given more thought and a LOT of trimming.

As to the politics of the thing Pelosi needs to be taken out to the woodshed. Her behaviour is nothing short of shameless.

About the foresight issue a few members of congress forwarned of this exact failure several years ago... Clinton era I believe. There 'warnings' fell on deaf ears.

[goldorak]

Its the end of the completely free market deregulation capitalism ideology.
Just 15 years after the end of communism and 15 years too late if you ask me.
The 2 greatest 20th century ideologies finally put to rest.
Oh well, all we can hope for is that from this debacle a new economic order arises.
A better and more transparent one. :yep:

[Jimbuna]

TBH...it's the financial consequences in the future my children might face that bothers me greatly.

[AVGWarhawk]

Sorry Skybird, everyone had foresight into this problem. Everyone? Should I laugh now? I remember some of the accusations I had been targetted with over the past years. Some of them were hurtful. Foresight into the problem they did not reveal - more outright ignorance, according to the motto: it cannot be what should not be - we are STRONG.

Of course, some people with a more open mind saw it coming. but by far not everyone. People headed for the cliff with thundering applaus. That with the masses pushing in your rear the only way down there is to jump, nobody wanted to hear. It's the classical Lemmings phenomenon. Lemmings do not jump off cliffs because they are stupid, as often is said. The ones up in front get pushed from the masses coming behind them. It does not need many to get the march of the Lemmings started, but once it's under way, it seems you can't stop it - everybody yells "Me to! and dreams of the cheap fortune, and pushes with all his strength.

Don't cherry pick. Most ignored it. It is not the lemming to the sea. It is greed and keeping up with the Jones. There are constant ads on TV advertising for help with folks who are in over their heads. Again, everyone knows but chose to ignore. Phone calls from collectors keep coming in with letters to follow looking to collect. These were ignored as well. Then the roof caved in.

[goldorak]

TBH...it's the financial consequences in the future my children might face that bothers me greatly.

Democracy is great because you have CHOICE. Americans CHOSE not to change. They continued to elect the same political establishment over and over again over the last decades. And if I'm not mistaken up until the 2000 presidental election, the % of voters for each presedential election was always under 50%.
Democracy and your duty as citizen are not god given rights. You don't exert them in full, you have yourself and people like you to blame, besides the usual politicians as to why a country goes the way it does.

[Jimbuna]

TBH...it's the financial consequences in the future my children might face that bothers me greatly.

Democracy is great because you have CHOICE. Americans CHOSE not to change. They continued to elect the same political establishment over and over again over the last decades. And if I'm not mistaken up until the 2000 presidental election, the % of voters for each presedential election was always under 50%.
Democracy and your duty as citizen are not god given rights. You don't exert them in full, you have yourself and people like you to blame, besides the usual politicians as to why a country goes the way it does.

One small point here if I may....I'm not a US citizen!!

We have our own financial problems here in the UK to contend with.

I certainly don't see your country as a paragon of financial security either....and that is going back as far as the last world war and before.

As a father I also reserve the right to feel concerned about the financial and economic wellbeing of my offspring in the future.

What is happening throughout the world will undoubtadly have consequences for the future.

[goldorak]

One small point here if I may....I'm not a US citizen!!

We have our own financial problems here in the UK to contend with.

I certainly don't see your country as a paragon of financial security either....and that is going back as far as the last world war and before.

As a father I also reserve the right to feel concerned about the financial and economic wellbeing of my offspring in the future.

What is happening throughout the world will undoubtadly have consequences for the future.

I didn't intend to single you out. It was a general consideration I was making. I'm sorry for not being a native english speaking person, and sometimes the things I want to express don't come out clearly. :oops:
As to italy being in a catastrophic situation, well as ironic as it may seem italy is well insulated from this particular crysis. And the reason is very simple, our financial institutions didn't invest a lot of money in american securities. So while there may be loses and I'm sure there will be, we won't assist to banks collapsing as is happening in other countries in europe.
As to there being consequences for the future I'm well aware of that. But I think that the americans will suffer the most, and this very harsh lesson will prompt their poltical establishment to rethink what capitalism is about.
The real tragedy is that if america goes under so does the rest of the world.
I don't particularly care what happens to them, but I care what will happen to europe.

[Skybird]

Sorry Skybird, everyone had foresight into this problem. Everyone? Should I laugh now? I remember some of the accusations I had been targetted with over the past years. Some of them were hurtful. Foresight into the problem they did not reveal - more outright ignorance, according to the motto: it cannot be what should not be - we are STRONG.

Of course, some people with a more open mind saw it coming. but by far not everyone. People headed for the cliff with thundering applaus. That with the masses pushing in your rear the only way down there is to jump, nobody wanted to hear. It's the classical Lemmings phenomenon. Lemmings do not jump off cliffs because they are stupid, as often is said. The ones up in front get pushed from the masses coming behind them. It does not need many to get the march of the Lemmings started, but once it's under way, it seems you can't stop it - everybody yells "Me to! and dreams of the cheap fortune, and pushes with all his strength.

Don't cherry pick. Most ignored it. It is not the lemming to the sea. It is greed and keeping up with the Jones. There are constant ads on TV advertising for help with folks who are in over their heads. Again, everyone knows but chose to ignore. Phone calls from collectors keep coming in with letters to follow looking to collect. These were ignored as well. Then the roof caved in.

Have I really said so much a different thing? Do we really that much disagree here? :hmm: as I said, Lemmings do not run and jump to droiwn in the sea, they just don't knopw when enough is enough (of running up that cliff). And at some time, it turns to being driven by a self-dynamic - and push and ooops and splatter...

[UnderseaLcpl]

Its the end of the completely free market deregulation capitalism ideology.
Just 15 years after the end of communism and 15 years too late if you ask me.
The 2 greatest 20th century ideologies finally put to rest.
Oh well, all we can hope for is that from this debacle a new economic order arises.
A better and more transparent one. :yep:

What? We haven't had anything approaching a "free" market since the 30's, arguably, before that. We have regulated capitalism right now and even had it in the financial sector. A lot of those institutions were bound by federal law to pursue sub-prime lending.

I'm curious about what type of order you would like to see....

[goldorak]

What? We haven't had anything approaching a "free" market since the 30's, arguably, before that. We have regulated capitalism right now and even had it in the financial sector. A lot of those institutions were bound by federal law to pursue sub-prime lending.

I'm curious about what type of order you would like to see....

What order I would like to see ?
How about one in which financial health is directly linked to industrial production. Where financial assets are linked with real tangibile things.
One where the risk of doing a bad operation is 100% taken by the financial istitution. Private profits ? Ok. Private loses also.
One order where self regulating markets are thrown out the window as experience has demostrated they don't work.
Just for starters, and this doesn't mean a communist or socialist state driven economy.
The faster americans learn this reality the better we're all going to be.

[UnderseaLcpl]

I don't feel like writing a huge paragraph about why this is a good thing, so I'll let one of my favorite spokesmen do it for me.:D


http://www.youtube.com/watch?v=1sfUKZOHtRs&feature=related

http://www.youtube.com/watch?v=SQhHxKz1hEQ&feature=related

[GoldenRivet]

Who cares what Bush is thinking... CONGRESS wields the power. in the end, all bush has to do is sign the dotted line and accept public praise or ridicule depending on the public perception.

Congress is the one who should be thinking. :yep:

I say... put some of these big lending company CEOs in prison. let them do a little "thinking".

i can trace this whole mess to loaning TONS of money to people who were not qualified for loans.

Remember these slogans from the recent years?

"No money down! No interest for 24 months!!!"

"Zero Interest! zero downpayment! No Social Security Number Required!!!"

"No Social Security Number! Se Habla Espanol!!"

give me a break...

loaning out tons of money to unqualified borrowers gets you into this mess.

NO BAIL OUT PACKAGE.... HOLD BIG BUSINESS CEOS AND LENDERS ACCOUNTABLE FOR THEIR ACTIONS!!!!

[UnderseaLcpl]

What? We haven't had anything approaching a "free" market since the 30's, arguably, before that. We have regulated capitalism right now and even had it in the financial sector. A lot of those institutions were bound by federal law to pursue sub-prime lending.

I'm curious about what type of order you would like to see....

What order I would like to see ?
How about one in which financial health is directly linked to industrial production. Where financial assets are linked with real tangibile things.
One where the risk of doing a bad operation is 100% taken by the financial istitution. Private profits ? Ok. Private loses also.
One order where self regulating markets are thrown out the window as experience has demostrated they don't work.
Just for starters, and this doesn't mean a communist or socialist state driven economy.
The faster americans learn this reality the better we're all going to be.


I'm a little confused on the first one, do you mean directly linked to all commercial output, or only industrial output? What about banks?

Next I assume you mean by going back on the gold standard or something. I'd be for that:yep:

And you're right to a degree about self-regulating markets. They do need some regulation to prevent fraud and ensure workers' and consumers' safety, but how much? I would argue for as little as possible.

Clarify just a bit more, please.

[UnderseaLcpl]

Who cares what Bush is thinking... CONGRESS wields the power. in the end, all bush has to do is sign the dotted line and accept public praise or ridicule depending on the public perception.

Congress is the one who should be thinking. :yep:

I say... put some of these big lending company CEOs in prison. let them do a little "thinking".

i can trace this whole mess to loaning TONS of money to people who were not qualified for loans.

Remember these slogans from the recent years?

"No money down! No interest for 24 months!!!"

"Zero Interest! zero downpayment! No Social Security Number Required!!!"

"No Social Security Number! Se Habla Espanol!!"

give me a break...

loaning out tons of money to unqualified borrowers gets you into this mess.

NO BAIL OUT PACKAGE.... HOLD BIG BUSINESS CEOS AND LENDERS ACCOUNTABLE FOR THEIR ACTIONS!!!!

But more than that, hold the State accountable for requiring them to do this by law, and by providing fiscal incentives (i.e. bailouts for failed venture)

Community Reinvestment Act.....
http://www.ffiec.gov/cra/

the FMs were created by the State.....
http://www.creativeinvest.com/fnma/

[August]

Well I know this may come as a disappointment for some here but I am positioned rather well to ride out whatever happens. I have no debt, everything i own i own outright, nearly all of my savings is tied up in property and schools like the one I teach at historically do quite well in hard times when people need the edge that job training provides to compete for work.

[August]

Meanwhile I'm seeing signs that the market actually had the money to bail themselves out instead of relying on the government to wipe their noses for them.

http://business.timesonline.co.uk/tol/business/markets/article4844255.ece

and oil falls another $10 bucks a barrel.

http://www.breitbart.com/article.php?id=D93GIS200&show_article=1

:hmm:

[goldorak]

I'm a little confused on the first one, do you mean directly linked to all commercial output, or only industrial output? What about banks?


I meant directly linked to commercial output in general. And that comprises also industrial production. But nowadays most financial istitutions push products which in no way are linked to real goods or services. Speculative products whose values are arbitrary. They are totally separated from the real economy and they are one of the reasons of this crisis.


Next I assume you mean by going back on the gold standard or something. I'd be for that:yep:


As great as that would be I don't think we will ever go back to gold standard.


And you're right to a degree about self-regulating markets. They do need some regulation to prevent fraud and ensure workers' and consumers' safety, but how much? I would argue for as little as possible.

Clarify just a bit more, please.

Yes the issue is always how much does the government intervene in markets.
Let me start by saying that I'm contrary to government coming to the rescue of institutions that brought their own downfall (and here in italy we have a great example of that, our government has been financing our Alitalia air company for over a decade, a company that was completely broke, losing 2 million € per day).
The point is that government has a responsability towards society to regulate markets, establish a series of checks, controls, and in general a supervising authority that can take action against Corporations/financial istitutions that don't play by the rules. But rules must be made, and regulatory bodies are not to be controlled by those it is supposed to control and supervise.

[Skybird]

Who cares what Bush is thinking... CONGRESS wields the power. in the end, all bush has to do is sign the dotted line and accept public praise or ridicule depending on the public perception.

Congress is the one who should be thinking. :yep:

I say... put some of these big lending company CEOs in prison. let them do a little "thinking".

i can trace this whole mess to loaning TONS of money to people who were not qualified for loans.

Remember these slogans from the recent years?

"No money down! No interest for 24 months!!!"

"Zero Interest! zero downpayment! No Social Security Number Required!!!"

"No Social Security Number! Se Habla Espanol!!"

give me a break...

loaning out tons of money to unqualified borrowers gets you into this mess.

NO BAIL OUT PACKAGE.... HOLD BIG BUSINESS CEOS AND LENDERS ACCOUNTABLE FOR THEIR ACTIONS!!!!

This practice came into play because greed and the inability of the human mind to form mental visual representations of high numbers led to falure of banker's sense of responsibilities. And this human nature exactly is the casue why as a safeguard against such human failures certain rules that make avoidance of such pratcice mandatory, are needed. This is the minimum of regulation, that is needed. nobody talks of 5-years-plans and the bstate governing the economy (although he does with plenty of subsidies, custom taxes, lobbyistic clinch between politics and economics, laws talired for certain businesses' desires - the market is far less unregulated as many propagators of the ultra-liberal market-philosophy are ready to admit. The enthusiasm for globalization also has stopped to shoot fireworks every Friday, it seems, and so more calls for protectionistic measures are to be heared on both sides of the Atlantic.

Egoism is part of human nature, and it becomes the more tempting the less obvious the dmage is, and when the mind behind it is iunable to realise what one hundred thisuand means, then I can tell you as a psychologist that this mind also is unable to imagine what one hundred billion means. and if that difference is not to be seen, and the irelevance of it is taken for granted, then do not be surprised if nobody thinks bad about taking the money with both hands without having a bad consacience, and always wanting more. eno9ugh ex.-bankers have admitted in interviews and newspaper essay that they were acting like being in a drugged state, that it was like an ego trip to handle those numbers - and not being aware of what they mean.

the market does not regulate all things all by itself. If their are no rules of civilisation, it brings out the worst in man: egoism, selfishness, greedl, brutality, and it leads to from healhty competiton to lethal rivalry, and finaly monopoly. Once monopoles are established, the monopolist has the community by its balls. like you need traffic rules to regulkate traffic, and need them the more the more dense traffic has become, you need rules of reuglation for economic business and financial traffic as well - and an auhtority monitoring commitment to these rules, and sanctionising those who violate them, like traffic cops.

that poses a new problem - who should do that? In Germany, we have had banks that came into trouble, and having been run by a board od directors that all were no bankers, but politicians. but only few politicians are finacial experts, most vpoicing their opinions on the issue are not. Non-political experts need to win experience and knowledge, but at the same time they should not be friends with the banking systems, and should have no close ties to it, so that they can keep their independence.

And bam-. there you are again with the same old problem that democracy as well as feudal sytems are suffering from: beiong elected does not mean you are competent, being memkeber of the noble class does not mean you are competent or feel responsible.

I have no solution, but i would say the ones we tried did not work too well - on both sides of the atlantic, but for different reasons.

Maybe our civilisation simply has come too far already. Who says that it always refines and moves on and improves and becomes more developed, is that a natural law, a general trend that cannot be escaped? Certainly not.

[Jimbuna]

One small point here if I may....I'm not a US citizen!!

We have our own financial problems here in the UK to contend with.

I certainly don't see your country as a paragon of financial security either....and that is going back as far as the last world war and before.

As a father I also reserve the right to feel concerned about the financial and economic wellbeing of my offspring in the future.

What is happening throughout the world will undoubtadly have consequences for the future.

I didn't intend to single you out. It was a general consideration I was making. I'm sorry for not being a native english speaking person, and sometimes the things I want to express don't come out clearly. :oops:
As to italy being in a catastrophic situation, well as ironic as it may seem italy is well insulated from this particular crysis. And the reason is very simple, our financial institutions didn't invest a lot of money in american securities. So while there may be loses and I'm sure there will be, we won't assist to banks collapsing as is happening in other countries in europe.
As to there being consequences for the future I'm well aware of that. But I think that the americans will suffer the most, and this very harsh lesson will prompt their poltical establishment to rethink what capitalism is about.
The real tragedy is that if america goes under so does the rest of the world.
I don't particularly care what happens to them, but I care what will happen to europe.

Rgr that mate....no harm no foul :up:

[Stealth Hunter]

We're doomed, aren't we?

[goldorak]

All this financial breakdown remembers me of Tom Clancy's Debt of Honour.
A pity that we can't use the same solution Ryan devised in the story. :rotfl:

[August]

We're doomed, aren't we?

You are such a negative nancy SH. Fear not. We have survived worse times and we'll survive this one too.

[UnderseaLcpl]

I meant directly linked to commercial output in general. And that comprises also industrial production. But nowadays most financial istitutions push products which in no way are linked to real goods or services. Speculative products whose values are arbitrary. They are totally separated from the real economy and they are one of the reasons of this crisis.

I wouldn't ban speculation without some very convincing evidence. Speculation really gets a bum rap when it is actually a very productive force. What it should be called is "Futures Investment". Admittedly, the system is very complex, but basically it all comes down to buying something (a commodity, a part of a business, a product) before the market has a chance to establish the real price. This generates immediate income for businesses to reinvest.

Where the system falls down is in government. Complex finance laws make some of these trading practices illegal for people like you or me. Sometimes they require expensive licensures. Capital gains taxes are not equally applied amongst the rich and rest of us. I don't know about you, but I can't afford to hire a lawyer that can set up a safe channel for my capital gains to go into a Swiss bank tax-free. Everytime I trade, I am taxed, so my flexibility is limited, and so is my competitive ability in the futures market.

Also, any removal of speculative trading would put the U.S. at a huge competitive disadvantage, just in terms of investment capital alone.

As great as that would be I don't think we will ever go back to gold standard. But if you had fiat powers, you would do it right?




Yes the issue is always how much does the government intervene in markets.
Let me start by saying that I'm contrary to government coming to the rescue of institutions that brought their own downfall (and here in italy we have a great example of that, our government has been financing our Alitalia air company for over a decade, a company that was completely broke, losing 2 million € per day). Agreed. The U.S. Government has also been guilty of bailing out corporations other than banks. It never ends well. It generates spikes of inflation and discourages competition as companies that should have fallen and broken into pieces are allowed to survive and maintain a significant market presence whether the consumer wants them or not. Unsustainable business models that are allowed to exist by the state are bad for everyone in the long run.


The point is that government has a responsability towards society to regulate markets, establish a series of checks, controls, and in general a supervising authority that can take action against Corporations/financial istitutions that don't play by the rules. But rules must be made, and regulatory bodies are not to be controlled by those it is supposed to control and supervise.


Well, that's the real trick isn't it.:D
Problem is, government is badly in need of some kind of regulation as well.

My favored method is constitutional law. The U.S. Constitution is a decent way of regulating government, except that it has been badly eroded by "interpretation"
Things over here aren't going to change much until they get so bad that there is some kind of major upheaval and a new constitution is written, hopefully by freedom-minded individuals.

A strong and limiting constitution can force the state to adhere only to its' assigned roles, and those roles need to focus on creating a fair trading environment. Without fraud, state subsidies, over-regulation, corporate taxation, property taxation, and inflationary problems caused by state overspending, competition wins out. Competition for jobs and consumers and products, and competition is what makes a powerful economy.

Of course, even if we did have such a constitution, it would eventually be eroded like the one we have now, I just think it would take a lot longer.

[Onkel Neal]

Who wants to bet a similar version of the bill will be passed in the next 10 days?

The market dropped 777 points, largest evah.

[August]

Who wants to bet a similar version of the bill will be passed in the next 10 days?

The market dropped 777 points, largest evah.

You're probably right but I hope not.

[UnderseaLcpl]

Who wants to bet a similar version of the bill will be passed in the next 10 days?

The market dropped 777 points, largest evah.


Or sometime in the not-so-diatant future. Followed an indeterminate time later by another bailout package:roll:

Of course, even if this works, they'll just find another statism-rampant sector of the economy to build a bubble in. Agriculture is looking good for now, with a history of subsidy and the ethanol-driven price surge......

[August]

Interesting article from CNN (of all places)

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/

CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown. This bailout was a terrible idea. Here's why.
The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.
Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

[Stealth Hunter]

We're doomed, aren't we?

You are such a negative nancy SH. Fear not. We have survived worse times and we'll survive this one too.

Things change...

[Skybird]

Who wants to bet a similar version of the bill will be passed in the next 10 days?

The market dropped 777 points, largest evah.

The number of the beast, if that doesn't mean something.

No wait, that was a different number. :lol:

It seems many republican representatives fear the wrath of their voters. They already predicted on saturday that it would not find a majority - at least this time. But since the elections will not go away, and the ambitions of people stay the same - 50:50, Neal - at least they think a majority of their voters does not support the idea to pay for the banker's mistakes.

[SteamWake]

It seems many republican representatives fear the wrath of their voters.

Both sides of the aisle are scared witless.

One of the things holding up this legislation is posturing to make sure that no one party or indivitual will stand out as the bad guy.

No one it seems is willing to step foward and be a leader.

[August]

I hope the deadlock continues. Read the CNN article i posted above.

[UnderseaLcpl]

I hope the deadlock continues. Read the CNN article i posted above.

Me too, but I don't think it will matter in the end. Public sentiment seems to be against bankers and "lack" of regulation, judging by the media response and the papers here.

The Republicans have offered a glimmer of hope by turning the package down, but I won't count on them defeating future measures until I can access some of the .gov pages I usually use to check up on Congressmen. They're still down right now.

There is a fundamental flaw in public reasoning, exemplified by repeated usage by the media of the phrase "Who will/should run the country?"
Government isn't supposed to run the country, it's supposed to let the country run.

When everything goes to hell in a handbasket, most people look to the State to fix it, even when the state caused the problem in the first place. And who can blame them? We are taught this system from first grade (if you are in a public school);
"We're a Democracy" "We are Empowered" "Your vote counts" blah blah blah......
whatever.
Trusting the State to solve problems is especially dangerous when combined with politics, which is mostly the art of manipulation and/or deflecting blame. The sources of problems are misidentified, and the problem continues, only to be "fixed" again, and resurface again with worse consequences.

I'm not sure what Washington's next move will be. The media has been strongly critical of bailouts (generally under the misconception that the companies are entirely at fault), but the recent nosedive of the DOW and the repurcussions we are seeing worldwide already may spur a knee-jerk response.

Either way, general fiscal policy will probably remain unchanged. Best case scenario; bailout rejected and we ride the recession to a new bubble in some other industry, back to square one.
Worst case; bailout passes and the resulting inflation and public debt makes the next bubble-burst worse.

Without a major policy reversal in State spending we will eventually slide to economic ruin and social chaos. :down:

[August]

Well i certainly don't see the GoP as saviors but it is encouraging that the opposition to the bill is bi-partisan.

[gimpy117]

Shame on all of the companies who did this to us. Those greedy big wigs on Wall Street were careless about their business practices and thought that money grew on trees and that they could ride the bubble and didn't even worry about the pop that has now happened (and now they are riding their golden parachutes away from the burning companies). And then, when it does go down hill, the corporations cry for help bailing their butts out of the fire because they didn't plan well for the future.

Sorry all you companies, but if nobody wants to look into the future and plan for it, I'm not gonna bail you out with my own money. Besides, if I went out right now and got a loan for a big house and didn't think about how I'm gonna pay for it next month and I go broke, people would say I was stupid and I deserved it when I held a fundraiser to save my house. So then why did they expect us to come with open arms and pocketbooks when they did the Wall Street equivalent??

[UnderseaLcpl]

Well i certainly don't see the GoP as saviors but it is encouraging that the opposition to the bill is bi-partisan.

:hmm: :hmm: :hmm: , maybe........

I guess it depends on the reasons for bi-partisan opposition. Hopefully, after I get home from work I can look some of them up. I still don't know who voted for what and why.

I'm generally not fond of bi-partisan initiatives, because I hate to see that kind of solidarity amongst a legislative body, I guess we'll see. Who knows? Maybe there is a major paradigm shift in the works?

Hope springs eternal.

[UnderseaLcpl]

Shame on all of the companies who did this to us. Those greedy big wigs on Wall Street were careless about their business practices and thought that money grew on trees and that they could ride the bubble and didn't even worry about the pop that has now happened (and now they are riding their golden parachutes away from the burning companies). And then, when it does go down hill, the corporations cry for help bailing their butts out of the fire because they didn't plan well for the future.

Sorry all you companies, but if nobody wants to look into the future and plan for it, I'm not gonna bail you out with my own money. Besides, if I went out right now and got a loan for a big house and didn't think about how I'm gonna pay for it next month and I go broke, people would say I was stupid and I deserved it when I held a fundraiser to save my house. So then why did they expect us to come with open arms and pocketbooks when they did the Wall Street equivalent??


@ August



See? Everyone is eager to blame the market, despite everything the government has done to produce this crisis.:down:

[SteamWake]

Media... yea.. there a reputable source.

You know it seems to me there is a lot of finger pointing going on. Posturing, politicing, etc.

You think the timing is by chance? I dont think so.

Dammit quit playin politics step up and solve the problems.

Without a doubt the quasi socalist policys have brought us to this brink.

Without a doubt no one is willing to step foward and 'lead'. Make the tough choices. All want to be the hero, none want to be scapegoat.

[gimpy117]

Shame on all of the companies who did this to us. Those greedy big wigs on Wall Street were careless about their business practices and thought that money grew on trees and that they could ride the bubble and didn't even worry about the pop that has now happened (and now they are riding their golden parachutes away from the burning companies). And then, when it does go down hill, the corporations cry for help bailing their butts out of the fire because they didn't plan well for the future.

Sorry all you companies, but if nobody wants to look into the future and plan for it, I'm not gonna bail you out with my own money. Besides, if I went out right now and got a loan for a big house and didn't think about how I'm gonna pay for it next month and I go broke, people would say I was stupid and I deserved it when I held a fundraiser to save my house. So then why did they expect us to come with open arms and pocketbooks when they did the Wall Street equivalent??

@ August



See? Everyone is eager to blame the market, despite everything the government has done to produce this crisis.:down:

ohhhh.....don't even get me started on the government.

Basically, De-regulation helped allow this to happen and the war quickened it's pace. I doubt this administration will be painted well in the future and might serve as an example of governments gone wrong.

That aside, although the bush administration allowed this to happen by not watching over more carefully, the corporations did not have a gun held to their head when they made the decision to use such risky and near-sighted business practices.

[August]

Shame on all of the companies who did this to us. Those greedy big wigs on Wall Street were careless about their business practices and thought that money grew on trees and that they could ride the bubble and didn't even worry about the pop that has now happened (and now they are riding their golden parachutes away from the burning companies). And then, when it does go down hill, the corporations cry for help bailing their butts out of the fire because they didn't plan well for the future.

Sorry all you companies, but if nobody wants to look into the future and plan for it, I'm not gonna bail you out with my own money. Besides, if I went out right now and got a loan for a big house and didn't think about how I'm gonna pay for it next month and I go broke, people would say I was stupid and I deserved it when I held a fundraiser to save my house. So then why did they expect us to come with open arms and pocketbooks when they did the Wall Street equivalent??

@ August



See? Everyone is eager to blame the market, despite everything the government has done to produce this crisis.:down:

Everyone? It's one anonymous poster on an internet forum. That's quite a stretch of logic you've got there! :D

[nikimcbee]

So what do you reckon will happen to the value of the $ on the international currency market now :hmm:

Can we re-join the Crown and use the Pound?

[Sailor Steve]

So what do you reckon will happen to the value of the $ on the international currency market now :hmm:

Can we re-join the Crown and use the Pound?
I'll pound you if you say that again!:lol:

[FIREWALL]

http://afp.google.com/article/ALeqM5j9vXiWc_DC1Sjd_GwZo2DUsasMcw

Good. I don't see the value in bailing out those that caused this mess in the first place.


Good :up:

[FIREWALL]

So what do you reckon will happen to the value of the $ on the international currency market now :hmm:

Dunno, maybe lower it enough to bring back all those manufacturing jobs from overseas?

Good Again :up: :up:

[PeriscopeDepth]

Those manufacturing jobs are never coming back to what they used to be. Asia will still be cheaper by a good couple of miles. But I still do hope it helps some of them come back.

And all the excitement aside, isn't this just a natural cycle in capitalism? I mean, it has to bust to boom. Constant growth forever isn't possible. A nearly trillion dollar hand out by a government that's several trillion more in debt doesn't make sense to me.

PD

[Hylander_1314]

Those manufacturing jobs are never coming back to what they used to be. Asia will still be cheaper by a good couple of miles. But I still do hope it helps some of them come back.

Actually, if the government would impose the tariffs and duties on imports like it used to, the cost of foreign made goods would be equal to or more than the what it would cost to make it domestically. But that would be "fair trade". Trouble is, corporate America for the last 40+ years has been lobbying congress to strip away the tariffs and duties so that corporate America could move overseas, close down industry here, and get workers worldwide to do the same job for a far cheaper wage than an American would, then turn around and ship the product home, pay very little for importing it, and sell it for the same ammount or more and increase profits sometimes 100 fold.

And all the excitement aside, isn't this just a natural cycle in capitalism? I mean, it has to bust to boom. Constant growth forever isn't possible. A nearly trillion dollar hand out by a government that's several trillion more in debt doesn't make sense to me.

PD

Yes, and it used to occur naturally, but ever since the the Federal Reserve came into being, it has been scientically created (Congressman Charles Lindberg Sr. warned of this occurring after the Federal Reserve Act of 1913 was signed into law). This gives a few who are in the know the ability to buy and sell with insider information and therefore increase their power and their wealth at the expense of the majority.

[PeriscopeDepth]

Those manufacturing jobs are never coming back to what they used to be. Asia will still be cheaper by a good couple of miles. But I still do hope it helps some of them come back.
Actually, if the government would impose the tariffs and duties on imports like it used to, the cost of foreign made goods would be equal to or more than the what it would cost to make it domestically. But that would be "fair trade". Trouble is, corporate America for the last 40+ years has been lobbying congress to strip away the tariffs and duties so that corporate America could move overseas, close down industry here, and get workers worldwide to do the same job for a far cheaper wage than an American would, then turn around and ship the product home, pay very little for importing it, and sell it for the same ammount or more and increase profits sometimes 100 fold.

And all the excitement aside, isn't this just a natural cycle in capitalism? I mean, it has to bust to boom. Constant growth forever isn't possible. A nearly trillion dollar hand out by a government that's several trillion more in debt doesn't make sense to me.

PD
Yes, and it used to occur naturally, but ever since the the Federal Reserve came into being, it has been scientically created (Congressman Charles Lindberg Sr. warned of this occurring after the Federal Reserve Act of 1913 was signed into law). This gives a few who are in the know the ability to buy and sell with insider information and therefore increase their power and their wealth at the expense of the majority. I happen to agree with you. But $700 billion in federal aid to investment bankers just isn't the solution. Increased regulation of both our legislative branches and our financial institutions would be a good start, IMO. Some of THE highest level crimes are committed at high levels in these two institutions.

PD

Edit: Now that I think about it, regulation probably doesn't cut it. Outright surveillance would not be a bad idea, I think.

[Hylander_1314]

Well ya know PD, the old saying goes, Washington D.C. is the only place in the world where you can run for 10 square miles and never leave the scene of the crime.

There actually already is government regulation. It's the Constitution of the United States of America, and The Bill of Rights. Getting the **censored** to adhere to those rules and regulations is the tough part. As my old contact at the EPA Clean Air Division used to say, there's too many lawyers. Too many things are left open to interpretation, and therefore the former documents that charter our Republic, are rendered impotent by them.

And I agree totally 100% that these institutions shouldn't be baiked out, but they shouldn't have been forced by the government to make these bad moves in the first place, especially since the government promised to make good the bad if things went south. So the institutions going to D.C. isn't a crying situation, as much as it is, ok, now it's your turn to make good your promise on the obligation.

[Skybird]

By heart I agree that the taxpayer should not have to pay for the failures of selfish greedy bankers who introduced business practices so risky and off reason that the status quo is the result. It is too costly.

But by mind I see that there is damage coming from not saving the system that spreads through all economy, sooner or later effect John Smith on the street again, and causes damage to other nations as well, and huge damage. So again: it is too costly.

40% of democrats and two thirds of republicans voted against the bail out. They all are people taking themselves very important and wanting to continue their careers after the next election they must face. They will decide on the bail out for populistic reasons, then.

I personally do not know what to do here, its like having to choose between cholera and plague. And whatever you do, it will probably be wrong in both cases. Also, it is argued and I think that is true, that if you go for the bailout option, 700 billion is not enough. critical analysts and economosts argue that several times as much would be needed.

The consequence on an administrative level however must be clear. There must be better regulation in that there must be better rules and tighter rule enforcement. It cvannot be that the community is left defenseless against the greed and irresponsibility of the few. Certain standards mst be set that prevent certain high risk operations, and violating them must be under so intense negative sanctions that it does not calculate well to even take them into account. We just have seen that the market itself will not rgulate itself, but will allow pathologic egoism and irresopnsibility to destroy it all - more of that cannot be the answer.

On the other hand, offices and authorities that should supervise and monitor the market practice, failed, and failed both in america and in Europe. In germany, esepcially banks that were run by boards filled with not bankers and experts, but politicians (the socalled Landesbanken) have seen a series of crushes and failures in this year, so politicians should not be expected to decide on the final monitoring system and they also should not be the responsible persons of control. In general, that the supervision in europe already was nevertheless tighter and more rules - against America's will who wanted more deregulation worldwide - over here regulate business practices, saved us from being affected as hard as america so far, plus the different consumer behavior with mortgage credits, and the encouraging by banks to not save (another symptom of the failure of the market). But this could change for us in europe - the impacts we see coming closer day by day. Germany, probably one of the most stable players on the scence, already had been hit repeatedly by banks who could not resists to follow the example of greed and quick profit and took high-risk opportunities. In Britain I read they have also a problem with non-secure mortage credits, nd already seem to bee hit worse than we are. Spain also has a mortgage crisis, and some things go on in Netherlands, Belgium and Lichtenstein as well (well, Lichtenstein is no surprise, is it :lol: )The real costs however will come with a delay, in form of recession, more than halved economical projection values, cut of jobs and the loss of taxes, and the stress all this together puts on the GNP and the state budget.

As a German banker said on radio on the weekened - "the next American colleague telling us we should deregulate more our banking market and should become a more liberal market, we probably will rip his head off." :D

[Skybird]

It seems many republican representatives fear the wrath of their voters.

Both sides of the aisle are scared witless.



40% of Democrats voted against, I read yesterday - but two thirds of the Republicans.

On a side-note, this of course is a bad blow to the government as well - to be let down not by the opposition, but by one's own party. :D

[Skybird]

This is the German finance minister in interview:

http://www.spiegel.de/international/business/0,1518,druck-581201,00.html

[gimpy117]

Those manufacturing jobs are never coming back to what they used to be. Asia will still be cheaper by a good couple of miles. But I still do hope it helps some of them come back.

And all the excitement aside, isn't this just a natural cycle in capitalism? I mean, it has to bust to boom. Constant growth forever isn't possible. A nearly trillion dollar hand out by a government that's several trillion more in debt doesn't make sense to me.

PD

I hope your right....but yes it seems it does need to bust and rebuild to be stable once again. However I live in Michigan and I would Love to see GM Decide to move back into flint and ford start growing.

[XabbaRus]

Someone mentioned the pound. Don't go there.

They need to get back to the basics of not lending more than someone can afford to payback.

My mortgage is £69,000 and my gross income £27,090 so it is less then 3 times my gross income which used to be how they calculated what they gave you. Also I had a good deposit. When I first got my mortgage they were giving out 5 times gross salary.

It does seem we need a bust to weed things out and level them off. The thing that pisses me off is that I try to live within my means but get hit by the twats up top who had pound signs replace common sense.

[Konovalov]

It does seem we need a bust to weed things out and level them off. The thing that pisses me off is that I try to live within my means but get hit by the twats up top who had pound signs replace common sense.
I share your frustration as one who also has always been fiscally resposnsible while not living in a world of ga-ga credit that I can't afford.:yep:

[Skybird]

Yes.

What also makes me most angry in all this is that probably none of those being responsible will be held accountable, and will escape with the money they have made. That includes a certain Mr. Paulson, former head of Golden Sacks and now finance minister of the US. If that is not a joke in itself.

[AVGWarhawk]

It seems many republican representatives fear the wrath of their voters.
Both sides of the aisle are scared witless.

One of the things holding up this legislation is posturing to make sure that no one party or indivitual will stand out as the bad guy.

No one it seems is willing to step foward and be a leader.

Could possible political suicide if they do. Most are up for re-election. Welcome to American politics.

[AVGWarhawk]

Here is the best analysis of this I have found to date:

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryview


Let the banks go into bankruptcy and stop the fear mongering by the news and Bush. Let the banks take it in the shorts. Right now the banks are using extorsion to bail out the US. Screw 'em.

[SteamWake]

Could possible political suicide if they do. Most are up for re-election. Welcome to American politics.

So what if it is. Someone has to step up and do the right thing. Making the hard choices and living with the consiquences are what defines a leader.

[Digital_Trucker]

Could possible political suicide if they do. Most are up for re-election. Welcome to American politics.
So what if it is. Someone has to step up and do the right thing. Making the hard choices and living with the consiquences are what defines a leader.

You must be mistaking American politicians for leaders:D

[ReallyDedPoet]

Making the hard choices and living with the consiquences are what defines a leader.
Unfortunately there are not to many of those around in today's political climate. It is not much different here in Canada.
Cookie-cutter politicians and politics on both sides of the border :dead::dead:


RDP

[UnderseaLcpl]

That aside, although the bush administration allowed this to happen by not watching over more carefully, the corporations did not have a gun held to their head when they made the decision to use such risky and near-sighted business practices.

Actually, the Carter Administration and every other administration thereafter allowed this after the Community Reinvestment Act was introduced, during his tenure. Clinton strengthened it(the CRA)

And since the law required subrime loans to be made to low-income citizens, the firms actually did kind of have a gun to their head. :dead: That is to say nothing of the power the Federal Reserve and various political concerns that shape corporate decision-making.

[AVGWarhawk]

Could possible political suicide if they do. Most are up for re-election. Welcome to American politics.
So what if it is. Someone has to step up and do the right thing. Making the hard choices and living with the consiquences are what defines a leader.
You must be mistaking American politicians for leaders:D

Well, lets look at the stepping up part...McCain attempted that last Wednesday and was ridiculed as looking to avoid the debates. He is still be ridiculed today because he could not get his party together to vote on this and pass this poorly written bill. Fine by me, the bill needs to be looked at closely and what ramification it will wrought. Not to mention we are dealing with extorsionist (banks) at the moment.

Obama, he stepped up....and ridiculed Republicans and McCain because it did not pass. Finger pointing at everyone with exception of the Democrates and this poor business practice of pressuring the banks to offer bad loads since the 1990's. I see no leadership there. Pelosi, she decided to throw rocks in her glass house.

We are seeing the epitomy of Washington corruption and shelfish politicians.

[UnderseaLcpl]

We are seeing the epitomy of Washington corruption and shelfish politicians.

:-? Perhaps we should look at starfish politicians? :D

[Konovalov]

Recieved this on email today:


The problem with bail-outs

If you owe the bank $10, it's your problem.
If you owe the bank $10m, it's the bank's problem.
If you and a million others owe the bank $10 each, it's still your problem - but now it's also the bank's problem.
If the bank then sells to an investor the $10 you owe, it ought to be the investor's problem.
But if you have a problem repaying the $10 and the bank insured the investor against your problem, then it's both the investor's problem and the bank's problem.
Your problems and your neighbours' problems and the investor's problems mean the bank now owes another bank $10bn. That is both banks' problem.
But if banks can't or won't pay the $10bn they owe to other banks, it's very quickly a $700bn systemic problem.
And if the government then owes the banking system $700bn, it's your problem.

Trust that makes sense. ;)

[AVGWarhawk]

Recieved this on email today:


The problem with bail-outs

If you owe the bank $10, it's your problem.
If you owe the bank $10m, it's the bank's problem.
If you and a million others owe the bank $10 each, it's still your problem - but now it's also the bank's problem.
If the bank then sells to an investor the $10 you owe, it ought to be the investor's problem.
But if you have a problem repaying the $10 and the bank insured the investor against your problem, then it's both the investor's problem and the bank's problem.
Your problems and your neighbours' problems and the investor's problems mean the bank now owes another bank $10bn. That is both banks' problem.
But if banks can't or won't pay the $10bn they owe to other banks, it's very quickly a $700bn systemic problem.
And if the government then owes the banking system $700bn, it's your problem.
Trust that makes sense. ;)

Here is the problem. The Fed insured these loans...FDIC. Now they need to make good on the insurance. The banks know this and knew this going into making these bad loans. Furthermore, there was no oversight and the banks just ran with it like lunatics. We can disect it all we want but the bottom line is the Fed needs to cover up their mistake and sleeping at the helm as well as the insurance.

[AVGWarhawk]

We are seeing the epitomy of Washington corruption and shelfish politicians.
:-? Perhaps we should look at starfish politicians? :D

Maybe shellfish also :rotfl:

[Digital_Trucker]

@AVG Maybe I should have phrased that differently. There are a few trying to do the right thing but, percentage wise, there aren't very many. It's just not how the current Washington, DC works. In the current DC, doing the right thing just isn't the right thing.

That and I'm a little jaded against politicians in general:shifty: I think they should all be lined up against a wall and given a good spanking. Oh wait, they'd probably enjoy that too much:rotfl:

[AVGWarhawk]

@AVG Maybe I should have phrased that differently. There are a few trying to do the right thing but, percentage wise, there aren't very many. It's just not how the current Washington, DC works. In the current DC, doing the right thing just isn't the right thing.

That and I'm a little jaded against politicians in general:shifty: I think they should all be lined up against a wall and given a good spanking. Oh wait, they'd probably enjoy that too much:rotfl:
I agree that there are few that are attempting to do the right thing but they are far out numbered by those that court the lobbyists and big business. It is all about the dollar and what house page you can text and have lunch with:roll:...this is were the spanking comes in :rotfl: Barney Frank comes to mind.

[Thomen]

It seems many republican representatives fear the wrath of their voters.
Both sides of the aisle are scared witless.


40% of Democrats voted against, I read yesterday - but two thirds of the Republicans.

On a side-note, this of course is a bad blow to the government as well - to be let down not by the opposition, but by one's own party. :D
You are correct, but look at why they voted against it. The bill was either hinky enough that 40% of the Democrats did not feel comfortable with it, or maybe the Pelosi speech pissed more people off (even in her party) then they would admit. They needed only 12 more Yes voted to pass the bill. The Democrats could run the whole thing by themselfs, but yet refuse too.
Also, please note, that apparently the VOTERS ( the american public) are against the plan. They literally flooded the Congress guys with mail and phone calls that they do not want the bail out.
Furthermore, Pelosi went through the ranks and allowed people to vote against it because they are up for re-election.
And 12 of Barney Frank people who are on his commity (House Finance Services Commity)voted, with Pelosi's permission, against the bill. The House Finance Service Commity oversees Fanny May and Freddie Mac.

They claim because they want to involve the other party, yet you have people like Pelosi holding an incredible stupid speech right before the vote. The Democrats are a bunch of chicken chits that are to afraid to take the blame if their bail out fails, yet ignore other viable options.
Apperantly there is a plan from the Republicans that would not involve any or just a small amount of tax payer money, but so far the Democrats have refused it.
Taxpayer money is not the solutuon to everything, imho.

[joegrundman]

It seems many republican representatives fear the wrath of their voters.
Both sides of the aisle are scared witless.


40% of Democrats voted against, I read yesterday - but two thirds of the Republicans.

On a side-note, this of course is a bad blow to the government as well - to be let down not by the opposition, but by one's own party. :D
You are correct, but look at why they voted against it. The bill was either hinky enough that 40% of the Democrats did not feel comfortable with it, or maybe the Pelosi speech pissed more people off (even in her party) then they would admit. They needed only 12 more Yes voted to pass the bill. The Democrats could run the whole thing by themselfs, but yet refuse too.
Also, please note, that apparently the VOTERS ( the american public) are against the plan. They literally flooded the Congress guys with mail and phone calls that they do not want the bail out.
Furthermore, Pelosi went through the ranks and allowed people to vote against it because they are up for re-election.
And 12 of Barney Frank people who are on his commity (House Finance Services Commity)voted, with Pelosi's permission, against the bill. The House Finance Service Commity oversees Fanny May and Freddie Mac.

They claim because they want to involve the other party, yet you have people like Pelosi holding an incredible stupid speech right before the vote. The Democrats are a bunch of chicken chits that are to afraid to take the blame if their bail out fails, yet ignore other viable options.
Apperantly there is a plan from the Republicans that would not involve any or just a small amount of tax payer money, but so far the Democrats have refused it.
Taxpayer money is not the solutuon to everything, imho.

you're saying that republican senators (or whatever) are so stupid that they'll vote to willfully hurt the nation against their beliefs, intentions and instincts, because they are pissed at what a democrat says?

You guys are in trouble if so.

[AVGWarhawk]

It seems many republican representatives fear the wrath of their voters.
Both sides of the aisle are scared witless.


40% of Democrats voted against, I read yesterday - but two thirds of the Republicans.

On a side-note, this of course is a bad blow to the government as well - to be let down not by the opposition, but by one's own party. :D
You are correct, but look at why they voted against it. The bill was either hinky enough that 40% of the Democrats did not feel comfortable with it, or maybe the Pelosi speech pissed more people off (even in her party) then they would admit. They needed only 12 more Yes voted to pass the bill. The Democrats could run the whole thing by themselfs, but yet refuse too.
Also, please note, that apparently the VOTERS ( the american public) are against the plan. They literally flooded the Congress guys with mail and phone calls that they do not want the bail out.
Furthermore, Pelosi went through the ranks and allowed people to vote against it because they are up for re-election.
And 12 of Barney Frank people who are on his commity (House Finance Services Commity)voted, with Pelosi's permission, against the bill. The House Finance Service Commity oversees Fanny May and Freddie Mac.

They claim because they want to involve the other party, yet you have people like Pelosi holding an incredible stupid speech right before the vote. The Democrats are a bunch of chicken chits that are to afraid to take the blame if their bail out fails, yet ignore other viable options.
Apperantly there is a plan from the Republicans that would not involve any or just a small amount of tax payer money, but so far the Democrats have refused it.
Taxpayer money is not the solutuon to everything, imho.
you're saying that republican senators (or whatever) are so stupid that they'll vote to willfully hurt the nation against their beliefs, intentions and instincts, because they are pissed at what a democrat says?

You guys are in trouble if so.


Claiming that Pelosi's speech is what turned the Republican is grossly over-rated. Just her mere presense is enough to turn a vote. Really, the first bills sucked. Even the Dems see that. Rushing to cut a check without any thought is the wrong way to go. Has any other avenue been walked other than cutting a fat check? It takes congress months to pass legislation and usually it is full of holes. Now we are going to cut a deal in under 4 days? This one will be full of black holes!

[TDK1044]

You can't have a system where you privatize profit and socialize loss. And that's what was being offered.

[AVGWarhawk]

You can't have a system where you privatize profit and socialize loss. And that's what was being offered.

If it were asked to be put in a nutshell... you nailed it TDK:up: That is exactly what is happening.

[Sea Demon]

You can't have a system where you privatize profit and socialize loss. And that's what was being offered.

Very well put. :up:

[owner20071963]

So what do you reckon will happen to the value of the $ on the international currency market now :hmm:
Can we re-join the Crown and use the Pound? Join The EURO I'd say,As the Arab Companys still control the Price of Oil which in itself controls the cost of goods,I blame the Oil Companys,Could we ever predict Diesel would now be more costly than Petrol?Stock markets did,The whole Blame has got to go to the Oil Companys,Whoever,Wherever They are Based,Its The Future Of Our Children,We must Protect,All Over The World,Maybe concentrating Our resourses on Say Like Africa,Poverty Stricked Countrys,Helping Them To Make Food & to Industrialise Them,Would Ease The Worlds Burden On Supply And Demand,A Structure the EU,Is Now Looking at,Lets Hope The Right Decisions are made,Whenever,
:know:

[AVGWarhawk]

Here is the nice part...stocks, buy low and sell high. Right now there is a fire sale going on at Wall Street. People will buy low as of now and hopefully purchase good stocks that look promising. The stock market will correct itself. Let the banks go bankrupt.


Also, the Savings and Loans crisis of 1987....did we survive? Sure the hell did. We will survive this without a bailout. :yep:

[SteamWake]

Also, the Savings and Loans crisis of 1987....did we survive? Sure the hell did. We will survive this without a bailout. :yep:

That was a completly different situation no where near the magnitude of what is happening right now. In that scandle the banks did not hold Billions of dollars of worthless loans. Loans which will never really be re-paid.

The problem is now that there is no money left to loan, without loans buisness grinds to a halt. Without buisness the stock market fails. When the stock market fails my IRA goes to hell in a handbasket. :damn:

Yes of course we will survive it but it will be very very painfull. Keep your resume's up to date and watch you portfolios very carefully. Hard times are ahead regardless of what the politicos do.

[AVGWarhawk]

Also, the Savings and Loans crisis of 1987....did we survive? Sure the hell did. We will survive this without a bailout. :yep:
That was a completly different situation no where near the magnitude of what is happening right now. In that scandle the banks did not hold Billions of dollars of worthless loans. Loans which will never really be re-paid.

The problem is now that there is no money left to loan, without loans buisness grinds to a halt. Without buisness the stock market fails. When the stock market fails my IRA goes to hell in a handbasket. :damn:

Yes of course we will survive it but it will be very very painfull. Keep your resume's up to date and watch you portfolios very carefully. Hard times are ahead regardless of what the politicos do.

Correct me if I'm wrong, are not IRA FDIC insured? If so, you are covered. This is the whole problem. The Fed said they would insure these loads if the banks eased up on requirements for issuing these loans so all could have the American dream. Now, the crow has come home to roost with defaulting loans and the Fed is stuck covering the loans. The Fed failed to oversee what was happening or ignored it. I think both. Hard times are already here for most. This just adds to the burden. I will be honest with you Steamwake. I know of only one person in trouble.....this person has been in trouble for over 3 years. What is the real number who are affected? I do not know. How did they arrive at 700 billion dollars? What, did these people buy million dollar mansions?

[SteamWake]

Correct me if I'm wrong, are not IRA FDIC insured? If so, you are covered.

Whom insures the insurers? The money isnt there. All the FDIC will do is print more money.

The money is not there.

[AVGWarhawk]

Correct me if I'm wrong, are not IRA FDIC insured? If so, you are covered.
Whom insures the insurers? The money isnt there. All the FDIC will do is print more money.

The money is not there.
The Fed pays the money. FDIC is the Federal Deposit Insurance Corporation. This was created so banks would feel more at ease in granting loans to those who might be on the edge in paying them back. So, the Fed figures a handful might default...not the magnitude we see here today. Sleeping Giant? Yep! Ultimately in the case, the tax payor is the insurer for the insurance provided by FDIC because as you stated...the money is not there....not enough to cover this magnitude of defaulted home/personal/auto loans. Now, the Fed has extended the extorsionist banks ideals here on the American people. We are being extorted because if we do not go ahead with the bailout, we are screwed. Of course, this is how Bush sees and tells it not only once but twice in two days. Some fear mongering tactics from the Fed and the bank.


Personally, I do not care if I loose every cent in my 401K over this. I do not want to pay for someone elses problems. It is not right nor fair. There is no reward for me no matter how you cut it. Not only that, it sets precident with other companies who wish to pull the same BS as these banks did.

[AVGWarhawk]

On, btw, love thy neighbor...even the one who can not afford his home, Hummer and two jet skis he pulls behind it. We all will be paying his way. :up: Got to love it.

Obama now calls it a 'rescue plan'. I'm so glad I could rescue my neighbors Hummer H2....spare me. A lemon by any other name is a lemon.

[Dan D]

I have some questions (keep in mind, I do not know much about how bills get passed in the US):

Is it correct that the Democrats have a majority in Congress and if so, could not they pass a new bail out bill without votes from Republicans, given that there are no Democratic dissenters? Would that be realistic?

For the failed bail out bill: Who initiated the bill? The Democrats or the Republicans?

Is the situation so, that that neither the Democrats nor the Republicans can get a majority together to pass a bail out bill?

Thx

[August]

Is it correct that the Democrats have a majority in Congress and if so, could not they pass a new bail out bill without votes from Republicans, given that there are no Democratic dissenters? Would that be realistic?
The Democrats hold a slight majority in Congress and yes they could pass the bill if they were all in lockstep with each other but 95 Democrats joined 130 Republicans in defeating the bill so opposition is very much bi-partisan (though the Dem leadership would have you believe otherwise).

[XabbaRus]

You know I can't believe you guys had a law that MADE banks give bad loans to people who couldn't pay.

Over here when they sold off the social housing depending how long you'd lived there you could get a hefty discount, and given the fact a lot of these people who lived in the council houses weren't doing too badly, they could afford it. Never have the banks over here been forced to give bad loans....

WTF were they thinking?

[AVGWarhawk]

You know I can't believe you guys had a law that MADE banks give bad loans to people who couldn't pay.

Over here when they sold off the social housing depending how long you'd lived there you could get a hefty discount, and given the fact a lot of these people who lived in the council houses weren't doing too badly, they could afford it. Never have the banks over here been forced to give bad loans....

WTF were they thinking?
It is not a law. In short, the 1990 the Fed asked the banks to work up a plan to offer loans on homes so people can start making purchases. Before all of this, banks would ask for a large percentage of the home value as a down payment. This locked out people who could not come up with $15000.00+ for a home. This was reduced conciderably for those without the means to put that amount down. Next, the banks plan was to offer sub-prime loans for those that on the edge if accepting these loans could be approved for and definitely over their head if the loan was approved at prime lending rates. These sub-prime loans were based on home values going up (which we see have fallen) and these loans have interest rates that would fluctuate with the market. Interest rates always going up of course thus raising the month payment on the mortgage. The banks were betting on the future that the folks approved for these loans would get raises etc and be financially better off thus being able to pay the now higher month to month payment. The Fed said for doing all of this (plus some strong arm tactics if they didn't) would insure these loans if anyone defaulted. So, the banks had a safety net and then went haywire handing out loans like candy. But we are not done....the persons who took these loans went haywire also. Once you received loans like this, your credit is almost magic. Credit card companies approved credit cards. Car loans are handed out. We are already dealing with people who were on the edge with carring a home mortgage. Now add credit card debit and automobiles, etc. You have one nasty brew of defaulted loans. Once you are in the hole, getting out is very tough. If possible at all without going bankrupt. This has gone on for years unaddressed and unmonitored by the Fed. Here we are today having to make good on the promise to insure these loans as the Fed said they would. So, in short, these folks caught up in it will be basically getting a free ride in short order. Those that did the responsible thing and lived within their means gets it in the shorts. Feels great I assure you. :down:

[nikimcbee]

Is it correct that the Democrats have a majority in Congress and if so, could not they pass a new bail out bill without votes from Republicans, given that there are no Democratic dissenters? Would that be realistic?
The Democrats hold a slight majority in Congress and yes they could pass the bill if they were all in lockstep with each other but 95 Democrats joined 130 Republicans in defeating the bill so opposition is very much bi-partisan (though the Dem leadership would have you believe otherwise).

That's what I found so funny listening to the news yesterday. "oh its the republican's fault:rotfl: " The democrats hold the majority, so who care what the republicans do. i also found it funny that the democrats are doing (yet again) what Bush wants. then they turn around and blame him.:rotfl:

[Dan D]

Thank you, August.
Just an idea: If the Democrats want to rule the country for the 4 next years, then may be it would be a good start for them to act right now and initiate an improved bill and make it pass with their own slight majority? Why wait until the Presidential election campaign is over?

[Sea Demon]

i also found it funny that the democrats are doing (yet again) what Bush wants. then they turn around and blame him.:rotfl:
And they call Bush stupid. How stupid do they all look? From where I sit, they all look pretty lame right about now.

[August]

Thank you, August.
Just an idea: If the Democrats want to rule the country for the 4 next years, then may be it would be a good start for them to act right now and initiate an improved bill and make it pass with their own slight majority? Why wait until the Presidential election campaign is over?

Basically because a third of Congress is up for reelection and it'd be political suicide to vote for a bailout at the moment, regardless of party affiliation.

[nikimcbee]

Thank you, August.
Just an idea: If the Democrats want to rule the country for the 4 next years, then may be it would be a good start for them to act right now and initiate an improved bill and make it pass with their own slight majority? Why wait until the Presidential election campaign is over?

You know, if obama wins, it will be really funny if they do what clinton did in his first 2 years of office: nothing.

[August]

Thank you, August.
Just an idea: If the Democrats want to rule the country for the 4 next years, then may be it would be a good start for them to act right now and initiate an improved bill and make it pass with their own slight majority? Why wait until the Presidential election campaign is over?
You know, if obama wins, it will be really funny if they do what clinton did in his first 2 years of office: nothing.

Wouldn't be surprising though seeing as how the Dems have been in charge of Congress for the past two years and haven't done squat either.

[gimpy117]

That aside, although the bush administration allowed this to happen by not watching over more carefully, the corporations did not have a gun held to their head when they made the decision to use such risky and near-sighted business practices.
Actually, the Carter Administration and every other administration thereafter allowed this after the Community Reinvestment Act was introduced, during his tenure. Clinton strengthened it(the CRA)

And since the law required subrime loans to be made to low-income citizens, the firms actually did kind of have a gun to their head. :dead: That is to say nothing of the power the Federal Reserve and various political concerns that shape corporate decision-making.
well, that aside you can't exactly say the administration did a good job, Besides, how many years has it been since Carter??? if the economy was gonna tank solely because of this law it would have happened in the decades since then. You may be right that the law caused it to some extent, but as much blame lies with the President and his people, because quite frankly, other administrations didn't run the economy into such a pickle for it to even matter. I really wish they would have planed for something like this more when the economy started getting shaky around 911....but it seemed they had other things on their mind to the east...

[Frame57]

Correct me if I'm wrong, are not IRA FDIC insured? If so, you are covered.
Whom insures the insurers? The money isnt there. All the FDIC will do is print more money.

The money is not there.
The Fed pays the money. FDIC is the Federal Deposit Insurance Corporation. This was created so banks would feel more at ease in granting loans to those who might be on the edge in paying them back. So, the Fed figures a handful might default...not the magnitude we see here today. Sleeping Giant? Yep! Ultimately in the case, the tax payor is the insurer for the insurance provided by FDIC because as you stated...the money is not there....not enough to cover this magnitude of defaulted home/personal/auto loans. Now, the Fed has extended the extorsionist banks ideals here on the American people. We are being extorted because if we do not go ahead with the bailout, we are screwed. Of course, this is how Bush sees and tells it not only once but twice in two days. Some fear mongering tactics from the Fed and the bank.


Personally, I do not care if I loose every cent in my 401K over this. I do not want to pay for someone elses problems. It is not right nor fair. There is no reward for me no matter how you cut it. Not only that, it sets precident with other companies who wish to pull the same BS as these banks did.I thought it was to protect the individual and not the bank. The feds do not pay the bank if someone defaults on a loan. 100k FDIC means that you and I are covered if the bank itself defaults. No?

[AVGWarhawk]

Correct me if I'm wrong, are not IRA FDIC insured? If so, you are covered.
Whom insures the insurers? The money isnt there. All the FDIC will do is print more money.

The money is not there.
The Fed pays the money. FDIC is the Federal Deposit Insurance Corporation. This was created so banks would feel more at ease in granting loans to those who might be on the edge in paying them back. So, the Fed figures a handful might default...not the magnitude we see here today. Sleeping Giant? Yep! Ultimately in the case, the tax payor is the insurer for the insurance provided by FDIC because as you stated...the money is not there....not enough to cover this magnitude of defaulted home/personal/auto loans. Now, the Fed has extended the extorsionist banks ideals here on the American people. We are being extorted because if we do not go ahead with the bailout, we are screwed. Of course, this is how Bush sees and tells it not only once but twice in two days. Some fear mongering tactics from the Fed and the bank.


Personally, I do not care if I loose every cent in my 401K over this. I do not want to pay for someone elses problems. It is not right nor fair. There is no reward for me no matter how you cut it. Not only that, it sets precident with other companies who wish to pull the same BS as these banks did.I thought it was to protect the individual and not the bank. The feds do not pay the bank if someone defaults on a loan. 100k FDIC means that you and I are covered if the bank itself defaults. No?

Not as I understand it. If that were the case, everyone would default and not worry about. The bank is covered by FDIC so the bank would feel better about handing out loans that quite possibly could turn sour as we see today. If it were you and I as covered, then there would be no worries and or conscience to pay up on time. The bank now has called in it's chips for payment. But, once the chips are cashed in, the banks are in turn going to help those in foreclosure. Reduce the payments for a few months until said home owner is stable enough to handle the payments again. Plus, these folks will probably get some fire sale interest rate as well as a 30 year fixed rate. In all reality, the banks should have helped folks out when they got in trouble but they are nasty a-holes. I know, I was there over 15 years ago and I know what they do. But, I pulled up my boot straps and prevailed over their strong arm tactics. I'm much more the wiser today as a result.

[AVGWarhawk]

Thank you, August.
Just an idea: If the Democrats want to rule the country for the 4 next years, then may be it would be a good start for them to act right now and initiate an improved bill and make it pass with their own slight majority? Why wait until the Presidential election campaign is over?
You know, if obama wins, it will be really funny if they do what clinton did in his first 2 years of office: nothing.
Wouldn't be surprising though seeing as how the Dems have been in charge of Congress for the past two years and haven't done squat either.
He will have more speeches so he can hear himself talk some more. Got a problem? Have a speech.

[FIREWALL]

Thank you, August.
Just an idea: If the Democrats want to rule the country for the 4 next years, then may be it would be a good start for them to act right now and initiate an improved bill and make it pass with their own slight majority? Why wait until the Presidential election campaign is over?

Basically because a third of Congress is up for reelection and it'd be political suicide to vote for a bailout at the moment, regardless of party affiliation.

Bingo !!! You nailed it. August :up:

I was wondering when someone was going to get around to posting that. :yep:

[AVGWarhawk]

Thank you, August.
Just an idea: If the Democrats want to rule the country for the 4 next years, then may be it would be a good start for them to act right now and initiate an improved bill and make it pass with their own slight majority? Why wait until the Presidential election campaign is over?
Basically because a third of Congress is up for reelection and it'd be political suicide to vote for a bailout at the moment, regardless of party affiliation.
Bingo !!! You nailed it. August :up:

I was wondering when someone was going to get around to posting that. :yep:

I did a few posts back. ;)

[FIREWALL]

@ AVGWARHAWK

:oops: Didn't see that post.

It's now all about politics and them covering their A$$E$.:yep:

[AVGWarhawk]

@ AVGWARHAWK

:oops: Didn't see that post.

It's now all about politics and them covering their A$$E$.:yep:

Sure is! Sad though in reality. It is like kids for crying out loud.

[August]

Bingo !!! You nailed it. August :up:

I was wondering when someone was going to get around to posting that. :yep:

It sure would be interesting to see how many of those who voted against it are up for re-election this year...

[Onkel Neal]

You know I can't believe you guys had a law that MADE banks give bad loans to people who couldn't pay.

WTF were they thinking?

Yep, it's true and was driven by left-leaning, politically correct ideology. What? You're poor, urban, and you feel the system discriminates against you by requiring a 10% downpayment for a house? We'll that's not fair, let's make it easier for you. No downpayment! Adjustable mortgage rates! Interest only loans! What?? The bank won't lend you $200,000 because you have bad credit? You have a history of not repaying loans? Those meanies!!

This mortgage subprime crash may be a surprise to some but a lot of people have known it has been coming for a decade. (http://www.youtube.com/watch?v=cMnSp4qEXNM)

McCain warned about this in 2006. (http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002 Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrm x002Fms20060525-16.xmlElementm0m0m0m)
If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.



I certainly got a first hand look when I applied for a mortgage in 2004. I was divorced a year, money was tight, but I had $10,000 to put down on a $95,000 house (and that's a decent house here in Texas--in California it wouldn't buy a tool shed :roll: ). My mortgage officer tried to convince me to take out an ARM or a loan where I only paid $300 a month for 4 years... pfftt! no thanks, I told her. Give me a straight 30 year mortgage. I imagine a lot of people were foolish and thought they could get a house and some tricky financing to make their life easier. In the end, PC minded people forced artificial constraints on sound lending practices and thousands of loans were made to people who had no business owning a home.

This is not purely the fault of "greedy bankers" (what a cliche), there were many average people who contributed to this problem by trying to take shortcuts.

[AVGWarhawk]

You know I can't believe you guys had a law that MADE banks give bad loans to people who couldn't pay.

WTF were they thinking?
Yep, it's true and was driven by left-leaning, politically correct ideology. What? You're poor, urban, and you feel the system discriminates against you by requiring a 10% downpayment for a house? We'll that's not fair, let's make it easier for you. No downpayment! Adjustable mortgage rates! Interest only loans!

This mortgage subprime crash may be a surprise to some but a lot of people have known it has been coming for a decade. (http://www.youtube.com/watch?v=cMnSp4qEXNM)

McCain warned about this in 2006. (http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002 Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrm x002Fms20060525-16.xmlElementm0m0m0m)
If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.


I certainly got a first hand look when I applied for a mortgage in 2004. I was divorced a year, money was tight, but I had $10,000 to put down on a $95,000 house (and that's a decent house here in Texas--in California it wouldn't buy a tool shed :roll: ). My mortgage officer tried to convince me to take out an ARM or a loan where I only paid $300 a month for 4 years... pfftt! no thanks, I told her. Give me a straight 30 year mortgage. I imagine a lot of people were foolish and thought they could get a house and some tricky financing to make their life easier. In the end, PC minded people forced artificial constraints on sound lending practices and thousands of loans were made to people who had no business owning a home.
My first loan I took as an ARM. It got me in the door. Once in, I paid on time for 12 months. This is when they can zap you with increased interest....and it always increases. I refinanced to a 30 year fixed and never looked back. I knew it was a bad deal but it did get me in the door on my very first house. After that I was able to rent it and purchase another home as my primary dwelling. If you play the cards right, it can work for you. If you play the cards wrong and do not pay attention you end up with foreclosures and credit cards that will never get paid.

BTW, Neals description for the laymen on how this came about is dead on. Without stepping on any toes, the Black Caucus and the left-leaners as Neal puts it (I believe the Clinton Admin) started all of this. It was a plan to get everyone in a home whether they can afford it or not. But it goes further as I stated a few posts back, credit cards filtered in and approved for these new home owners. People bought and bought with credit. The economy looks fantastic. Clap ourselves on the back! Then one day everyone woke up and found they are credited to the hilt and can not make payments on both mortgage and credit cards....add in the car just blew up and we are stuck. But, pehaps refinancing would get these folks out from under the credit cards and car payments. Unfortunate the homes are now appraise less then what they purchased them for. So, refinance and taking some money off the top for credit cards bills is now out. Economics 101.

[UnderseaLcpl]

That aside, although the bush administration allowed this to happen by not watching over more carefully, the corporations did not have a gun held to their head when they made the decision to use such risky and near-sighted business practices.
Actually, the Carter Administration and every other administration thereafter allowed this after the Community Reinvestment Act was introduced, during his tenure. Clinton strengthened it(the CRA)

And since the law required subrime loans to be made to low-income citizens, the firms actually did kind of have a gun to their head. :dead: That is to say nothing of the power the Federal Reserve and various political concerns that shape corporate decision-making.
well, that aside you can't exactly say the administration did a good job, Besides, how many years has it been since Carter??? if the economy was gonna tank solely because of this law it would have happened in the decades since then. You may be right that the law caused it to some extent, but as much blame lies with the President and his people, because quite frankly, other administrations didn't run the economy into such a pickle for it to even matter. I really wish they would have planed for something like this more when the economy started getting shaky around 911....but it seemed they had other things on their mind to the east...


That isn't how economics works. You're looking at only the short-term, and discounting a lot of other factors.

CRA was passed by the Carter administration, but it's not all their fault. Neither is Clinton wholly at fault. Remember that Congress passes the laws, and within either party there is a great degree of variance. A surge of illegal immmigration, as well the .com bubble and subsequent burst, 9/11, rising gas prices.......all these are factors. I know it's fun to jump on the Bush-bashing bandwagon, but this little spatz was just waiting to happen, and would have happened with just about anyone in power. And Carter did preside over a nice little pickle himself in the gas crunch:yep: . And that WAS the fault of a single administration, his, for trying to regulate gas prices, destroying the dynamics of supply and demand.


But it is your last sentence that worries me most. Everyone wishes the government would plan for things, or plan for them better, or whatever. What amazes me is that you would have enough faith in any lawmakers to suppose that they might have been able to prevent this crisis at any point. The State simply cannot do such a thing. It is inherently at odds with the market, and the more it interferes, the more it disrupts the economic cycle. It disrupts prices, and often hurts competition. Show me any economic crisis since Woodrow Wilson and I will show you how the state caused it or significantly contributed to it.

And before anyone says something about it, yes I realize some regulation is necessary, but it is a lot less than most people think, imo.

edit- damn, now that I look at this, it seems rather preachy and condescending. That wasn't my intent at all. Try to read it in the friendliest possible tone.

[mookiemookie]

The CRA is absolutely a non-issue. To quote one of my favorite economist bloggers:

• Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?
• 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations (http://blogs.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html). How was this caused by either CRA or GSEs ?
• What about "No Money Down" Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?
• Explain the shift in Loan to value from 80% to 120%: What was it in the Act that changed this traditional lending requirement?

• Did any Federal legislation require real estate agents and mortgage writers to use the same corrupt appraisers (http://money.cnn.com/2005/05/23/real_estate/financing/appraisalfraud/index.htm) again and again? How did they manage to always come in at exactly the purchase price, no matter what?
• Did the CRA require banks to develop automated underwriting (AU) systems that emphasized speed rather than accuracy in order to process the greatest number of mortgage apps as quickly as possible?
• How exactly did legislation force Moody's, S&Ps and Fitch to rate junk paper as Triple AAA (http://www.portfolio.com/news-markets/national-news/portfolio/2007/08/13/Moody-Ratings-Fiasco)?
• What about piggy back loans? Were banks required by Congress to lend the first mortgage and do a HELOC for the down payment -- at the same time?
• Internal bank memos showed employees how to cheat the system to get poor mortgages prospects approved that shouldn't have been: Titled How to Get an "Iffy" loan approved at JPM Chase (http://www.oregonlive.com/business/index.ssf/2008/03/chase_mortgage_memo_pushes_che.html). (Was circulating that memo also a FNM/FRE/CRA requirement?)
http://bigpicture.typepad.com/comments/images/2008/09/30/caseshillerpricedeclines_2.png (http://4.bp.blogspot.com/_pMscxxELHEg/SOJUBZrWo3I/AAAAAAAADgo/0kebZN4Lz-w/s1600-h/CaseShillerPriceDeclines.jpg)
• The four biggest problem areas for housing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California. Explain exactly how these affluent, non-minority regions were impacted by the Community Reinvesment Act ?
• Did the GSEs require banks to not check credit scores? Assets? Income?
• What was it about the CRA or GSEs that mandated fund managers load up on an investment product that was hard to value, thinly traded, and poorly understood
• What was it in the Act that forced banks to make "interest only" loans? Were "Neg Am loans" also part of the legislative requirements also?
• Consider this February 2003 speech by Countrywide CEO Angelo Mozlilo at the American Bankers National Real Estate Conference. He advocated zero down payment mortgages (http://bigpicture.typepad.com/comments/2008/09/how-washington.html) -- was that a CRA requirement too, or just a grab for more market share, and bad banking?
The answer to all of the above questions is no, none, and nothing at all.
Rest of the post here: http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html

*EDIT: Font color

[SteamWake]

There we go with the black font again :nope:

[baggygreen]

Neal,

Did i read reading correctly??

Did you say that you bought a house in texas for $95,000?????

jeeeeeeeeeeeeeeeeeeeeeeebus!

My fiancee and I are looking to buy, we have $25k saved up now, but we'll needa save for another 12 months before we'll have enough for a 10% deposit! Places we're looking at cost between $365,000 and $400,000!

Maybe I should try convince her to move to the states... I hear you yanks like aussies?

[UnderseaLcpl]

@ mookiemookie


expect a reply edited in here within a few hours. I don't agree with your (favorite blogger's) assessment entirely but it made me think and compelled me to do some research. Thanks for that:up:

[Sailor Steve]

Maybe I should try convince her to move to the states... I hear you yanks like aussies?
Love 'em!

Grilled with mushrooms is best, but roasted in a good sauce works almost as well.

[August]

Maybe I should try convince her to move to the states... I hear you yanks like aussies?

Yeah the general feeling is that Aussies are sort of like Texans with funny accents.

[Konovalov]

Maybe I should try convince her to move to the states... I hear you yanks like aussies?

Yeah the general feeling is that Aussies are sort of like Texans with funny accents.
:lol: But back home we also have our fair share of San Francisco/Hollywood type Aussies too in some parts of Sydney and Melbourne.

By the way Congress has just approved the amended bill.

http://news.bbc.co.uk/1/hi/business/7651060.stm

I guess this makes some people happy and many people totally peeved.

[Jimbuna]

Maybe I should try convince her to move to the states... I hear you yanks like aussies?

Yeah the general feeling is that Aussies are sort of like Texans with funny accents.
:lol: But back home we also have our fair share of San Francisco/Hollywood type Aussies too in some parts of Sydney and Melbourne.

By the way Congress has just approved the amended bill.

http://news.bbc.co.uk/1/hi/business/7651060.stm

I guess this makes some people happy and many people totally peeved.

It certainly split the politicians for a while.