About that $700B...

[D_Tintagel_Demondong]

I'm tired of 'Westerners' associating Capitalism, and free markets, with Democracy. Yanques in particular are clinging to their precious free market model as a bellwether of prosperity. Suppose that there are more massive bail-outs in the future: The taxpayers simply won't be able to handle the debt. Social programs will be cut; the standard of living will decrease. So much for American prosperity.

This latest fiasco could cost several trillian dollars. Each taxable American will have to pay an extra $20,000 towards the national debt.

There is an alternative, and it's not increased regulation.

 

[deleted213967]

There is an alternative, and it's not increased regulation.

Do tell!

What is the alternative?

 

[Drifterwood]

The Financial sector has enough companies not mired by this fiasco. They should be allowed to buy the fucked up banks for a song and serves the fuckers right. We have done this in the UK. It will work and it will bring confidence back into the banking sector as a place where you can trust your money. Remember, almost no banks lend their own money.

 

[deleted213967]

Without regulation you have the environment that you had before the great depression where huge monopolies manipulated their markets. If you think Microsoft would want more anti-trust regulation instead of less, you are smoking something.

Who exactly opposes all forms of regulatory mechanisms, including the rule of law?

Not even Limbaugh does.

Freddie and Fannie, which again enabled this complicated mess, were hardly independent from the government. Hello!

It was Congress, (i.e. The Government), yes, including the democrats who pushed them to make housing affordable and thereby relax their standards.

Once Fannie and Freddie told the market they wanted to buy all that alt-a and subprime crap, hell broke loose.

 

[deleted213967]

On a related note, did you read how much the last CEO of the now-seized WaMu made during his days-long stint at the failed bank?

To think that some people here criticized Michael Phelps for raking in all those sponsorship dollars. At least he worked for it.

 

[Phil Ayesho]

Who exactly opposes all forms of regulatory mechanisms, including the rule of law?

Not even Limbaugh does.

BULL SHIT

When you spend YEARS banging on the "free market" drum- screaming from the rooftops that the "invisible hand "will save us all and make all things profitable....
Then you ARE arguing against the rule of law--- Rush may be for hard time for hard crime- but EVERYTHING he favors economically is equivalent to NO rule of Law in the board room.

PLEASE give me a good old fashioned mugging Any Day... no mugger ever took all the money my grandchildren will ever make.

Any intelligent, reasoned examination of free market theory and de-regulation reveals it to be removing all accountability and oversight from the people who are manipulating VAST sums of money.

Any fool can see thats a stupid thing to do.
...As if the wealthy are incapable of acting unethically.

It was Congress, (i.e. The Government), yes, including the democrats who pushed them to make housing affordable and thereby relax their standards.

Un supported allegation. And untrue-

Since the Clintons second term Republicans have had a majority in congress.
The Democrats couldn't even stop a 40 million dollar blowjob investibation... much less more substantive legislation.

Clinton held Newt in check as best he could... but with Bush in office there followed a long period of Absolute Republican Rule.

Remember the Democrats trying to hold independent investigations and the republicans shutting off the power to the room they were in?



This current crisis is ENTIRELY due to the DE-regulation of mortgage lending by REPUBLICANS.

In a larger sense- the whole fiasco is due to idiotic ideas about free markets that history has shown , time and again, to be disastrous.

Many Democrats and MOST Americans Fell for this hogwash hook line and sinker.

Time for conservatives to get a NEW idea.


Time for all of us to laugh any free market fuck right out of the room.

 

[Captain Elephant]

OK, here it is in a nutshell, and correct me if I'm wrong.

Brokerman arranges a loan so Poorman can buy three times as much house as he can afford. BigBank loans him the money. Brokerman just made a huge commission. And BigBank is happy too because although he knows that Poorman cannot afford to pay for the house and will eventually lose it, BigBank will own a house worth 200% of its original sale price and will probably sell it to another Poorman.

Put 500 BigBanks together and you have an amazing investment opportuniy that RichGuys can't get enough of. So Brokerman and BigBanks just keep it up.

In the meantime, InsuranceFolk sees a good gig and says "I want to play, too, after all, I'm an expert on insurance. I'll insure all of those loans, heh, heh." They know that they'll be riding that housing gravy train for decades.

Except a weird thing happens. Reality intervenes and people look at the house and says "the emperor has no clothes. This house really isn't worth $300,000. More like $200K, actually."

So Poorman loses his house. BigBank has lost $100K. Brokerman says "not my problem." RichGuys say "WTF? Where did my dividend go?" And it appears that InsuranceFolk maybe knew about insurance but not a whole lot about the real value of houses.

So UncleSam comes in and take a look around at what's happen. He sees how Brokerman has made his fortune; he sees the greediness of BigBank and RichGuy and the folly of InsuranceFolk.

Then UncleSam rolls up his sleeves and says "Poorman, pay these people for all of their troubles."


OK, here's the moral of the story: Profits are privatized while losses are socialized.

 

[VeeP]

OK, here's the moral of the story: Profits are privatized while losses are socialized.

Now you're catching on: Capitalism on the way up; Socialism on the way down.

Horseshit, I say.

 

[deleted213967]

BULL SHIT

This current crisis is ENTIRELY due to the DE-regulation of mortgage lending by REPUBLICANS.

In a larger sense- the whole fiasco is due to idiotic ideas about free markets that history has shown , time and again, to be disastrous.

Many Democrats and MOST Americans Fell for this hogwash hook line and sinker.

Time for conservatives to get a NEW idea.


Time for all of us to laugh any free market fuck right out of the room.

Phil,

By now you should know that barking and blustering doesn't work with me.

The market-based economic model is wrong because Phil says so and that's the bottom line?

You are sounding so bitter these days I sometimes wonder whether I should trust your judgment on your highly-controversial rejection of the Big Daddy In The Sky.

1. I am sure you know that Fannie and Freddy are GSEs: Government-Sponsored Entities. What part of "Government" don't you understand?

2. Congress has been controlled by the Democrats since 2006. Congress had the power to mandate tougher lending standards for Fannie and Freddie.

3. The residential lending industry's risk-taking strategy is pegged to the standards of Fannie and Freddie, which obviously went south well into GWB's first term. Nobody bitched at the time when homeownership skyrocketed, including in the blue state of California.

 

[D_Davy_Downspout]

You bring up a good point. The issue here is this -- how do you really know if somebody can repay it? Payment experience.

These types of loans never existed before. When they became available, the payment experience was fine. The economic slowdown began in summer of '07 and BAM - the payments stopped. At that point, we were too far into the thing to unwind the problem and it just snowballed. Add to this that the real estate market was unraveling as well and all the sudden we are in a shit mess. No one, I mean no one saw this coming and deliberately sought out to reap profits from a sinking ship.

So now you're saying the the BANKS didn't read the terms, but it's not THEIR fault? Are you kidding me? Tons of people saw this coming. They were just too busy making money when the market was good and didn't want to stop the gravy train. The buyers didn't want to admit the market might burst, because then they couldn't sell their McMansion for a profit.

Don't be naive.

 

[transformer_99]

OK, here it is in a nutshell, and correct me if I'm wrong.

Brokerman arranges a loan so Poorman can buy three times as much house as he can afford. BigBank loans him the money. Brokerman just made a huge commission. And BigBank is happy too because although he knows that Poorman cannot afford to pay for the house and will eventually lose it, BigBank will own a house worth 200% of its original sale price and will probably sell it to another Poorman.

Put 500 BigBanks together and you have an amazing investment opportuniy that RichGuys can't get enough of. So Brokerman and BigBanks just keep it up.

In the meantime, InsuranceFolk sees a good gig and says "I want to play, too, after all, I'm an expert on insurance. I'll insure all of those loans, heh, heh." They know that they'll be riding that housing gravy train for decades.

Except a weird thing happens. Reality intervenes and people look at the house and says "the emperor has no clothes. This house really isn't worth $300,000. More like $200K, actually."

So Poorman loses his house. BigBank has lost $100K. Brokerman says "not my problem." RichGuys say "WTF? Where did my dividend go?" And it appears that InsuranceFolk maybe knew about insurance but not a whole lot about the real value of houses.

So UncleSam comes in and take a look around at what's happen. He sees how Brokerman has made his fortune; he sees the greediness of BigBank and RichGuy and the folly of InsuranceFolk.

Then UncleSam rolls up his sleeves and says "Poorman, pay these people for all of their troubles."


OK, here's the moral of the story: Profits are privatized while losses are socialized.

That's about it, but you forgot to mention the role that "owner/seller" played in it:

And that role would be that the house was listed and priced beyond what it was worth and after a few property flips/flops, the price was even more ridiculously inflated. There were people that really profited that had no intention of selling that sold simply because the prices were doubling, tripling and quadrupling in some markets over what they had paid for them a decade or two ago.

""the emperor has no clothes. This house really isn't worth $300,000. More like $200K, actually.""

More like still worth not much above $ 100K., because Poorman's wages never went up enough to swing even a $ 200K mortgage, instead of the $ 300K mortgage that seller/owner & brokerman were hyping.

 

[Drifterwood]

There is more to this situation.

Banks are a conduit through which global, yes other people have money, finances flow.

Some banks have been naughty. They took a lot of money and lent it to people they should never have ought to, encouraged by politicians I would add to continue the illusion of living the dream. When it became clear that they had overdone it, they bundled all the crap up as covertly as they could and tried to off load it. They did a good job and no one really knows where all of it is.

Well actually the Banks do, but they won't tell. OK says the global money market, you won't tell, we won't let you have any more money. Credit Crunch. This is why central banks have been propping up the flow of funds.

Oh shit. We can't trust US Banks. They take our cash, lend it unwisely, then try to cover their tracks by selling it back in bundles of shite that weren't properly credit scored.

Oh dear, our economy relies on debt, but suddenly we don't have any credit. Banks fall, foreclosures soar, high leveraged business goes pop, jobs go etc etc etc. No one wants your debt, no one wants your money, yet you have all the treasury committments in the pipeline and no one is in the mood to get bitten twice.

Don't blame the short sellers, they are weeding out the naughty boys, well they were until they were silenced.

More debt is not the answer IMO. Cleaning the system out is.

Edit - let me rephrase that last bit. Someone should carry the can, but not the taxpayer. Your financial sector should take the hit. George W knows you have to clear the mess up yourselves, he has been told to do so.

 

[MTHgasm]

I want to say first this is not a plan to help the bad companies. They should have called this the freaking "Invest in America plan" not a fucking bailout. This is for the American people.

This is an effort to save the wealth of America (houses) that these companies have fucked with/stupid ass people that cant understand the difference btw a fixed and a variable interest rate have created.

Name brand companies (any public company really) have value on wallstreet (determining how much money they could borrow) so when they can't borrow against their assets (houses/real estate and "value") they can't function as a business and when their value falls off a cliff they have to CUT JOBS in effort to keep costs down/profit up/keep functioning. Also anyone who has money saved on wallstreet AKA 401 K no longer have value allowing people to lose their life savings.

CREDIT HAS GONE TO HELL BECAUSE NO ONE REALLY KNOWS WHAT ANYTHING IS WORTH ANYMORE AND BANKS HAVE NO WORTH OR CONFIDENCE.


THE RISK OF LENDING IS TRYING TO BE MINIMIZED BY GOVT'S EFFORT TO TAKE THE ASSETS THAT ARE MAKING THE BANKS SO AFRAID.... AWAY


So life as we know it can go back to "normal" for the American people.

 

[Phil Ayesho]

Well put.

 

[Flashy]

Un supported allegation. And untrue-

Since the Clintons second term Republicans have had a majority in congress.
The Democrats couldn't even stop a 40 million dollar blowjob investibation... much less more substantive legislation.

Clinton held Newt in check as best he could... but with Bush in office there followed a long period of Absolute Republican Rule.

Remember the Democrats trying to hold independent investigations and the republicans shutting off the power to the room they were in?



This current crisis is ENTIRELY due to the DE-regulation of mortgage lending by REPUBLICANS.

In a larger sense- the whole fiasco is due to idiotic ideas about free markets that history has shown , time and again, to be disastrous.

Many Democrats and MOST Americans Fell for this hogwash hook line and sinker.

Time for conservatives to get a NEW idea.


Time for all of us to laugh any free market fuck right out of the room.

you know phil, sometimes even you are too clever for your own good.

I of course pointed this out to you earlier, which you then totally ignored.

the fact is that the Democrats are just as culpable on this one....



so save your breath, hyperbole, and phony consternation.

you are totally wrong on this one.

they all wanted the Gramm LEach Bliley act, and it passe the senate 90-8-1 and Clinton gladly signed it...I repost for you, below, my post, that you conveniently ignored yesterday, after going off on one of your rants, where you are never wrong, then when are proven wrong, you simply ignore.


so let's hear you defend the democrats (who voted for it in lockstep with the republicans) and Clinton who signed it happily.

you are right...the republicans did have the majority in 1999...in which case, the democrats could have all voted against it, and Clinton could have refusd to sign it, and the republicans could have simply overrode Clinton...

but Clinton and the dems did not do that, did they? they signed on big time, cause they wanted very similar things

"When this potentially historic agreement is finalized," Clinton said in a statement, "it will strengthen the economy and help consumers, communities and businesses across America."




so go ahead Phil....respond to my post from yesterday which you have ignored since it completely refutes your absurd take on the situation....about the republicans being the only bad guys in all this, while the innocent democrats stood on the sideline wringing their hands in horror.

you are either incompetent on this, or a pathological liar.





*A PORTION OF MY POST FROM YESTERDAY, WHICH YOU IGNORED*
--------
http://www.lpsg.org/1726495-post30.html


^^^^^^^^^^^^^^
both parties are responsible for this mess, and you know it.

You need look no farther than the banking deregulation Bill of 1999, as the best reasons for this predicament, otherwise known as the Gramm-Leach-Bliley Act.

Just in case you forgot, in addition to all the Republicans who supported that bill, the current VP candidate Joe Biden supported it, along with President Bill CLinton.

and just in case you forget, one of the most brilliant financial minds i know of, former treasury secretary Bob Rubin supported it as well, and he is now an Obama advisor, along with LArry Summers who supported it as well.

the Gramm-Leach-Bliley Act, in case you forgot, repealed parts of the Glass-Steagall Act.


the Final bill was passed in the Senate 90 yes, 8 no and 1 not voting and in the House: 362-57-15. It was signed into law by President Bill Clinton on November 12, 1999.

these were the only senators who did not vote "Yea"

NAYs ---8 Boxer (D-CA)
Bryan (D-NV)
Dorgan (D-ND)
Feingold (D-WI)
Harkin (D-IA)
Mikulski (D-MD)
Shelby (R-AL)
Wellstone (D-MN)
Present - 1 Fitzgerald (R-IL)

Not Voting - 1 McCain (R-AZ)









In the Senate, Biden, Edwards, Schumer and President Clinton all supported it....of course, Senator Chris Dodd, ranking member of the Senate Banking committe was there at the signing, applauding warmly

"Dodd, whose state is home to the nation's largest insurance companies, and Schumer, with strong ties to Wall Street, have long sought legislation to repeal the Glass-Steagall Act. Both men said in interviews Friday that they moved to strike a compromise after it became apparent that the legislation might be killed, as it was last year by Gramm, over the debate about the Community Reinvestment Act."


does this picture look familiar from the Clinton signing ceremony for that particular final bill?

http://i188.photobucket.com/albums/z...gallrepeal.gif

"When this potentially historic agreement is finalized," Clinton said in a statement, "it will strengthen the economy and help consumers, communities and businesses across America."


"And so, Mr. President, in conclusion, this is a historic day. It's a historic day for my state of New York, which I am proud to say is the financial capital of the world, and with this bill has a much greater likelihood of remaining. It is a historic day for modernizing one of the most important industries in American where we are technologically and entrepreneurially way ahead of the rest of the world and this will help us maintain our lead. And it is an historic day for those who have argued that we need to keep C.R.A. strong and keep consumer protections in the bill.
From Glass-Steagall to Gramm-Leach, from the Great Depression to the Golden Age, from isolationists to internationalists, from underdogs to champions, this bill, in my opinion, Mr. President, is an American success story for our economy, for our financial institutions, for our communities and consumers and for my state of New York. And I was proud to have played a role with so many others in ensuring its passage.
Thank you."
- Senator Chuck Schumer - D - NY
Senate Floor (excerpt)

http://www.senate.gov/~schumer/Schum...s/PR00066.html

 

[Phil Ayesho]

Phil,

By now you should know that barking and blustering doesn't work with me.

The market-based economic model is wrong because Phil says so and that's the bottom line?

Where did I say that?

I said "free market" economic models don't work and hey, don't take my word for it... READ THE HEADLINES...

Human nature is human nature- Communism fails because it fails to recognize that.
Free market theory fails because it makes the same mistake.
Free market theory is based upon the assumption that people will NOT take advantage to the point of disaster. That some 'invisible hand" will take hold and suppress excess.

Guess what? if that were true we would not be in this mess.

Also- study some history. Free markets are pushed by the wealthy to get govenrment out of the way of their accural of wealth by any means.

The Freer the market- the more lopsided the distribution of wealth.



I think we are after as free a market as is PRUDENT. That means, trust your neighbor... but lock your fucking door.

The FED regulates interest and money supply... without the FED's efforts, our economy would have crashed dozens of times since 29.

Government is supposed to POLICE- regulating the market is how you police.

1. I am sure you know that Fannie and Freddy are GSEs: Government-Sponsored Entities. What part of "Government" don't you understand?

GW BUSH is a government sponsored entity, too.. So the fuck what?
The Republican lock on governmental power this last 10 years makes the REPUBLICANS a government sponsored entity...

And how well have they done?

Fannie and Freddie were renowned as the safest investments in the world... UNTIL REPUBLICANS BECAME GOVERNMENT and republican initiatives became law.

2. Congress has been controlled by the Democrats since 2006. Congress had the power to mandate tougher lending standards for Fannie and Freddie.

Don't you read?
The democrats have a majority of a few- They can not override veto-
They can't pass shit with that brain donor in the white house.

They can't even impeach him and charge him cause Cheney would just pardon him- which is how republicans show their disdain for the rule of law.

Congress has been FROZEN by the Bush administration's partisan bullshit..
And by republicans inserting bill killing riders into every initiative the democrats want to put forth.
Pay some attention to ACTIONS - less on political rhetoric.

3. The residential lending industry's risk-taking strategy is pegged to the standards of Fannie and Freddie, which obviously went south well into GWB's first term. Nobody bitched at the time when homeownership skyrocketed, including in the blue state of California.

Bullshit I know a LOT of folks who complained as house prices escalated to the point where your only option to buy were these stupid loans.

Once again- Bush got handed an economic downturn- he wanted better economic numbers. And he had NO idea how to stimulate real growth.

With total power, republicans went on a deregulation FRENZY...- They enabled ENRON and some others to steal 40 billion from California alone.
I was here... I remember dire warnings from State power officials that the de-regulation plans for California would be a disaster.

The republican de-regulation advisers convinced our republican governor to go ahead...
and then Bush REFUSED to investigate the manipulations...

ANd what happened? Not satisfied with robbing California, The board of ENRON ROBBED its own employees of their pensions.

Bush has made it his personal mission to fill every appointment with the least qualified doofi he could scrape up from his long list of personal buds and fellow colluders in crime... not to mention addle witted bible school grads.


Once more, Dom, If you aren't outraged then you just don't realize what the hell has been going on.

..Or you just don't care.

 

[ifxne_at_yahoo]

YouTube - Burning Down The House: What Caused Our Economic Crisis?
This shows some objective commentary wrapped in a polarized political advertisement. Take the good parts and leave the bad. Putting it on mute will benefit everyone.

The cause and effect of this blame game is not as simple as libs creating cheap loans for poor people so their favorite lobbyist companies would write them a check. Part of it is so clear. The checks and balances failed because of politicization. Bush was able to blame this on libs so he did not care it crippled the economy. That is probably the second largest travesty in all of this. The largest travesty is the FED oversight failed and that really is black and white, plain as day obvious and Greenspan and Bernanke should both be jailed without parole for their gross negligence. If you don't understand why they should be in prison you should not be spreading ignorance on any boards. This is a bank issue.

Worth noting is how we'll come out of this because most of us are from the good ole U.S. of A. In the Japan and Sweden real estate blunders their central banks took similar measures and their equities and real estate markets began recovering the following year. There are other examples as well.

The writing was on the wall for traders. I wish I was a trader a few years ago so I could capitalize on the corruption on wall street. At least I would pay taxes on my profits.

 

[Phil Ayesho]

The cause and effect of this blame game is not as simple as libs creating cheap loans for poor people so their favorite lobbyist companies would write them a check.

Again- Liberals did not deregulate lending. Republicans did. Since 1996 not one law has been passed without REPUBLICAN assent.

Seriously- with absolute power comes total responsibility for what does and for what doesn't become law.

 

[Phil Ayesho]

PS-
The people who came up with these stupid loan "products' were NOT liberals... they were the management of the nations largest lenders.


Anyone want to hazard a guess what party they voted for?

They went after low income buyers because they wanted to RAKE IN CASH while the regulation was in force.

 

[Flashy]

Again- Liberals did not deregulate lending. Republicans did. Since 1996 not one law has been passed without REPUBLICAN assent.

Seriously- with absolute power comes total responsibility for what does and for what doesn't become law.

[/quote]

sorry phil...again, liberals helped deregulate lending almostas much as the republicans did...interesting how you cannot admit it.

only six democratic senators voted against the largest landmark deregulatory bill in decades....and a democratic president signed it into law.

The liberals were wanking themselves silly at the prospects of a deregulated housing market offering loads of "Affordable housing" to people who could not secure funds anymore.

they were gagging for it, same as the republicans...but why should we take President Clinton's, Chuck Schumer's and Chris Dodd's word for it, when we can take yours after all....after all, they voted for it, even if you didn't.

funny how you keep ignoring the massive role the democrats played in assisting their republican colleagues in decimating the american economy.