bailouts

[texas grass]

know what pisses me off more is that both the dems, reps, and president are giving our money away to bad business ethic money waisting criminals.

everyone thats scared of socialist b.s.. some of americas biggest firms are now socialized with the government taking the bill

one of the worst thing about this is the ceo's and big wigs of the companies are goin to get their multi million dollar bonuses still. so they run companies into the ground with bad practices and still get their contracts. b.s.

stanley morgan and another are about to drop and the govt is going to bail them out to from what i understand.

so the bill of the bailout when said and done is going to be +$1 TRILLION

[Breukelen advocaat]

A loan bailout is not a "giveaway". A massive, multi-faceted, established company like AIG is not the rat-infested, corrupted criminal institution that people are making it out to be. Neither was Lehman Brothers.

We give billions to banks and governments all over the world, including those of very wealthy countries like Switzerland. Why should we ignore our own institutions? It angers many people when it occurs in America, but they don't seem to mind all the foreign aid we give to other nations' businesses and social programs.

Not to mention the hundreds of billions, or more, that the Iraqi war is costing.

Charity must begin at home, for the American people. For every job that's lost on Wall Street, or the banking industry, several in other parts of the economy also disappear.

Things have now changed forever, and it's too much to take in all at once. There's a lot of hate toward the financial sector, some deserved, but the markets must still must be maintained, supported and improved......if we want our future to be stable.

[killerweed420]

Why stall the inevitable? The system is going to fail. A fiat money system was one of the dumbest ideas these greedy assholes have ever thought up and the the stock market is just an extension of that. The taxpayers should never be required to bail these corrupt institutions out. It wouldn't have meant shit if AIG went under. People would just have had to buy insurance somewhere else no big deal. Personally I think what should happen is when one of these corrupt mortgage banks go under everyone that had a mortgage there should have there slate wiped clean. No company,No mortgage.

[texas grass]

A loan bailout is not a "giveaway". A massive, multi-faceted, established company like AIG is not the rat-infested, corrupted criminal institution that people are making it out to be. Neither was Lehman Brothers.

We give billions to banks and governments all over the world, including those of very wealthy countries like Switzerland. Why should we ignore our own institutions? It angers many people when it occurs in America, but they don't seem to mind all the foreign aid we give to other nations' businesses and social programs.

Not to mention the hundreds of billions, or more, that the Iraqi war is costing.

Charity must begin at home, for the American people. For every job that's lost on Wall Street, or the banking industry, several in other parts of the economy also disappear.

Things have now changed forever, and it's too much to take in all at once. There's a lot of hate toward the financial sector, some deserved, but the markets must still must be maintained, supported and improved......if we want our future to be stable.

it also pisses me off when israel saudi georgia eu poland ect gets billions of dollars in both military and economic aid. or any other country for that matter

we could use all the waisted money from giving to governments, money waist of our military, waisted money giving weapons to people. waisted money on politics.

we could spend that sort of money on education and healthcare and better ourselves

[Breukelen advocaat]

it also pisses me off when israel saudi georgia eu poland ect gets billions of dollars in both military and economic aid. or any other country for that matter

we could use all the waisted money from giving to governments, money waist of our military, waisted money giving weapons to people. waisted money on politics.

we could spend that sort of money on education and healthcare and better ourselves
A few people have gotten a bigger waist from all the waste.

[TheMetal1]

Things have now changed forever, and it's too much to take in all at once

I think this is the key right here ^^ We are at an "OH FUCK" point, where if we don't do what we're doing... we're fucked. While it seems like our government is rushing to bail them out... I think everyone realizes that it is a bad situation. Charity should begin at home.

In regards to that quote though... I think that is so true. We are going to be changing in many ways to meet these new challenges. While we seem to be jumping to the will of Big Money CEO's... I highly doubt they will be granted such aid in the future.

Like I said... we're at an "Oh FUCK" point. They see this as the only way to "save" our country. After things are squared away... it is up to US to make sure this bullshit stops. I think that "fire" has been lit under the American people lately... and things will get interesting in the near future.

[daihashi]

know what pisses me off more is that both the dems, reps, and president are giving our money away to bad business ethic money waisting criminals.

everyone thats scared of socialist b.s.. some of americas biggest firms are now socialized with the government taking the bill

one of the worst thing about this is the ceo's and big wigs of the companies are goin to get their multi million dollar bonuses still. so they run companies into the ground with bad practices and still get their contracts. b.s.

stanley morgan and another are about to drop and the govt is going to bail them out to from what i understand.

so the bill of the bailout when said and done is going to be +$1 TRILLION

Ugh.. I'm sick of this crap too. I don't think we should be bailing out these companies who put themselves in the hole. The problem is that these companies are so intertwined with our economy that if they go down so does our economy. We would bounce back... no doubt about it, but it would be very hard times for a while.

Personally I'd be willing to deal with hard times as opposed to giving the impression to these companies that it's ok to be corrupt and run their company into the ground.. because the government will save them.

[daihashi]

I think this is the key right here ^^ We are at an "OH FUCK" point, where if we don't do what we're doing... we're fucked. While it seems like our government is rushing to bail them out... I think everyone realizes that it is a bad situation. Charity should begin at home.

In regards to that quote though... I think that is so true. We are going to be changing in many ways to meet these new challenges. While we seem to be jumping to the will of Big Money CEO's... I highly doubt they will be granted such aid in the future.

Like I said... we're at an "Oh FUCK" point. They see this as the only way to "save" our country. After things are squared away... it is up to US to make sure this bullshit stops. I think that "fire" has been lit under the American people lately... and things will get interesting in the near future.

I understand this, but it still makes me sick to my stomach.. ugh.

[flyingimam]

Comrades Bush, Paulson and Bernanke Welcome You to the USSRA (United Socialist State Republic of America)


Nouriel Roubini | Sep 9, 2008

The now inevitable nationalization of Fannie and Freddie is the most radical regime change in global economic and financial affairs in decades. For the last twenty years after the collapse of the USSR, the fall of the Iron Curtain and the economic reforms in China and other emerging market economies the world economy has moved away from state ownership of the economy and towards privatization of previously stated owned enterprises. This trend was aggressively supported the United States that preached right and left the benefits of free markets and free private enterprise.

Today instead the US has performed the greatest nationalization in the history of humanity. By nationalizing Fannie and Freddie the US has increased its public assets by almost $6 trillion and has increased its public debt/liabilities by another $6 trillion. The US has also turned itself into the largest government-owned hedge fund in the world: by injecting a likely $200 billion of capital into Fannie and Freddie and taking on almost $6 trillion of liabilities of such GSEs the US has also undertaken the biggest and most levered LBO (â??leveraged buy-outâ?�) in human history that has a debt to equity ratio of 30 ($6,000 billion of debt against $200 billion of equity).

So now Comrades Bush, Paulson and Bernanke (as originally nicknamed by Willem Buiter) have now turned the USA into the USSRA (the United Socialist State Republic of America). Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion.

This biggest bailout and nationalization in human history comes from the most fanatically and ideologically zealot free-market laissez-faire administration in US history. These are the folks who for years spewed the rhetoric of free markets and cutting down government intervention in economic affairs. But they were so fanatically ideological about free markets that they did not realize that financial and other markets without proper rules, supervision and regulation are like a jungle where greed â?? untempered by fear of loss or of punishment â?? leads to credit bubbles and asset bubbles and manias and eventual bust and panics.

The ideologue â??regulatorsâ?� who literally held a chain saw at a public event to smash â??unnecessary regulationsâ?� are now communists nationalizing private firms and socializing their losses: the bailout of the Bear Stearns creditors, the bailout of Fannie and Freddie, the use of the Fed balance sheet (hundreds of billions of safe US Treasuries swapped for junk toxic illiquid private securities), the use of the other GSEs (the Federal Home Loan Bank system) to provide hundreds of billions of dollars of â??liquidityâ?� to distressed, illiquid and insolvent mortgage lenders, the use of the SEC to manipulate the stock market (restrictions on short sales), the use of the US Treasury to manipulate the mortgage market (Treasury will now for the first time outright buy agency MBS to manipulate and prop up this market), the creation of a whole host of new bailout facilities (TAF, TSLF, PDCF) to prop and rescue banks and, for the first time since the Great Depression,to bail out non-bank financial institutions, and a whole range of other executive and legislative actions (including the recent bill to provide a public guarantee to mortgage for banks willing to reduce their face value).

This is the biggest and most socialist government intervention in economic affairs since the formation of the Soviet Union and Communist China. So foreign investors are now welcome to the USSRA (the United Socialist State Republic of America) where they can earn fat spreads relative to Treasuries on agency debt and never face any credit risks (not even the subordinated debt holders who made a fortune yesterday as those claims were also made whole).

Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or cross dressing or found to be perverts these Bush hypocrites who spewed for years the glory of unfettered wild west laissez faire jungle capitalism (and never believed in any sensible and appropriate regulation and supervision of financial markets) allowed the biggest debt bubble ever to fester without any control, have caused the biggest financial crisis since the Great Depression and are now forced to perform the biggest government intervention and nationalizations in the recent history of humanity, all for the benefit of the rich and the well connected. So Comrades Bush and Paulson and Bernanke will rightly pass to the history books as a troika of Bolsheviks who turned the USA into the USSRA. Fanatic zealots of any religion are always pests that cause havoc and destruction with their inflexible fanaticism; but they usually donâ??t run the biggest economy in the world. But these laissez faire voodoo-economics zealots in charge of the USA have now caused the biggest financial crisis since the Great Depression and the nastiest economic crisis in decades. So let them be shamed in public for their hypocrisy and zealotry that has caused so much financial and economic damage.

RGE - Comrades Bush, Paulson and Bernanke Welcome You to the USSRA (United Socialist State Republic of America) (http://www.rgemonitor.com/blog/roubini/253529/comrades_bush_paulson_and_bernanke_welcome_you_to_ the_ussra_united_socialist_state_republic_of_ameri ca)
Press TV - 'USA transforming into USSRA' (http://www.presstv.com/Detail.aspx?id=69774&sectionid=3510203)
-------------------------------------------
people deserve what they get as i said b4... unless they take action not their so called "representatives" from prez to legislature

privatization of SS comes as a joke in light of these news

[8182KSKUSH]

Ugh.. I'm sick of this crap too. I don't think we should be bailing out these companies who put themselves in the hole. The problem is that these companies are so intertwined with our economy that if they go down so does our economy. We would bounce back... no doubt about it, but it would be very hard times for a while.

Personally I'd be willing to deal with hard times as opposed to giving the impression to these companies that it's ok to be corrupt and run their company into the ground.. because the government will save them.

Agreed. Where has my country, party, gone?:(

[rebgirl420]

Ugh.. I'm sick of this crap too. I don't think we should be bailing out these companies who put themselves in the hole. The problem is that these companies are so intertwined with our economy that if they go down so does our economy. We would bounce back... no doubt about it, but it would be very hard times for a while.

Personally I'd be willing to deal with hard times as opposed to giving the impression to these companies that it's ok to be corrupt and run their company into the ground.. because the government will save them.

Agreed.

I'll take a few months of hardship for that. bailing them out gives a VERY bad message that the government will be the safety net when you choose to run a company into the ground because of your own greed.

And WTF is up with the fact that these jerks get multi-million dollar settlements when they leave? I call hoopla on that.

[flyingimam]

And WTF is up with the fact that these jerks get multi-million dollar settlements when they leave? I call hoopla on that.

Connected, wealthy and powerful people (say government officials included) have lots and lots of investments in stocks in general, they dont like their investments go down the drain.

i quote from the article i posted above

A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion.

that should be a trilliong dollars in just 10 days, since lehman failed and meryl lynch was bought and AIG was bailed just in the last 8 days
and there is a plan for another $700 Billion for future bailouts n such:mad:

Many 401ks and retirements sadly have investments in a very unregulated and risky market and thats another reason the feds fear that free market's natural failures due to this lack of regulation and greed of corporations can have disastrous effects on general public and can repeat a depression like experience...so they bail them out and yet again fail to regulate it wisely and prevent any future problems... makes u wonder, now read the quote again and imagine why

[rebgirl420]

We should have been able to vote on this crap. I don't like the idea of ANY government official attaining THIS much power for the government.

I don't like it at all.

[Markass]

They should really start listening to Ron Paul..

[Mississippi Steve]

know what pisses me off more is that both the dems, reps, and president are giving our money away to bad business ethic money waisting criminals.

everyone thats scared of socialist b.s.. some of americas biggest firms are now socialized with the government taking the bill

one of the worst thing about this is the ceo's and big wigs of the companies are goin to get their multi million dollar bonuses still. so they run companies into the ground with bad practices and still get their contracts. b.s.

stanley morgan and another are about to drop and the govt is going to bail them out to from what i understand.

so the bill of the bailout when said and done is going to be +$1 TRILLION

I wanna know where is the bail out for *MY* company

[killerweed420]

I would like to know what happened to all the fiscal conservatives are. You would think they would be screaming bloody murder. One reason they're not. They're making money on this deal.

[Breukelen advocaat]

Whoever said that EVERYBODY in America has a right to own a house, regardless of their ability or lack of to pay, and implemented the hare-brained schemes to give mortgages and loans to every poor schmuck that wanted one, should be drawn and quartered. No money down, pay only interest, and pay rent to the bank - for the rest of your life because you will never actually own this house.

Years ago, people waited and put down 20 percent on a house. That was the normal, customary amount. I grew up in a working-class neighborhood, and don't remember a single foreclosure of my neighbors' homes.

Just because something is available, you don't have to take it. I've never owned a house, or even a co-op, and I'm glad for that. The common belief was that you're throwing your money away by paying rent, and that a house was a good investment. Some of these buyers even looked down on "renters", thinking that they were smarter because they "owned" property. What a crock that turned out to be for many of them.

[flyingimam]

yeah, now just about right now try to get a loan and its back to principles, now the banks have woken up and i hope the feds dont bail them out, cuz thats the only way to correct what was wronged, the feds are saying we are bailing out people, but thats wrong... u r bailing out the kind of people who have debt till they die with other peoples money

thats as stupid as jailing a stoner with our money... makes no sense and will have no benefit for us... those who made the mistake of getting those bad loans are responsible for their mistakes and also those who made the loans as well.

the sky wont fall on earth if they get foreclosed, simply keep your job and rent, there are plenty of properties available for rent.

just dont take my money for this bullshit... this makes me wanna study law on top of my business studies later on, so maybe i can make my case in court and avoid paying taxes that are wasted... I pay taxes in order to benefit from the services of the government and run the essentials of the government, i dont pay taxes so some losers can be bailed (or jailed)

u guys think this 700 billion dollar plan will get a green light from congress?

[Mississippi Steve]

u guys think this 700 billion dollar plan will get a green light from congress?


I sure hope not... the ones that need bailed out are the hard working folks that have been hurt by the the oil companies and financial institutions that are playing fast and loose with other peoples lives and livelyhoods.

I simply can't afford to pay any more taxes.

[Jerry Garcia 2007]

Well I hope we learned our lesson in monopolization This all started years ago when the government started letting the financial institutions start aggressively buying up the smaller fish therefore ending diversification of our money in many institutions. We then ended up with these few giant institutions that are so large that as we now can see "if one goes down the rest will follow and bring our economy to its knees".

[killerweed420]

Well I hope we learned our lesson in monopolization This all started years ago when the government started letting the financial institutions start aggressively buying up the smaller fish therefore ending diversification of our money in many institutions. We then ended up with these few giant institutions that are so large that as we now can see "if one goes down the rest will follow and bring our economy to its knees".
Dream on. Come monday it will be business as usual. We just sucked into a one and half trillion dollar welfare program. Shit. I though repubs were against welfare?

[daihashi]

Dream on. Come monday it will be business as usual. We just sucked into a one and half trillion dollar welfare program. Shit. I though repubs were against welfare?

They are.. to be honest this was just a lose/lose situation. Sigh... I and I'm sure majority of other Americans are not happy.

[Breukelen advocaat]

Breaking news:

Last major investment banks change status

By MARTIN CRUTSINGER, AP Economics Writer
11/21/2008



The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks â?? Goldman Sachs and Morgan Stanley â?? to change their status to bank holding companies.

The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.

The change continued the biggest restructuring on Wall Street since the Great Depression.

The request for the change to bank holding companies was granted by a unanimous vote of the Fed's board of governors during a late Sunday meeting in Washington.

The change of status means both companies will come under the direct regulation of the Federal Reserve, which regulates the nation's bank holding companies. The banking subsidiaries of the two institutions will face the stricter regulations that commercial banks are required to meet.

Previously, the primary regulator for Goldman and Morgan Stanley was the Securities and Exchange Commission.

Shares of both institutions had come under pressure ever since the bankruptcy filing last week by investment bank Lehman Brothers and the forced sale of investment bank Merrill Lynch to Bank of America.

Investors feared that the last remaining independent investment banks would not be able to survive in their current form. There had been speculation that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding.

The decision by the two giants of finance to get approval from the Fed to change their own status represented another dramatic development in one of the most turbulent periods in Wall Street history.

In the surprise announcement late Sunday, the central bank said that to provide increase funding support to the two institutions during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.

The Fed said its action would take final effect after a five-day waiting period required under law.

The decision means that the Goldman and Morgan Stanley will be able not only to set up commercial bank subsidiaries to take deposits, giving them a major resource base, but they will also have the same access as other commercial banks to the Fed's emergency loan program.

After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks. However, that extension was granted on a temporary basis.

But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.

The action by the Fed's board of governors in Washington came on a day when the Bush administration continued to campaign for quick congressional approval of its request for authority to use $700 billion to purchase a mountain of bad mortgage debt held by financial companies.

The effort represented the boldest action yet aimed at stabilizing chaotic financial markets.

Democrats in Congress said they would demand provisions in the bailout measure to protect people in danger of losing their homes as well as seeking to cap executive compensation at firms who get to unload their bad mortgages debt onto the government. But the proposal was expected to win quick congressional passage because both parties are concerned about the adverse reaction in financial markets should the measure look like it was being delayed.

Last major investment banks change status - Yahoo! News (http://news.yahoo.com/s/ap/bank_change)

[flyingimam]

hand in hand
they play merry go round!:mad:

all of a sudden parties are no more important, they come together... makes u wonder yet again why?!

I really do hope we are not gonna get screwed over like in the 30s... these politicians are all rich and there really will be nothing much they can do if we hit such a situation

[daihashi]

hand in hand
they play merry go round!:mad:

all of a sudden parties are no more important, they come together... makes u wonder yet again why?!

I really do hope we are not gonna get screwed over like in the 30s... these politicians are all rich and there really will be nothing much they can do if we hit such a situation

Times will definitely be hard.. all of a sudden increasing corporate taxes doesn't seem so bad anymore.. I'll take the marginal unemployment increase over a market crash...

sigh

I can't believe I honestly just said that.. rofl. It must truely be a bad situation for me to say that; but like all things, this too we'll make it through.

[The Figment]

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Fellow citizens and taxpayers, this has got to be the last straw. Here we have a proposal to commit $700,000,000,000 of money we can ill afford, to bail out companies that not only made bad investments, but made those bad investments while paying their top executives obscene salaries. This is not bad enough, now the bush cabal wants to put Paulson in a position where he, and he alone has sole discretion in determining where and how this money will be doled out.

We have seen time and time again the total lack of regard these criminals have for the checks and balances our government was designed with. This however takes it to a new level. We're not talking about a small thing here folks, this is almost a trillion dollars with absolutely no oversight on a man (Paulson) who as the CEO of Goldman Sachs from 1999 to 2006, most certainly played a part in the creation of financial crisis.

Just Like the sign says that has been in the front window of my house for the last two years.....

http://i172.photobucket.com/albums/w36/pjphreak_photos/00002-1.jpg

And,Yes That is My Desk!!!!

[flyingimam]

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Fellow citizens and taxpayers, this has got to be the last straw. Here we have a proposal to commit $700,000,000,000 of money we can ill afford, to bail out companies that not only made bad investments, but made those bad investments while paying their top executives obscene salaries. This is not bad enough, now the bush cabal wants to put Paulson in a position where he, and he alone has sole discretion in determining where and how this money will be doled out.

We have seen time and time again the total lack of regard these criminals have for the checks and balances our government was designed with. This however takes it to a new level. We're not talking about a small thing here folks, this is almost a trillion dollars with absolutely no oversight on a man (Paulson) who as the CEO of Goldman Sachs from 1999 to 2006, most certainly played a part in the creation of financial crisis.

Just Like the sign says that has been in the front window of my house for the last two years.....

http://i172.photobucket.com/albums/w36/pjphreak_photos/00002-1.jpg

And,Yes That is My Desk!!!!

could u please provide the source of this, citations will help to verify if this is actually what is in the proposal. i know dems have so far put up a fight to make sure there is independent oversight and taxpayer protection, but if this is whats being sent to congress to be voted on... i must say its just such a shame...

lol how old is that CRT... i got a similar crappy box! keep it for a few more years and we may get paid more than what we paid for them:D antiques & collectibles of the digital era!

[flyingimam]

I know im citing a far left source, however this article IF holding true should be read by any and all citizens of this land who give a rats arse about their very near future affairs!

RSS: US: Welcome to the Final Stages of the Coup (http://www.mathaba.net/rss/?x=606839)

dont be bashin me, i said IF it hold true... gotta get some details on the damn bailout plan with our money, seems to be classified for now

[Mississippi Steve]

Times will definitely be hard.. all of a sudden increasing corporate taxes doesn't seem so bad anymore.. I'll take the marginal unemployment increase over a market crash...

sigh

I can't believe I honestly just said that.. rofl. It must truely be a bad situation for me to say that; but like all things, this too we'll make it through.

Its too late... times are already hard, and the ones that are getting hit first and hardest are the retirees on fixed incomes, and small businesses....especially in the rural areas.

[Rusty Trichome]

In the spirit of Live Aid, and Farm Aid, I'm really surprised that with their overblown sense of importance...that Hollywood hasn't organized a Financial-Aid' concert to help cure the financial ills of the world. Would fit in nicely with their 'green' philosophy, lol.

[Mississippi Steve]

In the spirit of Live Aid, and Farm Aid, I'm really surprised that with their overblown sense of importance...that Hollywood hasn't organized a Financial-Aid' concert to help cure the financial ills of the world. Would fit in nicely with their 'green' philosophy, lol.

THat makes too much sense..... but even as misguided as most of the Hollywood types, they have figured out that the bailout is nothing but smoke and mirrors and is going to do nothing but bankrupt the federal government.

[The Figment]

could u please provide the source of this, citations will help to verify if this is actually what is in the proposal. i know dems have so far put up a fight to make sure there is independent oversight and taxpayer protection, but if this is whats being sent to congress to be voted on... i must say its just such a shame...

lol how old is that CRT... i got a similar crappy box! keep it for a few more years and we may get paid more than what we paid for them:D antiques & collectibles of the digital era!

Lol...Thats my $9 Thrift Store CRT!! (Yes as you can see it still works) I used it for a year or so before I fianally broke down and got myself a Acer 19' LCD Monitior!! And "Section Eight" of the "Bailout Plan" is available at most News Sites. (FOX CNN Bloomberg)

[killerweed420]

Elect Ron Paul and he'll just default on all the Chinese loans. What are they going to do? Repossess the US?

[daihashi]

Elect Ron Paul and he'll just default on all the Chinese loans. What are they going to do? Repossess the US?

They will cut us off from their exports (or additionally tax the hell out of our exports to them or not even allow them in) and our economy will be even more in the crapper. Defaulting our loans that the Chinese own is a horrible idea. Not to mention the hostilities we would endure from China and it's allies.. possibly resulting in War.

I certainly hope that's not what Ron Paul would do.

[dragonrider]

I AM PISSED LIVID ABOUT THIS FUCKING BAILOUT!!!!!

I cannot believe how fucking incompetent our goddam government is! How is it we can have our president saying the economy is fundamentaly strong and we are not even in a recession one day, and then have the Treasury Secretary tell Congress on Friday that if we don't get a plan together for a $700 BILLION bailout by Monday, the entire banking system will collapse and we will face a FUCKING DEPRESSION????

How does a FUCKING DEPRESSION sneak up on you like that?

This president has appointed the most incompetent boobs ever to run our country!

Heckuva Job Brownie sat on his ass while the Katrina drowned New Orleans.

Heckuva Job Rummy sat on his ass while Iraq went into the toilet.

Now we have Heckuva Job Bernie at the Federal Reserve and Heckuva Job Pauli at Treasury, and they sat on their asss while a FUCKING DEPRESSION sneaked up on us to the point where if we don't come up with $700 BILLION over the weekend, the world economy might actually tank?

WHAT THE FUCK IS GOING ON WITH THESE GODDAM IMBECILES???????

[daihashi]

I AM PISSED LIVID ABOUT THIS FUCKING BAILOUT!!!!!

I cannot believe how fucking incompetent our goddam government is! How is it we can have our president saying the economy is fundamentaly strong and we are not even in a recession one day, and then have the Treasury Secretary tell Congress on Friday that if we don't get a plan together for a $700 BILLION bailout by Monday, the entire banking system will collapse and we will face a FUCKING DEPRESSION????

How does a FUCKING DEPRESSION sneak up on you like that?

This president has appointed the most incompetent boobs ever to run our country!

Heckuva Job Brownie sat on his ass while the Katrina drowned New Orleans.

Heckuva Job Rummy sat on his ass while Iraq went into the toilet.

Now we have Heckuva Job Bernie at the Federal Reserve and Heckuva Job Pauli at Treasury, and they sat on their asss while a FUCKING DEPRESSION sneaked up on us to the point where if we don't come up with $700 BILLION over the weekend, the world economy might actually tank?

WHAT THE FUCK IS GOING ON WITH THESE GODDAM IMBECILES???????

To be fair this is a problem that many politicians have been avoiding for a long while now.

Bush #41 didn't do anything about it
Clinton didn't do anything about it
and "W" didn't do anything about it.

It's been well known for a while that these industries were at potential risk and needed restructuring..

however you and I are in agreement. I am very pissed at the government right now for their incompetence and just being so nonchalant about this whole thing as if it wasn't that big of a deal.

GRRRR!!!!

[dragonrider]

Ugh.. I'm sick of this crap too. I don't think we should be bailing out these companies who put themselves in the hole. The problem is that these companies are so intertwined with our economy that if they go down so does our economy. We would bounce back... no doubt about it, but it would be very hard times for a while.

Personally I'd be willing to deal with hard times as opposed to giving the impression to these companies that it's ok to be corrupt and run their company into the ground.. because the government will save them.

Yes, exactly, the problem is that if these companies go down, then we all go down. This is the flaw in the deregulatory philosophy. The philosophy is that regulation strangles the risk-taking that drives the economy --- and in return for loose regulation, the companies themselves will take responsibility for their decisions. If the risks pay off, they get the profit, but if the risk goes bad, they take the losses (according to how deregulation is always sold to us) But the flaw is that when those risks do go bad, they DON'T take responsibility. They know the truth is that we cannot afford to let them fail, so we will pcik up the tab for the bad decisions while they walk away with the profit for the good decisions. They have us over the barrel and they are fucking us all the way to the bank.


Agreed. Where has my country, party, gone?:(

Your party has abandoned all of its principles, and has driven your country into a fucking toilet. You can find your country in the sewer, and you can find your party in the driver's seat.


Agreed.

I'll take a few months of hardship for that. bailing them out gives a VERY bad message that the government will be the safety net when you choose to run a company into the ground because of your own greed.

I think maybe you are misunderstanding what is at stake. We aren't talking about a few months hardship here. The bailout will be a few months hardship --- your share is $3000, and you should be able to get that together in a few months I imagine. The alternative is a banking collapse and a Depression. The last one of those lasted more than 10 years and resulted in many people losing absolutely everything. People starved to death. I think that is what they are talking about here. If it was a few months hardship, then I'd definitely be for letting these companies bear the responsibility they deserve. But I think we are talking about something a lot more serious than that.

[dragonrider]

This biggest bailout and nationalization in human history comes from the most fanatically and ideologically zealot free-market laissez-faire administration in US history. These are the folks who for years spewed the rhetoric of free markets and cutting down government intervention in economic affairs. But they were so fanatically ideological about free markets that they did not realize that financial and other markets without proper rules, supervision and regulation are like a jungle where greed â?? untempered by fear of loss or of punishment â?? leads to credit bubbles and asset bubbles and manias and eventual bust and panics....

...Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or cross dressing or found to be perverts these Bush hypocrites who spewed for years the glory of unfettered wild west laissez faire jungle capitalism (and never believed in any sensible and appropriate regulation and supervision of financial markets) allowed the biggest debt bubble ever to fester without any control, have caused the biggest financial crisis since the Great Depression and are now forced to perform the biggest government intervention and nationalizations in the recent history of humanity


I did not agree with everything in the article, but this part I agreed with. The laissez-faire free-market bullshit is based on the idea that everyone takes responsibility for themselves, even big compaines. But we see that is not the case. Instead these companies are "too big to fail," so if it looks like they are going to fail, WE have to take the responsibility.

Let's not forget that next time. It is TRUE --- these companies ARE too big to fail. We have a stake in their well being, so we need to keep an eye on what they are doing. We need to exercise enough oversight to prevent them from getting into the situation in which they need to come to us for $700 BILLION overnight.

I also agreed with the part of the article that pointed to the hypocrisy of pure laissez-faire free-market ideology. This kind of philosophy gets applied all the way up and down the economic spectrum, including all they way down to inidviduals. YOU are expected to take respnisibility for your own life and not ask for a handout from anyone, especially not the government or your fellow taxpayers.

If YOU lose your job, you are on your own. Don't come to the government. YOU take responsibiltiy and get another job.

If YOU get sick without healthcare, you are on your own. Don't come to the government. YOU take responsibiltiy and pay for it yourself.

If YOU get caught in a mortgage you can't pay, you are on your own. Don't come to the government. YOU take responsibiltiy and either pay or lose your house.

The differrence between YOU and these investment banks and insurance companies is that YOU are not too big to fail. YOU can fail and everyone else will be fine. No one needs to bail YOU out, because YOU are expendable.

But these companies are NOT expendable. YOU need to take responsibility for both THEM and YOURSELF! So pay up, Mr. Expendable!

[GoldenBoy812]

At first glance, this looks like a bail out of big business, at the expense of the American tax payer. But lets take a much more detailed look at the situation.

Most economic experts (Keynesian college professors etc...) will pertain to the deregulation of the banking industry as the main reason these large investment firms have failed. They will tell you its the lack of regulation in the banking industry that caused this mess.

But tell me, what exactly is/was the Community Reinvestment Act? Am I wrong, or does that sound very much like a government regulation, that calls for an ease of risk management practices, as to act in the interest of non discriminatory lending. Meaning, this act is calling for banks and lenders alike to issue loans to people who ordinarily would have been discriminated based on their credit rating. Because a higher % of people who are credit deficient are of minority status, Jesse Jackson then made it a political issue. With Jackson's help, lending institutions relaxed their lending standards and began issuing high risk mortgages rather than be labeled "racist" or "discriminatory".

Fast forward to 2007, and the sub prime crisis arises out of the loins of the Community Reinvestment Act. All high scale investment banks at the time were heavily leveraged in these investments, which has caused the collapse of ALL main street investment banking (Morgan Stanly and Goldman Sachs are no longer investment institutions but regular old banks).

So I the question: Was it the deregulation or the regulation that help cause the collapse of the US financial sector? Was the CRA not on the same level as over site? Does regulation defined by only disallowance, and deregulation defined by only allowance? I was always taught that regulation was government intervention into the economy, and that deregulation was government not intervening in the economy.

One thing is for certain, the federal government has been intervening with the economy for nearly 100 years, and Keynesian practices have done very little to eliminate recession but very much to devalue or debase our currency.

[dragonrider]

With this bailout fiasco, I think McCain's statement at the begining of last week that the "fundamentals of the economy are strong" is going to hang around his neck like a dead albatros for the rest of the campaign.

Fanny and Freddie had been bailed out the week before for $200 billion, Lehman Brothers had gone bankrupt, Bear Stearns sold to Wells at firesale prices, and AIG was in trouble. McCain said, the "fundamentals of the economy are strong." Within a day or two we are bailing out AIG for $85 billion. And by the end of the week the treasury secretary is saying we need $700 billion more or the whole economy will collapse!

McCain is even more oblivious than Bush if he thinks the fundamentals of the economy are strong when we are BORROWING A TRILLION DOLLARS in two weeks to keep our economy from a complete meltdown!

What an ass!

Later he said he meant the "American Worker" is strong and workers are the fundamentals of the economy. He's a boob. That's is not what the term "fundamentals" means when you are talking about the "fundamentals of the economy." The "fundamentals of the economy" are measurable yardsticks by which you measure the economy --- things like growth in GDP, strength of the dollar versus other currencies, inflation and things that drive it like energy costs, interests rates, consumer confidence, unemployment rates, job creation rates, durable goods orders, etc. It's not some vague thing like "the American Worker."

If McCain doen't even understand what these terms mean, he has no business even talking about it. Almost all of these true "fundamentals of the economy" are trending down. We have some serious problems. It's either incompetence or a lie to look at those numbers in the same week we are having a true economic crisis and say the "fundamentals of the economy are strong."

McCain either truly has no idea at all what he is talking about, or he is lying to our faces.

[Breukelen advocaat]

I doubt that there is a single poster on this board that lived through the Great Depression. Most of them are young, and their parents are my age or younger - their grandparents may have been children when this event happened. I know, from my parents' generation's stories, that a depression is not something that you take lightly.

I do not buy things that I cannot afford to pay cash for. If I use a credit card, it is only for convenience and 99% of the time I pay the entire bill off as soon as I receive it. I've never owned a car, a house, co-op, or any type of property. That being said, I understand that many people are willing to put their ass in debt because they want to have a family or live above their means in some other way. Even though I did not have these things, I cannot come out against the bailout loans that are currently being worked out because a depression is not something that I would wish on anyone - especially myself.

My heart does not bleed for those who have to rent an apartment instead of owning a house, but it's not right for everybody to have to suffer because of bad loan practices. If we let the country's economy go under, we'll all be in very bad shape.

[dragonrider]

I doubt that there is a single poster on this board that lived through the Great Depression. Most of them are young, and their parents are my age or younger - their grandparents may have been children when this event happened. I know, from my parents' generation's stories, that a depression is not something that you take lightly.

I do not buy things that I cannot afford to pay cash for. If I use a credit card, it is only for convenience and 99% of the time I pay the entire bill off as soon as I receive it. I've never owned a car, a house, co-op, or any type of property. That being said, I understand that many people are willing to put their ass in debt because they want to have a family or live above their means in some other way. Even though I did not have these things, I cannot come out against the bailout loans that are currently being worked out because a depression is not something that I would wish on anyone - especially myself.

My heart does not bleed for those who have to rent an apartment instead of owning a house, but it's not right for everybody to have to suffer because of bad loan practices. If we let the country's economy go under, we'll all be in very bad shape.

My grandparents lived through The Depression, and yeah, it was no fun. They were just coming into adulthood when it struck and all the jobs went away. My grandmother's first husband died of tuberculosis. My grandmother could not support herself and her daughter (my aunt). And so my aunt lived with other family far away for years, while my grandmother struggled to make ends meet. She later remarried and had my dad during the War. My other grandparents got married during the Depression, but seldom lived together because my grandfather followed work where he could find it. He lived away from my grandmother in tents in work camps and worked for the CCC and on WPA projects when those programs were started. They didn't have kids until the Depression was nearly over. For that generation, delaying kids until you were 30 was not so common, but if you had to spend a whole decade living apart and not knowing where your next meal was coming from, you put a few plans on hold. I don't wish that kind of hardship on anyone.

As for the debt thing. I don't carry what you might call "consumer debt" either. I use the credit card for convenience and always pay it off each month. I paid cash for all my cars except for one, and that was an emergency situation in which I needed to replace a totalled car in order to keep a good job --- I paid it off in a year. I think I do a good job of avoiding "bad" debt.

But credit and debt do have a productive role in our society too. I am glad I was able to finance a house. I did it responsibly with 20% down and a 30-year fixed mortgage. I have a few investment projects that I am considering, and I may need to draw on an equity line in order to do them. I am also glad for the equity line in case the roof fails or the water heater blows up. It's extremely important to the economy for individuals and businesses to have access to financing, and that is exactly what was in danger of disappearing with this financial crisis.

If the banks won't do any lending at all, then our economy stops, and before we know it, none of us have jobs, homes, cars, or food.

[flyingimam]

Later he said he meant the "American Worker" is strong and workers are the fundamentals of the economy. He's a boob. That's is not what the term "fundamentals" means when you are talking about the "fundamentals of the economy." The "fundamentals of the economy" are measurable yardsticks by which you measure the economy --- things like growth in GDP, strength of the dollar versus other currencies, inflation and things that drive it like energy costs, interests rates, consumer confidence, unemployment rates, job creation rates, durable goods orders, etc. It's not some vague thing like "the American Worker."

McCain either truly has no idea at all what he is talking about, or he is lying to our faces.

did u know that we almost got no industries left in america for our workers?

we got auto and aerospace as the only major lasting industries, the rest is service section and our economy is BASED on consumer spending...

with this said, he would have been better off sayin our fundamentals are our consumers.... which i think almost everyone can agree are being screwed over by our governments decisions!

and in my believe, HE AINT GOT A CLUE WTF IS UP WITH ECONOMY...
imo he wouldnt be lying into our face like this... or he must be thinking we are all children who will buy this crap as daddy's word!

Canada any1? lol j/k

[dragonrider]

and in my believe, HE AINT GOT A CLUE WTF IS UP WITH ECONOMY...
imo he wouldnt be lying into our face like this... or he must be thinking we are all children who will buy this crap as daddy's word!


It's plain wrong, so I'm not sure if he is just clueless or if he is lying. Either way, it is very dangerous misinformation.

Bush has been leading us along with this tra-la-la everything is just fine song and look where we are at now. WE NEED TO BORRROW A TRILLION DOLLARS IN LESS THAN TWO WEEKS TO KEEP AFLOAT!!! Bush led us right up to the precipice denying anything was wrong, and it looks like McCain is singing the same song!

Do not take a chance on this guy!

[flyingimam]

It's plain wrong, so I'm not sure if he is just clueless or if he is lying. Either way, it is very dangerous misinformation.

Bush has been leading us along with this tra-la-la everything is just fine song and look where we are at now. WE NEED TO BORRROW A TRILLION DOLLARS IN LESS THAN TWO WEEKS TO KEEP AFLOAT!!! Bush led us right up to the precipice denying anything was wrong, and it looks like McCain is singing the same song!

Do not take a chance on this guy!

my friend, we must be fair... its not like its all Bush's fault despite how bad this guy has performed in certain fields imo

just take a look @ this
United States public debt - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/United_States_public_debt)

we have been doing this for over 50 years man, ITS OUR FAULT as well as our politicians fault who stayed silent and preferred the prosperity built on debt, my 2cents

[JakeMartinez]

I think it's the height of bullshit to bail out companies that ran themselves into the ground out of greed. No one's talking about holding these greedy bastards accountable for their actions. How about some hard time? Maybe these CEO's need to spend 10-20 years in a cell with a well-hung rapist to attone for their actions?

Just maybe?

And, based on what I've been hearing in the financial world (I have a good friend who works at a title company and has lots of deep connections), a bail out might not even be effective at this point. I mean, the stock market jumped nearly 1000 points after Bushie announced his stupid idea, but just today it dropped ~400 points again.

Even if it does work, though, these corrupt fuckers should definitely be held accountable for their actions. How many people are starving RIGHT NOW because of what their greed has done to the economy???

(sigh)

[Breukelen advocaat]

I think it's the height of bullshit to bail out companies that ran themselves into the ground out of greed. No one's talking about holding these greedy bastards accountable for their actions. How about some hard time? Maybe these CEO's need to spend 10-20 years in a cell with a well-hung rapist to attone for their actions?

Just maybe?

And, based on what I've been hearing in the financial world (I have a good friend who works at a title company and has lots of deep connections), a bail out might not even be effective at this point. I mean, the stock market jumped nearly 1000 points after Bushie announced his stupid idea, but just today it dropped ~400 points again.

Even if it does work, though, these corrupt fuckers should definitely be held accountable for their actions. How many people are starving RIGHT NOW because of what their greed has done to the economy???

(sigh)

Allowing the country, and most of the world, to go into a major depression by allowing a company like AIG to go under because of the acts of a few people is like letting a multi-dwelling building burn down because a firebug committed arson.

[dragonrider]

my friend, we must be fair... its not like its all Bush's fault despite how bad this guy has performed in certain fields imo

just take a look @ this
United States public debt - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/United_States_public_debt)

we have been doing this for over 50 years man, ITS OUR FAULT as well as our politicians fault who stayed silent and preferred the prosperity built on debt, my 2cents

I agree that the long-term situation is not ALL Bush's fault, but I do think he bears some significant responsibility.

What I am faulting him for and also faulting McCain for is this idea that they both have been pushing that nothing is wrong. They both have been saying the economy is fundamentally strong! It is not!

Have Paulson and Bernanke been telling Bush that the economy is fundamentally strong and then in one week make a complete reversal and decide we need a trillion dollars in order to avoid a Depression? I don't think that is true. I think that Bush has known that we are in serious trouble for a long time and has not wanted to say or do anything about it.

This is only my personal theory, but I think Bush was hoping we could push the collapse off a few more months and let the next guy clean it up. He wanted to go on saying everything was OK, and then if it all fell apart in January or sometime next year, maybe everyone would just blame the new President.

There is just absolutely no way that these economic experts in the Treasury and the Federal Reserve were completely unaware of fundamental economic problems that were very serious dangers for our economy for some time and just figured it out last week. That is impossible. If it is true, then they are incompetent.

Or perhaps it is the opposite. Maybe the economy really is strong and this trillion dollars is simply being looted from us for no good reason. Maybe the bailout is not really necessary and it is just a big money grab?

[flyingimam]

What I am faulting him for and also faulting McCain for is this idea that they both have been pushing that nothing is wrong. They both have been saying the economy is fundamentally strong! It is not!

i get it. i was just tryin to clarify things a bit to prevent attacks from your opposite point of view that would drive this thread to Bush-bashing subject and somehow eventually get it locked.;)


Or perhaps it is the opposite. Maybe the economy really is strong and this trillion dollars is simply being looted from us for no good reason. Maybe the bailout is not really necessary and it is just a big money grab?

i dont rule out the idea of money grab. but i certainly dont think an economy with 10 trillion dollars worth of debt is considered strong...

again our economy has long been based on consumer spending and guess what, 10 trillion dollars means some $30000 per capita worth of debt. meaning 30k for every man, woman and child in this land.

i dont know how no1 has never seen or noticed this gigantic flaw... we borrow money from foreigners and from our credit cards all the time to spend and be "capitalist" and yet we think OUR economy is str8?

we are on crash-course if we dont change our "fundamentals" of economy, that i dont doubt being in a business major.

or perhaps defaulting on foreign debt was the idea at first.... but now china is unexpectedly too strong for us to threaten?

[GoldenBoy812]

I agree that the long-term situation is not ALL Bush's fault, but I do think he bears some significant responsibility.

I do not think much of it is Bush's fault at all. Maybe you can make the argument that the federal governments dramatic increase in size caused for a debasement of the currency, but Bush really just inherrited this mess. He inherrited Greenspan who lowered interest rates to their lowest level (Keynesian measure) in decades (50's).


What I am faulting him for and also faulting McCain for is this idea that they both have been pushing that nothing is wrong. They both have been saying the economy is fundamentally strong! It is not!

It certainly does not help to have your chief economic advisor chiefly
responsible for the Gramm-Leach-Bliley Act. Of course, it should be noted that Clinton signed this into effect.


Have Paulson and Bernanke been telling Bush that the economy is fundamentally strong and then in one week make a complete reversal and decide we need a trillion dollars in order to avoid a Depression? I don't think that is true. I think that Bush has known that we are in serious trouble for a long time and has not wanted to say or do anything about it.

Paulson is former chairman of Goldman Sachs. Does anyone find it hilarious that a former Investment Bank CEO is treasury secretary, and governmental actions were more so protective of "To big to fail banks" and little more than a rebate check for taxpayers?


This is only my personal theory, but I think Bush was hoping we could push the collapse off a few more months and let the next guy clean it up. He wanted to go on saying everything was OK, and then if it all fell apart in January or sometime next year, maybe everyone would just blame the new President.

Just like it is greasy to blame Bush for the current situation, it would also be a fallacy to blame the next executive for actions beyond their control.


There is just absolutely no way that these economic experts in the Treasury and the Federal Reserve were completely unaware of fundamental economic problems that were very serious dangers for our economy for some time and just figured it out last week. That is impossible. If it is true, then they are incompetent.

Exactly!~! Has the instance of such controlling and unconstitutional financial banking policies known as the FDIC been able to sure up the problem? Financial entities of large stature seem to be failing or nearly failing every week. Has the economy become too complex to be controlled by artificial interest rates? I believe so, and will use the Japanese as an example.


Just as the boom builds outward from banks to the rest of the economy, with banks benefiting the most, the bust collapses inward to banks from the rest of the economy, with banks suffering the most. Now the balance sheets of fractional-reserve banks, swollen with loans and checkable deposits during the boom, suddenly collapse. Or rather, the value of their loans collapses initially, as the projects they lent to turn out to be unprofitable, leaving them with negative net worth and then upon bankruptcy, their checkable deposits are liquidated.

Bankruptcy is made much more likely by the policy of fractional reserves. The checkable-deposit liabilities built up during the boom no longer have assets of equal value balancing them out once the crisis hits. Customers who know this have a great incentive to demand redemption of their checking accounts in cash, an obligation which fractional-reserve banks cannot fulfill even when the value of their assets is intact let alone after their loans devalue.

Monetary deflation via bank failures is the other side of the coin of liquidation of bad loans. Liquidating the loans implies realizing the bankruptcy of the businesses that have taken out these loans. The monetary inflation and credit expansion of the boom are now reversed in the bust. The capital build-up of the boom must now be dismantled and factors reallocated into lines of activity made profitable by consumers.

It goes on to say:
From 1985-1990, the largest six banks in Japan made $215 billion worth of real-estate loans. In the six major Japanese cities, commercial real-estate values have fallen 75% since the bubble burst in 1991. Risky Japanese loans were not confined to real estate. Recently, Moody's Investors Service Inc. downgraded Toyota Motor Corp. debt from triple-A to double-A-1, leaving only nine Japanese companies with the triple-A rating and five of these are being reviewed for downgrading. Mitsubishi Electric Corp., Hitachi Ltd., Nissan Motors Co., and Mitsubishi Motor Co. all recently had their debt downgraded. Moody's is even considering downgrading Japan's triple-A, sovereign-debt rating.

The rest of this article can be found here: Click Here (http://www.gold-eagle.com/editorials_98/herbener102698.html)

[daihashi]

Golden boy.. all I have to say is that you are my new friend. I've been hoping additional voices of reason would be able to come in here and explain the situation as unbiased as you have.

Excellent posts.. all of them have been so far. :thumbsup:

[GoldenBoy812]

Golden boy.. all I have to say is that you are my new friend. I've been hoping additional voices of reason would be able to come in here and explain the situation as unbiased as you have.

Excellent posts.. all of them have been so far. :thumbsup:

Thank you:jointsmile:

Nobody suspects a stoner to be so in tuned with the economy.

[dragonrider]

I do not think much of it is Bush's fault at all. Maybe you can make the argument that the federal governments dramatic increase in size caused for a debasement of the currency, but Bush really just inherrited this mess. He inherrited Greenspan who lowered interest rates to their lowest level (Keynesian measure) in decades (50's).

I disagree that Bush inheritted this mess. THIS mess is mostly about the mortgage meltdown and real-estate bubble spreading throughout the economy. We did not have a real-estate bubble or mortgage financing bubble at the time Bush came into office. And the Fed Chairman serves at the pleasure of the President. If Greenspan was a problem that Bush inherrited, all he had to do was assign someone else.

When a president inherrits a problem (and I'm not agreeing that is entirely the case with Bush), then it is up to him to DO something about it. You can't just sit on a problem for 8 years not doing anything about it, and then say, "Well I didn't cause this --- I inherrited it!"

The other part to this mess, is the lack of room to maneuver, and that is mostly due to the massive debt. Again, Bush is not responsible for the enitre debt, but he is responsible for a very large portion of it! The massive Bush tax cuts and the cost of the unnecessary Iraq war have driven the debt so high, that there is very little room to borrow our way out of this situation.

We are just about completely painted into a corner. There is very little room to drop interest rates to stimulate the economy, and it might trigger inflation anyway. A bailout might be necessary, but who will lend us that much money, and under what terms? Maybe we'll just "print" the money, and we're back to inflation again. Maybe we'll need to rais taxes in order to deal with the problem, but what will that do to the economy?

We are getting into a situation where we are very susceptible to having our economy held hostage. Any number of foregin countries could kick us right over the edge --- massive oil embargo, dumping dollars to devalue the currency, another terrorist attack.

[JakeMartinez]

Allowing the country, and most of the world, to go into a major depression by allowing a company like AIG to go under because of the acts of a few people is like letting a multi-dwelling building burn down because a firebug committed arson.

I understand that. What I'm saying is we should put out the fire but somehow arrest the arsonist. The plan Congress is arguing over right now is says nothing about holding the directors, CEO's, and even corporations accountable for their actions.

So, in keeping with the metaphor, it's like putting out the fire and telling the arsonist...

"That could have been disastrous! Be more careful next time!

[Breukelen advocaat]

I understand that. What I'm saying is we should put out the fire but somehow arrest the arsonist. The plan Congress is arguing over right now is says nothing about holding the directors, CEO's, and even corporations accountable for their actions.

So, in keeping with the metaphor, it's like putting out the fire and telling the arsonist...

"That could have been disastrous! Be more careful next time!
Exactly, but I should have worded it a bit differently since these loans, and loans on loans, were probably within the framework of being legal at the time. The CEO's, corporations and directors must be held accountable - but first we have to develop and enforce better regulations.

Hopefully, AIG should be able to sell off some of their non-essential assets and pay back the government within 24 months.

[JakeMartinez]

Exactly, but I should have worded it a bit differently since these loans, and loans on loans, were probably within the framework of being legal at the time. The CEO's, corporations and directors must be held accountable - but first we have to develop and enforce better regulations.

Hopefully, AIG should be able to sell off some of their non-essential assets and pay back the government within 24 months.

Hopefully.

Since the loan is coming out of the Federal Reserve's pockets (not really the taxpayers', though it affects us indirectly through inflation), they're not really required to pay it back unless the Fed withdraws a lot of the money supply.

So...hopefully AIG and any other soon-to-be-bailed-out corporations aren't stingy with the money they make with the huge "loans".

...hopefully...

[dragonrider]

I'd be a lot happier about these bailouts if the Governemnt would mail me a share certificate for each company they bail out. They got what, something like an 80% ownership stake in AIG for the bailout loan? Maybe they should do a stock split so that it comes out to exactly a share for each citizen and mail us out each a share certificate. That would take the stink of "nationalization" off of the bailout since the shares would still be privately held. And if it is actually true that each and every one of us has a stake in the success or failure of these companies, maybe they should make that real by actually giving us a share. I'd also feel like I had got more for my money.

[flyingimam]

I'd be a lot happier about these bailouts if the Governemnt would mail me a share certificate for each company they bail out. They got what, something like an 80% ownership stake in AIG for the bailout loan? Maybe they should do a stock split so that it comes out to exactly a share for each citizen and mail us out each a share certificate. That would take the stink of "nationalization" off of the bailout since the shares would still be privately held. And if it is actually true that each and every one of us has a stake in the success or failure of these companies, maybe they should make that real by actually giving us a share. I'd also feel like I had got more for my money.

dude as it is its going to cost us 700Billion. now add printing stock certs and mailing costs as well.

[Breukelen advocaat]

From: Minister of the Treasury Paulson

Subject: REQUEST FOR URGENT CONFIDENTIAL BUSINESS RELATIONSHIP

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. I assure you, this transaction is 100% safe.

This is a matter of great urgency. We need a blank check.

We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to [email protected] so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully
Minister of Treasury Paulson

[dragonrider]

dude as it is its going to cost us 700Billion. now add printing stock certs and mailing costs as well.

My idea was more of a joke than anything, but believe me, the mailing costs would be a mere drop in the bucket compared to the $700 Billion...

[dragonrider]

From: Minister of the Treasury Paulson

Subject: REQUEST FOR URGENT CONFIDENTIAL BUSINESS RELATIONSHIP

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. I assure you, this transaction is 100% safe.

This is a matter of great urgency. We need a blank check.

We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to [email protected] so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully
Minister of Treasury Paulson

HAHAHAHHAHAHA!!!!!

[flyingimam]

My idea was more of a joke than anything, but believe me, the mailing costs would be a mere drop in the bucket compared to the $700 Billion...

lol true, what like a million or somethin... we are talking 700'001'000'000 :S2:

[dragonrider]

lol true, what like a million or somethin... we are talking 700'001'000'000 :S2:

Yeah, it would be about comparable to the "rounding error."

[GoldenBoy812]

dude as it is its going to cost us 700Billion. now add printing stock certs and mailing costs as well.

Its not going to cost $700 billion per say, the $700 is a number being used as a nominal value of funds available which acts like a psychological boost in regards to market confidence. There is not certainty in even how they are going to actually buy these bundled securities.

Most likely it will start off slow, with around $50 billion in the first month, but it seems more or less a number, something on par with the richest man in the building letting you know it. They really do not have a clue, its all touch and go from here on out, as this has never been done (and its only a theory lol).

A quote i heard today and really liked. We are playing a new game with old rules!

[flyingimam]

Its not going to cost $700 billion per say, the $700 is a number being used as a nominal value of funds available which acts like a psychological boost in regards to market confidence. There is not certainty in even how they are going to actually buy these bundled securities.

Most likely it will start off slow, with around $50 billion in the first month, but it seems more or less a number, something on par with the richest man in the building letting you know it. They really do not have a clue, its all touch and go from here on out, as this has never been done (and its only a theory lol).

A quote i heard today and really liked. We are playing a new game with old rules!

OMG! this is even scarier!!!!

[GoldenBoy812]

OMG! this is even scarier!!!!

Yeah they do not have clue as to HOW to identify the bad debt from the good debt (because its bundled) because they are parts of collateralized mortgage obligations that vary in repayment schedule. I mean, they can do it, but they are writing the book as they go, and it will take lots of time and worker hours.

[dragonrider]

Yeah they do not have clue as to HOW to identify the bad debt from the good debt (because its bundled) because they are parts of collateralized mortgage obligations that vary in repayment schedule. I mean, they can do it, but they are writing the book as they go, and it will take lots of time and worker hours.

As I understand it, that is a big part of how this disaster happened in the first place. Mortgages of varying terms and originated with all kinds of differrent questionable underwriting standards were bundled in such a way that it's hard to know really what is the value and what is the risk of the securities that were put together this way. Then these things were rebundled and resold. There are derivative investments based on the future performance of these unknown quantities, which makes them even more unkonwable. And companies like AIG insured them without understanding the risk. Nobody knows really how much of it is "bad" and where it all is.

When Paulson talks about having the governemnt buy the "bad assets," what is he talking about exactly? Buying these bundled securites that are being dragged down by some bad loans? Or buying the actual bad loans? Is the government going to own a load of foreclosed homes? If so, that might come in handy when the depression hits --- we won't need as many tent cities and shanty towns if the government has title to a bunch of vacant houses.

One thing is for sure, someone is going to make a buttload of money sorting it all out, and it's probably going to be the same assholes who concoted the mess in the first place.

[GoldenBoy812]

As I understand it, that is a big part of how this disaster happened in the first place. Mortgages of varying terms and originated with all kinds of different questionable underwriting standards were bundled in such a way that it's hard to know really what is the value and what is the risk of the securities that were put together this way. Then these things were rebundled and resold. There are derivative investments based on the future performance of these unknown quantities, which makes them even more unknowable. And companies like AIG insured them without understanding the risk. Nobody knows really how much of it is "bad" and where it all is.

Credit derivatives are used for much more than securities, and securities in this instance represent less than 10% of the overall derivatives market (estimates usually eclipse $500 trillion) and are even hedged against to remove of some risk (sounds kinda strange but its needed to preserve credit ratings). Note that the $500 trillion is a nomative number which accumulates the total leveraged amount (for example 30:1) where some entity is borrowing 30x's the value of a specific investment while only collateralizing 1/30th of the total package. These are usually implored in short sales, as well as futures and options. The real problem is the massive amount of short term liabilities that are taking in very little, and require a constant repayment stream from their holder. Usually in a good investment, short or long term liabilities pay the holder more than they are paying the issuer/ former holder/ government etc... which is why they took these pieces of paper as investment in the first place. Instead, interest received or even principle received is not in fact being received, which costs firms big time. Because if a firm is not making money off of a said note, how can they make the payments of the issuer, and if that issuer cannot receive the payments of that holder, how can they make the payments to the original source? Imagine the same paper being basically bought and sold for interest say 20 times. What happens if even a small percentage of firms are unable to make their bond payments?


When Paulson talks about having the governemnt buy the "bad assets," what is he talking about exactly? Buying these bundled securites that are being dragged down by some bad loans? Or buying the actual bad loans? Is the government going to own a load of foreclosed homes? If so, that might come in handy when the depression hits --- we won't need as many tent cities and shanty towns if the government has title to a bunch of vacant houses.

Although he has not specifically said they would be in the market of equity, but he did not say no to the notion either. In order for a note to be used as an asset (investment, collateral etc...) their usually has to be a bond issued on behalf of the seller to the buyer. So in essence, they are not really buying the mortgage unless specified. Now say a house is buying mortgage backed securities, they are buying the equity, while issuing a bond of sort (paper) to the seller. The seller can then keep the bond, and take the interest, or resell it to another buyer who in turn issues another interest baring contract.

It has gotten so complicated, and in such a short period of time, that they will need at least a few weeks to even locate all the contracts, on all the bonds, on all the securities, on all the secondary loans, on all the primary loans (original equity possibility) that are failing. The fucked up part is that they are bundled together with different types of repayment contracts, to act as a diversification instrument as well as investment.

Think of it this way, they have to go into the sewer, and find and separate and identify the stinkiest shit, and know find out what house it came from.


One thing is for sure, someone is going to make a buttload of money sorting it all out, and it's probably going to be the same assholes who concoted the mess in the first place.

It could be the taxpayer, and most likely will be for the simple fact that they are represented by the richest man at the table, who has unlimited credit, and the very best rates of borrowing.

[Dutch Pimp]

I owe my bookie $200...will they cover that too?

[dragonrider]

Credit derivatives are used for much more than securities, and securities in this instance represent less than 10% of the overall derivatives market (estimates usually eclipse $500 trillion) and are even hedged against to remove of some risk (sounds kinda strange but its needed to preserve credit ratings). Note that the $500 trillion is a nomative number which accumulates the total leveraged amount (for example 30:1) where some entity is borrowing 30x's the value of a specific investment while only collateralizing 1/30th of the total package. These are usually implored in short sales, as well as futures and options. The real problem is the massive amount of short term liabilities that are taking in very little, and require a constant repayment stream from their holder. Usually in a good investment, short or long term liabilities pay the holder more than they are paying the issuer/ former holder/ government etc... which is why they took these pieces of paper as investment in the first place. Instead, interest received or even principle received is not in fact being received, which costs firms big time. Because if a firm is not making money off of a said note, how can they make the payments of the issuer, and if that issuer cannot receive the payments of that holder, how can they make the payments to the original source? Imagine the same paper being basically bought and sold for interest say 20 times. What happens if even a small percentage of firms are unable to make their bond payments?



Although he has not specifically said they would be in the market of equity, but he did not say no to the notion either. In order for a note to be used as an asset (investment, collateral etc...) their usually has to be a bond issued on behalf of the seller to the buyer. So in essence, they are not really buying the mortgage unless specified. Now say a house is buying mortgage backed securities, they are buying the equity, while issuing a bond of sort (paper) to the seller. The seller can then keep the bond, and take the interest, or resell it to another buyer who in turn issues another interest baring contract.

It has gotten so complicated, and in such a short period of time, that they will need at least a few weeks to even locate all the contracts, on all the bonds, on all the securities, on all the secondary loans, on all the primary loans (original equity possibility) that are failing. The fucked up part is that they are bundled together with different types of repayment contracts, to act as a diversification instrument as well as investment.

Think of it this way, they have to go into the sewer, and find and separate and identify the stinkiest shit, and know find out what house it came from.



It could be the taxpayer, and most likely will be for the simple fact that they are represented by the richest man at the table, who has unlimited credit, and the very best rates of borrowing.

Wow, a good deal of that went over my head, but I appreciate the explanation.

I've got a question about part of it:

My quote:

One thing is for sure, someone is going to make a buttload of money sorting it all out, and it's probably going to be the same assholes who concoted the mess in the first place.

Your response:

It could be the taxpayer, and most likely will be for the simple fact that they are represented by the richest man at the table, who has unlimited credit, and the very best rates of borrowing.

Are you saying that you think the government will make money on this bailout? I see how it might work with AIG given the terms of the loan and the equity stake --- if the company does not actually go under, then we could make money.

But where is the profit in the new proposed bailout? As you mentioned, we are sorting through the shit for the smelliest nuggets. Hopefully after we buy them we can resell them for something. But do you really think we could make money buying this crap and reselling it later? If that is really the case, then why can't these companies do the same?

[GoldenBoy812]

Are you saying that you think the government will make money on this bailout? I see how it might work with AIG given the terms of the loan and the equity stake --- if the company does not actually go under, then we could make money.

But where is the profit in the new proposed bailout? As you mentioned, we are sorting through the shit for the smelliest nuggets. Hopefully after we buy them we can resell them for something. But do you really think we could make money buying this crap and reselling it later? If that is really the case, then why can't these companies do the same?

Right now the "crap" is being sold in a bear market for pennies on the dollar. This is mostly due to the fact that it is trying to be sold, which tends to send prices lower as sellers are trying to liquidize. Uncle Sam does not want to buy it at "wholesale" price because that would kinda be unfair given their unlimited money, but could purchase it at an arbitration point, that is market orientated of course.

The bailout is in essence trying to give people a fresh start. The purchasing of bad debt could in fact provide incentive's to mortgage holders so to restructure various mortgages. This is a win win, because the value's of certain holdings will go up, and this foreclosure that has been a plague to the financial institutes will decline. Will it decline enough to yield a profit, of course that is the $700 billion question.

You have to remember, the "bailout" is in theory designed to replenish investor confidence to the US markets. Say they were to purchase all of the zombie debt :D from holders, until the terms of the contract are either fulfilled, or voided, we the tax payers will be paying the liability aspect, as these things most likely have a cost associated to holding. That means $700 billion of bad paper is not going to be purchased. Instead, say $50 billion to start, and have another $650 billion to pay interest as well as potentially purchase more. If there are tweakings that need to be done in that time, a few weeks later they buy $50 billion (now holding $90 billion and paying contractual obligations of it). And so on, and so forth.

Foreign investors might even start getting interested (a goal of this plan) along with private investors and that's all they are trying to accomplish. Take the load off of some of these "banks" so they can do normal business and if things improve, and it does go as they plan, the load will be profitable.

[rebgirl420]

Well goldenboy, your a new fave in the politics section (at least in my book). Great posts.

[GoldenBoy812]

That means $700 billion of bad paper is not going to be purchased. Instead, say $50 billion to start, and have another $650 billion to pay interest as well as potentially purchase more. If there are tweakings that need to be done in that time, a few weeks later they buy $50 billion (now holding $90 billion and paying contractual obligations of it). And so on, and so forth.

Oops, a mini typo. What i was trying to illustrate is that if they tweak things, rational response would be to buy less in the next transaction. So they would be buying 40, instead of 50, and if they still need to tweak, they would buy say 35 the next time etc... The inverse is also possible if they start off with good results.

[painretreat]

It is said that this will cost each taxpayer between 200 and $300.00 a month! Hold on to your wallets and anything else you value! Weez in for some hard times.

Grow your own! :jointsmile:

Golden Boy, great understanding and explanations! I sold an investment house (bought with a friend) for $300,000.00 when I knew I paid $50,000. for it 9 years prior! I figured, in a few years, I can buy several more of the same, if I so desire! That house is most likely worth less than 50% of what I sold for! WHO DID NOT SEE ANY OF THIS COMING! I DID!! I am not a financial genius, just a good observer! :rastasmoke: PR

Since, Insurance Co's just piss me off so much I would rather fix my own stuff than deal with them; I surely resent this bail out of companies that don't even provide the service's they sell! :wtf: well, my B/P just got over 98/46!!!:thumbsup: I can go to the Dr. and not have my arm squeezed off taking my Blood pressure, thanks to bailouts!

If we filed bankruptcy, we would have a very hard time holding on to more than just the necessary assets we needed to provide for our families, homes, etc!

I'd like the job sorting this shit out! I would start at the top! Oh, but we are in the process of changing that with the election, anyway! It was shocking that it took so many thumps by these corporations to get the politicians on economics! We have been in trouble for many years in this country!

The only way I can live with it, is to ignore it and balance my checkbook, hide my money and hope I make it through! When CD's over $100,000.00 paid less than 3% for 12 mos. someone had to figure that out, over a year ago! What happened to calling for re-inforcement (Greenspan) when we really needed him?

Oops! Greenspan wrote a book and said we would face this in 2008!!! No one was listening. I couldn't forget! :pimp: running the pig pen! :rastasmoke:

[flyingimam]

my B/P just got over 98/46!!! I can go to the Dr. and not have my arm squeezed off taking my Blood pressure, thanks to bailouts!

:S2:

greenspan knew it for sure, i dont care if he is at fault here in any way or not, but im sure the man can pwn bernanke any moment in knowledge and experience

btw if i were u, i would switch savings and investments to gold and real gold not certificate and not anything held in a bank that can be screwed if the bank goes under. perhaps in a very secure and high net worth bank in a safe deposit box or a foreign bank with much less risk than most american banks in current situation.

If i had any major savings or investments i would be switching all to gold, despite the high prices and would keep them there until the mess and laws regarding stock market clear up...

the only traders who can always make money on stocks are savvy swing traders. day trading is also not a bad choice if u know whats up, but it is indeed a very risky and time consuming type of trading. buy n hold = aint gonna fly anymore with me.

although fundamentally it would work, but since there are very few safeguards in regards with how bad it can get and how long it can remain that way, i just find the trade off not worth the risk...

just my 2 cents

[daihashi]

:S2:
the only traders who can always make money on stocks are savvy swing traders. day trading is also not a bad choice if u know whats up, but it is indeed a very risky and time consuming type of trading. buy n hold = aint gonna fly anymore with me.


being a business major does not make you an investor. People make money by not selling their investments and enduring these hard times. If I sold my shares of HP/Compaq or other stocks that had significant drops over the years I would have lost 10's of thousands of dollars.

Investment is not about jumping ship when times get hard. Granted there are times you do this and it's correct to do so, but majority of the time the right thing to do is to hold onto your investments; or sell them and rebuy the stock after it's stable and bottomed out.

Many investment guru's would say the same, but to each his own. Really if your portfolio diversified then situations like this are not a real issue.

[flyingimam]

Being a business major doesn't make me an investor, but it sure helps me understand things better and I don't buy the free trade and free market (with or without regulation) promise anymore. when I'm a millionaire I may partially invest in stocks but it will certainly not be my first choice.

its not about "jumping" ships. I wouldn't get on this ship in the first place when it has no "lifeboats" sure it may be the most luxurious ship in the economy when its maintained correctly, but still i wouldn't wanna ride it when there are safer ways.

there are far more secure ways for investment, ways u can have more control over and take less risk. Gold, land, owning small businesses, owning rental property, offshore investments in tourist resorts. China & India offer great deals for foreign investors, why? cuz they are developing countries and can afford paying much higher interest rates despite the fact that there is no such a thing like FDIC there.

Pickens: Natural gas, Warren Buffett could ease nation's woes - CNN.com (http://www.cnn.com/2008/US/09/25/boone.pickens.energy/index.html)
see, the more money and capital u have, the better u can position yourself for stock market and perhaps take short-term hits.
But I'm afraid if we don't change some policies around, we ought to expect another major crash in future which scares the hell out of me.
and some1 like him, probably has investments in at least 10-20 different fields from stocks to land to whatever u can think of

but u r correct people gamble and do make money, its just the matter of how much of a hit u can take and stay good. Some investors know what they are doing and even they have to cope with hard times, and some have no idea and get hit hard. I don't like 1-2 years of paranoia over money every 10-15 years, and we have had this trend happen eversince great depression

List of recessions in the United States - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/List_of_recessions)


remember that no1 can guarantee how bad or long each downturn will be or take. and thus i find it quite risky to have your money in a market that can go down with just 1 bad statement by 1 famous man. its psychologically a very paranoid market, it goes up this way and it goes down this very same way.

[dragonrider]

This is one of those markets where cash is a huge asset.

So many good investments can be had at a bargain price right now. For example, the entire mortgage/forclosure/financial market crisis has put thousands of real-estate properties on the market at the best prices in years. If you have access to cash, you can make a fortune, because this is the time to "buy low." These kinds of buying opportunites did not exist a few years ago when real-estate was booming --- that was the time to "sell high." A lot of people have that backwards. They get attracted to an investment when it is booming, which is really too late. They jump in at inflated prices, then as soon as it tanks, they panic and jump out.

Do not overreact to short term changes in markets. The stock market swings a week ago are a great example. You had a couple days of HUGE drops in the market. If you panicked and sold on Wednesday, you missed the gains on Thursday and Friday. You effectively locked in your 8% losses from the first part of the week and missed the 8% gains of the last half of the week. If you just planned your strategy before we were in a crisis, and held steady through it, you came out almost exactly even. If your strategy included faith that the market will do well long term, and included a plan to have cash ready to buy on dips (instead of sell on dips), you came out ahead.

I personally think real estate in my area of the country is going to always recover because this area is an engine of job growth and more people always come here. Prices are way down now because they went so high during the boom. I'm thinking about investing in some rental properties now if I can find some with the cash flow to be self sustaining until the next boom. The problem is cash, and that is what this whole financial crisis is about. My credit union is not processing any real estate loans at all right now. Without access to credit and without huge piles of cash money sitting ready, you cannot take advantage of opportunites like this. If the credit sqeeeze did not exist, these prices would not be as low as they are, and without more credit coming into the market, no one will be able to step in and take these properties off the market, even at bargain prices.

Bottom line: In my opinion, this is a great market for opportunites, if you have the stomach for it, and access to cash or credit.

[dragonrider]

They just got out of the meeting with the White House, Congressional leadership of both parties and both houses, plus honored guests Obama and McCain.

Looks like everyone is on board with the comprimise worked out so far, except for some Senate Reeps and most of the House Reeps. Ha ha! This is a Republican President pushing the idea that this is a crisis and proposing the initial plan, Democrats understanding how urgent it is and working bipartisanly to back a plan, McCain wanting to suspend the campaign because of the urgency of getting a plan approved --- and it's the Republicans in congress refusing to commit to cleaning up this mess!

Hahahahhaha! Why does it always look like it is Democrats who have to clean up Republican messes? Hahahahahaha! Can't Republicans ever step up?

Personally, I am pissed livid about this crisis and the need to commit so much to fixing it, expecially since we've been told for so long that the economy is so "fundamentally strong" by the same Republican adminstration who is now acknowledging a serious economic crisis. However, I think this is a REAL crisis, and we will need congress to put up the money to stabilize it. I knew Bush and McCain were lying all along with their happy talk about the healthy economy, and I definitely believe them now that they claim we are in crisis. We've been in a growing crisis for a long time, and it has just finally come to enough of a head that they have to acknowledge it. I am not surprised by this at all, just pissed.

What do you think is the deal with these Reeps not supporting the deal? Is it that they have been lied to so many times by Bush they don't believe this thing is real? Understandable --- it's hard to believe when you've been burned so many times. Or do you think they really do believe it is a crisis, but they don't want to do anything about it? Sounds pretty typical. I guess it could be either one.

Maybe McCain can actually do some good in Washington --- it's not up to him to shape the plan, but maybe he can get his dumbass party members to take this crap seriously!!!

[thcbongman]

being a business major does not make you an investor. People make money by not selling their investments and enduring these hard times. If I sold my shares of HP/Compaq or other stocks that had significant drops over the years I would have lost 10's of thousands of dollars.

Investment is not about jumping ship when times get hard. Granted there are times you do this and it's correct to do so, but majority of the time the right thing to do is to hold onto your investments; or sell them and rebuy the stock after it's stable and bottomed out.

Many investment guru's would say the same, but to each his own. Really if your portfolio diversified then situations like this are not a real issue.

I very much agree with you and Dragonrider.

Recessions are the time to buy! In anything basically, there's deals all around. I been researching a wide variety of stocks, financials, real estate. Buy low, sell high.

[GoldenBoy812]

s.Investment is not about jumping ship when times get hard. Granted there are times you do this and it's correct to do so, but majority of the time the right thing to do is to hold onto your investments; or sell them and rebuy the stock after it's stable and bottomed out.

The problem is, credit is as tight as a virgins ass. Many new/ used car/ motorcycle/ RV/ boat/ (whatever requires credit to finance) dealers will have to close shop, that will result in high rates of unemployment. As companies crash, the desire to get out while you still have some value persists. People sell things when they need a means of exchange. When you are unemployed, you then will dip into your retirement money (therefore participating in the market correction).

If i have the money to lose and i am in it for the long term, only going to sell if i believe its going to be bad. Credit has to be freed up or people will lose jobs, im talking millions of jobs will be lost by the years end.


Many investment guru's would say the same, but to each his own. Really if your portfolio diversified then situations like this are not a real issue.

Everybody is losing money. The average long term investor is down between 10% and 20% this year (IMHO). Its really a shame.

[dragonrider]

The problem is, credit is as tight as a virgins ass. Many new/ used car/ motorcycle/ RV/ boat/ (whatever requires credit to finance) dealers will have to close shop, that will result in high rates of unemployment. As companies crash, the desire to get out while you still have some value persists. People sell things when they need a means of exchange. When you are unemployed, you then will dip into your retirement money (therefore participating in the market correction).

If i have the money to lose and i am in it for the long term, only going to sell if i believe its going to be bad. Credit has to be freed up or people will lose jobs, im talking millions of jobs will be lost by the years end.

The reality of this started to come home for me in the last few months. As I mentioned earlier in the thread, I started looking at the possibility of buying some rental units in the last few months. Prices are way down, so it seems a better time to buy than in the past.

The problem is the financing. Loan terms have gotten worse for the past few months, and now I'm not even sure if I can find ANY kind of loan. My credit union has removed ALL information regarding real estate loan terms and rates from its website for the past two weeks. I have excellent credit and plenty of equity to draw on, but the financing is still not there.

I started to understand the reason these prices are so low is not because there are not willing buyers at these prices --- there just isn't any credit for those who do want to step up and buy. If we don't get some financing available, prices will continue to drop until we get to the point where people with lots of cash on the sidelines can buy without financing. Those people will make a fortune in the long term, but everyone else will suffer.


Everybody is losing money. The average long term investor is down between 10% and 20% this year (IMHO). Its really a shame.

This is true for me. My long-term investments in 401k and IRA are way off year-to-date. WAY OFF!!!

[painretreat]

:jointsmile:Dragonrider; these are some good times for bargains. Last time I saw it in the housing mkt was in '94 and I managed to take a little advantage of that. Now, again is the time, soon. Have been watching it. Frankly, the best time to buy investment homes is when there is 'blood in the streets' so to speak! As far as gold, I expect it may go as high as $1500. or more an ounce. Buying in blocks instead of coins is better and easier to trade. If you want coins, try Canadian (pure gold)!! The '80's was the last really good time I recall it was a fairly good bargain. It is all relative though!

I believe the best investments in homes will either be those extremely large house's (if built in a town with potential of a greater population) or simple duplex's. Because, something has to be done with the 3500-4,000 sq. ft. homes sitting empty. Would make nice retirement centers for the baby boomers or simple split up apartments (which is what has happend in Los Angeles over the years!). But, you must really look around at the potential of the city. In L.A. county, parts of Riverside and San Berdo are pretty ripe for High Density Housing!

These are times to really make some good bargains, only in the stock market if you have a Phd in it. I've lost too much in it over the years and do not care to mess with it again.

Problem with gold, it is hard to keep, if you have enough :twocents:quantity, the safe deposit box costs about what it would go up in value over decades! Just depends on where your knowledge on investing lies. Use you best skills and put them forward.

I'd like to know what all this translates to in the price of mmj? any clues? Oh I hear you, buy a 4,000 sq. ft. home and become a caregiver or collective! It is being done! Or, go to the redwoods and buy some secluded parcel to go outside on??

These bailouts, etc. It did not happen during the great depression and I am guessing this is a bandaid :sadcrying to avoid the 'great depression' until after the election!!! :twocents::twocents:

And when all else fails: :joint1::bigsmoke: go to cannacom and be entertained and educated at the same time!!! Thank U cannacom for being here! pr :jointsmile:

It won't matter how it shakes out, I will be unhappy with what has been done for large corporations that is not being done for those that need Soc. Sec. disability or SSI. This means, more denials for those that have been waiting years. In fact, that ought to be a thread to start right now and keep track of! A lot of people on this site have been fighting SS for many years and still do not have it. think they stand a snowballs chance in hell, now? People have filed bankruptcy for years and have had more consequence's to pay in long term than those companies! I am pissed, bailing out an insurance Co. Those S.O.B.'s!!! It isn't fair. They need to find where the money went and go get it back! Even if t is a few Islands in the South Pacific, Fiji and all over he world! Plus, their banks off shore! I am a very unhappy camper with our politicians, today! I realize, they did not do this themselves, but if i could see it coming, they should have! In fact, we ought to take a poll of how many people here saw something bad coming when you could buy a house: NO $ down, no principal payments and wait, interest rates will go way up and then you'll need to make a full payment with todays' interest rates, including interest, principal, insurance and tax every month! No, we are far from out of the woods.

My know it all neighbor down the street feels, the worst is over, and that was before the bailout! Wonder what he thinks today, other than avoid me, cause 'I told him so!'

Well, as long as my supply of mmj lasts until my next payday, I'll be fine for now-or spend what I have on mmj! Right now we need to look at our finance's like a boat with a hole in it! Before you take your finger out of the hole and dole out your money for anything, THINK, how full of water will your boat get, before it sinks. Do you need to take your finger out of the hole to drain your wallet and fill the boat? If not, keep your finger in the hole and find a better way to stay dry without cleaning out your wallet!

I must shut up, this whole topic has really gotten my blood pressure up to readable levels now! Our Gov't has gone to far to protect big business. If big business was let go, we might get back to the good ole days of Mom and Pop business's with a chance of making it and supporting a family, again!!! That has been a long time. If we go back to personally knowing our bankers and people we do business with, people would become more responsible in spending. I would hope. It is questionable with a few of the new breed of the self righteous, self centered spoiled ones that have no clue of what dirt is, except FF for a growing medium!

O.K., sorry guys, I'll get off my soapbox, again! Cause this one gets the hair on the back of my neck to stand up! And I am not looking at a wild cat right now! Thanx for your patience! Pr ;) :hippy:

Crap, the news just said that value of homes in 'Valley' Plummet! That would be outside of Los Angeles. Good, the closer to L.A. the better. Wouldn't mind having a little ghetto house in L.A. close to the theatre, ball games and where there are events every week-end! If the celebs would move out, it could be a fun town. So, much to do! But, I am not sure I can be civilized enough to live in a city anymore! Tooooo long in the country! bye now :jointsmile: Pr

[GoldenBoy812]

Being a business major doesn't make me an investor, but it sure helps me understand things better and I don't buy the free trade and free market (with or without regulation) promise anymore. when I'm a millionaire I may partially invest in stocks but it will certainly not be my first choice.

You have to remember, Keynesian economic/ financial infrastructure has intertwined us together. As banks fail, so go the economies they represent.


its not about "jumping" ships. I wouldn't get on this ship in the first place when it has no "lifeboats" sure it may be the most luxurious ship in the economy when its maintained correctly, but still i wouldn't wanna ride it when there are safer ways.

Its funny you say that. Part of the problem was created when smart investors did something that was both genius and kinda sad. These "smart" investors bought up huge sums of these securities and bought insurance (a lifeboat) on the instance that the bundled security was to default. If it did, the holder of the CDO would collect a "claim" just like a homeowner who's house burnt down. AIG did not have the money to pay these massive CDO's and other investments. Commonly, this is called a "credit default swap" that is about to be completely regulated (limiting leverage ratio's to under 15:1) very soon.

Secondly, the "Gov" is going to provide a floor now. That way, people will be less likely to pull their money out due to fear.



there are far more secure ways for investment, ways u can have more control over and take less risk. Gold, land, owning small businesses, owning rental property, offshore investments in tourist resorts. China & India offer great deals for foreign investors, why? cuz they are developing countries and can afford paying much higher interest rates despite the fact that there is no such a thing like FDIC there.

Only gold will hold its utility. The rest are independent variables in the land of Keynes. Foreign banks will begin to fail also, setting up a world wide recession if credit is not freed. Chinese and Indian goods will no longer be demanded, causing them to drop prices resulting in deflation. This deflation will spill over into oil producing countries, and supply will soon be restricted to offset fixed cost already outstanding (buying land, discovering oil, buying equipment all at previously higher prices). The only thing that slightly hedged will be consumer staples (razors, toothpaste, etc...) as well as renewable energy.


Pickens: Natural gas, Warren Buffett could ease nation's woes - CNN.com (http://www.cnn.com/2008/US/09/25/boone.pickens.energy/index.html)
see, the more money and capital u have, the better u can position yourself for stock market and perhaps take short-term hits.
But I'm afraid if we don't change some policies around, we ought to expect another major crash in future which scares the hell out of me.
and some1 like him, probably has investments in at least 10-20 different fields from stocks to land to whatever u can think of

I love T-Boon:jointsmile:


but u r correct people gamble and do make money, its just the matter of how much of a hit u can take and stay good. Some investors know what they are doing and even they have to cope with hard times, and some have no idea and get hit hard. I don't like 1-2 years of paranoia over money every 10-15 years, and we have had this trend happen eversince great depression

There were depressions during the 19th century, but those were based on fraud, as well as extortion and government intervention... Gold, yes gold is the only thing that will hold value. As conditions worsen and hyperinflation or hyperdeflation persist, people will being buying up supplies of bullion. You could see gold prices at $100,000 per ounce in such a situation. But seriously, if credit is not freed up, this very well can happen. :beatdeadhorse:



remember that no1 can guarantee how bad or long each downturn will be or take. and thus i find it quite risky to have your money in a market that can go down with just 1 bad statement by 1 famous man. its psychologically a very paranoid market, it goes up this way and it goes down this very same way.

It will go down under paranoia, but if its only hot air, and of little fundamental significance, it will go up shortly and people will make a killing. Im not going to beat the dead horse again:smokin:

[flyingimam]

GoldenBoy812

Nice post and info. u sorta corrected AND completed my post :D thnx

and great point about AIG and insurance. that is what i failed to point out.

But for now, until i have a good sum of money, im gonna stick with Gold, silver, and platinum :thumbsup:

with a shotgun on my wall and these stuff under my mattress ill be good;)

no but seriously, Diahashi also had a good point which i actually agree with: Diversification of portfolio matters alot, but again I would not step into stock market at all until i have a good amount of capital to invest as just a portion of my net worth.

OR

if i have small amount of cash to invest, I will become a fulltime trader following market's every move to preserve my investment the best way i can.

but my point was: MY LIFESTYLE SHALL NEVER DEPEND ON THIS MARKET. so in times like this that tend to happen too often imo, i wont have much to worry about. the whole point of living large is to live a happy good life, not to worry about making or losing money in my philosophy.

i still can't believe people use borrowed money in the stock market... same thing that led to 1929 crash. stock market slowed down sharply and no1 was making anymore cash off of their borrowed investment... resulting in non-payment to banks and collapse of financial sector which blew back again to stock market bringing it to a complete halt and making a full loop.

an old article... man i just saw this and im now scared shitless!
NY Times: Stock Loans Are No Place for Secrecy (http://www.nytimes.com/2007/09/28/business/28norris.html)


The S.E.C., which also filed civil fraud allegations, says the actions brought in $12 million for the traders. This is a $700 billion market, according to calculations by Vodia Group, a research firm, but one that is so hidden from view that this suspected fraud could go on for more than five years without being detected.

$700 billion bail out plan rings a bell?
Threats and fears of a massive recession remind u of the great depression?

this all just opened a new window for me...ill be looking into it.

[GoddessHerb]

I think this is the key right here ^^ We are at an "OH FUCK" point, where if we don't do what we're doing... we're fucked. While it seems like our government is rushing to bail them out... I think everyone realizes that it is a bad situation. Charity should begin at home.

In regards to that quote though... I think that is so true. We are going to be changing in many ways to meet these new challenges. While we seem to be jumping to the will of Big Money CEO's... I highly doubt they will be granted such aid in the future.

Like I said... we're at an "Oh FUCK" point. They see this as the only way to "save" our country. After things are squared away... it is up to US to make sure this bullshit stops. I think that "fire" has been lit under the American people lately... and things will get interesting in the near future.

The following is not directed to TheMetal1 but rather is a general response to their and others' posts:

Whether we bail "them" (the people that created and profited handsomely from this mess) out or not we're still fucked, it's just a matter of who feels the pain and when. The boomers will postpone the pain (like they always do) until after their dead (if they can) and their kids down to their great great grand kids will be paying for this in the form of UN-CONTROLABLE INFLATION! Despite what the Fed wants you to believe.

With a bail out the pain will be slow and last a lot longer like a bad toothache. Without one it will hurt more but the pain will end sooner like a ripping off a band aid. Either way we're fucked and it's going to hurt! A lot! Oh and giving these guys more money isn't going to help any taxpayers in the end. It's just the only place they haven't sucked dry... yet. But as you give them more and more money inflation will rise so it will definitely hurt us on the way to the end. (can you say computer chips as money?) This is a generality for simplicity's sake if you care to debate the points please start another thread and I will be happy to explain and discuss the entire situation (as I see it) in greater detail.

It's sad that the citizens of this country are so clueless about money management, financing, and currency. People just don't understand the situation (including all those smarty pants' in government and business) and react out of fear due to ignorance. I'm sure I could explain it to people but I just don't think they even care to understand it. And that's where the problem lies. People are so under-educated and mentally lazy that they don't know how to think anymore. They believe what bullshit they're fed as long as they don't have to feel "bad" about anything. Feeling "bad" (ever) is generally seen as a disease now. "We" (society as a whole) medicate people, or remove them from society completely, (via hospitals and prisons) for feeling "bad" so that we don't have to feel "bad" because they do. So they won't "infect" "us" with their bad feelings and "we" can go on blissfully ignorant to the reasons these "bad" people feel "bad" in the first place. The many make the few carry the emotional burden of all for the betterment of the many to the extreme detriment of those few. The beginnings of authoritarianism in our society. We shall see which road this leads us down next.

I've been feeling "bad" for my entire life because I can see the big picture way ahead of just about everyone else, and I knew this "crisis" (among others) was coming. And now I'm glad that everyone else can't ignore that there's a great big reason to feel "bad", because things are BAD! And they're only going to get worse with or without a bailout. I can't even tell "you" (reader in general) how fucked "we" truly are. Then again I'm not sure "you" are ready to understand it as it will most assuredly make "you" feel "bad" too.

"We" should not accept ineffective government and its ineffective policies, "we" have the right, and the duty, to remove an inept government and it's arcane and obtrusive policies and install a new and better one. (maybe this time we can keep it simple, loophole free, with liberty and justice for all, not just those with enough money to buy it) It's just a matter of getting the authoritarians (followers and leaders alike) on board, and that is an almost impossible task.

Blessed be ~

[Mississippi Steve]

My biggest concern with all of this is will there be enough customers that can afford my services so that I can keep my business open for another month.

[GoldenBoy812]

The following is not directed to TheMetal1 but rather is a general response to their and others' posts:

Whether we bail "them" (the people that created and profited handsomely from this mess) out or not we're still fucked, it's just a matter of who feels the pain and when. The boomers will postpone the pain (like they always do) until after their dead (if they can) and their kids down to their great great grand kids will be paying for this in the form of UN-CONTROLABLE INFLATION! Despite what the Fed wants you to believe.

Not really, let me explain.

One can only analysize the situation as you have, if you study Austrian Economic Theory. The Austrian school believes that inflation will arise when government injects money into the economy. Yet how does the money supply increase? Money is created (mostly) in banks. The banks that you and i work with every day... Bank of America, Chase, Washington Mut, Credit Unions, etc..., all have a FDIC license to create money. Whenever someone gets approaved for a loan of any aspect, the banking system which is authorized by the federal reserve creates the money it was loaning (actually it creates 90% of it, but thats another story within itself) to the loanee. As the loanee repays the the nominal value of the note, a bit of interest (cost for doing business) is attached in various ways, and when the loan is payed off, the transfer of money earned and paid through a (x) number of years offsets the initial creation, and ties it directly to nomitive and real growth. Therefore, no inflation has been created through this transaction.

Tell me, what happens when a person defaults on their loan?


With a bail out the pain will be slow and last a lot longer like a bad toothache. Without one it will hurt more but the pain will end sooner like a ripping off a band aid. Either way we're fucked and it's going to hurt! A lot! Oh and giving these guys more money isn't going to help any taxpayers in the end. It's just the only place they haven't sucked dry... yet. But as you give them more and more money inflation will rise so it will definitely hurt us on the way to the end. (can you say computer chips as money?) This is a generality for simplicity's sake if you care to debate the points please start another thread and I will be happy to explain and discuss the entire situation (as I see it) in greater detail.

Ehh... Think about it along the lines of stitching up a brain surgery. If you rip those stitches out, the "situation" will bleed to death. That is what will happen if taxes are maintained, and credit is not freed up. We are talking a 10% across the board cut in the labor force, with an additional 5%-10% in the following year.


It's sad that the citizens of this country are so clueless about money management, financing, and currency. People just don't understand the situation (including all those smarty pants' in government and business) and react out of fear due to ignorance.

Yes it is a shame. :rolleyes:


I'm sure I could explain it to people but I just don't think they even care to understand it. And that's where the problem lies. People are so under-educated and mentally lazy that they don't know how to think anymore. They believe what bullshit they're fed as long as they don't have to feel "bad" about anything. Feeling "bad" (ever) is generally seen as a disease now. "We" (society as a whole) medicate people, or remove them from society completely, (via hospitals and prisons) for feeling "bad" so that we don't have to feel "bad" because they do. So they won't "infect" "us" with their bad feelings and "we" can go on blissfully ignorant to the reasons these "bad" people feel "bad" in the first place. The many make the few carry the emotional burden of all for the betterment of the many to the extreme detriment of those few. The beginnings of authoritarianism in our society. We shall see which road this leads us down next.

I am not trying to put my foot down your throat, but you really are not well informed in regards to how this bailout actually works, and the possible ramifications of tax payers getting stuck with paper that is worth pennies on the dollar.


I've been feeling "bad" for my entire life because I can see the big picture way ahead of just about everyone else, and I knew this "crisis" (among others) was coming. And now I'm glad that everyone else can't ignore that there's a great big reason to feel "bad", because things are BAD! And they're only going to get worse with or without a bailout. I can't even tell "you" (reader in general) how fucked "we" truly are. Then again I'm not sure "you" are ready to understand it as it will most assuredly make "you" feel "bad" too.

The Keynesian's will always be able to prop up the system through government intervention. Human economic activity acts in seasons, where booms and busts of the business cycle change the overall psychology of consumption/ production activity. Yet in order for the system to work, real GDP growth must be achieved, as well as the practice of "buy now pay later".


"We" should not accept ineffective government and its ineffective policies, "we" have the right, and the duty, to remove an inept government and it's arcane and obtrusive policies and install a new and better one. (maybe this time we can keep it simple, loophole free, with liberty and justice for all, not just those with enough money to buy it) It's just a matter of getting the authoritarians (followers and leaders alike) on board, and that is an almost impossible task.

When this bill goes through, it will be quite effective of freeing up banks to make loans so that regular economic activity can begin. As we speak, many large businesses that require financing to sell a majority of their products will have to make drastic cuts in cost, translating into jobs being lost. If Joe's Ford cannot sell half of the cars on his lot because the financing simply is not available, what do you think will happen to Ford? Ford will have to lay off people, and what do you think that will do to their spending patterns; will they spend less or more on things like going out to eat, movies, etc...?

The fucking economy will collapse, causing firms to lower their prices to remove of inventories. This in turn will enact a deflationary phenenomon, which will cause production of commodities to decrease to offset built in costs. What happens when their is a shortage in iron? How about oil? Shortage in oil means shortage in transportation, means shortage in food at grocery markets. Do you believe a responsible government would allow such a scenario?

I feel like i am repeating myself, so i will stop there. You need to go back and rethink the ramifications of the situation. Ron Paul believes in no intervention from the federal government. Yet the good Dr. also believes in dramatically lowering taxes. You cannot prevent collapse without the proposed bailout plan unless taxes are cut big time. Since they cannot or will not, we are left with really only one option.

:jointsmile:

[dragonrider]

Yet how does the money supply increase? Money is created (mostly) in banks. The banks that you and i work with every day... Bank of America, Chase, Washington Mut, Credit Unions, etc..., all have a FDIC license to create money.

Woops! Take WaMu off the list! It just failed last night... Biggest bank failure in history...

[flyingimam]

Woops! Take WaMu off the list! It just failed last night... Biggest bank failure in history...

call it JP Morgan Chase

i think if this shit goes on we end with 2 gigantic banks: BOA and Chase:D

guess what... in this fucked up credit situation these 2 banks' balance sheets are just solid and well. its quite hard to shell out billions in this situation to take over a business and they both have done it.

tells me some businesses do know how to run it and some just dont get it right

[GoldenBoy812]

call it JP Morgan Chase

i think if this shit goes on we end with 2 gigantic banks: BOA and Chase:D

guess what... in this fucked up credit situation these 2 banks' balance sheets are just solid and well. its quite hard to shell out billions in this situation to take over a business and they both have done it.

tells me some businesses do know how to run it and some just dont get it right

If you are a bank, and not an investment bank, CDO leverage is maxed at 12:1. If you are an investment bank, CDO leverage is maxed at 40:1. I laugh when democrats keep spewing that more regulation was needed. Soon, a massive reform of investment banks (such as Franklin Templeton Investments) is in the making.

:jointsmile:Hindsight is always 20/20.

[dragonrider]

call it JP Morgan Chase

If it has absorbed WaMu, can I call it JP WaMuGan Chase?

[maladroit]

"I do not think much of it is Bush's fault at all."

- i think a LOT of it is george bush's fault:



Fact Sheet: President Bush Calls for Expanding Opportunities to Homeownership (http://www.whitehouse.gov/news/releases/2002/06/20020617.html)

June 17, 2002

Fact Sheet: President Bush Calls for Expanding Opportunities to Homeownership


Today's Presidential Action

Today, President Bush announced a new goal to help increase the number of minority homeowners by at least 5.5 million before the end of the decade. The President's aggressive housing agenda will help dismantle the barriers to homeownership. The President's aggressive housing agenda will help dismantle the barriers to homeownership by providing down payment assistance, increasing the supply of affordable homes, increasing support for self-help homeownership programs, and simplifying the home buying process & increasing education. The President also issued "America's Homeownership Challenge" to the real estate and mortgage finance industries to join in his effort to increase the number of minority homeowners by taking concrete steps to tear down the barriers to homeownership that face minority families.

Background on the President's Homeownership Agenda

Buying a home is the biggest single investment most people will make in their lives. Homeownership is a cornerstone of America's healthy, vibrant communities, and benefits individual families by helping them build stability and long term financial security. But sadly, homeownership is out of reach for many Americans -- especially for minority families. For millions of these families, homeownership is a distant, unreachable dream.

President Bush has a comprehensive agenda to help increase the number of minority homeowners by at least 5.5 million before the end of the decade.

The President also believes that government alone can't close America's homeownership gap. It is critical that our government challenge the private sector to take concrete steps to tear down the barriers to homeownership that face minority families. The President is issuing "America's Homeownership Challenge" to the real estate and mortgage finance industries to join in his effort to increase the number of minority homeowners by 5.5 million families by the end of the decade. Many organizations have already responded to the President's challenge by committing to:

# Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;


************************************************** ***************


in 2004, george bush seeks to increase home ownership rates by eliminating downpayment requirements for mortgages, targetting "first-time buyers with somewhat impaired credit":
USATODAY.com - Bush seeks to increase minority homeownership (http://www.usatoday.com/money/perfi/housing/2004-01-20-fha_x.htm)

bush 2004 campaign boasts of home ownership rates:
CNN.com - Bush hails 'growing' economy - Apr 26, 2004 (http://www.cnn.com/2004/ALLPOLITICS/03/26/bush.homes/index.html)


************************************************** ***************

2005 testimony of bush appointee (and personal friend) about the bush administration's goal to force fannie may and freddie mac to match the private banks percentage of mortgage loans to low income and minority homebuyers (editted to highlight the guilty parties)

HUD Testimony - Statement of HUD Secretary Alphonso Jackson, before the U.S. House Committee on Financial Services, 4/13/05 (http://www.hud.gov/offices/cir/test041305.cfm)

Statement of The Honorable Alphonso Jackson, Secretary, United States Department of Housing and Urban Development, before the United States House of Representatives Committee on Financial Services

April 13, 2005

I welcome the opportunity to join Secretary Snow in discussing the Administration's views on how best to improve and reform regulatory oversight of the housing government-sponsored enterprises, or GSEs.

The President has set an ambitious goal: to build an ownership society where everyone has a chance to own a home and a retirement account or health care plan, and to gain a permanent stake in the American Dream.To build an ownership society, the President is committed to helping even more Americans buy homes. That commitment is embodied in the President's challenge to the housing industry to join with us in creating 5.5 million new minority homeowners by the end of this decade.

Our interest in regulatory reform builds on that commitment and is rooted in a responsibility to those whom the GSEs were established to serve: low- and moderate-income individuals who seek affordable homeownership opportunities.

As Secretary Snow has described in his testimony several other troubling problems impacting the safety and soundness of the GSEs have come to light. In addition:

* In July 2004, HUD reported that Fannie Mae and Freddie Mac continued to substantially lag the conventional market in serving first-time homebuyers, especially minority first-time homebuyers.

Congress established the housing goals to ensure that these GSEs fulfill their mandate to provide leadership to the mortgage market. The goals direct Fannie Mae and Freddie Mac to serve low- and moderate-income families and provide funding in underserved areas, such as central cities and rural areas. A third goal directs these GSEs to finance housing for very low and low-income families in low-income areas.

To better ensure these two GSEs' leadership in the mortgage market, HUD recently strengthened the affordable housing goals. By 2008, the new goals will require that the GSEs at least "meet the market" - in other words, their purchases of mortgages in each goal category must be proportional to the share of all mortgages in the conventional conforming market that fall within that category. In the past, HUD's goals have been set "below the market." Other conventional lenders - without the GSEs' Charter Act privileges - have served lower-income families and underserved areas better than the two GSEs have done. HUD believes the GSEs can do at least as well as other conventional lenders.

We also consider it important that fair housing requirements and enforcement that pertain to the housing GSEs remain at HUD, given HUD's expertise in fighting housing discrimination. HUD should have full enforcement power for those authorities, in the same way it enforces the Fair Housing Act.