The Trillion Dollar Mad Hatter’s Tea Party
By Uppity Woman on September 24, 2008 at 10:58 PM in ACORN, Bamboozling, Barack Obama, Economy, Federal Lobbyists, Homeland Security, Hoodwinking, Joe Biden, John McCain
I was cruising the internets for a simple way to explain what Paulson and our irresponsible congress are thinking about doing. First of all, it certainly appears that congress created this problem by allowing Fannie Mae and Freddie Mac run wild guaranteeing loans to people with Zero credit ratings, no means to pay for a home, and certainly no means to maintain a home.
I was just listening to Barack Obama, who has essentially been silent for a week when it comes to details, repeat John McCain’s idea to have a bipartisan oversight committee to watch over the man who thinks he should get a trillion dollar blank check: Mr. Paulson.
At the same time, I was listening to Obama talk about “opening up credit” again. What does this mean? Does this mean that ACORN can start getting mortgages for dead beats again instead of being shut down as they should be? His idea is to repeat the very same mistake again!
What does this trillion dollars of taxpayer money all mean? What are we buying? According to Paulson, we are buying up “Toxic” debt that is “clogging up the arteries” of our economy.
Now I ask you, would you buy up a deadbeat’s mortgage and expect to be paid? Anybody? Would you buy somebody’s bankrupt local company and take on the owner’s debt? Would you not think this was crazy? And if nobody else wants to buy these bankrupt companies’ debts, are they a good deal? Of course not.
If they were a good deal, other companies would be bidding on them.
What are we getting for this trillion dollars?
Well we don’t really know.
What is what we are buying actually worth?
Well we don’t know that either.
What will be a future benefit for our purchases?
Well we don’t know.
Is this a good idea? Well we don’t really know that either. We just know that what we are investing a trillion dollars in something “toxic”. That’s all we know. Oh, we know one more thing too. “It” might work or “it” might not. How will we even know if “it” “works” if we don’t even know what would constitute success? Do we have a benchmark or two? Nope. We don’t have that either.
What we do have is one man, whom nobody ever elected, saying that we have to do this by friday or the sky will fall. Give me a trillion dollars to hand out like Santa Claus or you are all going to be sorry. I don’t know if you will STILL be sorry after you give it to me, but Just. Do. It.
How stupid is that? This is what you get when you put people who have never even run a lemonade stand in charge of a country. This is the Mad Hatter’s Tea Party folks!
Every one of my senses is insulted by what is going on here.
My business sense tells me that we are about to be shafted by very stupid politicians who are beholding to greedy rich lobbyists representing companies that couldn’t care less about any one of us.
My common sense also tells me we are also being shafted by greedy deadbeat individuals who want things that are privileges under Democracy handed to them as rights under Socialism.
What is the government going to do with all these bad mortgages they are about to buy? Foreclose? I doubt that, don’t you? I think instead they will give these people their homes for pennies on the dollar, at the expense of people who have responsibly paid their own mortgages for years. What about all the people who figured out that owning a home means you repair your own home when something goes wrong, that there is no landlord–and they can’t handle this and don’t even WANT to refinance? What is our government going to do with all these abandoned homes in need of repair?
What reward will responsible Americans get for this deal? I can’t think of anything. Can you?
Maybe we should all, everybody in America, stop paying our mortgages. Then we can all get our homes practically for free? Ya think?
So what else am I hearing? I’m hearing that some in congress want to add auto loans and charge card balances to the mix as well. And student loans. I don’t care whose idea this is or what party you are in while you serve in congress. If you support this, You suck. If you support this and you are a Republican, you SUCK! If you support this and you are a Democrat, you SUCK! I smell lobbyists stuffing your pockets, you pigs. You are going to make sure these creditors get their money from everyone else’s pocket and everybody who is at fault, be they individuals or corporations, walk away scott free!
Charge Card Joe! Where do YOU stand in this? You and MBNA, the big honcho of your state of Delaware that has lined your pockets for decades. You gave us “bankruptcy reform” that forces people who are dying of cancer and who had to file bankruptcy because of medical bills, to recognize that after they are dead, their home will go to creditors and their famiies can just punt. How come you aren’t worrying about that??? These are people who deserve help, people who were responsible until a catastrophe hit their lives, not the kind of people who acquired mortgages they knew they could never pay for. That trillion dollars would go a lonnnnng way to reduce the cost of health insurance in America. That trillion would go a lonnnng way to repair our decaying infrastructure AND provide jobs while doing it.
Barack! How come you voted No to a cap on credit card interest? you said you voted No because the cap was too high. So no cap is better than a high cap? And how are you doing with your buddies ACORN?????? You started out with these criminals in Chicago (of course!). They and your Finance Chair, the Mother of The Mortgage Meltdown, Penny Pritkzer got loans for people with absolutely NO ability to buy a home. And here they are today, working hard for you to illegally register as many people as possible to vote for you. The states can hardly keep up with their crimes. You and your friends have been playing footsie with Fannie and Freddie and now you have the audacity to say now that “We have to act fast”?
What the Hell is going on here? Nevermind. We already know.
Ok maybe I am off base here, I’m just a shmuck next to these honcho big shots in DC running our lives. But it seems to me that if you want the stock market to do better, you CUT the capital gains tax to ZERO instead of doubling it.! You set interest rates at 4.5% and LEAVE IT THERE. You Regulate the IRRESPONSIBLE, not the RESPONSIBLE. Why on earth would anybody bother to save money or invest a little in the market if they have to take all the risk but give all the benefits to stupid politicians so they can hand the money out to somebody else??? I don’t get it.
Ok, I digressed. But it’s my blog so I can do that, right? Back to the rest of congress.
Those of you who pay off your charge cards, those of you who reliably pay your auto loans and mortgages, those of you who rent while you save your own money to buy a home, and those of you who bust your butts to pay off your school loans, will this benefit you? Nope. The middle class is about to get screwed again. This time it’s BIG TIME. That’s the message. There is no other message here. By the time Congress is done porking up this bill for the lobbyists, the American Dollar won’t be worth squat. And guess who cares? Those of us who aren’t benefiting from this bailout, that’s who. Why? Because we are going to have to pay for it and still pay our own bills with our devalued dollar.
If you worked hard and responsibly paid your bills up until now, you will get NOTHING. If you are a deadbeat, this is your Day. If you are a greedy corporation, this is your Day. But the rest of you can just go punt. You get to pay for the whole goddamned thing. Socialism for corporations. And socialism for debt defaulters. Nothing for you. In short, you are sucker punched. You are being punished for the sacrifices you made. You are being punished for living within your own means. And you are being punished for saving against your own future. Both sides of congress are punishing you. In America, the middle class is shit. It always was shit. And right now, you are on the bottom of the congressional shoe and they are wiping you off. Right after they empty your wallets. If for some reason, you busted your butt to reach a piece of the American Dream through your own hard work and ingenuity, you are also screwed. You will pay for this. You will pay for doing it right.
I think it’s interesting how corporations want Capitalism when things are going well, and they want Socialism when things aren’t going so well. When was the last time a corporation offered their share their profits with Americans? Now they want us to share in their debt. I think it’s even more interesting that congress thinks this is Ok.
I think it’s just as interesting that our congress thinks the people who behave responsibly toward their creditors are worth nothing, and people who are not responsible should have their debts absorbed by the rest of us who ARE responsible.
I think America has lost its way, hijacked by extremists at the fringe of two parties. This is what lack of moderation and extremism-gone-wild does. Good habits are now officially bad habits. And bad habits are now officially rewardable.
And Capitalism has just been removed from our country. Blogger Pundita was right. Say hello to the New Democratic Socialist Republic of the United States, Comrades. It’s the Pie thing Michelle was talking about, folks. You work. You save. Then you Share with those who haven’t done either of those things. People left other countries to come here so that they could get away from that.
According to Rasmussen, Sept 23, Only 28% of Americans approve of this trillion dollar idea.
I could do hours on this, as you can tell. But my scouring of the internet did yield the simple explanation of what is really going on here.
Paulson’s Toxic Toxic Debt Plan
So, Treasury and the Fed (i.e., you and I) are going to buy toxic mortgage securities.
1) If these were priced fairly relative to their intrinsic value, an actual investor would have bought them. So we are forced to conclude that the government is going to overpay for them, regardless of the price they actually end up paying for them.
2) What is the immediate benefit? That investment bankers who make $2 or $3 million a year don’t lose their jobs? Boo freakin’ hoo.
3) If the government ends up owning all these mortgages, are they going to foreclose? No. They’ll let folks keep their houses for pennies on the dollar. “American dream” and all that bull—-, you know. Houses worth 2x or 3x what mine is, which I paid for all on my own.
4) How are they going to deal with all this debt? They’ll monetize it, of course. Severely depleting my savings, to the benefit of those who didn’t save squat.
Thanks again, Washington. I hate you all.
Copyright 2008 Uppity Woman. All Rights Reserved.
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Whine…..
Now I’m not sure what to think, Uppity. I just read this by Steve Diamond
http://globallabor.blogspot.com/2008/09/why-left-should-back-paulson.html
and this by Charles Lemmos
http://www.bythefault.com/2008/09/24/the-urgency-of-the-paulson-plan/
Medusa see my post below. If they are still going to use the “fair housing” rules we are screwed AGAIN in the future.
Thank you. I too have a big problem with this double dipping policy.
Whenever there is a hint of federal money, the vouchers will come. That’s what happened with Fannie and Freddie and is a big reason why there is a crisis. My fear is that this plan is just an invitation for the vouchers to come.
I found this old article
http://money.cnn.com/magazines/fortune/fortune_archive/2005/01/24/8234040/index.htm
Uppity-excellent post-
many people are wondering the same thing you are.
Medusa-
You are correct-this is very confusing.
No matter who you support for President, Read what Ralph Nader has to say about Paulson proposal. he is STRONGLY against it and the tactics that are presently being used to force this legislation down the throats of the panic-stricken citizens.
Good article to use a basis for comparison. Nader has a clean, clear writing style.
Nader Warns Against Mammoth Bailout
Wednesday, September 24, 2008 at 12:00:00 AM
ShareThis
Press Release
EXCERPT:
FOR IMMEDIATE RELEASE
Contact: Toby Heaps, 202-441-6795, toby@votenader.org
Ralph Nader to Congress: Put the Brakes on “Carte Blanche” Bailout:
“Haste Makes Waste” with Goliath of Panic Legislation.”
“Taxpayers are being asked to foot the bill for corporate malfeasance.”
Independent presidential candidate and longtime consumer advocate Ralph Nader said today that he opposes giving Treasury Secretary Henry Paulson — heralded as King Henry on the cover of Newsweek — what amounts to a blank check for $700 billion with nothing more than a promise to keep the U.S. financial system from imploding. Nader said that any bailout should have strict accountability, conflict-of-interest, regulatory, and oversight rules attached, including a cap on executive compensation and stock warrants for the rescuing taxpayers.
Ralph Nader, whose vigilance for consumers dates back to 1965, issued the following statement this afternoon, urging Congress to slow down, “Haste makes waste.”
“The proposed $700 billion blank check is the Goliath of domestic panic legislation.
“It’s a triple whammy on the American people as taxpayers, consumers and workers.
“Without public hearings, without civil justice safeguards, accountability and Congressional oversight, without comprehensive regulation and shareholder governance, this three-page bill could be the mother of terrible unintended consequences. For example, what if it is the wrong kind of bailout?
Nader expressed strong agreement with William Greider of The Nation who recently wrote that “If Wall Street gets away with this, it will represent an historic swindle of the American public — all sugar for the villains, lasting pain and damage for the victims.”
Nader objects strongly to the language of the bill itself. The draft is very brief, broad, vague and overreaching, granting authority to Secretary Paulson with no oversight, says Nader.
[http://www.nytimes.com/2008/09/21/business/21draftcnd.html] He highlights Section 8. Review which dictatorially states: “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.”
“This recklessly empowers a government appointee with no accountability.
Read more of Nader’s position:
http://www.votenader.org/media/2008/09/24/meltdownbailout/
And it bears repeating that panic and rush judgments in Congress got us into the current war five years ago.
let’s not forget the many families who got a chance to buy a home, made their payments and then got caught in the aftermath of the lender’s greed when their interests rates soared beyond what they could afford…
this is a tragedy for honest americans too….
a. hillary
b. mccain
america first!
Point taken. But Fannie Mae and Freddie MAC were busy handing out loans to people who could not afford a house to begin with. I just found a copy of the “New” crieria that allowed unemployed folks, folks on welfare, folks with zero credit and folks with no down payment to get mortgages on homes that in some cases were more expensive than yours and mine.
And the the MACs not only irresponsibly handed out these mortgages like candy, but they put the pressure on bankers to do it too, lest they be violating the new “Fair Lending” laws AKA “discrimination” against people who don’t have any money. No kidding. I’m doing a piece on that right now.
This is what brought the MACs down and they were warned as far back as 2003 that this would happen. Congress chose to shelve a law to regulate the MACs TWICE, once in 2003 and once in 2005. We have every right to hold congress responsible for this set of dominoes.
Do you have a link to that source? It would be very interesting. If not, will Google soon.
I’m doing a piece on it now. You will read it.
Uppity woman-
not sure if you saw this video-
may provide some supplemental info for your next article.
Keep up the great work!
http://www.youtube.com/profile?user=themouthpeace&feature=iv&annotation_id=event_525530
Vicki,
Here is the link (pdf) to a report dated February 2003.
see the conclusions beginning with Section Four (p. 105)
Thanks!
better yet, start with Section Three on p. 93
Oh never mind, I will wait for your next piece.
Great work!
Fannie Mae doesn’t make loans. It buys them from originators. They have to meet strict criteria for them to be bought.
Cocky, tomorrow when you read my piece on this, you will be horrified as to what those “strict” criteria were.
Am looking forward to your next piece, Uppity. This one was a gem.
Wapo has an editorial by James Galbraith. (Isn’t he an economist or something like that?) Anyway, he thinks the bailout is unnecessary.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092403033.html?hpid=opinionsbox1
We can add that banks in the western third of the country were lending to illegal aliens who were subject to deportation at any time. Some banks are believed to have made 25% of their loans to illegals.
Very good point gerard. This will take many families down who work hard, pay their bills and meet their mortgages every month. Too many are making broad strokes about the people who may face foreclosure. Calling them all deadbeats is just irresponsible.
I applaud you Uppity Woman for a very well written article. Even though we don’t agree on who to vote for, I can honestly say that your views on this situation match mine. A few years back, I lived in one of the most expensive areas of this country to own a home (The Bay Area of California), and as the prices went up, I knew I could not afford a home in that region. So, I did the responsible thing and did not purchase a home I could not afford. I don’t feel I should be called upon by this Government to help out those who got loans they could not afford, and that includes those who signed on for adjustable rate mortgages, without reading the fine print before they signed on the dotted line.
I have no pity for those who are loosing their homes because of their own ignorance of the terms of their loan. I also have no pity for those who are loosing them because they lied to get it. They, along with the banks who made the loans, shouldn’t be bailed out at all.
I see nothing in this bail out that prevents this situation from happening again in the future. I am extremely irritated with this Government that they would even be considering such a Socialist policy.
Thank you Brandon. As a reward for your responsible decision, you are now about to pay for the bad choices of others.
I already have paid for others bad decisions. I have done construction for the last 16 years. I got laid off from that with 60 other people in my company back in March. No worries from my end though, as I got myself enrolled in school to learn something new.
Brandon you’re the kind of son I would love to have, regardless of who you vote for!
Indeed, Brendan.
I’m doing the same thing in Seattle that you did in the Bay Area: renting because I knew I could not afford to buy except with risky interest-only or ARM mortgages that would come back to haunt me sooner or later.
I am single. I have no children or other dependents. I make around $95,000/yr, which is just under our area’s median income (where the average single family home costs over $400,000.) Note that this is just below the point at which social security tax cuts off. I obviously rent. I am on salary and can’t hide random living expenses in a tax return as business expenses. I don’t have a huge enough portfolio that I can sell depressed securities (and then rebuy them) in order to book a capital gains loss.
In short: I will be one of those paying most dearly to bail out those who in many cases have a net worth greater than my own, merely because they cannot stomach the horrifying thought of going back to being what I’ve been all along – a renter.
I shed no tears for those who didn’t realize what an ARM was, or who were taken in by high-pressure salesmen. This is America. We all have the freedom to screw up. And investing has always been one of those areas in which some people win and some people, sometimes many people, lose. Don’t ask me about the $100K that I lost while investing in tech stocks a few years back. It was a great learning experience and has certainly made me more cautious with investing.
How many people REALLY don’t know about the dot-com bubble’s bust’s effect on the market? How hard is it really, to take that knowledge and apply it to the real estate bubble? Nearly everyone had to have gone into this with an awareness that a financial disaster COULD happen. Instead, they chose to be opportunists and see real estate as a way to get rich quick, figuring that the odds were in their favor. Funny thing about opportunities that are “too good to be true”… they usually are not.
None of those homeowners should profit. At the very most, the government could give them back their down payment and allow them to start fresh, as if their home ownership debacle had never happened. This would still allow for a correction on the past 5 years or so of insane real estate appreciation. The people who’ve been in their homes long enough would still see a small amount of appreciation over the past few years, and the rest would be once again be renters competing with fellow renters like me to get to the point of being able to afford home ownership.
To help them stay in their homes (1) penalizes folks like me who made more responsible financial decisions and therefore missed out on the opportunity these folks would enjoy if the govt bailed them out and (2) will actually cost me tax dollars I’d rather use for something else.
Actually, if I were to give them back their down payments, I’d deduct every dime of mortgage interest deduction taken on their taxes over the years. If they aren’t willing to accept the down-side of their risky investment, they shouldn’t reap any positive benefits from it, either.
If a large chunk of the taxes I pay per year are going to keep someone in their home, then I want to pick one of those homes and have my investment mean the same kind of equity in that home for me, as its primary owners get from every dime they put into it, and I want my cut of the tax-free gains when they sell.
LOL, oops!
I meant:
Funny thing about opportunities that are “too good to be true”… they usually are
not.The bailout as proposed will NOT be going to keep people in their homes. That is not what it is about whatsoever. It is simply buying up the securities so the stock market doesn’t crash, banks don’t close, and the economy stays liquid.
No individual homeowner is going to get a check or a break from that bailout plan.
That is not what I understand, HB.
I understand that the bailout will help banks review loans that have the potential of going into foreclosure, with the object of “making payment terms affordable” to those who took out the loans. Reality is that they SHOULD lose their homes, and market forces should be allowed to adjust home prices to levels that can be sustained, given the means of current potential buyers.
Aw, the free, and unregulated, market. The myth. And we are seeing, yet again, the reality.
We’re like you, Bellevue, except we have a very small, affordable home that we bought almost 13 years ago. It was the best we could do at the time. We have several neighbors who have just walked away from their homes, and therefore their debt, because they a)bought between 2005-2006 and couldn’t afford it b)got risky equity loans and can no longer afford the payments. One of the houses that’s on the market right now, the owners bought new, like us, and they’re trying to sell short. Because Clark County, NV, has all these records online, I’ve been checking a lot of them out and my husband and I are appalled at these particular neighbors. They bought their house for just under $110K and they’re trying to sell short at almost $200K! Got lots of expensive toys, though. And I’m supposed to pay for that?
Something else here that’s ticking us off even more, though, are the people who are walking away from their debt, that CAN afford the payments, but just don’t want to, ’cause their house isn’t worth the half mil’ they paid for it 3 years ago. They can’t “flip” and make some outrageous profit now, so no problem, they just quit paying their mortgage, and save the payment for a down somewhere else!
And I’m supposed to pay for them? Horse pucky!
Last I heard, at the peak, over seventy percent of mortgages issued were the so-called Liar loans, i.e., stated income loans. What’s this mean? It means that for a slight additional fee, no credit check or verification of the loan applicant’s loan application statements was made. None.
The mortgage originators didn’t care because they didn’t keep the paper. They immediately bundled (securitized) and sold the loans.
Sheer lunacy.
Mr Natural-
Guess who bought the bad loans for their investment portfolios…
Mutual funds.
Guess who are MAJOR investors in mutual funds?
Pension Plans
Guess who the mortgage originators actually ultimately ripped off- guess who got stuck with these bad loans…US Citizens-
If you are young & not retiring soon-you can weather the storm-crisis will be a paper loss for your account-
However if you are retiring in the near term , the amount you thought you would be retiring with will get negatively affected .
Mccain has been stealing Obama’s ideas. It’s the other way around. Now, we see him act like a coward and not debate!
Bozo has ideas?
Hillbilly, McCain IS NOT a coward. McCain is the tough guy and Nobama is the wimp… If Obama wins, we’ll have another pussy like Jimmy Carter as President.
Iran WILL chew us up and spit us out completely this time around…
You better start stocking up on the good ole Koolaid…
If Obama is elected we will have a divided country.
I know I will never support him!!
I’ve thought about that, too. I think people like me will always be watching him and looking for anything that we can get him impeached on!
I told someone very close to me, even before I knew just how corrupt Obama is what his presidency would be like. he was concerned that if the Republicans win no one will go after Bush/Cheney (like the dems are planning, uh no!). Anyway, I said that I am more concerned about the democrat being investigated. When Bill clinton was President, not as much got accomplished as could have because the GOP was so busy accusing them of criminal behavior that they spent an awful lot of time on putting out fires, rather than moving forward on policy. The first 4 years were rather wasted.
Obama will get nothing done if elected. Mark my words. He’ll be horribly investigated, by the public if no one else and he will not have money to accomplish shit! There isn’t any money for all this crap he wants and the places he thinks he can get the money are not going to happen. He knows it. We know it. At least McCain is a place holder and a leader.
NObama!
Hillbilly…you really don’t know anything about the candidate you’re supporting, do you? Of all debates, this one is on foreign policy – McCain’s strength and without a doubt Obama’s weakness. McCain didn’t and doesn’t need to spend 3 days cramming for this debate – he knows his stuff. If McCain were afraid of ANY debate, it certainly wouldn’t be this one. The very idea that McCain’s afraid to debate is laughable! Do you bother to pause and think about what you’re saying?
Your shitty candidate said NOTHINg for a week but babbling Non-details. He waited for McCain to come out with his plan and then he stole it. Just like he stole hillary’s ideas and just like he steals everything else.
Nobody on earth is afraid to debate Mr. Uhhhhhhhhh Ahhhhhhhh. He’s a horrible debater.
He is now doing the senatorial equivalent of voting “Present”. Call me if you need me. What the hell kind of leadership is that? He says he will show for the vote only if it’s close. He wants to avoid voting so that if things go well he can say he “supported” it. and if things go poorly he can say he “Didn’t vote for it”. He’s a coward just like he was a coward in his state senate. He’s Leland Gaunt handing out needful things. That’s who he is.
Amen, Uppity.
That is exactly why he is afraid to go to Washington. Doesn’t want to be pinned down.
This poltiical expediency crap is coming to an end, however.
As President, guess where the buck stops. He is going to have to be held accountable eventually.
Guess that thought never occurred to him.
Great article, by the way.
Is that why Obama wouldn’t take McCain up on his weekly townhall proposal?
Thank you Uppity for your powerful on-target essay. As you well know, to many Obama supporters, it is blasphemous to criticize him. That he is a chameleon when it suits his power quest is meaningless to them. I believe dangerous Obama is not a coward, but rather cold and calculating with the stuff of a Socialist dictator. I applaud your needed, reason and passion to repeatedly meet Obama head-on with every truth. Just maybe, some blind eyes will see.
I guess you’ve already forgotten the first debate where Obama got his ass kicked? And claimed McCain cheated, when Obama himself got more questions up front that McCain? Of course you’ve forgotten. How conveeeenient.
Or the Columbia forum where McCain went first and Obama listened and proceeded to repeat nearly everything McCain had said. Even once openly referencing what McCain had said. He is a great “symbol”. We don’t need another symbol… we need a President.
I also forgot to mention that a “real coward” stays in a POW camp for 5 extra years being beaten mercilessly because it’s the fair thing to do. Wow you are a fool.
If every elected official in the House and Senate were to check their campaign funding records, they could identify the contributions they’ve received from Fannie, Freddie, Morgan Stanley, Lehman Bros., Merril Lynch et al. Once they’ve done that they should assemble on the steps of the Capitol and one by one, announce that they are giving up this money and placing it in the “bailout” fund. Wheeee! Now that would save the tax payers a ton of money.
Actually it wouldn’t.
Those SOBs sold their votes pretty cheaply.
“Fair Housing Act” criteria shoved down lenders’ throats and used liberally by the MACS. Hope you are sitting down: Would you hold a mortgage for someone in these categories?
This is how the community organizer built his base, the fair housing act was catered for just that.
ACORN. They started with him in Chicago and Penny Pritzker. The failed Superior Bank. SHe’s the mother of all of this, the Mother…
ACORN brought freddie and fannie down helping to get mortgages for people who didn’t have a pot to piss in.
And you could have an entire congressional hearing having bankers come forward to tell how ACORN extracted monies from them under duress. Nobody can say this wasn’t a factor in the problem.
You can BET it was. And you can BET that congressional members ignored STRONG warnings. I have all the links of their remarks when they tanked legislation to regulate these people……….twice. Barney Frank REALLY comes to mind right now.
They gave accolades to Countrywide and Bear Stearns for their work with “Fair Housing”. You know where those two landed.
If you refused a loan to a person with NO Income, on welfare even, you were breaking the new Fair Housing laws. If you refused a loan to somebody with ZERO credit rating, you were on the receiving end of a complaint.
The Community Reinvestment Act gave power to groups like NACA and ACORN the responsibility and right to create mortgages and bring them to the banks!
ACORN was one of the groups terrorizing the banks with a lowered CRA rating if they didn’t write these mortgages, which essentially would put them out of business. A bad CRA rating meant no expansion or new branches.
So the banks HAD to accept these crap loans despite their own misgivings. They just sold them to FNMA and FDMC, who kept them because they looked better on the balance sheets.
It has been a cluster-… You fill in the blanks.
There was even something called New Alliance Task Force or NATF created in 2003 to provide banking AND MORTGAGES to illegal immigrants – which kind of makes the “illegal” part an oxymoron. It started with the Financial Sector Program at Harvard, the NATF and they worked with FDIC and the Mexican consulate. The Chicago Tribune did an article on it Dec. 10, 2003, entitled “Mortgage Plan Open to Illegal Immigrants.” Don’t tell Lou Dobbs, though. He’d have a stroke.
Uppity, Vicki, Annie oakley
what has been happening in this country?
These facts that you are presenting all lead up to something that I cant put my finger on.
What is going on here?
I read about Sen Obama’s community organizing days- and the questions that I could not answer after reading these articles (see below)
are:
WHO IS SEN OBAMA’S REAL BASE
WHAT IS HE TRYING TO GET FOR HIS REAL BASE
After reading your comments and the links you provide to support your comments…well lets just say that I wont sleep well tonight.
All your facts lead to one conclusion for me- a massive redistribution of wealth and power in this country…and…a destruction of the middle class.
When any society has NO MIDDLE CLASS- it is much easier to promote agitation and unreast and chaos and revolution.
Our middle class appears to be shrinking.
I say this based upon what I have seen happening all around me on daily basis these past 5 plus years…
here is more info on Sen Obama’s community organizing and what that really meant…
http://www.windycitizen.com/2008/07/ask-a
-community-organizer-what-is-community-organizing-anyway
http://infed.org/thinkers/alinsky.htm
I will read your links in the morning. In the meantime, think about places like Oakland, San Francisco, New York and Seattle. Lots of upper class and poor, no middle class. And they are all overwhelmingly liberal!
Hehe, McCain stealing Obama’s ideas – did McCain suddenly adopt a phony southern accent? Did he send out surrogates to accuse anyone who disagreed with him of dropping anti-Scots-Irish code words? Did he put up greek columns at his last speech?
Obama has no ideas, he has only branding and self-promotion. Have you even read this year’s Democratic Party Platform? Compare it to WJC’s 1992 platform and tell me about Obama’s “ideas”.
McCain is doing the right thing on this issue – rolling up his sleeves and getting to work. Obama has no “idea” how to do that because… he’s never done it. Without an Ayers or Rezko or Emil Jones or Axelrod handing his career to him on a silver platter he has no idea how to get anything -done-.
But to reply to the overall post – I was intuitively against the Paulson plan until I heard about how deep this thing could go. If it’s a couple of private firms failing, sure, let them fail; that’s not the taxpayer’s responsibility. If it’s a catastrophic market failure on the horizon – which many experts seem to now be thinking – then some action is needed.
I don’t have a lot of expertise here but Charles Lemnos over at By the Fault had a persuasive post on what he called the urgency of the Paulson plan.
Charlie knows what he’s talking about.
Precisely.
Basically a Keynesian idea. But it still holds. Charlie doesn’t have much respect for the easily ignited who go in losing their tempers over the issues. I don’t either.
It’s a ridiculous plan. “Hey, let’s throw lots of money at it, and have the only guy in charge of all that money be the guy who oversaw the collapse. Then let’s go play some fiddle!”
The only bailout ideas that make sense are these: First, an equity stake in the crap we buy. That way we have some assurance that we’re not, say, putting $700 billion in pallets of hundred dollar bills in the middle of Baghdad.
Second, as a loan. With interest. To be paid by a .25% tax on every stock trade, by the buyer and the seller, such as we had until 1966. Not only will this repay the debt over roughly eight years, but it will stabilize the market due to there being an actual cost to participate. It will encourage investment rather than speculation. This is probably the best plan. John McCain would hate it.
He would hate it. So do I. We are not letting Jim Johnson run the plan so the guy who caused it will not be in charge.
Freddie and Fannie caused this problem by forcing money to people who should never have qualified for a $200 loan much less a mortgage.
Yeah, that was George W’s idea. The audio of it is in the first segment of today’s Thom Hartmann program if you want to listen to it. Although Freddie and Fannie are not at the heart of this problem they certainly are a big part.
The big problem is that fiscal conservatives, and I include Bush, McCain, the Clintons, and to a lesser extent Obama in this, have no earthly idea how an economy works.
What happened here was that in 2002, we were facing a recession. It was an inevitable part of the fiscal cycle, and we were pretty much facing a permanent recession at that point until we switched off of the free trade/supply side madness. However, we avoided that by deregulating the mortgage industry. Thus was recession avoided by inflating this housing bubble.
The bubble popped, as bubbles do. Unfortunately, this one was all that was keeping our economy afloat, since it was masking the fact that every other sector has been running on debt accrued from real estate to avoid this recession. In effect, the entire economy was built on a bubble.
It’s hard times ahead, unlike we’ve seen in this country in eighty years. It’s that way whether Obama or McCain is President. I’m voting for Obama on the economic issues because he has shown some liberal tendencies on economics, rather than McCain’s dogmatic Reaganism. Dogmatic Reaganism is what started this whole slide, and in my opinion the difference between Obama and McCain is that under Obama we’ll have a second Republican Great Depression from which we’ll probably recover, and under McCain we’re the latest entry into the Third World Disco.
CRA was Jimmy Carter’s idea, and Bill Clinton supercharged it. W is to blame for thinking that homeownership was the ticket to prosperity and responsibility and not stopping its worst abuses. So they are all to blame.
Money has to have a place to go, and after the equity market tanked (dot com bubble), the housing market grew abnormally and then did the same thing.
It doesn’t help that Sarbanes Oxley is still on the books. That is a drag on many companies’ true value. They have to write their books as if they would be sold in the next quarter! Way too much paperwork for not much benefit. A lot of private companies hesitate to go public because of the Sarbox paperwork and legal burden, so they don’t go onto the stock market, putting them at the mercy of venture capital.
Cut capital gains to zero, as well as corporate taxes, get rid of Mark-to-market, suspend Sarbox, let the investors in Fannie and Freddie hang, and let the drilling ban expire. Those will fix the problem.
By the way, the investment banks (Goldman, Barclays, Credit Suisse, JP Morgan) are heavily betting on rising commodity prices (gas, oil, metals, etc.). Will we have to bail them out when the prices of commodities drop too?
SEn Magoo,
what liberal tendencies on economics have you seen in Sen Obama that has caused you to decide to vote for him?
Source please-be specific.
Please refer to Sen Obama’s past actions-not his past speeches as support for your statement above.
Please read these articles and explain to me what you mean…exactly… by liberal attitudes on economics.
http://www.thenation.com/doc/20080211/fraser
The Nation, “Subprime Obama” by Max Fraser 1/24/08 Post 2/11/08 issue
“Obama’s disappointing foreclosure plan stems from the centrist politics of his three chief economic advisers and his campaign’s ties to Wall Street institutions opposed to increased financial regulation”, according to the article.
More examples of how Sen Obama has
SABATOGED efforts to help the middle class and working class people in this country.
http://www.beyondchron.org/articles/The_Obama_Craze_Count_Me_Out_5413.html
Beyondchron.org, The Obama Craze: Count Me out “ by Matt Gonzalez 2/27/08
Excellent analysis of several major pieces of legislation that Sen Obama was involved with in Congress.
http://www.motherjones.com/commentary/columns/2008/03/i-am-barack-obama.html
Mother Jones, “ I am Barack Obama” by Mark
Winston Griffith 3/17/08
“And on the question of a federal response to subprime lending abuses and foreclosure, an issue I’ve been passionate about since my days running a financial cooperative in Bedford-Stuyvesant, I’m convinced that extensive regulation and government intervention is the only way to curb predatory lending and prevent massive foreclosures.
Obama, on the other hand, relies far more on the market correcting itself.
Max Fraser recently wrote in The Nation that “As he has done on domestic issues like healthcare, job creation and energy policy, Obama is staking out a position to the right of not only populist Edwards but Clinton as well” writes Griffith
Read the rest of these three articles.
I am not voting for Sen Obama for a number of reasons but the bottom line, quite frankly is I do not think that he has any personal integrity and I do not trust him to be looking out for the best interests of USA.
http://www.barackbook.com/
Obama facebook
We dont want ANY of these people getting anywhere near Washington DC, our Constitution, or our Bill of Rights.
These are all close associates of Sen Obama.
Sen Obama owes many people many favors…what are they expecting as repayment?
Watch this chilling video.
Dear Mr. Obama: Who Are You?
http://www.youtube.com/watch?v=16aBNduAyQ4
Troll. Reconize the name from other sites. Disregard all that he says.
“It’s hard times ahead, unlike we’ve seen in this country in eighty years. It’s that way whether Obama or McCain is President. I’m voting for Obama on the economic issues because he has shown some liberal tendencies on economics, rather than McCain’s dogmatic Reaganism. Dogmatic Reaganism is what started this whole slide, and in my opinion the difference between Obama and McCain is that under Obama we’ll have a second Republican Great Depression from which we’ll probably recover, and under McCain we’re the latest entry into the Third World Disco.”
This is something I’m going to mull over.
Although, with all the opposition to both candidates, maybe we won’t recover under either.
Charles admits he was a Goldman Sachs employee. Charles admits that the last time this happened another GS employee was running the Treasury. Maybe GS is part of the problem. Maybe there’s a better way to spend $700B that might do more good.
This is what is deeply troubling me about this possible bailout. Who are these “experts?” Are these the same “experts” that are responsible for helping to create this financial crisis in the first place?
I’m confused about this whole thing…
Yes, they are the same experts and they think this MIGHT work. They are pretty sure it will help pull their fat out of the fire.
I just want to thank John MCcain for providing leadership in this time of national need.
Thank you Senator McCain.
According to John Mauldin at FrontLineThoughts.com, here is what we are about to do:
Policy mistakes are likely to be repeated.
Talking about policy makers, back in 1991, when the Japanese property bubble finally burst, few investors imagined that it would take at least a couple of decades to work off the excesses which had accumulated after years of rising property prices. Some commentators have made the point that the overheating in the Japanese property market was much more severe than anything we have witnessed in the U.S. in recent years, but that is factually incorrect. As pointed out in The Economist last week (see chart 4), residential property prices have actually risen more in the U.S. during the boom years 2000-06 than Japanese property prices did during their boom years in the late 1980s.
Likewise, as far as the monetary policy response is concerned, a case cannot be made that the Japanese were slow to respond to the crisis. If anything, the Bank of Japan reduced the cost of money more quickly than the Fed has done (see chart 4).
What worries me the most, though, is that the Americans, who were extremely critical of the Japanese approach back in the 1990s (”Let the weak banks go out of business” was the advice given by the libertarian Americans) are now at risk of making exactly the same mistake as the Japanese. A number of U.S. banks have capitulated over the past year, and both Fannie Mae and Freddie Mac are in pretty serious trouble at the moment. What do the Americans do? They spend tax payers’ money to try and fix something which is unfixable, not at all dissimilar to the policy mistakes made in Japan 10-15 years ago. This could have quite severe implications for U.S. GDP growth for years to come.
Cramming for debates? It’s called preparation. Mccain is running scared because of Obama’s polls.
What a joke. McCain put 10 townhall debates out there and Obama chickened out on all of them, so there’s no way that argument’s gonna stick. And we all know Obama got his ass kicked by Hillary in debates – he’s nothing without a teleprompter.
The truth is, every debate is going to hurt Obama, so if the schedule’s compressed and there’s more attention on the debates, more people are going to see him pontificate and choke with his own arrogance on stage next to McCain.
There’s real work to be done in the Senate this week – work we’re paying both these Senators to do, work which McCain actually knows how to do, something that Obama’s scarcely even tried in his unremarkable legislative career. But even beyond that, great strategic move from the McCain camp. He’s interrupted the rhythm and gotten inside Obama’s head, again. That’s a fighter and a leader.
No Hillbilly – Obama gives great speeches from a tele-prompter. Gotta give him that. McCain isn’t nearly as eloquent at speeches and knows it. McCain does much better when he’s not giving prepared speeches, like in town hall forums and debates. Obama does not speak well at all in that sort of environment and he knows that (Saddleback anyone?). That is why he refused McCain’s offer to have multiple town hall forums, why he didn’t want to debate Hillary, why he needed a teleprompter in Pueblo Colorado in what was a rodeo ring. It’s just not his strong point.
McCain being afraid to debate Obama is by far one of the most ridiculous things I’ve heard all week (and that’s saying something!).
Obama’s losing.
And everyone knows it.
Which is why he was so desperate to FINALLY debate McCain after running like a bitch from debates with McCain throughout the summer.
Mccain is losing? Did you read the Washington Post Polls? lol
Obama is losing? Did you read the Washington Post Polls? lol
A guy that was tortured for 5 years is running scared. Unlike Mr. O., he actually faced death. That does put many things in perspective. Obama has had the opportunity, frequently, to make strong statements about sexism (he didn’t), racism (he equivocated on black separatist racism), Iran (we’ll have tea some time), Chavez (we won’t be tough on you if elected), Nafta (it’s only words), slum dwellings for people living in his district (take Rezko’s money and don’t help the folks living in dangerous substandard housing), killing viable children (partial birth abortions), Iraq (let’s delay the troop withdrawal [a variation on just words]). McCain’s statement today reminds me of the stories of folks like John Peter Altgelt or Cabot Lodge in JFK’s Profiles of Courage. He put his country first.
Uppity,
You need a little better understanding of why these “products” are unable to be “priced” by the market. They are bundled groups of mortgages that were packaged to be resold. The bundle might have housing in Florida, New York, Las Vegas at 100 other cities in the package. To determine the value of the package you would have to disect them, tear them apart and then (maybe) repackage them in geographic areas. Say the Goverment buys these bundled mortgages and then unbundles them and repackages them into geographis areas. Many of these loans are not in trouble, are producing and are not a problem. But there may be some percentage that are non-performing and in default. The only way to price them is to know the specifics of the bundle. That requires a TREMENDOUS ABILITY to do DUE DILIGENCE before buying them. That is what has become virually impossible so no one wants them and they have NO market value since no one wants “unknown” risks anymore. Been there, got burned, done that. So the Government buys them, sorts them so a buyer can KNOW what’s there and then sells them. The mystery is gone and the benefit goes to the Government. Look, I don’t like it much, but I have to say it is not a crazy idea. There is NO WAY to know the costs or the benefits. Heck the Government might actually make some money on this like they did with Crysler.
The problem is the total of these mortgage backed securities is huge and they have sucked the life out of the banking companies as the mark them down to market. They lose capital with the mark down and then can not borrow any funds since their capital requirements no longer allow them the availability of those funds.
I think Bush actually said it very well tonight, how odd was that? It was far and away his best speech ever, it was short and to the point and he didn’t even crack a slanted smile once. This is serious and we need a solution.
Another approach by Newt was made today as well and Hillary has a different approach. This is why LEADERSHIP is needed. This needs to get done, now not next week.
Screw the debate, get this done!
You need a better understanding that responsible people who are struggling but STILL pay their mortgages and bills are getting this bill stuck up their asses.
You have no idea if it will cost one dollar one one trillion dollars. Until the secuties are unwound no one will.
So stick that thought ….. in your ear.
So you are one of those people who buy grab bags and get home to find garbage in the box eh?
Would you invest your life savings in something that you can’t even identify? If so, you probably don’t HAVE a life’s savings.
You would rather have the whole credit market freeze up. If they are right about what is happening to the market, the government has to intervene.
Sarcasm on:
Uppity Woman…don’t you know your place? How dare you state the truth that the people who played by the rules are being screwed to shore up the CEOs who messed up and the irresponsible people who took these loans when they had to know they couldn’t afford them.
Please, get with the program or if the US economy tanks, it is all the fault of those who played by the rules who don’t feel obliged to bail out the screw ups.
Sarcasm off.
By the way, IMHO, your post is spot on.
I understand your frustration Uppity – I don’t own a home, never have, and neither do my parents. I lived in poverty for most of my 20’s. Now I’m doing well but I’m also paying an incredible tax burden, it’s a bigger expense each month than rent and groceries and utilities combined. I’m keeping track of every dime and think I’ll be able to save up for a down payment eventually but it shouldn’t be this hard, and taxes are a big reason why – the idea that I still won’t own a home but will be paying taxes worth twice the average mortgage to bail out others who own homes but are supposedly “less fortunate” is, to say the least, perplexing.
All the same, I don’t know that a serious crash is going to help anyone, me or you or them or even the fat cats. If that’s what’s on the line we have to do what we have to do with this bailout to keep the economy from collapsing, and let’s elect people who understand that now is the time for LOWER taxes and an more reward for real entrepreneurial initiative, NOT huge government programs a la Obama. Since we have no Clinton Democrats on the ticket, for me it’s looking like that means voting Republican for the first time in my life – and not feeling all that bad about it. I guess now I know where Reagan Democrats came from.
PanMetron, thanks for the perspective regarding comparing taxes and rent/groceries.
I took a look at my pay stub.
I’m in the same situation. Wow, I’d never even noticed that before.
I, too, am struggling to save up for a down payment. I have to balance this with paying off long-term signature loans. I took those loans out when I experienced the double-whammy of the dot-com bust in the stock market and nearly 2 years of unemployment in Seattle when the tech sector wasn’t hiring and working at JC Penney just about covered my food expenses, and didn’t cover things like rent, cell phone to make calls to prospective employers, an Internet connection to send resumes to prospective employers, etc. So, I, too, know what hard times are like.
And I am pretty livid at the idea that my extra-hefty single/no kids/no dependents/salaried-wage-slave/no mortgage/standard deduction tax bill would be used to help so many others protect their asset base and even ultimately gain, at my expense, when their net worths are likely greater than my own. All because they made a stupid financial bet and ended up getting caught by the short-n-curlies when all the ARMs came up for revision, people sold because they couldn’t afford their new payments, and housing prices sank far enough to put many “under water.”
And if they government is going to hold fast to the position that home ownership is the American dream, let’s see them show some respect to those of us who’ve been living within our means and didn’t participate in the mortgage Ponzi scheme that every home owner benefitted from before the bubble burst. Let those who have never (not within 3 years, I mean really never) owned a home set aside 10% of our income per year TAX FREE, with the idea of being able to get into one eventually. That, combined with a correction in real estate prices, and enough of a helping hand to banks to get credit flowing again, might get a lot of *responsible* Americans into home ownership, who’ve never had the chance before.
UW: without this government intervention along the lines suggested by Ben the US middle class will experience first hand life in the new third world, without leaving their zip codes.
You are right of course and she is wrong – way wrong. She obviously doesn’t understand things like this. And she doesn’t appear to have much ambition to understand them either.
The comparison to Chrysler misses the most important point of all… there aren’t any Iacocca’s in these companies. How do we know we aren’t doing something which is the equivalent of giving money to a “crackhead” or a gambling “addict”. We should do something, but with strict rules… we should know what we are getting from these companies for the investment… and some of these companies… those that deserve it… should be allowed to fail.
Oh wait. Thanks for reminding me. The Auto manufacturers haven’t stuck their hands out yet. This is going to be a feed fest.
Oh yes, a feeding frenzy of biblical proportion.
Speaking of which, on another thread someone alleged that Pelosi, Reid and Democrats were in secret sessions to bail out the auto industry to the tune of 25 billion, no regulation, no oversight, no plan to payback.
Is this true?
Obama’s Katrina moment!
http://www.blogsforjohnmccain.com/was-today-obamas-katrina-moment
I have one major request to be put into any bill. No Bailout For Illegal Aliens. Having been in the secondary mortgage industry, private mortgage insurance industry and having been an escrow officer I can tell you that a large percentage of these bad loans went to illegals (at least in California). And from my experience this debacle started long before 2000. All lenders were put under pressure to make these bad loans and having to set aside percentages or numbers of loans for those in supposed “red line” areas.
The amnesty-promoting National Council of La Raza and its Development Fund have received millions in federal funds to “counsel” their constituents on obtaining mortgages with little to no money down; the group almost succeeded in attaching a $10 million earmark for itself in one of the housing bills past this spring.
The Washington Post noted, almost as an afterthought in a 2005 report: “Hispanics, the nation’s fastest-growing major ethnic or racial group, have been courted aggressively by real estate agents, mortgage brokers and programs for first-time buyers that offer help with closing costs. Ads proclaim: “Sin verificacion de ingresos ! Sin verificacion de documento !” — which loosely translates as, ‘Income tax forms are not required, nor are immigration papers.’”
Fraudsters have engaged in massive house-flipping rings using illegal aliens as straw buyers. Among many examples cited by the FBI: a conspiracy in Las Vegas involving a former Nevada First Residential Mortgage Company branch manager who directed loan officers and processors in the origination of 233 fraudulent Federal Housing Authority loans valued at over $25 million. The defrauders manufactured and submitted false employment and income documentation for borrowers; most were illegal immigrants from Mexico. To date, the FBI reported, “58 loans with a total value of $6.2 million have gone into default, with a loss to the Housing and Urban Development Department of over $1.9 million.
Hispana, that’s the Fair Housing Act. Anybody but ANYBODY can get a mortgage. Are we continuing this practice at the same time we put a trillion into the system? If so….
I am with you. This is one heck of a load to dump on the tax payer. I paid my way through school and bought my tiny home. I worked two jobs to keep my kid in a private school. I am paying for her college now and I did it all by myself. I am tired (mostly angry), and I sure as hell do not want to bail out those that had no business taking out loans that they could never repay. I don’t mind helping anyone in need, but this was greed and I don’t believe for one minute that it is going to stop.
Oh and a reminder, to anyone who still thinks that whole subprime mess, Fannie/Freddie failure and the expanding fallout is a partisan issue or one that should benefit Obama…
McCain raised alarms about Freddie Mac and Fannie Mae three years ago. In general, the Democrats in congress – including Obama – either blocked reform efforts or kept quiet. The economic sleight-of-hand of the FM’s was mainly a Democratic project, like it or not. Meanwhile, it was Obama himself – not someone merely on his campaign staff – that was raking in thousands of contributions from the FM’s, more than anyone except Dodd.
It’s only taken Obama 3 years to be more corrupted with Fannie Mae / Freddie Mac money than everyone else in the Senate except for the chairman of the Banking committee.
Did you know that a few years ago, when I was a customer service rep for Verizon Wireless and I donated $20 to a Democrat running against a Bush Republican, that $20 was jotted down as being from the telecom industry?
Did you know that John McCain has taken 10 times as much from Fannie Mae and Freddie Mac executives and lobbyists as Obama has?
I don’t really see what the low- and mid-level Fannie and Freddie employees did to cause this crisis. Maybe you see something that myself and most Americans don’t see, since only ~35% of them think John “Guiltiest of the Keating 5″ McCain is the guy to deal with the mess that his party created.
You might want to get your facts straight before posting in this forum. We know better and you are just making a fool of yourself.
My facts are straight, but thanks for playing.
http://www.nytimes.com/2008/07/27/us/politics/27lobby.html
Article’s a couple months old. From the numbers I saw yesterday Obama has taken about ten grand from them since then.
You are either seriously confused or trying obfuscate the matter by posting this link. It is a fact that Obama in 3 short years as a Senator has received more money from FMNA and FHLMC than anyone but Senator Dodd, who chairs the banking committee (which gaffester Obama once called “his” committee). His top ten campaign contributors include Goldman Sachs, Morgan Stanley and Lehman Brothers. He is a longtime friend of both Franklin Raines and Jim Johnson. His finance chair is Penny Pritzker, who led the Superior Bank of Chicago to ruin through involvement in subprime mortgages.
Obama’s hands are very, very dirty when it comes to Wall Street and the subprime mess.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638
McCain raised alarms about Freddie Mac and Fannie Mae three years ago.
McCain co sponsored S 190 , a bill which would have regulated Freddie and Fannie, in 2005. The Dems, Obama among them, shot it down.
One person is providing leadership at this time and the others are playing politics. AP reports the meeting tomorrow was McCain’s idea as well.
I was going to vote McCain as a vote AGAINST Obama and the hughly disappointing DNC. becuse of his leadership on this issue, I now am able to say that I am going to vote McCain as a vote FOR McCain.
I did a piece on that last week. With direct quotes. He most certainly DID warn and predicted this exact thing. He sponsored the legislation which was dumped just like it was dumped in 2003.
Here’s the coverage off my blog.
http://uppitywoman08.wordpress.com/2008/09/21/john-mccains-fannie-maefreddie-mac-warnings-may-2006/
Uppity ~ I am right there with you….You have stated my sentiments exactly! The Washington elite are out of control….I hate that we are totally being screwed over by those who are supposed to be representing us…. we the people…..the people that pay their their fricking salaries!
Cute. But reading your article several words come to mind. “Bigot” is one; “curmudgeon” is another. Also, you seem to be peddling your own brand of Koolaide.
You might do well to catch Bill Clinton’s interview on Larry King where he defends this policy and points out how it can turn a profit in the long run. You can hear how he himself instituted similar policies on at least three occasions and how he (and the United States) turned a profit on each and every one.
Your vitriol can be amusing but after a while it loses its appeal.
You have a lot of nerve. I sacrificed and saved and worked to get what I have and shore up my own future. Not yours. Who the hell are you to tell me I should give it to you? This is socialism pure and simple. You could sit on your ass on welfare and get a loan under the current Fannie and Freddie rules. Just don’t expect me to cheerfully pay for it.
Uppity Woman–
YOU GO GIRL!!!
Personally I think this is worse than socialism. With socialism, at least you have a predictable system, governed by laws that apply equally. This is flat-out extortion, with no accountability for those who profited the most from irresponsible behavior, and penalties for those who worked hard and played by the rules.
bloggers are complaining that the corpmedia is not mentioning that it was McCain who called on Dubya to call in BO and McCain. following was posted on PUMAPAC:
MCCains suspension speech . At 1:41 on the video is where he “calls on the President” to convene a meeting with the leadership and himself and Obama ..
http://www.youtube.com/watch?v=8gqTf37-MGc
Oh PLEASE!
The same media that’s been licking Obama’s boots? Since the VERY beginning of his (soon-to-be) failed presidential campaign? We’re suppose to believe that that same MSM would suddenly withhold possibly damning information against McCain from the public???
The stupid bloggers who wrote that need to spend some time in a mental institution.
Newt has the best plan so far and I wish people would listen to him. This plan to just bail out everyone is madness I just hope someone comes up with something better than that crap
I would agree with you. It at least needs to ne heard as it would be a “loan” at Treasury plus 2% and make the firms work their way through their problem. Worth a look.
SJ – Where did you get your info about the meeting in NY with Obama and Ahmadinejad – what link (on previous posting this evening)?
Mary it was not Obama met with Ahmadinejad but it was Jodie Evans a founding member of the campaign Jodie Evans, co-hosted Obama’s first major fundraiser in Hollywood in February 2007 just after Obama announced his candidacy and is a top fundraiser and donor to Obama’s campaign.
http://forpeace.net/news/2008/09/24/convenes-meeting-peace-activists-and-president-ahmadinejad
Her name is listed under Leaders of advocacy & activist organizations:
Thank you SJ.
Jodie Evans is the founder of Code Pinko… that should tell you something right there.
Here is some more Mary interesting this is from their press release of the meeting !!
The CODEPINK women proposed inviting American and Iranian artists to build a “peace park” in Tehran, a memorial dedicated to people-to-people commitment to peace and diplomacy between our two countries.
http://codepink4peace.org/blog/2008/09/official-release-leading-codepink-activists-and-other-peace-organizations-meet-with-iranian-president-in-new-york/
meant to add this poll, even tho it was done just prior to the bailout plan being announced. what i want to know is if this excerpt is correct, how on earth could BO be ahead in any poll?
Pittsburgh Channel: Poll Shows Tight Race For White House
Survey: McCain Holds Slight Lead Over Obama
McCain’s advantage over Obama among people describing themselves as fundamentalist Christians has grown from 8 percentage points in June to 30 points in September.
His advantage among white men has increased from 7 points to 28 points; and his advantage among white women has increased from 5 points to 17 points, the poll said.
Candidate preference among partisans has also changed since June.
McCain has more support among Republicans than Obama has among Democrats, the survey showed
http://www.thepittsburghchannel.com/politics/17548838/detail.html
I think we have a right to know if the Fair Housing Act is going to continue forcing mortgages for people who can’t afford homes onto lenders. Because if this is so, we are going to be in the EXACT same trouble again. Under those rules, anybody can get a mortgage without two pennies to rub together. Without a job even. With Zero credit. This is just plain socialism going on here. We are paying for this now and we will continue to pay for this unless this comes to an end.
Didn’t mean to be confrontational. You are 100% correct about the cause of the problem. There is no credit available right now but I do agree that the first course is plugging the hole.
Then unwinding and reasonable sale of these securities. They are not worthless, just not priced since no one understands what is packaged.
Ben my major concern here is that if we apply the same Fair Housing Laws we will be right back where we are now in a few years again. You just can’t give loans to people who cannot pay them off. Truly, ACORN et al, brought the MACs down. And the dominoes fell.
I like what Newt Gingrich said to do, if we DO pass anything, WE MUST REQUIRE THEM TO PAY IT OFF, BY WORKING IT OFF.
It made a lot of sense. NO FREEBIES. Anyone who gets money HAS TO WORK IT OFF.
Yah, WORK, a word Obama knows nothing of, as he’s tralloping around the country on his humongous EGO TRIP – WHEN HE NEEDS TO GET HIS PENCIL A** BACK TO WASHINGTON AND DO SOME WORK.
AFTER ALL, WE AMERICANS ARE PAYING HIM. But the “servant mentality” is beneath Obama. He doesn’t get that he is a public SERVANT, not the other way around.
WE DON’T WORK FOR YOU OBAMA – YOU WORK FOR US!
WE REBUKE OBAMA!
Newt makes me itch, but I saw his proposal and dammit he’s right.
I’m going to disagree with you here Uppity. The problem here isn’t something that we can walk away from without the entire economy collapsing.
You may have a visceral reaction to the idea of the government buying up bad mortgages but that’s not what they are doing. From my understanding, they are buying the securities that backed the mortgages. If this is not done, the entire house of cards the economy is currently built on will COLLAPSE and EVERYONE will be in serious doggie doo because of this.
I don’t blame the government for this entirely. I have a friend who was a subprime mortgage broker – he made a mint off of selling these mortgages to poor people and thought he was “attractive wealth” ala The Secret. There’s a lot of blame to go around.
I personally don’t give a crap who is to blame, I think they need to do something otherwise we could turn into a third world country overnight. People’s life savings will be lost in a huge market crash and those who are retired will have nothing to live off of.
This really is that serious, from my understanding.
Excuse me, I meant “attracting wealth” ala The Secret.
Okay, Uppity, thanks.
I think I’m beginning to understand that this crisis does need an immediate response–the whole “liquidity is to the economy as oxygen is to life” thing. But the proposed bailout could be like bailing out a boat with a huge hole in the bottom–the Fair Lending thing.
Zelda Crunch, BTW, the readers and writers of NQ are very fond of Uppity. By insulting her, you are insulting us.
Ah I love you anyways, Hillarys.
But please read my post on this thread about the fair housing act rules and please tell me we aren’t going to be in the same pickle in a few years if this nonsense isn’t stopped. I truly blame congress for a LOT of this.
I agree with you – it’s the subprime mortgages to people with bad credit that caused this in the first place. I’ve been following the Housing Bubble Blog for years and they all knew this was coming:
http://thehousingbubbleblog.com/
But, see, people like my friend made a lot of money off of selling these mortgages. As a mortgage broker, you get a commission when the house is sold. No-one comes back to you and asks for that commission back when the loan is defaulted. So there was a lot of greed out there by ordinary people with all the housing bubble hype.
Hillary or Bust–great post. Does everyone remember back in 2002 when Bush unveiled his big “Ownership Society” plan? It had a logo and everything…somehow I don’t think this was because the Bush/Cheney crowd deeply cared about the average joe being able to buy a home. Follow the money trail. Who benefited from this before the bubble burst? A lot of people made a lot of money off these sub-prime mortgages; it’s not like they were trying to be charitable! Yes, a lot of people made dumb decisions and got into houses they couldn’t afford, but those actions are just a drop in the bucket of this mess. You know who should be working it off? Those fat cats who walked away with their 400 mil severance packages.
Good rec for a book (sorry can’t remember the author’s name): “The Nanny State: How the Wealthy Use the Government to Get Wealthier”
Here’s another one.
Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense ( and Stick You with the Bill) by David Cay Johnston
We are the laughingstock of the world right now.
this is an unproductive rant. 90% of the paper that the government will buy is GOOD paper. the problem is the 10% that is mixed into to the SIVs (structured investment vehicles). The govt buys all of this and then as things calm down sorts through it and SELLS the 90% that is good, once the markets are functioning again.
I’m getting a little tired of the ranting.
Without this bill the ENTIRE country is screwed for at least a decade, when the credit markets freeze and the entire system melts down.
It’s NOT mostly toxic. The problem is that the toxic was packaged in with the good and it will never get sorted out in this environment of fear.
AT least try tt be accurate about what you are ranting about.
Thanks.
Well said!!
Funny Camille, Paulson is where i got the word TOXIC.
Riiight.
I have some swampland to sell you if you believe this bull crap.
I love this blog, but lately it is turning into a rant site. How about some analysis and perhaps a little inside scoop once in a while? Larry used to do that.
This scaring everyone about all this TOXIC paper is going to screw the country. Most of the paper that will be bought is NOT toxic. The problem, i repeat, is the confidence in the system, which will ONLY be restored when all the SIVs/CDOs are purchased up so no one entity has to worry about being stuck with the 10% that is BAD paper. THEN the govt sorts it out and sells the 90% that is good when the market returns to sanity. Yes, it needs oversight, but what doesn’t?
Then people will start lending again and the markets will start functioning again.
Unless you are asking for a long long depression, you might be hoping they pass this bill.
I didn’t use the word TOXIC to describe it. Paulson did. The guy you want to give a trillion to.
And if the Fair Housing rules still apply, we will be giving somebody just like him another trillion in a few years.
This country has been living on credit for far too long. People live above their means. Bailing the world out isn’t going to correct a thing. You bite the bullet now or you get a chance to bite it again later. We are paying for symptoms and not addressing causes at all.
If we don’t do that, we will be throwing another trillion at this in the future.
That’s a good one-line summary: “This country has been living on credit for far too long.”
And what people are learning now is that sooner or later, the well runs dry.
This bill is not to bail out any one institution.
It is to buy up all the paper out there so that the fear subsides and credit resumes.
Without credit, you have a crash, and then you have a depression.
All this indignation misses the point. You really WILL be indignant if you have to live through a long depression.
This is bailing out you and me, not any company.
The paper the govt will buy will get 90% on the dollar when the markets calm.
But keep it up, let’s have a real depression just because it is easier to rant and blame everyone than to figure out what the REAL problem is and deal with it.
I don’t need to be bailed out of anything. I live within my means. I don’t have mortgages I can’t pay for either. I saved and I invested. My portfolio is in the crapper, but I STILL know instinctively that this will cure nothing. It will just make it easy to start the same thing all over again. We need to regulate institutions and we need to go back to regulating individuals as well. You can’t buy what you can’t pay for.
Uppity…You’ve got it right.
My mom and dad survived the depression. Frankly, I am beginning to think the soft, lazy, consumer-driven folks who believe they are entitled to free credit and a free home and believe they deserve something for nothing deserve a depression.
Many in this country have no clue about sacrifice. They just want it all now. Welcome to the generation of GIMMME, GIMMEE, GIMMEE and GIMMEE NOW, OR ELSE!!!!
I can survive a depression. These deadbeats cannot.
How to destabilize the US economy.
Step One: Inflate the prices of homes, but create everybody-gets-one mortgages at variable interest rates.
Step Two: Raise interest rates.
Step Three: Bail out before the facade crashes, and pull the ripcord on your Golden Parachute.
Hooray for predatory mortgage lenders.
It is pretty sad. Real Estate agents make $ on the sale, motgage broker makes $ on the sale, Closing company makes $ on the sale, then the martgages are bundled and sold across the financial market to diversity and still it blows up.
Sad testiment to rational markets and I’m a full fledged capitalist. When irrational funding seeks unqualified browwers it is no longer a rational market.
Makes me weep.
Greed at the top facilitating greed at the bottom.
Yeah, so now we have suffered through all of this.
won’t we feel better with a DEPRESSION on top of it?
Look folks. My portfolio is in the crapper right now. I could benefit by this money being pumped into the system. But the truth is, this plan treats symptoms without addressing root causes.
If you get shot in the stomach, and you’re out in the middle of nowhere, you need to stop the bleeding first. THEN get stabilized so you can get back to civilization and get the bullet out.
The hemorrhaging needs to be dealt with here first.
Yes, the point being that the government helped create this mess by giving Fannie and Freddie preferential rates. Which Fannie and Freddie turned into a business model of buying paper and creating a layer of extra profitability for mortgage brokers and pass through lenders… instead of making loans more affordable for the end consumer.
I agree, Uppity. Our 401K has taken a sizeable hit. I’m glad we don’t need to rely on it yet [should make retirement very interesting].
But I have 20-something kids. I don’t want them and their children or anyone else’s children strapped by this monstrosity that may or may nor work. This is one of the few times I agree with Newt Gingrich. Forget the bailout. How about a work out. You borrow the money from the Treasury at a low interest rate with an absolute committment to pay it back over 2, 3, 5 years–to the American taxpayer. Each and everyone of us. You, me, our children and grandchildren. Fair’s fair. A bailout stinks to high heaven.
I’m not ready to foot the bill for crooks, greedy speculators and doofus consumers, who believe that they’re entitled to something they haven’t earned.
Hard hearted? You’re damn right. I’m not looking forward to pushing a shopping cart around with all my worldy goods because our politicians and investment brokers were asleep at the wheel, at best, or at worst, feeding from the golden trough.
McCain has balls to suspend his campaign. It’s an enormous risk. And I absolutely believe if Hillary Clinton was his opponent, she’d be doing the same thing right now–putting things on hold until the people’s business is resolved.
Obama? Not so much. He’s still standing in the peanut gallery with his finger to wind.
Remember when Richard Clarke announced after 9/11: your Government has let you down.
Well, it’s just happened again.
Technically, this is not a “bailout.” It is a BUYOUT. The government would be buying the equivalent of a piece of stock. The government is NOT just giving money away to homeowners who got in over their heads. It is not giving money to corporations or to homeowners.
The government would be BUYING the securities at pennies on the dollar, and these would act as investments that would later bring returns to the treasury based on the fact that they were bought so cheaply.
No homeowner or CEO is getting their grubby hands on this money whatsoever. The purpose of this action is to simply keep the market afloat and keep credit available.
I think there is a misunderstanding on what it is the government is proposing here.
The plan is to buy the bad debt at far above market value, not pennies on the dollar.
At pennies on the dollar, the collapse has by definition already happened.
That’s why so many people are so angry.
My bad – poor choice of words on my part, but the point is, we’d be buying these things up cheap and then hopefully getting a return on it later as things settled down.
Bottom line – the money isn’t going directly to CEOS or to homeowners who got in over their heads. It would be buying up investments. Whether these investments would be worth something over time is I suppose the bigger issue.
(No, I’m not a financial expert, this is just my understanding of things.)
Where’s the best source of information on Newt’s plan? The mentions in the comments to this blog entry are the first I’ve seen.
Thanks.
Thank you. It is a hard pill to swallow. People do have to rethink need vs want. This country has been severely misguided into believing that they must have what they want. And they want it now.
10% of that paper is toxic. i don’t care how he used the term. there is no excuse for inaccurate reporting or ranting or whatever when a matter is this serious.
90% of the paper is good paper that will be resold. the problem is that no one knows where the bad stuff is. no one wants to be the last one holding the bag.
govt buys it ALL takes it off the table to sort it out. sells the 90% when calm resumes. the govt can afford to hold it until there is stability. not a bad deal and beats a depression, which is absolutely what you will get without this deal.
credit markets seize, collapse, and no i’m not an alarmist. that is how bad it is. massive suffering on a scale you are not imagining.
The problem isn’t the 10% junk paper. The problem is the high leverage embodied in the derivatives guaranteeing this junk paper. That is why even your conservative estimate of 10% defaults ricochets around and among an immense mesh of interconnected counterparties.
i know what i am talking about, i have been studying this for a year, when this first started.
you are just plain wrong on this…and you better hope they pass the bill…..
just sayin…..
And I am the Queen of England.
Any anonymous person on the internet can claim to be something they are not.
Show me the money. Where is the proof that you know what you are talking about?
Oh, I am suppose to take your word for it because you say so. Riiiight…
Just check this nonsense out!!! Code Pink and their meeting with this Iranian nut today.
They presented several proposals for the Iranian government to consider and copies of a petition signed by 50 U.S. mayors all over the country calling for diplomatic engagement with Iran, not military action.
I sure would love to know who these 50 US mayors are??
http://codepink4peace.org/blog/2008/09/official-release-leading-codepink-activists-and-other-peace-organizations-meet-with-iranian-president-in-new-york/
Root causes can be dealt with; why would passing this bill stop that?
Without the bill, forget root causes and find a breadline.
But with the bill are our kids going to get our breadline?
Having spent most of my life in corporate America, the model attitude adopted by congress, I can answer that: Because they get complacent when things settle down and root causes no longer seem important any longer.
Go read up on SIV’s and CDO’s and how they work.
The assets these papers back are mostly GOOD assets, real homes and mortgages THAT ARE BEING PAID.
Again, the problem is the 10% or so that is BAD is hard to “see” because it was packaged into these “exotic” investment vehicles.
Govt buys and sorts it out and resells when markets are calmer.
It’s not that hard to understand.
I have neighbors that refinanced their house up to three times taking cash each time… and have now walked away from them. I understand we don’t want a depression. But, I don’t want to buy somebody a house that already had one and lost it due to irresponsibility. And I don’t want to put a band-aid on their banker’s butts for loaning them money they knew they weren’t good for. We don’t need to keep encouraging irresponsibility as a valid lifestyle choice and business style. But yes, no doubt good people and good companies need help. Fine. But there needs to be some real controls… else we will just wind up at this same spot… a trillion dollars poorer.
so let’s have a depression to get even with the govt and the mortgage companies and banks.
good idea!
I give up. If you think having a depression and wiping out all of YOUR assets will help your kids, have at it.
Instead of being indignant maybe go read what the bill is really about and about SIVs and CDOs and the FACT that 90% of that paper is good.
Frankly, I think my parents were part of the greatest generation. The depression made them strong.
You want comfort in exchange for nothing and at the expense of everybody else.
Let’s not romanticize the depression. We live in different times now and things could end up getting really bad. Violence, civil war, who the hell knows.
Peace at home is predicated on prosperity.
Uppity Woman,
If we just let the economy fail, and kick people out of their homes, African Americans will be disproportionately affected yet again. Fannie and Freddy was suposed to give African Americans a chance at the American dream when they were disproportionately shut down, and now you want to kick them out of their homes. Joe Biden is right, it’s time to be patriotic, it’s time you paid your fair share.
Bullshit. I never in my life bought something I couldn’t pay for and I have no intention of letting socialism take over my life’s work and my life’s savings. There are people who came to this country to get away from that kind of government.
let Joe biden pay his fair share. He gave less than I did to charity last year. WAY less.
If I had known this was what we were going to do to Democracy and the American Dream, I would have been a bum and got me a loan I couldn’t pay and just wait for everybody else to bail me out. I wouldn’t have paid of my college loans. Or my auto loan. Or……
I might as well retire now and just wait for my “share” of somebody else’s sweat.
I don’t think individual homeowners will get bailed out at all here. The homeowners who took advantage of this have already done so. These are folks who bought a house with no money down, took out a home equity loan and got tens of thousands in cash, defaulted on the mortgage and walked away with the cash.
That’s technically fraud, but no-one has gone after these people.
But this bailout has no effect on that one way or the other. The foreclosures that would have happened will still happen with this bailout. It’s just that the government will own the securities rather than the companies that were failing anyway.
YOU GO, GIRL!!!
You have freaking one track mind–to you everything comes down to race. I wonder if you’re not a guilt-ridden, recovering racist, trying to make up for your sins.
Two things:
Believe it not, Whole Foods Freedom Fighter, not all white people have money. it’s not just a black thing.
And most of us weren’t ever racist so we don’t have to atone for your sins.
DING, DING, DING!!!!
Why dont you pay for them? Being patriotic means also be responsible and sensible. Not senseless and drinking kook-aid.
Video of OB and Michelle at a Black Caucus meeting in 2005 where Interim CEO of Fannie Mae calls them “Family” and their “Conscience”.
http://www.youtube.com/watch?v=usvG-s_Ssb0
If Obama has been working with the “leaders” all week is that why they won’t agree, to hold off until he can finish his debate then ride into town and ’save us”? Is this like the Iraq stuff where he says hold off just to get elected? Sounds like it to me.
Literally cutting of your nose to spite your face.
You won’t feel so righteous when you have no job or income or home….it will feel pretty bad.
but stoke the indignation and let it simmer….you will need the heat when you can’t pay your utilities because YOU have no job.
it’s like dominoes…you can’t segment it into one part of the economy at this point….they will fall on you.
yeah, keep stoking it….then when it really hits the fan you can feel very righteous….the anger does not solve the problem.
Something in this for you?
I’m waiting for the deathbed scene.
GASP…GAG…ACK!!!!
LOL!
In politics the guy with the upper hand doesn’t want to debate. Obama is running scare if he calling McCain to debate him……
Why should taxpayers pay for the markets screw ups? If these loans were “mostly good” and backed by good credit then there wouldn’t be a crisis or a need for a bailout now would there?
Screw that. These people deal in billions and trillions of dollars. If they aren’t smart enough to manage it why should we pay for it?
How can a Depression result from sound loans and good financial management? It can’t. Let the money lenders, the Fed, and the rest pay for it.
No one bails me out if I don’t pay my bills. BTW the people are the government. Not the banks, lenders, and the market.
screw screw screw rant rant rant
try this for some cogent discussion:
http://online.wsj.com/article/SB122230704116773989.html?mod=rss_opinion_main
This is not a rant. The Dems took control in 2006 but they didn’t see this coming. Hillary warned us. MCain warned us. Heck, even Warren Buffett and Bill Gates warned us. I read the interviews.
What is wrong with an American citizen deciding where their taxpayer dollars go? That’s called democracy. If you want to help bail them out then I expect you’ll be volunteering for higher taxes and emptying your bank account. After all, it’s a good idea and you’re willing to pay every penny you have for it. Right?
I don’t think the average taxpayer understands the severity of the crisis or what this proposal actually means. I can tell from people’s responses here that most people against the “bailout” are against it based on emotional reasons of not wanting to make up for other people’s perceived greed, stupidity, or laziness.
I personally don’t want to bailout a greedy homeowner BUT I do believe that if this mess is not responded to, we could enter into a major depression.
I know someone who used to work for the Comptroller of the Currency, overseeing banks, and he has been saying for a while we are on the verge of a depression.
This is serious. Average Americans responding emotionally to the idea of a “bailout” are not thinking rationally, and as such this is why we supposedly elect leaders who have a greater understanding and can respond more logically.
I am really learning a lot reading all the posts. Good article UW.
I agree that we need to infuse cash into the economy by a bail out. Uppity’s point is that if we don’t fix the problem – maybe get rid of the Fair Housing Act – we will have the same problem a few years down the road, despite the bail out. If your boat is sinking because it has a hole in it, just bailing water is not going to fix the problem, you have to plug the hole and bail the water, then you can get your boat to shore. Just my two cents worth…
BINGO!!! Well said, Snickers.
Very interesting. I heard from several people that the sky was falling from the CDOs. I feel better now, maybe it’s time for bed.
Speaking of baldfaced lies, where is the “whitey” tape?
You have NO understanding of the bill or the situation.
You are just fuming with populist outrage.
Good luck with that.
Camille do you have any idea how silly you look? I mean, who the hell are you that we should all imagine you are all knowing on this issue? I’m sure it makes you feel good about yourself but overall your anonymous impact is nil.
Oooh I’m a populist. That’s a bad thing now? Sorry if I don’t see that as an insult. Populists fought for the end of child labor, minimum wage, and other terrible things.
Dude, this IS bailing you out. Bailing you out of having to go through a depression. The fat cats already got out with THEIR bonuses, so it won’t bother them much. It’s YOU who will be hosed. It’s almost funny how you don’t realize it.
Dude, I don’t need bailing out.
Neither do I. But apparently, becaus a whole lot of deadbeats screwed up, somehow this is our problem too.
Good Lord. This is a classic abusive relationship Economy Style…..The abuser accuses the abused of being the problem.
I’m sorry, UW. I agree with Camille. The whole economy will go down the tube if we don’t address this issue and yes, do some type of bail out. Unfortunately, all of us will be affected, not just the few who helped create this mess. Even more unfortunate is the fact that we all have to pay for this solution. That’s what being a society is all about; if the economic system the society uses crashes, then all of society is impacted. I don’t want to pay for this any more than any one else, but I just don’t think we can get away with not doing it. It doesn’t mean we panic and immediately react; it means that we thoughtfully and with due consideration reach a solution (Congress) and then implement this solution. However, I don’t think we have a whole lot of time to ruminate on this. This is one of those times that quick and decisive action is needed.
Camille, I believe you are right, but you aren’t articulating your points in a respectful manner that can be heard.
It’s not bailing me out. I own my home no mortgage. I own my car, no payments. I have credit cards and all my balances are zero. I have a good credit rating. I’ve gone green and have a good sized garden. I’ve reduced my carbon foot print.
I’ve put my money and personal practices where my mouth is.
What do I owe again?
Oh, the indignation is really getting hotter and hotter.
If only you had the barest of understanding of what is involved. You hear bailout and you make all these assumptions.
I’m going elsewhere now where I can discuss the actual BILL and not just listen to misinformed OUTRAGE…..
Yeah we know. You’re an anonymous expert. We should all listen to you right this minute. You can see the humor in that right?
Can’t answer can you? No wonder you’re leaving.
No, I’m asking you why I, taxpayer, should pay for a situation I didn’t create.
Because if you don’t, and the financial markets have a meltdown, and major banks collapse, the entire economy could enter into a depression and you will have NO JOB, that’s why.
I have actively been checking to see if my bank is still stable. Do you know that a lot of regional banks have gone under recently with this crisis? You could wake up and your bank will be GONE along with your money. This is VERY SERIOUS.
Umm no, because my bank is FDIC. I’m retired. I own what I have out right and I have savings.
Do I feed others? Do and have. Give money to charity? Do and have. Help my neighbors? You bet.
I grow food and do not spend excessively and only buy what I save to buy.
My grandmother, who lived through the Depression, gets smarter as I get older.
I just have to agree to disagree with some folks on this one.
This is a financial institution crisis. With the exception of Hillary and McCain, who both warned of the coming crisis, no one listened.
Some Dems were too busy attacking Hillary then Palin to notice. Some Repubs were too busy following GWB to do what was best for the country.
The Dems can’t stand Hillary and GWB is no fan of McCain. Us middle class prudent folks did listen and start saving.
Do I want to see the economy collapse? No. But I’ve already seen gas lines where tempers flared.
I love my country. But if Wall Street and the Banking system now constitute the country then we are already in trouble. Our FDR candidate, Hillary is gone.
We had to suck it up for GWB. It may be time to suck it up again. The media is determined to help elect Obama much as they helped elected Bush.
“Umm no, because my bank is FDIC. I’m retired. I own what I have out right and I have savings.”
The FDIC only insures up to $100K. Total, I believe, for all your money, not $100K per bank account.
If there’s a crash and a panic, and your bank closes, how quickly do you honestly believe you’ll get your money back from the FDIC?
What if the value of the dollar collapses at the same time we have rampant inflation? What good will your savings do then?
I’m not saying this bailout is the sole answer. I’m just saying things are bad if banks are already closing and I don’t want to trust the FDIC as being the only stop-gap. Something needs to be done.
I’m not saying do nothing. I’m saying we were told it’s our responsibility to pay for two wars. We were told the oil would flow from Iraq, to pay for these wars, no worries.
Now we are being told that we must save the banks from financial collapse.
This is a situation created by greed. I don’t mind paying for honest mistakes. We all make them. I do mind paying for excess.
I guess the tin-foil hatters were right. They said there would come a day when things would collapse financially and the American public would have to pay for it. They were dismissed as nuts.
Nothing I can do about it. I’ll pay my share of what I don’t owe. But I don’t have to like it.
I give up. Why vote? Why bother? Our 2006 votes didn’t stop this. So what will?
Per Bank.
You’re right, per bank, but if you have multiple accounts at one bank and it’s over $100K, you won’t get more than $100K, see:
http://www.fdic.gov/deposit/deposits/insuringdeposits/
“elect Bush”
Don’t let the door hit you where the Lord split you.
GOOD RIDDANCE!!
In my opinion, it’s virtually a crime that “Senator” Obama has spent a single day in the US Senate.
Not only is he the least qualified candidate ever to head a major party ticket, he is also indolent, ineffectual, and a total disgrace to US politics.
OT, but I just received an email from a friend encouraging all of her Moveon friends to vote NO at the PBS poll asking whether or not Governor Palin is qualified to be Vice President. If you have the time, go and cast your vote to offset the votes of some liberal loonies.
http://www.pbs.org/now/polls/poll-435.html
Uppity Confession:
I love when I get everybody all riled up.
I’m with you Uppity. This bailout is a slap a face to those of us who are responsible with our money. Take from the responsible and give to the irresponsible.
You don’t understand, this is serious sh** happening right now. Your bank could fail and you will lose all your money.
That’s why God made silver and gold.
Bellevue_NW_Voter, who’s been buying Krugerrand every month for over a year, because something just didn’t feel right about the US dollar, smiles.
And I’m not tellin’ where they are, except that they’re neither under my mattress nor in a safe deposit box.
For those who don’t get how this financial crisis could reverberate through the economy – here’s an example of a recent bank failure here in California. If this happens all at once, your FDIC insurance will mean nothing:
IndyMac Bank seized by federal regulators
http://articles.latimes.com/2008/jul/12/business/fi-indymac12
I’m not trying to scare people unnecessarily. I’m suggesting that we have to get past our anger to see that something needs to be done to stabilize things, or it could get a LOT worse.
Thanks to orgs like ACORN and LaRaza, campaigning for affirmative action in these loans, about 1/3 were made to illegal aliens. No down, no documentation, no proof of citizenship, no proof of income, nada. And do I want them out of houses they can’t pay for? Yes. I didn’t take out one of those loans because I knew it wasn’t right.
File restraining orders vs. the Executive and Congress.
In California a Mandamus can be filed at the state level to compel appellate judges to enforce existing law when the executive will not.
It is also decisis for the SCOTUS(Marbury v. Madison).
Why not wield that power as persons(Amendment IX).
This is a response to Hello’s comment
Baldfaced lie???
You want to know where the “whitey tape” is?
It’s coming to your television screen soon, real soon!!!
Tic Toc
Tic Toc
Tic Toc
Uppity, I do not have the economic or business background to fully understand the problem or how to best address it. I have been listening to economic pundits on television. I understand the argument about buying up the bad debts to free up these institutions so they will continue to inject money into the markets otherwise companies and farmers won’t be able to get money for everyday operations and this might lead to people getting laid off or people etc, etc. I also understand the point about categorizing the debts to make it easier to market these debts. I still have some questions though and I apologize in advance if they are naive, silly, or ignorant, I just want to understand since I am going to be paying about $10,000 for this bailout.
1) If these companies who have a vested interest in getting rid of these debts could not do it, what evidence do we have that the federal government will do a better job? If the issue is that this will take the company time, time which the market cannot afford, then shouldn’t we ask what is the cost to the people and this nation of having 1 trillion dollars of government funds tied down by this debt? That is, what is the economic cost to this country and consumers of having 1 trillion dollars of “toxic” debt
2) I don’t like government getting directly involved in the market, but if they are determined to go down that road, why doesn’t government become a direct lender of prime loans to companies and farmers instead of becoming a buyer of toxic debt? Wouldn’t this give taxpayers a better return? Or why doesn’t government directly inject money into stable, responsible, financial institutions to lend to the companies and farmers instead of buying bad debts from corrupt, ill-run, institutions that got us here in the first place?
Thank you for putting up with my layman questions.
“I think instead they will give these people their homes for pennies on the dollar, at the expense of people who have responsibly paid their own mortgages for years. What about all the people who figured out that owning a home means you repair your own home when something goes wrong, that there is no landlord–and they can’t handle this and don’t even WANT to refinance? What is our government going to do with all these abandoned homes in need of repair?”
Are you making the assumption that people in foreclosure are deadbeats? That they trashed their houses because they’re trashy people?
Good people have been foreclosed on, good people are about to go into foreclosure. Most had good credit ratings. Most are hard working. Most kept their houses up, they did not trash them. Many were victims of companies like Ameriquest and Countrywide, they did not understand the mortgage terms, were misled and some were lied to. Mortgage employees lied on the applications, the borrowers had no idea their incomes or the house values were inflated so the mortgages would be approved. Many bought homes to find out a few years later, the mortgage was now more than the home’s value. Many were led into adjusted rate mortgages not understanding it, being told it would be no problem to take out another mortgage when a balloon mortgage came due. Everywhere they looked, they were encouraged to take equity out of their homes to pay for college, cars, credit cards, medical bills, etc. Many bought homes they couldn’t afford if the economy changed. A lender does have the duty of saying no to loans that are too risky.
Good, trusting people were preyed upon by a mortgage industry out of control while our state and federal governments watched and in some cases, could be said to have encouraged the practices.
I believe very few people took out a mortgage with the intention of never paying it off.
An industry out of control bundled good and bad mortgages, refinances, equity loans and every other gimmick they’ve come up with in the past decade into mortgage securities. They’ve sold them like they were trading baseball cards. Interest rates increased, balloons came due, real estate values plummeted, people lost their jobs, etc. The companies trading in their baseball mortgage cards suddenly couldn’t get anyone to buy them. The things are worthless, even though the majority of the mortgages in the bundles will be paid off.
We can let the companies holding the mortgages go under. They were idiotic to invest in them. They were idiotic to go after the quick buck of buying and selling them. Only if they go under, so will the banks in Peoria, Atlanta, Cheyenne and Wasilla. So will major employers of our nation who are struggling, corporations like General Motors. As the banks go under, the credit card industry may end up in crisis too.
You’re right, it’s a Mad Hatter’s Tea Party in DC right now. It’s been one for a decade now, while the agencies that were supposed to be monitoring our banking and investing industries and economy, stuck their heads in the rabbit hole and didn’t do their jobs. We shouldn’t be surprised, the FDA hasn’t done it’s job in awhile. FEMA is doing better at it’s job after a complete failure, but it still needs help.
The current plan being hammered out in DC to buy the securities isn’t one I’m happy with. I’m not convinced that loaning the money will work any better either. About the only thing I am convinced about is if we don’t get cash into Wall Street soon, we will have a financial disaster that will rival if not surpass the Great Depression. Considering how much of our economy relies on credit to function from using a credit card to park one’s car to businesses relying on credit to make the payroll, we will be in trouble.
We don’t even know if $700 billion will be enough. Supposedly they have predicted that 5% of the mortgages are toxic and that adds up to $700 billion. What if it turns out to be 10%? Or they missed a few million mortgages that weren’t included in the calculations? What if we buy the mortgage securities at say $100 per share when they’re currently worth $10 and they never sell for more than $25?
It’s a mess. We’re as guilty as a society as the people we’ve elected. We’ve sat by for the past eight years watching the Bush Administration pull one blunder after another and did nothing. We’ve let the Oval Office and the media tell us we’re unpatriotic if we question any of President Bush’s policies. We’ve watched Congress do nothing for eight years except chip away at our rights under the guise of national security. We’ve been warned for several years now that we were facing a severe economic crisis in the future, we chose to ignore it as we saw foreclosure signs spread like the flu in January. The future is here.
We have a guy named Hank who has convinced a guy name George to write a blank check. Which may or may not be for $700 billion. Hank hasn’t quite decided how he’s going to spend this money, he’s thinking of buying up mortgage securities from companies in trouble. What constitutes a company in trouble, no one has decided. How long we hold the securities we’ve bought and who manages them, no one knows. And the companies who get to sell their toxic mortgage securities to us, do they get to continue on with their same top executives and boards? Do they get to take home their multi-million bonuses since they will have pulled off the coup of the century – selling off paper for far more than it’s value?
I don’t know the answers. I don’t know what will work. But I do know that Clyde and Mildred in St. Louis didn’t sign on the dotted line of their mortgage never planning to make the payments and when their payments escalated, they wanted to fix the roof – but making the mortgage payment was more important. Bob and Suzy in Stockton intended to pay off their mortgage too. But then Bob and Suzy decided to divorce. Suzy couldn’t keep the house on her with her salary nor could Bob. They attempted to put the house on the market, only to find out realtors wouldn’t take it since the mortgage was more than the value. Their only choice was to let the house go into foreclosure. Currently, I wouldn’t be surprised to find out that 10% of divorces include a house in foreclosure. Ralph and Iris didn’t decide to divorce, but Iris was laid off. Without her salary, they needed to sell their house – but once again, with a depressed housing market, they couldn’t get what they owed on the mortgage. Another foreclosure.
It’s not just the lower income population that is in foreclosure. In my state it’s the working poor, the middle class, the upper middle class and the affluent. It’s across the spectrum of incomes.
It’s not fair to the rest of us who have managed to pay our mortgages. We’re all victims of financial system out of control. But we were warned. And we did nothing. Just as the executive and legislative branches we elected did nothing.
We can continue to do nothing, we can find a plan to buy up the mortgage securities or loan the money and keep our fingers crossed that the option we choose brings stability to our economy. Then we can begin the work of making sure it never happens again.
Nice try, but you obviously are spewing talking points from Wall Street.
I have no problem bailing out an elderly person who scrimped and saved and was wiped out due to a catastrophic illness. But I have little tolerance for those in the prime of their lives who claim to have been decievied by the big bad Mortgage Guys.
Now the Big Bad Mortgage Guys do exist. But….you don’t have to buy what they are selling.
Even in my most naive youth with ZERO economic knowledge, I smelled a rat with variable rate mortgages and never bought into one. There is an old adage: If it sounds too good to be true, then it probably is.
Why, after working hard all of my life and laying everything on the line to take care of my family from elderly parents to my grandchild is it my place to save complete strangers from their own naivity and screw ups?
It isn’t and I am not going to let a bunch of Wall Street assholes and politicians frighten me into thinking that I need to save EVERYBODY.
Let me repeat: This “bailout” WILL NOT SAVE PEOPLE WHO ARE IN FORECLOSURE. That is not the purpose of it. The purpose of it is to stabilize the economy so we don’t enter into a massive recession/depression.
None of these deadbeat homeowners will see a DIME from this bill. It is only to help keep Wall Street from totally collapsing.
But it will benefit those who haven’t gone into foreclosure yet, but who would have without the bailout.
How so? Buying mortgage-backed securities has no effect on anyone with an actual mortgage – it is simply buying the paper backing the mortgage.
Regardless, I don’t see how letting more foreclosures is good for the economy as a whole. Blame people all you want for not understanding their mortgage fine print…I have yet to see anyone here show any in-depth understanding of this financial crisis (I’m not saying I do either)…I see a lot of people here claiming financial superiority but they don’t seem to be aware that actual BANKS have been failing.
So how can you claim you wouldn’t have also been taken in by a pushy greedy lying mortgage broker?
It’s easy to judge others, isn’t it, but I think compassion is also a good thing to have.
And Wall Street collapsing? Who’s fault is that?
Not mine.
And Wall Street collapsing? Who’s fault is that?
Not mine and yet Wall Street expects me to foot the bill. When has a profitable corporation ever shared it profits with tax payers….
Crickets…..
It’s not my fault either but as a small business owner I sure as hell would prefer a bailout to a depression. So I’d rather foot that bill and have an economy that’s running than have a total collapse.
Excellent post.
i dont want to bail out “bob and suzy” either… because my name is not bob and nor is it suzy, and their divorce is not more important than my mothers surgery and my aunts cancer. bob and suzy never came to help my mom or my aunt. my mom never got a chance to live in her own home, its a shame that i have to watch her buy someone else one.
I am someone who either muted my TV, changed the channel or threw soft pillows at the TV everytime GWB addressed the nation over the last 7 years.
Tonight I listened to him and started to get scared. Then I came to my senses and realized that this is the same scary bullshit he used to lie us into war with Iraq.
The government is trying to scare us into accepting the debt for irresponsible borrowers and lenders, just like abusive spouses make it sound as if they are the victims and threaten us with death if we don’t let them keep beating us up and screwing us.
For too long has this country wanted to fight war on someone else’s soil. Now, they want the easy way out for irresponsibility.
I say it is time to cal the bluff and break the cycle of abuse.
Screw the bailout. The build up to this is just like that of the Iraq war.
Pass the bailout and we have another “Mission Accomplished” moment. Yes, accept the bailout and I screw myself.
I’d rather let those who caused this suffer too and screw them with a well-deserved depression. That way, we are all in the same boat and these losers don’t get something for nothing.
Don’t let blind partisanship and Bush-hatred keep you from seeing the severity of this issue.
A depression serves no-one. This is not 1930. We do not live in a friendly bygone age where our neighbors are going to help us out. We live in modern times where our doors are locked and our children have gun detectors at schools. A depression would be extremely bad for this country and we don’t need to have that kind of instability causing violence, looting, crime, etc.
I am well aware of the severity of the issue and how soft and weak citiznes of this country have become, compared to the generations of my parents.
Why should we get a pass on hardship or give Wall Street a pass for screwing up royally?
Typo….Citizens…..
Oh, and my folks had to deal with both the depression and WWII. We are so special not to have to deal with this, exactly why??? We deserve a bail out, why?
Let’s say I (as one of many taxpayers) have to pay $10K to keep the economy afloat. That $10K means my business flourishes, I get paid more, I’m happy, I get to go on vacation.
If I don’t pay the $10K, the economy collapses, I can’t get business, I am financially stressed, I can’t go on vacation, my neighborhood isn’t safe, I can’t get food, things are dire.
Personally, I’d pay the $10K and suck it up. Who cares who’s at fault. The milk has been spilt, let’s stop crying over it and clean it up.
Anyway you slice it, it is blackmail. We are being asked to fix a problem that we didn’t create.
It is not fair. It is not right no matter how you slice it.
We are being told a problem we didn’t create is our problem to solve and it is total BS.
Emotion has nothing to do with it. Wall Street and Washington are trying to deceive us all and it is NOT WORKING.
Others bad loans and poo judgement do not deserve a reward and this is exactly what the bailout is.
You jerks are a bunch of wimpy cowards. Prior generations have weathered wars and depression. You want to wimp out.
You are a bunch of wusses.
New Wapo editorial by James K. Galbraith (famous economist):
A Bailout We Don’t Need
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092403033.html?hpid=opinionsbox1
check it out, folks.
I’m not an economist so I can’t judge what solution would be best – but do notice this guy is not saying “do nothing and hope for the best.”
The alternative perspective on the “bailout” (buyout) is here as posted above:
http://online.wsj.com/article/SB122230704116773989.html
The key point in this article is the following, if the US bought up all these mortgage securities, here’s the potential upside:
You can slice the numbers a lot of different ways. My calculations, which assume 50% impairment on subprime loans, suggest it is possible, all in, for this portfolio to generate between $1 trillion and $2.2 trillion — the greatest trade ever. Every hedge-fund manager will be jealous. Mr. Buffett is buying a small piece of the trade via his Goldman Sachs investment.
Over 10 years this could change the budget scenario in D.C., which can also strengthen the dollar. The next president gets a heck of a windfall.
Which is why I think people need to stop judging based on anger and look at all sides of the issue before shutting down the bailout idea.
My understanding is that Buffett invested in preferred stock in Goldman Sachs which is very different than buying bad debt from Fannie, Freddie, and AIG.
Bigger picture here, folks:
Some here are saying “bring on the depression, I can take it.”
BAD IDEA.
Let’s talk conspiracy here for a moment. A few days ago some folks were saying that Soros helped the market crash to put Obama in power.
If the economy tanks, and Obama gets elected, do you REALLY want a depression to happen?
Go back to history – DICTATORS COME TO POWER DURING A TIME OF FINANCIAL CRISIS.
We CANNOT weather a depression and keep democracy intact if powerful interests are trying to set up Obama as King of America.
Remember that, and remember those far left radicals who want to start communism up again here at home.
A depression opens the window for that sort of coup to happen.
We cannot afford that. No way, no how.
The economy will collapse if we don’t buy up bad debts from bad lenders…What happens when this nation suddenly incurs 1 trillion of bad debt? How will that impact the economy?
Sorry but we need better explanations and better answers before we trust people who either ignored or were ignorant about the problem until a week to effectively change it. Government involvement with Fannie and Freddie helped get us here, now we are suppose to believe government as a player in the market will make things better?
I keep remembering Wimpy from Popeye saying “I’ll gladly pay you Tuesday for a hamburger today.”
I have no desire for a depression and if we can avoid one, that is good. I just need someone to explain to me what evidence there is that we are facing a depression if we do not pass this plan, and what makes us think we can avoid a depression if we pass this plan? Why should we trust the people who allowed this problem to reach this crisis point to come up with a plan to get us out of it? Why should we trust them to have the foresight to solve this problem when they did not have the foresight to recognize the crisis even one month ago? If government involvement with Fannie and Freddie helped get us here, why is more government the solution? I already see legislatures trying to attach more junk to these plan to make it even more costly. Are their alternative plans and why were they passed by?
I don’t mean to be a stick in the mud but this is a lot of money.
Those are excellent questions. Personally, I just want this patched up for now so that Obama doesn’t win by default because there’s a huge stock market collapse before November 4.
McCain and Palin might potentially be able to do something once in office, but if Obama gets in and things are tanking badly…yikes, that’s all I can say.
Hear hear! And I’m kinda wondering about the timing on all this. I firmly believe Barky’s the Corporate Candidate, so I’m very skeptical about this happening now. Especially since the Democratic “leadership” has been so clear about him being their choice for our candidate.
Is this is déjà vu or what?
Remember how we bailed out the banking system under Reagan?
Curiously, Republican policies always cause money to hemorrhage out of the country. 90% of the total national debt of this country has been accumulated by Republicans. 70% of it has been accrued by a Reagan or a Bush!
When their policies fail, as now, the Republicans then do their famous moonwalk, trying to blame the Democrats for their massive failures. Unfortunately, Democrats—having little spine when it comes to defending their own—go along with the blame game, as most PUMAs are doing now.
I think it’s time we let the Republican take responsibility for their screw-ups. The years 2000-2006 proved that Republican policies don’t work.
Consider this. If the economy were somehow doing well, would the Republican be giving the Democrats credit for it? Think about your answer before writing it down
It’s a mess Uppity. We had Democrats damaging the system with a form of regulation, creating this system where everybody was entitled to a loan and credit because Dems claimed to want everybody to have access to affordable housing. Then we have Republicans running around trying to deregulate companies so they wouldn’t have obstacles in the way of their profits, which would allegedly help stimulate the economy. Between the two parties, it’s been like a tag team to financial ruin. Dems running around saying make more bad loans! Republicans saying no limits, no boundaries on what you can do.
Thanks for quoting me. I did feel those comments got to the heart of the matter. This bill is an armed robbery of the American public.
Best regards,
Alberto