Our federal govenment now controls the largest insurance company in the world

carguy123 wrote:

Jensenman wrote: [fans embers of political debate] Bush got 9/11, he and Congress directed Fannie and Freddie to ease underwriting restrictions and Bush got the mortgage crisis.

No, you weren't listening. The easing of underwriting standards happened on Clinton's watch in exchange for the hope of some votes.

I love the one sided fanboyism thats so common once politics is involved. ITS THE DEMS FAULT! NO ITS THE REPUBS FAULT!

The two parties couldnt possible share any blame could they? Its so much more fun to just make reality fit you good vs. evil, dems vs republican viewpoint.

It is THE GOVERNMENTS FAULT.

No, it is our fault because we are the oblivious ones who send these morons to DC so they can try their best to ruin everything.

Both of the parties are really pretty close to one party - they just choose different rhetoric and that allows all these stupid distractions like listick, pigs, flag pins, etc. etc. so we lose sight of what they are doing to our country.

John Brown wrote: It is THE GOVERNMENTS FAULT.

Yep

Dems may have relaxed loan requirements and set in motion the formation of a bubble. The Reps certainly didnt do anything to stop it. Heck, i remember Bush constantly using the rise in value of housing to show that the country wasnt in a recesion. The Reps had a strong incentive not to pop it.

System wide fail. A snafu this size took both parties fing up at some point

GlennS wrote:

John Brown wrote: It is THE GOVERNMENTS FAULT.

Yep i remember Bush constantly using the rise in value of housing to show that the country wasnt in a recesion.

OK, now I'm really confused so rising values isn't good?

The other side here...

The Republican football team has long worked towards the deregulation of money markets. Bush has also been a weak domestic policy president. The Iraq war is a tremendous drain on our national finances creating a deficit level never seen before. Those three factors shouldn't be ignored when discussing our current financial crisis's.

The Democratic football team do share blame in this as well. The no-nuts Congress did not reign in Bush when they should have. Clinton tried to turn this trend around by curtailing national spending.

Here's the graph:

Graph from http://www.cedarcomm.com/~stevelm1/usdebt.htm

Another one for good measure:

from http://zfacts.com/p/318.html

My take is both pussied out and didn't do what needed to be done.

carguy123 wrote:

GlennS wrote:

John Brown wrote: It is THE GOVERNMENTS FAULT.

Yep i remember Bush constantly using the rise in value of housing to show that the country wasnt in a recesion.

OK, now I'm really confused so rising values isn't good?

Not if its a bubble thats quickly turning the worlds financial system into a house of cards sitting atop a puddle of gasoline.

edit: To clarify the rise in housing value was being caused by flawed lending practices that were letting a vast number of people buy houses that couldnt before

If I wanted to be really cynical, I'd say that we have the best representation that money can buy. However, cynicism is not going to make my life any happier, improve the economy, or pay anyones mortgage.

As I understand it (which is doubtful), the biggest cause of this fiasco is the trading of uncollectable debt which was made possible by a relaxing of the applicable law which happened in the very last session of the 2000 congress. This crap would not have happened with the laws in place before 2000. To me it is ironic that the Republican's desire to not regulate business has led to the the government being ultimately responsible for the debt of the majority of the mortgage industry.

BTW, I see that the national debt shown in the graph above comes from the White House data which does not include all the expenses of the Irag war nor the expenses related to bailing out Frannie, Freddy, and all the others. The Our real national debt is far higher, one expert says possibly 2X! And it got there under Reagan and the two Bush's. Who do the Republicans think is going to pay off this debt? We are at least leaving our young ones a tough economic future, and maybe more of this economic management could lead to our undoing. China and Japan already practically own us. And McCain says our economy is fundamentally sound!!?

TJ wrote: No, it is our fault because we are the oblivious ones who send these morons to DC so they can try their best to ruin everything. Both of the parties are really pretty close to one party - they just choose different rhetoric and that allows all these stupid distractions like listick, pigs, flag pins, etc. etc. so we lose sight of what they are doing to our country.

Yup. We The People reap what we have sown. Time to limit these bastards' available time to screw us up.

The "bailing out" of Fannie and Freddie might not be much of a cost. The "lost money" has been more of a loss in stock value and if you don't sell your stock when it's down you haven't really lost any money PLUS their estimate of all the potential foreclosures. Notice I said potential, they have no hard data.

Now when a house is foreclosed upon it doesn't just cease to exist, the house is still there and can be sold. Except for a few places in the country these houses will be sold for very good prices so the loss potential is minimal.

I don't know exactly the Govt's exit strategy for the stock they own, but once values are up again they might even see a profit.

To a certain degree it's like Chrysler and AIG. The govt got something like a 300M profit from Chrysler and AIG's "bail out" is only a short term loan at 11.5% to solve liquidity issues for required reserves of an insurance company. AIG has several TRILLION dollars worth of collateral that can and will be liquidated. This is to stop a fire sale.

Dr Hess will probably swallow his tongue to find I agree with him here, but I find the bailouts both ridiculous and disturbing. First: why is the Fed doing the bailing? The purpose of the Fed is to regulate the supply of money, not to act as some sort of "investment central."

Second, for all the talk about the Friedmanesque "free market nirvanna with the associated risks, the market has spoken and the Fed steps in and protects everyone but Lehman. And why NOT Lehman? What did they do wrong? Somewhere I wonder if someone who ratted on Neil Bush ended up running Lehman...anyway...

Third, isn't the market supposed to provide the counterbalance to all this out of control stuff? For example, when Big Steel was collapsing around here, the Reagan Administration made a big production of talking up the "market corrections" and our need to "understand there would be fallout" and the "labor force will undergo adjustments." Now we keep hearing about preventing "ripple effects." I guess back then when the "ripple effect" of entire communities collapsing and disappearing no one was too very worried.

Fourth, when are we going to see someone actually charged with some sort of criminal behavior regarding the cooking of the books and such that has accompanied the glorious marketing of debt as an investment vehicle? I mean, i am not all that bright but even I know that taking loans that have not been underwritten properly and then selling them as an investment vehicle is just plain dumb, but once that was exposed for what it was how long did these companies continue to show these vehicles as profit generators? All that they were was some giant game of musical chairs except that when the music stopped someone would lose not millions, but possibly billions.

Fifth, for all the bleating about Chavez this and Castro that. The fact that the Federal Government is providing the loan guarantees to prop up these losers and in the case of AIG picking the folks who are going to run it smacks of nothing less than de facto nationalization - particularly if AIG goes belly-up if they cannot sell off whatever it is that they have that is not investment grade debt that they bought from some other fool who was laying their debt off on AIG and who AIG didn't get around to foisting it off on to the next sap.

This has been like watching a bunch of coke dealers knowingly selling each other baby powder laced with a teensy bit of coke: no one wants to admit they have been had so they just keep trying to unload the crap on the next fool.

The problem is that you and I are guaranteeing these idiots the millions of dollars they have paid themselves and continue to pay themselves for running their businesses into the ground abd further, promoting future stupid behavior because the Fed has now taken away the element of risk: you screw up we bail you out. Perfect.

The current crisis is no more Clinton's fault than it is Mccain's (he was one of the keating 5 after all) and he has been a long time friend of market deregulation...

Neither party is honest. I would through my complete support behind a party that would speak frankly and honestly about our problems. In partiular the national debt and our crazy spending really worry me.

• The democrats favor tax and spend policies that drive up the base tax rate and do not address the national debt

• The republicans are, if anything worse, instead of tax and spend they promote Borrow and Spend policies. So not only do I get to pay for their expensive project I also get to pay interest on it, awesome...

Both parties give lip service to cutting spending but its fake. What they do is hold up some flaky scientific study on say: the mating habits of crabs and go: "ooh look at the hundreds of thousands of government dollars being wasted"

Give me a break, we could cut 100% of all of our scientific funding (including NASA) and we would still be in the red. There are two areas in our buged that our killing us: Social Security, and Defence spending. Those are the ones that need to be dealt with. (I hate saying that seeing as I work for a defence contractor)

While I am ranting, could the government please not work so hard at obscuring exactly how its spending my money. Why is it that the war in Iraq warrants "special" budgetary status. It should be included in the budget along with everything else.

Why not Lehmann? I am sure I don't have all the facts straight but Lehmann had a good offer that they rejected so basically the gov said they deserved it. I am sure someone else has all the facts. But they weren't trying diligently to get out of the hole and made some bad business decisions that could have changed the whole outlook.

And it is 100% Clintons fault that the problem existed in the first place. He was buying votes and as was proved with all his dealings good 'ol Bill always came first.

My wife had an interesting observation. "B" loans is what caused their problems and they had to take out a "B" loan to get out of the mess. Poetic justice.

carguy123 wrote: And it is 100% Clintons fault that the problem existed in the first place.

Are you sure you dont just hate Clinton?

From the very limited research ive done on the subject the Gramm-Leach-Bliley Financial Services Modernization Act seems to be blamed for putting the forces in motion to create the current financial crisis.

From wikipedia: The bills were introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA). The bills were passed by a 54-44 vote along party lines with Republican support in the Senate[1] and by a 343-86 vote in the House of Representatives[2]. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. This veto proof legislation was signed into law by President Bill Clinton on November 12, 1999.

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Financial_Services_Modernization_Act

Veto proof bill passed by Republicans who voted along party lines in the senate and its %100 Clintons fault?

Am i missing something? Are there other bills that Clinton sponsored that he somehow forced past the Republican controlled congress? I was young at the time and dont care to do extensive research on what was going on back then. Someone please fill me in.

GlennS wrote: Its so much more fun to just make reality fit you good vs. evil, dems vs republican viewpoint.

GlennS wrote: "a pile of reality"

Uh oh, now you're going to be vilified! Nothing offends the mongers like reality.

Jensenman wrote: Actually, this is not much different than the Fed bailout of Chrysler back in the Iacocca days. The Feds are loaning money to AIG. Of course, if AIG goes belly up the Feds (actually, We the People) will own a bunch of worthless insurance policies and the liabilities that go with them.

Not correct. It's not just a loan.

Unlike all the other "bailouts" (incorrectly named), AIG is different. The government nowhas a shareholder stake in the company. If it turns around, they could actually make money on the deal.

That's socialism, plain and simple (although the deal is anything but plain and simple).

WoooEEEE, them embers is a glowin'.

BTW, the Chrysler deal was a loan guarantee package and it was repaid with interest. Had Chrysler gone belly up, the creditors would have looked to the US government for repayment, once that repayment was received the assets would have become the property of the US government and then we would have had our own version of British Leyland. Now THERE's a scary thought.

The Chrysler deal was not really different than the AIG deal in that respect.

back to finances..

http://online.wsj.com/article/SB122169431617549947.html

That article scares me.

and the fact that russia stopped trading today.. just stopped it cause they were losing so much money.. on the russian stock exchange..

ohh and the fact that the US is now exchanging dollars for the yen with japan. http://ap.google.com/article/ALeqM5jDbqOMkFdjXu7X3OxXKhAxNQL1fgD9391FEG0

Thats right folks.. the Yen is being held by the FED rather than Dollars.... think about it.

This is no longer about a minor problem with out country.. we are quite possibly on the edge of a great global collapse.

Still, what's so evil about high interest rates?

IMHO, it's not very smart to have interest rates below inflation, as it's been pointed out before- leads us to borrow.

High interest rates probably will slow the housing market, and end the speculative increase in housing costs.

(one thing to think about in the housing issues- a GROSS majority of homes are NOT in forclosure, and families will stay in them for a LONG time. So unless jobs are lost, it's unlikely that these loans will default, AND the housing inflation will not really be seen).

If we have high interest rates, then people are probably more likely to save a little here an there, since they might earn 5% on their interest. Comare that with the last few years where houses went up faster than inflation, the effective borrowing rate was closer to 3.5% (with tax breaks included), and that was an easy place to appear to make a buck.

I'm just confused on the whole forcing of low interest rates. It's part of a cycle, much like sun spots....

Eric

high interests rates will force more saving. Which isn't a bad thing.. It'll prop up banks better and provide them more $ into business loans.

foxtrapper wrote:

GlennS wrote: "a pile of reality"

Uh oh, now you're going to be vilified! Nothing offends the mongers like reality.

It takes a distinct lack of thinking to find one person 100% at fault for the current financial crisis. It was a team effort, private and government.

GlennS wrote: Veto proof bill passed by Republicans who voted along party lines in the senate and its %100 Clintons fault? Am i missing something? Are there other bills that Clinton sponsored that he somehow forced past the Republican controlled congress? I was young at the time and dont care to do extensive research on what was going on back then. Someone please fill me in.

when i was in school, even if a bill passed with "veto-proof" numbers, it could still be vetoed by the president, and only then would a 2/3rds majority be needed.

perhaps hes not responsible for starting that particular peice of legislation, but he definitely did nothing to stop it.

GlennS wrote: passed in the Senate 90-8-1 and in the House: 362-57-15.

Im bad with fractions, is that two thirds?