$700Billion, Bail Out draft proposal as it stands today.....

Email Me When A New Comment Is Made
Show Only Poster Name and Title Newest to Oldest

Pages: PREV 1 2 3 4 5 6 7 8 9 NEXT

RockyMTNClimber Glass Steagell 9/25/2008 11:56:59 AM

The repeal of it in 1999 made the present crisis possible.<W.C.

No Glass-Steagell's repeal had exactly nothing to do with today's crisis. Today's crisis is the result of legislative mandates by corrupt Congressmen getting low interest no qual loans and bags of cash from a Federal agency (yes I said a Federal Agency, FreddieMac and FannieMae are not private entities as has been clearly demonstrated) who authorized FreddieMac and FannieMae to issue loans under known adverse conditions. The ultimate failure of those practices was made certain by a financial market who also looked the other way and practiced unethical deals with a wink and a nod from their regulators who were bound and determine to let the good times roll and an Excecutive branch who was either a corrupt participant in the scheme (Clintons) or used it as a financial cover for international adventurism (Bush). Even Robert Ruben, Clinton's Treasury Secretary, has stated that repealing Glass Steagell is not the problem! Good old fashioned graft is the problem!

Keep it simple. Blame the Washington ruling Class and question any solution that increases Government's authority.

Check Six

Rocky

Quote Reply

Softwar One way without Congress 9/25/2008 12:02:46 PM

One way Bush could have acted was to use his EXECUTIVE ORDERS powers. The same kinb of powers used by Clinton which started some of this mess.... From today's IBD:

"the problem was that Congress was about to change hands, from the Democrats to the Republicans. Rather than submit legislation that the GOP-led Congress was almost sure to reject, Clinton ordered Robert Rubin's Treasury Department to rewrite the rules in 1995.

The rewrite, as City Journal noted back in 2000, "made getting a satisfactory CRA rating harder." Banks were given strict new numerical quotas and measures for the level of "diversity" in their loan portfolios. Getting a good CRA rating was key for a bank that wanted to expand or merge with another.

Loans started being made on the basis of race, and often little else.

"Bank examiners would use federal home-loan data, broken down by neighborhood, income group and race, to rate banks on performance," wrote Howard Husock, a scholar at the Manhattan Institute.

But those rules weren't enough.

Clinton got the Department of Housing and Urban Development to double-team the issue. That would later prove disastrous.

Clinton's HUD secretary, Andrew Cuomo, "made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis," the liberal Village Voice noted. Among those decisions were changes that let Fannie and Freddie get into subprime loan markets in a big way.

Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks.

Since they could borrow at lower rates than banks due to implicit government guarantees for their debt, the government-sponsored enterprises boomed."

Quote Reply

RockyMTNClimber Bill Clinton agrees with Rocky.... 9/25/2008 12:35:19 PM

Going very much against the media meme that the current financial crisis is all George W. Bush and the Republicans' fault, Bill Clinton on Thursday told ABC's Chris Cuomo that Democrats for years have been "resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac" (video available here..., relevant section at 2:45).

Quote Reply

Wicked Chinchilla 9/25/2008 12:55:44 PM

You guys are not hearing my argument, well, not all of it.

I am NOT blaming the Republicans. I am blaming everyone.

If it was bad loans that were just the problem Fanny, Freddy, and what was Countrywide, would have been the only ones screwed. Because these were packaged, sold, and leveraged all to hell via investment vehicles on Wall Street, ALL of us are now at risk. Stage one was important in this crisis, but stage two is what kicked it into high gear.

Yes, everything would have been prevented had bad loans not taken place. They however did because of pressure, because of lack of regulation, and then the banks got carried away. I realize that you CAN stop the problem at stage one. What I feel is not being realized is that it COULD have stayed at stage one with that safeguard of Glass-Steagal. A system with no safeguards will have problems and breakdowns. This crisis IS one of those. The blame belongs on everybody. From the idiots who couldnt afford their houses to the Investment Banker peddling and leveraging garbage. One cannot simply ignore half of the problem.

In my mind the actor most resonsible for this is the one with full knowledge of their actions, which are the investment banks. That however, is going to be a matter of opinion forever as who is "most to blame" is a subjective thing.

We can play what if games about "if the Dems didnt do this!" or, "if the banks didnt do that!" but what happened is EVERYONE screwed up. Thus, we need to respond to each failure in the system or else they will happen again.

However, from reading the things prior to this I see I disagree from the two of you on the fundamentals of the problem. This is not one parties failure, this is a governmental and systematic failure as a whole.

Quote Reply

eldnah 9/25/2008 1:00:51 PM

I think the crux of the problem with Bush's responsibility has to do with Executive Orders. Whether by tradition or legal constraints previous executive orders are usually not overridden. To be simplistic, when a new President comes in office he doesn't say "All those last minute executive orders my predecessor from the other party wrote are BS. Cancel them immediately!" Nor does he simply write a specific order reversing many. The courts have refused to take up challenges to purely adminstrative EOs regarding the running of the executive departments. Even on more substantative (legislativish) issues the courts have been reluctant to intervene. I'm having dinner this weekend with two of my favorite lawyers ;) (daughters) and I'll try to get myself a better understanding of the constraints on executive orders overturning executive orders, if there are any. As far as using the bully pulpit to convince enough Democratic Senators to vote against their base without a disaster slapping them in the face, I just can't see it happening.

Quote Reply

FJV 9/25/2008 3:37:14 PM

I'm not all that nervous about this to be honest.

- First my simple obeservation is that I haven't eaten a meal less, because of this yet. (You shouldn't start screaming before you feel

any pain in my opinion)

- Second, this would happen sooner or later anyway. You can look at it negatively and say if it happened sooner it would only take a

350 billion bailout to fix this. However if this would have gone on for another few years it might have taken a 1400 billion bailout to

fix this. So better to have this now than 3 years later.

- Third China's economy also looks like a bubble. It may be better for the better to get this crap dealt with and in the past,

compared to having this happen when China's economy starts showing serious problems.

- Fourth You could see this as Capitalism's creative destruction and thus it is the natural thing to happen. Stupid ideas and practices

are being purged from the market. (with the US govt. ensuring the purge doesn't fatally hurt innocents)

If I understand this correctly as long as people don't start blindingly panicing and somewhat change their spending behavior and start saving a bit paying off some loans then things should turn out ok.

Oh well, at least nobody is whining about how the high oil prices are going to do us in anymore.

Quote Reply

RockyMTNClimber A rosey scenario viewed through a half full glass of optimism....... 9/25/2008 5:25:48 PM

So basically don't panic and start acting sensible like your parents taught you, which you should have done in the 1st place anyway. Does that look like the end of the world to you? In life you can be forced to have to deal with much greater misfortune than this, so why all the whining?

I suppose that is one way to look at this. That it is no big deal. No skin off of anybody's back. Blatant corruption is the way things are so stop whining, gov't siezures of whole sections of the economy are to be expected now and again, debt can always be run down by inflating the currency, don't worry about your valueless savings since you will always have welfare, leadership isn't really needed as much as sound bites and bail outs.

Yeah.

Check Six

Rocky

Quote Reply

Jeff_F_F Power corrupts 9/25/2008 5:54:57 PM

The sad fact is that the GOP congress has become as pork-glutted as the Democrats ever were. The problem isn't party, it is government. Power corrupts. The power of big government corrupts those who wield it and whatever party controls that power will become the party of big government. The only solution is to remove that power. The problem that we face is that government power is not the only corrupting power that we need to fear, and the power of corporations is proving to be just as destructive.

Quote Reply

hardcharger Good Point 9/25/2008 8:08:58 PM

But it does bring everyone back to the age old question, Do you vote for someone advocating bigger government, or someone advocating smaller government?

Quote Reply

xylene 9/25/2008 8:12:28 PM

It just baffles me how investment banks could be brought down and not have been intimitely aware of the toxic stuff they were selling investors. Okay....I can see how an airline company may get blindsided with skyrocketing fuel costs. Out of their control and affects bottom line. But an investment bank to have gotten caught up in investments not worth the paper they are written on is just unbelievable. That is their core business and they did have control. They could have refused to buy crap loan products that were given to people under bad terms. They could have separated risky ones from the bad ones, but not only did they choose to bundle, there was incentive to bundle because the regulators were alseep or regulation was dismantled or regulation and control was non existent.

It really shows a lot of weaknesses in this economy. One it shows the extent that growth has not been organic but primarily through the buying and selling of paper on existing assets. It shows how average wages for workers have remained stagnant while housing costs rose. It showed how much people chose to supplement their static wages with credit from equity loans on rising housing prices.

Now the government is in the quandry and it looks like they are willing to risk the value and standing of the dollar to for this bailout.

Peer Steinbrück, German finance minister, said today the US will lose its status as the superpower of the world financial system with the emergence of stronger, better-capitalised centres in Asia and Europe.

It's sad at what the believers of the laisser faire religion have done to this nation.

Quote Reply

PREV 1 2 3 4 5 6 7 8 9 NEXT