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We should've used the money ten years ago to keep guys like Greenspan around.

I don't like the bailout because I don't understand how businesses were allowed to become so big the entire market lynchpinned on a pair of supergiant, federally-backed, virulent lenders who infected and, now, destroyed the tissue of the housing market.

Now these same backers who gave the go-ahead to underperform tell us we need to feed more capital into these same two companies... but a couple of stipulations before drafting the bailout blank check, like capping executive pay, isn't going to fix the problem.

The problem is accountability, and blaming the free market on this one when the pivot point came from the initial misguided [de]regulation. The government hasn't done a good enough job convincing me that roughly $1000-$3000 from every man, woman and child in the US is going to fix this problem in the future.

I want Senatorial heads to roll for this, THEN I want them talking about a cure. Cut out the diseased tissue like Dodd and Frank, then we'll talk about my money fixing your problems.

there is nothing we can do. beside you know not being an idiot with money so you know...

At 9/25/08 10:59 AM, poxpower wrote: Ok well tell me this: are any of the ultra-rich wallstreet people who own those business going to be accountable for anything? What's going to happen to them?
They can't go to jail. They won't be punished as far as I see. They're just laughing they asses off aren't they?

Basically they're probably going to be fired, but they'll recieve gigantic multimillion dollar bonus' just for leaving the company. They wont have to deal with any consequences for their actions, and they wont go bankrupt because the government is going to completely bail them out with American tax dollars. It's absolute bullshit.

At 9/25/08 10:59 AM, poxpower wrote: Ok well tell me this: are any of the ultra-rich wallstreet people who own those business going to be accountable for anything?

Unless they did anything illegal, probably not.

What's going to happen to them?

Well, it depends on exactly how the bailout plan is authored and enforced, and whether or not deliberate crimes or criminal negligence were committed.

If the bailout plan specifies that funds cannot be used to compensate CEOs, then there's a chance that the CEOs will be fucked in that regard. Of course, they probably won't go through any personal hardships because a lot of their personal assets are untouchable and they have limited liability to the company.

They can't go to jail. They won't be punished as far as I see. They're just laughing they asses off aren't they?

There's always economic/business assassination. Someone could do that.

But with that said, shouldn't we also be publicly chastising the politicians who have allowed this shit to go on for so long? Fannie and Freddie couldn't have put us in this situation were it not for years and years of political support and immunity given to them by Democrats. They were given a pass by our government, and our government (at least democrats) have been given a pass by the media. Blaming the CEOs only is missing the big picture here.

At 9/25/08 07:48 PM, cellardoor6 wrote:

If the bailout plan specifies that funds cannot be used to compensate CEOs,

Is there one reason why it shouldn't it? :o

Of course, they probably won't go through any personal hardships because a lot of their personal assets are untouchable and they have limited liability to the company.

Yeah good times.

But with that said, shouldn't we also be publicly chastising the politicians who have allowed this shit to go on for so long?

How can you prove that they knew that was coming?
And how can you blame the democrats since it's been 8 years since republicans have been watching this bubble grow and grow?

If you want to blame the democrats for starting it, then don't you also have to blame the republicans for keeping it going?

I'd personally put a solid chunk of blame on the CEOs because THEY'RE IN FINANCE. If they're ANYONE who would have known that what they were doing was criminally retarded, isn't it them?

At 9/25/08 08:24 PM, poxpower wrote: Is there one reason why it shouldn't it? :o

Legal issues. The government may not necessarily be able to nullify preexisting contracts and things of that nature.

How can you prove that they knew that was coming?

That doesn't matter if they knew it was coming or not. If they were responsible for the lack of oversight that allowed the GSEs to do what they did, then they facilitated it. If they refused to review regulation of these GSEs when Republicans were warning that this was needed years ago, then they are responsible. Whether or not we can prove that they were intentionally allowing a disaster to ensue is missing the mark.

And how can you blame the democrats since it's been 8 years since republicans have been watching this bubble grow and grow?

Um, simple. It's actually been Republicans that have tried to pass legislation to review regulation of GSEs like Freddie and Fannie. It's been Democrats that have blocked legislation.

In 2003 President Bush called on congress to review regulation of GSEs, specifically Freddie Mac and Fannie Mae:

The Bush administration today recommended the most significant
regulatory overhaul in the housing finance industry since the savings
and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new
agency would be created within the Treasury Department to assume
supervision of Fannie Mae and Freddie Mac, the government-sponsored
companies that are the two largest players in the mortgage lending
industry.

The new agency would have the authority, which now rests with
Congress, to set one of the two capital-reserve requirements for the
companies. It would exercise authority over any new lines of business.
And it would determine whether the two are adequately managing the
risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of
Fannie Mae and Freddie Mac -- which together have issued more than
$1.5 trillion in outstanding debt -- is broken.

------------

Republicans congressmen, including John McCain, sponsored a 2005 bill that would have done this as well. Check out what John Mccain had to say about it (2 and 1/2 years ago):

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

-------------

It's been the Republicans who have warned about the problems we're having now. It's the Democrats that are in bed with Freddie and Fannie. It's been Democrats that have prevented the much-needed oversight of these institutions. It's been the DEMOCRATS, not Republicans, who have received the largest money contributions from Fannie Mae and Freddie Mac.

Just because Republicans had a majority and Bush has been president doesn't mean they could do anything they pleased. The Democrats sabotaged the efforts that were made by Republicans because Democrats had a personal and political stake in giving GSEs like Freddie and Fannie basically complete immunity.

If you want to blame the democrats for starting it, then don't you also have to blame the republicans for keeping it going?

No, because the Republicans weren't "keeping it going", it was Democrats.

The democrats started it, AND they kept it going.

I'd personally put a solid chunk of blame on the CEOs because THEY'RE IN FINANCE. If they're ANYONE who would have known that what they were doing was criminally retarded, isn't it them?

Yes, but the Democrats are still very much to blame. Even if they didn't engage in direct, intentional criminal activity, their policies allowed this whole thing to happen. I'm not saying they should be indicted, but I'm saying that people need to realize the political implications of this issue. It's absolutely fucking flummoxing that the the mainstream media is refusing to report these facts due to their OBVIOUS bias in favor of democrats. Since the election is coming up, liberals in the media are trying to keep the public misinformed and focusing their blame on Bush even though Democrats are to blame.

I'm all for social assistance, but forcing the acceptance of mortgage applications from people who can't afford them is just stupid.

At 9/25/08 09:18 PM, Elfer wrote: I'm all for social assistance, but forcing the acceptance of mortgage applications from people who can't afford them is just stupid.

Ah! How dare you put the stability of our entire economy before the ability of "underprivileged people" to get loans for homes that they can never afford (and will almost certainly default on).

At 9/25/08 09:27 PM, cellardoor6 wrote:

At 9/25/08 09:18 PM, Elfer wrote: I'm all for social assistance, but forcing the acceptance of mortgage applications from people who can't afford them is just stupid.

Ah! How dare you put the stability of our entire economy before the ability of "underprivileged people" to get loans for homes that they can never afford (and will almost certainly default on).

Because everyone is an idiot, and we've had a whole generation of people trying to buy more than they can afford when they could easily get by on less.

Helping people is good, but trusting them to gauge how much help they need is a bad idea.

This is one of the largest crises to ever hit The United States. None of your opinions are worth spit seeing as how scrolling through this thread every one of you has completely conflicting replies. I'm saying your dumb but can you just leave it to the professionals who have been discussing it for hours on end? If you would like to educate people on the state of the USA and not regurgitate your bitter soliloquies then just suggest geting a subscription to the New York Times. And for god's sake VOTE!

At 9/25/08 09:57 PM, falz3333 wrote: I'm saying your dumb but can you just leave it to the professionals who have been discussing it for hours on end?

whoops! Freudian slip. I meant " I'm NOT saying you dumb..."

At 9/25/08 09:08 PM, cellardoor6 wrote:

It's been the Republicans who have warned about the problems we're having now. It's the Democrats that are in bed with Freddie and Fannie. It's been Democrats that have prevented the much-needed oversight of these institutions. It's been the DEMOCRATS, not Republicans, who have received the largest money contributions from Fannie Mae and Freddie Mac.

Yeah ok you keep blaming those two, but as I understand it, the ENTIRE loaning market has gone bonkers.
Meh I'll need to read up on it more.

Yes, but the Democrats are still very much to blame. Even if they didn't engage in direct, intentional criminal activity, their policies allowed this whole thing to happen.

Heh, I guess, I don't know american politics enough so I'll have to trust you on this.

At 9/25/08 09:08 PM, cellardoor6 wrote:

At 9/25/08 08:24 PM, poxpower wrote:

Yes, but the Democrats are still very much to blame. Even if they didn't engage in direct, intentional criminal activity, their policies allowed this whole thing to happen. I'm not saying they should be indicted, but I'm saying that people need to realize the political implications of this issue. It's absolutely fucking flummoxing that the the mainstream media is refusing to report these facts due to their OBVIOUS bias in favor of democrats. Since the election is coming up, liberals in the media are trying to keep the public misinformed and focusing their blame on Bush even though Democrats are to blame.

Go back and read my response to your first post. Fannie and Freddie were certainly lynchpins, but they are not the whole story. There were various actions that could have prevented this all around, including better regulation of the subprime mortgages themselve. The problem is more complex than this. The Democrats certainly have their share of the blame, but there is a lot more going on than you either realize or care to admit to.

At 9/25/08 11:27 PM, VigilanteNighthawk wrote:

At 9/25/08 09:08 PM, cellardoor6 wrote:

At 9/25/08 08:24 PM, poxpower wrote:

Go back and read my response to your first post. Fannie and Freddie were certainly lynchpins, but they are not the whole story. There were various actions that could have prevented this all around, including better regulation of the subprime mortgages themselve. The problem is more complex than this. The Democrats certainly have their share of the blame, but there is a lot more going on than you either realize or care to admit to.

Government regulation is what got us into this mess into the first place, any more of it would not have done any better. As cellar has stated earlier Fannie and Freddie were instrumental in it, as well as that nice little Community Reinvestment Act that went though Congress.
I also disliked the unnaturally low interest rate that the Fed was keeping to help continue to fuel the housing boom, but that is very much debatable.

I just happen to keep my dislike for this mess on the Federal Government as a whole, not just the democrats, though they did help.

I've been following this somewhat, and makes me upset a little bit.

For instance, corporations are viewed as seperate entities, just as, an individual is viewed as an entity. So what if I were to file bankruptcy, would the goverment come and bail me out or would they say, "you fucked up, now eat it." I view it the same way. Banks take a risks by lending to people, so if they make bad decisions with their money, I don't think its the government job to be the life line.

And if this deal goes through, I think it's predicted that every middle class household will have to pay an extra 10,000 in taxes I think yearly to pay for this.

So overall, I say, let the banks do what every other corporation would do that files bankruptcy, and every CEO and stockholder should take the hit.

Well like you said, "Loans were being given out too easily". That's the problem there. Loans were being giving out too easily and people buy things out of their financial range. The result, people can't pay back the loans and the banks go bankrupt.

Those muderous trolls.

And rescue might be more of the same..

"..then there's the part of their [new] rescue plan where they want to "remove regulatory and tax barriers that are currently blocking private capital formation". That's right.. Removing regulations and lowering taxes. Exactly what's been done for the last 8 years."

At 9/26/08 11:06 AM, MortifiedPenguins wrote:

At 9/25/08 11:27 PM, VigilanteNighthawk wrote:

At 9/25/08 09:08 PM, cellardoor6 wrote:

At 9/25/08 08:24 PM, poxpower wrote:

Government regulation is what got us into this mess into the first place, any more of it would not have done any better. As cellar has stated earlier Fannie and Freddie were instrumental in it, as well as that nice little Community Reinvestment Act that went though Congress.
I also disliked the unnaturally low interest rate that the Fed was keeping to help continue to fuel the housing boom, but that is very much debatable.

I just happen to keep my dislike for this mess on the Federal Government as a whole, not just the democrats, though they did help.

The problem is that this mess is that there was regulation where there shouldn't have been, and none where there should have been. I do agree that the way the government went about funding mortgages was a complete disaster, but there are other problems issues as well. Two issues that come to mind that are exasperating the situation or credit default swaps and the removal of leverage limits on investment banks. Very few people in the media seem to be discussing these factors, but they are draining liquidity out of the system.

As I understand it, credit default swaps are basically insurance offered by investment banks against the default on bonds. The problem is that these products were not regulated, and as a result, companies that offered them never had the actual ability to pay on the claims, and were doing so by issuing more default swaps. Now, what is happening is that they are pushing these companies to the brink. As banks fail, they are forced to pay on these credit default swaps without the ability to raise the capital necessary to pay them. The risk is that the companies that offered these swaps are at risk of going under and triggering other swaps, triggering a chain reaction that could wipe out several financial institutions. If you go back a page, I believe I posted a link about them, though I'll admit I've only recently begun to learn about all of these things, and my understanding of macroeconomics and high finance is still shallow at best.

I am glad to see, though, that you are not turning this into some sort of partisan blame game. I personally hold everyone responsible: the government, the speculators, the people who couldn't afford loans, especially those who could have afforded a more modest house but decided to supersize by utilizing interest only mortgages, and to all of those from the local banks on up who knew this was a bad idea but exploited it to gain short term profits.

As a somewhat off topic aside, what bothered me most about cellar's post was that it seems to be based more on a desire to score partisan points than to come to a real understanding of the situation. I'm getting sick of this nonsense. Both parties, in my opinion have their own crosses to bare, and I believe that in the long run the analysis of this situation is going to point out several issues across the board. I feel that all this rancor is counterproductive. Just look at what the government has devolved into. In some ways, this financial crisis has been like a breath of fresh air because our politicians had to start acting like adults and work together instead of bickering, for a few days at least. I turned the debate off after about 15 minutes because Obama and McCain spent a good amount of time tattling on each other, interrupting each other, and doing everything they could to prevent each other from talking. We've done too much of that. What we truly need to do now is to find common ground and find common goals to work towards as a nation. We have been and continue to be going nowhere unless we can stop bickering and choose a direction.

At 9/26/08 11:06 AM, MortifiedPenguins wrote: Government regulation is what got us into this mess into the first place, any more of it would not have done any better.

But aren't you saying that it was lackluster govt regulation that brought the crisis, then shouldn't it have been more strict, ie, "more regulation"?

At 9/25/08 09:57 PM, falz3333 wrote: I'm saying your dumb but can you just leave it to the professionals who have been discussing it for hours on end?

;;;;;;;;;
Maybe I just haven't been paying attention (right, that's why I sold all my American Stocks back in June)
Falz33333333333, I believe your up to your eyeballs in shit... BECAUSE almost all of your so called 'professionals' are greedy selfserving assholes who shouldn't be allowed to , no shouldn't be trusted to self regulate the temperature in their own homes,never mind your financial sector.
Your Govenrment is in the pockets of the Big Banks,- which is the big flaw in Central Banks- & I for one believe they should let the Banks alone to find their own way out of their troubles.
As for the Government bailing them out... I think the real problem they're all having is in how to do it & still look good to voters, where by they can protect their cushey jobs as opposed to caring one way or the other about the American people or anyone else for that matter.

At 9/27/08 09:28 AM, Der-Lowe wrote:

At 9/26/08 11:06 AM, MortifiedPenguins wrote:

But aren't you saying that it was lackluster govt regulation that brought the crisis, then shouldn't it have been more strict, ie, "more regulation"?

I didn't say lackluster, I mearly said regulation as a whole. Increased regulation would have only exasperated the situation more so then the regulations that were in place.

As we can see now, from past history, and from the current nationalization of our investment banks; the government has absolutely no place in regulating the market. Beyond protecting the few rights of workers that they have actually done correctly in past history, the government has doesn't have the competence or the know how to predict in which way the market takes it's course or how the invisible hand will work.

Der Lowe, you know I'm never going to actually say that increased government regulation will help the situation. Come on you know me better.

How do you penalize someone who has nothing?

Are debtor's prisons still in use?

Is locking up defaulted homeowners and forcing them to work their debt off constitutional?

At 9/27/08 11:42 AM, MortifiedPenguins wrote: the government has doesn't have the competence or the know how to predict in which way the market takes it's course or how the invisible hand will work.

But the "invisible hand" does not work in the financial system, ergo, the Fed.

Either way we go in this situation, The Working-Class is screwed.

At 9/27/08 02:26 PM, Der-Lowe wrote:

At 9/27/08 11:42 AM, MortifiedPenguins wrote:

But the "invisible hand" does not work in the financial system, ergo, the Fed.

And didn't the fed screw up in now and in past history.

I like the idea of the FDIC, it's a good way to keep the money supply appear stable and it's especially good for inspiring confidence in the people.

But the interest rate is something that should float naturally, and as we have seen in this occasion and in past occasions can be kept unaturally deflated.

At 9/26/08 07:17 PM, JudgeDredd wrote: And rescue might be more of the same..

Bailout Pandemic is spreading worldwide.. i'm quite certain that nationalizing all the worlds' banks is not a viable solution to rescue the major global markets from a full-blown ressession.

Republicans are the most powerful types of politicians... TOO powerful! >:(

We need democracy so that they may return America to its former world of so called freedom!

It's a difficult case.
In a way, if the government pays up, they are being unfair to the poor by giving the rich (major shareholders who own the banks) more money (or at least an escape from debt). On the other hand if they don't give them the money, then the poor will get poorer along with the rich and the country will be worse-off overall.

Maybe we should just let all the current banks crash so that other, better financial institutions spawn from the wreckage.

At 9/25/08 09:38 PM, Elfer wrote:

At 9/25/08 09:27 PM, cellardoor6 wrote:

At 9/25/08 09:18 PM, Elfer wrote: I'm all for social assistance, but forcing the acceptance of mortgage applications from people who can't afford them is just stupid.

Ah! How dare you put the stability of our entire economy before the ability of "underprivileged people" to get loans for homes that they can never afford (and will almost certainly default on).

Because everyone is an idiot, and we've had a whole generation of people trying to buy more than they can afford when they could easily get by on less.

Helping people is good, but trusting them to gauge how much help they need is a bad idea.

They should teach economics at school, or at least have a few occasional guest speakers talk about financial management coz some people don't have a clue.
In my school in Australia, we had a couple of guest speakers talk about shares, interest, compounding interest, retirement plans etc... It's not much but I'm sure it opened some people's eyes. It seems that a lot of people completely ignore interest rates or at least they don't realize its significance. For one I seriously can't see why anyone would even use a credit card unless they intend to pay it off REALLY soon; seriously, the interest rate is fkn high on that shit.

At 9/29/08 09:52 PM, yinyangman wrote:

:They see me trollin'.

They hatin'.