For general discussion and debate. Possible talking point: bailout in trouble.
What seemed like a done deal Thursday morning fell apart by afternoon. With Congress set to leave for recess, an agreement seems less likely. Stocks are set to open much lower, and the financial system once again looks like it's teetering above the abyss.
Although he put his campaign on hold to try to help the situation, John McCain is actually being blamed by Democrats and some in the media for the breakdown in negotiations even though folks inside the meeting dispute this. There was some suggestion that Democrats orchestrated a marvelous trap for McCain yesterday that worked very nicely to embarrass the Republican presidential candidate.
Of course, if you read deeply into some of these McCain-blaming articles, you'll find that Republicans are not behind the Paulson plan, haven't been for days, and that McCain was specifically asked by Paulson through Lindsey Graham to come back to Washington and help broker a deal that Republicans could get behind.
How is this playing out, is there going to be a deal, who's going to be the winners and losers OTHER than the American taxpayers, and will there be a debate tonight?
Comments Policy
House GOP
September 26, 2008 - 08:42 ET by SchnikeysCheers to the House GOP members for beginning to actually grow a pair.
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"My morality is your morality."
Once again, the liberals
September 26, 2008 - 08:47 ET by BDOnce again, the liberals got greedy in their pursuit of increased socialism.
They thought they could get the money passed off to ACORN under the table and no one would notice.
The media haven't noticed yet and I doubt they will
September 26, 2008 - 08:50 ET by Dee Bunkthose of us who are plugged in know, but the general public doesn't.
Selective reporting, that's
September 26, 2008 - 09:02 ET by SchnikeysSelective reporting, that's all there is to it.
Remember how CNN threw in a mention of Obama and Biden's votes for the Bridge to Nowhere funding one time- as if it were an afterthought- while, for all that time beforehand, they went on and on about Gov. Palin's pre-gubernatorial "support" for the bridge as if it merited a hypocrisy badge?
Well, too late. The damage is done.
Nothing makes the MSM an authority- they just present themselves as an authority, and the public takes it seriously.
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"My morality is your morality."
Once again...
September 26, 2008 - 09:15 ET by UberconBD,
Perception is Reality.
The House Republicans, say it with me...REPUBLICANS...have stopped the process of negotiations. They are looking like fools and are losing the PR battle. Socialism starts with the panhandler-in-chief and his wanting of TAXPAYER money to help the poor, undernourished investment bankers for the mistakes they made. There's no risk to them if we allow them to have our money. They should be allowed to fail.
Ubercon
If the investment bankers
September 26, 2008 - 09:35 ET by SchnikeysIf the investment bankers should be allowed to fail, and the House Republicans have stopped the process of negotiations on a bill that would bail them out, then how is it that the House Republicans are "looking like fools," in your eyes?
Yes, I dislike socialism as well. But with all due respect, your post is confusing.
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"My morality is your morality."
Schnikeys
September 26, 2008 - 10:32 ET by Indiana JoeUcon won't be diverted. This is all the Republicans fault, no matter what happened or happens. If the Republicans object to anything in the "compromise," they're obstructing. Of course, Pelosi refusing to have her controlling majority pass the bill without Republican cover doesn't merit mentioning.
Self-contradiction is a small price to pay to fit his argument into his "R bad, D good" paradigm.
"... smells like... victory." - Robert Duvall
Correct me if I am wrong,
September 26, 2008 - 11:09 ET by general companyCorrect me if I am wrong, but if the Banks were forced to give loans (by the Gov) to folks whom could not pay for them, is it really the investment bankers who are at fault? Wasnt Obama and other lawyers happily suing these Banks to make sure they gave $ to sorry clients? The biggest problem I have with any of this mess, is I have yet to hear any of these clowns suggest that we should repeal the very laws that started this in the first place. Bailing them out is one thing, letting is happen again is pitiful.
"Television is a freak show" Bernie Goldberg
You are correct, gc
September 26, 2008 - 11:26 ET by Indiana JoeThe CRA, passed in the 90s (?), imposed fines if a certain percentage of a bank's loans didn't go to "sub-prime" borrowers, i.e. the "poor." And it seems to have snow-balled from there.
It was supposed to be an "anti-redlining" law.
Good intentions, meet unintended consequences... again.
Here's a pretty good video that lays it out.
"... smells like... victory." - Robert Duvall
Indiana Joe:
September 26, 2008 - 13:20 ET by j. frank wilsonThat's the current right-wing myth, and demonstrates nothing other than a complete misunderstanding of CRA and how it works. To be very brief, if what you wrote were true, home mortgages would have imploded years ago. They didn't.
Finally, you are conflating sub-prime mortgages with non-traditional loan underwriting. Safe and sound underwriting is stressed in CRA - one of the points is that discrimination (disparate treatment or impact) is poor business. That happens to be correct. When Oakland CA was being redlined by lenders in Northern California we made a number of excellent that others didn't turn down - they wouldn't even consider them.
Safe and sound underwriting
September 26, 2008 - 14:03 ET by BDSafe and sound underwriting is stressed in CRA -
Another interesting
September 26, 2008 - 08:42 ET by dmntd1Another interesting article.
"Socialism is the philosophy of failure, the creed of ignorance, and the gospel of envy." - Winston Churchill
Very good, dmntd1
September 26, 2008 - 11:16 ET by general companyIt didn't work because you can't cause ethics to happen.
I really love this line, very fitting.
"Television is a freak show" Bernie Goldberg
The Real Story
September 26, 2008 - 08:50 ET by JDWGOP and McCain are upset at the cost to taxpayers, imagine the lib reaction.
JDW
DAILY WAVE
'Hey Chuck, Stand Up!'
Bush
September 26, 2008 - 08:56 ET by rick007If Bush sides with the Democratic Mafia he should be Impeached.
No money for ACORN just prison time and for the ACLU also.
These two entities are subverting our system.
Indite "O" Dumby for his shady Chiago deals.
Let Biden go back to coal mining.
Send Reid and Pelosi to prison for Raping the American people.
Rangle,Dodd.and Frank should be tarred and feathered as in the old times.
People this year lets clean out the communists in Congress and start anew with the Constitituion.
In God we trust should be the National Anthem and the Liberals will burn in hell.
I pray for John Mc's health so he can mold Palin into our next Reagan.
Does B Frank multi task?
Sarah Palin
September 26, 2008 - 09:27 ET by GothampcI think many people are holding their breath hoping Sarah Palin will be what we are looking for. If you believe in prayer, I encourage you to pray that she has wisdom and strength.
Wisdom and strength
October 1, 2008 - 08:47 ET by easygoerAnd that's what matters, it's not so much experience. Either you have what it takes to be president or you don't. I believe she does. If McCain loses I think she'll be the Republican nominee in 2012.
Let us lay our hands upon
September 26, 2008 - 16:34 ET by UberconLet us lay our hands upon her head and pray for Almighty God to bless this woman with the insight and resolve to continue upon the course he has laid out for her in the upcoming years. May the witch be gone and the car accidents nationwide decrease...Hey, look up in the sky, it's bird, it's a plane...no...that's Putin rearing his head and flying over my airspace...I meant our airspace...Give me the shotgun...I'm going to shoot him down...dagnummit, he didn't slow down!!! Shucks!!!
Don't blink her light is about to go out...POP!
Ubercon
President Bush doesnt have
September 26, 2008 - 10:23 ET by Dan The Man 2President Bush doesnt have to side with anyone. His job is to sign what the congress places before him; of course he will look at it and see that there are no wild eyed schemes in it. The scheme to redirect money is not his concern as President, it is congress' responsiblity to hammer out some solution.
What is funny congress wasnt going to do anything until last week and the President stood up and said this is what we are gonna do and congress whined. From what I remember the Presidents deal was pretty much straightforeward and direct, nonwithstanding of being right or not.
Nuke em til they glow then shoot em in the dark.
First reports
September 26, 2008 - 09:02 ET by KC MulvilleIn the military, they say that first reports are always wrong.
I checked the Philly news website this morning. The headline is that the GOP is to blame for no deal. The bias is in the premises. First, the article assumes that the deal must be agreed to - no matter the details, or even the philosophy behind it. Second, the article takes the point of view of Barney Frank, who quite likely is a major part of the problem in the first place - and Frank blames the GOP for being "in revolt."
What happened here is obvious. The Democrats rushed to the microphone, and the media relayed their accusations, unchallenged. The Liberal Bias System is in full operation.
But these first reports are now, slowly being contradicted. It turns out that - guess what - there was resistance to the plan. (Polls show that most of the country is against it, but never mind that.) The Dems are trying to spin this as a GOP tantrum against a done deal, even though it was clear that there was no deal in the first place. And now they're shocked, shocked that politics is involved, even though they can't grasp the irony that the Democrats are accusing this of the Republicans, as if they were themselves non-partisan, and only the GOP was being partisan.
Truth will out, but it will likely be ignored if they can hammer out a fairer deal.
Right on
September 26, 2008 - 09:26 ET by CapitalismRulesAll I can say is that sums it up. I was so livid with the way this was being painted by the "step up the mic first" libs. While the conservative politicians were trying to ease the burden on the taxpayers and actually working, the libs were in front of the cameras lying.
That is dead on, KC. The
September 26, 2008 - 12:19 ET by motherbeltThat is dead on, KC. The Democrats have the majority; they could pass this bill without a single Republican vote, so why don't they?
And Rush just played a clip of Harry Reid at his press conference saying McCain contributed nothing to the WH meeting; he was the last one to speak and didn't say "anything substantive."
Way to go, Harry; stay classy!
Update: Oh, and Chuckie Schumer says, on the floor of the Senate says "We need the President to respectfully tell Sen. McCain to get out of town....."
Another class act.
he (McCain) was the last
September 26, 2008 - 12:25 ET by Jack BauerSo you have to wonder: then how did he blow up and derail the meeting as Reid, and now Chuck U, have also claimed.
The Democrats really have problems keeping their lies straight!
Exactly, Jack! They are
September 26, 2008 - 13:27 ET by motherbeltExactly, Jack!
They are operating from the Stephanopoulos playbook: "That explanation is no longer operative."
What a soory piece of.....
September 26, 2008 - 12:34 ET by general companyOh, and Chuckie Schumer says, on the floor of the Senate says "We need
the President to respectfully tell Sen. McCain to get out of town.
That pompas dip $hit, who the hell is he to suggest any elected official should not be present at any time. How about you get the hell out of town chuckie, take Harry and Pelosie with you.
"Television is a freak show" Bernie Goldberg
Newsflash...
September 26, 2008 - 12:53 ET by UberconMcCain to debate Obama in Mississippi! Sounds like he took the advice and is getting out of town. Good luck, old man!
GC, comments?!?
Ubercon
Chuckie Shumer
September 26, 2008 - 13:26 ET by CapitalismRulesdoes anyone even take him seriously? He just says things to get on TV, I swear he's Washington's Shock Jock. If he does not have anything to say to me about where my money is going, you know, me and you the guys who pay his salary, he needs to shut up.
Trap=Lie
September 26, 2008 - 09:05 ET by txcoThe trap Democrats set was to lie they had an agreement....
Wonder how many Republicans Obama has reached across the aisle to yesterday? Isn't that what he's been promising? That's why he's in Mississippi today..he has no plan to work with anyone other than democrats.
Obama
September 26, 2008 - 09:23 ET by GothampcPersonally, I don't think Obama even wants to work with the Democrats. His "call me if you need me" comment tells me that he just wants to sit at a big desk and look important. When a serious issue comes along, he just wants to vote "Present". Be very afraid of anyone who votes for this man.
yes
September 26, 2008 - 09:30 ET by txcoI agree, he just wants to run for President...!
And heaven help us if he
September 26, 2008 - 11:54 ET by Scuba DudeAnd heaven help us if he is elected. What will he do when he realizes that he actually has to make a decision as President? Start campaigning for President of the World so he doesn't have to do any work but travel and make some silly speeches?
Full blame should be put on the shoulders of the Dems.
Nuff said.
txco... Yeah, but the
September 26, 2008 - 12:11 ET by bigtimertxco...
Yeah, but the dems and the msm made a big mistake yesterday coming out saying they had an agreement, whether McCain was there or not...people immediately got very angry...took to the emails and phones right after this was announced like nothing I have ever seen...I could not get through for a couple of hours, I called Mitch McConnell's office and talked for a bit with his aide..then later called my reps office from Mt. too...
I am going to be calling Tester and Baucus' office later today...as if it would do any good but it will.
In other words, their little scheme back-fired on the dems yesterday...especially putting the likes of Barney Franks out there, when he should be in jail for what he has got away with over the years, especially regarding Fred&Fannie.
I'm telling you, I wasn't all that charged up about watching the debate tonight...but I am now.
"America isn't the problem...America is the solution." ~ Rush Limbaugh
Well, bt....the debate is
September 26, 2008 - 12:21 ET by motherbeltWell, bt....the debate is supposed to be on foreign policy.
I read somewhere that McCain's camp said they should debate on the economy instead. I can't imagine Obama agreeing to that; he won't have enough time to cram.
LOl mb... Poor ol' Barry
September 26, 2008 - 12:44 ET by bigtimerLOl mb...
Poor ol' Barry doesn't have enough time in the world to cram for either issue...
What I want to hear McCain slip in during this debate with a one liner is "well ya know Majority Leader told me to get out of town...and here I am"...as he is making a fool of Obama with some answer.
Btw mb...if you didn't watch the Presser Reid had today with Dodd, do not watch it...there isn't enough duct tape!!!
"America isn't the problem...America is the solution." ~ Rush Limbaugh
I won't...just that little
September 26, 2008 - 13:29 ET by motherbeltI won't...just that little clip I heard had me running for it; I barely made it in time!
However, if you are where you can listen to Rush, I suggest you do; he is tearing up all their claims and accusations!
mb/Dee
September 26, 2008 - 13:48 ET by bigtimermb...
I have been from the beginning...and glad he is and was as angry as I have been...
Thank God for Rush...and he is putting it all in order too!
I am very glad he is going after ACORN too now...and the dems wanting to insert that into the bail-out bill...
I have been so outraged since yesterday I still haven't calmed down about this...Barry is one of the leaders of ACORN...I have a great link here that Dee may be interested in if she is still here...this is $$$ that Barry paid them this campaign...yet the msm keeps silent...of course.
Here is the link.
"America isn't the problem...America is the solution." ~ Rush Limbaugh
"I read somewhere that
September 26, 2008 - 13:02 ET by ckc1227"I read somewhere that McCain's camp said they should debate on the
economy instead. I can't imagine Obama agreeing to that; he won't have
enough time to cram."
No cramming necessary. He'll just use a soothing, melodic series of "umms" and "uhhs" to hypnotize the audience into believing everything he says.
And now, today's Shrub
September 26, 2008 - 09:13 ET by Roger the ShrubberAnd now, today's Shrub Report®:
Today's Culture of Corruption Update.
Fun with Headlines! A bad day for the GOP on politics, bailout plan! Oh no! The reason it was a bad day? Because House Republicans are not amiable with the insane bailout plan? That's a bad day? How dare the Republicans NOT go along with the Democrat(ic) plan?!?!?
Fun with Headlines Part II! Gambler McCain seeks redemption in finance crisis!
Also, teamster thug PA governor Fast Eddie wants another $100 billion to roads, and 'nat. No problemo, Eddie!
1789: Thomas Jefferson becomes first Sec of State, John Jay becomes first Chief Justice. 1820: Daniel Boone dies at a ripe, old age of 85.
Ahhh, the smell of democracy in the air… Here is the best line: The Central Asian state, located on Afghanistan's western border, currently has just one political party, the Democratic Party, which is the former Communist Party and is headed up by President Gurbanguly Berdymukhamedov. I dare you to say that guy's name three times fast.
Today's Religion of Peace Update.
What is on this boat? Radioactive material? Some X-Files type substance? Hmmmm, we might need Fox Moulder to leave Sex-Addiction rehab and investigate!
Uh-oh! PETA wants cheep-and-goat-f***ers to be registered as sex offenders! The nation of Islam must be outraged!
And, finally… Where was Nancy Grace, Geraldo, and Greta von Lockjaw to report this national tragedy?
three times fast
September 26, 2008 - 11:06 ET by SouthJersey1953Gurbanguly Berdymukhamedov, Gurbanguly Berdymukhamedov, Gurbanguly Berdymukhamedov No problem Rog.....
McCain/PALIN '08
PALIN/Jindal '12
I got a kick out of
September 26, 2008 - 09:26 ET by easygoerI got a kick out of this first paragraph:
Who was it who said, "crack-brained meddling by the authorities" can
"aggravate an existing crisis"? Ronald Reagan? Milton Friedman? Adam
Smith? Not even close. It was Karl Marx. Unlike most leftists today,
Marx studied economics.
Thomas Sowell_ Washington Times_ September 25, 2008
The rest of his excellent column is here:
http://www.washingto...
The lessons of paternalism ought to be unlearned and the better
lesson taught that while the people should patriotically and cheerfully
support their Government its functions do not include the support of
the people.
Grover Cleveland_ 2nd Inaugural Address_ March 4, 1893
The rest of Cleveland's address:
http://www.yale.edu/...
bailout the bailout
September 26, 2008 - 09:31 ET by east tennessee johnFrom little ACORNS,huge financial problems grow.
B. H.Obama, ACORN tutor.
There will be an agreement of some sort. Perhaps the House Republicans can force the issue of risk transference back to Wall Street by insuring the loans rather than acquiring the loans. The Democrats and their leader compromise with noone. Afterall, has the media even asked the anointed one about his contributions from Fannie and Freddie, or how the 2 advisors shouldn't be doing a perp walk?
Who's "playing politics?"
September 26, 2008 - 09:37 ET by Indiana Joe"House Speaker Nancy Pelosi has so far ruled out that notion, saying the bill must pass with solid Republican support or not at all, fearing that Democrats would left on the hook for a plan that many Americans have greeted with skepticism."
Yeah, that's leadership for you. Not only is she willing to ignore the "skepticism" that the people have expressed for this (so much for "representative government"), she's afraid of the political fall-out if she can't point the finger at the Republicans later.
Hey, Nancy, if you can't accept the responsibility, you can't take the credit! This is your idea of "running" the government?
What am I thinking? These are Democrats we're talking about!
"... smells like... victory." - Robert Duvall
Smart assed comment
September 26, 2008 - 09:57 ET by ricklailI got just a bit of the comments that that piece of worthless human debris, Harry Reid, said after the WH meeting. He said something to the effect that McCain spoke last for a few minutes but did not make any sense. Yet he praised Obamanation for comments. Until these damn dumbass Democrats stop crap like this there will be not deal. Shut and legislate and stop the politics. The American people want a soultion that does not cost them and arm and a leg.
If pro is the opposite of con what is the opposite of progress? Congress!
Harry Reid sees the
September 26, 2008 - 10:14 ET by bassndudeHarry Reid sees the collapse of our banks as just another political opportunity to bash Republicans. Those people up there see all this as just a political game! Pelosi couldent lead a horse to water, let alone a bunch of a$$es to agreement. So long as you have rabid extremists like Pelosi and Reid, no agreement will be reached.
Save a SeAL, club a liberal!!
Someone was suggesting here
September 26, 2008 - 11:41 ET by general companySomeone was suggesting here yesterday, that the Dems would not turn this into a circus. That they would work together with Repubs to staighten out this mess. I knew the Dems had it in them. They never fail to dissapoint when the chips are down.
Please NV get rid of this fool,,Im begging you.
"Television is a freak show" Bernie Goldberg
An Exercise in Patriotism
September 26, 2008 - 11:07 ET by bradbenj5952Here's an exercise for all you freedom lovers out there and would-be freedom lovers. Go re-read the U.S. Declaration of Independence (or read it if you never have). There's a link below. Pay particular attention to the abuses of King George's government that wrought the determination in our Founding Fathers to cast off that old form of government. Once you have a clear picture of those offenses that were the cause of our revote, then look carefully at what the American government has become. And if there remains any vision in you, if any modicum of original American patriotism continues, if you have not been so brain washed by the MSM and the public school catastrophe that you can no longer discern, then you will clearly see that the offenses perpetrated by King George upon these Colonies (now States) pale in comparison to the abuses now perpetrated upon these United States of America and its citizens by the current generation of politicians in Washington. President Washington would be ashamed to have his name associated with that place were he alive today.
Our government and the politicians that occupy the offices therein have become largely a cesspool of political vileness whose principle purpose is to use their offices and America's resources to buy votes and keep their worthless carcasses in office. There are far too few politicians left who actually have the original noble purposes of our beginnings. And those patriots who actually understand our Constitution and its meaning (the meaning given to it by its authors) are usually run out of Washington on a rail. We have the philosophy of socialism/communism and its principle defenders the MSM and the American education system to thank for that.
http://www.ushistory...
"Believe on the Lord Jesus Christ, and thou shalt be saved, and thy house." Acts 16:31
I'm having way too much
September 26, 2008 - 09:55 ET by Clear thinkerI'm having way too much fun. Last night, one of our NB members, Mighty Mouth, posted a link to a youtube video which explains in vivid detail, how we got into this financial mess, here. I posted the video on my blog and then went to a couple of the most liberal blogs on the web and linked to it. The libs are not happy about the video's existence, but so far have not left me any nasty remarks. But, I know they are seeing it because my sites traffic for that link is through the roof. How long until the blogs delete my link?
The good news is, it's making the rounds and should open quite a few eyes. I suggest everyone send the video to every liberal you know. This alone, could sink Democrats for good, it's that powerful!
Palin/Gore/Clinton - Hate/Love/Hate
Making Fun of AGW http://giovanniworld.wordpress.com/
Great Video, CT
September 26, 2008 - 10:27 ET by CapitalismRulesLiberal government started this, liberal government agitated this, liberal government wants to tell us how to solve this by taking our money. It's time to say NO MORE to government instutions who use taxpayer money to try to fund the futures of individuals who need to take responsibility for themselves. We are NOT a nanny state and we are never going there as long as the American People, not some stupid, moronic talking head on TV have a voice. American's DO NOT WANT this bailout.....get over it Bush, Get over it Pelosi, Get over it Ben, get over it Obama. That is OUR money you are using as toilet paper.
it must have been Rove who
September 26, 2008 - 11:51 ET by TruthMongerit must have been Rove who set up the dems on this - placing them on public display as the management players whilst secretly running fannie and freddie into the ground from his underground lair...
Journalism is the opium of the liberals
I would love to see the
September 26, 2008 - 12:20 ET by Scuba DudeI would love to see the McCain/Palin campaign run this as an ad all over the country.
Clear
September 26, 2008 - 12:46 ET by BlondeThis video is now linked at Drudge, in the upper right corner...
VIDEO: What caused our economic crisis?
David Gregory, do you know which damn network you lie for? ~ Uncle Jimbo, @Blackfive
Blonde... They must have
September 26, 2008 - 14:31 ET by Clear thinkerBlonde...
They must have taken it down. I just checked and could not find.
What Caused Our Economic Crisis?
Making Fun of AGW http://giovanniworld.wordpress.com/
It's one of the links in
September 26, 2008 - 15:27 ET by motherbeltIt's one of the links in the first column now.
Clear
September 26, 2008 - 15:43 ET by BlondeThey moved it to the Left Hand column, LOL.
David Gregory, do you know which damn network you lie for? ~ Uncle Jimbo, @Blackfive
Clear...up to 100K views now.
September 26, 2008 - 16:59 ET by BlondeDavid Gregory, do you know which damn network you lie for? ~ Uncle Jimbo, @Blackfive
"Obama" Decision-making
September 26, 2008 - 09:56 ET by Great Debater"Obama" will not come out with ANY position on the bailout until he's had a chance to run the poll numbers and is reasonably certain he has an accurate gauge of how the political winds are blowing on the issue. Strange way to run a country, huh?
To prove my point: Remember how long it took for him to say anything about Russia's invasion of Georgia?
Taking It A Step Further...
September 26, 2008 - 10:17 ET by JDWPolitico reports Obama was the one who brought up the GOP plan
JDW
DAILY WAVE
'Hey Chuck, Stand Up!'
Directly from the Politico
September 26, 2008 - 10:40 ET by SchnikeysDirectly from the Politico report you may be referring to:
"And it was Obama who raised the subject of the conservative alternative and pressed Paulson on what he thought of the idea."
That the one?
If so...it says he "raised the subject" of the "conservative alternative."
Sounds pretty vague to me. It doesn't really say that he created the plan, or that it was his idea- just that he brought it up. As in, "Hey, there's this thing that the House Republicans are doing- they're refusing to negotiate on a bailout plan...maybe we should talk about that instead," not "Hey, I think that we/the House Republicans should consider refusing to negotiate on this bailout plan."
There's a huge difference between having an idea, and reminding the group of an idea that another person (not Obama) had come up with. In this article, it seems that Politico doesn't want you to know which one they're referring to when they say "raised the subject."
An error of equivocation indicative of shoddy reporting? Nah, it can't be! ;-)
------------------------------------------------------------
"My morality is your morality."
Just a general question:
September 26, 2008 - 10:04 ET by Hero SquadJust a general question: If this crisis is being caused by a poor economy, why aren't all banks collapsing?
*****
"People only insist that a debate stop when they are afraid of what might be learned if it continues." - George Will
Hero Squad:
September 26, 2008 - 10:17 ET by j. frank wilsonHave you ever heard of WAMU? $40,000,000,000 bank failure? Largest thrift in the 11th District? Without even looking it up I would guess the 2nd or 3rd largest financial institution (Federally regulated bank or thrift) in the United States.
How many more do you wish to see go down?
Frank, it has already been
September 26, 2008 - 10:21 ET by bassndudeFrank, it has already been established that it is not the economy that caused the bank failures. It is the bundeling and buying and selling what amounts to "junk bonds". Which is what bad loans are.
Save a SeAL, club a liberal!!
bassndude:
September 26, 2008 - 11:13 ET by j. frank wilsonIt's a very complex issue - but I suggest this is the perfect storm brought about by a number of factors.
Your junk bond analogy is a very good one. Sub-prime, Alt-A and neg am option ARM's (not, by the way, purchased by Fannie or Freddie) were bundled up and sold - initially most went overseas. These loans went south remarkably quickly.
Then came a liquidity crisis. Banks keep on hand a fraction of their overall deposits - most are loaned out. Another NB commentor quoted Jimmy Stewart in "It's A Wonderful Life" and that is precisely the truth. WaMu experienced an old-fashioned run - $16,000,000,000 pulled out since September 15th. How can any institution withstand that?
Personally I see the roots of the liquidity crisis in America's low (negative?) savings rate. For years banks and thrifts have chased hot money CD's as a funding source. More conservative institutions funded themselves with transaction accounts. This can lead to the classic "mismatch of maturities" and make them vunerable to a run, however.
But they got bit by the yield curve (I actually first typed yield "curse" and that's the way it worked out). Recall that we had an extended period of time when long-term rates were lower than short term rates. That just kills banks and thrifts. They need to borrow low and lend high - not the other way around.
Then we've had a very low interest rate environment for a long time. This hurts lenders in two ways. They can't price for risk because all loan interest rates - great, good, and just ok - are low. Lenders have a cost of funds (what they pay for money) and what it costs to operate (G&A). Then they try to make a profit. The market did not permit them to charge enough to cover those 3.
So they turned to credit cards, excessive fees, etc., etc. This mirrors America's general shift from a manufacturing to a service economy.
And so it goes. Not trying to lecture or otherwise get on my high horse (as my Daddy used to say). Just trying to point out that this terrible mess has many, many causes.
One more: I just read on another site that the global (ie, unregulated) financial markets have $45,000,000,000,000 in "credit default swaps." The world markets are awash with extraordinarily complex financial derivities - today no one really knows these are worth or how they will they perform (as designed? or?). Most folks don't even know what they heck they are - including many of their owners and most of the people who will be effected by them. These, of course, brought down Long Term Capital - a distance memory but also a faint echo of what we have today. , even wha
Frank, on this issue we can
September 26, 2008 - 11:26 ET by bassndudeFrank, on this issue we can agree. Debt in the world, individual, corporate and nation is rampant. One thing, if the US economy goes south, so goes the rest of the world. Instead of 1929, we are looking at a world wide depression.
Save a SeAL, club a liberal!!
bassndude:
September 26, 2008 - 13:26 ET by j. frank wilsonYes, on this we can agree. You and I certainly have not always done so on this site; let me add it is a pleasure to have an adult conversation. This issue is far too big for blame or name calling - let's wait to resolve it first (to the extent that is even possible).
In my view '29 was a world-wide depression (did the Crash cause the Depression or did the root causes of the Depression trigger the Crash?).
One of the most frightening things about 1929 is that today, almost 80 years later, there is no consensus on what caused it. Lots of theories but to the extent the dismal science can produce them, no facts.
Wilson... The blame is
September 26, 2008 - 14:36 ET by Clear thinkerWilson...
The blame is squarely on the Dems shoulders. If you don't believe me, watch this video... What Caused Our Economic Crisis?
I think you are dead wrong, or just don't want to hear the truth when you say the problem is to big to assign blame. The Dems put us in this position, so I sure as hell don't expect them to be able to fix it. I have ZERO confidence in all Democrat Pols.
Making Fun of AGW http://giovanniworld.wordpress.com/
Clear thinker:
September 26, 2008 - 18:39 ET by j. frank wilsonWho is the party of less regulation? Who was in the White House, majority in the Senate and House in 2005 when the new accounting regulations for Fannie and Freddie were put into place?
What has Sen. McCain done to push for new regulation during the 110th Congress? How many bills on that subject has he introduced? Do I hear a "Zero." I'm not talking about passing - I'm saying "introduced."
Who was in charge of overseeing Fannie and Freddie from the mid-1990's up until January 1, 2007? The Republicans.
Who de-regulated the financial markets - Phil Gramm, Sen. McCain's campaign advisor for economics. "America is the only nation in the world that has fat poor people" Gramm.
There's a lot of silly noise on this site about the need for more regulation and how the Republicans wanted it and the Democrats didn't. There's a believable story. Meanwhile, how about using the regulations that are now on the books? How about enforcing the laws we have now? Why did President Bush consistently appoint agency heads who simply had no interest in government regulation?
THis is not a case of too
September 26, 2008 - 19:38 ET by BDTHis is not a case of too LITTLE government intervention - but rather too much government involvement.
Can't buy a house because you make $10K per year and are a crack addict? Don't worry, the democrats will ENSURE you have one....
BD, not only that, but the dims will step in...
September 26, 2008 - 19:57 ET by R D Helm...and force us to make their motgage payments for them when they no-longer are able to.
Like after the very first payment winds up past-due. :-O
-Dave
Politicians are the only people in the world who create problems and then campaign against them - Rick Roberts
My troll fuse length today: 0.003mm
What has Sen. McCain done
September 26, 2008 - 19:52 ET by motherbeltWhat has Sen. McCain done to push for new regulation during the 110th
Congress? How many bills on that subject has he introduced? Do I hear
a "Zero." I'm not talking about passing - I'm saying "introduced."
Oh, jeez, the "what has he done lately?" ruse!!
Who was in charge of overseeing Fannie and Freddie from the mid-1990's up until January 1, 2007? The Republicans.
And in 2005, as Bloomberg reports:
For the first time in
history, a serious Fannie and Freddie reform bill was passed by
the Senate Banking Committee. [of which McCain was a member]. The bill gave a regulator power to
crack down, and would have required the companies to eliminate
their investments in risky assets..
....But the bill didn't become law, for a simple reason:
Democrats opposed it on a party-line vote in the committee,
signaling that this would be a partisan issue. (emphasis added)
Frank, I do think that if
September 26, 2008 - 15:14 ET by bassndudeFrank, I do think that if barney Frank and Dodd had not fought so hard to keep fanny and freddie from oversite, and they had been forced to keep good books, this whole thing could have been headed off. But again, the Whitehouse did not scream loud enough, nor the repubs in the house and senate did not force some hearing on the matter. There is enough blame to go around, but it all stems from a bad goverment regulation causing lenders to make sub prime loans. ARMs are bad loans. But some people will make them just because they are the only ones that they can get. If that is the only type loan you can get, it would be better to walk away.
1929 hit the world hard, and so will this one. It is the trickle down theory at work. The US economy falls into depression, soon after follows Japan, France, Germany all the way down to already depressed Africa. It will go world wide, just a matter of time.
Save a SeAL, club a liberal!!
bassndude:
September 26, 2008 - 18:26 ET by j. frank wilsonNot to play too much inside baseball, but Fannie and Freddie sucked the cream off the top of residential mortgage lending. Banks and thrifts could not afford to portfolio the best loans - they served as a conduit, passing those along to the agencies.
That is what fueled the growth of sub-prime and other types of lending. That is why those loans were purchased, packaged, and sold (largely overseas until the packagers began believing their own BS and started keeping larger and larger portions for themselves; huge mistake).
If I may disagree with you on one point. I don't agree that ARM's per se are bad loans. They are a tool, a financial vehicle to accomplish a certain end. Personally, we've got an ARM to purchase our first home - refi'd into a 30-year fixed and stuck with that ever since, riding the yield curve down and never taking our cash (although when one does that the maturity keeps returning to 30 years, so you've got to make those extra curtailments).
Is a hammer a bad tool? It is if you need a screwdriver. ARM's aren't good or bad - they just are. Now, option pay neg am loans are for 99.9% of the borrowing population a horrible product.
Ethical mortgage lending, in large part, is matching the proper loan program with the borrower.
"Your junk bond analogy is
September 26, 2008 - 15:04 ET by ckc1227"Your junk bond analogy is a very good one. Sub-prime, Alt-A and neg am
option ARM's (not, by the way, purchased by Fannie or Freddie)"
Not sure about the ARMs, but Fannie and Freddie were the largest buyers of sub-prime and alt-a mortgages between 2003-2007.
ckc1227:
September 26, 2008 - 18:59 ET by j. frank wilsonThere were two mortgage markets - conforming and non-conforming. Along with much tigher underwriting standards, Fannie and Freddie had relatively low loan limits. They were certainly not the largest buyers of sub-prime mortgages 2003-2007. Sub-prime loans were securitized and sold - largely overseas. Don't confuse ARM's and sub-prime. Almost all sub-prime loans were (some still are) ARM's. However, plenty of ARM's were not sub-prime.
Some folks on NB get their news from YouTube (many people in this country get it from Comedy Central). I prefer Dow Jones:
Fannie, Freddie deepen involvement in subprime loan market
By Danielle Reed
DOW JONES NEWSWIRES
July 22, 2007
NEW YORK – Fannie Mae and Freddie Mac are riding to the rescue of the subprime lending market.
The two large housing finance agencies are beefing up their business of guaranteeing subprime loans at a time when slack lending standards and falling home prices have translated into rising delinquencies and foreclosures among subprime borrowers.
Their involvement will provide alternatives for borrowers anxious to refinance out of existing mortgages that have or will reset to higher monthly payments.
Until recently, Fannie Mae was only involved marginally in guaranteeing subprime loans, while Freddie Mac had sidestepped the market altogether. But, the agencies are now stepping into the breach caused by a surge of defaults, foreclosures and subsequent caution that's set in on Wall Street where the bulk of the loans were packaged into tradable securities.
Consumer advocacy groups and politicians have been calling on the agencies to get more involved in guaranteeing subprime loans and creating consumer-friendly mortgages that can be made available to borrowers with blemished credit histories.
Such borrowers have seen their options reduced as some subprime lenders have shut their doors and many others have tightened lending standards.
The agencies have already begun moving into this lower-credit mortgage market segment.
Fannie Mae has had a program in place – called “Expanded Approval” – since 2001, said spokesman Alfred King. Expanded approval loans – aimed at borrowers with blemished credit histories – were only offered up until this year by about 500 lenders.
In April, Fannie Mae announced it would expand this program and make it a standard option for all the roughly 2000 lenders who regularly deliver loans for guarantee to Fannie Mae.
The agency also said it would now include 40-year loans as an option in the subprime program to help improve affordability for borrowers.
Unlike some of the subprime lenders who loosened lending standar