The Congress says …they have arrived at a viable Bail Out compromise….that they are ready to vote on Monday! They continue to harp…endlessly…that unless they pass the “Fed Money for Bogus Paper Act”…..we will suffer a severe “credit crunch”. No borrowing, no building, no nothing! As usual these people love to talk about biting into apples while they squeeze the oranges.
Please answer this one for those of us here in the hinterland that still don’t get it: How can buying virtual worthless junk bonds….unfreeze our credit borrowing? How about this: All these guys with the “Toxic Non Tangible Investment Products”……”they buy them” and just borrow the money from the Fed to pay for them. They get no broker fees, they get no credit and no excess cash. They call all there European Investment Bank partners and buy up this junk right away. They borrow as much as they need from the Fed…and they have two years to pay the Fed back.
There will be no Federal Bail Outs…There will be no Treasury Secretary running around giving out indiscriminate money out of his Weiner Mobil. They even have to sign a “Homeowner Quick Deed” over to the Fed…to be sure that if they fail to pay back the Fed…they lose their primary residence. There will be a good chance these rich guys will quickly be moving into some low cost retail property immediately. Congressman Darrell Issa has come up with the perfect answer: Sell these guys Federal Treasury Bonds that they can acquire their “Bogus Bonds” with!
This joke has run its course hasn’t it. Anyone that votes for the so-called Paulson Compromise should be voted out of office immediately. They just don’t seem to get the message…we do not want to end up giving $6 to 7 Trillion dollars to Wall Street Wise Guys. We don’t want Inflation to make our money totally worthless….and we don’t want to pay $10.00 a gallon for gasoline.
Everyone knows that the $700 Billion is just wine from the teaspoon. Once they get that….they soon will be returning to the well. Washington Mutual figured out a market solution…so can Wachovia. Goldman Sachs and Morgan Stanley should be the ones designing tougher banking laws…they know how to get out of stuff ….. so well.
Like my friend The Green Queen likes to say “A compromise has two losers.”
Winships – I couldn’t agree with you more.
The people who got us into this mess, by government meddling in the free market, now purport that they can get us out of it – by government meddling in the free market.
I don’t buy it !!
Note to Congressman John Campbell – vote NO on the bailout.
Call your member of Congress – tell them to vote NO on the bailout.
http://www.house.gov
I like the Winship plan. The problem with this seems to be decide in haste repent at liesure.
junior,
The government didn’t create the insane home lending schemes that have led to this crisis. The free market did that on their own.
The free market, and I dare say this country as a whole, is driven by a greedy “I want it all and I want it now” mentality. Until that changes, we’ll continue dealing with these cyclical meltdowns.
Dont forget the fundraiser for the Fullerton Women’s Transitional Living Center over at the OSEA office on Rampart today at lunch.
Looks the House has spoken…No on the bailout!
anon 9:37,
You are an idiot.
The credit industry is going to close?
Then cash will be king.
Of course the High Rollers will not be able to get high on other people money anymore and the extent of their theft will soon be felt all over.
What are the pension companies going to do to make these high pension payments to the retired? The bailouts and sell/takeovers at 10 cents on the dollar will wipe out all of the pensions, even the government backed ones. (Yes and the 401k and IRA’s) (What about the guaranties? Those companies are going out of business, and congress just decided NOT to back their guaranties.)
I for one would like to see the 200 thousand dollar a year pensions that Ex-sheriff Corona and Ex-treasurer Citron and many others are getting being reduced to 20 grand a year, similar to what most get on social security.
For all the highbrows in the RICH cities and such around the country and the world, If Uncle Sam does not figure out so way of tossing a life line to the money changers to stop a 1929 type collapse.
I say Welcome to Santa Ana. Many here have been living in a cash and carry life style for a long time and will be happy to show where the best soup lines are.
My how the worm has turned. (Maybe)
junior,
Well now THAT is one compelling argument! Thanks for that!
anon said: “The government didn’t create the insane home lending schemes that have led to this crisis. The free market did that on their own.”
junior said: anon – You are an idiot.
anon said: “Well now THAT is one compelling argument! Thanks for that!”
anon,
You do not seem understand that the “US free market” is not free. The guv’ment forced banks to make sub-prime loans, through the Community Reinvestment Act and other regulatory schemes. These government designed and instituted sub-prime loans are the cause of the current financial crisis.
The free market the United States is practically non-existent. The government wants large corporations to run the show. It is much easier for the government to control a few large corporations, rather than smaller, more efficient and less controllable small business entities.
junior:
“The guv’ment forced banks to make sub-prime loans”
Do you really believe that??? The government can force banks to make loans??? IJoe like to get some of what you are smoking.
They may have made it easy for the banks to do these loans, but for sure haven’t forced anybody to do them.
And of course, the government was asleep at the wheel, and should have stopped banks from doing these loans long ago. They were too busy wasting our tax money in Iraq…
But the real culprits are the bank managers.
In any case, the bailout will come. All the people who are now so vocal against it will change their minds when they notice that their 401(k)s would become as worthless as social security.
As much as I hate this bailout, there is no way around it. 2 years ago there would have been, now the bailout is the only option. Thanks a lot, Mr. Bush…
junior,
In one breath you advocate for government to stop “meddling” in the free market, as if the free market is functioning just fine thank you, then you tell us the free market is “non-existent”. Well if the free market doesn’t exist, how can the government be meddling? We can’t keep up with your illogical arguments.
The Community Reinvestment Act (which has undergone meaningful revisions), requires banks and SLA’s to offer credit throughout ALL neighborhoods, not just wealthy ones (a practice known as redlining). Can you tell us how that is a bad thing? NOBODY FORCED THESE BANKS TO APPROVE HOME LOANS TO PEOPLE WHO SHOULDN’T HAVE GOTTEN THEM. Additionally, this housing crisis is hitting ALL neighborhoods, the upscale ones as well as the lower income areas. The CRA didn’t cause that phenomenon to occur.
Joe said: September 29th, 2008 at 4:52 pm
junior:“The guv’ment forced banks to make sub-prime loans”
“Do you really believe that??? The government can force banks to make loans??? ”
junior says: HEY JOE !! – “Economist Stan Liebowitz has claimed that banks were FORCED to loan to consumers who were not credit worthy with no verification of income or assets; little consideration of the applicant’s ability to make payments; no down payment.”
“A Wall Street Journal editorial argued that the law COMPELLED banks to make loans to poor borrowers who often could not repay them and that this contributed in part to the subprime crisis.”
Hey Joe !! I can come up with 20 other citings that banks were forced to make these loans which are the cause of the economic meltdown. The fore mentioned examples came from Wikipedia.
anon,
You mis-quoted me. I said that the free market is “practically non-existent”. We need to reinforce what is left of that free market with sensible regulations.
Please see my above comment and examples cited to Joe in regards to banks being FORCED to make these loans – it is a fact.
junior,
You are mischaracterizing the Community Reinvestment Act in order to make a case against that very act, and you’re citing economists who would like to see the CRA go away as well. But the CRA does NOT “force” or “compel” banks to make loans to low income citizens. It forces banks to make credit AVAILABLE to them. Prior to the CRA, many banks weren’t even OFFERING credit to citizens in low income areas. It doesn’t “force” banks to approve ANY loan that the bank would rather not make.
Junior:
Ok, I FORCE you to give me money for the Brooklyn Bridge.
Anybody who claims that banks have been forced to anything is, I am sorry to say, a nut case and belongs in a mental institution.
Show in detail, not what some idiots write in papers that have a vested interest in deflecting the blame, where banks have been forced to make these loans.
Anybody can write the most ridiculous things and even make money with it, see the tabloids. But it remains fabrication.
So, come up with the smoking gun or shut up!
Oh, and junior, since you are arguing with the WSJ, I rather argue with the Economist, which supports the bailout, and says “This one deserves support.”
http://www.economist.com/opinion/displayStory.cfm?Story_ID=12305249
http://www.federalreserve.gov/dcca/cra/
The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations. It was enacted by the Congress in 1977 (12 U.S.C. 2901) and is implemented by Regulation BB (12 CFR 228). The regulation was substantially revised in May 1995, and was most recently amended in August 2005.
Evaluation of CRA Performance
The CRA requires that each depository institution’s record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution’s application for deposit facilities.
Neither the CRA nor its implementing regulation gives specific criteria for rating the performance of depository institutions. Rather, the law indicates that the evaluation process should accommodate an institution’s individual circumstances. Nor does the law require institutions to make high-risk loans that jeopardize their safety. To the contrary, the law makes it clear that an institution’s CRA activities should be undertaken in a safe and sound manner.
CRA examinations are conducted by the federal agencies that are responsible for supervising depository institutions. Information on this page is related to depository institutions that are examined by the Federal Reserve, mainly state-chartered banks that are members of the Federal Reserve. CRA information on other depository institutions is available from the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS). Interagency information about the CRA is available from the Federal Financial Institutions Examination Council (FFIEC).
Heavily encouraged, with no specific goals.
http://www.occ.treas.gov/fr/cfrparts/12CFR25.htm
§ 25.65 Sanctions.
(a) In general. If the OCC determines that a bank is not reasonably helping to meet the credit needs of the communities served by the bank in the host state, and that the bank’s statewide loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, the OCC:
(1) May order that a bank’s covered interstate branch or branches be closed unless the bank provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank has an acceptable plan under which the bank will reasonably help to meet the credit needs of the communities served by the bank in the host state; and
(2) Will not permit the bank to open a new branch in the host state that would be considered to be a covered interstate branch unless the bank provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank will reasonably help to meet the credit needs of the community that the new branch will serve.
(b) Notice prior to closure of a covered interstate branch. Before exercising the OCC’s authority to order the bank to close a covered interstate branch, the OCC will issue to the bank a notice of the OCC’s intent to order the closure and will schedule a hearing within 60 days of issuing the notice.
(c) Hearing. The OCC will conduct a hearing scheduled under paragraph (b) of this section in accordance with the provisions of 12 U.S.C. 1818(h) and 12 CFR part 19.
Interesting item –
Fox News blames Democrats for financial crisis, BILL CLINTON agrees:
CHRIS CUOMO, ABC NEWS: “A little surprising for you to hear the Democrats saying, “This came out of nowhere, this is all about the Republicans. We had nothing to do with this.” Nancy Pelosi saying it. …”
BILL CLINTON: “… I think the responsibility the Democrats have may rest more in 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. (emphasis added)
Junior, good luck on this project of yours. I don’t think you will be successful in laying this at the feet of the Democrats but give it your best shot.
I think that the hardening of the partisan politics that affected both Republicans and Democrats during the Clinton years was because of the Republicans and thier spokesman Newt Gingrich. Many things that could have been accomplished were not because it would take bi-partisan cooperation and Newt and the Republican Party would hear none of that. So the fact that Democrats did not cooperate with Republicans during Clinton can be equaled with the charge that Republicans did not cooperate with Democrats during the same time.
The idea that tightened regulating of Fannie Mae and Freddie Mac then would have prevented the subprime mortgages is also hard to believe. Were Fannie and Freddie making zero interest loans with varriable interest rates? I don’t think so. These are the bulk of the subprime mortgages that have gone bad to my understanding.
Lets look at some events from my limited memory that seem to apply: First the ability to declare bankruptcy is taken away from the average person. Next, the Banks come up with shortened grace periods and the ability to hike all of your credit rates based on your performance on one account resulting in a ballooning of American credit card debt in just a few years. Then they come up with Ajustable Rate Mortgages that self-destruct in five years and have to be refinanced. Then they come up with 110% equity loans. Then when Americans find themselves unable to make payments becuase of this increased debt payment and stop paying anything (banks couldnt see this coming?) while the bank forecloses on properties worth less than they have in them. The banks then plead to the government who tells the millionaires among them to pound sand and the billionaires among them to write a blank check that the President will get congress to sign. Do I have that about right?
anonyms,
You do not make any sense. One stupid convoluted argument at a time please.