So McCain once again said yesterday that the fundamentals of our economy are strong, while the stock market plummeted 500 points, and Lehman Brothers filed for bankruptcy. Unemployment is high, and the deficit is soaring. The news networks—never ones to underplay a crisis—were warning of the apocalypse. Plenty has been and will be written about how out of touch McCain must be, but his statement signaled something else for me.
How inept must a politician be to be quoting Herbert Hoover on a day like yesterday?
I am really curious if perhaps McCain is losing it.
The fundamentals are right where they need to be. Why? We the People just bought ourselves an 80% stake in AIG! (//%22http://news.bbc.co.uk/2/hi/business/7620127.stm%22)
Hell, just right there we insured ourselves against all the fundamentals you can think of!
Vote Bernanke/Paulson 2008! Countrywide First!
quote:
Originally posted by pmcalk
So McCain once again said yesterday that the fundamentals of our economy are strong, while the stock market plummeted 500 points, and Lehman Brothers filed for bankruptcy. Unemployment is high, and the deficit is soaring. The news networks—never ones to underplay a crisis—were warning of the apocalypse. Plenty has been and will be written about how out of touch McCain must be, but his statement signaled something else for me.
How inept must a politician be to be quoting Herbert Hoover on a day like yesterday?
I am really curious if perhaps McCain is losing it.
Strange. You haven't mentioned the fundamentals of the US economy in your post. The stock market and a few failed banks and investment/insurance firms does not the economy make. Hint: how about indicators (those are numbers).
Keep going.
quote:
Originally posted by Gaspar
Quote
Strange. You haven't mentioned the fundamentals of the US economy in your post. The stock market and a few failed banks and investment/insurance firms does not the economy make. Hint: how about indicators (those are numbers).
Keep going.
If by fundamentals, McCain means "capitalism," he may be sort of right. If he means "inflation, unemployment, and various confidence indicators are all currently up" then he's either lying or he's ignorant.
And actually, just to circle back, if he means "capitalism" is fundamentally sound, he may also be wrong. Valuing risk is an inherent part of how capitalism works, and this string of failures occurred because the investment banks (and the mortgage lenders, and AIG, which is the biggest insurance company in the country) don't know how to value all the junky mortgage instruments in their portfolios. So, in actuality, this crisis actually does point out a fundamental flaw. If no one knows what something's worth, how can other market players buy or sell or invest in it?
quote:
Originally posted by Gaspar
quote:
Originally posted by pmcalk
So McCain once again said yesterday that the fundamentals of our economy are strong, while the stock market plummeted 500 points, and Lehman Brothers filed for bankruptcy. Unemployment is high, and the deficit is soaring. The news networks—never ones to underplay a crisis—were warning of the apocalypse. Plenty has been and will be written about how out of touch McCain must be, but his statement signaled something else for me.
How inept must a politician be to be quoting Herbert Hoover on a day like yesterday?
I am really curious if perhaps McCain is losing it.
Strange. You haven't mentioned the fundamentals of the US economy in your post. The stock market and a few failed banks and investment/insurance firms does not the economy make. Hint: how about indicators (those are numbers).
Keep going.
If that's the case then why did the fedrl gubmint just bail out AIG to the tune of (from the taxpayers, mind you) $85 billion? Along with Fannie Mae/Freddie Mac. And Bears Stearn?
Move along.
quote:
Originally posted by Gaspar
quote:
Originally posted by pmcalk
So McCain once again said yesterday that the fundamentals of our economy are strong, while the stock market plummeted 500 points, and Lehman Brothers filed for bankruptcy. Unemployment is high, and the deficit is soaring. The news networks—never ones to underplay a crisis—were warning of the apocalypse. Plenty has been and will be written about how out of touch McCain must be, but his statement signaled something else for me.
How inept must a politician be to be quoting Herbert Hoover on a day like yesterday?
I am really curious if perhaps McCain is losing it.
Strange. You haven't mentioned the fundamentals of the US economy in your post. The stock market and a few failed banks and investment/insurance firms does not the economy make. Hint: how about indicators (those are numbers).
Keep going.
You miss the point. Whatever you think about the economic indicators is irrelevant. Why would your candidate be quoting Herbert Hoover on a day that the majority of Americans feel that the economy is in shambles? It's kind of like quoting Custer before a battle.
If he is this inept at running for president, what sort of administration would he have?
McCain Thinks Americans Kick donkey (//%22http://juxtaposably.blogspot.com/2008/09/mccain-thinks-americans-kick-donkey.html%22)
quote:
Originally posted by pmcalk
quote:
Originally posted by Gaspar
quote:
Originally posted by pmcalk
So McCain once again said yesterday that the fundamentals of our economy are strong, while the stock market plummeted 500 points, and Lehman Brothers filed for bankruptcy. Unemployment is high, and the deficit is soaring. The news networks—never ones to underplay a crisis—were warning of the apocalypse. Plenty has been and will be written about how out of touch McCain must be, but his statement signaled something else for me.
How inept must a politician be to be quoting Herbert Hoover on a day like yesterday?
I am really curious if perhaps McCain is losing it.
Strange. You haven't mentioned the fundamentals of the US economy in your post. The stock market and a few failed banks and investment/insurance firms does not the economy make. Hint: how about indicators (those are numbers).
Keep going.
You miss the point. Whatever you think about the economic indicators is irrelevant. Why would your candidate be quoting Herbert Hoover on a day that the majority of Americans feel that the economy is in shambles? It's kind of like quoting Custer before a battle.
If he is this inept at running for president, what sort of administration would he have?
IOW, pay no attention to the facts as long as the American people THINK the country's on fire economically. Then hope our candidates play on their fears regarless of the truth.
^^^So . . . looking at the facts only, I guess AIG was not in trouble, that an $80 billion bailout of a private insurance company is routine in American history, that failures of Bear, Lehman and Merrill are no big deal?
Riiiiiiiight. Keep lying to yourself.
quote:
Originally posted by CoffeeBean
^^^So . . . looking at the facts only, I guess AIG was not in trouble, that an $80 billion bailout of a private insurance company is routine in American history, that failures of Bear, Lehman and Merrill are no big deal?
Riiiiiiiight. Keep lying to yourself.
How do the failures of individual businesses "prove" that the economy is in shambles? Without exception, these business failed because of poor business practices.
Baseline indicators have proven (even after 9/11) that we can withstand a hell of a lot more than a few businesses going belly up.
quote:
Originally posted by iplaw
quote:
Originally posted by CoffeeBean
^^^So . . . looking at the facts only, I guess AIG was not in trouble, that an $80 billion bailout of a private insurance company is routine in American history, that failures of Bear, Lehman and Merrill are no big deal?
Riiiiiiiight. Keep lying to yourself.
How do the failures of individual businesses "prove" that the economy is in shambles? Without exception, these business failed because of poor business practices.
Baseline indicators have proven (even after 9/11) that we can withstand a hell of a lot more than a few businesses going belly up.
the treasury dept. apparently doesn't seem to think so. these 'individual businesses' have been repeatedly described as 'too big to fail' remember the airline bailouts after 9/11?
'individual businesses' that's a pretty flippant way to describe multinational corporations with billions of dollars of capital, employing tens of thousands of professionals. okay, sure.
quote:
Originally posted by grahambino
quote:
Originally posted by iplaw
quote:
Originally posted by CoffeeBean
^^^So . . . looking at the facts only, I guess AIG was not in trouble, that an $80 billion bailout of a private insurance company is routine in American history, that failures of Bear, Lehman and Merrill are no big deal?
Riiiiiiiight. Keep lying to yourself.
How do the failures of individual businesses "prove" that the economy is in shambles? Without exception, these business failed because of poor business practices.
Baseline indicators have proven (even after 9/11) that we can withstand a hell of a lot more than a few businesses going belly up.
the treasury dept. apparently doesn't seem to think so. these 'individual businesses' have been repeatedly described as 'too big to fail' remember the airline bailouts after 9/11?
'individual businesses' that's a pretty flippant way to describe multinational corporations with billions of dollars of capital, employing tens of thousands of professionals. okay, sure.
Yes I do remember, and it was a mistake then as well.
Flippant or not, you still failed to answer my question.
I have been reading on this forum spirited defenses of our economy for over a year now. The conclusions of the most sophisticated, well educated thinkers on this forum have hotly defended with wonderfully strong links that we are just fine, thank you very much.
Well, this isn't fine. Ignoring it or minimizing it won't make things better. 30,000 lost jobs here, buyouts of huge banks, mortgage companies and insurance companies there, and staggering debt everywhere. Any one of these failures alone would be understandably of little concern. But not all in 8 month period.
Forbes thinks we're in trouble, Greenspan thinks so, and a lot of others are very tight lipped. If the best thing you can say is "the fundamentals are strong..." Lord help us that says a lot.
Make note of this. All incumbents administrations sweeten the pot when re-election time comes. Even the mayors of Tulsa used to make sure the BA expressway got a new coat of asphalt before their re-elections. If this is the best the Republican administration can do to support McCain in his time of need, either they don't like him or we don't have any ammo left.
quote:
Originally posted by pmcalk
quote:
Originally posted by Gaspar
quote:
Originally posted by pmcalk
So McCain once again said yesterday that the fundamentals of our economy are strong, while the stock market plummeted 500 points, and Lehman Brothers filed for bankruptcy. Unemployment is high, and the deficit is soaring. The news networks—never ones to underplay a crisis—were warning of the apocalypse. Plenty has been and will be written about how out of touch McCain must be, but his statement signaled something else for me.
How inept must a politician be to be quoting Herbert Hoover on a day like yesterday?
I am really curious if perhaps McCain is losing it.
Strange. You haven't mentioned the fundamentals of the US economy in your post. The stock market and a few failed banks and investment/insurance firms does not the economy make. Hint: how about indicators (those are numbers).
Keep going.
You miss the point. Whatever you think about the economic indicators is irrelevant. Why would your candidate be quoting Herbert Hoover on a day that the majority of Americans feel that the economy is in shambles? It's kind of like quoting Custer before a battle.
If he is this inept at running for president, what sort of administration would he have?
Thats what I was waiting for. . . the word FEEL. All done here!
GDP up. GNP up. CPI down (actually going down another .1 % today). Consumer spending up. Mortgage refinance index up 15.4% Wow! Housing starts jump 1.6% announced today. Target futures on oil are at $88 a barrel (unrelated but I'm happy about it none the less, gonna buy some options).
So while most libs FEEL like the economy is in shambles, most actual people, including libs, aren't showing it. Actions and numbers speak louder than tears.
quote:
Originally posted by Gaspar
Quote
GDP up. GNP up. CPI down (actually going down another .1 % today). Consumer spending up. Mortgage refinance index up 15.4% Wow! Housing starts jump 1.6% announced today. Target futures on oil are at $88 a barrel (unrelated but I'm happy about it none the less, gonna buy some options).
Gaspar, I don't think even the biggest optimist is delusional enough to be doing cartwheels over the current economy.
There have been just too many shocks to the system in a short time. The housing bust, doubled inflation, staggeringly high oil prices, rising unemployment and now a slew of financial houses teetering on collapse. About the only reason the GNP was in positive territory in the third quarter was the stimulus checks.
Yes, the U.S. economy is resilient. But no economy stands strong when it keeps absorbing massive body blows. You don't stand strong; you grab onto the ropes and hold on for dear life until the crisis passes.
quote:
Forbes thinks we're in trouble, Greenspan thinks so, and a lot of others are very tight lipped. If the best thing you can say is "the fundamentals are strong..." Lord help us that says a lot.
I should hope Greenspan has something to say as his fingerprints are all over this mess, especially Fannie and Freddie.
Here is a summary of the latest economic numbers that matter:
*
New orders for manufactured goods in July, up five consecutive months, increased $5.9 billion or 1.3 percent to $465.4 billion, the U.S. Census Bureau reported today.*
New orders for manufactured durable goods in July, up three consecutive months, increased $2.9 billion or 1.3 percent to $219.6 billion, unchanged from the previously published increase. This followed a 1.4 percent June increase.*
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.3 percent in the second quarter of 2008*
The Census Bureau of the Department of Commerce announced today that the estimate of U.S. retail e-commerce sales for the second quarter of 2008, adjusted for seasonal variation, but not for price changes, was $34.6 billion, an increase of 2.9 percent (±1.0%) from the first quarter of 2008. Total retail sales for the second quarter of 2008 were estimated at $1,034.8 billion, an increase of 0.9 percent (±0.3%) from the first quarter of 2008. These stats come from http://www.economicindicators.gov/ for anyone interested in reading actual statistics.
Finally, the dollar has been rallying against the Euro for the last few months bringing the exchange rate back to levels not seen since late '07 -- Yahoo Finance (//%22http://finance.yahoo.com/currency/convert?amt=1&from=USD&to=EUR&submit=Convert%22)
You're ignoring consumer confidence.
Which is a huge part of the broader economy.
Is that true? If people are concerned about their 401k's losing 20-30% of its value, do you think, it's a good time to go out and buy that new washing machine?
Resulting to corporate welfare is a good thing for the economy? Resulting to corporate welfare is an indication that things are hunky-dory with our economy?
So, clarify this for me...its because the American public has been told that the economy is bad?
How about you tell to the folks now unemployed in the Rust Belt states?
How about the you tell this to the folks that have been foreclosed on?
How about you tell this to the folks who will not be able to afford home heating oil in a Pennsylvania winter?
I'm sure you're doing quite well for yourself. Maybe you shorted FNM, FRE, LEH a year ago. Kudos if you did. I wish I had.
However, I feel for you to deride problems our economy are having as just irrational behavior and that people are being manipulated by democrats or some other 'visible hand', only proves your own myopic view.
quote:
Originally posted by grahambino
You're ignoring consumer confidence.
Which is a huge part of the broader economy.
Is that true? If people are concerned about their 401k's losing 20-30% of its value, do you think, it's a good time to go out and buy that new washing machine?
Resulting to corporate welfare is a good thing for the economy? Resulting to corporate welfare is an indication that things are hunky-dory with our economy?
So, clarify this for me...its because the American public has been told that the economy is bad?
How about you tell to the folks now unemployed in the Rust Belt states?
How about the you tell this to the folks that have been foreclosed on?
How about you tell this to the folks who will not be able to afford home heating oil in a Pennsylvania winter?
I'm sure you're doing quite well for yourself. Maybe you shorted FNM, FRE, LEH a year ago. Kudos if you did. I wish I had.
However, I feel for you to deride problems our economy are having as just irrational behavior and that people are being manipulated by democrats or some other 'visible hand', only proves your own myopic view.
Yeah, it almost sounds like someone calling Americans, when it is regarding the economy, whiners...oh, wait a minute, Phil Gramm already did that.
quote:
Originally posted by grahambino
You're ignoring consumer confidence.
Which is a huge part of the broader economy.
Is that true? If people are concerned about their 401k's losing 20-30% of its value, do you think, it's a good time to go out and buy that new washing machine?
Consumer confidence is an easily manipulated commodity. I prefer objective information.
quote:
Resulting to corporate welfare is a good thing for the economy? Resulting to corporate welfare is an indication that things are hunky-dory with our economy?
Of course not, but is the economy going to spontaneously combust from it. I highly doubt it.
quote:
How about you tell to the folks now unemployed in the Rust Belt states?
The rust belt? What is this 1983?
quote:
How about the you tell this to the folks that have been foreclosed on?
You mean those folks that decided to buy homes they can't afford?
quote:
How about you tell this to the folks who will not be able to afford home heating oil in a Pennsylvania winter?
Like hyperbole much? During the Clinton years the story was that people were going to have to resort to eating Alpo to pay bills. I've heard this same song before.
quote:
Originally posted by Gaspar
quote:
Originally posted by pmcalk
quote:
Originally posted by Gaspar
quote:
Originally posted by pmcalk
So McCain once again said yesterday that the fundamentals of our economy are strong, while the stock market plummeted 500 points, and Lehman Brothers filed for bankruptcy. Unemployment is high, and the deficit is soaring. The news networks—never ones to underplay a crisis—were warning of the apocalypse. Plenty has been and will be written about how out of touch McCain must be, but his statement signaled something else for me.
How inept must a politician be to be quoting Herbert Hoover on a day like yesterday?
I am really curious if perhaps McCain is losing it.
Strange. You haven't mentioned the fundamentals of the US economy in your post. The stock market and a few failed banks and investment/insurance firms does not the economy make. Hint: how about indicators (those are numbers).
Keep going.
You miss the point. Whatever you think about the economic indicators is irrelevant. Why would your candidate be quoting Herbert Hoover on a day that the majority of Americans feel that the economy is in shambles? It's kind of like quoting Custer before a battle.
If he is this inept at running for president, what sort of administration would he have?
Thats what I was waiting for. . . the word FEEL. All done here!
GDP up. GNP up. CPI down (actually going down another .1 % today). Consumer spending up. Mortgage refinance index up 15.4% Wow! Housing starts jump 1.6% announced today. Target futures on oil are at $88 a barrel (unrelated but I'm happy about it none the less, gonna buy some options).
So while most libs FEEL like the economy is in shambles, most actual people, including libs, aren't showing it. Actions and numbers speak louder than tears.
Tell that to the 600,000 people who have lost their job in the last year. Tell that to the people who have lost their home, filed for bankruptcy, lost their job, put off retirement. I understand that people married to billionaires with 9 houses may not
feel the pain, but it is out there. It was politically stupid to quote Herbert Hoover when the stock market plunged. Maybe that's why Obama has moved ahead (//%22http://www.reuters.com/article/politicsNews/idUSN1642854220080917?pageNumber=2&virtualBrandChannel=10112%22) of McCain in national polls.
quote:
Originally posted by rwarn17588
quote:
Originally posted by Gaspar
Quote
GDP up. GNP up. CPI down (actually going down another .1 % today). Consumer spending up. Mortgage refinance index up 15.4% Wow! Housing starts jump 1.6% announced today. Target futures on oil are at $88 a barrel (unrelated but I'm happy about it none the less, gonna buy some options).
Gaspar, I don't think even the biggest optimist is delusional enough to be doing cartwheels over the current economy.
There have been just too many shocks to the system in a short time. The housing bust, doubled inflation, staggeringly high oil prices, rising unemployment and now a slew of financial houses teetering on collapse. About the only reason the GNP was in positive territory in the third quarter was the stimulus checks.
Yes, the U.S. economy is resilient. But no economy stands strong when it keeps absorbing massive body blows. You don't stand strong; you grab onto the ropes and hold on for dear life until the crisis passes.
That's not what this thread is about. This thread is about the "fundamentals of our economy" as indicated in the title. I agree that there are some very unfortunate economic occurrences that have slowed growth. But the fundamentals are still healthy and growth is still positive.
I typically ignore consumer confidence numbers because they are subjective and I haven't ever found a use for them in predicting anything. The sample is far to low to be accurate (5,000 households give or take 3%) and is mostly a number for media to use, not sound investors.
quote:
That's not what this thread is about.
If I had a dime for every time I had to tell her that I'd be Obama rich. Get used to it. The moment the debate starts to go south it's deflection city. Usually involves obsession with a tangential issue.
quote:
Originally posted by pmcalk
Maybe that's why Obama has moved ahead (//%22http://www.reuters.com/article/politicsNews/idUSN1642854220080917?pageNumber=2&virtualBrandChannel=10112%22) of McCain in national polls.
Correct me if I'm wrong but wasn't it YOU that said this last week:
quote:
Little advice, IP--don't try to prove your points with daily polls.
quote:
Originally posted by Gaspar
quote:
Originally posted by rwarn17588
quote:
Originally posted by Gaspar
Quote
GDP up. GNP up. CPI down (actually going down another .1 % today). Consumer spending up. Mortgage refinance index up 15.4% Wow! Housing starts jump 1.6% announced today. Target futures on oil are at $88 a barrel (unrelated but I'm happy about it none the less, gonna buy some options).
Gaspar, I don't think even the biggest optimist is delusional enough to be doing cartwheels over the current economy.
There have been just too many shocks to the system in a short time. The housing bust, doubled inflation, staggeringly high oil prices, rising unemployment and now a slew of financial houses teetering on collapse. About the only reason the GNP was in positive territory in the third quarter was the stimulus checks.
Yes, the U.S. economy is resilient. But no economy stands strong when it keeps absorbing massive body blows. You don't stand strong; you grab onto the ropes and hold on for dear life until the crisis passes.
That's not what this thread is about. This thread is about the "fundamentals of our economy" as indicated in the title. I agree that there are some very unfortunate economic occurrences that have slowed growth. But the fundamentals are still healthy and growth is still positive.
Fair enough.
However, the recent developments about AIG would make one question the fundamentals.
If AIG -- one company -- going belly-up would result in economic Armageddon, doesn't that call into question the true strength and fundamentals of the economy?
Should a economy with supposedly strong fundamentals have its fate that crucially tied to one insurance firm?
Or is the gloom and doom about letting AIG perish just hyperbole to satisfy a few Wall Street fatcats?
Again, these questions aren't rhetoric. I'm genuinely curious about your response.
You guys don't know what you are talking about. The fundamentals of the economy are super strong. Until our economy is about the transaction of money, things like all the banks going under won't change anything. By all banks, I mean just the big ones :)
quote:
Originally posted by rwarn17588
quote:
Originally posted by Gaspar
quote:
Originally posted by rwarn17588
quote:
Originally posted by Gaspar
Quote
GDP up. GNP up. CPI down (actually going down another .1 % today). Consumer spending up. Mortgage refinance index up 15.4% Wow! Housing starts jump 1.6% announced today. Target futures on oil are at $88 a barrel (unrelated but I'm happy about it none the less, gonna buy some options).
Gaspar, I don't think even the biggest optimist is delusional enough to be doing cartwheels over the current economy.
There have been just too many shocks to the system in a short time. The housing bust, doubled inflation, staggeringly high oil prices, rising unemployment and now a slew of financial houses teetering on collapse. About the only reason the GNP was in positive territory in the third quarter was the stimulus checks.
Yes, the U.S. economy is resilient. But no economy stands strong when it keeps absorbing massive body blows. You don't stand strong; you grab onto the ropes and hold on for dear life until the crisis passes.
That's not what this thread is about. This thread is about the "fundamentals of our economy" as indicated in the title. I agree that there are some very unfortunate economic occurrences that have slowed growth. But the fundamentals are still healthy and growth is still positive.
Fair enough.
However, the recent developments about AIG would make one question the fundamentals.
If AIG -- one company -- going belly-up would result in economic Armageddon, doesn't that call into question the true strength and fundamentals of the economy?
Should a economy with supposedly strong fundamentals have its fate that crucially tied to one insurance firm?
Or is the gloom and doom about letting AIG perish just hyperbole to satisfy a few Wall Street fatcats?
Again, these questions aren't rhetoric. I'm genuinely curious about your response.
Don't fall for media hype. A % of the market is speculators and they will indeed be hurt. The fate of the market is not tied to any one company. The federal government takes action to soften the blow (though I don't agree with that). But it looks like the private sector will mount a defense first (and far far more effectively).
Lots of people moaning, but the intelligent large-scale investor, your fat cats, just see this as a buying opportunity and they will continue to inject oil into the engine.
Now if the "fundamentals of the economy" were weak, the private sector would begin to build walls to protect their capital, and we would be in a crisis.
Either way this is fodder for both sides, but more for Obama in this election, because his followers are far less likely to have an understanding of the market.
Stop right there! I'm not saying that Obama supporters are stupid, I'm just saying that his target demographic has other aspects of life that they focus on rather than the intricacies of the american stock market or the economy.
quote:
Originally posted by iplaw
quote:
Forbes thinks we're in trouble, Greenspan thinks so, and a lot of others are very tight lipped. If the best thing you can say is "the fundamentals are strong..." Lord help us that says a lot.
I should hope Greenspan has something to say as his fingerprints are all over this mess, especially Fannie and Freddie.
Actually, Greenspan should keep his yapper shut since he is no longer in the paid position of being a "director" of our economy. He only stands to do more damage.
What I'm seeing a number of you doing is to over-look the Pygmalian Effect that glass-half-empty economists and election cycle media have on the economy. Obama has zero compunction about saying "worst (insert noun here) since the Great Depression".
No, the economy is not ideal, mainly due to the finanical and lending markets making stupid bets and losing. The overall picture does not match the hyperbole being thrown around though.
The quickest way to cause large-scale recession is to scare healthy businesses and individuals into putting off investment and purchases. If a business owner is flush with cash, but is being reminded that the economy might crash down around his ankles at any minute, he's likely going to put off buying new equipment or hiring more people. Multiply this effect by hundreds of thousands and you WILL create a recession.
Scare people who are working in healthy industries into believing that they are going to lose their job because U/E is up to 6.1% and they will put off purchases which help the rest of the economy.
There are plenty of companies flourishing in the U.S. It appears that lending and financial services are the two sectors hurting the worst. Small business as a whole is still strong. In my line of work, I follow liquidation auctions, and I've seen no significant increase in shuttered manufacturing operations over the last four years, it's pretty stable actually.
Manufacturing numbers are very strong. Unemployment in the "Rust Belt" is planned obsolescence in getting rid of jobs no longer needed in auto manufacturing due to automation, consolidation to reduce overhead, and changes in consumer habits.
If you choose to believe that either Obama or McCain can fix the economy you are a total dupe.
The only thing a leader can do is inspire confidence or tear it down. To this point, McCain understands this concept. Obama wants you to be scared so he can swoop in and save the day. His kind of campaigning is dangerous and doesn't show any sort of conscience, other than his total blind ambition to be President, regardless of the cost to everyone else.
quote:
Stop right there! I'm not saying that Obama supporters are stupid, I'm just saying that his target demographic has other aspects of life that they focus on rather than the intricacies of the american stock market or the economy.
I think you are highly overestimating the public and republicans. I am sure it is around the board on both sides. But I have flat tax republicans complaining its wrong that if they make 78,849 they have to pay 25% and if they make 78,851 they pay 28% so they make less money! I seriously doubt much of anybody knows what the hell is going on. In fact, I would say that if we had another party in power they would swap sides whoever claimed the economy was strong. I mean the worst the economy ever was was when Clinton was in power. At least thats what I hear from some people.
quote:
Originally posted by rwarn17588
Should a economy with supposedly strong fundamentals have its fate that crucially tied to one insurance firm?
Right, wrong, or otherwise-
AIG, along with other insurance giants is a large institutional investor which has kept capital flowing in the economy which has benefitted many segments of the economy outside the financial services industry. That is what they do. Large insurers like this have more functions than just writing life insurance.
Typically, the taxpayer is going to pick up the tab for failed insurance companies, so this could have been a pre-emptive strike on the part of the gov't. Though it is usually state insurance funds who step in to make policy holders whole again when an insurer fails, not the feds.
I'm more against this bail-out, but without knowing all the facts, nor facets of AIG's business, it's a bit premature to say whether or not this was definitely the right thing to do, and why it would be more appropriate to bail them out than Lehman.
quote:
Originally posted by Gaspar
Quote
Lots of people moaning, but the intelligent large-scale investor, your fat cats, just see this as a buying opportunity and they will continue to inject oil into the engine.
Now if the "fundamentals of the economy" were weak, the private sector would begin to build walls to protect their capital, and we would be in a crisis.
From Bloomberg today: (//%22http://www.bloomberg.com/apps/news?pid=20601087&sid=aO1crPsEJ9MA&refer=home%22)
"Money-Market Rate Jumps, TED Spread Soars on Credit Squeeze
By Gavin Finch and Kim-Mai Cutler
Sept. 17 (Bloomberg) -- The cost of borrowing in dollars for three months jumped the most since 1999 as banks hoarded cash amid concern more financial institutions will fail.
The London interbank offered rate, or Libor, rose 19 basis points to 3.06 percent, the British Bankers' Association said today. The increase is the biggest since Sept. 29, 1999, during the run-up to the new millennium. The difference between what banks and the Treasury pay to borrow, the so-called TED spread, widened 64 basis points to 283 basis points. That's the biggest spread since Oct. 20, 1987, when stocks collapsed around the world on what became known as Black Monday.
[snip]
``Everybody is worrying about which bank is going to go bankrupt next,'' said Ronald Tharun, a money-market trader in Stuttgart at Landesbank Baden-Wuerttemberg, Germany's biggest state-owned bank. ``There's almost nothing being traded in the money markets. Nobody trusts anyone else.''
[snip]
"The Fed added $70 billion in temporary reserves yesterday, while the European Central Bank offered 70 billion euros ($100 billion) in a one-day refinancing operation. The Bank of England injected 20 billion pounds ($36 billion), the Bank of Japan added 2.5 trillion yen ($24 billion) and the Reserve Bank of Australia injected A$1.85 billion ($1.5 billion)."
This is just one article of a brazillion that have come out since the Fed opened its discount credit window to all comers. Essentially, private funding has done the exact opposite of what you're suggesting, Gaspar. It's completely dried up. Banks are hoarding capital because they don't have reserves to cover the vastness of their bad loans. That's why you're seeing central banks around the world injecting "liquidity" (ie. cash) into the banking system. The large scale private investor is scared ****less, in other words, and hiding under the kitchen table.
When the Federal Reserve is having a liquidity crunch and is borrowing money to shore up banks and AIG, it's no exaggeration to say that we are in very scary times.
http://www.tulsaworld.com/news/article.aspx?articleID=20080917_13_WASH373124
quote:
Originally posted by swake
When the Federal Reserve is having a liquidity crunch and is borrowing money to shore up banks and AIG, it's no exaggeration to say that we are in very scary times.
http://www.tulsaworld.com/news/article.aspx?articleID=20080917_13_WASH373124
According to the article:
Notes have a 35-day maturation.
"Treasury officials said the action did not mean that the Fed was running short of resources but simply was a way for the government to better manage its financing needs."
Quit trying to frighten the simple-minded, Swake. [;)]
quote:
Originally posted by Gaspar
quote:
Originally posted by rwarn17588
quote:
Originally posted by Gaspar
quote:
Originally posted by rwarn17588
quote:
Originally posted by Gaspar
Quote
GDP up. GNP up. CPI down (actually going down another .1 % today). Consumer spending up. Mortgage refinance index up 15.4% Wow! Housing starts jump 1.6% announced today. Target futures on oil are at $88 a barrel (unrelated but I'm happy about it none the less, gonna buy some options).
Gaspar, I don't think even the biggest optimist is delusional enough to be doing cartwheels over the current economy.
There have been just too many shocks to the system in a short time. The housing bust, doubled inflation, staggeringly high oil prices, rising unemployment and now a slew of financial houses teetering on collapse. About the only reason the GNP was in positive territory in the third quarter was the stimulus checks.
Yes, the U.S. economy is resilient. But no economy stands strong when it keeps absorbing massive body blows. You don't stand strong; you grab onto the ropes and hold on for dear life until the crisis passes.
That's not what this thread is about. This thread is about the "fundamentals of our economy" as indicated in the title. I agree that there are some very unfortunate economic occurrences that have slowed growth. But the fundamentals are still healthy and growth is still positive.
Fair enough.
However, the recent developments about AIG would make one question the fundamentals.
If AIG -- one company -- going belly-up would result in economic Armageddon, doesn't that call into question the true strength and fundamentals of the economy?
Should a economy with supposedly strong fundamentals have its fate that crucially tied to one insurance firm?
Or is the gloom and doom about letting AIG perish just hyperbole to satisfy a few Wall Street fatcats?
Again, these questions aren't rhetoric. I'm genuinely curious about your response.
Don't fall for media hype. A % of the market is speculators and they will indeed be hurt. The fate of the market is not tied to any one company. The federal government takes action to soften the blow (though I don't agree with that). But it looks like the private sector will mount a defense first (and far far more effectively).
I'm not speaking from hype. I'm speaking as an investor. I learned many years ago the principle of "specific stock risk." In other words, keep your investments widely diversified among many stocks, so that if a company goes belly-up, the hurt to your portfolio doesn't hurt as much.
The same should hold true to the U.S. economy. But I find it deeply troubling that one corporation would hold so much sway over the markets that the Fed would need to step in. I can draw no other conclusion that parts of the U.S. economy -- particularly the financial sector -- aren't diversified enough and are in too few hands.
Which leads a second primary reason why antitrust laws were created, I'd say.
Investment banks and insurance companies aren't like other businesses. A single company fails or even when an entire industry is troubled isn't that big of a deal. But these companies are different. Investment banks don't "do" anything, they invest their and other peoples money in lots of things. Insurance companies are very similar. They really make most of their money investing customer's premiums, they are largely investment banks themselves.
The issues with these companies reveal very large issues in the economy as a whole because they represent the economy as a whole in the form of what these companies are invested in. That's why they are important. These companies are taking a beating in the bond markets but they are so huge it's now killing the stock market too. No private banks bailed out AIG, it took the Federal Reserve, no private entities would touch them.
Now they, and others, are going to sell themselves off at fire sale prices further depressing the worth of the bits and pieces of the economy that they own. The sale of assets that is coming to try to meet these loan payments or to justify mergers is going to devalue a huge range economic sectors further depressing the stock market. Too many sellers and too few buyers. With the bond market still in bad shape maybe people will put their money into the bank. That would be a good thing as that would drive up the savings rate and stabilize local deposit based banks that have been hurt by the mortgage crisis and remove some of the pressure off of the Fed now that it's in the investment bank rescue business.
quote:
Originally posted by swake
Investment banks and insurance companies aren't like other businesses. A single company fails or even when an entire industry is troubled isn't that big of a deal. But these companies are different. Investment banks don't "do" anything, they invest their and other peoples money in lots of things. Insurance companies are very similar. They really make most of their money investing customer's premiums, they are largely investment banks themselves.
The issues with these companies reveal very large issues in the economy as a whole because they represent the economy as a whole in the form of what these companies are invested in. That's why they are important. These companies are taking a beating in the bond markets but they are so huge it's now killing the stock market too. No private banks bailed out AIG, it took the Federal Reserve, no private entities would touch them.
Now they, and others, are going to sell themselves off at fire sale prices further depressing the worth of the bits and pieces of the economy that they own. The sale of assets that is coming to try to meet these loan payments or to justify mergers is going to devalue a huge range economic sectors further depressing the stock market. Too many sellers and too few buyers. With the bond market still in bad shape maybe people will put their money into the bank. That would be a good thing as that would drive up the savings rate and stabilize local deposit based banks that have been hurt by the mortgage crisis and remove some of the pressure off of the Fed now that it's in the investment bank rescue business.
Pretty good analysis, Swake. Actually, I think the gov't may have been trying to ward off a fire sale of AIG assets by taking this action. Still not sure if that is right or wrong action by the gov't, but you are correct, insurance companies are amongst the largest institutional investors we have in this country.
It will be interesting to hear what shakes out in the coming weeks.
quote:
Originally posted by cmatt1
quote:
Stop right there! I'm not saying that Obama supporters are stupid, I'm just saying that his target demographic has other aspects of life that they focus on rather than the intricacies of the american stock market or the economy.
I think you are highly overestimating the public and republicans. I am sure it is around the board on both sides. But I have flat tax republicans complaining its wrong that if they make 78,849 they have to pay 25% and if they make 78,851 they pay 28% so they make less money! I seriously doubt much of anybody knows what the hell is going on. In fact, I would say that if we had another party in power they would swap sides whoever claimed the economy was strong. I mean the worst the economy ever was was when Clinton was in power. At least thats what I hear from some people.
???I am not really following you, but you do understand that under our tax code, you only pay the higher bracket on the amount of income that exceeds the cut off levels? In other words, someone who makes 78,851 would pay 25% taxes on 78,849, and 28% on the remaining 2 dollars (I am assuming that your cut off levels are correct--I don't know what they are). You don't suddenly pay 28% on all of your income.
I think you are talking to some very biased people about the economy under Clinton.
For those who claim that the fundamentals are strong and that McCain was correct in saying it, then please explain why your candidate is backpedaling? Why is he "clarifying" that he meant the American worker when he said fundamentals--why didn't he just say American worker? American worker vs. fundamentals, not something that I use interchangeably. But what do I know--I am just a fundamental.
quote:
Originally posted by pmcalk
For those who claim that the fundamentals are strong and that McCain was correct in saying it, then please explain why your candidate is backpedaling? Why is he "clarifying" that he meant the American worker when he said fundamentals--why didn't he just say American worker? American worker vs. fundamentals, not something that I use interchangeably. But what do I know--I am just a fundamental.
Because he's old, he's addled, he's angry, and Obama is a silver-tongued devil, that's why.
Why haven't you been answering questions raised about Obama being gilded by AIG, Fannie Mae and Freddie Mac?
Second-highest benefactor, that Obama is. Few other questions raised about him you don't seem prepared to answer. Just keep throwing darts and McCain and Palin, it will take the focus off your flawed candidate, and sleazy old DC politician he picked for a running mate. Talk about not vetting the veep...sheesh.
We've lost over a trillion dollars of our economy in three days ..... but vote for our souless old stupid white guy because he says that the economy is sound.
White House scraps press coverage of Bush meeting
http://www.boston.com/news/nation/washington/articles/2008/09/16/white_house_scraps_press_coverage_of_bush_meeting/?rss_id=Boston.com+--+National+news
WASHINGTON—With Wall Street in turmoil, the White House has canceled any press coverage of President Bush's meeting with his chief advisory group on the reeling financial markets.
Bush was scheduled to make a statement Tuesday to a pool of White House reporters after huddling with his financial working group. That won't happen now.
Spokesman Tony Fratto says the White House decided it would be best to limit public comment about markets.
The meeting went on as planned. The group is led by Treasury Secretary Henry Paulson and includes Federal Reserve Chairman Ben Bernanke and the chairpersons of the Securities and Exchange Commission and the Commodity Futures Trading Commission."
It probably went something like this: "Hell, those middle-classers are really taking it in the rear, aren't they. Well, you guys go out there and steal as much as you can before it all comes crumbling down. The Fed will bail all of you out with taxpayer money."
Off the record, the official white house source said their only comment about the economy was "oh sheett!".
quote:
Originally posted by FOTD
We've lost over a trillion dollars of our economy in three days ..... but vote for our souless old stupid white guy because he says that the economy is sound.
White House scraps press coverage of Bush meeting
http://www.boston.com/news/nation/washington/articles/2008/09/16/white_house_scraps_press_coverage_of_bush_meeting/?rss_id=Boston.com+--+National+news
WASHINGTON—With Wall Street in turmoil, the White House has canceled any press coverage of President Bush's meeting with his chief advisory group on the reeling financial markets.
Bush was scheduled to make a statement Tuesday to a pool of White House reporters after huddling with his financial working group. That won't happen now.
Spokesman Tony Fratto says the White House decided it would be best to limit public comment about markets.
The meeting went on as planned. The group is led by Treasury Secretary Henry Paulson and includes Federal Reserve Chairman Ben Bernanke and the chairpersons of the Securities and Exchange Commission and the Commodity Futures Trading Commission."
It probably went something like this: "Hell, those middle-classers are really taking it in the rear, aren't they. Well, you guys go out there and steal as much as you can before it all comes crumbling down. The Fed will bail all of you out with taxpayer money."
Off the record, the official white house source said their only comment about the economy was "oh sheett!".
Sounds like the ole 'nothing to see here, move along' defense.
If it wasn't so typical of this administration, I'd say unbelieveable.
quote:
Originally posted by Conan71
If a business owner is flush with cash...
i was flush with cash until three days ago...
despite being broadly diversified with the most "ideal portfolio" and "safest bet for your age"...
i lost 35% of my net worth... ouch...
looks like ten more years until i retire...
but everything is rainbows and tomorrow is a new day :P
oh well, call me a vindictive SOB but i'm going to take it out on the boys in charge...
I lost 25%. I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.
There needs to be a thorough investigation into who Fannie, Freddie, and AIG have had in their pockets. Oh wait, we already know.
&.
The administration's decision to bail out AIG is foolish, not to mention illegal. I don't care if it helps to soften the blow, it has far reaching consequences that we will see within the next few weeks as other companies crater, and request that the government bail them out. Then there will be the litigation. Oh, the litigation.
quote:
Originally posted by Gaspar
I lost 25%. I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.
You keep saying this but I have no idea what you mean. Who forced whom to lend to who again?
quote:
Originally posted by we vs us
quote:
Originally posted by Gaspar
I lost 25%. I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.
You keep saying this but I have no idea what you mean. Who forced whom to lend to who again?
Once upon a time. . .
Fanny and Freddy give Johnny who works at McDonalds a mortgage for a $200,000 house. Now there is no way that Johnny could afford a mortgage of any size but because Johnny meets all of the criteria set forth by the Fanny and Freddy to grant loans to those who can't afford them they sign the papers and smile and shake.
You see Freddy and Fanny are going to package Johnny's mortgage and exchange it for a government security. Now if johnny has a college education and a good job, but still has no cash. Fanny and Freddy are going to package Johnny's mortgage into a bond and sell it for profit, and they are actually going to market it that way. What they are NOT going to market is the fact that Johnny has never proven any track record of paying debt on even the basic rudimentary level. In fact Johnny has racked up quite a credit card debt, and as soon as he is granted this mortgage, he is going to be showered with more credit offers.
Now why can Freddy and Fanny operate this way and other banks usually will not shoulder the risk?
Because TA-DA Fanny and Freddy Bonds are guaranteed by the good folks at the federal government. Fanny's and Freddy's operations are regulated and subject to congressional oversight (oxymoron the term congressional oversight, like getting a wolverine to watch your baby).
The End (no really The End)
You don't lose anything if you don't sell.....Big deal ya lost some dough on paper....
quote:
Originally posted by Breadburner
You don't lose anything if you don't sell.....Big deal ya lost some dough on paper....
Correct, and I don't intend to sell for a long long time.
quote:
Originally posted by we vs us
quote:
Originally posted by Gaspar
I lost 25%. I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.
You keep saying this but I have no idea what you mean. Who forced whom to lend to who again?
Good insight.
Anybody know the % of those $0 down bad loans that are for second and third vacation homes? It has been implied on Fox and CNBC that many of those loans to wealthy folks are among the ones packaged in with Johnny from McDonalds. Not only their ability to pay but the valuation of the properties is in question. They are walking off from their debt as well.
And every channel of news that I watch across the political spectrum considers the lack of oversight of regulators to be paramount in the failures.
I feel vindicated, since I'm just one of the simpletons.
"In general, the art of government consists of taking as much money as possible from one class of citizens to give to another."
Voltaire
Otherwise known as: Republicanism
quote:
Originally posted by Gaspar
quote:
Originally posted by we vs us
quote:
Originally posted by Gaspar
I lost 25%. I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.
You keep saying this but I have no idea what you mean. Who forced whom to lend to who again?
Once upon a time. . .
Fanny and Freddy give Johnny who works at McDonalds a mortgage for a $200,000 house. Now there is no way that Johnny could afford a mortgage of any size but because Johnny meets all of the criteria set forth by the Fanny and Freddy to grant loans to those who can't afford them they sign the papers and smile and shake.
You see Freddy and Fanny are going to package Johnny's mortgage and exchange it for a government security. Now if johnny has a college education and a good job, but still has no cash. Fanny and Freddy are going to package Johnny's mortgage into a bond and sell it for profit, and they are actually going to market it that way. What they are NOT going to market is the fact that Johnny has never proven any track record of paying debt on even the basic rudimentary level. In fact Johnny has racked up quite a credit card debt, and as soon as he is granted this mortgage, he is going to be showered with more credit offers.
Now why can Freddy and Fanny operate this way and other banks usually will not shoulder the risk?
Because TA-DA Fanny and Freddy Bonds are guaranteed by the good folks at the federal government. Fanny's and Freddy's operations are regulated and subject to congressional oversight (oxymoron the term congressional oversight, like getting a wolverine to watch your baby).
The End (no really The End)
I think you conveniently left out a step or two. F and F buy loans that are already made, securitize them, and sell them off to the Lehmans of the world. They don't make the loans themselves. Companies like Countrywide (RIP) originated the dumb loans to Johnny who worked at McDonald's, F and F just helped that dumb mortgage and hundreds of thousands like them to become the CDOs that are exploding in the basements of all the major investment houses around the world.
I see that you're trying kinda of desperately to peg this on government regulations, or a Democratic congress, or HUD, or Clinton, anyone that isn't private business or a Republican, but it just isn't gonna happen. Private business went after these awful mortgages with gusto; they demanded them as much as any individual homeowner did. Republican led government turned a blind eye to an entirely new and entirely unregulated form of security market (the CDO market)into which several $T were pumped over the last decade or so. Before that, the market didn't even exist.
But if there's another way you can pin this on somebody other than a Republican administration or the financial industry, I'd love to see you work it.
"Blessed are the young for they shall inherit the national debt."
Herbert Hoover
quote:
Originally posted by Gaspar
.
The administration's decision to bail out AIG is foolish, not to mention illegal.
Illegal? How?
And, if so, why don't you call the cops?
quote:
Originally posted by brunoflipper
quote:
Originally posted by Conan71
If a business owner is flush with cash...
i was flush with cash until three days ago...
despite being broadly diversified with the most "ideal portfolio" and "safest bet for your age"...
i lost 35% of my net worth... ouch...
looks like ten more years until i retire...
but everything is rainbows and tomorrow is a new day :P
oh well, call me a vindictive SOB but i'm going to take it out on the boys in charge...
Your cash didn't evaporate unless you spent it. Not the first time in the last two decades people have lost 35% of their net worth. Many people did worse in the dot bomb bubble. Don't sell and you've lost nothing.
quote:
Originally posted by we vs us
quote:
Originally posted by Gaspar
quote:
Originally posted by we vs us
quote:
Originally posted by Gaspar
I lost 25%. I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.
You keep saying this but I have no idea what you mean. Who forced whom to lend to who again?
Once upon a time. . .
Fanny and Freddy give Johnny who works at McDonalds a mortgage for a $200,000 house. Now there is no way that Johnny could afford a mortgage of any size but because Johnny meets all of the criteria set forth by the Fanny and Freddy to grant loans to those who can't afford them they sign the papers and smile and shake.
You see Freddy and Fanny are going to package Johnny's mortgage and exchange it for a government security. Now if johnny has a college education and a good job, but still has no cash. Fanny and Freddy are going to package Johnny's mortgage into a bond and sell it for profit, and they are actually going to market it that way. What they are NOT going to market is the fact that Johnny has never proven any track record of paying debt on even the basic rudimentary level. In fact Johnny has racked up quite a credit card debt, and as soon as he is granted this mortgage, he is going to be showered with more credit offers.
Now why can Freddy and Fanny operate this way and other banks usually will not shoulder the risk?
Because TA-DA Fanny and Freddy Bonds are guaranteed by the good folks at the federal government. Fanny's and Freddy's operations are regulated and subject to congressional oversight (oxymoron the term congressional oversight, like getting a wolverine to watch your baby).
The End (no really The End)
I think you conveniently left out a step or two. F and F buy loans that are already made, securitize them, and sell them off to the Lehmans of the world. They don't make the loans themselves. Companies like Countrywide (RIP) originated the dumb loans to Johnny who worked at McDonald's, F and F just helped that dumb mortgage and hundreds of thousands like them to become the CDOs that are exploding in the basements of all the major investment houses around the world.
I see that you're trying kinda of desperately to peg this on government regulations, or a Democratic congress, or HUD, or Clinton, anyone that isn't private business or a Republican, but it just isn't gonna happen. Private business went after these awful mortgages with gusto; they demanded them as much as any individual homeowner did. Republican led government turned a blind eye to an entirely new and entirely unregulated form of security market (the CDO market)into which several $T were pumped over the last decade or so. Before that, the market didn't even exist.
But if there's another way you can pin this on somebody other than a Republican administration or the financial industry, I'd love to see you work it.
Oops! I set that little trap well. Hoping someone would fall in.
You see Once upon a time there was this piece of legislation called the Community Reinvestment Act. It re-energized F&F to the tune of your Trillions of dollars worth of loans.
Lets see what that bill was? Oh yeah.
It was nice and friendly back in 1977 when it was passed, but then came the horny ogre and the evil witch.
The Clinton Administration's regulatory revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.The market was suddenly heavy on junk loans and realistic lending became a thing of the past.
The End.
P.S. there are two more traps here.
A tip for the unsuspecting. Don't ask for a source.
Also don't press him on the resulting benefits of the change in lending practices/policies during that time, their genesis and their tacit approval by Republican dominated congress starting in 1994. Finally, don't even imply that it was a Republican congress and administration during the last 8 years that kept rubber stamping the whole process because it so benefitted their base. Its the new Republicanism applied to oversight: Don't Ask, Don't Look, Don't Listen and Damn Sure Don't Take Responsibility.
quote:
Originally posted by waterboy
A tip for the unsuspecting. Don't ask for a source.
Also don't press him on the resulting benefits of the change in lending practices/policies during that time, their genesis and their tacit approval by Republican dominated congress starting in 1994. Finally, don't even imply that it was a Republican congress and administration during the last 8 years that kept rubber stamping the whole process because it so benefitted their base. Its the new Republicanism applied to oversight: Don't Ask, Don't Look, Don't Listen and Damn Sure Don't Take Responsibility.
Waterboy, "passed buck" thinking is sinking this nation.
It's not a GOP or DEM issue near as much as a culture of corruption and special interests in DC. As long as we allow the chairman of our Senate Banking Committee to accept money from the companies and industries he is charged with "regulating" we are going to reap what we sow. If it were still a GOP majority, I'd say the same exact thing. This stinks. Dodd is sitting around blaming the Bush admin. The Admin is blaming Congress. In this election season, no one wants to lay the blame on greed and corruption which is the real truth of the matter.
As I predicted after the changing of the guard in 2006, and so many of the Democrats on here were squealing about Abramoff and big contributions going to GOP members, the tide of contributions would shift to the majority party in the Senate and HOR. They did.
Democrats were going to stem corruption and reverse all the havoc wrought by the GOP the previous 12 years.
Remember Pelosi's "First 100 hours".
Chirp...chirp....
Business as usual in DC. Nothing has changed just the party label in charge. Different players, same corrupt patterns.
quote:
Originally posted by Gaspar
Oops! I set that little trap well. Hoping someone would fall in.
You see Once upon a time there was this piece of legislation called the Community Reinvestment Act. It re-energized F&F to the tune of your Trillions of dollars worth of loans.
Lets see what that bill was? Oh yeah.
It was nice and friendly back in 1977 when it was passed, but then came the horny ogre and the evil witch.
The Clinton Administration's regulatory revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.
The market was suddenly heavy on junk loans and realistic lending became a thing of the past.
The End.
P.S. there are two more traps here.
I love the way you have conversations with people, Gassy. Setting rhetorical traps is a really effective way to, you know, win friends and influence people. It also increases in general the civility of the discussion, wouldn't you agree?
But I did find an interesting article (//%22http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626_pf.html%22) in the Washington Post from January of this year that does in fact trace HUD's involvement in encouraging low and moderate income loans from Clinton establishing the initiative in '95
quote:
Since HUD became their regulator in 1992, Fannie and Freddie each year are supposed to buy a portion of "affordable" mortgages made to underserved borrowers. Every four years, HUD reviews the goals to adapt to market changes.
In 1995, President Bill Clinton's HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The idea was that subprime lending benefited many borrowers who did not qualify for conventional loans. HUD expected that Freddie and Fannie would impose their high lending standards on subprime lenders.
However, by 2000, " . . . as HUD revisited its affordable-housing goals, the housing market had shifted."
quote:
With escalating home prices, subprime loans were more popular. Consumer advocates warned that lenders were trapping borrowers with low "teaser" interest rates and ignoring borrowers' qualifications.
HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay. Freddie and Fannie adopted policies not to buy some high-cost loans.
The problems start to mount, and even as early as 2001, HUD's own researchers start to warn the incoming Bush administration about high foreclosure rates among subprime loans.
quote:
But by 2004, when HUD next revised the goals, Freddie and Fannie's purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.
That year, President Bush's HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and "must do more."
For Wall Street, high profits could be made from securities backed by subprime loans. Fannie and Freddie targeted the least-risky loans. Still, their purchases provided more cash for a larger subprime market.
"That was a huge, huge mistake," said Patricia McCoy, who teaches securities law at the University of Connecticut.
"That just pumped more capital into a very unregulated market that has turned out to be a disaster."
Though if we're talking mea culpas, it's worth noting that at least Clinton's guys can admit mistakes with hindsight, and shoulder some of the blame:
quote:
William C. Apgar Jr., who was an assistant HUD secretary under Clinton, said he regrets allowing the companies to count subprime securities as affordable.
"It was a mistake," he said. "In hindsight, I would have done it differently."
Allen Fishbein, who was Apgar's adviser at HUD and is now at the Consumer Federation of America, said the agency failed to use its regulatory power by refusing to credit Fannie and Freddie for loans that were "contrary to good lending practices."
"They chose not to put the brakes on this dangerous lending when they could have," Fishbein said.
And Gassy, I could care less about your other traps. And neither could he.
(http://www.terminally-incoherent.com/blog/wp-content/uploads/2008/03/ackbar.jpg)
quote:
Originally posted by Conan71
quote:
Originally posted by waterboy
A tip for the unsuspecting. Don't ask for a source.
Also don't press him on the resulting benefits of the change in lending practices/policies during that time, their genesis and their tacit approval by Republican dominated congress starting in 1994. Finally, don't even imply that it was a Republican congress and administration during the last 8 years that kept rubber stamping the whole process because it so benefitted their base. Its the new Republicanism applied to oversight: Don't Ask, Don't Look, Don't Listen and Damn Sure Don't Take Responsibility.
Waterboy, "passed buck" thinking is sinking this nation.
It's not a GOP or DEM issue near as much as a culture of corruption and special interests in DC. As long as we allow the chairman of our Senate Banking Committee to accept money from the companies and industries he is charged with "regulating" we are going to reap what we sow. If it were still a GOP majority, I'd say the same exact thing. This stinks. Dodd is sitting around blaming the Bush admin. The Admin is blaming Congress. In this election season, no one wants to lay the blame on greed and corruption which is the real truth of the matter.
As I predicted after the changing of the guard in 2006, and so many of the Democrats on here were squealing about Abramoff and big contributions going to GOP members, the tide of contributions would shift to the majority party in the Senate and HOR. They did.
Democrats were going to stem corruption and reverse all the havoc wrought by the GOP the previous 12 years.
Remember Pelosi's "First 100 hours".
Chirp...chirp....
Business as usual in DC. Nothing has changed just the party label in charge. Different players, same corrupt patterns.
If we're bipartisaning here, have any GOPers you'd like tossed out, too? You're focused in like a laser on guys who've had power for the last two years, or who had power almost a decade ago. Surely somewhere in the last 8 years -- as this problem was hitting critical mass -- someone let their hand drift from the the wheel . . .?
You are correct in your statement
quote:
The problems start to mount, and even as early as 2001, HUD's own researchers start to warn the incoming Bush administration about high foreclosure rates among subprime loans.
You are also correct that action should have been taken earlier, and the Bush administration is guilty for waiting until it was too late.
There was however an attempt to take action in 2005/2006 that fell on the deaf ears of Congress.
I believe that this was the speech that some sick old white guy gave to congress in 2006:
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 believe that Barney's (not the dinosaur) response was that there was nothing wrong with Freddy or Fanny, and Pelosi and Reed supported this stance.
Congressional record is a beyotch.
Good news Bruno. You don't have to work another 10 years.
Retirement party back on.