Banking Crisis

[Gekko71]

Watch it all just go away.

Oh Lord - why do I bother?

[TheCope]

Watch it all just go away.

Oh Lord - why do I bother?

Remember the S&L scandal? Yea... it just went away.

In the western world our whole lifestyle is on the back of others. You know it. Watch it all just go away.

[Gekko71]

Watch it all just go away.

Oh Lord - why do I bother?

Remember the S&L scandal? Yea... it just went away.

In the western world our whole lifestyle is on the back of others. You know it. Watch it all just go away.

Sorry TheCope, but I don't agree. The S&L scandal (from memory) was isolated to the US. This recent event however has deleted trillions from US, Australian, UK, Canadian, New Zealand, Russian, Japanese, Chinese and Korean stock exchanges - just to name a few. The only thing that's definitely gone away here are people's retirement savings.

I also think if you track down investors who lost money in the S&L debacle and ask them, the repercussions of those events have FAR from gone away too.

And thirdly, please don't make sweeping generalisations on behalf of the entire western world. Your country may well make money on the backs of others (I wouldn't know, I don't live there), but you're in no position to say that of mine.

[Cuda68]

Watch it all just go away.

Oh Lord - why do I bother?

When it comes to him I was wondering the same thing.

[Sergeant Thorne]

Watch it all just go away.

There's a good possibility that TheCope's rather shallow assessment of the situation is right, actually. If it isn't then we're in for another depression (I daresay the government is buying their way out of this depression, on credit... we'll see how that turns out), but if it is then you can be sure that it only takes us deeper into the compromised governmental and economic system we're in. I think the more discerning of us will look back and wonder where our great country went (no one will tell you it went anywhere), and the answer will be that it went to the top single-digit percent--businessmen and idealists who may or may not also be politicians--who changed it to suit their purposes. The rest of us will be stuck behind all of the checks and restrictions that keep this enormous house of cards from falling. It's freedom in the sense that you can go anywhere, but what comfort is freedom when we've got all of these weights attached to us?

What is it that makes people everywhere consciously and unconsciously shy away from unpopular extremes, with little regard for the truth of them?

[Spidey]

“There's a saying / truism in my country - whenever the US markets sneeze, the Australian markets catch a cold. Recent increases in trade with China will insulate Aust. to some extent - but there's still a lot of pain to go round yet.”


Watch out Gekko. There are a lot worst virions coming out of that part of the world.

[Tunnelcat]

It’s ironic but, the other night on the News Hour they pointed out that the lightly regulated hedge funds are doing ok, the highly regulated investment banks are taking a hit and the most regulated Fannie & Freddie are doing the worse.

So why do you think that is? Maybe because they get to dump all their really bad mortgage investments into Uncle Sam's lap with this bailout? Maybe because they weren't bound by the same rules as other investors or banks? Fannie and Freddie had to play by the rules while the Hedge Funds and other derivative speculators got to gamble and steal for massive profits. (The U.S. funds, not foreign ones. They get hosed in the bailout.) Hmmmmmm. Out of our pockets and into theirs. Trickle UP economics! This all blew up because of an uneven playing field between the teams, cheating and massive greed. By the way, it's the MORTGAGE BANKS fault for lending to noncredit worthy people. They didn't perform their due diligence when lending the money in the first place! You don't lend money to people that want to buy a house that have LITTLE OR NO MONEY! STUPID IDIOTS!

I don't think Obama wants to really go down the road of who's connected to the failed institutions because his own glass house is far from stone proof.
He's been in the congress for around one twentieth the time McCain has yet he's received that many times more the contributions from those failed institutions as McCain has...he also had at least one of the top executives from Fannie Mae running his campaign so the pot is calling the kettle black....Oh Dear!!! According to Obama and Newsweek I just made a racist comment didn't I?!?

You claim Obama has Franklin Raines from Fannie Mae? Not quite true. He's never even been on Obama's team, unlike Phil Gramm, who WAS on McCain's team and MAYBE still is. He is McCain's good friend.

http://www.washingtonpost.com/wp-dyn/co ... 03604.html

Let's see, McCain's been in Washington for 26 years, 20 of them in the Senate and Obama's been in Washington for 4 years. Who's had more time to schmooze with the lobbyist culture in Washington and get tainted? Who has more connections to lobbyists now? Could it be ... aaaaaaah ..... McCain?

Whether we as a nation like it or not, racism is going play a major role in this election, especially among white male voters. Even if people are asked whether they think race plays an important role when polled about it, VERY few people will have the balls to admit they are racist. Personally, I hope the intelligent and educated African American wins over the senile old White American for once.

[TechPro]

Let's see, McCain's been in Washington for 26 years, 20 of them in the Senate and Obama's been in Washington for 4 years. Who's had more time to schmooze with the lobbyist culture in Washington and get tainted? Who has more connections to lobbyists now? Could it be ... aaaaaaah ..... McCain?

Actually ... the correct may be very well be Joe Biden. (but I don't know for sure)

[dissent]

So why do you think that is? Maybe because they get to dump all their really bad mortgage investments into Uncle Sam's lap with this bailout?

well, since Uncle Sam's lap is our (American taxpayers) lap ... .

Maybe because they weren't bound by the same rules as other investors or banks? Fannie and Freddie had to play by the rules while the Hedge Funds and other derivative speculators got to gamble and steal for massive profits. (The U.S. funds, not foreign ones. They get hosed in the bailout.) Hmmmmmm. Out of our pockets and into theirs. Trickle UP economics! This all blew up because of an uneven playing field between the teams, cheating and massive greed. By the way, it's the MORTGAGE BANKS fault for lending to noncredit worthy people. They didn't perform their due diligence when lending the money in the first place! You don't lend money to people that want to buy a house that have LITTLE OR NO MONEY!

If you want to make a case that this whole mess is due cheating and simple greed, then make it. I think this whole issue is a far more complex problem than you are admitting.
Maybe they weren't bound by the same rules ...? Well, were they or weren't they; and let's be clear about who the "they" is. At least part of the problem at Fannie Mae was due to their own management malfeasance; for example this from a 2006 investigation. There's plenty more on Fannie and Freddie's cooking of the books to be found on the interweb, and I'm sure there will be more in the coming days.

There was an interesting discussion today on Bob Brinker's Moneytalk program, where Brinker got up on a soapbox about the 2007 repeal of the uptick rule. Read some of the links there, and also this IBD article. It seems clear that there were lapses at these instiutions, at the regulatory agencies, and in the Congress.

Quite frankly, I'm more worried right now that the Congress will try to overcorrect for their share of the problem and blunder into the china shop waving a large, heavy regulatory club. What's needed is a steady hand on the tiller and the wisdom to steer the ship in the right direction. If regulatory overcompensation results in a contraction of money and credit to the markets, then we're in for a lot of trouble.

STUPID IDIOTS!

You'll get no argument from me there.

Whether we as a nation like it or not, racism is going play a major role in this election, especially among white male voters. Even if people are asked whether they think race plays an important role when polled about it, VERY few people will have the balls to admit they are racist. Personally, I hope the intelligent and educated African American wins over the senile old White American for once.

wow. racism and ageism. a twofer!!
And I thought this election was going to be about issues. Thanks, Barack!

[Will Robinson]

You claim Obama has Franklin Raines from Fannie Mae? Not quite true. He's never even been on Obama's team,....

No, actually I was thinking of Jim Johnson who was on Obama's campaign staff but had to quit when the legal trouble popped up for his making millions off of Fannie Mae. As far as Raines goes he told a reporter he has taken phone calls from Obama answering questions for him on mortgage and finance issues...Raines took something like 74 million out of Fannie Mae and had to surrender 25 million in fines for his part in the scam...
So you can repeat the mantra that Raines isn't on Obamas staff and don't let it bother you that Obama is calling that crook who helped trash the economy and mortgage finance machine in america for unofficial advice, if that's what it takes to keep you convinced Obama is free and clear of any connection

Let's see, McCain's been in Washington for 26 years, 20 of them in the Senate and Obama's been in Washington for 4 years. Who's had more time to schmooze with the lobbyist culture in Washington and get tainted?...

Well I thought I already mentioned this but perhaps you just went off on knee-jerk-auto-defense mode without really reading what I said. Yes, McCain may have had more exposure to the potential corruption but Obama, in spite of only being there for a few years compared to McCains 20 plus years has taken 20 times more money from Fannie Mae that McCain has!

On a larger scale Obama leads McCain in taking the money from all financial and investment industry sources. See it here - Overall, the securities and investment industry has contributed about $10 million to Obama and $7 million to McCain.

Like I said, Obama doesn't want to go down this road...at least not in the light of day. He's been much less willing to answer requests for records on who is giving him the money than McCain has - Obama ignores requests for details

Basically the Obama friendly press report him having taken less by using only the figures he is willing to disclose! Nothing like having a national press corp on your team to cover your tracks!!

By the way, didn't the democrats and Clinton build the sinking ship we're talking about? Jim Johnson, Jaime Ghorelic [sp]

[Lothar]

This recent event however has deleted trillions from US, Australian, UK, Canadian, New Zealand, Russian, Japanese, Chinese and Korean stock exchanges - just to name a few.

"Deleted" is the wrong word. It "exposed" a large amount of imaginary money for being imaginary -- money that was promised to be paid by people who couldn't keep that promise.

That imaginary money made its way through a lot of systems, and a lot of people (through no fault of their own) are seeing their imaginary gains disappear. It's not as though any real product was actually destroyed by this process -- it's not like a hurricane wiping out billions of dollars of buildings, equipment, and other property.

That's what you really have to keep in mind. When imaginary money takes a hit, real factories keep working, real productive people keep being productive, and the economy keeps on chugging. There's some adjusting to be done -- people who put too many eggs in an imaginary basket are in trouble, and a lot of people who could've done OK under previously existing finance options now have to make some changes. But there's also a nice opportunity -- those with real money who've been planning to buy a house when the bubble burst will soon have their pick, and banks will be eager to deal with people with real money and real ability to pay it back.

Like Adam said, it'll all go away. The government will put some imaginary money into the system to placate those who care about such things, those who overextended themselves will end up with debt they can only repay in their imaginations, and the rest of us will make the best of it.

The best thing the government can do is create more transparency and accountability, both in terms of loan bundling and ratings, and in terms of monetary policy. The best thing the rest of us can do is not be stupid -- don't take out loans you can't afford, don't give out loans the other party can't afford (even if you're not the one who'll be left holding the bag), and get your friends on board with the "not being stupid" plan.

[Duper]

*cough* gold standard *cough*

[Gekko71]

That imaginary money made its way through a lot of systems, and a lot of people (through no fault of their own) are seeing their imaginary gains disappear. It's not as though any real product was actually destroyed by this process -- it's not like a hurricane wiping out billions of dollars of buildings, equipment, and other property.

The physical infrastructure may remain Lothar, but the business entities that run those buildings/factories (and the business models that made them feasible to run) may not.

It's no longer safe to assume that the organisations that own the infrastructure you speak of are the same ones that run/use them. Many business sectors sold off their manufacturing and property infrastructure years ago and then leased it back to reduce operating and maintenance expenditure.

If the businesses that run / lease those facilities were highly leveraged and borrowed against their cashflow to expand / continue their operations, then they will be vulnerable. As huge numbers of workers are employed via 'imaginary money' then when it vanishes, they will be made redundant. If enough people become redundant and demand for good and services diminishes, then those factories and buildings that are now empty will STAY empty for the forseeable future - as there will not be enough demand to warrant them starting back up again under the control of a new business.

Capacity for production is nothing without demand. I know demand never truly vanishes (except in times of war or natural catastrophy) - it only shifts from one segment to another. But just because there is demand for a product/service, doesn't mean there will a ready supply of product to fill it.

I'm sorry Lothar, I admit I'm no expert, but the only way I can see this problem 'going away' is by taxpayers in the US and other countires 'paying for it to go away'. The US government has already commited themselves to $810 Billion worth of emergency funding (thereby making the world's largest free-market economy a state-managed economy to a greater degree). The primary way they will raise that extra money (I imagine) would be taxing its populace to some degree.

(As a side note if an industry has excess manufacturing capacity worldwide, ant factory that closes is going to stay closed regardless, unless that factory can manufactur goods cheaper than they can in other factories overseas. It then largely boils down to who can supply the labour cheapest - and unfortunately I don't think that's going to be the US)

[Sergeant Thorne]

Where's the dropping value of the dollar in all of that, Lothar?

Also, wouldn't I be correct in saying that a lot of big companies are built on \"imaginary money\", and therefor will act as this imaginary problem's extension into the real world? A company goes down, or comes into hard times because of the imaginary money, and their employees start experiencing real layoffs or real pay-cuts.

I suppose our best defense is to have a clear understanding, in our day-to-day lives, of what is real and what is \"imaginary\"--has a basis in \"imaginary money.\" Build our houses on the rock.

(just went back and read Gekko's post after replying to Lothar, and I believe I agree)

[Duper]

the Saudi's did something like this about 10 years ago with bogus stocks. While it works ok and everyone makes money while it IS working. The whole thing is a house of cards. When one goes, it ALL goes and suddenly you find out where the \"real\" bottom is. And they did. big time.

They outlawed false stocks after that. ;D

But of course this is all the President's fault... right?

[Sergeant Thorne]

No, it's George W. Bush's fault, and if you elect me best Descent 3 player of all time I will prosecute him for it, once he's out of office!

[Spidey]

“Whether we as a nation like it or not, racism is going play a major role in this election, especially among white male voters. Even if people are asked whether they think race plays an important role when polled about it, VERY few people will have the balls to admit they are racist. Personally, I hope the intelligent and educated African American wins over the senile old White American for once.”


Well at least that’s one you wont be able to pin on Republicans, if he loses, because Democrats out number Republicans, so if he loses it will be because the racist Democrats didn’t vote for him. And you can’t blame Republicans because they have every right not to vote for him, strictly along political lines.

[Gooberman]

You are correct.

A new study that surveyed racial attitudes suggests that racial prejudices could tip the balance in the upcoming presidential election.

A poll finds a small percentage of voters said they may turn away from Sen. Barack Obama because of his race.

If there were no racial prejudice among voters, Sen. Barack Obama would receive about 6 percentage points more support, according to an AP-Yahoo News poll, designed in partnership with Stanford University.

The results suggest that 40 percent of white Americans hold at least a partly negative view toward blacks, including more than a third of white Democrats and independents. A small percentage of voters -- 2.5 percent of those surveyed -- said they may turn away from Obama because of his race.

A CNN/Opinion Research Corp. survey also indicates that race could play a big role in November. Asked if race would be a factor in their vote, 37 percent of respondents said yes. But of that group, many are Republicans who are not likely to vote for any Democrat, and some are Democrats who may vote for Obama because of his race.

Of the 8 percent of Democrats who told CNN they plan to vote for Obama's GOP rival, Sen. John McCain, half said race was a factor.

So ya, Democrats arn't the more racist ones, but Democrats also don't win elections by large margins. So chances are it would be fair to blame Obama's loss on the few racist democrats and independents then on the racist republicans who wouldn't vote for Obama if he was white.

[dissent]

wrong thread, Goob. Mods?

[Beowulf]

A finance joke...

An entrepreneur walked into a bank in New York City and asked for the loan officer. He needed to borrow $5,000 for two weeks, but he was not a depositor of the bank. The loan officer said that the bank would need some form of security for the loan, so the entrepreneur handed over the keys to a new $250,000 Ferrari out front and they could hold it until the loan was paid off in two weeks. The title was produced and everything checked out, the car was driven into the bank's underground garage and parked, and the loan granted at 12%.
Later, the bank's president and officers all enjoyed a good laugh on the entrepreneur for using a $250,000 Ferrari as collateral for a $5,000 loan.

Two weeks later, the entrepreneur returned, repaid the $5,000 plus interest of $23.07. The loan officer said, “Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is, why would you bother to borrow $5,000?”
The entrepreneur replied: “Where else in New York City can I park my car for two weeks for only $23.07 and expect it to be there when I return?”

[Gekko71]

A finance joke...

An entrepreneur walked into a bank in New York City and asked for the loan officer. He needed to borrow $5,000 for two weeks, but he was not a depositor of the bank. The loan officer said that the bank would need some form of security for the loan, so the entrepreneur handed over the keys to a new $250,000 Ferrari out front and they could hold it until the loan was paid off in two weeks. The title was produced and everything checked out, the car was driven into the bank's underground garage and parked, and the loan granted at 12%.
Later, the bank's president and officers all enjoyed a good laugh on the entrepreneur for using a $250,000 Ferrari as collateral for a $5,000 loan.

Two weeks later, the entrepreneur returned, repaid the $5,000 plus interest of $23.07. The loan officer said, “Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is, why would you bother to borrow $5,000?”
The entrepreneur replied: “Where else in New York City can I park my car for two weeks for only $23.07 and expect it to be there when I return?”

LOL - never heard that one - Thanks Beowulf, I needed a good laugh.

[Gekko71]

“There's a saying / truism in my country - whenever the US markets sneeze, the Australian markets catch a cold. Recent increases in trade with China will insulate Aust. to some extent - but there's still a lot of pain to go round yet.”


Watch out Gekko. There are a lot worst virions coming out of that part of the world.

Too true

[Gooberman]

wrong thread, Goob. Mods?

Read the post above mine.

[Ford Prefect]

Interesting read from someone who is an insider

As someone who owns both an investment bank and commercial banks, and also runs a hedge fund, I have sat front and center and watched as this mess unfolded.

http://www.washingtonpost.com/wp-dyn/co ... 02808.html

[Will Robinson]

At $700,000,000,000 to bail them out they could just divide the money and pass it out to everyone who is a citizen. A family of 4 like mine would take home approximately $10,000 cash.
I think we can weather the storm quite nicely with the return on that compared to how much not bailing them out would cost us.
Bail out gets canceled, market dive, everyone invests their handout in an index fund while it's at the bottom....ten to fifteen years later we will all have made a million off of it.
Just a thought.

[AlphaDoG]

Damn Will, we can't have thoughts that make sense! Are you crazy!

[Tunnelcat]

OK Will, how about Rick Davis and his lobbying efforts?

http://www.nytimes.com/2008/09/22/us/po ... ref=slogin

And yes, I'm allowed to play the ageism card. I'm getting older myself and know what begins to fail as we age. The man is getting OLD and in not so good health. McCain has had too many 'senior moments' lately for my taste. In fact, when Meredeth Viera asked him about capping 'golden parachutes' for CEO's, she specifically asked about Carly Fiorina and her little 'golden parachute' after she was fired from HP. You'll notice that she hasn't been seen in McCain's camp since she made that comment, err slip, that McCain couldn't run a company. She said that about Palin, Obama and Biden too. But McCain must have gotten mad about it and banished her from speaking in his behalf. He is reported to have a nasty temper.

http://thinkprogress.org/2008/09/22/fiorina-mccain-pay/

If he's that clueless about his own staff, what about if and when he becomes President?

To change tack, this $700 billion bailout is sounding more and more like a ripoff scheme of the taxpayers to me. This may be the October Surprise that the Republicans were going to spring right before the election. It also gives WAY too much power and money to one man, Paulson, to decide what to do with, no oversight or input from any other government agency or Congress. King Paulson indeed! He's a little too cozy with Goldman Sachs, he WAS the CEO and used a little known law from George H.W. Bush's term to escape capital gains taxes with his huge bonus when he left to take the job of Treasury Secretary. Notice how they are going to come out just fine in this bailout. I encourage anyone that wants GOOD information about this whole sordid mess buy and read a copy of this week's Business Week Magazine.

If Reid, Pelosi and the rest of the Dems cave into Paulson's terms with this bailout, they will truly be MAJOR WIMPS and COWARDS that don't deserve their positions in Congress and the taxpayers will be effed!

[dissent]

Read the post above mine.

oops. sorry Goob. my bad.

And yes, I'm allowed to play the ageism card. ...

oh, so if you have a race, you're allowed to play the racism card without repercussions as well .........?

[Spidey]

Did I just read the words “October Surprise” Right on cue… (reference in “Opinions Please” post)

[Will Robinson]

to tunnelcat -
Well you completely ignored the Obama connection to two of the guys who took over 100 million as top execs in Fannie Mae and Freddie Mac, and bailed out right before the feces hit the fan and one went to work for Obama on his staff and the other is answering his calls to give him advice on mortgage and finance... and you ignored Obama's amazing ability to take in much more money from the financial giants in his short few years than McCain ever did in all his 20+ years...

But now you want me to worry about Davis who worked as a lobbiest for the industry yet during that time McCain was sponsoring regulation legislation to get the finance industry under the microscope... and his comments to the congress during his work to pass the bill talked about the danger of this very scenario we're now seeing! Doesn't sound to me like Davis was very successful getting McCain to play ball does it?

Why doesn't the media call Obama's bull★■◆● when he tells them McCain is nothing but the same old deregulation guy!
I believe Obama was in the Senate when the democrats in committee killed the bill McCain was trying get to the floor for a vote. What did Obama do about it, I guess he was too busy campaigning...probably didn't even show up for work that month.

Here, from your link:

Asked about the reports of Mr. Davis’s role, a spokesman for Mr. McCain said that during the time when Mr. Davis ran the Homeownership Alliance, the senator had backed legislation to increase oversight of the mortgage companies’ accounting and executive compensation. The legislation, however, did not seek to change their anomalous structure as private companies with federal support.

A lot of balls to try and diminish the importance of trying to pass regulation legislation by saying 'Oh yea well he wanted to make them comply but he didn't want to undo everything we did wrong creating the mess in the first place'...
F@#&, as if the democrats were trying to do anything at all?!? At least McCain can say he was on the right path and warned them about this mess...well he could say it if the media would take their head out of Obama's butt long enough to hear it!

[Lothar]

interesting article. A good, basic summary of the situation we're currently looking at.

[snoopy]

So, how about this new, huge proposed bail-out?

Things seem to be getting worse still...

So, the question of me, as a young non-homeowner is, is now that time to buy, or do I wait for things to settle down more? (My real estate agent was trying to tell me that the market was going to take off again.... and boy do I hope it doesn't.... Normal people can hardly afford homes as it is, after the crash.)

[Will Robinson]

So, how about this new, huge proposed bail-out?

Things seem to be getting worse still...

So, the question of me, as a young non-homeowner is, is now that time to buy, or do I wait for things to settle down more? (My real estate agent was trying to tell me that the market was going to take off again.... and boy do I hope it doesn't.... Normal people can hardly afford homes as it is, after the crash.)

Every region or even neighborhood will have it's own dynamic that drives the local market but I'd guess that over all we won't see a rapid rise anytime soon.

I have our house on the market and am expecting to have to wait many months, the average months on the market is something like 9 or 10 around here.

Now is a good time to buy, the inventory is flooded and interest rates are low. You will have some time, many months, before prices go up.

[Capm]

This was posted to our forums by one of our members, I thought it was a pretty good idea:

The old Bosn has a way

Works for me. What do you think?

Now here's a bail out plan that works!

I'm against the $85,000,000,000.00 bailout of AIG.`

Instead, I'm in favor of giving $85,000,000,000 to America in "We Deserve It Dividend".

To make the math simple, let's assume there are 200,000,000
bona fide U.S. Citizens 18+.

Our population is about 301,000,000 ± counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billion that equals $425,000.00 each.

My plan is to give $425,000 to every person 18+ as a
"We Deserve It Dividend".

Of course, it would NOT be tax free.

So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads

Put away money for college - it'll be there

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs,

Invest in the market - capital drives growth.

Pay for your parent's medical insurance - health care improves.

Remember this is for every adult U S Citizen 18+ including the folks
who lost their jobs at Lehman Brothers and every other company
that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out
a puny $1000.00 ( "vote buy" ) economic incentive that is being proposed
by one of our candidates for President.

If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG - liquidate it.

Sell off its parts.

Let American General go back to being American General.

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can "never work."

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion
"We Deserve It Dividend" more than I do the geniuses at AIG or in
Washington DC .

And remember, this plan only really costs $59.5 Billion because
$25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

You don't want to even hear what I think about the stupid mortgage companies
that loaned out billions of dollars to people who they knew had no way of paying
back the loans, with both sides of the equation interested in one thing...fast money.
But it didn't work, and now we're supposed to bail out those idiots too???

[Will Robinson]

You could just eliminate capital gains tax and the markets would go way up in spite of letting Freddy and Fannie crumble....

*cough*Fair Tax*cough*

[Herculosis]

This was posted to our forums by one of our members, I thought it was a pretty good idea:

The old Bosn has a way
...
Instead, I'm in favor of giving $85,000,000,000 to America in "We Deserve It Dividend".

So divide 200 million adults 18+ into $85 billion that equals $425,000.00 each.

My plan is to give $425,000 to every person 18+ as a
"We Deserve It Dividend".
...

Um, yeah, except for that's not math. 425 DOLLARS per person doesn't quite have the same effect.

[Krom]

Hey its that new math. It's not short by $84,915,000,000,000; it only needs you to put in three more zeros and then it will work, and since we all know zero has no value it won't be any problem no matter how many of them you add in.

[Will Robinson]

Interesting, besides John McCain joining the effort in 2006 to get a stalled bill out of commitee that would have addressed this issue apparantly Bush was telling the congress that Freddie Mac and Fanny Mae were seriously screwed up back in 2003.
And some of the same democrats who are trying to now blame Bush and McCain for this problem were singing a different tune back then -

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

This is the same guy who will no doubt be demanding control of the bail out oversight.

It looks like political correctness, campaign donations and buying votes by pandering to the class envy voters was the motive for democrats to prop up Fannie Mae and Freddie Mac and excuse the horrible accounting fraud perpetrated by their executives. Those executives would forge signatures and generally cook the books in order to trigger payment of their multi million dollar bonuses! Some of those executives are advising Obama today or recently had to leave his campaign when the news of this scandal broke because team Obama knows they are guilty as sin.

Here, from the New York Times

September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON

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

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

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

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.

The administration's proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies' exemptions from taxes and antifraud provisions of federal securities laws.

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.

After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration's proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.

''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing. ''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.

''These irregularities, which have been going on for several years, should have been detected earlier by the regulator,'' he added.

The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.

At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.

Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission.

After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.

''We welcome the administration's approach outlined today,'' Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company's 18 board members.

Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.

Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.''

The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.

Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.

''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

[Tunnelcat]

Will, Rick Davis is DIRTY! It may not be apparent what kind of 'advice' he is giving to McCain, but he was STILL tied to his lobbying firm as of a month ago by receiving a monthly stipend.

http://www.newsweek.com/id/160713

Why was he getting paid money for a job he didn't supposedly have while at the same moment working for the McCain campaign? Money under the table from Freddie Mac for Rick Davis to influence McCain? It just looks dirtier than anything Obama has connection to. McCain is just being a political hypocrite when calling for regulation NOW after being against it in 'most' of his career, except when he was being a 'Maverick'. Maybe Rick Davis is using his position to make sure McCain doesn't go a little TOO FAR with regulation for Freddie Mac's tastes if McCain were to become President in the present economic climate. Remember, the government now runs both of these companies and if McCain becomes President and Rick Davis is part of his cabinet........

By the way, I just heard on CNBC that if you own an Exchange Traded Fund or ETF, not a stodgy old mutual fund, you are effed! You don't actually own the stocks in the fund, the brokerage firm does! So when they go bankrupt, you become an unsecured creditor and if you're an average person with one or more of these in a retirement account, you become a bottom feeder that has to wait for any crumbs left over after, say for example, Lehman Bros., goes belly up. I remember these being heavily pushed by Brokerage firms for the last few years and something smelled wrong about them. To good to be true.

I'm old enough to remember the Savings and Loan Crisis and what effort it took on my husband's part trying to keep our meager savings accounts intact in a stable bank during that time. I also remember McCain's little part in the whole mess. NO THANKS! If John Glenn, a Democrat, were running for president now, I wouldn't vote for him either for that reason.

Greed gone wild. Privatized profit, socialized risk!

[Will Robinson]

Tunnelcat, no doubt Davis, in his capacity as a lobbiest, has pulled in money he doesn't deserve (I'm predjudiced, I think lobbiests should be criminalized), but the facts speak volumes about his inability to stop McCain from being one of the few voices in congress to call for regulation...read it again..the guy your party portrays as Mr.Deregulation is the one who called for....wait for it....REGULATION!
And who killed the bill he tried to get freed from their clutches....that's right....the DEMOCRATS!

So you can believe what you want but reality doesn't quite fit into your perspective.

Now if Davis is a problem what about the guys working at Freddie Mac and Fanny Mae who actually committed the fraud, took close to a hundred million based on having forged signatures to cook the books and then left...to go work for Obama?!? Sounds a little more sinister, in fact literally criminal compared to a guy who worked as a lobbiest, a legal proffession that involved no forgery or fraud....oh, that's right...those guys are democrats so it doesn't bother you does it?