The Great Depression Part II

[Minor Axis]

On the radio it was reported that the Fed decided to bail out AIG, because if they did not, they feared it would have triggered a CATASTROPHIC domino failure in the financial markets that would ripple across the economy into most sectors... Just how close to the edge are we? Great depression Part II anyone?

We are not there yet, however the Republican Party and conservative forces have slowly been unraveling the protections put in place after the original Great Depression. Why? Because they don't like regulations that hinder business. Boys, go make some money!! is a motto that when it comes to free wheeling, wild west mentality is really hindered by regulations. The regulations might prevent the huge profits, but they also prevent the huge crashes. The U.S. government under Bush really had no serious interest in regulating financial markets. They did not want to stand in the way of the holy grail- profits. Well the chickens are coming home to roost and I went to all cash (money market to be exact vs stocks or mutual funds) last week.

Better yet who made the fortunes in the sub-prime mortgage crisis that U.S. taxpayers will now have to pay? All of a sudden the U.S. taxpayer is covering the greed in the name of Bear Sterns, Lehman, Freddie Mac, Fannie Mae, AIG, and those yet to be named.

BILLIONS OF DOLLARS of taxpayer liabilities. No problem though. You know we have a printing press in DC that can print unlimited piles of money? And the Republicans pull out the stops when it comes to tak'n care of business. :smiley24:

And hey come on you conservatives in the forum, lets give a great big cheer for Republican rule!

:kneelsuckers: <- Conservatism as it exists today. Mulder is the far right grape...

 

[Wookiegirl]

Amen.

That's all I have to say about that.

 

[Strauss]

We are not there yet, however the Republican Party and conservative forces have slowly been unraveling the protections put in place after the original Great Depression. Why? Because they don't like regulations that hinder business. Boys, go make some money!! is a motto that when it comes to free wheeling, wild west mentality is really hindered by regulations. The regulations might prevent the huge profits, but they also prevent the huge crashes. The U.S. government under Bush really had no serious interest in regulating financial markets. They did not want to stand in the way of the holy grail- profits. Well the chickens are coming home to roost and I went to all cash (money market to be exact vs stocks or mutual funds) last week.

Better yet who made the fortunes in the sub-prime mortgage crisis that U.S. taxpayers will now have to pay? All of a sudden the U.S. taxpayer is covering the greed in the name of Bear Sterns, Lehman, Freddie Mac, Fannie Mae, AIG, and those yet to be named.

BILLIONS OF DOLLARS of taxpayer liabilities. No problem though. You know we have a printing press in DC that can print unlimited piles of money? And the Republicans pull out the stops when it comes to tak'n care of business. :smiley24:

And hey come on you conservatives in the forum, lets give a great big cheer for Republican rule!

Hmmmmmmmm:

Let not facts get in the way of good rant no matter how wrong:

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.

Found here>New Agency Proposed to Oversee Freddie Mac and Fannie Mae - New York Times

BTW, that article is from September 11, 2003.

 

[Minor Axis]

So Strauss, I guess you and Mulder think the economy is in ship shape. :thumbup

Hey, Bush's plan to oversee Freddie Mac and Fanny Mae, worked swell. :thumbdown

Of course I also like their unfunded mandate of Leave No Child Behind. The Republican Party is really really big on empty talk.

 

[Strauss]

Hey, Bush's plan to oversee Freddie Mac and Fanny Mae, worked swell. :thumbdown

Didn't read the article did you? It wasn't the Republicans that shot down what the President proposed.

Of course I also like their unfunded mandate of Leave No Child Behind. The Republican Party is really really big on empty talk.

Please explain to me what this has to do with the regulation of Fannie/Freddie? Would you be trying to divert the thread away from your obvious misinformation and bogus rant?

 

[Strauss]

So Strauss, I guess you and Mulder think the economy is in ship shape. :thumbup

The economy is growing at annualized rate of 3.3%. Please explain how we have a recession or a bad economy when the economy is EXPANDING?

 

[Minor Axis]

The economy is growing at annualized rate of 3.3%. Please explain how we have a recession or a bad economy when the economy is EXPANDING?

Case closed!

 

[lumpenstein]

Question: where is all this money coming from to bail out AIG?

 

[Strauss]

Case closed!

Avoided answering the question didn't you? That's because you have no answer. You Chicken Little's can't stand it when reality hits you in the face. Go clucking you'll feel better.

 

[Strauss]

Question: where is all this money coming from to bail out AIG?

The US Treasury and Federal Reserve. Its not a "bail out", its a loan. A bail out would not require repayment. Again, should have let AIG fold.

 

[Minor Axis]

Question: where is all this money coming from to bail out AIG?

From the printing press running 24/7 in D.C. Actually I think (correct me if I'm wrong) they are using the fund that insures savings accounts in the U.S. And I heard the fund that is running out of money.

 

[lumpenstein]

So let me get this straight.

- People with lots of money get to invest it to make more money.

- People making bad investment choices lend money to people that can't pay it back.

- The government pumps billions into saving the people with lots of money from losing it.

- The government ignores the people without money and lets them lose their savings and homes.

Thank you for explaining how free enterprise and the noninterference of the government in business works.

 

[Strauss]

So let me get this straight.

- People with lots of money get to invest it to make more money.

- People making bad investment choices lend money to people that can't pay it back.

- The government pumps billions into saving the people with lots of money from losing it.

- The government ignores the people without money and lets them lose their savings and homes.

Thank you for explaining how free enterprise and the noninterference of the government in business works.

That is so wrong on so many levels. Most of the money invested doesn't come from people with "lots of money".

 

[Fox Mulder]

Hey Minor--why don't you tell us which party you think pushed for looser standards to allow for more loans to lower middle class and poorer Americans? :rolleyes

You liberals are absolutely amazing--you push completely assinine economic policies in the name of social justice and then when they blow up in your face your blame someone else. This mortgage crisis in completely the fault of the liberas and their dumb economic policies.

And the economy was great for the first 6 years of the Bush Presidency. Two years ago the Democrats took over Congress and it has been since then that all this shit hit the fan.

 

[Fox Mulder]

So let me get this straight.

- People with lots of money get to invest it to make more money.

- People making bad investment choices lend money to people that can't pay it back.

- The government pumps billions into saving the people with lots of money from losing it.

- The government ignores the people without money and lets them lose their savings and homes.

Thank you for explaining how free enterprise and the noninterference of the government in business works.

No--if they don't do the bailout, the effect on the economy will be worse--the issue is stopping the economy from going into recession, which will cost millions of jobs and result in less tax revenue. Again, this is basic economics that we have to continue to explain over and over and over and over again.

Democrats are in charge of Congress--they are the ones that have to approve this bailout. They are actually making the right decision in this instance.

 

[Minor Axis]

Two years ago the Democrats took over Congress and it has been since then that all this shit hit the fan.

Sorry to inform you but you just lost your credibility implying this crisis fomented in the last 2 years by the hands of the Dems while relieving Republicans of all responsibility.

BTW I've always supported sound lending practices, so if and when standards were eased, who exactly in the financial industry lept at the chance to make lots of money, the geniuses in the mortgage industry? Who bears responsibility for deciding if a loan is sound or not? This still goes back to Government regulatory responsibility. I'll admit that Clinton did play a part along with Bush and the Republicans. I found this blurb online. Looks like you can't trust anyone ey? :smiley24:

Add President Clinton to the long list of people who deserve a share of the blame for the housing bubble and bust. A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place.

President Bush continued the practices because they dovetailed with his Ownership Society goals, and of course Congress was strongly behind the push. But Clinton and his administration must shoulder some of the blame.

 

[lumpenstein]

The US Treasury and Federal Reserve. Its not a "bail out", its a loan. A bail out would not require repayment. Again, should have let AIG fold.

All I'm wondering is what are the odds that the money will be get repaid, or how much of it. Could AIG fail despite the "loan"?

 

[Alien Allen]

All I'm wondering is what are the odds that the money will be get repaid, or how much of it. Could AIG fail despite the "loan"?

The same was questioned when Chrysler was bailed out with a loan guarantee.

hopefully AIG will survive. on the one hand it creates a bullshit safety net for the companies to screw up when ya bail them out but there is a domino effect here and maybe it was the right thing to do to stop the hemorrhaging.

 

[Strauss]

All I'm wondering is what are the odds that the money will be get repaid, or how much of it. Could AIG fail despite the "loan"?

They are charging (they being the US government) 11.5% interest on the loan! :eek If it wasn't the government I'd call them loan sharks.

 

[Strauss]

hopefully AIG will survive. on the one hand it creates a bullshit safety net for the companies to screw up when ya bail them out but there is a domino effect here and maybe it was the right thing to do to stop the hemorrhaging.

AIG will survive as most of the company business is very profitable. Its this one division that is bleeding them red.