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gnosis
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 Posted: Fri Jul 11, 2008 10:12 am Post subject: Fannie Mae and Freddie Mac take a dive |
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Yikes... This does not bode well for the U.S. economy.
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Jason_Harvestdancer
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| Posted: Fri Jul 11, 2008 12:03 pm Post subject: |
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The US economy is sliding into the crapper, and has been ever since the housing bubble started to pop. Actually, it's been heading that way for a long time before but it's been all downhill since housing.
This is just another "yes, we really are fucked" indicator.
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tinker683
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| Posted: Fri Jul 11, 2008 12:55 pm Post subject: |
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Makes me wonder how many of these big banks touted the line as being "laissez-faire" back when they were making millions and now that their asses are in the frying pan, they come running to government just as quickly as the people they probably once condemned.
Sorry, but I have no sympathy for these guys. They made stupid decisions right along with the rest of us, and it's time we all take our lumps.
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SvZurich
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| Posted: Fri Jul 11, 2008 2:07 pm Post subject: |
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Well, be sure to check out this quote from Senator Phil "I am rich and you are lazy" Gramm.
| Quote: | "Whining" comments controversy
On July 9, 2008, Gramm participated in an interview with The Washington Times, explaining John McCain's plans in reforming the U.S. economy. During the interview, he downplayed the idea that the nation was in a recession, stating, "You've heard of mental depression; this is a mental recession," and "We have sort of become a nation of whiners, you just hear this constant whining, complaining about a loss of competitiveness, America in decline."[8] The following day, McCain strongly denounced Gramm's comments and subsequently stated that Gramm was not in consideration for any high level positions, joking "I think Senator Gramm would be in serious consideration for ambassador to Belarus, although I'm not sure the citizens of Minsk would welcome that."[9][10][11] Gramm later attempted to clarify his comment, explaining that he had used the word "whiners" to describe the nation's politicians rather than the public, stating "the whiners are the leaders."[12] In the same interview, Gramm stated, "I'm not going to retract any of it. Every word I said was true."[11] |
http://en.wikipedia.org/wiki/Phil_Gramm
And yes, he is the fucker who pushed the deregulation that created Enron.
Guess he doesn't notice how much gas, food, and other things cost due to being rich.
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kmisho
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| Posted: Fri Jul 11, 2008 2:49 pm Post subject: |
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| tinker683 wrote: | Makes me wonder how many of these big banks touted the line as being "laissez-faire" back when they were making millions and now that their asses are in the frying pan, they come running to government just as quickly as the people they probably once condemned.
Sorry, but I have no sympathy for these guys. They made stupid decisions right along with the rest of us, and it's time we all take our lumps. |
Good point. It's the junk bonds thing all over again.
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Ivan_Ivanov
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| Posted: Fri Jul 11, 2008 4:14 pm Post subject: |
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| tinker683 wrote: | | Makes me wonder how many of these big banks touted the line as being "laissez-faire" back when they were making millions and now that their asses are in the frying pan, they come running to government just as quickly as the people they probably once condemned. |
Sorry, but if they said anything about laissez-faire they were simply lying, both Fannie and Freddie are operating under a federal charter, and true laissez-faireists have been railing against them for decades (while some of currtent liberals/socialists were cheering them).
The same applies to Enron, they were all in bed with the government.
Yes, let them drown, let them go under, this is how the market deals with corruption. More government intervention will not solve the problem, it will only set up the stage for an even bigger failure.
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Knight_of_BAAWA
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| Posted: Fri Jul 11, 2008 5:15 pm Post subject: |
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| tinker683 wrote: | | Makes me wonder how many of these big banks touted the line as being "laissez-faire" back when they were making millions and now that their asses are in the frying pan, they come running to government just as quickly as the people they probably once condemned. |
Except that we all know that the banking industry is heavily regulated and has been cartelized by the federal government.
| tinker683 wrote: | | Sorry, but I have no sympathy for these guys. They made stupid decisions right along with the rest of us, and it's time we all take our lumps. |
Oh, but the government can smooth the ride, donchaknow.
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Knight_of_BAAWA
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| Posted: Fri Jul 11, 2008 5:17 pm Post subject: |
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| kmisho wrote: | | Good point. It's the junk bonds thing all over again. |
Actually, junk bonds made a lot of people rich.
You really should shut the fuck up about shit you haven't got the first fucking clue regarding, Hovind.
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Jason_Harvestdancer
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| Posted: Fri Jul 11, 2008 5:23 pm Post subject: |
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| tinker683 wrote: | Makes me wonder how many of these big banks touted the line as being "laissez-faire" back when they were making millions and now that their asses are in the frying pan, they come running to government just as quickly as the people they probably once condemned.
Sorry, but I have no sympathy for these guys. They made stupid decisions right along with the rest of us, and it's time we all take our lumps. |
Tout all you want, they weren't laissez faire in any normal sense of the word.
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Persuasion
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| Posted: Fri Jul 11, 2008 5:27 pm Post subject: |
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I was watching BBC World and it was said that bailing out the said companies would costs nearly 50% of the national debt. Then, a bowtie capitalists came on and said that the costs would not be that great. He mentioned the fact that most of the mortgages held by both companies were viable. By implication he was saying that the companies should be bailed out, which is to say, defaulters should be bailed out, whilst those account holders in good standing should get nothing but bills. I think it unfair to reward defaulters and tell those who are in good standing to fend for themselves.
To me this is an examples of how competition and the profit motive causes problems at times. When one company relaxes a lending rule, the others follow.
The Republicans won't let those companies go under in an election year. Heck, some are saying that doomsday would be upon all of us if they are allowed to perish.
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Jason_Harvestdancer
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| Posted: Fri Jul 11, 2008 5:33 pm Post subject: |
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| kmisho wrote: | | tinker683 wrote: | Makes me wonder how many of these big banks touted the line as being "laissez-faire" back when they were making millions and now that their asses are in the frying pan, they come running to government just as quickly as the people they probably once condemned.
Sorry, but I have no sympathy for these guys. They made stupid decisions right along with the rest of us, and it's time we all take our lumps. |
Good point. It's the junk bonds thing all over again. |
Ah yes, the famous "junk bonds". Do you know the full story on the junk bonds?
Wall Street regulatory procedures were basically written to protect from competition, which contrary to what you think is far from laissez faire. Any takeover attempt had to be announced well in advance so that the target company had time to prepare. That makes it very hard for a company to take over another company.
Except Milken found a legal loophole in the regulations. Did you notice that word before "loophole"? That word was "legal". Do you know why they were called "junk bonds"? It is not because they were worthless, but because they were high risk. Any bond or stock of a risk level above a certain amount is rated as junk, no matter it's worth.
These junk bonds could be sold to raise money for a takeover attempt without prior notice and then converted into stock later. Horror of horrors this was a threat to the aristocracy and therefore had to be demonized. This could make people rise to the top based on merit instead of network, and that could not be tolerated.
So therefore Giuliani (yes, that Giuliani) launched a crucade against Milken without any basis, but when you are facing the (essentially) limitless resources of the government and very vague laws it is very hard to win. He forced Milken to not resist and to plea bargain by threatening his family. Yeah, that shows just how bad the junk bonds are - Giuliani had to resort to mafia tactics.
Milken's crime was to prove Wall Street was wrong about non-investment grade bonds. He financed CNN, Barnes & Noble, Stone Container Corporation, Time-Warner, Safeway, and Mattel through these bonds.
Miken is obviously a horrible person for doing all of that. No wonder you consider him so awful.
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tinker683
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| Posted: Fri Jul 11, 2008 5:38 pm Post subject: |
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To Ivan, Knight, and Jason: I agree with what your saying entirely. I admit that my reaction was knee-jerk but what I was venting my anger about was how I was wondering how many of this rich guys love to claim that they're there all for limited-government and they 'believe in the power of the marketplace' and yadda yadda but when the shit hits the fan and sudden THEY are the ones who's head is next up on the chopping block....suddenly...they looooooooooooove government intervention.
A lot of the republicans that I work for believe that the government needs to step in and try and save us (and these people are Republicans for science sake!). I was absolutely shocked to listen them cheering on about how the government needs to step up and protect the economy from crashing. I just wanted to step in and say, "My my, how liberal of you to think such a way!"
It pisses me off that I, as a holder of credit card debt (which was a result of stupid decisions on my part) are expected to pay back my debts but yet these bankers and other fat cats are allowed to go beg for help from Mommy and Daddy government.
I intended to pay back every cent of my debts, and I think these guys should be expected to do the same.
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Knight_of_BAAWA
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| Posted: Fri Jul 11, 2008 6:57 pm Post subject: |
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| Persuasion wrote: | I was watching BBC World and it was said that bailing out the said companies would costs nearly 50% of the national debt. Then, a bowtie capitalists came on and said that the costs would not be that great. He mentioned the fact that most of the mortgages held by both companies were viable. By implication he was saying that the companies should be bailed out, which is to say, defaulters should be bailed out, whilst those account holders in good standing should get nothing but bills. I think it unfair to reward defaulters and tell those who are in good standing to fend for themselves.
To me this is an examples of how competition and the profit motive causes problems at times. |
Mmmmhmmm. So the fact of sanctions by the federal government for perceived redlining had nothing to do with it, right?
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Persuasion
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| Posted: Fri Jul 11, 2008 7:45 pm Post subject: |
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| Knight_of_BAAWA wrote: | | Persuasion wrote: | I was watching BBC World and it was said that bailing out the said companies would costs nearly 50% of the national debt. Then, a bowtie capitalists came on and said that the costs would not be that great. He mentioned the fact that most of the mortgages held by both companies were viable. By implication he was saying that the companies should be bailed out, which is to say, defaulters should be bailed out, whilst those account holders in good standing should get nothing but bills. I think it unfair to reward defaulters and tell those who are in good standing to fend for themselves.
To me this is an examples of how competition and the profit motive causes problems at times. |
Mmmmhmmm. So the fact of sanctions by the federal government for perceived redlining had nothing to do with it, right? |
At that moment I did not consider what you mentioned. I would like to believe that sanctions for companies found guilty of redlining caused some lenders to issue risky loans. However, the trend seems to be one where the lenders actually charge scorned groups more in interest rates instead of actually refusing them loans.
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If you wish, like us, that the entire liberty of the individual and, consequently, his life be respected, you are necessarily brought to repudiate the government of man by man, whatever shape it assumes; you are forced to accept the principles of Anarchy that you have spurned so long. You must then search with us the forms of society that can best realize that ideal and put an end to all the violence that rouses your indignation.
-- Peter Kropotkin
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Knight_of_BAAWA
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| Posted: Fri Jul 11, 2008 8:10 pm Post subject: |
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| Persuasion wrote: | | At that moment I did not consider what you mentioned. I would like to believe that sanctions for companies found guilty of redlining caused some lenders to issue risky loans. However, the trend seems to be one where the lenders actually charge scorned groups more in interest rates instead of actually refusing them loans. |
Yeah, it's called "credit risk". You might want to learn that.
And bankers were quite terrified of being accused of redlining.
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