O/T: The Bail Out

[Lew Hodgett]

The subject takes me back to 1960, a few weeks before graduation.

Was in an industrial engineering class, the instructor had spent a lifetime in the real world, and up to then, not much in the class room.

The subject of the Edsel, the 1958 FoMoCo screw up, the largest business screw up since the Curtis-Wright mess of 1940, was brought up for discussion.

Still remember the instructors advice:

Class, if you are going to screw up, make it as big as possible.

They fire you for making small mistakes.

They won't fire you if the mistake is big enough because that will make the guy who hired you look like an idiot.

Almost 50 years later, sounds like there is about to be a repeat application of that advice.

Lew

[Mark & Juanita]

Yep, despite the fact that the congress-critters like Barney Frank and Chris "Country-wide" Dodd caused the problem by using Fannie Mae and Freddie Mac as their own playground to essentially socialize the mortgage market by setting standards so low that just about anybody could get a loan to buy a house, these congress-critters are going to continue get re-elected and now get even more taxpayer money to "manage" the bail-out of the problem they caused.

Talk about the ultimate promotion.

[Renata]

These, of course, had nothing to do with anything... Renata

" Gramm-Leach-Bliley Act of 1999 ... ...By preventing mergers between the various branches of Wall Street, ...[this] act reversed basic Depression-era legislation passed to prevent the sort of collapse we are now experiencing.

Commodity Futures Modernization Act of 2000. ...legitimized the "swap agreements" and other "hybrid instruments" that are at the core of the crisis.

"Legal Certainty for Bank Products Act of 2000," Title IV of the law--a law that Gramm snuck in without hearings hours before the Christmas recess--provided Wall Street with an unbridled license to steal. It made certain that financiers could legally get away with a whole new array of financial rip-off schemes.

One of those provisions, summarized by the heading of Title III, ensured the "Legal Certainty for Swap Agreements," which successfully divorced the granters of subprime mortgage loans from any obligation to ever collect on them. That provision of Gramm's law is at the very heart of the problem. But the law went even further, prohibiting regulation of any of the new financial instruments permitted after the financial industry mergers: "No provision of the Commodity Exchange Act shall apply to, and the Commodity Futures Trading Commission shall not exercise regulatory authority with respect to, an identified banking product which had not been commonly offered, entered into, or provided in the United States by any bank on or before December 5, 2000. ..." from an article by Robert Scheer

[Larry Blanchard]

And of course Phil Gramm couldn't possibly have had anything to do with it. After all, John McCain relies on his advice. And we all know he wouldn't associate with a crooked politician, would he?

[Tim Daneliuk]

You mean like Comrade Obama and his cast of thugs here in IL? (The Mayor, the Governor, two convicted felons - one a 60s mad bomber and the other one Obama's real estate fairy.)

"I'll take liberal hypocrisy for 500 Alex...."

[Jimbo]

In 1989 when the Berlin Wall fell, it was described as the Fall of Communism. In 2008, Wall Street fell: can this be described as the Fall of Capitalism?

[Swingman]

"Jimbo" wrote

The "Fall of Mortgages Being Backed by Welfare Payments" is a more apt description, eh?

[Mark & Juanita]

It is debateable that the repeal of the Glass-Steigal act had anything to do with this. After all, it really didn't matter whether brokerage houses or banks were the ones getting this toxic waste from Freddie Mac and Fannie Mae.

[Mark & Juanita]

The core of the crisis was Freddie Mac and Fannie Mae for setting the loan standards so low that those swap agreements and hybrid instruments contained loans to people with no chance of paying them back. This was done at the direction of Congress who demanded an end to "redlining" and the availability of "affordable mortgages" to more people. At its height, it was possible for people to walk in and get a loan with no down payment and not even have proof of employment.

[Han]

Mark & Juanita wrote in news:uc-dnRE75tX0zkHVnZ2dnUVZ [e-mail]:

The real core of the problem is not the direction of Congress so much as the implementation. Isn't it the fiduciary duty of banks etc to protect their depositors' and stockholders' "investments? Then they (the banks and investment firms) should have NOT invested in dubious loans and Ponzi schemes of insurance thereon. The fault of Congress is only in not insuring that there was proper oversight and regulation of the Ponzi schemes and 120% of value mortgages.

Don't blame attempts to increase home ownership and responsibility for irresponsible acts by greedy banks, investment and insurance firms, as well as corrupt ratings agencies. (Not saying that F&F are blameless).

[Tim Daneliuk]

So ... the banks are "irresponsible" and "greedy" for trying to maximize their profits. But the welfare queens who already were living off of everyone else's money are noble? The government is as responsible for this mess as the banks. So are the people who borrowed money for homes they could not actually afford. It's just convenient to blame the eeeeeeeeeeevil rich people because the slimy left has so ingrained class warfare in the public mind. The best thing we could do here would be *nothing*. Let all the participants in this fiasco reap what the sowed. Let the irresponsible banks go under. Let the irresponsible borrowers loose their homes and equity. Why should I have to pay to bail either party out?

[Maxwell Lol]

AIG was $579 billion in debt.

The CEO of AIG made 5.6 million which included a "performance bonus." for ruining the company.

Total US welfare costs are $440 million per year.

Blaiming the problem is those on welfare is really misguided and and frankly bigoted.

By the way - have you ever talked to anyone on Welfare? Like those people still living in FEMA trailers that have 5 times the normal level of Formaldehyde gas? I bet they feel like queens. Sure.

[Upscale]

It's always about "you" isn't it? Every time you open your mouth all that comes out is ME, ME, ME. Stick it to everybody else just as long as it doesn't cost you anything.You really are the quintessential definition of the word "selfishness".

Arrogant, greedy, selfish, don't give a damn for anyone except yourself. You exude some of the worst traits in the human condition.

Fortunately, a large amount of your countrymen fail to share your failings. Lucky for the rest of the world.

[Tim Daneliuk]

That's correct, it is about me. It's about no one - you particularly - having ever explained why the family of someone I've never met is more deserving of my hard work than *my* family. It's about no one - you particularly - having ever explained why I have to be a slave to lazy, irresponsible, dishonest people. That's right, it's about me.

[Tim Daneliuk]

You must have trouble with elementary arithmetic. Of the $3 Trillion US Federal budget (never mind State and Local), over

*half* is entitlement spending - welfare in all it's forms - by my count, that's north of $1.5 *Trillion* - you're missing a lot of zeros.

And it's only bigoted if you have to look in every nook and cranny to find bigotry and make yourself feel better. The overwhelming portion of the $1.5 trillion goes to elders in some form - who, last I checked, cover all flavors of race, religion, and so forth.

What is "bigoted", is the bigotry displayed here and in the larger culture against those of us who object to being made slaves to serve the dishonest and lazy majority.

Yes. I used to live next door to them. It's what made me realize what a complete scam social entitlements are.

Perhaps they shouldn't have built homes below sea level in the first place. Perhaps they shouldn't have elected the (arguably) most corrupt government in the entire nation in NOLA. Perhaps - after a major disaster - they shouldn't insist on living the same place again. And, perhaps, they shouldn't expect their Federal rehabilitation to give them a quality of life *better* than they ever had in the first place. The entire system is a fraud.

[Jimbo]

[Tim Daneliuk]

I am neither a conservative nor a bigot. I am unapologetically opposed to force, fraud, and threat. I live in IL and have seen Obama for what he is locally. If he is elected it will not be me who is disappointed - I already have very low expectations for both him and McCain - It will be Obama's groupies who will get sold out in acts of political expediency, no different than pretty much everyone else who ever supported the man. I strongly urge people to read the New Yorker article on Obama's rise to power to just get a small taste of what a political bottomfeeder this guy is.

[Jimbo]

[Tim Daneliuk]

Disagree strongly. He is a political snakeoil salesman with no real legislative record and a long history of bad associations, and political double dealing.

No. The private sector will revitalize the economy unless the various flavors of neo-communists in government, the general population, and even the business community insist on collectivizing that which should be private. Politicians do not "fix" economies. They merely damage economies, some more, some less.

You are likely right about his election - very sadly. Then again, a nation that has lived with economic fiction, force, and all that accompanies socialism for some 70 years, doesn't deserve to be all that well off. Obama will get elected and when he leaves office, he will leave a chain of high taxes, nationalized businesses, and a further erosion of the original American ideal of personal liberty.

Viva Obama, Viva Marx

[Swingman]

"Jimbo" wrote

"na·ive" : marked by unaffected simplicity : deficient in worldly wisdom or informed judgment.