Where did I say that America should base it's actions on the rest of the world? I said that the rest of the world is allowed to have an opinion and to take interest in what the US is doing.
Please don't put words in my mouth just to have something to argue about.

this stuff is spelled out in tremendous detail and something that both parties worked hard to hammer out to protect everyone involved, including the tax payers and home owners.

i agree in principle. i think the market and economy should be allowed to crash. i think people should get off their fat fucking asses, get hungry again and look inward for their own success rather than to others to fix their problems.

democrats love to banter on and one about how a free market (and of course greed) causes these problems and that a free market doesn't work.. but the fact of the matter is that when you are constantly interfering and rewarding failure and stepping in as government, you aren't allowing a free market to work. there has to be correction. there has to be lessons learned.

Yeah there you go. trust oversight of Politicians... They helped get us into this in the first place.

As I recall Fanny and Freddy each gave about 20 million to Obama and The old guy.

GFY Economists to the rescue ;-) Hahahahahaha you guys are FUNNAY!!!

Gator, do you know the scale of the crisis? Every fucking part of the world is getting slammed right now. The US will be hit hardest, because its where the biggest amount of bad debt have been accumulated - just as Europe was hit hardest by WWI due to the accumulated bad leaders in power.

And while you are on the "no one gives a shit if some...", then you just sit back and watch, if the central banks in Europe, Middel East and Asia drops stops given a shit about the USD... :2 cents:

Wow.... what an insightful and fact driven argument, backed with all kinds of points regarding bank risk management practices and financial market theory... most impressive!


:1orglaugh:1orglaugh

This is where a great portion of the 700b will go. Just lesten to the guy, it's only about 4:00min. Got this from AlienQ's thread.

Oops, here is the video

I'm just sick of hearing this republican meme.

They only reason it exist is because people are to lazy/busy/stupid to find out what actually happened.

I'll post this link again for the 5th time... and I'm sure no one will actually read it.
http://www.bis.org/publ/work259.pdf?noframes=1

I like where oil is heading :) Keep it up USA!

ow, my M1 hurts

Gimmick infringement!!!

get used to it... partisan politics aside, we now live in a world where billions of retards are connected to each other, can organize and can rally around falsehoods, lies, conspiracy theories and rhetoric and the "facts" become more and more irrelevant.

its game over man.

i was having a conversation a long time ago on another board where people were so happy about the fact that everyone could be so connected to information (within the context of stock investing) and i kept saying that connecting idiots together and making their voice increasingly louder is going to backfire with increasing frequency over time and the markets will no longer be driven by facts and numbers but by retards, panic, conspiracy theories, political rhetoric and the blind emotion of the emotionally disturbed.

I am sure the customers that signed those contracts realize they made a big mistake and are paying dearly for it, but on the other hand why should the banks that made mistakes too not accept responsibility for their own actions. No one is out there bailing out tax paying citizens that are in a jam....made bad decisions...ect, so why should we bail out these banks?

Kind of funny how their clients were approved for loans and then months later they could not even qualify to change the loan to a fixed loan.
These banks were the first ones telling the customers that took those loans that they could basically fuck off.....in a very cheerful way.

The banks knew exactly what they were doing and that was all fine and dandy while things were good, now that things have turned bad, they have their greedy hands extended looking for help from the same people they screwed. I do understand we need a strong and healthy economy to succeed, but this shit has gone too far and it's time to fry some asses and send them away.

These Banks and their executives need to be held accountable at the end of the day, just like all the customers that made bad decisions.

I have read it. The paper makes several very good points that I concur with but it is not the end-all be-all of economic truth. Note that throughout the paper there are disclaimers that these views merely reflect the opinion of the author and not BIS. If you ask 10 different economists you will receive 10 different answers, and to dismiss those who disagree as being merely stupid or lazy or uniformed is really not addressing the points. Perhaps it is YOU who is wearing blinders and not reading anything that does not already agree with your pre-conceived views?


:2 cents:

The market is rebounding a bit so far today.

If you actaully read that document and place any major level of blame on the CRA you are a complete moron.

EUR1.00 down to $1.4061.

Rather than personal insults, perhaps we could simply discuss the subject like the tolerant intelligent adults that we hold ourselves to be.:2 cents:

If you look at this statement in the paper:

"Contrary to some media commentary, there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust. This Act only applies to depositories, and did not cover most of the important subprime lenders. Depositories showed a lesser tendency
to write subprime loans than lenders not subject to the Act (Yellen 2008)."

This statement completely ignores the reality that those subprime lenders, that the act did not apply to, subsequently sold their paper on to larger lenders to whom the act DID apply. Therefore the affects of the act were passed on through the market. Also, even if as much as half of the subprime loans were made by non-CRA lenders (which is the highest statistic quoted by anyone), that still leaves 10s of billions of dollars in loans made directly by CRA lenders that were defaulted on.


.

You're completely ignoring something...

The subprime loans alone did not cause the problem.

Its the CHOICE the lenders made on how to USE the loans as leverage once they were packaged... no law made them do that.

The conclusion that a community development act passed 30 years ago was the major contributor to this is nothing short of INSANE.

Pleasure Pays maybe you should go on vacation or something. Your sounding bitter and preachy like my grandmother. lol
One thing, of course its easy to blame the consumer but if it wasn't offered it wouldn't of been taken. Also most mortgages dont go thru banks but thru slime bag mortgage companies that will say anything to get a commission.
Also its not just people dont want to pay, people lost jobs,wages are going down the toilet.Instead of a bail out, the government should of told the banks you made this mess you fix it. Instead of throwing someone out of their house ask them what can you pay and extend the load 100 yrs and say we will revisit it when things get better, your home starts to rises in value. So money is still coming in and home values dont go down the toilet.That is what should of happened.

I did not say that it was THE major factor. Any issue this large has many factors affecting it, (I said that I agreed with many points in the paper). But you should NOT dismiss it. Huge changes to the risk management procedures in lending take a long time to become established and to trickle down to the market to such an extent as to cause major swings in how "street" level lending takes place. 30 years is really not that long in terms of this level of change, and the Clinton Administration helped to start re-pushing the CRA, (which had been relaxed somewhat), as a caveat in allowing large bank mergers.


.

:thumbsup Those fucking derivatives. I've read multiple articles stating that an economy as massive as ours could easily withstand the failure of the subprime mortgages themselves. The debt now owed on the derivatives, or bets that those mortgages would fail, is a/the major factor here.

Fucking lag made me double post

I'm still waiting for the info on how banks were forced to use the loans as leverage...

I give up, I should be working. You're gonna always find a way to justify it. Its like religion.

The right needs someone else to blame so they have held CRA very close to their hearts. lol Forgot about deregulation pushed by gramm. Since that happenen only 25 % of subprime mortgages fall under cra and I presented here yesterday a report on cra from the fed in 1999 just as dereg was signed in law and up until that point CRA was very profitable. Deregulation and laon bundling did this not cra . The right screamed for deregulation get government off the backs of business. This what happens without regulation.

Let's just all agree that economists do it with models

One more thing before I try to get mind back on work...

I apologize for namecalling.

you act like banks aren't falling apart. do you watch the news? no one is trying to "bail out banks" - the objective of injecting money is to stabilize the credit system somewhat and restore some confidence in the financial market.

While I am for the bailout and feel it has to happen in order to keep us from slipping into a major recession and causing us major economic problems the oversight of this money has me worried. All the people that will be on the oversight committee have other full time jobs and the committee will only meet once a month. Also, it puts much of this deal in the hands of the sec. treasury Paulson. On January we will have a new president and most likely he will then appoint a new sec. treasury. So really we are putting this power into the hands of someone that we don't even know.

Let me ask you this. Would you comfortably invest 700 billion (or for that matter any large amount) into a company that you knew had a CEO that would be gone in less than 6 months with no idea of who the replacement is and that had a board that only met for a few hours a month? Probably not.

Don't get me wrong, I think the bailout has to happen to ward off some serious trouble, but to say that there is substantial oversight might be a little overstated.

In my opinion the bailout simply postpones the market correction... and makes it worse.
The correction will happen no matter what we do, and it will hurt somone.

Guess who it's gonna be?

*cough*middle class*cough*

i'm not for or against it really. at the end of the day, i don't really care. the interesting thing to me is that people want to bitch and point fingers and because of that and the unimaginably profound ignorance of the subject, their lives were just made harder, not easier.

generally speaking, i think the market should be allowed to run its course and whatever happens should happen. painful lessons need to be learned on all sides. banks need to collapse... people need to lose their homes and the whole idiotic system we have of living on borrowed money needs to collapse. i don't think the government should be involved in the economy in any real way and i don't think airlines or banks or farmers or anyone else should be doing whatever they want with the knowledge that the government will step in and save them.

Yea, I watch the news and they are falling apart because of shitty business practices by them and others involved in this mess that has been created. I guess you should watch the news more often. How many banks are having to fall on government bailouts?
Yea, I know all about stabilizing the system. There are allot of parties involved. I for one did not create this shit ball mess, the big boys did and they should have to pay for it.
What is to say this 700 billion is gonna be all, they will be back wanting more money, crying about another fuck up.
The banks are not the only ones involved. I just want to make that clear.


http://www.gofuckyourself.com/showthread.php?t=858510

from cnn: edition.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html

" The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk."

When my friend went down to the US to go to school for a masters he had to open a bank account to get his student visa. When he opened it with the tuition money they told him he was approved for a $750,000 mortgage. Keep in mind that this is a guy that has never had more than a summer job as he went straight from undergrad to masters. Obviously he didn't take it, but that kind of outlines a major piece of the problem and where it all started. Surely a high percentage of people are going to go for the mortgage since that's the world we live in. You have to have the best everything. We all see people driving cars they can't afford every day so are we really surprised?

In my opinion we trusted the banks to police this kind of thing and they failed us. It is their fault for pushing these products on us and to a much lesser extent the consumers for not doing the proper due diligence. Caveat emptor indeed. But when everyone is pushing the same products how is the consumer really supposed to know which way is up?

that said...playing the blame game isn't going to get us anywhere. The US needs strong leadership and a good plan. At this time, a solid plan does not yet exist, but I tend to think some action needs to be taken in the next few weeks in order to avoid a longer and more costly future.

In almost all cases I think the market should be allowed to work itself out. Like you point out with the airlines. If they can't make money flying people at their current prices then they should raise their prices or close down, we shouldn't be bailing out the airlines. If I start a business selling sandwiches and in order to compete with subway and quiznos I have to lower my prices to a point where I can't make a profit the government won't (and shouldn't) bail me out.

That said with this deal a lot of innocent people could get hurt. You could have regular people that work at regular jobs and made an ok living and are living within their means (meaning they own a house they can actually afford and cars they can afford and so on) losing their retirements and their jobs and they have done nothing wrong. The greed of the banks and mortgage brokers mixed with the idiocy of people that bought more house than they could afford on a sub-prime mortgage and too much deregulation could cause millions of people who had nothing to do with this and did nothing wrong to get screwed over badly. In order to protect them we need to protect the credit markets and a bailout of some form needs to happen.

However, I personally would rather see the bailout have more oversight. There should be a permanent committee whose full time job is overseeing this bailout. Any company that gets even 1 dollar of this money should have its CEO and high level executives not receive a penny in golden parachute/bonus pay. People who purchased these sub-prime houses should not be allowed to buy any house on a VAR or interest only mortgage again (for at least a very long period of time.) and we need to go back and look at all the laws and bills that deregulated the laws and rework them to make sure that this kind of thing doesn't happen again. They also need to adjust CEO pay so that they are not rewarded for driving companies into the ground even if no tax dollars went to bail it out. For example the CEO of HP just about bankrupted that company then got a 40 million dollar severance when she was fired. She should have gotten a kick in the ass and nothing more. If we just buy up all this bad debt and restore the credit markets and don't do things to discourage it from happening again we will be right back here in another 10-12 years with the same problem.

Yep the world is ending

"The Dow Jones industrial average (INDU) added 485 points, recovering much of the record 777 points lost the day before. It was the third-biggest one-day point advance for the indicator in its history. "

Much of that is investors betting on the bailout happening. Here is a clip from an article I just read:

"U.S. stocks roared back -- a day after their worst sell-off in 21 years -- and the dollar rallied as investors bet Washington would manage to salvage a package to stabilize the financial sector after Monday's shock defeat on Capitol Hill."

If the announcement had been that the bailout was a failure and wouldn't happen you can bet the opposite would have happened.

Blaming CRA seems to be nothing more than scapegoating.