Congress Told "Maybe Days Away From A Complete Meltdown Of Our Financial System"
 

Pretty scary shit!!

September 20, 2008
Congressional Leaders Were Stunned by Warnings
By DAVID M. HERSZENHORN

WASHINGTON ? It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

?When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program ?Good Morning America,? the congressional leaders were told ?that we?re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.?

Mr. Schumer added, ?History was sort of hanging over it, like this was a moment.?

When Mr. Schumer described the meeting as ?somber,? Mr. Dodd cut in. ?Somber doesn?t begin to justify the words,? he said. ?We have never heard language like this.?

?What you heard last evening,? he added, ?is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.?

Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.

?You have the credit lines in America, which are the lifeblood of the economy, frozen.? Mr. Schumer said. ?That hasn?t happened before. It?s a brave new world. You are in uncharted territory, but the one thing you do know is you can?t leave them frozen or the economy will just head south at a rapid rate.?

As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. ?You know we?d be lucky ...? he said as his voice trailed off. ?Well, I?ll leave it at that.?

As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.

Lawmakers in both parties described the meeting in Ms. Pelosi?s office on Thursday night with Mr. Paulson and Mr. Bernanke as collaborative, and that they were prepared to put politics aside to address the needs of the American people.

While Democrats initially said after the meeting that they planned to use the administration?s proposal of a huge rescue effort to win support for an economic stimulus package, they pulled back slightly on Friday morning, saying that their top priority was to help put together the bailout package and stabilize the economy.

But it was clear they continued to examine ways to make clear that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit.

In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.

Among the potential steps Congress can take include approving legislation to allow bankruptcy judges to modify the terms of primary mortgages ? authority that the bankruptcy laws do not currently allow and that the banking industry has strenuously opposed.

But the Democrats said it was too soon to discuss such details, and that they were awaiting a draft of the proposal from the Treasury Department.

?We have got to deal with the foreclosure issue,? Mr. Dodd said. ?You have got to stop that hemorrhaging..If you don?t, the problem doesn?t go away. Ben Bernanke has said it over and over again. Hank Paulson recognizes it. This problem began with bad lending practices. Those are his words, not mine, and so this plan must address that or I?ll be back here in front of a bank of microphones at some point explaining the next failure.?

Even before the drafting of the plan was complete, the Bush administration and the Fed began efforts to sell the idea of a huge rescue to potentially skeptical rank-and-file members of Congress. Mr. Paulson and Mr. Bernanke held a conference call with House Republicans to explain their thinking.

Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, said in a television interview that cost to the government of purchasing bad debt could run to $1 trillion ? a potential warning sign since Mr. Shelby is a longtime skeptic of government intervention in the private market.

Until Mr. Shelby was interviewed on Friday morning, officials on Capitol Hill had been careful not to discuss specific figures, though the rescue envisioned by the Treasury Department clearly entails a government appropriation of hundreds of billions of dollars.

Article Here

I don't know, they've said this a lot. They said Bear Stearns would collapse the economy, then Freddie and Fannie, then Lehman, then AIG, now this. I wonder if we're just getting all these dire scenarios to scare us into accepting a bailout for the billionaires.

Funny how no one gave two shits about homeowners last year. But once someone's stocks take a hit, it's armaggedeon.

nature has a way to balance itself all the time

401K and IRAs

Both long term investments that would recover down the road. A huge drop in September of 2008 is not going to make much difference if you retire in 2025. Not to mention that a 401k and IRA is an "investment". They are supposed to have risks.

Ok so we are days away from complete meltdown and they are working hard for a plan to bring to the floor in a fucking week. Doesnt make much since to take so long if we are days away. We are fucked.

OMG great fucking picture. :1orglaugh:1orglaugh:1orglaugh:disgust:helpme

StickyGreen... That picture is awsome!

It's missing...Alan Greenspan

:1orglaugh:1orglaugh:thumbsup

thank Reagan for Greenspan, and Bush for Bernanke

no regulation is the best!

"The most terrifying words in the English language are: I'm from the government and I'm here to help." Ronald Reagan

September 20th?

So you can post news from the future now.

Please, tell me tomorrow's winning lottery numbers.

Reagan was a shifty guy...

good to know canada is not shrinking also;)

Let it burn. Lets get wasted and dance together.

You're so funny. You really don't get it, it's kind of sad. You didn't even read the wording for christ sakes.

they will just print more money. without gold and silver backing it they can print as much as they want. this is all BS the Super Wealthy famlies that own the banks and the fed will balance things out.

This is the simple truth. If you spend (print) money you don't have or can't earn in the future you are going to have troubles. The West has been spending money it does not have or will not earn for years. All they did was load credit cards, bank loans or overseas debt. And now it has stopped.

The roller coaster has hit the wall, some who were selling tickets to the ride are going to walk away very very rich. The rest of us will end up paying for it. Bushes decision to put $800 billion into the markets is genius. He will look like the savior today and if he can get through to January he will hand the problem to the Democrats for them to clean up.

The picture of the boat is so apt, except it should be a bigger boat. Not that much bigger though.

Cycles - good times, fuck up, restructure, good times, fuck up, restructure, good times.......

:thumbsup

what a crock of shit.

The US economy does not rest on these financial institutions nor do these institutions carry the weight of the US economy.. They have little to no affect on the "REAL economy" which is manufacturing, retail and consumer commodity/spending.


Also, looking back to 1929, THOUSANDS of institutions failed/collapsed and recent events are NOTHING in comparison.. not even close

Hey!! What the fuck!! Some institution is 6 billion/million or whatever the fuck in debt and the government picks up the tab at TAXPAYERS EXPENSE, yet Neidelmeyer Schmuck who owes 90K on his house and is floating in 30K in credit card debt loses home after missing couple months payments.. WTF!! Guess that shows where the US government's priorities lay!

Funny how a bunch of poor people brought our economy to its knees by listening to a bunch of rich people.

Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone... Dems Ignored Warnings
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted.

Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

The White House released this list of attempts by President Bush to reform Freddie Mae and Freddie Mac since he took office in 2001.

Unfortunately, Congress did not act on the president's warnings:

http://gatewaypundit.blogspot.com/20...annie-mae.html

ha ha ha.. that's great.. especially the illuminati logo on the boat..