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The spectacular collapse of two big investment banks — and the scramble by a major insurance company to stay afloat — has many on Wall Street and Main Street wondering: Is this as bad as it gets?
The answer is that nobody knows — not the heads of surviving banks, Treasury officials or policymakers at the Federal Reserve. The reason is that the true value of the investments being held by banks and other financial institutions cannot be known until home prices stop declining and the job market stabilizes. Until that happens, more losses are inevitable.
“I do not understand how we got into this situation,” said New Jersey Gov. Jon Corzine, a former chief executive of Goldman Sachs.
“You could have asked me two years ago, five years ago, would you ever see a day like this?," he told CNBC. "And I think, not just me, but most people would say: 'That's never going to happen.'"
The financial storm that swamped investment banking giants Lehman Bros. and Merrill Lynch over the weekend shows no signs of weakening. The Dow Jones industrial average lost more than 500 points Monday in its worst day since 2001. Insurance giant AIG, whose stock has been hammered by worries about its financial strength, was scrambling Monday to build its capital base and stabilize its stock price — which has lost more than 70 percent of its value in the past week.
Just as the bursting of the housing bubble destroyed hundreds of billions of dollars in phantom home equity built by an explosion of rogue lending, Wall Street is now suffering through its own evaporation of market value.
More than a year after the financial meltdown began in August 2007, Wall Street bankers are still uncovering more losses and working to raise more capital to cover their bad debts. Borrowing more money — from other investors or the government — won’t solve the problem.
When a financial firm's losses rise more quickly than it is able to raise fresh capital, the process can lead to a vicious downward spiral. Just like a credit card holder who spends beyond the limit, the outstanding balance is far too big to pay back all at once.
And Wall Street has a bigger problem than debt-strapped consumers. Financial company executives simply are not sure how big their debt is. Instead of getting one credit card statement, financial companies have hundreds of investors and “counterparties” — the holders of mortgage-related debt that has been sold and resold in private transactions.
“I don't think anybody has a handle on it,” said Corzine. "I have a feeling that people do not know all of the exposures they have to the entities that are troubled, and therefore causing additional problems that have to be adjusted, requiring even more capital and even greater shrinkage of balance sheets and other risk exposures.”
In the initial stages of the crisis, the Treasury and Federal Reserve were willing to pony up taxpayer capital to stop the bleeding for the most badly wounded firms, including government-sponsored mortgage brokers Fannie Mae and Freddie Mac.
But late last week the outlook for a broader financial turnaround became more uncertain when officials at both the Treasury and the Fed signaled an abrupt shift in policy, making clear they would not necessarily invest more capital in firms that had gotten into trouble.
Since the Fed-engineered sale of Bear Stearns in March and the Treasury’s takeover of Fannie Mae and Freddie Mac, opposition has been growing to taxpayer-funded rescues of private enterprises. Last week auto industry executives appeared on Capitol Hill explaining their desire for government financial help, raising fresh concerns about the costs of an open-ended policy to backstop big private companies.
The decision to allow Lehman Bros. to fail follows a fierce debate in Washington during the past year over the causes of the ongoing financial meltdown. The prevailing view in Washington argued against bailing out homeowners who made bad financial decisions, buying houses they couldn’t afford, or the lenders who wrote those loans.
The biggest government rescue plan applied to Fannie and Freddie, which did not offer mortgages directly but relaxed underwriting standards, allowing lenders to offer mortgages that made little sense for borrowers.
With the collapse of so many giant financial institutions, it has become clear that bankers acted imprudently, leaving them stuck with too much debt and not enough capital. Just like homeowners who took on mortgages they were unable to afford, commercial and investment banks that took on too much debt are now facing "foreclosure."
One critical question remains: How many more banks face the ultimate penalty? The answer depends on two huge unknowns.
First: When will home prices stop falling? The value of trillions of dollars of assets held by big investors — both here and around the world — is pegged to the underlying value of the real estate on which those assets are based. Every quarter that home prices fall, those assets have to be marked down further.
Second: When will the foreclosure rate stop rising and stabilize? As of the end of June, some 9 percent of all Americans holding a mortgage were either late on their monthly payments or in foreclosure. Those foreclosures add to the backlog of bank-owned properties that go onto the market, putting further downward pressure on home prices.
It’s unlikely the government can slow that downward spiral. Aggressive measures on Capitol Hill to slow mortgage defaults and home foreclosure rates were largely abandoned in the final version of the housing relief bill passed this summer, due largely to the prevailing view that homeowners should not be “bailed out.”
Until recently, the main cause of the spike in foreclosures was overreaching by borrowers — some of whom fell prey to questionable lending practices to take on loans they could not afford. More recently the deterioration of the job market has meant more homeowners are falling behind in their payments due to unemployment. If the job market continues to weaken, that will add further pressure to the housing market.
Corzine says these problems are being ignored in the recent “weekend work sessions” over what to do about Fannie and Freddie, Lehman and Merrill and AIG.
“The core problem that we have is the economy,” he said. ”There are two things here that are very disturbing and not addressed. One, there is no major infusion of new capital into the system. We are doing more financial engineering to solve problems. Second of all, and much more important, is the fundamental economy is in very bad shape and the problems are growing."
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 | Eye on the Economy: 4 measures to restore order | Associated Press | Fri Sep 19 | 40 |
| Answer Desk: Why no bailout for homeowners? | Associated Press | Sun Sep 14 | 66 |
 | Congress weighs new regulations amid crisis | Associated Press | Tue Sep 16 | 0 |
| Paulson urges quick action on $700 billion bailout | Associated Press | Sun Sep 14 | 25 |
| Bush, Iraqi leader thank a dwindling coalition | Associated Press | Sat Sep 20 | 2 |
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{"commentId":2942618,"authorDomain":"parthur169"}
Nearly eight years of unregulated, market-driven, voodoo economics with an option to extend four more years versus a change in direction. Simple choice.
Reform versus change. Simple choice.
It is past time to punish the guilty party (GOP).
{"commentId":2942618,"threadId":"358810","contentId":"1870059","authorDomain":"parthur169"}
- 1 vote
#1 - Mon Sep 15, 2008 6:59 PM EDT{"commentId":2947450,"authorDomain":"attributes"}
In the boat of Economics all and everyone is paddling.
Didn't housing prices mushroom under the Clinton Administration continued by desperately holding on till today?
The Real Estate Agencies are much to blame for the Mushroom factor in the housing sector. They jack up the price for a better fee!
If housing needs to stabilize then ENERGY needs to be addressed first. Without stable energy there is no stabilizing possible.
Energy prices are the first item on the list for a stable economy NOT Housing! Housing is the last item that mushrooms when an economy goes well.
{"commentId":2947450,"threadId":"358810","contentId":"1870059","authorDomain":"attributes"}
{"commentId":2942811,"authorDomain":"dszerlag"}
This has nothing to do with politics and everything to do with greed. Greed of the mortgage lenders who relaxed standards and lent money to greedy wannabe homeowners who wanted to keep up with the Jones, either in the first purchase of their home or subsequent bleeding of phantom equity in the property. This has been going on for the past six years or so and for anyone with more than one neuron firing to say they couldn't see it coming is just unbelievable. No one seemed to care that people could not afford these mortgages or that property values were not going to keep rising. The banks kept lending money to whoever wanted it and creditworthiness be damned. There should be no bailout for either the banks or the homeowners unless the homeowner can show that they were somehow the victim of fraud. Why should I pay for a bailout of an individual who kept sucking the equity out of his house or borrowed way more than he could afford in the first place. Further why should any of us pay to bailout companies who should have been smart enough to realize that these people could not afford the loans. My .02, at least I still have that.
{"commentId":2942811,"threadId":"358810","contentId":"1870059","authorDomain":"dszerlag"}
#2 - Mon Sep 15, 2008 7:18 PM EDT{"commentId":2944191,"authorDomain":"dallo"}
Wrong my friend it has everything to do with politics. Part of Bush's platform 4 years ago was "everyone will be in a home". Bush said the market was right to buy a home so mindless sheep bought homes by the thousands so now the loans are being called. Yes you can blame the Repubs for this one totally.
{"commentId":2944191,"threadId":"358810","contentId":"1870059","authorDomain":"dallo"}
- 1 vote
{"commentId":2942905,"authorDomain":"suede-wuede"}
Yeah, the GOP was the only cause for the collapse. Hey, morons on the left. Understand it was DC (that includes the idiots in all parties) that created this mess. Government, good job trying to house the poor. I can't wait until they provide health care to all. I wonder how many companies they'll destroy.
{"commentId":2942905,"threadId":"358810","contentId":"1870059","authorDomain":"suede-wuede"}
#3 - Mon Sep 15, 2008 7:27 PM EDT{"commentId":2943571,"authorDomain":"artisan3m"}
Good luck trying to sell this, Matt. Even if it was really, really, cross-your-heart-and-hope-to-die true, good luck trying to sell this story. I'd remind you that the GOP controlled the House of Representatives from 1994 to 2006 ~ where only a one vote majority is needed to pass out legislation. Even with a one vote majority in the Senate, rules require a super majority of 60 votes to pass out legislation. So you see, Matt, there probably isn't much market for your story. People will blame one party or the other. This year, you are it.
{"commentId":2943571,"threadId":"358810","contentId":"1870059","authorDomain":"artisan3m"}
{"commentId":2946535,"authorDomain":"northlakejohn"}
The housing problem is a democrat problem. They have been in the positions that count in this Bush administration. Do you know that the person who received the most donations from Fannie Mae was democrat senator Dodd and the person who received the second most donations was democrat senator Obama?
It's too bad that ordinary people are getting screwed but it isn't Bush screwing them this time!
{"commentId":2946535,"threadId":"358810","contentId":"1870059","authorDomain":"northlakejohn"}
{"commentId":3053479,"authorDomain":"tobyhanna"}
I read your comment with interest and respect. I feel Bush has every responsibility for this outrageous mess. Remember Bush's comments about housing for minorities, in particular, as well as others? It sounds wonderful, and I wish everyone could have a house who wants one. But there were dangerous options for the loans. Balloon Interest Loans and Interest only Payment. I pray some had a fixed rate mortgage. The Balloon Interest Rate sky rocketed for many, even doubling or tripling a monthly house payment. "Good intentions not combined with good sense are the pathway to hell." selected I believe this surely applies in this case, and this is hell for millions of people. Bush's plan was endorsed by Alan Greenspan whose financial advice was viewed by many as god like. Alan Greenspan spoke on TV about this plan. Bush and Greenspan cooked up this disaster. Greed, dishonesty, the riskiest of deals, a lack of any kind of meaningful oversight and correction are all huge components by Wall Street. Bush needs to be held accountable, but that will not happen.
My good friend told me her realtor told her in 2000 that a financial disaster was on the way due to so many extremely risky loans- many of which were doomed from the very beginning. If this realtor knew an impending disaster loomed, why did Bush neither know or care to know? Where was Alan Greenspan's mind to promote such a plan without parameters? I heard a hypothesis on Friday night by an economist author that this entire fiasco was orchestrated by Decider Bush, and for the purpose of making his rich CEO friends, even richer. I believe this is well with in the scope of the Bush bag of dirty tricks, but I do keep in mind one can hear many things at this time.
{"commentId":3053479,"threadId":"358810","contentId":"1870059","authorDomain":"tobyhanna"}
{"commentId":2943290,"authorDomain":"jeffhr4"}
I would think that the artificially high price of fuel, and the now evident price gouging at the gas stations would have to come down as well before any recovery can be made.
{"commentId":2943290,"threadId":"358810","contentId":"1870059","authorDomain":"jeffhr4"}
- 1 vote
#4 - Mon Sep 15, 2008 8:09 PM EDT{"commentId":2947532,"authorDomain":"attributes"}
Very Much So Jeff. Without stable reasonable Energy prices there isn't much of an eonomy left.
To run to Capitol Hill for a bail out by these companies is not a healthy solution either: Much like putting make-up on a very badly looking face, it doesn't solve the problems. This is an incentive for politicians to increase TAXES! The healthy way to go is by the laws of Nature... the strongests survives the rest goes bankrupt.
An economy that swells like a balloon pops in the end, simple laws of Nature we continuously seem to ignore as a society.
Urgent: address overpopulation, poverty and illiteracy. All fundamentals for a basic advanced economy: quality over quantity.
When quantity is your objective wars are part of such structures it all leads back to our values and mindset which originates in the abrahamic religions: Go and multiply and Conquer! Mental Retardation of delusional grandeur totally out of synch with our environment.
{"commentId":2947532,"threadId":"358810","contentId":"1870059","authorDomain":"attributes"}
{"commentId":3053522,"authorDomain":"tobyhanna"}
Jeff-310-700
I could not agree more with you.
We do not have any mass transit in our city except for
some buses. Thank goodness for them, but our city has so much urban sprawl.
Gas was not a factor when many people built homes, maybe even 20-50 miles away from their work.
Distance is a disaster, I am sure for many. We need a rail service so badly.
Gasoline is such an important issue, and I do not see a whole lot changing.
My friend kept telling me about the cost of fuel in Europe. Yes, I now that is true, but our economy was never set up for high fuel prices. Many countries have health and drug coverage, state operated day care for children, paid sick leave, and mass transportation.
(We have the most advanced healthcare in the industrialized world-yet we have the least accessibility.)
I am sure people have to substitute buying gas in place of food. Hunger is rampant in the US, and high gas prices make everything worse.
{"commentId":3053522,"threadId":"358810","contentId":"1870059","authorDomain":"tobyhanna"}
{"commentId":2943537,"authorDomain":"chinglun"}
Next big problem is the National Debt ...
Government is doing a 'good' example for its citizens...
It is sad that each person will have to share the debt as shown here...
At the end, rich people get richer and poor people get poorper ...
{"commentId":2943537,"threadId":"358810","contentId":"1870059","authorDomain":"chinglun"}
#5 - Mon Sep 15, 2008 8:34 PM EDT{"commentId":2943642,"authorDomain":"debrown"}
I agree we shouldnt have to pay for it, but the responsibility of government is to protect people against the greed of other people. The Market cant do that alone, as evidenced by these financial problems.
Mark, you can blame everyone in DC and I am upset that the dems didnt speak up more, but the GOP has been completely in control for six of the last eight years, and the last two the senate is essentially split, with anything pushed through by dems vetoed by your illustrious leader george bush. They have clearly dropped the ball here.
{"commentId":2943642,"threadId":"358810","contentId":"1870059","authorDomain":"debrown"}
#6 - Mon Sep 15, 2008 8:45 PM EDT{"commentId":2943710,"authorDomain":"irina-hynes"}
Corzine is full of it, "Nobody saw this coming," blah blah blah. Yes, they did. But the ones who did were pooh-pooh'd as doomsayers by the same people who would have been looking for the Seven Cities of Cibola, been at the Gold Rush of '49, been selling swamp land in Florida . . .
{"commentId":2943710,"threadId":"358810","contentId":"1870059","authorDomain":"irina-hynes"}
#7 - Mon Sep 15, 2008 8:51 PM EDT{"commentId":2944300,"authorDomain":"amriksidhu"}
When is the media going to stop putting a twist on this issue? Home prices rose to an unprecedented level. Where was the media then? Where was the investigative journalism then, in cahoots with the sub prime lenders! Media is now trying to be the spokesperson of these overpaid and mess creating CEO's by writing news headlines that the home prices have to stop declining. The fact is that home prices were driven up by the sub-prime lenders and they have to come down to where they should be. Is the investigative journalism dead? Have you ever told the American people what the inflation rate of the home prices was during that time? The good old fashioned saying, "If you commit the crime you have to do the time". The CEO's of the financial giants that created the mess have all had golden parachutes, Should not you the investigative journalist be exposing these guys so that they go to jail, that's would probably be too hard for you. The same is true for the oil companies and the gas prices. Fact: If the price of a barrel of crude goes up by $5 the gas price at the pump goes up by Ten cents per gallon the next day, on the other hand if the price of a barrel of crude comes down $5, the price of gas does not come down by Ten cents the next day instead we are told the crude they bought yesterday does not hit the market till the six months, well the increase did not wait six months.Our constitution gave you (press) the freedom not realising the very same press will become a tool for the clever criminals. Com-on guys, be honest with the American people and do the job by exposing these people who with your help are trying to fool the American people almost all the time now.
{"commentId":2944300,"threadId":"358810","contentId":"1870059","authorDomain":"amriksidhu"}
#8 - Mon Sep 15, 2008 9:42 PM EDT{"commentId":2944444,"authorDomain":"graydon"}
The falling real estate market is definitely a problem but I do not believe it is the weak link in the chain of economic falling sky. My personal opinion is that the weak link and the quickest route to an economic 180 is the price of fuel. I base my opinion on my observation as a Real Estate Broker and the type of property and clients my associates and I deal with. We deal with developers, millionaires, billionaires, simple ranch owners, sophisticated investors, and normal everyday folk. We interact with the dozer driver, banker, title company, and the attorney daily. We are also a affiliated with a very large network of Brokers that deal mostly with recreational properties from beach houses in Florida to ranches in Alaska and we talk. Here is the K.I.S.S. theory; the majority of the U.S. is comprised of hard working individuals earning from $20,000 to $60,000 per year (bait fish). Believe it or not, the bait fish unknowingly make the economy work. Lets call the developers the mid size fish and the millionaire big fish and the billionaire the shark. If the bait fish do not gather then the mid fish do not come to feed then the big fish don't come because there are no mid size fish to eat and you guessed it, no big fish to prey upon then the sharks don't eat either. Its called the food chain and it applies to the economy as well.
If you want the real estate market to stabilize then reduce the price of gas not a little but allot. This will fix many of the root issues for the bait fish and encourage them to school once more. This will reduce their cost of living across the board because it will lower food costs, utilities, and the cost of goods and services. It will allow them to meet their obligations such as mortgage payments. If the low end of the money chain can pay their mortgages then the real estate market will soon stabilize. Developers will start to purchase property and hire workers to develop it because now they will have people who are interested in buying. Millionaires will start speculating on real estate hoping to become billionaires. Billionaires will start to provide the funds to so their money can make money all the way back down the food chain. Real Estate will not get better till the price of fuel is drastically reduced.
You might have noticed that the real estate bubble popped at the same time that fuel costs rose.
My opinion is that the government ought to flood the market with our reserve and drop the cost of gas to $1.50 per gallon. Diesel should be priced the same or below because it has a greater bearing on the cost of goods and services. The government should immediately start drilling at the federal level in our national parks immediately under the supervision of the EPA and NP&W. They should supply the country with it's fuel and from that point forward utilize the foreign product as reserve. By doing so we would have a much better negotiating advantage with foreign suppliers. One last comment, If our new leader ops to raise taxes across the board it will be the final nail in our economic coffin should all else continues to decline.
{"commentId":2944444,"threadId":"358810","contentId":"1870059","authorDomain":"graydon"}
#9 - Mon Sep 15, 2008 9:53 PM EDT{"commentId":2944865,"authorDomain":"pacgems"}
The problem is Gordon, there are fewer bait fish, you did note the connection between higher gas prices and real estate, but it goes beyond that, many bait fish are now unemployed, the remainder have less to spend not just because of gas but literally everything has a higher cost attached to it and many have lower actual wages to boot.
That in a nut shell is why Trickle down economics is so very shortsighted and does not work. America, both the government and the people, oops I mean bait fish have been bleed dry.
The end of this economics chaos is not in sight.
{"commentId":2944865,"threadId":"358810","contentId":"1870059","authorDomain":"pacgems"}
{"commentId":2945137,"authorDomain":"MARKO1"}
How confident will the U.S. and world markets be if McCain ("I know nothing about the economy, but I have Alan Greenspan's book") and Palin ("what's an entitlement?") are elected?
Scary, huh?
{"commentId":2945137,"threadId":"358810","contentId":"1870059","authorDomain":"MARKO1"}
#10 - Mon Sep 15, 2008 10:39 PM EDT{"commentId":2945658,"authorDomain":"mvmjk"}
I agree that he doesn't know anything about finance. But I haven't heard one concrete idea from Obama except the promise of change. That's still 3 quarters 2 dimes and a nickel to me. That is why he is running neck and neck with a corpse. In a race that was his to lose he is putting on his best impersonation of Edmund Muskie.
{"commentId":2945658,"threadId":"358810","contentId":"1870059","authorDomain":"mvmjk"}
{"commentId":2947600,"authorDomain":"attributes"}
McCain appears to continue in the good old fashion way of the strongest survives.
With Obama the change appears to be for a much bigger role of Government in all aspects of life or a turn to Socialism which in turn leads to apathy: who cares the government must solve it; which in turn leads to anarchy, civil wars and dictatorships. The end result is chaos. History doesn't show any socialist regimes ending up in paradise.
The change Obama seems to stand for is very big government with control over every aspect of life. Must we carry a chip in our ears then just as the cows do? After all in a socialist regime all we are is cattle anyway.
{"commentId":2947600,"threadId":"358810","contentId":"1870059","authorDomain":"attributes"}
{"commentId":2945188,"authorDomain":"amriksidhu"}
The media does not seem to want to stop putting a twist on this issue. When home prices rose to unprecedented levels, where was the media then? Why did the media not tell the American public the rate of inflation of the home prices? Where was investigative journalism? The CEO's of these sub prime financial houses all had golden parachutes. Tax payer now has to bail out the facilitators (Fannie and Freddie) of these financial houses. Stop being spokespersons for these (know nothing) experts by writing news headlines that house prices have to stop declining. House prices are not declining they are coming down to the level they should be at. The good old saying, " If you commit the crime you will have to do the time". Rather than exposing these criminals, media is fast becoming their spokesperson. The same goes for the oil company executives. If the price of a barrel of crude goes up by $5 the price of of gas goes up by Ten cents a gallon the next day, on the other hand if the price of a barrel of crude goes down by $5 the price of gas does not go down by Ten cents a gallon the next day, instead we are told that the crude we bought yesterday does not hit the market until the next six months, that was not the case when it went up. Is the investigative journalism dead. The constitution gave freedom to the media so that it can be the eyes and ears of the public not realising that one day the same press will join the criminal minds to fool the people. So come on Guys be honest with the American people, expose these institutions and criminal CEO.s and redeem yourselves.
{"commentId":2945188,"threadId":"358810","contentId":"1870059","authorDomain":"amriksidhu"}
#11 - Mon Sep 15, 2008 10:42 PM EDT{"commentId":2945772,"authorDomain":"Peter17"}
I can think of something more scary than McCain in charge and that would be Obamanomics. I guess with his lack of any executive experience, Obama could run around the country giving town hall speeches since that is the only thing he is trained to do.
{"commentId":2945772,"threadId":"358810","contentId":"1870059","authorDomain":"Peter17"}
#12 - Mon Sep 15, 2008 11:21 PM EDT{"commentId":2945960,"authorDomain":"CFAUA"}
The next Big meltdown is about to happen:
Credit card debt, delinquencies rise Why? because under the pushing of the "working-class friendly" Biden the laws on individual bankruptcy changed making it almost impossible for people to file. Despite clear evidence that the vast majority of bankruptcies come from medical expenses, the credit card lobby spent millions lobbying for this bill and turn to the Senator from Delaware where most of these corrupt card companies incorporate because of lax regulations. He, with the support of Obama pushed through this legislation that basically screws the average American. It is no coincidence that his son worked for one of these companies before it became public knowledge a few weeks ago and he resigned. When you look at Biden Senatorial runs, one of the biggest groups contributing to his campaign was the credit card industry. Anyone, except McCain or Obama drones who have to constantly be re-program as their candidates constantly change their position, must come to the sad realization that corruption rules in both parties and, if this country is to survive, we have to take matters into our hands and not rely on the bias reporting of the news media whether left or right and take to the streets. One final note- Because of this change and the fact it is almost impossible for individuals to file for bankruptcy and NOT lose their home, you now see what experts call "Jingle Mail" which is, sadly, average Americans sending the keys to the mortgage banks because of rising credit card debt they can't do anything about. One other thing, the company that Biden's son worked for charges one of the highest interest rates and has more undisclosed fees than any other bank. CORRUPTION RULES BOTH PARTIES AND IF YOU SERIOUSLY THINK THAT EITHER PARTY REALLY GIVES A HOOT ABOUT AVERAGE AMERICANS, WE WANT TO SELL YOU A BRIDGE IN NEW YORK.
{"commentId":2945960,"threadId":"358810","contentId":"1870059","authorDomain":"CFAUA"}
- 1 vote
#13 - Mon Sep 15, 2008 11:35 PM EDT{"commentId":2945981,"authorDomain":"hanna2210"}
Dont forget who is on Obamas side. We are talking highly respected Biden with lots of experience in foreign policies. Artur you are absolutly right. * years of Bushwhacker is enough
{"commentId":2945981,"threadId":"358810","contentId":"1870059","authorDomain":"hanna2210"}
#14 - Mon Sep 15, 2008 11:36 PM EDT{"commentId":2946018,"authorDomain":"benyielding99"}
If my ears serve me Obama finally admits the DEMs are partially to blame for this. If you people would open your eyes, you will see Congress has approved everything in the last 16 years. That is the free trade agreements that lost so many middle class jobs mainly in the midwest! They passed the bill for everyone to have a home, and put very little regulation to protect the people, so corporate America could make more money off us. But, what gets me most is DEMs pretend they had nothing to do with the IRAQ war, but aproved it, and continue to fund it no matter what, but speak out against it for how many years now. They get control of congress, and they still do not stop it. Do not give me that crap the army will run out of beans and bulliets. Funding is for the future, so open your eyes and see these two parties for what they are. Puppets for corporate america. They sooner you reallize that the better off the country will be. The two men can not fix a problem that they are apart of the problem. Want Change, go to SPAN and meet a few canidates that talk about real change, and cleaning up Washington for real. These two parties have fed you this song and dance for years, change this and change that. The middle class continues to pay for everything.
{"commentId":2946018,"threadId":"358810","contentId":"1870059","authorDomain":"benyielding99"}
#15 - Mon Sep 15, 2008 11:39 PM EDT{"commentId":2946235,"authorDomain":"j-whitman"}
Don't dishonor this country by using it as your screen name
Congress has been controlled by republicans since 1994 --- This problem started in 2000 when
McCain's economic adviser Senator Phil Gramm slipped an Enron-backed provision into the Commodities Futures Modernization Act into the Farm Bill.
Every, since your Bush administration & McCain denied the problems & fought every attempt to remove the Enron Loophole or to even discus the issue
{"commentId":2946235,"threadId":"358810","contentId":"1870059","authorDomain":"j-whitman"}
{"commentId":2960997,"authorDomain":"Peter17"}
Gee, I thought that Nanny State Nancy P. was currently Speaker of the House. And doesn't Harry Reid lead in the Senate?? Aren't they both Democrats???
I guess that your statement is factually incorrect as that means that Democrats have controlled Congress since the beginning of 2007.
{"commentId":2960997,"threadId":"358810","contentId":"1870059","authorDomain":"Peter17"}
{"commentId":2946066,"authorDomain":"mvmjk"}
My Father-in -law has always been one of the most conservative investors I have ever met. Never sell your blue chips. Be in it for the long haul. Only Merrill Lynch for him. He made fun of me for using Scottrade. He bought a house in Naples Fl in 2000 for $200,000. 2 years ago we went to visit him. At the beginning of the weekend he would say his house was worth $600,000. By the end of the weekend it was worth $1,000,000. That's when I realized how pervasive this dopey bubble was in the mindset of Americans.
The morons on all the financial channels are all cheerleaders for the market. They all claim that nobody saw this coming yet every analyst who came on these shows, saying that this was a huge bubble that was going to burst, was derided as a nut case and laughed at.
The NY tri-state area has a median home price of $500,000. The median household income is $70,000. To buy a home you will have to put down 20% or $100.000 plus closing costs. A Bank will only lend you the traditional 2-3 times your income or a max of $210,000. That lets you know how far this housing market has to still fall before it stabilizes.
Now that the Gov't has involved the American taxpayer in these bailouts we are now mirroring the Japanese recession that ran for 13 years 1990-2003 where their gov't bailed out all their financial institutions.
{"commentId":2946066,"threadId":"358810","contentId":"1870059","authorDomain":"mvmjk"}
- 1 vote
#16 - Mon Sep 15, 2008 11:43 PM EDT{"commentId":2947657,"authorDomain":"attributes"}
Real Estate Agencies have forgotten what Real Estate really is and turned this product into some Barbie doll sale, their ever growing greed to collect a bigger fee. The true winners of this housing bubble is the Real Estate Agent.
Wasn't there a time you had to keep a Property for at least five years before selling it again? What happend to that rule? Wasn't this rule to prevent exactly what is happening?
It is wrong to involve government in these situation...in the end it lands back with a bigger burden for the tax payers.
{"commentId":2947657,"threadId":"358810","contentId":"1870059","authorDomain":"attributes"}
{"commentId":2946088,"authorDomain":"hanna2210"}
What are you talking about this country has been run by puppets for 8 years. The government knew about the rich oil in Colorado shale rock for over 40 years. If they had acted then the US of A woul be the leading oil industry in the world. Democrat or Republican rule. Now put that under your hat and sleep on it
{"commentId":2946088,"threadId":"358810","contentId":"1870059","authorDomain":"hanna2210"}
#17 - Mon Sep 15, 2008 11:45 PM EDT{"commentId":2946126,"authorDomain":"hanna2210"}
This country is going to crash BIG TIME if all this is kept up. You just wait RECESSION is coming quicker than you think
{"commentId":2946126,"threadId":"358810","contentId":"1870059","authorDomain":"hanna2210"}
#18 - Mon Sep 15, 2008 11:47 PM EDT{"commentId":2946197,"authorDomain":"hanna2210"}
Lets see if our congressmen and other government employees had to be on our social security. How would they live. OH NO THEY HAVE THEIR OWN. DRAWING HUNDREDS OF THOUSANDS A YEAR. LET THEM GO OURS AND SEE HOW QUICK THEY FIX IT. i BE OURS WOULD BE TAKEN CARE OF IF THEY RREALIZED HOW BAD WE HAVE IT
{"commentId":2946197,"threadId":"358810","contentId":"1870059","authorDomain":"hanna2210"}
#19 - Mon Sep 15, 2008 11:53 PM EDT{"commentId":2946200,"authorDomain":"CFAUA"}
8 years? try 50 years.
the only time is this period that a President and Congress did anything smart was the very early 90's when Bush Sr. agreed to tax increases in return for spending limits.
{"commentId":2946200,"threadId":"358810","contentId":"1870059","authorDomain":"CFAUA"}
#20 - Mon Sep 15, 2008 11:53 PM EDT{"commentId":2946911,"authorDomain":"amriksidhu"}
When is our media going to stop putting the spin on this? Where were the investigative journalists when house prices were going through the roof and sub prime lenders were making the loans to fund inflation? Why did the media not inform the American people the rate of inflation of the house prices.
The CEO's of these financial institutions all had golden parachutes, were the investigative journalists in cahoots with these CEO's?
Stop asking these good for nothing experts that house prices have to stop declining for the economy to get better, where were these good for nothing experts when the sub prime lenders were lining their pockets? Tax payers now had to bail out the facilitators (Freddie and Fannie) of these criminal institutions. House prices are not declining they are coming down to where they should be. So stop writing these bogus news headlines that the house price decline has to stop.
The same goes for the oil company executives. When the price of a barrel of crude went up $5 the price of a gallon of gas went up by Ten cents the next day, on the other hand when the price of a barrel of crude went down $5 the price of a gallon of gas did not go down by Ten cents the next day, instead we were told that the price of crude they bought yesterday does not hit the market for six months. How come that was not the case when the price of crude went up.
The constitution bestowed freedom upon the press so that they may be the eyes and ears of the people, wish they had known that the press will join the criminals to fool the people! Come on guys stop being mouth pieces of these institutions and criminals, expose them and redeem yourselves.
{"commentId":2946911,"threadId":"358810","contentId":"1870059","authorDomain":"amriksidhu"}
#21 - Tue Sep 16, 2008 1:11 AM EDT{"commentId":2946957,"authorDomain":"muskateer"}
I really doubt the housing crisis is going to correct itself with more and more Americans losing their jobs because greedy corporations want to close American factories and open new ones India, China, Mexico and then sell their products back in America. This is not globalization per-say, it is downright treason. As more people lose their jobs, more people will lose their houses. Simple solution, punish these American corporations by forcing them to pay import duties when they sell their products in America. Simply make it uneconomical for them to continue to do business as usual. Elimiate all tax breaks to them and use the excess funds to offset the wages lost by good hard working American employees.
{"commentId":2946957,"threadId":"358810","contentId":"1870059","authorDomain":"muskateer"}
#22 - Tue Sep 16, 2008 1:19 AM EDT{"commentId":2949218,"authorDomain":"frank-silbermann"}
What did the bankers THINK would happen when they sold tricky loans designed to fool ignorant homebuyers as to what their payment would really be? The mortgage brokers they hired to trick ignorant homebuyers double-crossed the banks by fooling THEM as to the homebuyers' true income -- but isn't that what happens when you partner with flim-flam men? Didn't any of their staff economists tell them that, no, housing prices cannot continue rising fast forever? What were they _thinking_?
{"commentId":2949218,"threadId":"358810","contentId":"1870059","authorDomain":"frank-silbermann"}
#23 - Tue Sep 16, 2008 9:39 AM EDT{"commentId":2951280,"authorDomain":"NAFTA"}
Let's get Palin to fix this, she's an economical genius.
{"commentId":2951280,"threadId":"358810","contentId":"1870059","authorDomain":"NAFTA"}
#24 - Tue Sep 16, 2008 11:51 AM EDT{"commentId":3343353,"authorDomain":"quiteshy2004"}
Well Dennis the "genius" economists did such a great job on this. granted Palin may not be the "genius" but then again name me a politican that is?
{"commentId":3343353,"threadId":"358810","contentId":"1870059","authorDomain":"quiteshy2004"}
{"commentId":2951416,"authorDomain":"NAFTA"}
JH 307896 JH must stand for Jug Head
{"commentId":2951416,"threadId":"358810","contentId":"1870059","authorDomain":"NAFTA"}
#25 - Tue Sep 16, 2008 11:57 AM EDT{"canLink":false,"threadId":"358810","isPrivate":false}
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