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Faced with the continued unwinding of the global financial system, the Treasury is opening a new front in its battle to right the banking system. By buying stakes directly, the government would immediately bolster banks’ capital foundations. But such a move — as the details of how it will be done are still sketchy — carries its own set of risks.
Treasury Secretary Henry Paulson said Wednesday that the financial bailout bill approved by Congress gives him wide authority to inject capital into the banking system. The White House confirmed Thursday that could include having the government take a direct ownership stake in banks.
The move follows action by the British government Wednesday to spend hundreds of billions of pounds to rescue its banking system.
In just the past few weeks, the contraction of lending has accelerated. Banks are unwilling to lend to each other out of fears that the borrower may be the next institution to fail. As the global lending machinery slows, the economy slows with it. The longer it takes to get money flowing again, the greater the risk of a deep and prolonged recession.
The plan would have little immediate impact on the safety of individual deposits. The Federal Deposit Insurance Corp. recently raised insurance limits individual accounts. But that may not be enough to calm nervous depositors — who may decided to move money to countries with unlimited guarantees on bank deposits.
“Internationally several countries — Germany, Ireland, and so forth — have guaranteed all deposits,” said William Seidman, “We'll have to see if that drains money out of the United States.”
The Treasury’s investment of billions of dollars indirect ownership of banks would constitute a stunning reversal of the government’s policy of minimal intervention in free markets. Much of the opposition to the $700 billion financial bailout came from Republicans who opposed using tax dollars to backstop failing financial institutions
Supporters of the idea, including Sen. Charles Schumer (D-NY), who chairs the Joint Economic Committee, said having the Treasury buy stakes in banks could insure that taxpayers benefit later.
"When the market recovers, the federal government would profit," Schumer said.
The idea is not without risks. If banks turn over stock to the government, it dilutes the value of shares already held by investors. Lowering value of already-battered bank stocks could put greater pressure on lending.
“If they're going to go in with an injection of capital into banks where the taxpayer is going to profit from that, that drives down equity capital in banks,” said David Malpass, a senior Treasury official in the Reagan administration. “It's a giant sucking sound away from bank equity and away from bank equity capital and from lending. Banks won't lend.”
Banks don’t have to sell stock to the government. But under the terms of the recently enacted Troubled Asset Relief Program, any bank that wants to sell bad mortgage-backed debt to the government have to give the government, in return, the right to buy some of its stock. Banks that have loaded up their books with these bad mortgage assets may have no choice.
“The only reason they're putting money in those banks and the banks are accepting is that the banks will go broke without it,” said Bill Seidman, former chairman of the Federal Deposit Insurance Corp. “They're not taking this because they love the government. They're taking it because the regulator is saying, ‘You don't have enough capital. If you don't get more capital, we're going to close you down.’”
Some critics suggest that government regulations may be a big part of the problem banks are now facing. The huge losses they’ve booked are due in large part to the heavy writedowns in the value of investments back by mortgages — for which there are no buyers. Most people are still paying their mortgages, so these investments are almost certainly worth something.
But because of the uncertainty about rising defaults and falling home prices, banks are required to “mark” the value of these investments to the “market price,” which may be far less than they’re really worth. Congress recently gave the Securities and Exchange Commission more leeway to relax those accounting standards.
“The SEC has destroyed $500 billion of bank capital by its senseless marking to market of these assets for which there is no market,” said William Isaac, former FDIC chairman. “And that has destroyed $5 trillion of bank lending. That's a major issue in the credit crunch we're in right now. The banks just don't have the capital to start lending right now because of these horrendous markdowns that the SEC's approach required.”
But allowing banks to assign a higher value to these investments could backfire — by undermining confidence in bank bookkeeping. That’s the main purpose behind the TARP program. The hope is that once the government begins buying these mortgage-backed investments, bankers, investors and depositors will get a better idea of how much capital banks have to work with — and which banks are at risk of going under.
That uncertainty about how much mortgage related assets are worth could also undermine the government efforts to pump money into the system by buying up stakes in banks.
“The problem is if you capitalize the banks that hold these troubled assets — but there’s no clarity or transparency or price discovery process for these assets — then that capital could quickly evaporate,” said David Resler, chief economist at Nomura Securities. “You need to have both.”
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 | Eye on the economy: Rate cut doesn't calm markets | Associated Press | Wed Oct 8 | 43 |
 | Bailout becomes buy-in as feds move into banking | Associated Press | Tue Oct 7 | 8 |
| Paulson endorses bank stock purchase plan | Associated Press | Wed Oct 8 | 0 |
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{"commentId":3401039,"authorDomain":"lmaccarato"}
Off the record, did you see the pictures of our wonderful President Bush getting himself so drunk at the olympic games it took four or five agents to assist him to stand? Wonderful way for a commander in chief and president of the US to present himself ?
{"commentId":3401039,"threadId":"383954","contentId":"1975980","authorDomain":"lmaccarato"}
#1 - Thu Oct 9, 2008 1:50 PM EDT{"commentId":3401601,"authorDomain":"leprechaun1230"}
So much for King George II being a reformed drinker, eeh?
{"commentId":3401601,"threadId":"383954","contentId":"1975980","authorDomain":"leprechaun1230"}
- 1 vote
{"commentId":3401851,"authorDomain":"sneila"}
Since I can't watch paint dry either..I did not see the Olympics. Therefore I missed that one... was it for real?
{"commentId":3401851,"threadId":"383954","contentId":"1975980","authorDomain":"sneila"}
- 1 vote
{"commentId":3402053,"authorDomain":"parthur169"}
He was in the air national guard, but spent tax payers money like a drunken sailor. Worst president in history.
This bailout is another waste of taxpayer money. Thanks George Hoover Bush!
{"commentId":3402053,"threadId":"383954","contentId":"1975980","authorDomain":"parthur169"}
- 1 vote
{"commentId":3403537,"authorDomain":"gdedman"}
Ya drunk and Obama was kissing Farekan on the lips, did you see that one. It true if I heard it or if some post say's so.
{"commentId":3403537,"threadId":"383954","contentId":"1975980","authorDomain":"gdedman"}
{"commentId":3405954,"authorDomain":"dhand34"}
where are the pics of drunk Bush?
{"commentId":3405954,"threadId":"383954","contentId":"1975980","authorDomain":"dhand34"}
{"commentId":3433236,"authorDomain":"magnumserpentine"}
Fire Paulson, Vote every Representative and Senator who voted for the 850 billion dollar Corporate Welfare out of office, then demand the new congress vote to with-draw this 850 billion dollar corporate welfare.
Thats as simple as it gets. Remember to vote everyone who voted for this 850 billion dollar corporate welfare out of office.
{"commentId":3433236,"threadId":"383954","contentId":"1975980","authorDomain":"magnumserpentine"}
{"commentId":3433265,"authorDomain":"magnumserpentine"}
Oh yes, forgot something. Kicking the G-7 out of the United States might help also.
I am also wondering if someone might be able to Sue the United States Government to prevent this 850 billion Dollar corporate welfare from taking effect??????
{"commentId":3433265,"threadId":"383954","contentId":"1975980","authorDomain":"magnumserpentine"}
{"commentId":3401094,"authorDomain":"lalaura"}
Let's see: allow the financial industry to unrealistically elevate the book price of a problem property instead of documenting the current value. Hmmm, wasn't a big chunk of this mess caused by the industry misdocumenting financial numbers (quality of loan applicants)?
Yea, that sounds like a good Republican solution: 1) falsify, 2) put the issue consequences on a later timetable, 3) turn an absurdly optimstic eye to corrupt and/or inept business leaders and 4) throw a boatload of vague PR at the public.
Thanks to all of you turkeys who voted for this administration. You are as guilty as the bums who directly caused this mess.
{"commentId":3401094,"threadId":"383954","contentId":"1975980","authorDomain":"lalaura"}
- 4 votes
#2 - Thu Oct 9, 2008 1:54 PM EDT{"commentId":3401484,"authorDomain":"leprechaun1230"}
Horrified 561930:
You're exactly right. I also think that move would get it off the backs of the Republicans, and onto the backs of the Democrats, once this thing is valued.
One idea that I think would help appease some, Certainly ME, is to put the CEO's, CFO's, Accounting geniuses directly in prison and let them rot there until rational people get this figured out. They were the ones that either condoned these transactions, turned a blind eye, or flat out didn't know, but, of course, collected their bonuses nonetheless.
McShame's idea of demonstrating some fiscal responsibility is to cancel plans for the installation of a stripper pole in the Oval Office for Sarah to entertain foreign dignitaries during visits. Good idea, but not near enough, John. You know how those Pigs with Lipstick are.
{"commentId":3401484,"threadId":"383954","contentId":"1975980","authorDomain":"leprechaun1230"}
- 3 votes
{"commentId":3402096,"authorDomain":"parthur169"}
Blame the christian right. They are the second largest cult in the world - aka Bush Zoombies.
{"commentId":3402096,"threadId":"383954","contentId":"1975980","authorDomain":"parthur169"}
- 1 vote
{"commentId":3402372,"authorDomain":"Evangelion"}
wow, what an informed debate Arthur.
Just two questions...
Did your poly sci teacher give you that line or are you the cc poly sci prof?
and
Dare I ask but.. What is the largest 'cult' in your kool aid drinking deluded mind?
{"commentId":3402372,"threadId":"383954","contentId":"1975980","authorDomain":"Evangelion"}
- 1 vote
{"commentId":3403442,"authorDomain":"baja-bandito"}
{"commentId":3401784,"authorDomain":"sneila"}
If congress supports it.....then I don't! The government is not helping us!!
{"commentId":3401784,"threadId":"383954","contentId":"1975980","authorDomain":"sneila"}
- 3 votes
#3 - Thu Oct 9, 2008 2:33 PM EDT{"commentId":3401874,"authorDomain":"scoots"}
More massive socialism under republican george bush. Yet, the republicans continue to call the democrats socialists?
{"commentId":3401874,"threadId":"383954","contentId":"1975980","authorDomain":"scoots"}
- 3 votes
#4 - Thu Oct 9, 2008 2:39 PM EDT{"commentId":3401940,"authorDomain":"sneila"}
And as an Independent....I just shake my head @ the pubs and dems...
{"commentId":3401940,"threadId":"383954","contentId":"1975980","authorDomain":"sneila"}
- 3 votes
{"commentId":3402848,"authorDomain":"bplough"}
Hey, watch it there.--
That's Comrade Bush to you.
{"commentId":3402848,"threadId":"383954","contentId":"1975980","authorDomain":"bplough"}
- 1 vote
{"commentId":3403657,"authorDomain":"sneila"}
Sorry
{"commentId":3403657,"threadId":"383954","contentId":"1975980","authorDomain":"sneila"}
- 1 vote
{"commentId":3406566,"authorDomain":"kdshodges"}
Hey, whats this blame game, author what are you a godless imoral @!$%#. To blame any one group is not only sensless but, dosen't require much imagination. This whole mess took about 16 years to develop. Clintons time of great prosperity was a paper boom and the start of the mortgage chrisis followed by the spending bill hes signed in 2002. Then the last nail in the coffin was the election of baby bush and his inability to control the molestation of the wolves around him. So, don't go blaming the religious right they are probably the last group of people who still hold good american values. The demo are as moraly corrupt and lazy as the Republicans are hungry and greedy.
{"commentId":3406566,"threadId":"383954","contentId":"1975980","authorDomain":"kdshodges"}
{"commentId":3402004,"authorDomain":"smonen"}
So Paulson's plan is risky?? Gosh; tell us something we didn't already know!
{"commentId":3402004,"threadId":"383954","contentId":"1975980","authorDomain":"smonen"}
- 3 votes
#5 - Thu Oct 9, 2008 2:47 PM EDT{"commentId":3402026,"authorDomain":"sneila"}
I just heard, that some analyst believe that within the next three years 1 out of every 9 banks in the US will fail...now that is alarming.
{"commentId":3402026,"threadId":"383954","contentId":"1975980","authorDomain":"sneila"}
- 1 vote
{"commentId":3402418,"authorDomain":"artisan3m"}
Yes, it is alarming, but try this one which has a much shorter detonation fuse. I heard an economist this morning predict that if this continues unabated through the next 60 days, as many as 25-million additional US workers will be without jobs before year's end. Now THAT's alarming!!! His reasoning makes sense ~ no market for goods and services, and no payroll reserves to retain employees through a recovery period ~ ~ if one comes at all.
{"commentId":3402418,"threadId":"383954","contentId":"1975980","authorDomain":"artisan3m"}
{"commentId":3403067,"authorDomain":"hogtie"}
Wow! Good stuff!
I heard an analyst predicted the sky is falling as we speak!
Really! Look out the window!
You'll all be dead by tomorrow.............bout 7:30? That sound about right?
{"commentId":3403067,"threadId":"383954","contentId":"1975980","authorDomain":"hogtie"}
{"commentId":3406603,"authorDomain":"kdshodges"}
marxlenin, it is people like you who are lucky they can hide behind a keyboard.!
{"commentId":3406603,"threadId":"383954","contentId":"1975980","authorDomain":"kdshodges"}
{"commentId":3412675,"authorDomain":"hogtie"}
What the hell does that mean ...........Don?
I hate people that say that.
I'm not hiding from anything or anyone................Don.
Would you care to meet for lunch sometime so I can prove it to you?
I live in West Palm Beach Fl. Are you close?
How does today sound? Fri. 10/10/08..........huh..................Don?
No? I guess your just one of those people who are lucky they are hiding behind a computer. Dickhead!
{"commentId":3412675,"threadId":"383954","contentId":"1975980","authorDomain":"hogtie"}
{"commentId":3402111,"authorDomain":"runster2"}
I would just like to say:
I am trying to be educated when I laugh at what our governing body is doing with the bailout. Everything I have read says though taxpayers are footing the bill; we will receive NOTHING in return. The bailout bill makes sure of that. Let's just rebel. This is SO not going to work. I just wanna see all those AIG employees who went to the spa with taxpayers footing the $400,000 plus bill; each and every one of them, begging on any street corner.
This is no longer a democracy. For crying out loud folks! Wake up! When government steps in and puts their grimy hands in the financial system, thus buying free market; this constitutes betrayal of the democratic system that was already flailing.
Are we seriously gonna just sit here and watch our OUR legislators go directly against what we want?????
We are so very lazy.
{"commentId":3402111,"threadId":"383954","contentId":"1975980","authorDomain":"runster2"}
#6 - Thu Oct 9, 2008 2:53 PM EDT{"commentId":3402207,"authorDomain":"SouthLady"}
Can someone tell me the facts on how safe an IRA account is with a local community bank? I had it in Merrill Lynch and when they sold I moved it to my local bank. Would I be safer to pay the penalities and get it out? Of course the bank says they are secure, but I`m unsure. It`s not much, but it`s all I have.
{"commentId":3402207,"threadId":"383954","contentId":"1975980","authorDomain":"SouthLady"}
#7 - Thu Oct 9, 2008 2:59 PM EDT{"commentId":3403455,"authorDomain":"hogtie"}
SouthLady
Try to relax. I know it's hard, I've seen 30% of my pittance of a retirement fund disappear. If there is one thing I know for sure, it's that NOONE knows for sure.
Historically speaking, your money is safe., but history isn't really helping that much, as we are in uncharted waters. This is a decision you'll have to make for yourself.
The market is a risk. Always has been.
Like a wise man once said: "You can't steal second base, with one foot still on first".
{"commentId":3403455,"threadId":"383954","contentId":"1975980","authorDomain":"hogtie"}
{"commentId":3404080,"authorDomain":"SouthLady"}
Thanks MarxLenin, I did just check my local banks rating and it had a CAEL rating of 1 and 5 stars, so I do feel some better and it is FDIC. It`s hard to sit back and watch what you`ve worked so hard for all your life suddenly start vanishing. And I know so many Americans are in this same situation or worse. God help us all.
{"commentId":3404080,"threadId":"383954","contentId":"1975980","authorDomain":"SouthLady"}
{"commentId":3405172,"authorDomain":"hodg1687"}
South Lady. Keep your money in your IRA and local banks! I will keep mine in my local banks also. However, I also have a 401K, several houses, cash in an undisclosed location, food, water, guns, ammunition. If your IRA goes under then everyone's IRA goes under. Also you are insured by the full faith and credit of the United States Government. Don't panic! There will be soup lines if everything crashes.
{"commentId":3405172,"threadId":"383954","contentId":"1975980","authorDomain":"hodg1687"}
{"commentId":3402244,"authorDomain":"JustMe101"}
As usual, the Gov't took the wrong road, went the wrong way, etc,etc. Why not use McCain's stolen idea and start at the bottom, by the way, that's us, Main street, the tax payers, etc, etc,...
{"commentId":3402244,"threadId":"383954","contentId":"1975980","authorDomain":"JustMe101"}
#8 - Thu Oct 9, 2008 3:02 PM EDT{"commentId":3402247,"authorDomain":"artisan3m"}
I don't think there is a quick fix solution to this mess, certainly not one that will turn the tide within the next 100 days. Make no mistake, BushCo is not in the least interested in some long term solution. It just wants to avoid depression striking before it can get out of town. I wouldn't bet on that happening. Every financial salvo fired at this crisis has been a dud. There is no confidence in any camp ~ and these daily crisis management actions by Paulson and the FED merely serve to solidify how perilous the problem really is. When the captain of the ship is in panic, others on board usually mirrow that attitude and fight for life preservers. VOILA! Such is the case here.
{"commentId":3402247,"threadId":"383954","contentId":"1975980","authorDomain":"artisan3m"}
#9 - Thu Oct 9, 2008 3:02 PM EDT{"commentId":3402365,"authorDomain":"widemoto"}
Here's an inside view by a stock market trader on why the bailout plan won't work. This is part of an article by Jon Markman who interviewed the trader.
"If you really read the bill, and understand how it will be interpreted, it's the scariest thing you ever saw," said the trader, who asked not to use his real name. "These guys have no idea what they're unleashing."
"Minimization of long-term costs and maximization of benefits for taxpayers." This is the section that Congress haggled into the bill to ensure a payoff, via warrants, for citizens if mortgages purchased from banks are later sold for a profit. Bank lobbyists snookered the government by sneaking in an exception under subsection 3a, "Conditions on purchase authority for warrants and debt instruments." The clause, titled "Exceptions -- De Minimis," states that any debt instruments worth less than $100 million won't trigger the
payback provision. Banks will simply issue their debt in tranches of $99 million or less, and avoid allowing the government -- and thus taxpayers -- to get a piece of the banks' profits. "It's a joke.
"Other traders who scanned the bill came to the same conclusion, through their own prisms, agreeing that the bill would provide only an illusion of action while failing to address the key problems facing the financial system: Too many houses will remain on the market; they were bought with too much leverage that is vaporizing in spurts; and those losses have left banks with too little capital from which they can lend. Even worse, the traders pointed out, the government can make money on the loans only if it pays so little for them that they can be sold at a much higher price. And yet if the government doesn't pay enough, then the banks won't receive enough to make a difference in their balance sheets.
So here's how the taxpayers will be cheated, they said:
Banks will take advantage of the suspension of mark-to-market accounting by stating that loans originally held at "par," or the equivalent of the purchase price, and now valued by the market at 20 cents on the dollar, will really be worth 85 cents if held until the loan matures. The banks will then sell the loans to the government at a fake discount of 75 cents on the dollar.
"The lobbyists made sure this bill was rammed through so that these rip-offs couldn't be fixed in committee," said another trader. "Everyone on the Street knows it solves nothing."
{"commentId":3402365,"threadId":"383954","contentId":"1975980","authorDomain":"widemoto"}
- 1 vote
#10 - Thu Oct 9, 2008 3:10 PM EDT{"commentId":3411777,"authorDomain":"psdixit18"}
Tad,
excuse my ignorance plz but is it really like this?Can anyone please elaborate that $ 700bn is not going to help?This sounds scary.
{"commentId":3411777,"threadId":"383954","contentId":"1975980","authorDomain":"psdixit18"}
{"commentId":3412426,"authorDomain":"widemoto"}
Prashant,
Wall Street knows it's not going to work hence the panic selling and lack of confidence in the plan which shows in the Dow crashing. It seems the banks asking for the bailout have figured out how to shaft the taxpayers and getting an infusion of capital at the same time.
Hopefully Paulson will not follow through with the rest of his purchase of the bad assets from them. The $700 billion bailout plan was wrong from the beginning, most of it was aimed to benefit large institutions who lobbied for this in the first place to save their own "assets" and butts with no interest in benefits for the average person.
It's not working now and it won't work in two months, it came much too late and too little and planned wrong. The key focus should be in keeping our nation wide commercial banks stable and operating which the FDIC is doing anyway. The bailout money can be used to keep the FDIC funded and operating. We don't need to be buying any bad mortgage assets from anyone.
Personally, I feel these institutions holding mega amounts of bad debt should be left to their own demise because of their greed and stupidity. We should let the rotten apples fall as their greed and wickedness still continues even when being offered help.
The worst thing Paulson can do is to start buying banks and getting government into the commercial banking business which it will fail miserably as it has in everything it touches.
{"commentId":3412426,"threadId":"383954","contentId":"1975980","authorDomain":"widemoto"}
{"commentId":3402388,"authorDomain":"rgm626"}
Somebody wrote in to a local news station here and had the perfect solution to this bail out thing. He said that they should divide the 700 billion between all the taxpayers, giving them about 1 million apiece. Everybody could pay off their debt and still infuse the economy with tons of money. It would be a win win for everybody.
{"commentId":3402388,"threadId":"383954","contentId":"1975980","authorDomain":"rgm626"}
#11 - Thu Oct 9, 2008 3:11 PM EDT{"commentId":3402410,"authorDomain":"mrluki"}
When everything seems like its coming your way, your in the wrong lane!
Would somebody please take the check book away from Paulson!
BREAKING NEWS: Dow drops below 9,000 in late afternoon trading
{"commentId":3402410,"threadId":"383954","contentId":"1975980","authorDomain":"mrluki"}
#12 - Thu Oct 9, 2008 3:12 PM EDT{"commentId":3402447,"authorDomain":"jls427sohc"}
The problem we have is that we have a bunch of eco idiot pliticians thinking they can fix something they have never had to experience in the buisness world, or live through in their actual lives.
{"commentId":3402447,"threadId":"383954","contentId":"1975980","authorDomain":"jls427sohc"}
#13 - Thu Oct 9, 2008 3:15 PM EDT{"commentId":3402652,"authorDomain":"mrluki"}
I'm having a hard time just paying my own bills I don't need anymore DEBT!
Let the suckers crash and burn(no buddy rides for FREE!)
{"commentId":3402652,"threadId":"383954","contentId":"1975980","authorDomain":"mrluki"}
#14 - Thu Oct 9, 2008 3:26 PM EDT{"commentId":3402783,"authorDomain":"bplough"}
I think the solutions are aimed at the effects and not the cause.
What caused the people to not be able to afford their loans? JOBS! The fix is to give us better jobs. This is an old problem, dating from the first W. Bush recession.
They created more jobs by pumping up the housing sector. The inflated cost of homes also pumped cash into the economy by letting people spend loaned money.
Now everyone has to pay that money back. There are not too many good construction jobs out there. Those two reasons will make this recession stick for a minute. The only solution is to somehow bring good jobs back, and to end out addiction to debt. Bailouts will only reduce the effect of these causes.
{"commentId":3402783,"threadId":"383954","contentId":"1975980","authorDomain":"bplough"}
- 2 votes
#15 - Thu Oct 9, 2008 3:33 PM EDT{"commentId":3407032,"authorDomain":"nzark"}
And I was beginning to think that no one understood the real problem! The strength of the economy is the ability of the American people to work and earn the income necessary to buy and pay for the things they want, and put a little aside for their kids education and their own retirement.
When instead, they're forced to take pay cuts and job losses while facing double digiet inflation, (government figures don't take into account the steep cost increase in energy, utitlitys, healthcare, etc.) things get out of hand.
Although it's important to get Wall St. back on track for the sake of retirement plans, investments and such, the economy won't stableize until unemployment (the government only counts those getting or currently applying for unemployment now. People whose benifits have run out, or who haven't applied aren't counted) and out of control inflation are adressed. Adam Smith pointed this out in his book "The Wealth of Nations."
As for Paulson and his group of experts, either they don't know what they're doing, or they're being less than honest, or both. Paulson's economic moves remind me of Rumsfeld/Bush war moves. Fake it, Wing it, and hope something works.
{"commentId":3407032,"threadId":"383954","contentId":"1975980","authorDomain":"nzark"}
- 1 vote
{"commentId":3402820,"authorDomain":"bra1sa"}
Has nothing to do with political parties and yes, politicians and Wall Street.
The bailout fixed one side of banks overleveraged balance sheet. Shareholder Equity is out of whack (other side of banks balance sheet).
Banks got more money from bailout, to meet bank customers withdrawals, only because they were scared (Main Street and Wall Street, both).
Hold your socks...here comes the 2nd bailout. This all started in 1977 (a Peanut Farmer did this to us).
{"commentId":3402820,"threadId":"383954","contentId":"1975980","authorDomain":"bra1sa"}
#16 - Thu Oct 9, 2008 3:35 PM EDT{"commentId":3403007,"authorDomain":"bplough"}
Started in 1977? I have heard people (all ditto heads) say time and time again that the economy is affected by years ago stuff, but 31 years takes us back beforee the teck bubble, the internet, the collaspe of the Berlin wall, and even the Space Shuttle. But I guess you have to go back far to put the blame on Democrats. I know that I had two of these so called smart people tell me the economy was really OK less than a month ago. I saw one of these guys avoid me on purpose since then. I bet you said the economy was OK too.
I was 3 in 1977, and now have 2 cars, a home and investment properties. I could care less about Carter. During the VP debate everyone's favorite gal said to stop looking backwards about 50 times. So please stop with this 1977 stuff.
{"commentId":3403007,"threadId":"383954","contentId":"1975980","authorDomain":"bplough"}
{"commentId":3403904,"authorDomain":"rlmullen12"}
For those who weren't around in 1977, or were of working age then, JimBo has a point, we had 22% inflation, 25% unemployment, and 20% mortage rates. Doesn't matter Rebublican or Democrat, that is exactly what the parties want to happen divide and conquer they have succeded. We play the blame game and keep getting mroe or the same. Blame the "D"'s no blame the "R"'s what we do not realize is they both are at fault and the two party system is broken and needs to be blown up and replaced with open minded thinkers who understand and uphold the constitution along with good soild Austrian Economics. Then we will see change.
What has happened is we haven't learned from our history and Japan's history. In the 90's Japan was the hot economy, they started doing the same things we did and it took them 15 years to get out of it and get their economy back on track. The problem isn't looking back, its looking back and not learning. That is America's biggest issue that is why we have congress people that have been there for 30 - 40 years and why were no better off than we were then we just kep re-electing the same people, we do not learn.
{"commentId":3403904,"threadId":"383954","contentId":"1975980","authorDomain":"rlmullen12"}
- 1 vote
{"commentId":3404131,"authorDomain":"Evangelion"}
There is a lot of truth that this started in 1977. That is when CRA was passed. CRA is the direct cause of the housing bubble. Changes to it in 1995 and 1997 helped accelerate the burst.
- The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations. It was enacted by the Congress in 1977 (12 U.S.C. 2901) and is implemented by Regulations 12 CFR parts 25, 228, 345, and 563e. (See Regulation).
- The CRA requires that each insured depository institution's record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution's application for deposit facilities, including mergers and acquisitions. (See CRA Ratings) CRA examinations (see Exam Schedules) are conducted by the federal agencies that are responsible for supervising depository institutions: the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS).
By forcing banks to make bad loans under CRA, congress set us on a course that could only end in crisis.
{"commentId":3404131,"threadId":"383954","contentId":"1975980","authorDomain":"Evangelion"}
- 2 votes
{"commentId":3405937,"authorDomain":"avivid8"}
http://www.youtube.com/watch?v=1RZVw3no2A4 you speak the truth now watch the video. Thanks Barney/Dodd/Obama
{"commentId":3405937,"threadId":"383954","contentId":"1975980","authorDomain":"avivid8"}
{"commentId":3402959,"authorDomain":"wtram46"}
It doesn't matter what we think--Bush and Congress will do, and have done, whatever THEY want!! They do not listen to We the People!!! I say hang 'em all for treason--starting with Pelosi--the chief idiot of all time!!!
{"commentId":3402959,"threadId":"383954","contentId":"1975980","authorDomain":"wtram46"}
#17 - Thu Oct 9, 2008 3:43 PM EDT{"commentId":3403111,"authorDomain":"kmoser1810"}
Pulling my money out of 401 today and taking hit on taxes! Last time I trust Govt. or financial planners advice. I have had enough!
{"commentId":3403111,"threadId":"383954","contentId":"1975980","authorDomain":"kmoser1810"}
- 1 vote
#18 - Thu Oct 9, 2008 3:52 PM EDT{"commentId":3403134,"authorDomain":"pgsmock"}
Let this government take over the banks? Anything that the government gets involved in turns sour. Hello.... that's what SOCIALISM is all about!! The liberals propose that the government should manage our health care as well! There is no easy answer, but a strong capitalist nation like ours will rebound. Have faith in America, folks!!
{"commentId":3403134,"threadId":"383954","contentId":"1975980","authorDomain":"pgsmock"}
#19 - Thu Oct 9, 2008 3:53 PM EDT{"commentId":3403188,"authorDomain":"cuzzza112"}
I'm just curious why I haven't seen or heard word one from any of our politicians about those thieving AIG execs. going on a $4000,000.00 vacation, obviously with our money.
Oh right, I forgot, it was our thieving politicians that gave them our money to go.
{"commentId":3403188,"threadId":"383954","contentId":"1975980","authorDomain":"cuzzza112"}
- 1 vote
#20 - Thu Oct 9, 2008 3:56 PM EDT{"commentId":3403447,"authorDomain":"gdedman"}
Obama gave them the OK when he, Polousy and Poulson past the $700 billion bailout. ACORN,ACORN,ACORN Obama
{"commentId":3403447,"threadId":"383954","contentId":"1975980","authorDomain":"gdedman"}
{"commentId":3403299,"authorDomain":"bigbconners"}
{"commentId":3403422,"authorDomain":"scrubnurse911"}
*faints*
{"commentId":3403422,"threadId":"383954","contentId":"1975980","authorDomain":"scrubnurse911"}
#22 - Thu Oct 9, 2008 4:07 PM EDT{"commentId":3403428,"authorDomain":"timfournier"}
The insanity just doesn't stop. Just look Look at he messages the White House and the two Wall Street slickies have been putting out over the period of the past three weeks....it started with:
A BAILOUT IS NEEDED then
A BAILOUT MUST AND WILL BE PASSED TO PREVENT FURTHER DAMAGE TO OUR ECONOMY then
THE BAILOUT HAS BEEN PASSED then
THE BAILOUT MAY NOT CURE ALL OF THE PROBLEM(S) then
THE MARKETS ARE NOT RESPONDING POSITIVELY TO THE BAILOUT then
A LOWER BANK INTEREST RATE MIGHT WORK then
THE BAILOUT + LOWER INTEREST RATES ARE NOT PROVIDING CONFIDENCE THE MARKETS NEED then
MAYBE THE US WILL TAKE A SHARE IN BANK OWNERSHIP
Wake up people....these folks don't know and don't have the answers!! The entire situation should have been left alone to correct itself and let the chips fall where they may. Now....you and I and our children and possibly their children are on the hook for the debt mis-management AND the now the government owning the banks?
Get a gun...a knife...a ball bat whatever it takes...because when the @!$%# hits the fan people will be in the streets trying to take what they think is theirs. Be prepared to defend yourself and you home either from angry rioters or government troops
This makes me sick...the whole lot...the politicians , the wall street slicks, and the banker types. should be thrown out of the country. They are traitors to America's values.
{"commentId":3403428,"threadId":"383954","contentId":"1975980","authorDomain":"timfournier"}
#23 - Thu Oct 9, 2008 4:08 PM EDT{"commentId":3403433,"authorDomain":"daniel-frontino"}
You should all own your own
{"commentId":3403433,"threadId":"383954","contentId":"1975980","authorDomain":"daniel-frontino"}
- 1 vote
#24 - Thu Oct 9, 2008 4:08 PM EDT{"commentId":3403468,"authorDomain":"amosriddelsjr"}
i don't even know where to start...this started during the depression when our government took responsibility to control the economy...every president...every congress...state local and federal are judged by the health of the economy...they all work to pass laws to prop up the economy by slight of hand and government spending they cant afford...simply to make the economy look better than what it really is...passing laws to make it easier and easier to for ordinary citizens to borrow money to make their finances better than they really are...nearly every aspect of our economy is propped higher than it should be...today's politicians are so busy pointing fingers that don't have time to raise their hands and acknowledge the facts.
i don't know if their is an answer except to allow the economy to reset to where it should be. Then take measures to end our national debt, illegalise bankruptcy or credit in general and get our selves out of debt ( number I've seen says 36 TRILLION DOLLARS owed by ordinary citizens in mortgages, credit card, car and assorted loans)
Constitutional Amendment to require a debt free nation...balanced budget...
AND THAT IS JUST THE BEGINNING
{"commentId":3403468,"threadId":"383954","contentId":"1975980","authorDomain":"amosriddelsjr"}
#25 - Thu Oct 9, 2008 4:09 PM EDT{"commentId":3403482,"authorDomain":"bigbconners"}
{"commentId":3403542,"authorDomain":"amosriddelsjr"}
oh yes i almost forgot that BUSH and Cheney and McCain is responsible for the crusifiction and extiontion of the dinasoars and the holocaust and chernoble and hell...every thing bad that has ever happened
{"commentId":3403542,"threadId":"383954","contentId":"1975980","authorDomain":"amosriddelsjr"}
#27 - Thu Oct 9, 2008 4:13 PM EDT{"commentId":3403723,"authorDomain":"bigbconners"}
{"commentId":3403849,"authorDomain":"baja-bandito"}
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