Congress, White House reach financial bailout deal »
Posted By STONERS 1 year, 1 month ago in Business & FinanceCongressional leaders and the Bush administration have reached a tentative deal on a bailout of imperiled financial markets that could cost taxpayers hundreds of billions of dollars.
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STONERS1 year, 1 month ago
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"The plan would spend up to $700 billion, most of it on buying deeply devalued mortgages from the housing market's collapse and other bad loans held by tottering banks and other investors."
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"The aim is to prevent credit from drying up and causing a meltdown of the U.S. economy."-
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ind061 year, 1 month ago
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I'd like to congratulate my friend STONERS for putting up a post about this subject featuring a headline that is NOT rife with political demagoguery.
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Hey, check it out! "Demagoguery" is actually a word! I should've said "demagoguerism" :D
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berkeley1 year, 1 month ago
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Goppy1 year, 1 month ago
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Sometimes I wonder if this national collapse isn't all part of GeeDubs overall plan.
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I mean ... look ... he campaigned on a platform that Government is bad. He sacked perfectly run government agencies and stuffed them with cronies and contributors (remember 'heck of a job Brownie?")
I simply cannot believe that this consistent level of incompetence and failure is by accident.
This consistency of failure defies the odds!
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miklkit1 year, 1 month ago
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Look at this chart. Where did all of the money suddenly go? This is not a natural thing. Someone caused it. Who and why?
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http://research.stlouisfed.org/fred2/series/BOGNON...-
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Beau78901 year, 1 month ago
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I've been fascinated by that chart ever since the first time I saw you post it. It's a freakin' scary graph and it doesn't explain its terms that well to the layman.
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I've had a hard time finding out what suddenly changed (and when) that caused that fall of the cliff of the Fed's chart of non-borrowed reserves.
Yesterday I found a couple of articles that say it's a fluke--that the Fed created a new way for financial institutions to obtain sufficient reserves in December 2007. Apparently, the Fed created a Term Auction Facility that allows institutions to borrow from them on a "wide range" of collateral for up to 28 days. Non-borrowed reserves refers to the institutional amount of reserves that is NOT borrowed from the Fed, and the creation of the Term Auction Facility shifted much more borrowing TO the Fed.
Here's a link about it:
http://blogs.wsj.com/economics/2008/02/08/non-borr... -
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David_Kellum1 year, 1 month ago
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It is a smoke screen to use OPM... Other People's Money..
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Ours, the taxpayers to get assets at bargain prices... Just ask Warren Buffett..
He bought into Goldman Sachs. Keep reading:
Over the past year, Citigroup, Bank of America, and JP Morgan have lost tens of Billions of dollars. Each. Now, if you and I were known to have lost several times our annual earnings over the past year, our ability to borrow heavily would be quite limited. Especially in a tight credit market.
Yet, in this seizing market, Citigroup has credit…or why would they be buying Wachovia? Bank of America has credit….they are buying Merrill Lynch. JP Morgan has credit…they are buying Washington Mutual after just having absorbed Bear Stearns. Is credit going to suddenly un-seize itself? (Is that really a real word?)
Virtually all the major banking players have consolidated into 3 companies, plus 2 surviving investment banking gieants who are in the process of converting into commercial banks.
Bear Stearns and Lehman were the 2 largest players in the mortgage securities markets, with Merrill Lynch buying in late in the game. Today, Bank of America has bought the largest mortgage network by acquiring Contrywide and now has Merrill’s mortgage security expertise in house. They will dominate mortgages in the US, with no clear competition because of their banking presence nationwide.
The largest S was taken over by JP Morgan, who did not have a retail banking presence, particularly in the West. Now they do. They also took over Bear Sterns.
Citigroup was amazingly quiet during this credit crisis, only emerging into the news today, by being in serious talks to take over the Wachovia operation. Wachovia is/was the 4th largest securities salesforce in the nation, as well as the 3rd largest retail banking operation in the nation.
So, we now have 3 gigantic banking players, plus a much smaller operation in Wells Fargo. Don’t be surprised if either Morgan Stanley or Goldman Sachs work a deal with them next week, just to stay in the game with the big three.
This seizing up of credit may just be the tool enabling the Big 3 banks to consolidate their base of power by buying up their major competition, at low prices, and perhaps at taxpayer expense. It’s just like in 1998 when Big Oil drove the price of oil DOWN, in order to force the merger of Exxon/Mobil, Chevron/Texaco, and Conoco/Phillips. Once the mergers were done, the price of oil suddenly surged, and hasn’t stopped since. You can look it up. When Exxon made the bid for Mobil, oil was at it’s 30-year low in December of 1998.
It is still in the government's best interest to keep fuel high, as the taxes are a percentage.... California makes 77 cents a gallon and the oil company makes 14 cents a gallon...
Government has us fooled who the culprit really is.
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cowboygrandpa1 year, 1 month ago
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Again the tax payers are the losers.
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The hard working middle class who have to shoulder another freaking disaster of the Bush administration. We need to impeach this guy!!!!!
We also need to seize the assets of the clowns who profited from the nightmare. The CEO's who drove up values with no real liquid assets to back them. The speculators who will walk away not nearly as hurt as the ones who lose it all.
This is not free market, this is cronyism and fascism at work.
Bush is not worried about the cost as long as he and his buddies get theirs.
I say lets take the private assets of those CEO's and the ones who allowed this financial boondoggle. It won't cover it all, but it will sure hurt them worse than allowing them to continue to live in luxury while so many lose everything.-
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lovemylibs1 year, 1 month ago
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cbg - I agree with most of what you post. It is wrong to completely lay the blame, though, at the feet of Bush. Sure he is partially responsible. Sure there was a lot of cronyism going on. A lot of that cronyism was created by the Democrats as evidenced by this video:
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http://www.youtube.com/watch?v=_MGT_cSi7Rs
Watch the video and see what the Rep's with the "D's" next to their names were saying in 2004. -
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dstern1Comment removed: Spam
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danielistical1 year, 1 month ago
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let them go down in flames and take the bush administration with them they are the ones who crated this let them enjoy it bush is just trieing to get his hands in our pockets one more time be fore he goes out the door and good riddence to him the destruction of this country is now complete bush has worked hard for eight years to do so
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mdaok1 year, 1 month ago
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In 2003, the Bush Administration recommended what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury. However, it did not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enabled them to issue debt at significantly lower rates than their competitors. The changes were generally opposed along Party lines and eventually failed to happen. Representative Barney Frank (D-MA) claimed of the thrifts "These two entitied Fannie Mae and Freddie Mae are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Representative Mel Watt (D-NC) added "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing."
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jordan111 year, 1 month ago
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The problem with not instituting greater oversight was that fannie and freddie had already shown huge accounting 'errors.' Obviously, ignoring that wasn't too smart; BUT,I still can't find the bill itself that either never got to the floor for a vote, or was voted down? I've heard a lot about this bill, and how democrats stopped it, but have yet to SEE it so I can decide what was really going on. Anyone have a link to it?
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sprytling1 year, 1 month ago
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I believe what has happened here is that the dem/lib/socialists/communists have just taken over our financial economy. They have always wanted input into corporations and they created legislation that no corporation could possibly make money with. There has been such classism and such jealousy of anyone who had earned their own homes or were able to run their own businesses and actually make money, that slowly but surely, dem/lib/socialist/communists used those jealousies to create entitlements. Fannie Mae and Freddie Mac were created to find ways to get mortgages for people who never would have been permitted to purchase a home under the financial corporations of the United States. That was why our economy stayed strong.
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Fannie Mae and Freddie Mac sought legislation to FORCE the financial institutions to make loans to minorities, citing what they said were prejudices preventing minorities from buying homes. Never mind that these people didn't have the money to pay the loans. In addition, Fannie Mae and Freddie Mac began spreading money throughout the Senate and the House. Lobbyists were sending thousands of dollars to Congress to get them to turn a blind eye.
Legislation was passed to force financial institutions to loan a percentage of money to all minorities so that they could buy houses. Never mind that there was nothing to back those loans. Congress made it LAW that those financial insitutions to make the loans anyway.
In return Wall Street tried to bundle those loans with others in order to lessen the losses. And that is how we ended up with the failures that we have now. Too many banks bought the bad paper, by law, and the amounts of the mortgages were carried on the books as assets, but the houses were not getting paid for...which meant that the assets were now liabilities.
This bail out was entirely created by Fannie Mae and Freddie Mac with the backing of Congress...and I'm not saying everyone in Congress, but enough that this crisis has happened. There has been talk from some of the Republicans, including John McCain, to reform Fannie Mae and Freddie Mac, as early as 4 years ago. But their voices were lost in the greed of the Congress and in the Dem/Lib/socialist/communist party in bribing their constituents with housing they could never have afforded-
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jordan111 year, 1 month ago
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AGAIN: I'm fed up with people trying to lay this at the feet of the democrats, when CLEARLY the republicans held both houses of Congress. How did the minority party do all that damage? Show me the bill everyone talks about that mccain tried to get passed.WHERE is it?
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jaern1 year, 1 month ago
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The rescue would only be open to companies who deny their executives "golden parachutes" and limit their pay packages. Firms that got the most help through the program — $300 million or more — would face steep taxes on any compensation for their top people over $500,000.
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The CEO of failed Washington Mutual Inc., on the job only a few weeks before the nation's largest thrift was seized by the government and sold to JPMorgan Chase & Co., is entitled to more than $13 million in severance and bonus pay.
Kerry Killinger the former CEO severance package is around $22mil reward for driving WaMu into the ground.
He should have been fired and applied for unemployment. -
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CHAM1 year, 1 month ago
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Thanks Stoner for posting this. At least there is some information to assess.
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What I see in this Bailout is a gigantic rip-off of the taxpayer. Seems those Companies who raked in obscene profits from the malfeasance that led to the crunch get to keep those ill gotten profits. And where they made bad investments that could potentially cost them in the future, they won't have to worry about that because the Government is going to buy those trash instruments and assume the liabilities that the Financial Industry could have lost on. What a sweetheart deal for the Financial Industry.
The plan should have required ownership of the firms by the taxpayers, and the taxpayers should be given a redeemable share whenever a payback is agreed to. Thats when the taxpayer should get a check from the rescued firm for the taxpayer money used to bail out wall street.
Instead we common worker taxpayers share in investments with the crooks. The shares break down like this: They get the mine, we get the shaft. -
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Bopi3651 year, 1 month ago
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I love it . Republicons trying to shift the blame The Mccain bill s.190-109th that would have averted the Freddie/Fannie mac crisis. As John flies in with his cape and red underwear.
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That little piece has been making all the right wing blogs in the hopes of rescuing Mccains campaign.
The facts :
1 Mccain signed on to the bill (s.190) after it was already stillborn in committee.
2 The dems did not fillibuster it.
3 It was a republican congress
4.It provided for a seperate agency to be set up to oversee Freddie and fannie but with less oversight than had been currently alotted.
5 George Bush was against the senate version (of s.190) hr1416
from georges desk himself:
H.R. 1461 fails to include key elements that are essential to protect the safety and soundness of the housing finance system and the broader financial system at large. As a result, the Administration opposes the bill. -
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Bopi3651 year, 1 month ago
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and my personal favorite...
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The Bush cut taxes/grow the economy plan showed only slight hope of success through revenue derived from the housing boom. That boom was fueled by sub-prime loans.
I hear george is going to ask for the stimulus checks back to help pay for this mess.
Trickle down. -
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