Comments for Congress, White House reach financial bailout deal »
Posted By STONERS 1 year, 3 months 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.
Read Full Story at news.yahoo.com »
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STONERS1 year, 3 months 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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mivan41 year, 3 months ago
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And to see where this problem came from watch this all of it for complete understanding
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http://www.youtube.com/watch?v=H5tZc8oH--o -
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ind061 year, 3 months 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, 3 months ago
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jordan111 year, 3 months ago
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Endoscopy1 year, 3 months ago
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They are the ones that wanted more control and accountability. At the start the Democrats were going along with the Bush proposal. Then McCain said they should listen to the House Republicans. Then the email came in 100 to 1 against it as it stood. I guess McCain was right again. Too bad libs.
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jordan111 year, 3 months ago
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Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.>>>>
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So oversight is subject to veto's? And compensation of over $500,000 is subject to stiff taxes? How stiff? This means CEO's could walk away with millions in taxpayer dollars, even after paying 'stiff taxes' with money that isn't theirs anyway? I've got a headache.
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berkeley1 year, 3 months ago
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the very worst part of all these lies relate to speed, with bush and paulson lying about total doom if congress doesn't act immediately.
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so all day and night sunday, the scribes are going to be writing the details of the bill, and monday, congress is expected to pass it. once again, they will be voting on something none of them have had time to even read, much less think about, or amend.
this still stinks to high heaven.
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Goppy1 year, 3 months 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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ADAGUY1 year, 3 months ago
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"I've thought the same thing, but can't come up with "why?""
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Why? This is the final result of the frisking the US has taken at the hands of the Bush administration.
I am afraid that this mortgage ripoff was planned far in advance, and what we are seeing now is merely collateral damage!
Likewise I don't think he sent us into Iraq to ruin our reputation. He went there to make money, and again the rest is collateral damage!
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miklkit1 year, 3 months 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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mark-stevens1 year, 3 months ago
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Geoge Bush is a commie!! Oh I thought lies was the agenda
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Bank of America and other major players drove this. The C.E.O.'s would get huge bonuses for acquring money owed paper.
In the bank world much like Enron, a debt is considered an asset,. not good debts, just debts.
They would bundle the paper and sell it to the investment banks whose C.E.O.'s would get huge bonuses.
Is anybody going to jail... no, did these crooks get unbelieveably rich, YES
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Beau78901 year, 3 months 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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Beau78901 year, 3 months ago
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And here's another link:
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http://www.bloomberg.com/apps/news?pid=20601039=co...
(I split them because I've noticed Propeller doesn't let me post two links in the same comment anymore.)
I'm no economist, but I don't see how creation of a short-term TAF to make it easier to borrow from the Fed than elsewhere, especially on the basis of a "wide range of collateral" (as surely a euphemism for bad collateral as any I've heard), solves anything. The Fed is then taking control of the bad collateral on which financial instutions were borrowing until other institutions stopped taking the bad risks on collateral. It made it more expensive for institutions to borrow, so they shifted the bad risk to the Fed.
The Fed can't fail if its securities fall in value, but it can print more money. That devalues everyone's currency. I still see that graph as a major problem. -
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Beau78901 year, 3 months ago
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I'm sure I didn't explain it very well. Let me give it another try:
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According to the articles I found and linked to, the Fed appears to define "non-borrowed reserves" (as used in mlklkit's graph) as requirements of cash in reserve to cover sudden runs or demands that are not borrowed FROM THE FED. They may be reserves that are still borrowed from other sources, like other financial institutions.
So the sudden plunge in the graph of "non-borrowed reserves" shows only that institutions are borrowing more from the Fed to cover their reserve requirements than they do from other places--but they still borrow to maintain their reserves, which seems to me to be inherently dangerous. A new program that made it much more advantageous for institutions to borrow from the Fed rather than other sources accounts for the suddenness of the drop in mlklkit's graph. But again, that drop only measured amounts borrowed from anywhere other than the Fed.
Everything clear as mud now? ;-)
No wonder economists can't agree on anything!
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miklkit1 year, 3 months ago
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Ok. I think I get it. Your first link has a better graph that shows both sides of the story. My graph only shows half of the story. Maybe I should complain to hyperbola about that. Anyway, I won't post it again.
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Your second link doesn't work.-
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Beau78901 year, 3 months ago
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I was posting that BOGNONBR link all the time, too--I thought it was really something. But I'm still not sure we're in great shape. The question I have is, how much do our financial institutions have in reserve that is not borrowed from anyone?
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By the way, I found those links by Googling "non-borrowed reserves." Sorry about the bad link, but I think you can still find the Bloomberg story if you try that search.
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David_Kellum1 year, 3 months 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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jordan111 year, 3 months ago
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Help me out please. You're saying the banks are getting credit but not giving it? How is buying ownership of Merril Lynch going to help B of A (for example) if business can't get credit from B of A to keep production & goods going that moves our economy? I'm now officially lost.
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cowboygrandpa1 year, 3 months 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, 3 months 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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wtagg1 year, 3 months ago
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There are times when doing nothing is preferable to doing something, especially when considering the amount and the level of confidence in providing a successful result.
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If we are being told that we are going to fund this bailout, we should get a guarantee on the investment.
This again points to the government's direction of creating a problem that financially burdens the taxpayer and then providing a solution that burdens the taxpayer.
It's ironic that while it was perceived to really be affecting those carrying the mortgages, everything was ok. Once it burdened and put at risk the mortgage providers, then there suddenly was the need to do something.-
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jordan111 year, 3 months ago
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we should get a guarantee on the investment.>>>>
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Absolutely!
Once it burdened and put at risk the mortgage providers, then there suddenly was the need to do something.>>>>
It went further than just mortgage providers. It has stopped the availability of credit, & threatens our economy. Business (small business) is no longer able to DO business.
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cowboygrandpa1 year, 3 months ago
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lovemylibs:
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OK, I won't lay the blame all at Bushes feet.
But what I will say is he is a free marketer whose ideas on the economy have no place in todays' complex financial world.
We must have some protections against the very things we have happening right now.
To just say the wealthy will play by the game fairly is simplistic at best and moronic to anyone with the understanding of absolute power corrupting absolutely.
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HateKoolAid1 year, 3 months ago
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If I'm right we taxpayers just bought a bunch of 'bad paper' in the hope (gamble) that a little ways down the road they will magically become worth their weight in gold. Either that or we just gave Wall Street a 700 billion dollar interest free loan payable whenever they feel they have recouped their loses. What's to keep them from recouping their loses in a couple of years but taking ten years to pay it back citing a bunch of excuses while using our money racking up interest. If I sound confused I'm sorry but it's because I don't know what the hell we just did. Will somebody out there please tell me exactly what we just bought for 700 billion dollars.
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dstern1Comment removed: Spam
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danielistical1 year, 3 months 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, 3 months 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, 3 months 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, 3 months 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, 3 months 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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FairNBalanced1 year, 3 months ago
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jordan,
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MCCAIN'S FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005
In this legislation McCain states the following:
((I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190,
I wish to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
McCain states in this legislation:
"IF CONGRESS DOES NOT ACT, AMERICAN TAXPAYERS WILL CONTINUE TO BE EXPOSED TO THE ENORMOUS RISK THAT FANNIE MAE AND FREEDIE MAC POSE TO THE HOUSEING MARKET, THE OVERALL FINANCIAL SYSTEM, AND THE ECONOMY AS A WHOLE."
I urge my colleagues to support swift action on this GSE reform legislation.))
http://www.govtrack.us/congress/record.xpd?id=109-...-
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jordan111 year, 3 months ago
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When the bill was originally submitted, the controlling party was republican. They didn't kill it, but they did set it aside and wouldn't let it go to the house for a vote. It apparently carried over to the new (democratic) Congress, and they wouldn't release it for a vote either. So the bill died in committee. At least this is what I take from it all. Anyone have a different scenario?
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FairNBalanced1 year, 3 months ago
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The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
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McCain submitted this 3 years ago.
The democrats shot it down!!-
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jordan111 year, 3 months ago
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The democrats shot it down!!>>>>
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Disingenuous. BOTH ruling party's let the bill sit in committee, and wouldn't release it for a vote. The republicans when it was originally submitted for consideration, set it aside. The democrats when they took power, ignored it. The bill died in committee, meaning it reached the amount of time a bill is allowed to 'exist.' No? Correct me if I'm wrong.
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jordan111 year, 3 months ago
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The bill wasn't killed. It died in committee. Both the republican and the democratic Congress's let it die. When republicans had power, they ignored it and wouldn't let it go to a vote. When democrats got power, they ignored it and it's time limit ran out, and it died.
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jordan111 year, 3 months ago
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OK, I found some information that the bill never made it to the floor for a vote. Who killed the bill? At that time, republicans headed committees. Why did his own party not want it to go forward, and how did this become the fault of democrats who were the minority party at the time?
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Did they hold it up knowing democrats would kill it? This is all so bizarre, and it's hard to figure it out. Thanks for the input. It helped.
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TcarosComment removed: Hard Banned
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jordan111 year, 3 months ago
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Well, as FairNBalanced pointed out, the bill did go over to the 2006 Congress after being held up by the republicans. Why didn't they allow it to go to floor for a vote? (the democrats). Why did BOTH party's want the bill to die? I would love to get my hands on Congress people's investment portfolio's.
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jordan111 year, 3 months ago
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No, the slate does not get wiped clean. For a bill to die in committee, it sits there for a specified amount of time. The bill was on the books when democrats took power. Republicans ignored it, and democrats let it die in committee.
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TcarosComment removed: Hard Banned
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jaern1 year, 3 months 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, 3 months 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, 3 months 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, 3 months 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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