Today's Headlines

ElfDude · Post by **ElfDude** » Mon Sep 22, 2008 10:50 am

The Illuminati control it all...

ElfDude · Post by **ElfDude** » Mon Sep 22, 2008 11:54 am

Back to our current economic woes... the more I read, the more I'm convinced that the problem has been caused by government meddling, not by deregulation.
http://www.bloomberg.com/apps/news?pid= ... KSoiNbnQY0

awip2062 · Post by **awip2062** » Mon Sep 22, 2008 12:42 pm

*just shakes her head*

We are so screwed. By our own people.

Big Blue Owl · Post by **Big Blue Owl** » Mon Sep 22, 2008 2:01 pm

Actually, to me, that article illustrates (through the opinions of an "adviser to Republican Senator John McCain of Arizona in the 2008 presidential election") that it's a case of the problem that could have been averted if there was any kind of regulation, and a bill to do just that was snagged, if not blocked by the dreaded Democrats.

"Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened."

"What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets."

"But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter."

One thing I find inaccurate is the claim that Obama's gain from these companies (in light of the many millions in contributions he has raised as opposed to the 125,000 he aledgedly recieved from FM,) was substantial compared to the shenanigans played out by McCain's campaign manager Rick Davis.
http://www.nytimes.com/2008/09/22/us/po ... in.html?em

Senator John McCain?s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

Mr. McCain, the Republican candidate for president, has recently begun campaigning as a critic of the two companies and the lobbying army that helped them evade greater regulation as they began buying riskier mortgages with implicit federal backing. He and his Democratic rival, Senator Barack Obama, have donors and advisers who are tied to the companies.

But last week the McCain campaign stepped up a running battle of guilt by association when it began broadcasting commercials trying to link Mr. Obama directly to the government bailout of the mortgage giants this month by charging that he takes advice from Fannie Mae?s former chief executive, Franklin Raines, an assertion both Mr. Raines and the Obama campaign dispute.

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain?s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

?The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,? said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis?s firm $35,000 a month. Mr. Davis ?didn?t really do anything,?

ElfDude · Post by **ElfDude** » Mon Sep 22, 2008 2:36 pm

A couple of points...

The author is the director of economic-policy studies at the American Enterprise Institute. That John McCain has asked him to be an advisor shows good judgement on the part of John McCain. It does not discredit the author.

Secondly, feel free to bring McCain into it all you want. I don't particularly like him and it doesn't change the history of this or my original point.

I'll let Matt Cover speak for me here. The following is a copy/paste, put inside of a quote box so everyone knows these words are not my own.

Both presidential candidates have said the bailouts of AIG, Fannie Mae, Freddie Mac, and Bear Stearns were necessary measures. Republican John McCain blamed greedy Wall Street tycoons, while Democrat Barack Obama blamed failed Republican economic policies.

According to Sheldon Richman, editor of The Freeman and an economist with the Foundation for Economic Education, government policy is to blame.

?The biggest culprit, I think, is the implicit guarantee the government has always issued to Fannie Mae and Freddie Mac,? Richman said. ?Something like 80% of the mortgages these days are held or backed by Fannie Mae or Freddie Mac,? he said, and ?they get special treatment from the government like no other lender gets.?

These factors, particularly the government guarantee, have brought about our current financial crisis, said Richman.

Fannie Mae and Freddie Mac have been able to buy bundles of home mortgages, or mortgage-backed securities, in massive quantities without real-world considerations of financial risk, because they could count on the federal government to bail them out if things went south.

?We don?t call them ?Government Sponsored Enterprises? for nothing,? Richman said.

Other economists reject this analysis. In a paper published this year by the Brookings Institution, economists Martin Neil Baily, Douglas W. Elmendorf, and Robert E. Litan argue that since ?financial institutions are regulated and supervised by a bewildering array of federal and state authorities,? those regulators could and should have acted.

?Despite the limited authority of any specific regulators,? the economists said, ?more should have been done to prevent the crisis.?

But lack of oversight is hardly the problem, Richman said, because ?the financial industry is regulated all over the place.? In Richman?s analysis, it is precisely the government guarantee of Fannie and Freddie that is ?short-circuiting? the market.?

That guarantee ?removes market discipline,? emboldens banks to make bad loans, and encourages Fannie and Freddie to back them. This, Richman asserted, is a ?moral hazard.?

?It?s like if I invite you to Vegas and say the winnings are all yours and I?ll cover your losses,? Richman said. ?You?re going to have a great old time. On the other [hand], if you go by yourself and you know you?ve got to cover your losses, you?re going to behave differently, and that?s been the problem.?

Providing context, Richman said government policy laid the foundation of this crisis more than 30 years ago when Congress passed the Community Reinvestment Act of 1977. This law forced banks to loan money to low-income borrowers as a way to ensure that financial institutions would ?meet the credit needs of the local community.?

Under the Clinton administration, federal regulators began using the act to combat ?red-lining,? a practice by which banks loaned money to some communities but not to others, based on economic status. ?No loan is exempt, no bank is immune,? warned then-Attorney General Janet Reno. ?For those who thumb their nose at us, I promise vigorous enforcement.?

The Clinton-Reno threat of ?vigorous enforcement? pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. ?Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn?t have been getting mortgage loans.?

This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the ?banks could just sell the loans off to Fannie or Freddie,? who could buy them with little regard for negative financial outcomes, Richman said.

However, the most harmful federal policy may not have been backing Fannie and Freddie per se, but bailing them out.

?When the government basically expropriates stockholders, that makes other stockholders nervous and therefore drives down other stocks that are similar,? said Cato Institute economist Alan Reynolds. ?Most obviously, Morgan Stanley [going] down after Lehman goes down.?

That nervousness can help drive poor economic policy decision-making. AIG, Reynolds explained, ?has just got fabulous assets. It?s a trillion dollar company. It?s just short of cash.? The federal government bailout of AIG has been ?draconian.?

Moreover, Reynolds said, the bailouts have forced these companies into a kind of ?quasi-bankruptcy? when no one knew in fact whether the firms were or were not solvent.

Reynolds called the government?s intervention ?capricious? and ?whimsical? and said it appears to have ?no rules.? No wonder, he said, investors have been scared away from infusing financial institutions with the capital they need to maintain solvency and stave off bankruptcy.

Economist Robert E. Litan challenged a negative view of government intervention. In bailing out Bear Stearns, Fannie, Freddie, and AIG, he said, ?federal policymakers appropriately used their authority to stabilize the markets and protect the American economy from systemic risk and collapse.?

?We have learned from the past,? he said. ?While Depression-era policy makers watched idly while events spiraled out of control, today?s policy-makers have recognized the need for swift action to contain the damage.?

What this financial crisis really shows, Richman said, is that politicians ?don?t know what they?re doing. They don?t understand economics. They think there are no laws of economics, that they can decree whatever they want and that there won?t be consequences.?

awip2062 · Post by **awip2062** » Mon Sep 22, 2008 2:41 pm

I think this is a great analogy:

?It?s like if I invite you to Vegas and say the winnings are all yours and I?ll cover your losses,? Richman said. ?You?re going to have a great old time. On the other [hand], if you go by yourself and you know you?ve got to cover your losses, you?re going to behave differently, and that?s been the problem.?

And I state again that I think it would be better for us (but harder in the short term for many) if we let this alone and what happens happens. No bail out, failure.

zepboy · Post by **zepboy** » Mon Sep 22, 2008 5:42 pm

I'm with t on this one.

CygnusX1 · Post by **CygnusX1** » Tue Sep 23, 2008 5:19 am

4 killed, 2 hurt as rock star's jet crashes

Ex-Blink-182 drummer and popular disc jockey are treated for burns

Both are going through skin grafts now, but are expected to make a
100% recovery. I understand that DJ AM got burned worse than Travis.

God bless 'em. I wish them a speedy get-well.

CygnusX1 · Post by **CygnusX1** » Tue Sep 23, 2008 5:43 am

There's a vicious rumor that Biden is stepping down as VP for Obama
to allow Hillary in.

The rumor says Biden will step down Oct. 5....

Anybody know if there's any truth to this?

I got it in a e-mail, but don't want to spread innuendo.

zepboy · Post by **zepboy** » Tue Sep 23, 2008 5:48 am

According to Snopes, it is still undetermined, but they are checking it out further and will post results.

Do you think the Dems would further shoot themselves in the foot and go through with this idea?

CygnusX1 · Post by **CygnusX1** » Tue Sep 23, 2008 6:28 am

zepboy wrote:According to Snopes, it is still undetermined, but they are checking it out further and will post results.

Do you think the Dems would further shoot themselves in the foot and go through with this idea?

Personally, I think it's brilliant. If true, it would certainly steal
Sarah's thunder, and also show that Biden is willing to

"take one for the team."

Obama needs SOMETHING to win.

If this is true - he just scored BIG TIME.

Big Blue Owl · Post by **Big Blue Owl** » Tue Sep 23, 2008 6:33 am

According to McCain theory, if you throw a woman in - ANY WOMAN - it causes this country to go ga-ga. So be it, I say. I refuse to be distracted by any of 'em anymore, though.

The author is the director of economic-policy studies at the American Enterprise Institute. That John McCain has asked him to be an advisor shows good judgement on the part of John McCain. It does not discredit the author.

No, it doesn't discredit the author, but if you can imagine how that article would look had it been written by an Obama advisor, perhaps you would see my point.

Secondly, feel free to bring McCain into it all you want. I don't particularly like him and it doesn't change the history of this or my original point.

I was just countering the bit of the article that accuses the Obama campaign of getting rich from Fannie and Freddie, when Loan Titans Paid McCain Adviser Rick Davis Nearly $2 Million, and the article itself was written by a McCain advisor.

From what I gather, your point is that;

Back to our current economic woes... the more I read, the more I'm convinced that the problem has been caused by government meddling, not by deregulation.

I was pointing out that, in the article you pointed to there was several mentions of "regulation" and how this crisis could have been averted if there had been some.

What this financial crisis really shows, Richman said, is that politicians ?don?t know what they?re doing. They don?t understand economics. They think there are no laws of economics, that they can decree whatever they want and that there won?t be consequences.?

Now THAT is indisputable, whoever says it.

Walkinghairball · Post by **Walkinghairball** » Tue Sep 23, 2008 7:58 am

CygnusX1 wrote:4 killed, 2 hurt as rock star's jet crashes

Ex-Blink-182 drummer and popular disc jockey are treated for burns

Both are going through skin grafts now, but are expected to make a
100% recovery. I understand that DJ AM got burned worse than Travis.

God bless 'em. I wish them a speedy get-well.

Really, you don't say??????

Look back a page or so there mr. slow poke. LOL

LOL

CygnusX1 · Post by **CygnusX1** » Tue Sep 23, 2008 8:17 am

Walkinghairball wrote:
CygnusX1 wrote:4 killed, 2 hurt as rock star's jet crashes

Ex-Blink-182 drummer and popular disc jockey are treated for burns

Both are going through skin grafts now, but are expected to make a
100% recovery. I understand that DJ AM got burned worse than Travis.

God bless 'em. I wish them a speedy get-well.
Really, you don't say??????

Look back a page or so there mr. slow poke. LOL LOL LOL

I'm a page late and a dollar short there furmeister.

My bad. Feel free to delete it.

Walkinghairball · Post by **Walkinghairball** » Tue Sep 23, 2008 8:38 am

NEVER!!!!!!

I'm not deleting nothing unless it's a spammer or the like.