Posted on 09/23/2008 3:09:52 PM PDT by politicket
Excerpt:
Not simple loans, but complex investments created by pooling millions of mortgages together and then slicing them into pieces. These were the investments that Wall Street bought, sold and borrowed against in cooking up the money it poured into housing.
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(Excerpt) Read more at finance.yahoo.com ...
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I’m listening to Michael Reagan and agree with him. I want to see some perp walks! The government that got us in this mess is NOT capable of fixing it!
http://www.petitiononline.com/BailOut/petition.html
To: US Congress
I oppose the bailout. “Nationalizing Every Bad Mortgage in America Is Not the Answer”
Sincerely,
The Undersigned
Congress has spent the last 1 1/2 weeks figuring out how to fix the fuse.
Time to liquidate these thieves and ship them off to Qatar....(that is what these jerks are threatening). The real estate alone from these banks are in the billions of dollars...NO ROLLING OVER AND PLAYING DEAD!!!
Sorry to say it is not Wall Street that caused the problem, it is government and mainly CONGRESS STREET. Wall Street may have added somewhat to the mess, but Congress is and should be number 1 on the hit list. You may not believe it or want to believe it but that is the way it is. And that you can take to the bank.
Well, there were quite a few citizens who welshed on their mortgages. They got in over their heads of their own free will didn’t they?
Congress shares some culpability my FRiend, but you are wrong concerning what has caused this economic disaster.
The derivatives market is unregulated and controlled almost completely by the investment banks of the world.
As an example: the segment of the derivatives market that deals with credit default swaps was valued at approx. $900 million of "bets" in 2001. It is now valued at over $45 TRILLION of "bets" in 2008. Congress did not make those bets.
I dont agree with Brookings much, but I do on this..
Did Congress FORCE the i-banks to ignore 50 years of precident and increase their leverage from 12 to 1 to 35 to 1? Did Congress force the i-banks to create and invest in securities backed by subprime mortgages? Did Congress force S&P and Moody’s to give AAA ratings to crap? Did Congress force i-banks to pay their CEOS hundreds of millions in compensation, money they could have used to maintain their balance sheets in this crisis?
Sorry, I’m not buying that it’s ‘all Congress’s fault’. Yes, Congress has significant culpibility, but anyone at the top of multi-billion dollar bank should be smart enough not to leverage the bank into a precarious position, overpay for services and buy crap. That’s just basic business 101.
Put those who have broken the law in jail. Do not compound the problem by pouring money into it. Things are falling from great heights. Don’t try to catch them. They are knives and anvils. Just withdraw. Get out of the way. Let the market take care of it. There will be Hard Times for a couple of quarters or a year. Trying to put the toothpaste back into the tube will make it Depression with no end in sight. Myopic visions of fairness are dangerous and destructive.There is no good end to this, only bad and worse. The very worst will come if the government tries to “do something” to keep bankers and homeowners from feeling any pain. A few of the bankers will fare well. Their money is in safe things like gold and Switzerland and the government will give them more. The rest of us will suffer in direct proportion to the extent of the government rescue efforts.
Instead of housing prices “plummeting”, it seems to me that they “Corrected.” The sky high housing prices were completely out of tune relative to incomes. The easy loans created a huge pool of buyers, so the supply/demand equation was messed up.
Exactly.
The government should certainly NOT be trying to figure out what they are worth and should not deal with them at all. The market will establish their value and flush the bad ones out of the system efficiently. This was all caused by government manipulation and government manipulation to "fix" it will make it infinitely worse.
“They got in over their heads of their own free will didn’t they?”
It’s those 80/20 interest-only loans on a 5-year ARM. They bought, nothing down, at a good rate. Then went to refinance before the ARM kicked in (after 5 years) and couldn’t get refinanced because of their credit or whatever (same reason they couldn’t get a decent fixed rate loan to begin with). So their interest goes from 6% to 11% overnight, adding hundreds or even thousands to their payment. They go broke. House back to shady lender. That’s the Main Street issue. Why 80/20 interest only loans were EVER allowed is quite beyond me! Texas doesn’t allow that rot.
You need to understand one thing my FRiend. IF Congress passes this bill then who make a lot of money will be the absolute least of your concerns. The international economy will go into the toilet with a loud flush. It is that serious that they don't pass this.
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