Posted on 09/23/2008 6:05:14 PM PDT by Craigon
A quick summary: Companies that had billions in subprime loans were feeling the effects of their stupid decision to make those loans in the first place, and practically gave them away for pennies on the dollar. But since no one wants these loans, and they've had to mark them down to market value, it has frozen the market. If we temporarily change the rule that forces companies to do that, that will free the market up.
This is one of Dave's biggest and most significant rants ever. It's an absolutely huge deal, and it involves everyone getting in touch with their congressperson before we spend hundreds of billions of dollars that we don't need to!
(Excerpt) Read more at daveramsey.com ...
And his main page for this plan is: Dave ramsey discussion
I know... I see the stupid typo’s in the title. Been a long day.
Thanks for bringing this up. I missed it.
I think a year or two would be a good period of time to discuss all these great ideas.
KaBoom Bump !
I saw this a little while ago on his show on FBN. It sounds great - so sensible. I don’t know why it’s not being pushed more in Washington. We need to get the word out!
the big elephant in the room are credit default swaps thst all these firms sold each other. It was private insurance, some are even classifying them as naked shorts in effect if not in name. They were off the books, and they have all long since kicked in big time. No wonder the credit markets have locked up - they all owe each other more money than they have. The commercial credit paper market machine just went TILT.
Much of that paper that the investment banks are holding that represent properties is being used to back their credit default swaps (CDS). The CDS bets are failing and the value is gone.
Changing the rules on Mark to Market will help a tiny bit (mainly with commercial banks), but it will really do nothing to tame the giant that is lurking at our door.
You beat me by THAT much...
send the $700B bill to Bill Clinton, Jesse Jackson, Al Sharpton, the NAACP, the ACLU and every other liberal organization clamoring for businesses to throw caution and common sense to the wind just so under/unemployed individuals (who already demonstrated their irresponsibility) could buy houses they couldn't afford in their wildest dreams.
They need to bring back literacy (and add IQ) tests in order to vote. And, in light of the current situation, issue the tests before you borrow money. If you are too stupid to read, write, add, and subtract; you are too stupid to borrow money and should rent from a person smarter than yourself. -- Voting should be out of the question. Now that's survival of the fittest.
GOOD READ
Thanks; I emailed our Congressman and Senators.
I’ve done a lot of reading on this situation. I’m an engineer and kind of glaze over trying to understand how $250B in bad mortgages turned into a $700B+ problem..
How do speculators/investors/traders make the credit swaps become bigger than the original debt? Is it all the layering and repackaging into larger bundles?
Thanks Ernest.
Buffett’s “time bomb” goes off on Wall Street
derivatives | Sep 18, 2008 | James B. Kelleher
Posted on 09/23/2008 11:09:15 PM PDT by dickmc
http://www.freerepublic.com/focus/news/2089109/posts
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