Stocks surge on report of entity for bad debt

Yahoo Finance ^ | 9/18/2008 | Tim Paradis

[politicket]

NEW YORK (AP) -- Wall Street surged higher Thursday, with the Dow Jones industrials up more than 400 points after a report that the federal government is considering creation of a repository for banks' bad debt. CNBC said Treasury Secretary Henry Paulson is considering creation of an entity like the Resolution Trust Corp. that was formed after the failure of savings and loan banks in the 1980s.

[marshmallow]

This won't work. They're clutching at straws now. It worked with the S & L problem but it won't work here.

Basic problem; there is way too much leverage in the system. Much too much. I'm not sure if anyone knows how much. The bubble will burst. It's just a question of when.

[Gondring]

Good one!

[koraz]

ok I get it. The U.S. should just isolate itself?

Like it or not we are a global society. U.S. citizens have lost menial jobs and gained more challenging jobs as we are one of the most advanced countries in world. The price we pay for being fortunate enought to being born an American (or an immigrant) is that we need to step up to the plate and educate ourselves for these more advanced jobs. Are you sad that we are no longer a nation of farmers??

[Nachoman]

As I feared, the snowball has been pushed down the mountain. I noticed on FOX that the big three automakers are looking for a gov’t handout.

Now that the precedent has been set, taxpayers will be on the hook to bail out all the Fortune 100 companies because they are “too big to fail”.

[Daus]

I don't think these guys are getting off "scott-free"

Well, maybe not scott-free. The shareholders are taking a hit but live another day to see the share prices rise to reflect their new 'bad-debt free' state. That is a long way from going out of business. The worst part is that it makes it very likely the current exec's running the business will survive as well to offend again.

[Gondring]

TANSTAAFL

[hedgetrimmer]

Like it or not we are a global society.

No we are not. America was the most unique culture in the world, we cultivate individual rights and private property and personal liberty. We don't fit in to the rest of the world's communist, socialist and totalitarian dictatorship societies, and that's fine by me.

It's time to stop the looting of our domestic economy in the name of globalism. You people have had a good run and made lots of dough, time for you to go destroy a different country.

[dan1123]

I’m confused. How does the Gramm-Leach-Bliley Act help the creation of ETF’s, derivatives, and mortgage bundling that caused this bubble and subsequent meltdown?

[dan1123]

The worst part is that it makes it very likely the current exec's running the business will survive as well to offend again.

If the exec offends again he's probably going to be kicked out the door by the board and stockholders.

[TomGuy]

Many of us on FR saw this coming... as early as 2005.

RE: The housing loans crisis

Investors Default On Outsize Share Of Home Loans
Wall Street Journal ^ | August 31, 2007 | MICHAEL CORKERY and JAMES R. HAGERTY

Posted on Saturday, September 01, 2007 8:22:34 PM by CutePuppy

Investors played a big role in pumping up home prices during the housing boom. Now, they account for an outsize proportion of loan defaults, mortgage bankers and builders say.

A survey by the Mortgage Bankers Association found that mortgages on properties that aren't occupied by the owner -- mostly investment homes -- account for between 21% and 32% of the defaults on prime-quality home loans in Arizona, California, Florida and Nevada, states where overdue payments are mounting fast.

Home Loans to Illegal Immigrants Sturdy But Show Some Cracks
The Washington Times ^ | 10-6-07 | Miriam Jordan

Posted on Wednesday, October 17, 2007 12:30:51 PM by JZelle

Despite the downturn of the mortgage market, a type of home loan has remained surprisingly sturdy: one extended to illegal immigrants.

Home Loans for Illegal Immigrants [no Social Security number? No legal residency? No Problem!]
ABC30.com ^ | November 19, 2005

Posted on Sunday, November 20, 2005 8:23:27 AM by John Jorsett

For many, it's the American dream: owning a home. With the recent spike in housing costs, it's become more difficult for many Valley families to qualify for a home loan. But some local banks are giving out loans, and they don't even require a social security number.

More articles of this type are available via Google Search: immigrants home loans.

[politicket]

I noticed on FOX that the big three automakers are looking for a gov’t handout.

This needs to be repeated....

And - what about those poor airlines? Isn't it in the "public good" that people can fly to any destination whenever they want for a "decent" price?

[politicket]

TANSTAAFL

OK...I know most of them....but???

[politicket]

Actually, I just googled it and saw the definition of the term.

Yes, there is a free lunch, as long as you have bribed the server at the cafeteria.

[Kimberly GG]

” The other interpretation is that they are deliberately trying to destroy the economy.”

I’ll take door number two. Except, IMO, it’s being done in order to make the Amero and North American Union an easy sell. When it happens, can I say I told you so? ;)

[marshmallow]

Why did the stock market stage such a rally today right after international backs injected close to $300 billion dollars into the world economy last night? The market should have been full of people trying to sell as fast as possible, but instead, everyone dives in thinking that we have reached market bottom and they don't want to be left out of "what is theirs". Scary times

I don't think that the magnitude of what's happening has really sunk in yet for most people.

Here's something that people need to think about.

Lehman Bros and Bear Stearns. One formed in the 19th century, the other in the 1920s. Both survived the Great Depression, the S&L crisis, Black Monday and probably numerous other ups and downs. Both went many years without reporting a quarterly loss. I'm not sure if Bear Stearns ever did.

Both gone in an instant.

[politicket]

Gee, look who's the one pressing for the creation of the RTC lookalike:

Paulson, Bernanke Weighing New Plan, Schumer Says

From the article:

"Schumer advocated a Great Depression-era Reconstruction Finance Corp. model, different from the Resolution Trust Corp.- type plan others have floated. Another RTC, which was a 1990s agency that sold devalued assets in the Savings and Loan Crisis, would ``simply transfer excessive risk to the U.S. government without addressing the plight of homeowners,'' he said."

So...so far we have Jessie Jackson and Chucky Schumer pressing for this thing. Hmmmm.....

[Kimberly GG]

"What an idiotic statement."

Hardly. Here's idiotic:

" Now, we've got a problem here in America that we have to address. Too many American families, too many minorities do not own a home. There is a home ownership gap in America. The difference between Anglo America and African American and Hispanic home ownership is too big. (Applause.) And we've got to focus the attention on this nation to address this.

And it starts with setting a goal. And so by the year 2010, we must increase minority home owners by at least 5.5 million. In order to close the homeownership gap, we've got to set a big goal for America, and focus our attention and resources on that goal. (Applause.)

And I picked a good man to help realize that goal, in Mel Martinez."....

George W. Bush June 17, 2002 http://www.whitehouse.gov/news/releases/2002/06/20020617-2.html

[politicket]

Both survived the Great Depression, the S&L crisis, Black Monday and probably numerous other ups and downs. Both went many years without reporting a quarterly loss. I'm not sure if Bear Stearns ever did.

Correct, and both got greedy beginning in the early 1990's when the investment houses began expanding the derivatives market from legitimate things like soybean futures to insane bets that would make Las Vegas blush.

[Cold Heat]

That bill is not what caused this. It is the manipulation of easy mortgage money by democrats, using Fanny and Freddie as backstops to create computer generated debt restructuring to spread the risk far and wide. These derivatives are too complicated to rate, and thus when the rash of foreclosures began, the panic began and can't subside until all this crap is unwound and done away with.

That bill did not do this. The real kicker was the total control that the congressional black caucus gained over Fannie and Freddie by 2003. Without Fanny and Freddie to take these mortgage's off the banking books, none of this could have happened. The Dem's knew this. They used fanny and Freddie as community organizers to buy votes with free mortgage money and that's a fact.

[Osage Orange]

While I would really like to think you guy's are very wrong....

I think it's possible. As there have been too many odd things/statements/laws/resolutions...etc..etc.

But...I don't know what to do about it as an American.. I feel helpless......

Although I do think about it personally..and have taken steps to protect me and mine....As best that I know how.