Posted on 09/18/2008 12:38:31 PM PDT by 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.
(Excerpt) Read more at biz.yahoo.com ...
You and I will have to agree to disagree on this, especially when it comes to things like raw materials, due to this country's ridiculous environmental policies. I truly pray that we don't get into a war anytime soon where we need to quickly spin up the manufacturing base for war machinery. We would be in a world of hurt.
Well that's true, and according to the real estate data, those homes are indeed selling off nicely. It will be a little while longer, but the home builders will start seeing orders again, maybe by late 09. People are still dumping homes.
What we are talking about here is a security that is so far removed from the home financed that you really can't say what mortgage package it was once based on.
I heard that bone head on FOX yelling about the government taking over millions of homes, and that is so far from reality to be laughable, which I did! LOL
No, the debt from these transactions was leveraged again and again to spread the inherent risks, and there is little relationship to the loans, until the security expires and is cleared. The clearance price will depend on the market, plus insurance reimbursements, and other things too complicated to even figure out. They are only short term 3-5 year securities and there are trillions of them.
But no........No houses attached.
“The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.”
Yeah, the seeds for this financial train wreck were planted, Bush just watered and intended to fertilized it 5.5 million subprime mortgages over. His number, not mine. I quit drinking the Bush Koolaid a long time ago. This country is now headed for disaster because of BIPARTISAN pandering to illegal aliens.
Stupid investors - smart short-term gamblers.
Besides, we won't be re-fighting WWI, or WWII. All that is old history in modern war.
This is largely the reason it took us a while to adjust to urban warfare. It does not require Tanks and artillery or big bombers. All that is becoming obsolete. We have the base to build what we need, and anything we may need.
My last job was in that field. I worked for a naval shipyard. We can build anything we need. They are busy on a new class Carrier, last time I checked with some old buddies. (Northrop Grumman)
You sure have had a lot of jobs.... ;-)
But I basically am a electrician/millwright/boilermaker.
Bull puckey!
One year after your posted statement,
when we were just starting to come out
from the national trauma and economic
blow from 9/11/01, and 1-1/2 yrs. into
his Presidency, having inherited a
recession from Clinton, this country
was hurting and struggling in so many
ways.
Can you remember that at all?
I can’t fault him for attempting to
consider new ways to heal this wounded
country’s citizens and our economy, among
ALL the other issues at hand, like the
War on Terror.
But, one year later .. when things had
settled more and further scrutiny was brought
to the subject and his desk, look at what he
said and attempted to do?
But Congress wanted that campaign $$
more than the solvency of their country,
AND THEY VOTED IT DOWN!
You really should get treatment for that
single issue lunacy, displaced perspective
and BDS.
I’m grateful for every day he’s been our
President, and that we’ve been free of
other devastating terrorist attacks since
9/11, thank God and thank Pres. Bush.
Right man ... right time.
If you’re going to continue criticizing him,
picking him apart FOR YOUR ONE issue .. whatever
.. please refrain from posting to me ... unless
you’re the one perfect human being in the world
and show me proof of that.
One trick ponies ... always resort to the
“yeah, but” argument.
Ditto's!
Did people get predatory mule loans too? Cuz mine is paid off.
Thank you.
Great explanation, many thinks! This is such a complex problem it simply overwhelms my understanding at times.
But, have we not removed a significant portion of the home-buying public from the market for about ten years?? These people who have defaulted and been foreclosed have a mar on their credit report that will prevent them from financing much of anything for a while.
Considering how many homes we’re talking about, isn’t there a real future again in rental properties, simply because so many people are now unqualified for any mortgage, no matter how loose the lending practices??
The rental markets in the major cities are booming.
LOL!
Yes, there are lot's of rentals being built in some areas, and banks and mortgage holders are reloading some mortgages to longer terms in order to rent them through a property management company until they can be sold. There are all sorts of ways, but when credit siezes up and money won't flow, the effort is stopped until it flows again, which is the crux of the current problem and why AIG, Fanny and Freddie were bailed. Now they have to put confidence back into the system with a fix that the markets are satisfied with.
If they do that, all will be healed, except for the loose mortgage terms and resulting risks that caused all of this to begin with. It will be like it was in the seventies, when a mortgage was tough but possible to get if you saved a 20% down and/or had VA assistance for assumption of a loan.
And that my friend, is pretty much nationalizing the housing industry. Funny, all those who want unregulated markets on the upside don't want to pay the price on the down side.
Cat is going massively overseas, Juan Deere is in deep trouble and is cutting their in house design staff (but the overseas plants are still running!) and aerospace? Boeing is all that is left, and if they don't get the tanker project they will probably be bought out.
Sorry, I have worked or have friends in all three places, and they are not very rosy right now domestically.
The 140.00 oil was what caused aerospace a bit of a fit.
What will happen now is that fuel efficiency will be key to new orders, just as it is with cars.
Changes will occur, but the beat will go on, and yes, I hope Northrup gets what they have already won, but I have a dog in that hunt, called my stock retirement fund.......
Deere is changing, but exports this year are dammed good on their dirt equipment. What you are saying may be true in some parts of the company, but last I heard they were pretty well funded by sales in emerging markets.
Now all that has taken a recent hit, yes, but it will come back as Oil prices remain stable and lower.
That is the key to all of it.
On the good side, we hope that by 2010, this will be a memory. Deere's other divisions are doing OK, but along with Cat, they are not shipping as much as last quarter, yet infrastructure projects will continue and sales will pick up if oil stays around a 100-120.
The financial meltdown was not caused by "unregulated markets."
Quite the contrary, the massive amount of non-performing mortgage loans that has caused the current crisis is the direct result of government regulatory intervention in the housing market over a number of years to remove credit standards and provide mortgages to large numbers of borrowers who under no rational standard could qualify for the amounts borrowed.
Barney Frank, Chris Dodd, Andrew Cuomo and their Rat and RINO co-conspirators wrote and enforced regulations that dramatically changed the landscape of the American housing market, creating billions and billions of dollars of worthless and low-value mortgages and unleashing a wrecking ball through the American economy.
Now of course American taxpayers will be taking it in the shorts once again, big time. While many commentators are likening this new entity that apparently will be established to the RTC, there is a big difference - in the S&L crisis, which I remember well, the government took over the failing S&Ls, both assets and liabilities, and were able at least to have some control over the businesses the liabilities of which we took on.
In the current case, the analogy would be if the government stepped into the role of servicer of these worthless or low-value mortgages with the power to negotiate terms with the borrower or foreclose or take whatever steps make sense to maximize recoveries. However, that would require a massive new bureaucracy and would be completely unworkable.
So what we will get instead is the government simply buying mortgage-backed securities from various financial institutions (who made poor decisions in acquiring them in the first place) with no good idea of the value of the securities and there will be intense opportunities and incentive for some financial institutions to fleece or influence the government into overpaying, while other financial institutions will get shortchanged the other way.
Barney Frank and pals, you have screwed us again.
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