Posted on 10/07/2008 11:54:20 AM PDT by NormsRevenge
WASHINGTON – Americans' retirement plans have lost as much as $2 trillion in the past 15 months, Congress' top budget analyst estimated Tuesday.
The upheaval that has engulfed the financial industry and sent the stock market plummeting is devastating workers' savings, forcing people to hold off on major purchases and consider delaying their retirement, said Peter Orszag, the head of the Congressional Budget Office.
As Congress investigates the causes and effects of the financial meltdown, the House Education and Labor Committee was hearing from retirement savings and budget analysts on how the housing, credit and other financial troubles have battered pensions and other retirement funds, which are among the most common forms of savings in the United States.
"Unlike Wall Street executives, America's families don't have a golden parachute to fall back on," said Rep. George Miller, D-Calif., the panel chairman. "It's clear that their retirement security may be one of the greatest casualties of this financial crisis."
(Excerpt) Read more at news.yahoo.com ...
How much did you receive from (insert any number of financial entities here as donors), Mr. Miller ?
E.R.I.S.A. is deep in the tank too. Wait and see what the brainiacs in Washington come up with when they try to bail out all the retired people on that list.
It’s just a flesh wound, America.
I and many others would like to see some vigorous prosecution of those who lost so much for so many and made so much on the side doing it.
This didn’t happen overnight.
Who had oversight?
Congress led by Barney Frank and Chris Dodd. Since they are Democrats they are calling a “do-over” but this time the real world won't respond. It is “gone with the wind” and all they can do is point fingers. The record is there but for some reason only Republican have a memory and a sense of shame.
“Have you no shame, Sir?”
>> I and many others would like to see some vigorous prosecution of those who lost so much for so many and made so much on the side doing it.
You’d better start with Congress, then. And you’d better be ready to see not just (D)s but also a helluva lot of (R)s do the perp walk.
After that mess is cleaned up, take on the finance bidness.
But — mark my words — if you don’t fix the root cause (CRA and the Congressional Black Caucus for starters), and focus only on business, you’ll have the same problem in a different flavor.
once this “flesh wound” heals (or maybe even before that)
My mother saw her 401K bleeding all over the place about a year ago and pulled her money, took the penalty hits, and paid off her house. Seems that she was one of the lucky ones.
I don’t even want to go there,, I hate lines, always have.
Their retirement portfolios all made money on the ride up and no one complained. The ride up, of course, made possible by democrat book cooking and market rigging. And now the inevitable bust. What goes up under false premises, must come down.
Couldn’t she sell the stock and put it in money markets or something without taking the penalties?
1977: Pres. Jimmy Carter signs the Community Reinvestment Act into Law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.
How did the government get so deeply involved in the housing market?
Answer: Bill Clinton wanted it that way.
1992: Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.
1993: Clinton extensively rewrote Fannie Mae and Freddie Mac’s rules turning the quasi-private mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.
1994: Despite warnings, which broadened theClinton unveiled his National Home-Ownership Strategy CRA in ways congress never intended.
1995: Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin’s Treasury Dept to rewrite the rules. Robt. Rubin’s Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.
1997 - 1999: Clinton , by passing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Development, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.
With incentives in place, banks poured billions in loans into poor communities, often “no doc”, “no income”, requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990’s Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.
Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.
1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie’s excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. “We manage our political risk with the same intensity that we manage our credit and interest rate risks,” Fannie CEO Franklin Raines, a former Clinton official and current Barrack Obama advisor, bragged to investors in 1999.
2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the “special status”. Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO’s who knew how to reward and punish. “We think that the statements evidence a contempt for the nation’s housing and mortgage markets” Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.
2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.
2003: Bush proposes what the NY Times called “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago”. Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.
2005: Then Fed chairman Alan Greenspan warns Congress: “We are placing the total financial system at substantial risk”. Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, “If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole”. Sen. Harry Reid accused the GOP ;of trying to “cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership” The bill went nowhere.
2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in ‘07, subprime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.
2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats’ talking points about this being a “Republican” disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That’s why taxpayers are now being asked for $700 billion!!
Good move..
I’m glad we talked mom-in-law into selling a couple properties when the market was peaking a couple years ago.
Unfortunately, some of that is back in the market, but .. at least she has had trips to Hawaii the last few years.
I’m telling her to buy a new Cadillac and sell the old one. She can’t drive but heck, why leave it all behind? Her and Pops wokred hard a lot of years to enjoy what they did.
Here’s to your Mom! (Oktoberfest mug clink)
After last weekend SNL will run all skits past the Polittcal Correction Commizar to make sure they are approved by The Party first.
I still own the same number of shares of stock in various companies, still own the same number of shares of stock in various mutual funds.
Unless she lives in a state with low property taxes and no intentions of raising them, "safe" is a nebulous concept.
“My mother saw her 401K bleeding all over the place about a year ago and pulled her money, took the penalty hits, and paid off her house.”
I’ve always considered retirement accounts that lock uo the money where you can’t use it just to save some tax currently a dumb idea.
When real estate hit bottom in recessions 4 different times i’ve been able to buy distresses property, make repairs and improvements and at least double my money within 6 months, pay the taxes and go on from there.
My retirement funds are tax free with no restrictions.
Looks like you forgot 2002, might wanna add to your timeline:
http://www.whitehouse.gov/news/releases/2002/03/20020320-22.html
http://www.whitehouse.gov/news/releases/2002/06/20020617.html
http://www.whitehouse.gov/news/releases/2002/06/20020617-2.html
http://www.whitehouse.gov/news/releases/2002/06/20020618-1.html
http://www.whitehouse.gov/news/releases/2002/10/20021015-7.html
I hear ya.
Hopefully we will survive the downer ahead or maybe not ,, if socialism is allowed to become in effect a ‘sharia’ form of governance in a “free state”, run by a pack of politico elites that believe your pocketbook is theirs too, the odds are not good.
All you can do is enjoy the good life while you can .. cuz a nasty side of Human Nature eventually kicks in and greedy corrupt barbarians will strip you bare if you let ‘em.
This is nothing new but it could have been so easily avoided save for a shameless few originally elected to protect all our best interests... only to work towards other ends.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.