David G. Healy Posted October 11, 2008 Share Posted October 11, 2008 Our corrupt and incompetent leaders are seemingly clueless about how to solve this tremendous economic crisis, which is threatening to topple economies all over the world. Their incredibly stupid trillion dollar banker bailout has only made things worse. Bush and co. can try and persuade the people that "this will take some time," but that ridiculous explanation simply won't cut it. Wall Street always responds to what it perceives to be good or bad news, and rises or falls accordingly. So, when the "good news" about the trillion dollar bailout being passed by Congress arrived, the markets should have soared upwards. Instead, they crashed down and have continued to slide ever since. I've lost almost half of my 401K since the beginning of the year. With so many people in that situation, eventually even our greedy leaders are going to have to address the real issue here; far too much wealth concentrated in far too few hands. The problem for Barack Obama is that he does not want to say anything that provides a danger to his lead in the polls. If he puts forward a plan that will really deal with the crisis, the media will portray him as a left-winger. This is why he is so supportive of the measures taken by Bush. The reason why shares continued to fall is that without outright natonalization, all the major banks in the US and the UK will become insolvent. Over the last few years financial firms sold credit default swaps (CDSs) - a form of insurance against a company defaulting on its debt - to investors in Lehman's bonds and those betting on the bank's creditworthiness. These companies will now be forced to pay out 91.4 cents in the dollar. This could amount to as much as $440bn. The same thing happened with Morgan Stanley. The bank's shares plunged by 22% in New York, taking their total week-long fall to 60%. Goldman Sachs is also in trouble. If Morgan Stanley and Goldman Sachs go under next week, banks face pay-outs that will bring them down as well. For some of our esteemed US free marketeers eyeing this board, what is wrong with nationalizing the US banking system? What is the primary fear doing so? Link to comment Share on other sites More sharing options...
John Simkin Posted October 12, 2008 Author Share Posted October 12, 2008 "It won't be easy to draw up a quick winners and losers column, however. Buyers of insurance are also sellers and vice versa. The International Swaps and Derivatives Association says all this netting out means the ultimate payout among trading partners may be closer to 2% of the gross outstanding $400 billion, or $8 billion."(bold mine) http://www.forbes.com/home/2008/10/10/lehm...010auction.html As you know, Credit Default Swaps (CDS) are completely unregulated. Therefore it is currently impossible to know how much money is involved. However, today's Sunday Times estimated that it is around $50 trillion. Of course, if the problem was only as small as you suggest, the shares would not have fallen as much as they did last week. If you believe this I suggest you start buying shares in the banks. A banker friend told me this morning that the banks have no real idea of how much they are in debt because of the way the deals have been packaged. In the meetings the government had with the UK's four leading banks last week, they were unable to discover the full extent of the problem. That is the real reason that the shares are in free-fall. Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 12, 2008 Share Posted October 12, 2008 (edited) "It won't be easy to draw up a quick winners and losers column, however. Buyers of insurance are also sellers and vice versa. The International Swaps and Derivatives Association says all this netting out means the ultimate payout among trading partners may be closer to 2% of the gross outstanding $400 billion, or $8 billion."(bold mine) http://www.forbes.com/home/2008/10/10/lehm...010auction.html As you know, Credit Default Swaps (CDS) are completely unregulated. Therefore it is currently impossible to know how much money is involved. However, today's Sunday Times estimated that it is around $50 trillion. Of course, if the problem was only as small as you suggest, the shares would not have fallen as much as they did last week. If you believe this I suggest you start buying shares in the banks. A banker friend told me this morning that the banks have no real idea of how much they are in debt because of the way the deals have been packaged. In the meetings the government had with the UK's four leading banks last week, they were unable to discover the full extent of the problem. That is the real reason that the shares are in free-fall. I'm always suspect when you say anything John and you have shown my concerns correct too many times to mention. I however have "suggested" nothing. I offered a quote from Forbes. Take it or leave it. It simply EXPANDED on the points YOU raised and filled out the story. At least I gave the readers a source, you on the other hand.... You say its the size of debt that is causing the drop in share price. Really? How can you know the exact cause? It is just as likely that lack of confidence has at least if not more effect on share price and than the depth of the debt. That surely was the case for Lehman for example. Cerrtain bank stock is quite a wise purchase these days John, even Warren Buffet thinks so. But sadly your "banker friend" gets it all wrong. The economy of the world is in free fall due to one thing...socialism. In this case its the Govenment of the US sticking its stupid fingers into the housing market in a failed attempt to redistribute wealth in the form of housing loans to people who had no business getting them. They FORCED banks to issue loans no sane banker would have ever written. Take the non-performing home loans OUT of the picture and its a totally different ball game. Edited October 12, 2008 by Craig Lamson Link to comment Share on other sites More sharing options...
David G. Healy Posted October 12, 2008 Share Posted October 12, 2008 [...] The economy of the world is in free fall due to one thing...socialism. [...] Nice dance, typical GOP mantra find a bogeyman or in this case, an entire system.... Craig, its failed economic policies and simple GREED. Can't run from this one.... Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 12, 2008 Share Posted October 12, 2008 [...] The economy of the world is in free fall due to one thing...socialism. [...] Nice dance, typical GOP mantra find a bogeyman or in this case, an entire system.... Craig, its failed economic policies and simple GREED. Can't run from this one.... Sorry David, you lose again. Greed is clearlly a factor but its for sure not the trigger. CRA is the cause. Oh wait I guess you are right in one aspect. Its WAS the failed ecomomic policies of Carter, Clinton the DIMS running fanny and freddy and smucks like Dodd, Framks ad Obama feeding from the fanny and freddy...all dims I might add.... Thanks for your typical dim mantra, and woeful attempt to deflect blame away from your failed party. Link to comment Share on other sites More sharing options...
John Simkin Posted October 13, 2008 Author Share Posted October 13, 2008 [...] The economy of the world is in free fall due to one thing...socialism. [...] This is probably the most amazing thing you have said so far. How is the collapse on Wall Street due to "socialism"? It seems that Bush and his administration are using "socialist-type" measures, for example, the taking over of AIG, in order to prop up the system. Of course, the action did not go far enough and it has not worked. Brown has gone further this morning with the part-nationalizing of our leading banks. However, I would not describe it as socialism as the government have made it clear that they do not intend to run the banks. Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 13, 2008 Share Posted October 13, 2008 [...] The economy of the world is in free fall due to one thing...socialism. [...] This is probably the most amazing thing you have said so far. And your statement reveals a a complete ignroance on your part on the root cause of the current crisis. Research is your friend Simkin, it allow you to see the facts. In this case the facts are clear. The CRA is the root case of the current meltdown and the CRA is pure socialism. How is the collapse on Wall Street due to "socialism"? It seems that Bush and his administration are using "socialist-type" measures, for example, the taking over of AIG, in order to prop up the system. Of course, the action did not go far enough and it has not worked. Brown has gone further this morning with the part-nationalizing of our leading banks. However, I would not describe it as socialism as the government have made it clear that they do not intend to run the banks. See above and then do the research. Link to comment Share on other sites More sharing options...
John Simkin Posted October 13, 2008 Author Share Posted October 13, 2008 [...] The economy of the world is in free fall due to one thing...socialism. [...] This is probably the most amazing thing you have said so far. And your statement reveals a a complete ignroance on your part on the root cause of the current crisis. Research is your friend Simkin, it allow you to see the facts. In this case the facts are clear. The CRA is the root case of the current meltdown and the CRA is pure socialism. How is the collapse on Wall Street due to "socialism"? It seems that Bush and his administration are using "socialist-type" measures, for example, the taking over of AIG, in order to prop up the system. Of course, the action did not go far enough and it has not worked. Brown has gone further this morning with the part-nationalizing of our leading banks. However, I would not describe it as socialism as the government have made it clear that they do not intend to run the banks. See above and then do the research. Maybe you could define "socialism" as it appears we are talking about different things. Link to comment Share on other sites More sharing options...
David G. Healy Posted October 13, 2008 Share Posted October 13, 2008 (edited) [...] The economy of the world is in free fall due to one thing...socialism. [...] Nice dance, typical GOP mantra find a bogeyman or in this case, an entire system.... Craig, its failed economic policies and simple GREED. Can't run from this one.... Sorry David, you lose again. Greed is clearlly a factor but its for sure not the trigger. CRA is the cause. Oh wait I guess you are right in one aspect. Its WAS the failed ecomomic policies of Carter, Clinton the DIMS running fanny and freddy and smucks like Dodd, Framks ad Obama feeding from the fanny and freddy...all dims I might add.... Thanks for your typical dim mantra, and woeful attempt to deflect blame away from your failed party. GREED is ALWAYS the trigger, Craig.... Read that bible!.... I do declah.... the Democrats have been working in a vacuum for ALL those years, while Republicans slept at the wheel. Including those righteous, Ronnie Ray-gun *trickle down theory* years. I loved Reagan's comment, "...recession? WHAT recesssion!" Speaking of "dim-bulbs". So how is your 401k doing, champ? Going down with the ship? Edited October 13, 2008 by David G. Healy Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 13, 2008 Share Posted October 13, 2008 [...] The economy of the world is in free fall due to one thing...socialism. [...] Nice dance, typical GOP mantra find a bogeyman or in this case, an entire system.... Craig, its failed economic policies and simple GREED. Can't run from this one.... Sorry David, you lose again. Greed is clearlly a factor but its for sure not the trigger. CRA is the cause. Oh wait I guess you are right in one aspect. Its WAS the failed ecomomic policies of Carter, Clinton the DIMS running fanny and freddy and smucks like Dodd, Framks ad Obama feeding from the fanny and freddy...all dims I might add.... Thanks for your typical dim mantra, and woeful attempt to deflect blame away from your failed party. GREED is ALWAYS the trigger, Craig.... Read that bible!.... I do declah.... the Democrats have been working in a vacuum for ALL those years, while Republicans slept at the wheel. Including those righteous, Ronnie Ray-gun *trickle down theory* years. I loved Reagan's comment, "...recession? WHAT recesssion!" Speaking of "dim-bulbs". So how is your 401k doing, champ? Going down with the ship? Well David, unless you think that CARTER and CLINTOON wrote the bible and you missed it once again. Please try again next time when your ducks in a row. No worries about my retirement funds Daid, how about yours? Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 13, 2008 Share Posted October 13, 2008 (edited) [...] The economy of the world is in free fall due to one thing...socialism. [...] Nice dance, typical GOP mantra find a bogeyman or in this case, an entire system.... Craig, its failed economic policies and simple GREED. Can't run from this one.... Sorry David, you lose again. Greed is clearlly a factor but its for sure not the trigger. CRA is the cause. Oh wait I guess you are right in one aspect. Its WAS the failed ecomomic policies of Carter, Clinton the DIMS running fanny and freddy and smucks like Dodd, Framks ad Obama feeding from the fanny and freddy...all dims I might add.... Thanks for your typical dim mantra, and woeful attempt to deflect blame away from your failed party. GREED is ALWAYS the trigger, Craig.... Read that bible!.... I do declah.... the Democrats have been working in a vacuum for ALL those years, while Republicans slept at the wheel. Including those righteous, Ronnie Ray-gun *trickle down theory* years. I loved Reagan's comment, "...recession? WHAT recesssion!" Speaking of "dim-bulbs". So how is your 401k doing, champ? Going down with the ship? Well David, unless you think that CARTER and CLINTOON wrote the bible and you missed it once again. Please try again next time when your ducks are in a row. No worries about my retirement funds David, how about yours? Edited October 13, 2008 by Craig Lamson Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 13, 2008 Share Posted October 13, 2008 [...] The economy of the world is in free fall due to one thing...socialism. [...] This is probably the most amazing thing you have said so far. And your statement reveals a a complete ignroance on your part on the root cause of the current crisis. Research is your friend Simkin, it allow you to see the facts. In this case the facts are clear. The CRA is the root case of the current meltdown and the CRA is pure socialism. How is the collapse on Wall Street due to "socialism"? It seems that Bush and his administration are using "socialist-type" measures, for example, the taking over of AIG, in order to prop up the system. Of course, the action did not go far enough and it has not worked. Brown has gone further this morning with the part-nationalizing of our leading banks. However, I would not describe it as socialism as the government have made it clear that they do not intend to run the banks. See above and then do the research. Maybe you could define "socialism" as it appears we are talking about different things. In this instance it's the US government telling banks exactly who they will lend money to for housing, and the qualifications of the borrower they MUST accept or face punishment by the Attorney General of the US. Wealth redistribution pure and simple...socialism...and the root cause of the current meltdown. Link to comment Share on other sites More sharing options...
John Simkin Posted October 14, 2008 Author Share Posted October 14, 2008 In this instance it's the US government telling banks exactly who they will lend money to for housing, and the qualifications of the borrower they MUST accept or face punishment by the Attorney General of the US. Wealth redistribution pure and simple...socialism...and the root cause of the current meltdown. This has been done by a Republican administration. Are you suggesting that Bush is a socialist? I thought the reason the bankers gave loans to the poor was because they were seeking to make profits from their economic needs. That is the way capitalism works. That is nothing to do with socialism. If Bush wanted to introduce socialism he would introduce high taxes on the rich and then give that money to the poor. Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 14, 2008 Share Posted October 14, 2008 In this instance it's the US government telling banks exactly who they will lend money to for housing, and the qualifications of the borrower they MUST accept or face punishment by the Attorney General of the US. Wealth redistribution pure and simple...socialism...and the root cause of the current meltdown. This has been done by a Republican administration. Are you suggesting that Bush is a socialist? I thought the reason the bankers gave loans to the poor was because they were seeking to make profits from their economic needs. That is the way capitalism works. That is nothing to do with socialism. If Bush wanted to introduce socialism he would introduce high taxes on the rich and then give that money to the poor. Uh..no, your ignorance of the facts in the case is showing again. It was Carter (a dim) who started this mess and Clintoon who pushed it over the edge and forced the banks to write loans to people not qualified to pay them back, under threat. Why the hell would a bank write a loan, to anyone, that was not qualified to pay it back? The answer is they would not. Unless they were forced. John sez: "If Bush wanted to introduce socialism he would introduce high taxes on the rich and then give that money to the poor." Thats exactly what happens every day in America. Over 30% of the federal taxpayers in this country pay NO federal tax, and MANY GET A CHECK..a "refund" in the form of earned income credit. Socialism. Who pays? The Wealthy. The top 5% pays four out of evey five dollars that goes into the system. Giving people ANYTHING is never the answer. If you don't earn it you will never value it. Link to comment Share on other sites More sharing options...
Guest Stephen Turner Posted October 14, 2008 Share Posted October 14, 2008 Redlining. The practice of denying, or increasing the cost of sevices such as, Banking, insurance, health care or even food costs to residents in certain, often racially determined areas. The most devistating form of redlining refers to Mortgage discrimination, in which middle income Blacks or Hispanics are denied loans available to lower income Whites.. The CRA of 1977 required Banks to apply the same lending criteria to all communities. The CRA mandates that all Banking institutions that recieve FDIC insurance be evaluated to determine if the institution has met the credit needs of its entire community,In a manner consistent with safe and sound operations. The CRA does not list specific criteria for evaluating their performance, Rather that the evaluation process should accommodate the situation, and context of each individual institution. The Law also does not require institutions to make high risk loans that may bring losses to the institution, instead the law emphasises that an institutions CRA activities should be undertaken in a safe and sound manner There are no specific penalties for non compliance. In a 2002 study exploring the relationship between the CRA and predatory lending, Kathleen Engle and Patricia McCoy noted that Bankscould recieve CRA credit by lending, or brokering predatory loans in lower income areas. Link to comment Share on other sites More sharing options...
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