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2008-09-30 Home Front Economy

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Posted by Fred 2008-09-30 00:00|| E-Mail|| Front Page|| [784 views ] Top

#1 Rescue plan for you and your Goldman pals, or for the rest of us? Please tell us why Goldman and Morgan Stanley should not go the way of Lehman, again?

Posted by tep 2008-09-30 06:49|| 2008-09-30 06:49|| Front Page Top

#2 Don't think, just sign?
Is that what he's saying?
Just like a car dealer.

Posted by bigjim-ky 2008-09-30 08:42|| 2008-09-30 08:42|| Front Page Top

#3 Meet Hank Paulson.

Posted by Besoeker 2008-09-30 08:47|| 2008-09-30 08:47|| Front Page Top

#4 yeah - we need a rescue plan before the market recovers and shows the 'end-of-the-world crisis' to be a simple(and oh-so-badly-needed) 'correction'.

Posted by CrazyFool 2008-09-30 09:11|| 2008-09-30 09:11|| Front Page Top

#5 DJIA is up about 200 points this morning after the bailout bill got torpedoed.

Posted by JohnQC 2008-09-30 09:59|| 2008-09-30 09:59|| Front Page Top

#6 I blame democrats.
I blame republicans.

Wait, YOU ARE BOTH RIGHT! Thank you both for putting a stop to this piece of kak.

Posted by Besoeker 2008-09-30 10:04|| 2008-09-30 10:04|| Front Page Top

#7 I blame Washington for making this mess in the first place.

No Washington for Mortgages!

Posted by DarthVader 2008-09-30 10:30|| 2008-09-30 10:30|| Front Page Top

#8 Washington mandated "affordable housing" with Fannie and Freddie repurchasing the resulting sub prime loans. It is good and proper that Fannie and Freddie have been bailed out. The issue today is that investment banks, powered by their own greed, who retained some of the high yielding but ultimately worthless paper are also going under.

To hell with them. But I do worry about the follow on cascade of those who invested in those who invested in them.

Is the bailout of Fannie/Freddie in addition to the Federal Reserve(remember them?) pumping liquidity into the market enough to keep a total meltdown from occurring? I don't think ANYBODY knows.

Posted by Minister of funny walks 2008-09-30 10:48|| 2008-09-30 10:48|| Front Page Top

#9
Ya know, I hear y'all. But if in fact the credit markets seize up for months there may well be a whole lot of small businesses that go under as a result, jobs that go away and families that lose the results of decades of hard work.

Just sayin.

Posted by lotp 2008-09-30 10:47|| 2008-09-30 10:47|| Front Page Top

#10 I don't know enough about this problem to say what the solution is, but $700 billion is a lot to pay for a pig in a poke.

Posted by Spot">Spot 2008-09-30 10:55|| 2008-09-30 10:55|| Front Page Top

#11 If money can be made from loaning money, money will be made. Been that way for quite some time. The... to whom is the only question. If you are not CONFIDENT in your ability to get a loan, the system may not be the problem.

Posted by Besoeker 2008-09-30 10:55|| 2008-09-30 10:55|| Front Page Top

#12 Why is it that the presidential race had three polls per day, but the only marker on the popularity of the bailout is Representatives - both d and r - in contended districts overwhelmingly voted against the bailout?

CrazyFool, that is my feeling exactly. I lack confidence in a congress which could not see this crises coming (or did and didn't care) is going to within a week fix a decade of bad decisions; wall street and congress - Many of these companies actively lobbied to not fix the problem like someone diagnosed with emphysema and chooses to keep smoking as to sue the tobacco business and does not quit smoking. Throwing money at a problem without fixing the reasons for the problem makes as much sense to me as fixing a cracked bathtub by just adding more water.

What was that story, oh maybe a year ago or something, about the economic professor volunteering his time in order to teach econ 101 to all members of congress?

End the requirement of banks to make bad loans and the small and medium banks who have had to make smart business decisions in order to compete with the larger banks fill in the gaps.

We got a running pool out here for how much it will cost (if a bailout passes). I have five bucks on $2 trln by end of 4th quarter. Unfortunately if I'm right that $5 bet will only seem like a $3 bet.

Posted by swksvolFF 2008-09-30 11:01|| 2008-09-30 11:01|| Front Page Top

#13 "End the requirement of banks to make bad loans and the small and medium banks who have had to make smart business decisions in order to compete with the larger banks fill in the gaps."

It is my understanding that Washington, though Fannie and Freddie, repurchased the sub prime paper from small and medium banks, but that large investment banks retained some of the bad paper for their own portfolios, attracted by the high yield note rates.

Posted by Minister of funny walks 2008-09-30 11:07|| 2008-09-30 11:07|| Front Page Top

#14 Bullshit.

SOME bailouts may be needed, but we sure as hell don't need to save every twit that bought their way to bankruptcy. $700 billion is way to much, and not targeted enough.

"Take the pain!"

Posted by mojo">mojo 2008-09-30 11:08|| 2008-09-30 11:08|| Front Page Top

#15 View THIS! It should remove most of the mystery.

Posted by Besoeker 2008-09-30 11:10|| 2008-09-30 11:10|| Front Page Top

#16 I can see where your coming from lopd - we cannot forget the human aspect of the problem.

But I think that perhaps a lot more business might end if the market is not _allowed_ to correct itself - if we just slap on yet-another-patch on yet-another-crutch to prop up a seriously ill market. And if we don't fix the stupid 'you must use preditory lending practices ' Act (otherwise known as the 'Community Reinvestment Act').

In short the market might just have to vomit to get better...

Posted by CrazyFool 2008-09-30 11:21|| 2008-09-30 11:21|| Front Page Top

#17 if in fact the credit markets seize up for months there may well be a whole lot of small businesses that go under as a result, jobs that go away... Those businesses & jobholders might be worthy recipients of a bailout from the Fed -- which is already authorized to do that in an emergency.

Posted by Anguper Hupomosing9418 2008-09-30 11:25|| 2008-09-30 11:25|| Front Page Top

#18 Correct Besoeker. This was driven first and foremost by the CBC desire to provide affordable housing to their constituents. (Welfare without the name) But the original legislation was passed back in 1995 when, IIRC the REPUBLICANS held majorities in congress. As such, the affordable housing/sub prime mortgage bubble was the ultimate fault of Washington as a whole. We elect the fools and now it's time to pay the piper.

Posted by Minister of funny walks 2008-09-30 11:37|| 2008-09-30 11:37|| Front Page Top

#19 Bloomberg Radio just reported both McCain & Obama want the FDIC to increase its coverage on deposits to $250,000. Sounds like a winner to me. Also make sure there is no doubt on full funding for the FDIC for the bank failures & closures which will be happening. Many banks are insolvent & have been shuckin' & jivin' about it.

Posted by Anguper Hupomosing9418 2008-09-30 11:38|| 2008-09-30 11:38|| Front Page Top

#20 So let me see. The government has already injected billions into the market to help bailout AIG, Fannie and Freddie. There are probably others not included on the list. Additionally, the FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud. Countrywide Financial Corp., formerly the nations largest mortgage lender and now owned by Bank of America Corp., is also under scrutiny. Bush's Secretary of Treasury injected another 150 B into the market in the last couple of days.

We are asked to trust all these people. Congress is largely the problem. Time to clean house in Washington. All House members are up for re-election and so is part of the Senate.

Dow is up triple digits today. It seems like the markets do pretty well if not meddled with by Washington. Manufactured crisis?

Posted by JohnQC 2008-09-30 11:41|| 2008-09-30 11:41|| Front Page Top

#21 Bloomberg Radio just reported both McCain & Obama want the FDIC to increase its coverage on deposits to $250,000.

One of those "I agree with you John" moments by BO?

Posted by JohnQC 2008-09-30 11:42|| 2008-09-30 11:42|| Front Page Top

#22 Providing "affordable housing" was just a placebo motive for the Housing Bubble. The bubble's real effect on housing was to make it less affordable, and it succeeded in that very well. The sub-slime mortgages ginned up in the Housing Bubble were really not affordable, as shown by the home loaners so affected being foreclosed on. 30-year fixed rate mortgages to creditworthy buyers was what FNMA provided for between 1938-1998, and that worked quite well to provide truly affordable housing.

Posted by Anguper Hupomosing9418 2008-09-30 11:48|| 2008-09-30 11:48|| Front Page Top

#23 True but irrelevant Anguper. Congress responded to a constituent need. All the problems are just the MAN keeping you down. And the media has their back on this. Fully.

*spit*

Posted by Minister of funny walks 2008-09-30 12:03|| 2008-09-30 12:03|| Front Page Top

#24 Some reasons why Democrats voted against the bailout.

Posted by Deacon Blues">Deacon Blues 2008-09-30 12:59|| 2008-09-30 12:59|| Front Page Top

#25 Sen Tom Coburn, not exactly a flaming liberal, issued a statement today saying

Taxpayers deserve to know that there is no guarantee this plan will work, but there is a guarantee that we will face a financial catastrophe if we do nothing. If banks continue to fail and stop lending the average American could lose their job, be unable to secure a loan for a car, home or college education, and find their life savings and retirement in jeopardy. Our economy depends on having liquid assets available for credit and lending just as an automobile engine needs oil. If those liquid assets stop flowing, our economy will be seriously damaged and will require far more costly and lengthy repairs.

This bill does not represent a new and sudden departure from free market principles as much as it represents an emergency response to congressional actions that have ignored free market principles, and our Constitution, for decades. If anyone in Washington should offer their resignation it should be the members of Congress who peddled the fantasy of free home ownership without risk. No institution in our country is more responsible for the myth or borrowing without consequences than the United States Congress.

I'm not sure everyone here is sensitive to just how bad things could get quickly.

Posted by lotp 2008-09-30 12:56|| 2008-09-30 12:56|| Front Page Top

#26 Say Hank (Paulson), the Dow is up 350 points as of 2:00 p.m. today. Manufactured crisis?

Posted by JohnQC 2008-09-30 14:04|| 2008-09-30 14:04|| Front Page Top

#27 I just checked my bank's loan rates, which as of this afternoon were quite reasonable. I'm sure that if their liquidity was tapped out they'd charge what the market could bear. It may be that with the Fannie/Freddie bailout, FDIC protections, Federal Reserve pumping liquidity and a trillion in SS checks going out each year etc, the underpinnings are already in place to support the American banking system.

The benefits of the Paulson rescue plan (as opposed to the overall government lending) may be mostly psychological at this point. A "we're in charge and we will take care of you" while the heavy lifting (and most of the expense) have already been done.

Posted by Minister of funny walks 2008-09-30 14:31|| 2008-09-30 14:31|| Front Page Top

#28 So there's 2,000,000 houses about to be foreclosed on ready to tank the price of housing. How to deal with this problem? Find 2,000,000 new home owners.

Where do we find 2,000,000 new home owners?

I suggest an auction of 2,000,000 green cards to college educated adults who promise to move to the US and buy a house within 12 months without respect to country of origin, minimum bid $100,000.

Posted by Nimble Spemble 2008-09-30 14:35|| 2008-09-30 14:35|| Front Page Top

#29 Dow is up about 400 points today. There is a message that things are OK when Congresscritters keep their hands off.

Posted by JohnQC 2008-09-30 15:37|| 2008-09-30 15:37|| Front Page Top

#30 Here is my issue - if the engine is busted adding more oil not just deals with the symptoms and not the actual problem, it could cause more damage by covering up the symptom and creating false belief that everything is ok. They want a bailout, then fix the underlying problem and dissolve every entity and congressional power associated with this trespass of government power and spending then talk liquid cash bailout options (pouring oil on top of the engine dont help either, which knowing this congress is what they are going to do - "see I added oil!"). Otherwise its just gobs of bluish smoke coming out the tailpipe.

What nobody has been able to clarify to me is that if nothing is down the economy takes it for a couple of years; if something is done the economy takes if for a couple of years - so why get more of this omnipitant government interference. To me, Wall Street et al whoever spent lobby money on congresscritters are just as responsible as the a-holes who took the money so now they pay for their dishonesty. I probably will not be immune to the market forces (just started own business 2 weeks ago, yippee!) but I want to know what I will be dealing with after 6 months is for real and not some cushioned economy which collapses again.

Coming down the pipe is SS and Medicare so maybe somebody should start dealing with this now instead of after the barn catches fire, hmmm? (I know President Bush already tried to get people's attention on this)

Posted by swksvolFF 2008-09-30 16:00|| 2008-09-30 16:00|| Front Page Top

#31 swksvolFF - believe me I know - pouring oil on the engine doesn't help. In fact it might just start an engine fire down the road!

Posted by CrazyFool 2008-09-30 16:43|| 2008-09-30 16:43|| Front Page Top

#32 Simple answer to Paulson: DON'T DEBASE THE CURRENCY! If the bailout doesn't get passed, some institutions are going to take a hit. So are some innocents. That's bad for the folks who didn't deserve it. Debase the currency and WE ALL take a hit. A HUGE ONE. For me there's no question which is worse.

Posted by Jolutch Mussolini7800 2008-09-30 18:34|| 2008-09-30 18:34|| Front Page Top

#33 ARRRRRGH!!!!

Posted by AutoBartender 2008-09-30 19:37|| 2008-09-30 19:37|| Front Page Top

#34 Anybody here know why the banks gained soo much today?? Wachovia was up 90%, over 400mil shares and AIG was up about 33%, over 100mil shares.
All 25 NYSE top gainers were banking categories..

Posted by Tom- Pa 2008-09-30 19:56|| 2008-09-30 19:56|| Front Page Top

#35 #34 Anybody here know why the banks gained soo much today?? Wachovia was up 90%, over 400mil shares and AIG was up about 33%, over 100mil shares. All 25 NYSE top gainers were banking categories..

(1.) Hank Paulson's nose is growing daily and the scare tactics are failing.

(2.) Banks are crawling out from under the Gov't pressure to lend to risky, undeserving borrowers.

(3.) Market correction optimism.

Posted by Besoeker 2008-09-30 20:03|| 2008-09-30 20:03|| Front Page Top

#36 Conspiracy theory here, fellow R'burgers, please comment. The oligarchists run this country. Just suppose all this recent activity has been staged.
Pelosi was to make sure the bill didn't pass so she made that blame speech on R's, GWB. What's GWB care anyway, he's lame(duck). The bailout is really a tax inrrease on those who can afford it.
I'm not so sure what is in the bill, but I'm sure its totally unfeaseable given the lack of time given for review. I think Nancy, amongst others, got her AIG losses back today. Thanks, Hank, your a genious.

Posted by Tom- Pa 2008-09-30 20:44|| 2008-09-30 20:44|| Front Page Top

#37 Wachovia was up 90%, over 400mil shares
Strokes chin: "interesting"

Posted by tipper 2008-09-30 23:21|| 2008-09-30 23:21|| Front Page Top

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