Tuesday, September 30, 2008
Monday, September 29, 2008
Give it up for NANCY PELOSI!
Nancy Pelosi is a foolish leader of the house. She derides the Republicans right before the vote on the bailout; the vote did not pass.
At least wait until after the vote, you absolute moron.
The further along she gets, the more she sounds like a drunken mess. "I don't know what's so great about the depression ... but that's the name they give it," she slurs. Hello. This is classic.Sunday, September 28, 2008
Government intervention is partially to blame
I am torn as to whether or not the government should be getting into this mess. I agree that the plan to buy these bum mortgages off the books of financial institutions will clean up a bit of the mess and get the credit flowing again; but, its hard for me to swallow more government intervention, as it is partially to blame for this whole mess. All the politicians want to put the blame on "greedy" Wall Street, but it was Fannie Mae and Freddie Mac, government created entitities, who packaged these garbage mortgages into securities, with a good credit rating. Wall Street got wrapped up in this by investing in these toxic securities, lacking the foresight to see the housing bubble come caving in later.
On the other hand, they created it, why shouldn't they "bail" out the market? They claimed that EVERYBODY (or at least many many more people) needed to own a home. The government decided that they needed to put their hand somewhere it shouldn't be. This gross invasion of people's private lives has created a giant welfare state, which will continue to tax those who can pay (more and more), and give it to those who are entirely dependent on the United States for their survival. What happens when Big Daddy (not Uncle) Sam defaults?
Read this article, from 1999, which applauds the government's initiatives to put people in houses who couldn't afford it: http://articles.latimes.com/1999/may/31/news/mn-42807 . Very informative.
"Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more."
"In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected."
On the other hand, they created it, why shouldn't they "bail" out the market? They claimed that EVERYBODY (or at least many many more people) needed to own a home. The government decided that they needed to put their hand somewhere it shouldn't be. This gross invasion of people's private lives has created a giant welfare state, which will continue to tax those who can pay (more and more), and give it to those who are entirely dependent on the United States for their survival. What happens when Big Daddy (not Uncle) Sam defaults?
Read this article, from 1999, which applauds the government's initiatives to put people in houses who couldn't afford it: http://articles.latimes.com/1999/may/31/news/mn-42807 . Very informative.
"Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more."
"In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected."
Friday, September 26, 2008
Save it, Harry; you're old news.
Gems from Harry Reid today.
"The insertion of presidential politics has not been helpful. I repeat, the insertion of presidential politics has not been helpful."
"The insertion of presidential politics has not been helpful. I repeat, the insertion of presidential politics has not been helpful."
"an economic recovery package ... will help middle-class families struggling in the weakening Bush-McCain economy."
Is this not the most loaded, political statement to be rendered in the package proposal?? How is this not infusing the current discussions with presidential politics?
Then why did you "call on Senator McCain to take a stand ... on the issue. " Did you remember that we are in the middle of a presidential election (40 days from now) and that Senator Obama was intent on staying out of the situation? You brought them here, Harry. McCain wasn't bringing Obama in. You brought them, along with President Bush. Now you want them to leave:
Then why did you "call on Senator McCain to take a stand ... on the issue. " Did you remember that we are in the middle of a presidential election (40 days from now) and that Senator Obama was intent on staying out of the situation? You brought them here, Harry. McCain wasn't bringing Obama in. You brought them, along with President Bush. Now you want them to leave:
"I would hope the two presidentials (candidates) would go to the debate tonight and leave us alone here."
And then, he has the audacity today to ask McCain to return:
“With the economic news only getting worse each day, I call on the president, Sen. McCain and congressional Republicans to join us to quickly get this done for American families.”
Thanks, Harry.
Is this so you can focus on an economic stimulus plan which will cost an additional $56 billion? Didn't we see what the last stimulus plan did for the economy? I never received my check. And look where we are RIGHT NOW. I think we are not worried about another economic stimulus package which will
Thanks, Harry.
Is this so you can focus on an economic stimulus plan which will cost an additional $56 billion? Didn't we see what the last stimulus plan did for the economy? I never received my check. And look where we are RIGHT NOW. I think we are not worried about another economic stimulus package which will
"create hundreds of thousands of good-paying American jobs."
Tuesday, September 23, 2008
Economic meltdown, and pointed fingers ...
With the economy tumbling, many fingers have been pointed, and many guns have been drawn. It was fascinating to watch as Russia's harball tactics were held hostage as the American financial system had a major hiccup. The Kremlin defaulted on huge amounts of foreign debt, yet the world rebounded just fine; if the United States defaulted on their foreign debt, the world as we know would collapse. The real power of the United States is shown every day as the people band together and make up the greatest economy in the world. It can't be compared to anything. The sum of the European nations is waiting with suspense as the details are worked out for what is building up to be the greatest bailout ever. The already volatile developing markets have been hit with a "tsunami," as the president of the Philippines stated at the United Nations summit this week.
As the blame has been passed around, there are many places to point. My friend Eric put together a starter's list of some places where we could start to place some blame. Through some of our discussions, we have come to the conclusion that not just one place can be the receptor of ALL the blame. Greed, which seems to be well up in all of us from one time to another, has contributed to this mess. But we are creatures of change, and sometimes we need some serious reminders to force us to change our ways ...
Your comments are appreciated. And if you'd like something posted up, email me at young.christopher.mark@gmail.com.
Eric's list
1. Financial Institutuions for not managing risk and not understanding the risks they were taking by buying mortgage backed securities. Had hedge funds, private equity funds, investment banks, insurance companies clearly understood the risks and had the foresight to see the housing market bubble, they would have never demanded these mortgage backed securities and therefore there would be no market.
2. Rating agencies who rated these mortgage backed securities at well above investment grade, making it hard for the above mentioned financial institutions to truly understand the risks associated with the securities.
3. Regulators for not understanding the mortgage backed securites and the associated risks involved with having these on their books.
4. Local mortgage lenders for using suspect techniques to convince people that they could get into loans they had no way of ever paying off. (ex. a maid in San Francisco who's pastor, also a mortgage lender, got her into a $500,000 house on a maids salary). Hoping to refinance after the rate adjusted up.
5. The public for not understanding the loans that they were signing up for, it is the responsibility as a borrower to not "live above your means." When someone wants to give you a loan you know you could never pay back you probably shouldn't sign up for it.
There are many people that can be blamed for this, but as like any economy there is highs and lows. Nothing could have fully stopped the housing market slump, appropriate risk measures put in place of companies could have helped to lower the risk. Regulation like the stuff mentioned in the article could have lessoned the blow. The reality is that no one truly understood the risks involved because the housing market had been growing for so long no one saw an end to it.
As the blame has been passed around, there are many places to point. My friend Eric put together a starter's list of some places where we could start to place some blame. Through some of our discussions, we have come to the conclusion that not just one place can be the receptor of ALL the blame. Greed, which seems to be well up in all of us from one time to another, has contributed to this mess. But we are creatures of change, and sometimes we need some serious reminders to force us to change our ways ...
Your comments are appreciated. And if you'd like something posted up, email me at young.christopher.mark@gmail.com.
Eric's list
1. Financial Institutuions for not managing risk and not understanding the risks they were taking by buying mortgage backed securities. Had hedge funds, private equity funds, investment banks, insurance companies clearly understood the risks and had the foresight to see the housing market bubble, they would have never demanded these mortgage backed securities and therefore there would be no market.
2. Rating agencies who rated these mortgage backed securities at well above investment grade, making it hard for the above mentioned financial institutions to truly understand the risks associated with the securities.
3. Regulators for not understanding the mortgage backed securites and the associated risks involved with having these on their books.
4. Local mortgage lenders for using suspect techniques to convince people that they could get into loans they had no way of ever paying off. (ex. a maid in San Francisco who's pastor, also a mortgage lender, got her into a $500,000 house on a maids salary). Hoping to refinance after the rate adjusted up.
5. The public for not understanding the loans that they were signing up for, it is the responsibility as a borrower to not "live above your means." When someone wants to give you a loan you know you could never pay back you probably shouldn't sign up for it.
There are many people that can be blamed for this, but as like any economy there is highs and lows. Nothing could have fully stopped the housing market slump, appropriate risk measures put in place of companies could have helped to lower the risk. Regulation like the stuff mentioned in the article could have lessoned the blow. The reality is that no one truly understood the risks involved because the housing market had been growing for so long no one saw an end to it.
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