Business Idea

[Bob Campbell]

It's not as complex as it looks. Corps trading mortgage portfolios like commodities, with zero regulation after the first trade.
Everybody bets on values continuing to escalate, thereby inflating prices on trade. When values don't rise, everything go boom.

[Lester]

"Corps trading mortgage portfolios" that were generated through the CRA...

...and as a side note, Citibank (among others) was sued for not issuing enough sub-prime mortgages... meaning they were forced to let more people that shouldn't play onto the field... to avoid being sued again. Government regulation gone horribly wrong led to this disaster.

[Hoosier Daddy]

Government regulation gone horribly wrong led to this disaster.

Unless you add the parts about unfettered greed and the LACK of adequate regulation in some areas and trying to make money off of money (as opposed to actually offering a tangible product or service), I'll swear you've been brainwashed by the FAUX News/Limbaugh crowd.

[genlock]

We need someone with an MBA(A) from MSU to explain the mess in
little words, writing slowly, that we may be able to understand the problem.
Does anyone think that if we understood it better, we might even be more pissed?

[Lester]

Did the government put a law into place that forced banks and lenders to issue subprime loans?

It's a yes or no question.

Did this plan invoke stiff penalties for failing to issue enough subprime loans?

It's a yes or no question.

Were lenders sued for not issuing enough subprime loans?

It's a yes or no question.

There is no spin to those questions. Simple yes or no responses for simple yes or no questions.

Now, did the corporations go ape-shit? Totally. Do I think they should be stripped of the million dollar percs? ABSOLUTELY. However, had the law never been put into place to begin with (and further modified for abuse in 1995), this COULD NOT have happened.

(This would be where I would share a great news story with you about WaMu's latest chief, and his 20m buyout for 17 days of work. However, since the link is from "faux" news, it obviously didn't really happen.)

[Hoosier Daddy]

... a great news story with you about WaMu's latest chief, and his 20m buyout for 17 days of work.

I read that story. It made me ill. And pissed off.

I like Genlock's idea about pitchforks, torches, and shovels.

[Dave Loudin]

Don't forget to direct your ire at Representatives like Barney Frank who pushed back hard on increasing the oversight for Fannie Mae and Freddie Mac. Many hands are stained by this debacle.

[Ace Purple]

Dr. Ron Paul explained this situation in the most logical way I've seen. Here is an excerpt of what he put on the Congressional record the day of the House vote:

-----
Indeed, we do face a major crisis but it is much bigger than the freezing up of Wall Street and dealing with worthless assets on the books of major banks. The true crisis is the pending collapse of the fiat dollar system that emerged after the breakdown of the Bretton Woods agreement in 1971.

For 37 years the world built a financial system based on the dollar as the reserve currency of the world in an attempt to make the dollar serve as the new standard of value. However since 1971, the dollar has had no intrinsic value, as it is not tied to gold. The dollar is simply a fiat currency, which has fluctuated in value on a daily, if not hourly, bias. This worked to some degree until the market realized that too much debt and malinvestment existed and a correction was required.

Because of our economic and military strength, compared to other countries, trust in America's currency lasted longer than deserved. This resulted in the biggest worldwide economic distortion in all of history. The problem is much bigger than the fears of a temporary decline on Wall Street if the bailout is not agreed to.

Money's most important function is to serve as a means of exchange—a measurement of value. If this crucial yardstick is not stable, it becomes impossible for investors, entrepreneurs, savers, and consumers to make correct decisions; these mistakes create the bubble that must eventually be corrected.

Just imagine the results if a construction company was forced to use a yardstick whose measures changed daily to construct a skyscraper. The result would be a very unstable and dangerous building. No doubt the construction company would try to cover up their fundamental problem with patchwork repairs, but no amount of patchwork can fix a building with an unstable inner structure. Eventually, the skyscraper will collapse, forcing the construction company to rebuild—hopefully this time with a stable yardstick. This 700 billion package is more patchwork repair and will prove to be money down a rat hole and will only make the dollar crisis that much worse.

But what politicians are willing to say that the financial "skyscraper"—the global financial and monetary system-is a house of cards? It is not going to happen at this juncture. They're not even talking about this. They talk only of bailouts, more monetary inflation, more special interest spending, more debt, and more regulations. There is almost no talk of the relationship of the Community Reinvestment Act, HUD, and government assisted loans to the housing bubble. And there is no talk of the oversight that is desperately needed for the Federal Reserve, the Exchange Stabilization Fund, and all the activities of the President's Working Group on financial markets. When these actions are taken we will at last know that Congress is serious about the reforms that are really needed.

In conclusion, there are three good reasons why Congress should reject this legislation:

a. It is immoral—Dumping bad debt on the innocent taxpayers is an act of theft and is wrong.

b. It is unconstitutional—There is no constitutional authority to use government power to serve special interests.

c. It is bad economic policy—By refusing to address the monetary system while continuing to place the burdens of the bailout on the dollar, we can be certain that in time, we will be faced with another, more severe crisis when the market figures out that there is no magic government bailout or regulation that can make a fraudulent monetary system work.

[Lester]

Excellent read.

[Jet Black]

Oh, Lord! Now Paul wants us to go back on the gold standard. Taking advice from Ron Paul may be like taking advice from, er, Barney Frank (or Bawrny Fwank, as the case may be. Dawm you, Dawm, You, You Gweedy Repubwicans!)

Time to cut out the finger pointing, political posturing and class warfare, and listen to some cooler heads in the market before we let the likes Bawrny Fwank talk us out of 700 B for billion dollars for his financial friends and benfactors.

[Hoosier Daddy]

Excellent read. As far as "cooler heads", I'm all for that. However, I am not interested in re-employing the Fox to tell me how to secure the doors to the hen house after he just killed every chicken on the farm.

[Jet Black]

No doubt you refer to Bwarney Fwank.

[Hoosier Daddy]

No doubt you refer to Bwarney Fwank.

Nope.

[Jet Black]

What a suprise. All problems are still met by Democratic stalwarts with plans of class warfare and cries of "Raise Taxes!"

Is that what Rush said? I wouldn't know, I never listen to him. I do watch Fox News. I keep waiting for them to spew the ethereal lies I'm always told about, but I can never catch them...

Have no fear, Bwarney and Nancy "What, Me Worry?" Leftist will fix it all, at a cost of $10,000 PER TAXPAYER, at the very least.

[Hoosier Daddy]

Relax, dude. I'm with you on this.

Well, maybe not the FOX News part, but I can't stand Pelosi or Frank.

I don't support the bailout either, if you haven't noticed ...

[AmpedNow]

Regardless of whose fault it "really" is, (and there's a lot of blame to go around), the fact is we're stuck with a potential economic meltdown if all of this sub-prime debris isn't removed from the economic travel lanes very shortly. The problem is figuring out how to best deal with this...

80% of the politicians on the hill should be fired immediately. Their approval ratings are only 10%, yet they're still going scorched earth against each other, seeing who can kill the bill fastest just to posture and blame the other party. Sickening. The country is possibly 1-2 more bank failures away from soup lines and still all they care about is one-upping each other. Just amazing...

In the word of Chef Ramsey: *slams fist on counter* "GET OUT OF MY KITCHEN!"

Pelosi is nothing more than a political hack in an empty suit. She proves time and time again that the job is too big for her.

/rant

[AmpedNow]

Here's what a top economist says about a bailout plan.

Weiss Research Press Release on Federal Bailout
by Martin D. Weiss, Ph.D.

FOR IMMEDIATE RELEASE:
September 24, 2008
Proposed $700 Billion Bailout
Is Too Little, Too Late to End Debt Crisis;
Too Much, Too Soon for U.S. Bond Markets
Weiss Research Submits Policy
Recommendations to Congress Today

JUPITER, FL, September 24, 2008 — The proposal before Congress for a $700 billion financial industry bailout will not only fail to end the massive U.S. debt crisis but could actually aggravate the crisis by driving up interest rates, according to a white paper submitted to Congress and banking regulators today by Weiss Research, Inc. Therefore, Weiss recommends limiting and reducing the bailout as much as possible, while bolstering existing safety nets for consumers.
Based on recently released FDIC and Federal Reserve data, Weiss Research finds that:

1. 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure, with total assets of $3.6 trillion, or 36 times the assets of banks on the FDIC's list of troubled institutions.

2. Among those with $5 billion or more in assets, 61 banks and 25 thrifts are heavily exposed to nonperforming mortgages.

3. The bailouts announced and proposed to date, although expected to cost over $1 trillion, are too small to rescue most institutions at risk, let alone address multiple problems with U.S. interest-bearing debts outstanding of $51 trillion and derivatives held by U.S. banks of $180 trillion.

Martin D. Weiss, president of Weiss Research, comments: "There should be no illusion that the $700 billion estimate proposed by the Administration will be enough to end the crisis. Nor should there be any false hopes that the market for U.S. government securities can absorb the additional burden of a $700 billion bailout without putting major upward pressure on U.S. interest rates, aggravating the very debt crisis that the government is seeking to alleviate." Among its policy recommendations, Weiss urges Congress to:

1. Severely limit the government's authority to buy bad private-sector debts by requiring it to pay strictly fair market value, including a substantial discount that reflects their poor liquidity.

2. Disclose to the public that there are significant risks in the financial system that the government is not able to address.

3. Focus more resources on strengthening existing safety nets, including FDIC insurance of bank deposits, SIPC coverage of brokerage accounts and state guarantee associations that cover insurance policies.

"Rather than focusing on the protection of imprudent institutions and speculators," concludes Weiss, "Congress should do more to protect prudent individuals and savers."
Regardless of what Congress decides, Weiss recommends that individuals continue to invest and save prudently, seeking the safest havens for their money, such as safe banks and U.S. Treasury bills or equivalent.

The Weiss Research white paper, "Proposed $700 Billion Bailout Is Too Little, Too Late to End the Debt Crisis; Too Much, Too Soon for the U.S. Bond Market," is available at http://www.moneyandmarkets.com/files/do ... -Paper.pdf. In addition, as a public service for consumers seeking advice on how and where to find safer institutions, Weiss Research provides a free 1-hour informational video on the Internet, entitled "The X List," at http://www.MoneyandMarkets.com.

[genlock]

Sept Ford sales down 34% , year to year.
GM down 33%.

[genlock]

Looks like forcing banks and lending companies to do risky things was a bad idea for the government.

[lastone]

Looks like forcing banks and lending companies to do risky things was a bad idea for the government

The current government is a bad idea for a government....has ben for about 20 years.

Still though, our Congress is the best money can buy! Perhaps we could "outsource" them too!