the bailout

Because the GOP cares only about their own and to he** with the rest of us. As Capt. kirk said when informed by Spock of the imminent demise of the Kilingons: "LET them die!"

One word.....Apathy! No one cares anymore!. If it isn't knocking at their door they just don't care...especially when they're brain dead programs are on tv! The people of this country have no spines anymore. Armchair politics. Bitch/Rag/Moan...just don't bother them while the tv is on.

They bitch about gas prices...but have no clue about everything else they pay high prices for...just a few examples....

Diet Snapple  16 oz  $1.29 ...... $10.32 per gallon

Lipton Ice Tea 16 oz  $1.19 ......$ 9.52 per gallon

Gatorade 20 oz  $1.59 ..............$10.17 per gallon

Ocean Spray 16 oz  $1.25 ..........$10.00 per gallon

Brake Fluid 12 oz  $3.15 ............$33.60 per gallon

Vick's Nyquil  6 oz  $8.35 .........$178.13 per gallon

Pepto Bismol  4 oz  $3.85 ...........$123.20 per gallon

Whiteout  7 oz  $1.39 .................$25.42 per gallon

Scope  1.5 oz $0.99.....................$84.48 per gallon !

And this is the REAL KICKER...

Evian water 9 oz $1.49...............$21.19 per gallon?! 

$21.19 for WATER! - and the buyers don't even know the source.  
(Evian spelled backwards is Naive.)

So, the next time you're at the pump, be glad your car doesn't run on water, Scope, or Whiteout, or God forbid, Pepto Bismol or Nyquil.

If you actually look at the roots of the situation, you would see this problem is a long time in the making, and has only gotten worse in the last year or so.  Also, remember who is actually in charge of the government at this point in time (hint: it's not the President).  

It's not the people, as in "We, the people" either.

You have to think of the economy like a big pond. If you drop a huge rock into one end, you don't see the effects right away. My point is that you have to look beyond the present, beyond the current administration to see where the ripple started from. While there are conditions that can worsen the ripple, it always has a starting point in the past tense. (think NAFTA and silly interest and economic policies)

I was also thinking along the line of who took us off of the gold standard, who took us off the silver standard, who took the cost of housing out of the cost of living index, who bailed out the S&L and freddie and fannie and now...

It's hard to understand how 51% of the people can support a party that only works for the upper 11%.

I also agree that it takes time for situations to resolve but the mortage industry problems have long been talked about with nothing being done until the dodo hit the fan.

NAFTA, now that was a big step backwards for the middle class and giant leap for business.

The problem with the bailout is it would also need to clearly address the other aspect of the credit market liquidity problem and that is new regulations are needed to ensure asset quality of mortgage backed securities.  The credit markets froze because no one had any appetite for mortgage backed securities.  They couldn't be properly valued.

If I had a bundle of $10M in mortgage backed securities the last thing I want to be is a holder of repossesed homes.  I want the cash flow that I believed I had purchased.  A quantifiable degree of uncertainty in the investment is tolerable as long as it's quantifiable and doesn't drastically change.  It drastically changed.

Furthermore, the banks who sold these end up having to repossess the homes and the cash flow fom these mortgages goes into default.  In short the banks even though they may not have written a pile of bad mortgages themselves can end up with severe problems by having purchased mortgage backed securities.

Finally as the economy slowed and layoffs began to increase, the problems of overvalued homes and cash strapped consumers compounded to freeze the capital markets.

This is not an issue of let the aholes suffer the consequences of their own actions.  The US would drag much of the world into a Depression as occurred in the 1930's if nothing is done.  Yet a bailout without a significant regulation overall will simply lay the groundwork for another ecomic meltdown in the future. 

The S&L crisis in the 1980's was an asset quality problem that compounded rapidly during an economic slow down.  There was a panic and run on the S&Ls.  The same thing has once again happened only today it's nobody wants to buy or own mortgage backed securities.  And, there's been a panic and run on wall st.

The Government must address this.  They have no other responsible choice.  Yet a regulatory end to "creative" financing in mortgages that was making millions in fees and bonuses for the select few needs to end also. 

Yes, fear and greed, the same old human problem is at fault here.  And, yes there are those who a few years ago who were raking in excessive profits from mortgages that were in reality high risk being packaged, marketed and sold as safe secure investments.   Regulations and enforcement are needed to solve that problem not do nothing and tank the bailout.

It was when Regan was president that all the de-regulation started. De-regulation is the prime cause of all this. No one watching what these greedy bastards are doing. I blame the Reagan people. Reganomics has led to this. The only thing that is trickling down to us is smelly and brown. It's true that republicans are more for the rich end of things. Let them eat cake seems to be the attitude. Ya see the reason you don't see anybody in jail for this is that no one broke any laws! Now between the horrible needless war and the housing meltdown our government is bankrupt and dragging all of us down with it. We will have to pay for this bail out. I think we are stuck and there isn't a thing we can do. Back in the 60's there was talk of revolution. I was all for it. The whole stinking financial system based on greed and now the middle class is dead. The government is hand in hand with the greedy bastards while we all go to hell for all they care. I say we all go on strike for a week. Shut this thing down. That will get their attention. I'm afraid that the detention camps they have hid all over the country would start filling up. WE ARE SCREWED. Get used to it. 

The way I see this bailing out nonsence; We are only delaying the inevitable by continuing to bail out banks which ended up broke due to their own policies. Everyone had to learn the hard way, apparently it's not a no brainer that when you loan someone money for lets say a mortgage and they cant pay it back you end up LOSING money.

Now the government owns banks and insurance companies, only bad can come from this. HELLO SOCIALISM!

Correct and nice job stating the issues.  I would add to that the need for congress to actually perform their oversight functions as the new regs will be worthless without oversight as are the current regs.  A whole lot of folks asleep at the switch in this area.  More interested in pandering for votes than telling a prospective homeowner that they did not qualify for a mortgage.

That is not the issue.  The lenders would package up bundles of the mortgages and sell them to other parties.  Each bundle might have some futuregood mortgages, some bad in the future, some on the borderline.  The bundle was then repackaged with other bundles and sold again.  Gradually it became obvious that some people were not able to make the payments.  But who was the mortgage owner now, which bundle was the mortgage in and how many other bad mortgages were in the bundle?  Obviously, people began to stay away from purchasing additional bundles as there was not way to truely value the assets within. . Meanwhile the banking regulations forced the banks to devalue the assets again and again due to the uncertainty.  With each devaluation, they (the banks) became more and more leveraged until the breaking point was reached.

Well, I can't agree with the majority of that statement. My immediate family has been squarely classified as middle class since I can remember. We started out very much so in the Lower-Middle class when my father started his business in 1984. He's done very well and could be considered upper middle class now. From my experience in my own life, I have seen the democratic party do very little for us as a middle class family. I've seen my father's successes metaphorically punished via taxes and policies which seem to do little but harm small businesses. I've seen my own taxes raised and raised again. The years in which my father's business has been most successful have been while local, state and federal governments have been under republican control. I abhor the idea that if you have any success, you are thus responsible for sharing that success with other that don't. Not by choice, not from kindness but without choice and mandated by the government. Why are those who are successful seen as though they are the evil men behind the curtain with the tall top hat and curly mustache? For all of the democratic party's propaganda regarding how they work for the middle classes, I've seen very little evidence of that in my own life. [Your] experience may vary (and I hope it has) but I can only speak from my own experience.

I respect your view wimpy - It's just very, very left. When there exists a party which works for the whole of the population, then we should talk. I'll help make the posters Did you know that 80% of statistics are made up? On the more serious side; Basically all thats left is just a bunch of finger pointing. Both sides of this fence have equally screwed us and I believe will continue to do so.

Regarding NAFTA, please reference http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement#History_of_the_implementation Who's that sitting there signing it? See, we've been equally hosed by both sides.

Just for the record, I subscribe to no particular party nor any set in stone set of party ideals. I am not partisan and could be considered closest to a Libertarian point of view.

WASHINGTON —  The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation.

The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official said.

The law enforcement officials spoke on condition of anonymity because the investigations are ongoing and are in the very early stages.

Officials said the new inquiries bring to 26 the number of corporate lenders under investigation over the past year.

Spokesmen for AIG, Fannie Mae and Freddie Mac did not immediately return calls for comment Tuesday evening. A Lehman spokesman did not have an immediate comment.

Just last week, FBI Director Robert Mueller put the number of large financial firms under investigation at 24. He did not name any of the companies under investigation but said the FBI also was looking at whether any of them have misrepresented their assets.

Over the past year as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. Mueller has previously said the FBI's hunt for culprits in the nation's subprime mortgage crisis focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.

The investigations revealed Tuesday come as lawmakers began considering whether to approve emergency legislation that would give the government broad power to buy up devalued assets from troubled financial firms.

The bailout proposed by the Bush administration is aimed at helping unlock credit and stabilize badly shaken markets in the United States and around the globe.

In the past two weeks, the government has taken over Fannie Mae and Freddie Mac, the country's two biggest mortgage companies, with a bailout plan that could require the Treasury Department to put up as much as $100 billion for each of them over time if needed to keep them afloat as mortgage losses mount.

Last week, the Federal Reserve provided an emergency $85 billion loan to AIG, which teetered on the brink of bankruptcy. Lehman Brothers was forced to file for bankruptcy after attempts to engineer a private rescue fell apart. All the companies were laid low from bad bets on complex mortgage-related securities.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke made the joint decision last week that the only way to stop the carnage was to deal with the root cause of all the troubles, billions of dollars of bad mortgage debt sitting on the books of major financial companies. This debt has triggered the worst credit crisis in decades, causing credit markets to essentially freeze up despite the fact that the Fed joined with major central banks around the world to pump billions of dollars of reserves into the financial system.

Additionally, the FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud. Countrywide Financial Corp., formerly the nation's largest mortgage lender and now owned by Bank of America Corp., is also under scrutiny.

I’ve never thought of myself as very, very left. I’ve always considered myself as a pragmatic humanist. I did grow up in Bezerkely during the 60’s but that was more of a Timothy Leary kind of experience rather than a Mario Savio one. I was self employed as a quality assurance/control contractor primarily in the aerospace industries for 20 years and understand small business concerns first hand also. Your Dad's an LLC right?

I truly believe that we are only as free as we are responsible. Bailing these companies out for being irresponsible seems so well, irresponsible. To me, it’s all about greed and the good old boy system while the rest of us get stuck with the check. You and I would not be able to get out from under so easily, we have to be financially responsible, why not the institutions also.

I been around the world and that view has made me appreciate our society. I have concerns about the erosion of those rights guaranteed by the Constitution. I don’t think some people understand the concept of “equal protection under the law” or the definition of “state militia”. I feel that the country is being bankrupted by those in power and find that to be irresponsible. I believe that everyone should have available to them affordable health care. I believe in “no child left behind” and that is should be appropriately funded.

I’m filing for my social security benefits very soon. I thought the blatant attempt to privatize social security was appalling and who was to be the recipient if that had of happened. I think it is the same guys with their hands out today. This one is really close to home I can feel my blood pressure rising some.

I feel blessed. I have a son that is younger than my granddaughter and a sweet wonderful wife. We moved to North Carolina from California for all good reasons. Better schools for our son, closer to my wife’s family where she wants to retire and I retire early (wish I had planned better) and be a stay at home dad.

I still feel apathetic towards the political machines, neither party really excites me and the media plays up the differences to sell news. It just seems that way, I mean, we all want the same things in life, to be self sufficient, a roof over our heads, food on the table and a good life for our families. Republicans don’t care any more about family values than Democrats, where did this myth originate. My wife and I volunteer in our son’s classroom and are an active part of the PTA (I’m just as surprised as those who know me).  I'm going to vote for Obama. I think he has the most potential for change not to mention setting precedents for those that come after him. I’m just not sure he will have the opportunity to make those changes, bipartisan politics being what they are.

Having said all this I still feel like a pragmatic humanist but I respect your subjective analysis and hope we both realize that other’s may view these views as right of center.

I was wonder if I would ever get the chance to tell my story, thanks Andrew.

The last time I asked, I believe he had it registered as an S corp. I couldn't say with certainty without asking him [again] though.

I can completely sympathize with your concern. I have very little doubt that I will not have social security to count on.

Agreed.

I wasn't attempting to claim that democrats (or the left for that matter) don't care about family, or their values persae. My opinions are more directed towards the politicians at the head of governments (local, state, federal). There are good people everywhere you look, that much is certain, and that isn't limited by their political beliefs or affiliations in any sense. I think we're in agreement about that. And that's the best kind of social responsibility. You're volunteering your time and no one is mandating by law that you have to. I like that government offers incentives to give, as it encourages people who otherwise might not. But I dislike it very much when tax dollars go to social programs which I don't agree with, or that I feel are mismanaged.

I personally feel that people should give to charities when they can and donate, in any way shape or form, on a regular basis. My objection falls in line with using the law to force people to. (slightly off topic, apologies, but this falls in line with how I view many liberal social agendas - not to be outshined by many conservatives complete lack thereof) It's commendable that you choose to use your time to benefit others.

You're well spoken wimpy, I hope the discussion engages some others with more good dialog.

Nighttrain, that would be a damned shame. I'm at a loss for words at the mere prospect of that being driven by fraud. Talk about a loss of consumer confidence...

I think this bail out is a complete and utter travesty... a double whammy for those who can least afford it.

Firtstly they've been screwed by the financial institutions, and now their tax dollars are going into saving the bastards who screwed them over to begin with... and in saving these institutions, the government is giving them the green light to continue doing more of the same.

It's a travesty because now their tax dollars are going into maintaining what they're already paying through the nose for... their homes.

Sure there needs to be some kind of a rescue package, but it should not be one to prop up the bastards who stuffed it up in the first place.  Surely a better option would be to provide affordable mortgage relief to those in greatest need, and with their greater propensity to pay, the financial institutions, with better economic management, could trade themselves out of trouble... meaning they and the home buyers both win... because as it stands, the current proposal will only see the banks and lenders come out of it smelling of roses.  The struggling home buyer will still have an unaffordable mortgage and debts beyond their means

The destruction/dismantling of the current system should be allowed so that it can be more equitably rebuilt with guidelines and controls to ensure nobody is unfairly diadvantaged.  OK, there would be a difficult period of adjustment, but look at it this way, how many more dollars can a fast going bankrupt government throw at a financial sector that will inevitably self-destruct regardless?

This all began with greed, maximising profits and trying to balance books based on electronic figures - quite often actual cash money doesn't change hand for something that 'corporately' only exists on paper - so instead of having something tangible to work with, they're playing catch-up mathematics while a nation of home buyers (whose debts on tangible houses are very real) get washed down the sewer with foreclosure notices.

Oh, and this isn't a political thing...Democrats and Republicans alike should stand up in unison to protest this insane proposal to rescue the already wealthy... c'mon, you don't really think the top dogs of the finance/mortgage industries are going to lose any of their personal wealth... that was always kept separate from business, makes sense, don't it.  That's how the rich stay rich after company collapses... and how they can be reborn again to screw you some more.

Noone will ever be able to convince me that the Mortgage comapanies actually expected the Homeowners to be able to pay the balloon payments worked into the mortgages.

They expected to foreclose on those homes and resell them for more profit. The problem is that housing Market collapsed underneath them and the decrease in value of the homes ruined their plans.

They did not care if people couldn't pay their mortgages. They got their money up front, cashed in and got out before the storm hit.

None of this can ever be proved because most involved legally don't have to answer any questions.  

It is a mistake to blame everyone involved because many were just following a business trend. Monkey see monkey do.

Take this with a grain of salt because i am completely shooting from the hip....I have been trying to learn as much as I can about all of this and so far I don't understand why they can't just rewrite some of the mortgages to make the homes affordable for people to keep them. Just make the 30 year mortgages, 40 year mortgages, then go back to buying and selling your packages.  It is the balloon payments that are the problem. Make those go away and.......

I saw first hand some incredibly greedy pillaging of Fedral funds to help Katrina victims. I live in New England ( a long way from the damage). A few construction companies around here got involved "helping" the victims. They helped by flying high priced contractors down their to rebuild. They then billed the Gov for their efforts with mark up attached. They legally didn't have to explain their expenses. Billions of dollars were made on helping the victims.

The same thing is happening with the war. Billions have been "lost" in Iraq. Yes, lost according to the man.

There is huge profit in disaster relief.   

We need a revolution. We need it now. People can't force change until they have hit the bottom. The govrnment has preyed on fear for too long. Soon we will have nothing more to fear except the government. I love America and what it is supposed to stand for but my I have to seriously consider getting out before the panic sets in.

Fearing terrrorists is not American. We will never learn this because people are too dumb.  

Religion and politics are not supposed to get into bed togather but the Gov relies on faith to keep us in control when things get bad. Think about it, people wouldn't look to an invisible man in the sky when things get bad. They would look towards the problem and do something about it. Faith comforts fear. There is something wrong there.

Well, I guess I got a little off track but all this stuff needs to be discussed. Discussed is the key word, not debated.

Oh and.... why wasn't a system put in place after the Enron scam to hold people responsible in clusterfucks like these. Did we expect the cheaters to never do it again? Keep an eye on US Automakers. I have a hunch they are the next group to be involved in something similiar to the mortgage crisis.

THere is a real political problem with that NT.  Your neighbor doesn't pay his high arm rate and gets a new mortagage with more favorable terms.  You have taken a second job to make your payments and you get nothing?  The illegal imigrant gets a new rate and a second try and you get nothing because you paid in time and kept your commitments?  Big problems there I would think!  After all 95% of the mortgages in this country are paid on time!

But that is is not the real issue, the real isssue is the problem of the bundlles that were sold as I desciribed in relpy #11

Pretty much this will happen again and again until the government is completely gutted...overhauled...and the idiots running this country are held accountable...tarred...feathered and made to do jail time and pay back the money they've been stealing. And then we need to replace the government with younger people who have a real stake in the future. And I won't say Bush is entirely responsible for the state of the countries economy...as was said earlier it started a long time ago...he just drove in the final nail with his personal vendetta of war....chasing ficticious WMP at our expense.

And really...did anyone buying a home expect our economy to go down the toilet as fast as it has? Everyone was pretty much caught with their pants down while while prices went up but incomes didn't follow. And those in government have the balls to say our economy is strong? They need to start drug testing and giving IQ tests to these idiots along with some huge reality checks.

Until people wake the hell up and take a stand against the rape and pilage of our country I really don't feel sorry for anyone. Why the hell is everyone so afraid of the government?

"When, in the course of human events, it becomes necessary for one people to dissolve the political bonds which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.

Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.

But when a long train of abuses and usurpation's, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security. --Such has been the patient sufferance of these colonies; and such is now the necessity which constrains them to alter their former systems of government. "

The real issue is companies giving mortgages to people who couldn't afford them in the first place.  This partly started in 1999 when the industries were pressed to be more "fair" to lower income people, so the restrictions were lessened.  This is where the ball really got rolling.

In 2003, the administration wanted to overhaul the housing industry, but certain politicians killed the proposals because it would make it more difficult for the "poor" (their voters) to get a mortgage they couldn't afford.

Oh please I D the poor aren't the source of the problem.  The poor aren't prospective homebuyers shopping for $250K to $500K homes out west which is where in the US this problem began.

People taking out mortgages they cannot afford is the problem.

The government in 1999 was not dictating to banks to lower their lending standards.  To the extent that happened they did it on their own.  From the banks standpoint all they cared about were their fees and could they find a buyer in the secondary market for the mortgages.  Keep the "profats" rolling was their only incentive. 

Once the housing market began to collapse from all the refinancing, reselling and churning in the markets that was encouraged because it generated fees to the point housing prices were no longer realistic homebuyers became scarce and the slide downhill accelerated from layoffs and high energy prices.

There were some mortgages written that should have never been written but that doesn't explain a problem this large.  There were fundamental problems I think in how banks were booking profits based on mortgage lending that created a problem this large.  As well as how brokers in the secondary market booked their profits, afterall the banks couldn't have written that much in mortgages without a secondary market to buy it up.  Once the secondary market froze the banks froze too.

I work for an agency that helps people find homes for rent. Many of the people who are looking for a rental homes right now are people who are losing their homes that they own. I've heard all the stories out there, and the most popluar one is that they bought the home at a certain price and could afford it with no difficulty. Now their taxes have doubled and even tripled, their homeowners insurance shot up, and the adjustable interest rate went up too....but their income didn't.

The average homeowner that ends up in my office has seen their house payments go from $800 a month to $1400 a month, in less than 5 years.

The number of rental properties in the Detroit metro area has gone from around 2500 to over 7000 in the last 5 years (it was close to 8500 last year but has since gone down).

Something needs to be done. I don't know what, I'm no expert. All that I see are the results of the crisis...and it's very bad.