Posted on 09/23/2008 5:19:04 AM PDT by SE Mom
When Sen. Chris Dodd (D-CT) gavels in the Senate Banking Cmte., he is expected to pro- pose changes to the Bush admin.'s $700 billion intervention in the financial markets. Witnesses include Sec. of Treasury Henry Paulson; Ben Bernanke, Chair of the Federal Reserve System; and others
(Excerpt) Read more at c-span.org ...
But they do. The US has one of the lowest savings rates in the world. And credit is readily available with many households maxing out their credit cards. If you reduce consumption significantly, you are going to reduce jobs which has a ripple effect throughtout the economy. If you have an unemployment rate of 25%, there will be a lot of people and businesses facing that fact. Do you think that you personally would be immune to the effects of a Depression?
http://www.thirdworldtraveler.com/United_Nations/Chronkite_UN.html
It seems to many of us that if we are to avoid the eventual catastrophic world conflict we must strengthen the United Nations as a first step toward a world government patterned after our own government with a legislature, executive and judiciary, and police to enforce its international laws and keep the peace.
To do that, of course, we Americans will have to yield up some of our sovereignty. That would be a bitter pill. It would take a lot of courage, a lot of faith in the new order.
There are no dumb questions - only dumb politicians and greedy bankers.
Till a week ago, Wachovia was all set to buy Morgan Stanley just like Bank of America bought Merill Lynch. However, Paulson’s bailout for his amigos is going to prevent that from happening and is going to rescue these criminally-leveraged investment banks.
“But why can’t consumers banks take over the tasks of investment banks?”
Please check this link out - it’s a useful read: http://www.vault.com/nr/newsmain.jsp?nr_page=3&ch_id=240&article_id=16020806
That is truly the scary part. We could end up in a total global financial collapse if it doesn't work. It's a tough call and it's already beginning to affect Main St. $700 Billion..... that is an astounding figure to throw out there. Geez, there are 250 million people in the country -- why not send everyone a million bucks and call it a day. (need a sense of humor to get through this mess).
Depending on what we do, they will be forced to act one way or another. The US is the engine of the world’s economy. It dwarfs everyone else. If we tank, the world’s economy tanks.
The “financial experts said that if we had let this go on it would have taken the DOW down to 8300. Well 8300 is probably better than we deserve.
Look at the Google Finance Graph of the Dow all the way back, max it out to ‘71. You will see that an orderly slant increasing from 85 to 94 would take US to around 8000.
If we were to drop to 8, it would just still leave us better off than after the 9/11 attack downturn.
The failed policies need to FAIL and DIE...not encouraged with Trillions of dollars of our money. They are just trying to scare US into giving in.
Of course not. But I'm fairly young, and therefore am interested in long-term solutions rather than band-aids.
Excessive leverage is the poison in the world economy just as it is in the individual's balance sheet (and just as it was in 1929!), I see nothing in this plan which reduces the incentive to become overleveraged.
Especially when I hear the deadly dangerous talk about "supporting housing prices" which makes as much sense as trying to reinflate Yahoo to $200 a share.
** 2001
April: The Administration’s FY02 budget declares that the size of Fannie Mae and Freddie Mac is “a potential problem,” because “financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity.”
** 2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
** 2003
January: Freddie Mac announces it has to restate financial results for the previous three years.
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that “although investors perceive an implicit Federal guarantee of [GSE] obligations,” “the government has provided no explicit legal backing for them.” As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. (”Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO,” OFHEO Report, 2/4/03)
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO’s review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact “legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises” and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any “legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk.” To reduce the potential for systemic instability, the regulator would have “broad authority to set both risk-based and minimum capital standards” and “receivership powers necessary to wind down the affairs of a troubled GSE.” (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
** 2004
February: The President’s FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: “The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator.” (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to “not take [the financial market’s] strength for granted.” Again, the call from the Administration was to reduce this risk by “ensuring that the housing GSEs are overseen by an effective regulator.” (N. Gregory Mankiw, Op-Ed, “Keeping Fannie And Freddie’s House In Order,” Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying “We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System.” (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
** 2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying “Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system.” (Secretary John W. Snow, “Testimony Before The U.S. House Financial Services Committee,” 4/13/05)
** 2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying “first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options.” (President George W. Bush, Press Conference, The White House, 8/9/07)
September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying “These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I’ve called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon.” (President George W. Bush, Discusses Housing, The White House, 12/6/07)
** 2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says “A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully.” (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and “move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages.” (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and “modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes.” (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)
May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.
“Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans.” (President George W. Bush, Radio Address, 5/3/08)
“[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator.” (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
“Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans.” (President George W. Bush, Radio Address, 5/31/08)
June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying “we need to pass legislation to reform Fannie Mae and Freddie Mac.” (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July: Congress heeds the President’s call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
In 2005— Senator John McCain partnered with three other Senate Republicans to reform the government’s involvement in lending.
Democrats blocked this reform, too.
More... Not only did democrats not act on these warnings but Barack Obama put one of the major Sub-Prime Slime players on his campaign as finance chairperson.
UPDATE: The media is not reporting that the failed financial institutions are big Obama donors
It is not just about the stock market, it is about millions of jobs. During the Great Depression, the unemployment rate hit 25% and remained high 15% up to 1940. WWII is what got us out of the Depression. And we didn’t have a social welfare system and an aging population. About 35 million Americans are over 65 and that number will double by 2030.
Remember the try by the President and some Republicans to fix SS?
Lots of howling.
So we will wait for a disaster like this to fix it?
I heard he was a Dem.
Is it fear of congressional retaliation?
They do have to approve any "bailout" package. Probably not a good idea to tell the idiots you need money from just how stupid they were/are.
I am glad you are young enough to look at long term solutions. We need guys like you to pay the $60 trillion unfunded liability represented by SS and Medicare. SS goes belly up in 2017 and Medicare around 2013. In 1950 we had 16 workers for every retiree. We now have 3.3 workers and by 2030 it will be two to one. We are headed for a major financial train wreck without this crisis. Congress has been spending beyond its means for many years. The chickens are coming home to roost and it is people like you and my daughter who will pay the real price. Good luck.
Facts the MSM and the Dems don’t want the public to know about. Thanks.
Amazing. Simply breathatking.
Now Sen Dole asks - WTH is up with the CDS (credit default swap) ...un regulated, un-examined, huge fraud potential..
From what I read somewhere yesterday- the CDS are equally scary in terms of market stability/collapse.
That makes sense.
Amazing that these Dem Senators pretending they CARE ABOUT TAXPAYERS???????????????????????
Didn’t their VP just say it is patriotic to pay more and more taxes?
LOL.
Isn't that the truth!
As I watch the senators, I find myself becoming encouraged that these guys are actually trying to adequately evaluate Paulson's plan so that they can come up sound legislation. Then, I remember that these guys are US senators and realize that they are just posturing to make their constituents think they are actually doing their jobs and to provide cover if the plan goes awry.
They all know that by Friday they will pass legislation that gives Dubya and Paulson pretty much everything they want with as much pork added as possible.
Am I too cynical? I don't trust anyone in government anymore.
That’s what I don’t understand..The markets are still between 10,000 and 11,000...was is the big emergency?
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