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Thread: Banks...............
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09-16-2008 #41
BUT no one complained when millions of folks with zero savings and zero employment history were getting mortgages and buying homes that under normal lending scrutiny would have never been approved. Our elected officials were saying it was an American's birthright to be property owners, so let's invite the entire population to the party. And who cares if you can't make your payments... the value of your house is going up 20% per year
Everyone is blaming Wall Street, but this was going on with the tacit approval of the government and the Federal Reserve Bank.
Keep in mind, Fed Chairman Allan Greenspan (appointed by Ronald Reagon) cut the fed funds rate to 1% back in '04. That's what ultimately made all these funky loans possible. And that's why we're in the shit
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09-16-2008 #42
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- Nov 2006
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Your right ! I wonder how much more the Federal Reserve Bank can take before it goes under...
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09-16-2008 #43Originally Posted by flabbybody
In free markets the only true ethical/moral code is risk. You have to be able to fail and fail big in order to discourage bad business practices (you also have to severely punish fraud). This crap that some companies are just too big to fail sets such a bad precedent for the future (though truthfully this is not the first example of it). Also let's not forget that in good economic times companies love to remind us that they are global and owe no allegiance to any particular nation, but when the shit hits the fan they want our taxpayers to shovel them out.
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09-16-2008 #44
All in all this is a pretty good thread. A couple of points:
All these things that're happening, from individual mortgage problems to bank collapses, are symptoms of a deeper malaise. I'm not buying that this is the result of laissez faire policies. There haven't been any. This is the result of economic manipulation from the top. Going back to at least the era of Calvin Coolige, trickle down or supply side economic theory has been geared toward consolidating wealth & economic control in the hands of fewer & fewer people. Consolidation leads to monopolization, & monopolies are anathema to a free market. A free market requires a laissez faire policy to remain so.
Laissez faire policies can mean deregulation but that's not necessarily what it's about. It's about maintaining open competition & allowing the markets to correct themselves. That won't happen in a cornered market. The purpose of regulaton is to make sure everybody' playing by the same rules & that nobody gets total control of anything. That's why we have anti-trust laws. The deregulation policies of the last 25 years or more have been geared toward promoting consolidation, & the manipulators at the top have taken advantage.
What's happening now looks like chaos, but what's actually hapening is the big guys are swallowing up the competition. The feds reclaim Fannie Mae. Morgan grabs Bear Sterns. B of A snatches up Merril Lynch. Best bet is that Goldman Sachs ends up with Lehman. (Do I have those 2 backwards?) Then they all start jockeying to see who's going to end up with all the marbles when they start buying each other. We saw a preview in the late '80s & early '90s when the entire savings & loan industry went down the tubes & got swalowed by the major banks. Credit unions are fighting tooth & nail since then to keep from being forced into the federal reserve.
There's more, but I have to run for now.
"You can pick your friends & you can pick your nose, but you can't wipe your friends off on your saddle."
~ Kinky Friedman ~
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09-17-2008 #45
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- Apr 2005
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Originally Posted by voy4her
Bastards!
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09-17-2008 #46
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Soon you too will feel Wall Street's pain. Have any money in a money market fund? You may not be able to get it out, or you will take a loss on what you thought was like a savings account.
Money market giant freezes redemptions
NEW YORK (MarketWatch) -- One of the first and largest money market funds has put a seven-day freeze on redemptions after the net asset value of its shares fell below $1. Primary Fund, a $62 billion fund managed by money market fund inventor The Reserve, said Tuesday afternoon that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero. As of 4 p.m., the value of the fund's share is 97 cents. The Reserve said that redemption requests received before 3 p.m. Tuesday will be paid out at $1 a share.
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09-17-2008 #47
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- Apr 2005
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Originally Posted by Buzz
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09-17-2008 #48
looks like Uncle Sam's gonna bail out AIG
http://biz.yahoo.com/rb/080916/aig_loan.html
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09-17-2008 #49
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I want to hear how people plan on riding this thing out.
I felt bad selling my house but now I feel kinda lucky that it didn't lose more value. Greenspan said home values are going to continue to drop at least for the next 6 months.
I'll get back in the market but I don't have the type of dough to make a killing in this market, I got the kinda dough to get killed if I try to get cute.
I plan on keeping my relatively solid job, finishing my masters, dumping what little debt I have and riding this next four years out.
I've neverdone good things
I've never done bad things
I've never done anything out of the blue
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09-17-2008 #50
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- Dec 2005
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Dow Plunges 300 Points After Lehman Files for Bankruptcy