P2P-Zone - The Big Bail OUt

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The Big Bail OUt

Quote:

WASHINGTON -- Unveiling its plan to rescue the nation's financial system from near-paralysis, the Bush administration is asking Congress for the authority to spend $700 billion and for powers to intervene in the economy so sweeping that they have virtually no precedent in U.S. history.

The proposal, set out in a spare 2 1/2 -page document sent to congressional leaders Saturday, would in effect allow the Treasury secretary to set up a government investment bank to buy up the billions of dollars of the mortgage-backed securities now clogging the arteries of the global financial system.

$700 billion dollars
- thats $2,333 for every man, woman, and child in this country, to bail out Wall Street. Here's the best part:

Quote:

Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

The biggest legislatively-authorized expenditure in history, and the Bush administration wants zero accountability or oversight. it's a major power-grab by Executive branch that's stunning in it's scope and audacity. hard to imagine how anyone (outside of those corporations who will be rewarded for years of execess and bad business practices), on the right or the left, thinks this is a good idea...

http://www.latimes.com/news/nationwo...,1208602.story

Aye, welcome to the United Socialist States of America: brought to you by the Republican Party and paid for by the Communists in China.

Good job Republicans. You have done what you have claimed and warned that the Democrats were trying to do and all you had to do to make it happen was to push your 'free market' ideals and deregulate the markets and the banks.

Why not tell the companies to go get fucked and the US government underwrite the mortgages, those which are not a business venture, at the true value of the property and at correct rates?

And while you're at it, tell Wall Street that the fundamentals of the economy are strong. Tell them that they are simply going through a mental recession. And tell them to stop whining.

Ð :S:

This is the best analysis of the problem I have seen so far. Anyone with brains should read this and try to understand what the 'conservatives' have done to cause the problems we are facing today. They should also realize that this isn't true 'conservatism' at all, but what conservatism has become:

Quote:

Three Times is Enemy Action
by Devilstower - DailyKOS

Quote:

"Once is happenstance. Twice is coincidence. Three times is Enemy Action."
-- Auric Goldfinger

James Bond's wealthy nemesis may have had an obsession with gold, but he judged, quite correctly, that if people keep putting your plans awry, that was likely their intent.

In 1982, the same year John McCain entered the Senate, a bill was put forward that would substantially deregulate the Savings and Loan industry. The Garn-St. Germain Depository Institutions Act was an initiative of the Reagan administration, and was largely authored by lobbyists for the S&L industry -- including John McCain's warm-up speaker at the convention, Fred Thompson. The official description of the bill was "An act to revitalize the housing industry by strengthening the financial stability of home mortgage lending institutions and ensuring the availability of home mortgage loans." Considering where things stand in 2008, that may sound dubious. It should.

Seven years later, the S&L industry was collapsing. What was the cause? Garn-St. Germain handed the S&Ls a greatly expanded range of capabilities, allowing them to go head to head with full service banks, but it didn't give them the bank's regulations. Left to operate in an anarchistic gray area, S&Ls chased profits, indulged in amazing extravagances, and cranked out enough cheap mortgages to fuel a real estate boom. They also experimented with lots of complex, creative -- and risky -- investments, even though they didn't have the economic models to really determine the worth of the things they were buying. The result was a mountain of bad debts and worthless "assets." Does any of that sound eerily (or nauseatingly) familiar?

It wasn't a foregone conclusion. In 1985, three years after the deregulation of the S&Ls, the chairman of the Federal Home Loan Bank Board saw that the situation was already looking shaky, with the potential to become much worse. He instituted a rule to limit the amounts and types of investments S&Ls could carry on their books in an effort to head off disaster. However, many savings and loans -- among them Lincoln Savings & Loan Association of Irvine, CA, which was headed by a fellow named Charles Keating -- promptly ignored these rules.

Now enters a familiar cast of characters. First to pop up was the universally beloved Fed-chief-to-be, Alan Greenspan. Greenspan argued against the loan board's new rules, and persuaded Reagan to appoint one of Keating's pals to the board to blunt the requirements. A quintet of senators, among them John McCain, began having meetings with both the management at Lincoln and the regulators at the loan board. ] Alan Greenspan also helped out with a letter to the regulators, asking that Lincoln be exempt from the new rules. With their help of Greenspan and their pet senators, Lincoln was able to stay in business an additional two years, at the end of which they failed -- taking the life savings of 21,000, mostly elderly, investors with them.

How involved was John McCain? McCain and Keating had known each other since 1981 and had become fast friends. Of all the "Keating Five," it was McCain who moved into the life of the Lincoln S&L chief. The two men vacationed together multiple times, with the whole McCain clan (babysitter included) heading out for Keating's private Caribbean property on Keating's private jet. McCain didn't think to actually report these trips, or pay for them, until the investigators were breathing down his neck. And McCain took his payment in the form of more than just vacations. Keating and other members of Lincoln's parent company padded McCain's pockets with $112,000 in campaign contributions.

In John McCain's biography, he called his meetings with Keating and regulators "the worst mistake of my life," though from the text you'd think this was a spur of the moment decision, not something that McCain did repeatedly over a space of years. Still, you might think that a "worst mistake" would stay fresh in his memory.

It certainly didn't fade quickly for the country. Following the S&L crisis, the Resolution Trust Company was formed to swallow up the debt of Lincoln and 746 other S&Ls gone wild, and taxpayers were left with the $125 billion bill. The resulting budget deficit forced cutbacks in other programs. The artificial real estate boom collapsed and housing starts fell to their lowest levels in decades. Finally, the whole nation settled in for a period nasty enough that three years later someone could still campaign around the idea "It's the economy, stupid."

Even so, by 1999 Phil Gramm -- who had entered the Senate two years after McCain and quickly become the economic guru of the Keating Five maverick -- put forward the Gramm-Leach-Bliley Act. This Act passed out of the Senate on a party line vote with 100% Republican support, including that of John McCain. (To be fair, the bill eventually passed again with a wide margin following revisions in the House.)

This act repealed part of the Glass-Steagall Act. This may sound like a bunch of Congressperson soup, but the gist of it is that Glass-Steagall was put in place in 1933 to control the rampant speculation that had helped cause the collapse of banking at the outset of the depression, and to prevent such consolidation of the banks that the nation had all its eggs in one fiscal basket.

Gramm-Leach-Bliley reversed those rules, allowing not only more bank mergers, but for banks to become directly involved in the stock market, bonds, and insurance. Remember the bit about how S&Ls failed because they didn't have the regulations that protected banks? After Gramm-Leach-Bliley, banks didn't have that protection either.

Gramm wasn't done. The next year he was back with the Commodity Futures Modernization Act, which was slipped into a "must pass" spending bill on the last day of the 106th Congress. This Act greatly expanded the scope of futures trading, created new vehicles for speculation, and sheltered several investments from regulation.

As with both Gramm-Leach-Bliley and Garn-St. Germain, large parts of this bill were written by industry lobbyists. This famously included the "Enron Loophole" that exempted energy trading from regulation and was written by (big suprise) Enron Lobbyists working with Gramm. Not coincidentally, Senator Gramm, the second largest recipient of campaign contributions from Enron, was also key to legislating the deregulation of California's energy commodity trading.

Thanks to this fortunate trifecta of Gramm-crafted legislation, Enron was able to create "EnronOnline" and trade electricity in California with absolutely no oversight or transparency. They quickly worked out how to game the system. Previously, there had been only one Stage 3 rolling blackout in the history of California. Within months, the system had been manipulated by traders to generate 38 such blackouts and wholesale electrical prices had gone up more than 3000%. Despite production capacity equal to four times the demand during winter, energy traders even engineered a blackout in mid-January.

During the confusion of these deliberate "shortages" and "price spikes," the California administration of Gray Davis -- blind to speculator manipulations because of the walls erected by Gramm's legislation -- was forced to sign energy contracts at enormous rates. There was little choice, because most of California's public utilities were on the brink of bankruptcy from the rising wholesale prices.

In a single year, Gramm's legislation allowed speculators to bring the state to its knees. Enron alone looted California of $11 billion. The manipulations of the energy market were also a major factor in Davis getting the hook, helped usher the governator into power, and they still have repercussions in California's budget battles today. By the end of that year, the depth of Enron's deception could no longer be hidden, and the whole company came crashing down in the largest bankruptcy in history -- at the time. This brought more billions lost in mutual funds and pension funds across the country, and played a major role in the economic downturn of 2001.

But that was only the second act. The combination of Gramm-Leach-Bliley and the Commodity Futures Modernization Act was a toxic cocktail whose total damage was greater than the sum of its parts.

The first Act promoted bank buyouts and mergers that reached such an insane pitch that the average consumer could only keep up by tracking the changing names on their checks and credit cards. Mercantile buys Ameribanc and Mark Twain. Firstar buys Federated and First Colonial. US Bancorp buys Mercantile and Firstar. And, because it allowed brokerages and insurance companies to mingle with banks, the Act cemented a trend that was already (and illegally) underway in which all those terms had become rather quaint. Is Wachovia a savings bank, an investment bank, a brokerage, or an insurance provider? The answer is "yes."

In allowing financial institutions to grow to Godzilla-sized proportions, Gramm-Leach-Bliley helped ensure that we would have financial entities that were "too big to fail." Rather than choosing to enforce rules that kept these institutions apart, the deregulators chose to create monster bankeragasurances whose downfall (and existence) was enough to threaten the whole system.

But if Gramm-Leach-Bliley removed the limits on size and scope, these new institutions still needed fuel. With many financial transactions operating on razor thin margins, and increasing automation sapping the profits from trading of all sorts, they needed a new way to generate the funds required to swallow their brethren in the merged fiscal corporation pond. For that, the Commodity Futures Modernization Act was a godsend.

Among those instruments which the CFMA sheltered from regulatory scrutiny was something called the "credit default swap." A kind of insurance one bank could exchange with another, credit default swaps supposedly made it safe for banks to take on ever riskier forms of debt. The Act didn't invent these swaps, though they were relatively new. Instead, by placing them in a state where they were not only unregulated but almost perfectly opaque, credit default swaps were turned into the perfect vehicle to fuel a Wall Street revolution. No one had any idea what these things were actually worth, they were traded "over the counter" without being administered by any exchange, and even the SEC could monitor their existence only indirectly.

Who would cheer for a new kind of financial instrument that was difficult to understand, invisible to regulators, and impossible for even the whizziest of Wall Street whiz kids to value? Guess.

Quote:

More recently, instruments that are more complex and less transparent--such as credit default swaps, collateralized debt obligations, and credit-linked notes--have been developed and their use has grown very rapidly in recent years. The result? Improved credit-risk management together with more and better risk-management tools appear to have significantly reduced loan concentrations in telecommunications and, indeed, other areas and the associated stress on banks and other financial institutions.
--Alan Greenspan, 2002

Get that? Greenspan loved credit default swaps. He opined again and again that such instruments would be the salvation of the industry by spreading around risks. To the mighty Greenspan, both their complexity and their lack of transparency were good things, since swaps would only be handled by the big boys who knew how to play with fire.

When questioned about his support of Gramm's legislation, John McCain called his friend (and by then, campaign co-chair) Gramm "one of the smartest people in the world on the economy" and pointed out that Greenspan also favored the acts Gramm and his coalition of lobbyists had authored. If both Gramm and Greenspan were on his side, McCain couldn't possibly be in the wrong.

Except, of course, that he could.

From the beginning, there were plenty of people in the financial community whose opinion of these unregulated credit swaps was not as rosy as that of Gramm, Greenspan, and McCain. Chief among those speaking in opposition was SEC Chairman, Arthur Levitt. Levitt argued that what the industry needed was more transparency, especially when it came to complex instruments like default swaps, and he testified to this before Gramm's Senate Banking Committee,.

Quote:

"In my judgment, the risk of this regulatory approach is simply unacceptable for America's investors."
--Arthur Levitt, 1999

Gramm paid no attention.

Credit default swaps did allow the banks to share risks. So much so, that banks raced each other in an effort to find more risks. They made it possible for the down payment on homes to become 3%, 1%, 0%. Skip the credit check, avoid the employment requirements, damn the torpedoes, full speed ahead! We've got a credit default swap, we can do anything!

The encouragement and "safety" that credit default swaps provided made the sub-prime mortgage market possible. Just as with the deregulation of S&Ls in the 1980s, the market was suddenly flooded with easy credit. The result was a real estate boom, soaring home prices, and a plague of "Flip that House!" shows on cable.

As the banks piled up crappy mortgages, they heaped on ever more of the credit default swaps -- and they still had no idea how to value the things. Worse, they began to trade the swaps themselves as if they were an investment, treating them like something worth holding instead of a big bundle of cartoon bombs whose fuses were already lit. Since very few loans were falling into default at the time, owning a default swap seemed like a way to collect fees without ever paying out. Banks wanted more, and more, and more.

A secondary market for trading swaps exploded into existence, and swaps were traded with absolutely no consideration for the nature or quality of the underlying investment. Swaps changed hands a dozen or more times, growing in "value" as they went. Worse still, no one regulated who could buy a swap, so it was (and is) perfectly possible for a company to acquire swaps that theoretically cover billions of dollars in loans, even if that company doesn't have a red cent on hand to cover those swaps should the loans default.

How big did this market become? Here's business correspondent Bob Moon and host Kai Ryssdal on American Public Media's Marketplace from back in the spring.

Quote:

BOB MOON: OK, I'm about to unload some numbers on you here, so I'll speak slowly so you can follow this.

The value of the entire U.S. Treasuries market: $4.5 trillion.

The value of the entire mortgage market: $7 trillion.

The size of the U.S. stock market: $22 trillion.

OK, you ready?

The size of the credit default swap market last year: $45 trillion.

KAI RYSSDAL: That's a lot of money, Bob.

As in three times the whole US gross domestic product, Bob. And the truth is that Moon probably underestimated. The unregulated and poorly reported credit default swaps may have actually passed $70 trillion last year, or about $5 trillion more than the GDP of the entire world.

So, are you starting to get an idea of just how big a genie Phil Gramm and his pals unleashed?

With some regularity over the last eight years, fiscal whistle blowers have tried to raise their hands and register a protest. Um, sirs? Is it altogether a good idea to run up debts exceeding all the assets it's even possible to hold? But so long as no one actually had to pay off on the swaps, the party went on. Even usually conservative (in the fiscal sense) companies like AIG started to worry that they were being left behind and leapt headlong into the swap pool.

Shortly after Greenspan's departure in 2006, the Federal Reserve took the unusual step of issued a joint statement along with the SEC to warn about the risks associated with credit default swaps. But by that point, the damage was already severe. If swaps lost their value, most of those who had played the game would find their giant firms abruptly valued in pocket change. The only solution was to cover the problem with still more swaps and keep moving.

Then a funny thing happened. After years in which banks had handed out loans willy-nilly, guarded by the indestructible swap, people and companies started to really default on those loans. Credit slowed, home prices fell, and the whole snake started to eat itself tail first. Suddenly, credit default swaps were not sources of limitless cash. It turns out that an insurance policy -- even a secret, unregulated policy -- is occasionally expected to pay. Speculators started to look at the paper they were holding and for the first time realized it could all be worthless. Worse, it could (and did) represent a massive debt; one that no one had the funds to cover.

When Bear Stearns fell apart last March, it was only suspected that a big part of the effort in saving the giant investment bank was keeping their holdings in credit default swaps from unraveling and spreading to other institutions. Naturally, part of solving this problem involved creating a new credit default swap to cover Bear Stearn's potential debt. But the all-purpose swap was starting to lose its power. Shortly after Bear Stearns went belly up, AIG reported the largest quarterly loss in the company's history, taking a $11 billion hit on revaluing its holdings of swaps. The party was definitely coming to a close.

When AIG finally collapsed this week, there was no doubt about the primary cause of its failure. The previously well grounded company had "gotten itself involved with something called credit default swaps." Point of irony alert: Arthur Levitt now serves on the AIG board... or at least he did until the government had to take over most of AIG to salvage the company from the very idiocy Levitt had warned of in 1999.

This week, the Bush administration announced the beginnings of a plan to salvage what remains of the financial markets. At first glance, it appears that the plan will consist mainly of creating a kind of "garbage pit," a fund or group of funds -- cousins of the Resolution Trust that was created during the S&L crisis -- into which those people who have dabbled in bad debts can toss their problems. Only this time the cost to the taxpayers is at least $700 billion... and a big bite out of representative democracy.

The expansion of unregulated Savings and Loans in the 1980s brought on the collapse of that industry, a crippling of the economy, and left taxpayers holding the bag. Maybe that was only happenstance. Those pushing for the Garn-St. Germain Depository Institutions Act may not have known what they were doing.

The deregulation of the California electricity market, along with the protections provided to Enron through Phil Gramm's lobbyist-written legislation brought blackouts, fiscal and political chaos, and left taxpayers holding the bag. But the people who engineered that event -- people like Gramm and Greenspan -- had already seen what happened with the S&Ls. They should have known better. Still, perhaps that was only coincidence.

The sub-prime mortgage crisis that has not only come so close to utterly destroying the markets, but has ruined the value of many people's homes and left millions with mortgages they can't pay, was also the outcome of the deregulation created by these men. The very predictable outcome. When taxpayers are left holding the bag for $1 trillion this time around, it's hard to believe it's any sort of accident.

This is enemy action. This is a bullet deliberately fired into the economy by men willing to exercise their ideology regardless of the cost to taxpayers. Men who have every expectation that they can plunder the system again and again, while the public picks up the tab. John McCain may not have had his finger directly on the trigger, but he was there. He assisted. These were his personal friends and philosophical comrades. He may not be the high priest, but he has been a loyal acolyte in the cult of deregulation.

It may come as a surprise to the champions of deregulation, but nobody likes regulation. The restrictions that were placed on banks, S&Ls, and other institutions in the 1930s weren't put there because someone thought it would be fun. They were put in place because they addressed problems that had just been clearly and painfully revealed. They were put in place because they were necessary.

It's bad enough if John McCain didn't know that. It's far worse if he did.

http://www.dailykos.com/

And all McCain can do is all he can ever do: blame anyone but himself.

Ð :S:

U actually expect me to read that?

It just goes on and on and seems the same whacked out stuff.

:ghug:

Get U're shit together u Irish dillweed.

i'm not a big Pelosi fan, but her response on behalf of the Dems was spot on:

Quote:

“ The Administration’s $700 billion proposal does not include the necessary safeguards. Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive executive compensation.

We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome."

http://thepage.time.com/pelosi-state...ncial-markets/

Quote:

U actually expect me to read that?

No, I'm actually surprised you choose not to. Though perhaps I shouldn't be.

It's a sad day when people choose to turn away from the facts of our past which are shaping the events happening around us and which determine our future.

Ð :S:

Hey Diego (with a -),

What has just happened is a way to deliver all those people who bought a house without the means to pay for it a way to keep it.

Call it like it is. It's just another entitlement program to be paid for by the ones who were not so lazy.

Maybe it is the time to be bare foot and preggers.....

:EB:

Quote:

Originally Posted by Nicobie (Post 263206)

Maybe it is the time to be bare foot and preggers.....

:EB:

Maybe?
Question,who wants to take nic from behind?
I thinks he might be a heshe:to3:

----------------
Listening to: Morrissey - Why Don't you Find Out For you
via FoxyTunes

Well knife...

The 1.8 tril they have gave away so far is = to $6,000.

Was it not a slap in the face to receive a $600 check earlier this year?

and yes Diego it is now the USSA owned by China and Japan.

They are making it into economic warfare, China vs. America.

The powers that be will have us at war with each other within' 5 years.

It is not just republicans either. Clinton and all the way back to Nixon sold us to China years and years ago.

Crooks and Liars.

:sarc: I for one welcome our new asian overlords and will be useful in rounding up others to toil in the coal mines. :sarc:

kos makes an excellent point:

Quote:

So Treasury gets congressional leaders into a room, and gives them a briefing so horrifying, that they all immediately age 20 years and come out with white hair and immediately get to work pissing away $700 billion to Wall Street.

They're terrified, we're told! It was horrible!

So why not slap that presentation online? Why not share this with the American people?

This isn't Iraq, where you can pretend that the information is "top secret" and must be protected lest disclosure amount to a security breach.

In this case, we're probably talking financial projections, maybe an excel sheet or two.

So put it online so the rest of the country can see what supposedly has our fearless leaders in a panic.

Oh, oh! I know! I know!

It's ALIENS! :BL:

Ð :S:

Quote:

Originally Posted by Ðiego (Post 263229)

Oh, oh! I know! I know!

It's ALIENS! :BL:

Ð :S:

hahhahhaa...

methinks it's bleedin' heart losers out to save the world at others expense.

So what else is new?

Quote:

methinks it's bleedin' heart losers out to save the world at others expense

You can just come out and say it, it's okay. REPUBLICANS! Who the fuck needs 'em?

Ð :S:

Quote:

Originally Posted by Ðiego (Post 263235)

You can just come out and say it, it's okay. REPUBLICANS! Who the fuck needs 'em?

Ð :S:

No its more like "liberals" who the fuk needs em......Oh thats right its all those lazy fukin illegals and legals that are perfectly capable of working and supporting themselves but CHOOSE not to because of all the liberal entitlement programs that supports their lazy non productive why should I work for a living when the liberal government pays me to sit on my ass and do nothing useless lifestyles.

God forbid the taxpayers actually pay to help hard working American citizens save themselves from forclosure and losing their homes that they work 60+ hours a week to pay the mortgages on. That shit is just un-fukin-American.

If U live in America and don't have a Gov'mt job and are self employed you will, like I did work over 12 hours a day, 6 days a week. Sunday it was a lite 4 hours looking over things that might go wrong AND being there for any employee that wanted to talk ( this was the time for them).

Ever hear of a govm't agency that did the same? U never will because they just don't give a shit about who they serve.

Quote:

Originally Posted by jcmd62 (Post 263248)

God forbid the taxpayers actually pay to help hard working American citizens save themselves from forclosure and losing their homes that they work 60+ hours a week to pay the mortgages on. That shit is just un-fukin-American.

The money isn't going to go to hard working American citizens. It's going to the greedy rich minority.

Quote:

Originally Posted by jcmd62 (Post 263248)

got a problem with asking those taxpayers?

that's basically the conversation the country's having right now. the days when bush could come out of a religous trance and lay down a scary sermon the entire country swallows are over. finally.

i'm sure you know lots of natavist republicans, so go ahead and ask them, they're who's blocking this bill. conservative republicans say folks back home are against paulson's proposal by a ratio of 100-1. they want a "free market" solution, not a bailout that leaves the country on the hook for hundreds of billions in loans. but free market fingers are all over this disaster so i don't know how that's going to work. meanwhile 200 economists who actually study this stuff say the bill won't work, period, and several who were in favor of it said today things are changing so fast even if this program is passed today it will be obsolete before it begins. sure, warren buffet's a chearleader but who really is behind this, and why, and where is the evidence it will do what they say? don't blame the liberals. i'm one and i'm against it. it's a wall street/washington ripoff unless someone proves otherwise, and i don't see that happening.

- js.

Quote:

Originally Posted by JackSpratts (Post 263259)

Apearently there's the difference, Your'e a liberal and I'm a TAXPAYER. If I have to choose between paying more taxes to help TAXPAYING HARDWORKING CITIZENS be able to keep their homes and not end up in foreclosure over paying more taxes to help the already ridiculous number of useless US residents that live on welfare, Food stamps, WIC vouchers and all the other government subsidised programs that are ABUSED by MILLIONS of people that are perfectly capable and able to WORK for a living, but CHOOSE not too because liberals like you make it so easy for them to say NO to supporting themselves, then I AM voting for CHANGE.

As for conservatives "blocking this bill", that is a load of usual JS crap. The lib controlled congress has made damn sure for last 4 years that GW has been unable to pass anything more than a kidney stone.

I love the way you assume that because you post it it's true. Your head is permantly lodged in that liberal ass of yours. You are just one of millions that feels the government should give you something for free because someone else has more because they worked damn hard for it, while you jacked off to internet porn and did NOTHING.

Even if that racist Obama gets elected, and he does NOTHING he promised, you whiny fukin libs will just find a way to BLAME somebody else for your usual ignorance.

you're still as nutty as always jc. :D

Quote:

Originally Posted by JackSpratts (Post 263277)

you're still as nutty as always jc. :D

Sometimes you feel like a nut, sometimes you're addressing one.

A Freddie Mac Money Trail Catches Up With McCain

Few advisers in John McCain's inner circle inspire more loyalty from him than campaign manager Rick Davis. McCain and his wife, Cindy, credit the shrewd, and sometimes volatile, Republican insider with rescuing the campaign last year when it was out of money and on the verge of collapse. As a result, McCain has always defended him—even when faced with tough questions about the foreign lobbying clients of Davis's high-powered consulting firm. "Rick is a friend, and I trust him," McCain told NEWSWEEK last year.

Last week, though, McCain's trust in Davis was tested again amid disclosures that Freddie Mac, the troubled mortgage giant that was recently placed under federal conservatorship, paid his campaign manager's firm $15,000 a month between 2006 and August 2008. As the mortgage crisis has escalated, almost any association with Freddie Mac or Fannie Mae has become politically toxic. But the payments to Davis's firm, Davis Manafort, are especially problematic because he requested the consulting retainer in 2006—and then did barely any work for the fees, according to two sources familiar with the arrangement who asked not to be identified discussing Freddie Mac business. Aside from attending a few breakfasts and a political-action-committee meeting with Democratic strategist Paul Begala (another Freddie consultant), Davis did "zero" for the housing firm, one of the sources said. Freddie Mac also had no dealings with the lobbying firm beyond paying monthly invoices—but it agreed to the arrangement because of Davis's close relationship with McCain, the source said, which led top executives to conclude "you couldn't say no."

The McCain campaign told reporters the fees were irrelevant because Davis "separated from his consulting firm … in 2006," according to the campaign's Web site, and he stopped drawing a salary from it. In fact, however, when Davis joined the campaign in January 2007, he asked that his $20,000-a-month salary be paid directly to Davis Manafort, two sources who asked not to be identified discussing internal campaign business told NEWSWEEK. Federal campaign records show the McCain campaign paid Davis Manafort $90,000 through July 2007, when a cash crunch prompted Davis and other top campaign officials to forgo their salaries and work as volunteers. Separately, another entity created and partly owned by Davis—an Internet firm called 3eDC, whose address was the same office building as Davis Manafort's—received payments from the McCain campaign for Web services, collecting $971,860 through March 2008.

In an e-mail to NEWSWEEK, a senior McCain official said that when the campaign began last year, it signed a contract with Davis Manafort "in which we purchased all of [Davis's] time, and he agreed not to work for any other clients." The official also said that though Davis was an "investor" in 3eDC, Davis has received no salary from it. As to why Davis permitted the Freddie Mac payments to continue, the official referred NEWSWEEK to Davis Manafort, which did not respond to repeated phone calls. One senior McCain adviser said the entire flap could have been avoided if the campaign had resisted attacking Barack Obama for his ties to two former Fannie Mae executives, which prompted the media to take a second look at Davis. "It was stupid," the adviser said. "A serious miscalculation and an amateurish move." Still, this adviser said, McCain's faith in his campaign manager remains unswerving.

http://www.newsweek.com/id/161218

Quote:

Originally Posted by JackSpratts (Post 263277)

you're still as nutty as always jc. :D

His or hers real name is "Little Debbie"
Does that mean he or her's a heshe nic?

http://www.littledebbie.com/products/NuttyBars.asp

:AP: :AP: :AP: :AP:

Quote:

Originally Posted by JackSpratts (Post 263277)

you're still as nutty as always jc. :D

Even if that racist Obama gets elected, and he does NOTHING he promised, you whiny fukin libs will just find a way to BLAME somebody else for your usual ignorance.

This is so true. Mr Obama (aka peepee head) will get elected.

Then......... turn about will be fair play and I can't wait. :EB:

So how did we get here?

New York Times Article Sept 30 1999.

The Headline...Fannie Mae Eases Credit To Aid Mortgage Lending

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

cont

http://query.nytimes.com/gst/fullpag...=&pagewanted=1

What I find funny is the fact the liberal media, aka NYT, wrote this praising Clintons efforts. Is the Bush admin as guilty, most likely but to put all the blame on the Bush admin is plain dumb.

excellent post. too bad diego(with a _) is busy making babies..

I'm sure the waster would reply.

come on guys i know you are smarter than this

there is no difference between dems and reps

they all take orders from the lobbying corporational military industrial complex = MONEY!!

they look out for themselves and leave some cake for us to feel special :)
they are detached from our reality.

The bailout is Authoritarian Dictatorship.

The FED gives out billions left and right, why do they need a law you ask?

It would give Paulson supreme command.

No oversight. No reprecussions. No Law!!

You libs should be quite happy.

McCain just threw any chance he had at winning this election away by voting for this useless and earmark filled piece of shit legislation.

Oh, he threw it away long before that. And several times since.

Not a bad thing. Not a bad thing at all..

Ð :S:

from Atrios:

Quote:

Spending the day watching CNBC, it's really quite stunning that they're unable to grapple with the real problem underlying all of this instead of the consequences of that problem. There's been a tremendous evaporation of housing wealth as a consequence of the bursting of the housing bubble. Lots of banks made bad loans and that money isn't coming back. Dealing with home foreclosures is time consuming and expensive and a lot of houses are underwater. Other people lost money insuring mortgages. Still more people lost money buying up those mortgages. Still more people lost money lending to people to buy up more mortgages. Even more people lost money insuring those loans. Etc.

All of this babble about liquidity and short selling and blah blah blah just obfuscates all of this. A big reason that there is a liquidity problem is that... people lost a lot of money. All gone!

sounds about right to me :beer:

relaxing standards appropriately for buyers, or to get renters off of the rental hamster wheel and into equity positions isn't bad policy. on the contrary it makes sense for any number of reasons and it's the basis of us ownership society tax policy since at least wwii. the breakdown came from predatory lenders (not fannie/freddie) who lowered standards to get owners to refinance with balloon mortages that couldn't possibly be repaid when the introductory payments reverted to sky high levels. like payday loans this was actually a plan. the lenders would take possesion at default for peanuts, sell and profit. it worked, as long as defaults in any one area were below levels that affected general pricing. this was not a clinton policy, it was old time private enterpise predation that occured in the post clinton years on a massive scale while regulators slept.

i have a simple test for housing bubbles: when you hear bartenders are bragging about "flipping condos" take cover. the bragging was deafening in the lates eighties and mid 00's.

- js.

funny you should mention bartenders..

Quote:

Originally Posted by JackSpratts (Post 263358)

predatory lenders

- js.

Predatory lenders?????????

Who put a gun to these peoples heads?????????

Who FORCED these idiots to buy houses well beyond their financial means and then FORCED them to sign on the dotted line to finance them with ridiculous variable rate, interest only and balloon mortgages?

EVERY FUKIN ONE of these idiots knew what they were buying was too expensive and KNEW that 5 years down the road when they actually had to start paying off the principal that they WOULD NOT be able to afford monthly payments that would double or even triple when they were barely able to pay just the interest to begin with.

So they lowered the standards, so fukin what. How is this anyones fault but the BUYERS??????? There are millions of people out there just like myself that refinanced or purchased a house when these morons did and were offered the same shit loans BUT said screw that. This is how much I can AFFORD to pay every month and I want a nice regular FIXED rate mortgage on a house that falls within this amount so that from day one I know I can make the payment each month as well as 15, 20, 30 years down the road my payments will still be the same.

I am so sick of you bleeding heart liberals constantly BLAMING EVERYONE but the people that willingly and full knowingly put themselves on the road to oblivion when they signed on the dotted line and PROMISED to pay the these loans when they knew they could not.

When are you idiots going to admit that just because the banks offered these loans NO ONE forced ANYONE to utilize them and perfectly good, valid affordable mortgage options were available to each and every one of them, but they CHOSE, yes they made a CHOICE, good or bad to ignore them and buy the 10 dollar Rolex out of some guys trunk instead.

Yes, yes..and let's see, who is it calling for the government to dole out another $300 billion to refinance those mortgages? Some 'bleeding heart liberal' no doubt....

Ah, there it is and true to form, it's John McCain. Fucking liberal bast..erm, wait a minute! WTF?!? Why that pandering son of a bitch! :BL:

Ð :S:

Quote:

Originally Posted by Ðiego (Post 263373)

Ah, there it is and true to form, it's John McCain. Fucking liberal bast..erm, wait a minute! WTF?!? Why that pandering son of a bitch! :BL:

Ð :S:

I'm not too happy about giving to the financial sector to keep us on a level track and not too sure McCain's give aways are affordable.

BUT.

I can guarantee that the dick-eared pinhead Obama will never pull off any of the free chit he is proposing.

Free health care as good as member of congress gets. Hahahahaha.... yea right.

Another expensive "bonus" for every citizen. What good did the last one do? And who will pay for it?

Free college for everyone, no matter how stupid or lazy they are. Sure thing Bubba...

Lower taxes for 95% of us. (the biggest lie of all).

It is just the same old crap from a politician who is 'owned' by the Daley Chicago machine. :bcow: :bow:

Many promises, zero follow thru.

You've GOT to stop fucking that cow, Nic :BL:

Ð :S:

Quote:

McCain changes homeowner plan

Sen. John McCain (R-Ariz.) made an overnight change in the homeowner bailout he proposed at Tuesday’s presidential debate, making it more generous to financial institutions and more costly for taxpayers.

McCain's staff says it was always meant that way.

When McCain sprung his surprise idea at the start of the debate in Nashville, his campaign posted details online of his American Homeownership Resurgence Plan, which would direct the government to buy up bad home mortgages, allowing strapped people to keep their property.

The document posted and e-mailed by the McCain campaign on Tuesday night says at the end of its first full paragraph: “Lenders in these cases must recognize the loss that they’ve already suffered.”

So the government would buy the mortgages at a discounted rate, reflecting the declining value of the mortgage paper.

But when McCain reissued the document on Wednesday, that sentence was missing, to the dismay of many conservatives.

That would mean the U.S. would pay face value for the troubled documents, which was the main reason Sen. Barack Obama (D-Ill.) gave for opposing the plan.

A McCain campaign official explained the change: “That language was mistakenly included in the initial draft and it’s been corrected. It doesn’t reflect the intentions of the initiative, which necessitated the correction and the removal of the sentence. A simple mistake.”

Obama Campaign Economic Policy Director Jason Furman said in the campaign statement opposing McCain's plan: "John McCain wants the government to massively overpay for mortgages in a plan that would guarantee taxpayers lose money, and put them at risk of losing even more if home values don’t recover. The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud."

The McCain campaign estimates in both documents that the plan would cost about $300 billion.

What a fart smeller he is..

Ð :S:

Quote:

Originally Posted by Ðiego (Post 263375)

You've GOT to stop fucking that cow, Nic :BL:

Ð :S:

Seems as if the cow will be getting ate if Obamawama gets in.

You can get full for awhile or get milk forever. Take U're pick peeps....

Quote:

"As the market began to seize up and as the market for the underlying obligations began to perform poorly, everybody wanted to get paid, had a right to get paid on those credit default swaps. And there was no 'there' there. There was no money behind the commitments. And people came up short. And so that's to a large extent what happened to Bear Sterns, Lehman Brothers, and the holding company of AIG," he explains.

In other words, three of the nation's largest financial institutions had made more bad bets than they could afford to pay off. Bear Stearns was sold to J.P. Morgan for pennies on the dollar, Lehman Brothers was allowed to go belly up, and AIG, considered too big to let fail, is on life support to thanks to a $123 billion investment by U.S. taxpayers.

"It's legalized gambling. It was illegal gambling. And we made it legal gambling…with absolutely no regulatory controls. Zero, as far as I can tell," Dinallo says.

"I mean it sounds a little like a bookie operation," Kroft comments.

"Yes, and it used to be illegal. It was very illegal 100 years ago," Dinallo says.

The Bet That Blew Up Wall Street

QUOTE; Even if that racist Obama gets elected, and he does NOTHING he promised, you whiny fukin libs will just find a way to BLAME somebody else for your usual ignorance.

Obamawama might not be a total tried&true racist (like his wife is), but JC nailed the rest about losers blaming everybody else for their problems.

Not all of my problems were created by me. I will blame the proper people who created the problems.

yes, and I wish I had a ton of pot too.

The liquor industry always does well in times of trouble.

The best investment I ever made was buying 3 pallets of R12 freon. Paid $.29 a pound and ended up selling it for (well) over $30.00 a lb. It is not that I'm all that smart. All I did was read the newspapers. :bc: :bc: :bc: :bc: :bc: