Wow we were literally days away from a worldwide depression the likes of which we may have never experienced. Ask yourself one really big question and that is who fought for this deregulation. Both parties fought for this to some degree but the lions share of the blame goes to the Republicans who believe industry can police itself. How does that philosophy seem now? If the people of this country elect John McCain who voted for every deregulation law ever put in front of him then they deserve the economic collapse that will surely come with that decision.
From David M. Herszenhorn of the Washington Post:
It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
"When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program "Good Morning America," the congressional leaders were told "that we're literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally."
Mr. Schumer added, "History was sort of hanging over it, like this was a moment."
When Mr. Schumer described the meeting as "somber," Mr. Dodd cut in. "Somber doesn't begin to justify the words," he said. "We have never heard language like this."
"What you heard last evening," he added, "is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly."
Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.
"You have the credit lines in America, which are the lifeblood of the economy, frozen." Mr. Schumer said. "That hasn't happened before. It's a brave new world. You are in uncharted territory, but the one thing you do know is you can't leave them frozen or the economy will just head south at a rapid rate."
As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. "You know we'd be lucky ..." he said as his voice trailed off. "Well, I'll leave it at that."
As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.
Lawmakers in both parties described the meeting in Ms. Pelosi's office on Thursday night with Mr. Paulson and Mr. Bernanke as collaborative, and that they were prepared to put politics aside to address the needs of the American people.
While Democrats initially said after the meeting that they planned to use the administration's proposal of a huge rescue effort to win support for an economic stimulus package, they pulled back slightly on Friday morning, saying that their top priority was to help put together the bailout package and stabilize the economy.
But it was clear they continued to examine ways to make clear that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit.
In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.
Among the potential steps Congress can take include approving legislation to allow bankruptcy judges to modify the terms of primary mortgages - authority that the bankruptcy laws do not currently allow and that the banking industry has strenuously opposed.
But the Democrats said it was too soon to discuss such details, and that they were awaiting a draft of the proposal from the Treasury Department.
"We have got to deal with the foreclosure issue," Mr. Dodd said. "You have got to stop that hemorrhaging..If you don't, the problem doesn't go away. Ben Bernanke has said it over and over again. Hank Paulson recognizes it. This problem began with bad lending practices. Those are his words, not mine, and so this plan must address that or I'll be back here in front of a bank of microphones at some point explaining the next failure."
Even before the drafting of the plan was complete, the Bush administration and the Fed began efforts to sell the idea of a huge rescue to potentially skeptical rank-and-file members of Congress. Mr. Paulson and Mr. Bernanke held a conference call with House Republicans to explain their thinking.
Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, said in a television interview that cost to the government of purchasing bad debt could run to $1 trillion - a potential warning sign since Mr. Shelby is a longtime skeptic of government intervention in the private market.
Until Mr. Shelby was interviewed on Friday morning, officials on Capitol Hill had been careful not to discuss specific figures, though the rescue envisioned by the Treasury Department clearly entails a government appropriation of hundreds of billions of dollars.
Saturday, September 20, 2008
Friday, September 19, 2008
Canadian Vacation
I am away in Canada until Sunday and will report back on some interesting conversations I had with average Canadians. We really are becoming the worlds joke.
Wednesday, September 17, 2008
When Will This Economic Nightmare End?
The horrible economic news just keeps coming. When will the people of this country wake up?
Stocks plummeted Wednesday, with the Dow industrials falling 449 points in its second worst session of the year, as the government's emergency rescue of AIG amplified fears about the stability of financial markets.Now watch MSNBC's Chris Matthews take apart a Republican asshole. It says all I want to say and more.
The Dow Jones industrial average (INDU) lost 449 points, or 4% and fell to the lowest level since November 2005. The Standard & Poor's 500 (SPX) index lost 4.7% and fell to its lowest point since April 2005. The Nasdaq composite (COMP) lost 4.9% and ended at its lowest point since August 2006.
Monday, September 15, 2008
The Bad Economic News Keeps Coming
Stocks See there worst one day decline since 9/11.
The nations largest insurer near collapse as a result of the credit crisis.
Nations largest thrift lowered to junk bond status .
This is the result of greed furthered by a lack of regulation. The Republican mantra was let industry police itself. If you think that philosophy works then keep voting for these clowns. It happened in the 1980's with the Savings and Loan crisis which nearly culminated with a censure against John McCain for helping Charles Keating bankrupt his institution at a cost of 2 billion to the U.S. taxpayers.
If you don't learn from history you are bound to repeat it. How many times can we repeat these same mistakes.
The nations largest insurer near collapse as a result of the credit crisis.
Nations largest thrift lowered to junk bond status .
This is the result of greed furthered by a lack of regulation. The Republican mantra was let industry police itself. If you think that philosophy works then keep voting for these clowns. It happened in the 1980's with the Savings and Loan crisis which nearly culminated with a censure against John McCain for helping Charles Keating bankrupt his institution at a cost of 2 billion to the U.S. taxpayers.
If you don't learn from history you are bound to repeat it. How many times can we repeat these same mistakes.
In Frantic Day, Wall Street Banks Teeter
Just when we thought the economy had bottomed comes this news of one of the most troubling days in Wall Street history.
One needs to look no further than Phil Gramm who is a top economic advisor to Senator John McCain.
In one of the most dramatic days in Wall Street's history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, hurtled toward liquidation after it failed to find a buyer.We all need to ask ourselves how we got here. It was the systematic deregulation of an industry that controls our nations finances. Ask yourself who was to benefit from these weaker regulations? Does anyone still think that industry can police itself? The Republicans systematically rolled back depression era regulations which were put in place to avoid a repeat of the Great Depression. Who helped to roll back these regulations?
The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.
But even as the fates of Lehman and Merrill hung in the balance Sunday night, another crisis loomed as the insurance giant American International Group appeared to teeter. A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive.
The stunning series of events culminated a weekend of frantic around-the-clock negotiations, as Wall Street bankers huddled in meetings at the behest of Bush administration officials to try to avoid a downward spiral in the markets stemming from a crisis of confidence.
"My goodness. I've been in the business 35 years, and these are the most extraordinary events I've ever seen," said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration.
It remains to be seen whether the sale of Merrill, which was worth more than $100 billion during the last year, and the controlled demise of Lehman will be enough to finally turn the tide in the yearlong financial crisis that has crippled Wall Street and threatened the broader economy.
One needs to look no further than Phil Gramm who is a top economic advisor to Senator John McCain.
The general co-chairman of John McCain's presidential campaign, former Sen. Phil Gramm (R-Texas), led the charge in 1999 to repeal a Depression-era banking regulation law that Democrat Barack Obama claimed on Thursday contributed significantly to today's economic turmoil.If America votes for more of this crap then they deserve what will come. We have gone from surpluses to record setting deficits. We have seen the value of our homes collapse and the greatest increase in consumer indebtedness in our history. Our middle class is nearly gone and yet this election remains close. What more will it take for us to wake up and say ENOUGH?
"A regulatory structure set up for banks in the 1930s needed to change because the nature of business had changed," the Illinois senator running for president said in a New York economic speech. "But by the time [it] was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework."
Gramm's role in the swift and dramatic recent restructuring of the nation's investment houses and practices didn't stop there.
A year after the Gramm-Leach-Bliley Act repealed the old regulations, Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS's new investment banking arm.
Later, he became a major player in its government affairs operation. According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and Treasury Department about banking and mortgage issues in 2005 and 2006.
During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages.
For his work, Gramm and two other lobbyists collected $750,000 in fees from UBS's American subsidiary. In the past year, UBS has written down more then $18 billion in exposure to subprime loans and other risky securities and is considering cutting as many as 8,000 jobs.
Gramm did not respond to an e-mail, and was unavailable for comment, according to a UBS spokesman. The bank has no official position on the subprime crisis, the spokesman said, but is a member of the Financial Services Roundtable and other industry groups that are actively lobbying Congress on the issue.
Now, some housing experts and economists see Gramm's thinking in the recent housing proposal from McCain, the Republican Party's presumed presidential nominee. Gramm is often a surrogate for the Arizona senator, particularly in meetings focused on the economy. And McCain has hinted he'd consider the former Texas senator for Treasury secretary in a McCain administration.
Subscribe to:
Posts (Atom)