No fix seen in Congress for locked-up debt markets

[flashl]

Source: Reuters

WASHINGTON (Reuters) - Little is being done in Congress or the Bush administration to repair a collapse of trust in private securitized debt markets that is threatening sectors beyond its origin in the subprime mortgage crisis.

Student loans are being hit as are the auction-rate bond markets used widely by municipal governments to help finance vital everyday projects such as roads, schools and parks.

Capital freezing up in these markets and possibly others could cause long-term damage to the financial system and the economy, some economists and lawmakers say.

While Congress and the White House focus on short-term steps to shield Americans from rising foreclosures and crack down on mortgage brokers, no major legislation is on offer to deal explicitly with the dysfunction spreading though the capital markets.

Reuters

Read more: http://www.reuters.com/article/ousiv/idUSN28558520080303

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OK.... Who's in charge of managing the financial interest of the world's former superpower?

You do know that 'we' were stripped of the title 'superpower' at the Davos conference.

[Hydra]

1. The ship is sinking

and the crew are smoking at the rails.

"What problem?"

[Nederland]

2. They are correct: Congress can't fix this mess

There is nothing they can do to fix the mess that has been created. Anything Congress tries to do would simply make matters worse.

[Vincardog]

3. Correction. To fix the problems the financial interests had congress create for them to profit from

would require Congress to regulate the financial interests run amok. Like all rabid free capitalists looting and pillaging they would rather die than face accountability for their actions.

[Nederland]

4. Question

What regulation are you proposing?

[Vincardog]

6. MAybe the banks should be locally owned and controlled. The hedge funds should have the same rules

as stock brokers. The Bankruptcy laws should be returned to what they were before the wage slave reform. That will do for a start.

[Nederland]

8. Bad idea

At least the locally owned and controlled banks idea. That change would only serve to severely limit the amount of capital availible in a depressed area. A community would be deprived of additional cash at the very moment they needed it most.

I agree with you on hedge funds though...

[Vincardog]

9. And taking the local capital out of the depressed areas to help the Global economy is good how?

When the banks made and serviced the loans they had an interest in making good loans. Now the brokers and predators are only interested in getting the paper work through. Have the Mega banks brought a lot of new capital into any depressed area you have seen? If they have I am willing to bet that it was to displace the poor people and rebuild some gated community.

[Nederland]

12. You can't take capital out of a depressed area

By definition, a depressed area doesn't have capital.

[Vincardog]

13. By definition, a depressed area has less capital than it needs. IF they have no capital Why do they

have all those liquor stores?
Your story does not add up.
You do not answer the question of how having Mega banks remove the capital helps the area?

Since the local bank would by necessity look of make and service local loans how is it better to have a mega bank not do that?

[Nederland]

14. I'll accept your definition

A depressed area has less capital than it needs.

Since it has less capital than it needs, it obviously must get additional capital from outside the local area. A mega bank can provide that outside capital because it has broader more geographically diverse customer base.

[Vincardog]

16. A mega bank CAN provide but it DOES NOT. Which obscene financial institution do you work for?

[Nederland]

17. Link?

I'd like some proof.

[Vincardog]

20. Google is your friend. If you can not believe your own eyes I can not educate you.

[dixiegrrrrl]

11. "This mess" is a symptom of

the problem that Ron Paul has been articulating for a long time.
And the problem Jefferson and others of his time warned against.
Unfortunately, most folks don't understand why the gravy train is going off the tracks, nor that there is no quick fix.
Google "The MoneyMasters" for a start....

Clinton ruined a dress.
Bush has ruined a nation.

Sigh.............

[sendero]

15. They can't fix this mess it's true..

... but they do need to force the SEC to regulate the shadow banking system, or this will happen again and again.

[lovuian]

18. Pull our troops out of Iraq that will fix it

Let the Saudis defend themselves that will fix it

[Jersey Ginny]

5. We are overextended as a nation. Credit should be less available.

We need to get back the notion of living within our means. Stop all the credit card advertising to start!

[Dr.Phool]

7. First of all, stop the war.

Show some balls, and repeal the chimp tax cuts. Then start working to repair our roads, bridges, and other infrastructure. And re-regulate the financial markets.

Nothing is quick. Nothing is easy. But, it's gotta be done.

[lovuian]

10. Get out of War and get people jobs with decent wages

that means Free trade is OVER

[Orsino]

19. Corrupt Congress is rearranging deck chairs on the Titanic...

...and none of the candidates is discussing the rocky times ahead. No bills pending.