We must not bailout the banks

[BanzaiBonnie]

They were warned. They knew it was coming. They ran with the program even with dire warnings. We can target assistance to those individuals who were taken in by this scheme. But we do not need to bail out the speculators. They went into this with eyes wide open and figuring the government would bail them out when things went sour.

Please contact your Congresspersons. It is my understanding, they are in hearings now. Let them know that in order to not bring down our entire economy, we must let the market correct. They must proceed with caution in what they do. If they don't allow market correction they will be screwing all of us. It's not like there were no warnings of what would come of their unbridled greed.

From Money and Markets newsletter by Weiss Research:

http://www.moneyandmarkets.com


"I want you to step back in time with me. Heck, we don’t even have to go that far... just a few years. The time is 2004:

Neophyte real estate “investors” are throwing caution to the wind, snapping up one, two, three, or more properties at the same time ...

Lenders are having a wild, anything-goes bacchanalia, flushing standards down the toilet and handing out high-risk mortgages like candy at Halloween ...

Wall Street is clamoring for high-risk bonds, including mortgage-backed securities, with little regard for whether the underlying credits are good.

Meanwhile, by 2005, a handful of serious analysts are warning of a coming catastrophe. Robert Shiller, the architect behind one of the most popular home price indices, goes on record saying “I think this is actually the biggest (real estate) bubble in U.S. history and possibly even world history.”

Do you know what the mortgage and banking industries did in response to warnings? They kept LOWERING their lending standards even as clear indications of deterioration in the housing market started popping up!

Heck, some Wall Street firms were still BUYING subprime lenders as late as 2006 to grab a bigger share of the market for high-risk mortgages. Morgan Stanley closed on its acquisition of Saxon Capital in December of that year, and Merrill Lynch agreed to spend $1.3 billion for the higher-risk home loan units of National City in September 2006."

[zanne]

1. I'm having flashbacks to the Savings and Loan disaster of the 80's. nt

[4dsc]

2. Remember the S&L mess...

I wonder if people rememeber how much the S&L crisis cost the US taxpayer and who was really bailed out..

[DemoTex]

5. Neil Bu$h was one of the Lucky-Duckies.

The Keating Five senators (4 Dems + Repub John McCain) didn't do so badly, either.

[BanzaiBonnie]

3. It's urgent we contact CONGRESS

Please kick this if you think this needs to be seen by more of us on DU. I hope others think this is important enough to contact their Congress.

[irish.lambchop]

4. But my guess is that we're going to be bailing them out

anyway because loads of people will pay creditors with their "rebate" checks.

[printpolitico]

6. responsible lending/buying

I agree with not bailing the banks out. This is going to come off as somewhat callous but think about it.
Do some of the buyers not also bear some responsibility.

I listen to a doctor talk about her crisis the other day. she said that she and her husband found a house for 500,000.00 and went to the bank for financing.
She stated that she didn't think they could afford the house but tried any way. She was given the sub prime loan.

The bank didn't bring the house to her and coax her into buying it she was irresponsible in what she bought. She's a doctor not a low income uneducated individual.
Granted the banks should not have jumped on the loan, but at some point we have to make responsible decisions about our economic future as well.

16 years ago when I bought my first house I was on an adjustable rate mortgage. I couldn't qualify otherwise, but I new i could make the house not anyway even at the highest
rate. But I knew the consequences and made plans to and did refinance within three years.

The government needs to let this one ride to some extent