The Most Important Event In US Economics In Almost 80 Years

[MannyGoldstein]

Happened tonight: http://www.nytimes.com/2008/07/14/washington/14fannie.html?hp">Treasury Acts to Save Mortgage Giants: Billions in Support for Fannie Mae and Freddie Mac.

"While senior Democratic and Republican officials in successive administrations have for many years repeatedly denied that the trillions of dollars of debt Fannie and Freddie issued is guaranteed, the package, if adopted, would bring the Treasury closer than ever to exposing taxpayers to potentially huge new liabilities. The two companies could face significant new losses this year as the wave of housing foreclosures continues. Officials seemed to suggest, however, that they had little choice but to intervene.

Our financial system is in full-throttle meltdown, and BushCo wants to take the government out along with it.

But did you see that &$#ing New Yorker cover? That makes me really, really, really, really, really, really, angry.

(Priorities, folks.)

[Hannah Bell]

1. yeah, it's nuts. can you post a paragraph & headline for those who

don't want to register? thx.

[MannyGoldstein]

4. Done. Thanks For The Suggestion

I think that very few people really understand what a colossal problem this is.

[Ichingcarpenter]

2. The Repeal of the Glass-Steagall Act is never mentioned

and the major players that made it happened in the vast majority
of all articles or news reported.


http://www.progressivehistorians.com/2007/11/bill-clintons-role-in-mortgage-crisis.html


The next two weeks will be really rocky, watch the banks
and the FDIC.

[mod mom]

3. Some folks here still put Bill Clinton on a pedestal.

:mad:

[AzDar]

35. Crazy, ain't it ?

:crazy:

Almost like we've all been set up like bowling pins the last 25 years or so.....

[populistdriven]

57. Bill Clinton gave the pen he used to destroy Glass-Steagall to Billionaire Sanford Weill

Billionaire Sanford I. Weill, who according to Louis Uchitelle made "Citigroup into the most powerful financial institution since the House of Morgan a century ago," has what I call the Wall of Me leading to his office, which he has decorated with tributes to him, including a dozen framed magazine covers. A major trophy is the pen Bill Clinton used to sign the repeal of the Glass-Steagall Act, a move which allowed Weill to create Citigroup. Fittingly, Citigroup is a major contributor to guess which current Democratic Presidential candidate?

Hillary Clinton (D) Top Contributors in the 2008 election cycle Citigroup Inc PAC $439,567

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant.



http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
http://www.opensecrets.org/pres08/contrib.php?id=N00000019&cycle=2008

[Muttocracy]

61. Interesting. Weill gives gobs of money to Cornell

and keeps getting more and more buildings and colleges named after him. Including the medical school in Qatar. hmmm.

[MannyGoldstein]

72. ANN COULTER Went To Cornell!!! Coincidence?

She was my classmate.

(Oh, OK, Keith Olbermann also went there... there goes that hypothesis...)

[Muttocracy]

73. so did Bill Maher.

and so did I. I was most pleased to learn about KO a few weeks ago

:toast:

[Ichingcarpenter]

74. Damn good school

and a recruiting ground for the CIA!

Just kidding, I have friends that went their too.

[MannyGoldstein]

76. I Had Two Frat Buddies Who Went To The CIA From Cornell

And another that tried, but kept failing the lie detector test on "are you a homosexual".

[Ichingcarpenter]

79. I know it was a well known school for recruitment

It had an excellent geo-political department.

[MannyGoldstein]

80. Actually, These Guys Were All Engineers

The two that went were geologists.

[Ichingcarpenter]

82. The Colorado School of Mines is or was

used as a recruitment area. I know that as a fact.
It makes for great cover.

[MannyGoldstein]

75. I Was Engineering 1985-ish. What About You?

And when was Maher?

[Muttocracy]

81. oh, just remembered - Janet Reno, Paul Wolfowitz, Ruth Bader Ginsburg

...do we have a mixed bag or what.

1990s, Aggie!

edit - Maher 1978
http://www.cornell.edu/search/index.cfm?tab=facts&q=&id=1312

[MannyGoldstein]

83. They Forgot Kurt Vonnegut and Huey Lewis

Just because they flunked out...

[Ichingcarpenter]

66. That is now well documented

I mentioned the dangers of this before the subprime
market went to hell.

In August of last year when the feds starting to loan to banks
I started adding it up.

I reached trillions and not one report of them paying it back.

[MGKrebs]

48. Ah, a Bob Dole fan!

[populistdriven]

58. You gotta be kidding me, Billy is up to his eyeballs in guilt on the housing crisis

[MGKrebs]

64. Another Bob Dole fan?

Jeez, how the hell did Clinton ever get elected in the first place?

[MannyGoldstein]

78. I Voted For Dole - What Of It? n/t

[MGKrebs]

84. It's the gratutitous shots at Bill Clinton defenders that I would challenge.

Bill Clinton has to be among the least likely leaders to be on anyone's "pedestal". Most of his flaws are well known, well documented, and well publicized. People who still defend him just may do so out of the understanding that the alternative may have been worse and a lot of good came out of that era, despite the flaws.
Clinton has to bear some of the responsibility, but other countries allow similar banking relationships without the problems we are having. In fact, some European countries allow even more flexibility in what banks can own. That doesn't make it right, but it might have made some people think that it could be done in a responsible way.

[Hannah Bell]

8. everything happens by accident; just the magic workings of the market.

just coincidence ordinary folks lose their houses, buying power & jobs, while boa & their ilk concentrate further power & capital.

[Ichingcarpenter]

12. Notice that Goldman Sachs, Citigroup and other of the big players

that pushed this through are now also the ones that are in trouble?

[Hannah Bell]

15. what do you make of that?

(personally, i'll only believe gs is really in trouble when i see all their assets sold off for pennies on the dollar & their execs in the poorhouse)

....but convince me.... :>)

[Ichingcarpenter]

21. The shareholders and taxpayers are in trouble not the players and directors.

I have to say it was the largest grifter game
in the history of the world and the citizens and shareholders
were and are still the mark and we know who to thank for this

I don't see justice happening until a radical restructure of
the whole international system is evaluated for what it is.

[Hannah Bell]

27. that i buy.

[SidneyCarton]

40. Obviously they tried to screw us, but...

Part of the problem is the myopia of greed. The fund managers, CEO's etc. all focus no further than the end of the quarter, because the quarterly earnings determine the future of the stock price, and whether or not they get to keep their jobs. Who cares if all hell breaks loose a couple years down the line, we can't think more than three weeks ahead! This is a recipe for disaster.

[alcibiades_mystery]

5. Capitalism is crisis yet again

Yawn.

IT. DOESN'T. FUCKING. WORK.

[bread_and_roses]

54. You said it for me. And note how the Free Marketeers run for the

Fed's to bail THEM out - while the rest of us are expected to bootstrap it alone when we fall on hard times.....

[jlacivita]

63. didn't you get your stimulus check? n/t

[NBachers]

60. Karl Marx: "Give capitalists enough rope

and they'll hang themselves."

The problem is, they're dragging us onto the gallows while they run away with all the resources.

[IntravenousDemilo]

6. Nationalize both Freddie and Fannie and distribute the assets equallly among the US citizenry.

That will solve your problem.

[MannyGoldstein]

9. It Would Certainly Suck Less

This is going to be very ugly.

[Hannah Bell]

10. no, the citizenry just has to pay for the mess. the assets? fuggidabout it.

[Extend a Hand]

14. They are insolvent

after the assets were liquidated there wouldn't even be enough money to pay the creditors-- which likely include bunches and bunches of public pension funds.

[IntravenousDemilo]

19. Wow, that is serious. Well, never mind then. n/m

[JetJaguar]

7. Stronger Regulatory Structure

"Therefore we must take steps to address the current situation as we move to a stronger regulatory structure.”
-Henry M. Paulson Jr. July 14, 2008

Sending out an S.R.S.

Sending out an S.R.S.

Sending out an S.R.S.

Sending out an S.R.S.....


Too late asshat.

[RainDog]

11. If a Bush is in office, expect a banking crisis

they make so much money off of this crap and we taxpayers end up subsidizing their crimes. They can't allow these two to fail b/c it would be the beginning of complete meltdown of the real estate sector of the economy.

Sometimes I fantasize about pulling the rich jerk offs who have benefited from all this out of their offices and homes, tar and feathering them, and hanging them by their thumbs until they return their ill-gotten gains to the U.S. treasury. That would include, of course, Cheney, Erik wazzisname at Blackwater, ALL the Bush family, hedge fund managers...

the reason things got so bad during the French Revolution is because finances were so bad.

The filthy rich always seem to forget this. (and I do mean flithy, as in disgusting.) As Balzac noted, behind every great fortune is a great crime. I cannot think of anyone offhand that doesn't meet that criteria. I hope there are some, but I'm doubtful.

[elehhhhna]

32. and "finances were so bad" in France because WHY? Because

the wealthy upper classes simply refused to pay taxes.

Hmmm. Sound familiar?

[gratuitous]

13. Profits? Privatized. Risks? Socialized.

And if you're not in the income stream for those profits? Well, you're just a whiner, that's all. Now, pay your taxes, because Uncle Phil needs another hundred grand!

[readmoreoften]

16. Excellent way to put it!

I'll be using this.

[XRubicon]

43. I want that on a bumper sticker

It says it all.

[Neshanic]

17. Meanwhile as Bernanke's young ward Paulson lights up a cigar with a C note...

"That was close boss!"

"Yes, my evil imp, it was, and they will never know what hit them until we are out of here."

[EbenezerMcIntosh]

18. Do you really need those dollars (worth a dime each) in your pocket?

Bow down to your corporate masters and hand it over. Fuck eating.

[Scurrilous]

20. WTF?

"Officials said that after talking to senior lawmakers through the weekend, they expected that Congress would attach the proposals to a housing bill that could be completed and sent to the White House for approval as early as this week."


"While senior Democratic and Republican officials in successive administrations have for many years repeatedly denied that the trillions of dollars of debt Fannie and Freddie issued is guaranteed, the package, if adopted, would bring the Treasury closer than ever to exposing taxpayers to potentially huge new liabilities."


Why is Congress in such a hurry to stick it to the taxpayers?

[Neshanic]

24. Pelosi and remoras will be waiting at the door to welcome this wonderfull legislation!

[MannyGoldstein]

25. Do You Have Any Idea Of How Much The Pelosis And Reids Would Be Out?

Look, fair is fair: they are better than we are.

[upi402]

26. Taxpayers easy to fool. Corporations control the big purse.

my .02 anyhow

[dorktv]

22. and if a D gets into office, he will clean up the mess and the Republicans will

learn nothing.

[Karenina]

31. This ain't no ONE MAN job!!!

:rofl:

[Ichingcarpenter]

23. Thanks for the thread Manny I forgot to nominate it. n/t

[TheWatcher]

28. K&R

This is definitely that, and hardly anyone is paying attention to it.

Looking at the Futures right now, Wall Street seems to be stroking themselves to climax over it.

http://money.cnn.com/data/premarket/

Look for a Huge up day in the Markets tomorrow, and a neverending parade of jawboning, happy-talk, Orwellian Bots that will be storming the The Great Meadow, soothing all the sheep about how "The Worst Of The Credit Crisis Is Over.....No Really, Seriously This Time!"

[Skittles]

29. some of us can be angry at more than one thing

the colossal fuckup of the economy has been in full-steam mode for some time now

[B Calm]

30. and the REPUBLICAN ECONOMIC DISASTER continues. . . .

[FogerRox]

49. It will be called the Second Great Republican Depression.

[truedelphi]

33. I am equally worried about the government getting its hands on

Fannie and Freddie. Than going ahead and draining that institution dry.

The two financial experts on Lehrer report seemed to think that the panic about Freddie and Fannie was bizarre and mostly just that - a panic. Neither institution is in as much trouble as the fears surrounding them seems to indicate. What it reminds me of is the many fears that the Repugs continually point to regarding the solvency of the SDocial Security - and most of us know how badly the Repugs have wanted to help "manage" our Social Security funding.

[ihavenobias]

39. Amen on the social security point n/t

[bdamomma]

59. like Carlin said

they will go after your Social Security too, and they will get it.

When is enough enough?

[spanone]

34. is it facism yet?

[drexel dave]

55. It's been facism for a long time now

jus' keepin' it real.

[indepat]

36. One might argue that advent of voodoo economics (Reaganomics)

ranks right up there with the national debt spiraling from about $1 trillion to about $9 trillion in little more than a quarter century, so what's a few trillion dollars more other than another giant slide in the value of the dollar? :D

[robertpaulsen]

37. Priorities indeed. K&R!

:kick:

[MasonJar]

38. And just how is Bill Clinton responsible for this? The Republicons in

Congress, especially "morans" like Phil Gramm, passed the deregulation bills. They were totally in control except for two years of Clinton's terms. I am tired of the Clintons being maimed here. We had a glowing economy under Clinton. He added 22 million new jobs.

[madrchsod]

42. he signed the repeal of the last act that was put in place

during the great depression....it set the stage for everything that is happening now.

google the glass-steagal bill

[MannyGoldstein]

51. Next You'll Be Telling Us That Clinton's NAFTA Cost Us Jobs!

And that Clinton's almost-free trade with China has hurt American manufacturing!

Ah jeez...

[madrchsod]

53. manny please do`t bring up rwanda

i mean poor susan got fired cause she said clinton was a monster(or something like that) but was she talking about hillary or bill?

[jlacivita]

65. the bill passed with like 90 votes, less than 50 were repubs

the repubs alone didn't have enough to overturn a veto, so Clinton and the congressional democrats are equally responsible.

To be honest, even if the repubs had a veto-proof majority (which they didn't) i would still expect a democrat president to veto that bill just to be on record that it was a horrible idea.

I mean it basically comes down to allowing banks to replace ordinary peoples money with imaginary money (stocks) and hope their value doesn't go down.

[Ichingcarpenter]

77. He was the leader......... he pushed it, signed it and helped make it happen

You are living in a delusion if you think that
all your political leaders on either side are on your side.

Look at the other Bills that have passed lately.
No one is fooled anymore, except the fool

[happygoluckytoyou]

41. if you missed the past lifetime.... WE ARE IN CLASS WARFARE... and ReaganOmics was the opening shot

[natrat]

46. total warfare, but one side didn't know it or bother to show up

[windoe]

44. K & R cringing. .....

[whistle]

45. The Treasury bailout makes U.S. Taxpayers responsible for over $5.0 trillion

...in debt now to pay-off hedge fund speculators while millions of homeowners loose their homes. This will be a scam bigger than anything witnessed in modern financial history

[Cha]

47. Quite a legacy dumbfuck

and his handlers(rove&cheney)have foisted on the American People with their greedy ineptitude.

[radhika]

50. Renters with no tax breaks now subsidizing homeowners....

NO one has mentioned this on the various blogs. If the US taxpayers bail out Fred and Fannie, they essentially bolster homeowners and developers using funds from the total population. That means taxpayers who do not receive the tax benefits of an interest-deductible mortgage (as in renters, homeowners with no mortgages, or workers that are living in cars on a friends sofa) are taking on this huge debt to fund those who enjoy those privileges - not to mention house appreciation if the economy rebounds. Now, I am not suggesting the people of America lose their homes. I propose the bailout be funded by the mortgage and banking firms, tax increases on billionaires -- and to a lesser degree, average Americans.

I am also suggesting that this neo-socialistic era we are entering include 1) universal single-payer healthcare 2) rental deductions on income taxes and 3)regulations on developers that requires them to do green and low-income housing.

[MannyGoldstein]

52. Return To Taxing The Rich

Under Eisenhower, the wealthiest Americans paid about 50% in taxes, while the median American paid far less than today. And the economy was great.

Today, the wealthiest Americans only pay 17% in taxes, while the median American pays more than 30%. That's disgusting.

[hay rick]

56. really angry, angry,angry

Krugman wrote a column on Fannie/Freddie today...http://www.nytimes.com/2008/07/14/opinion/14krugman.html?_r=1&hp&oref=slogin

Don't think this date will go down in history. Taxpayers being on the hook for Freddie/Fannie has been the market's operating assumption for years. The Treasury plan does signal a high-level surrender to the reality of the current real estate market meltdown.

On matters of higher priority...someplace around the fifth "really" it hit me- this guy is writing satire...

[Muttocracy]

62. let's see, when I graduated from college and learned a little personal finance

it was all about buying a house and investing in the stock market to ensure one's long-term security.

Hmmm.

[TexasObserver]

67. This latest step, to effectively guarantee Fannie & Freddie, will be inflationary & devalue the $

That has to be a result of this action. We've seen significant erosion of the US dollar against other currencies. The Canadian dollar has advanced over 60% against the US dollar in the past 5-6 years.

It's going to get worse.

[Ichingcarpenter]

69. I honestly see a barter system emerging between

people, although the 'economy' will continue.

The guy that bought my house, I made, in the early 80's in Austin
started a business back then that brought
like people together, such as carpenters, dentists,
farmers, electricians etc.

He made a money doing it and
had built a barter system from San Antonio to Austin.
Times were tough in the early 80s and I even used the system.

Back then we didn't have the internet, but I think
that this system will have a major comeback.

[DearAbby]

68. Takes over a decade to get the minimum wage increased

we get a whiplash watching congress bail out Fannie Mae/Freddie Mac, all on our dime...hell each person already owes tens of thousands to the national debt, whats a little bit more?


edit: STOP YUR WHINNING MY FRIENZ, SUCK IT UP!

[Ichingcarpenter]

70. My sucking up has been outsourced to Drafur n/t

[DearAbby]

71. Cripes...

cheap foreign sweat-shop suckers chaps my ass!