Bush Admin Bail outs in a sound economy!

[8Mud]

Dude, that's complete and utter bullshit. Look at what happened to the saving and loans industry when Reagan deregulated that. Taxpayers were on the hook for that one. Same thing with that Downs Syndrome suffering president of ours. He deregulated all this crap that's going to hell in a hand basket, and we're paying for it?! All so some stupid rich assholes can get even richer?

WTF?!

We had market regulation fromthe 1930's until the early 70's when Nixon took us off the gold standard. We had the greatest economy in the world. And what has laissez faire capitalism gotten us? The Great Depression, the oil and energy crisis of the 70's, the saving and loans debacle of the 80's and now this.

You guys that want this are out of your minds. . . . .

You have layer upon layer of money managers and clerks working the system now. You also have layer upon layer of watchers, watching the watchers and the wheeler dealers.
The solution may not to be to add another layer of watchers. All this does is add another layer to siphon off a percentage of the cash during the flow.
Administrative costs go up, less money actually gets to where it's actually needed to produce something (other than profit for the middle men).
You can introduce any regulations you want and before the day is out some sharp minded money manager is going to start right in finding and exploiting the loop holes.
No matter how good your regulators are, in most cases you are behind the curve in finding and weeding out those abusing whatever rules and system you have implemented. It's an unending game.
It used to be, in a break even company, that a customer received $.27 worth of product for every dollar he spent. Depending on the company, the overhead and the returns expected, the percentage of product the customer receives can fall dramatically.
Ask yourself how profits for a company, transportation and the cost of money, can go up and up and up and the customer still receive a reasonable percentage of a product for the money paid?
When the market prices the consumer out of the market, the whole process collapses.
The housing bubble was little more than pricing the consumer out of the market. The whole economy is riff with the same thing, it's not only housing.

The bail out IMO is only going to feed the whole process in the same direction. As painful as it seems, the only real solution is to fail and start all over again from scratch and/or let inflation turn whatever you have into half it's value in fairly short order.

The thieves now on days are some smarter than in previous generations, they steal 300% of what the think they need today as a hedge against inflation. Tame inflation makes whatever dollar you save today, worth about $.40 ten years from now.

Many money managers used to be happy staying slightly ahead of inflation, conservation of capital. Those days seem dead, many now rape the market.

 

[buschwhaked]

I saw this and thought it was interesting. That kind of cash would be sweet...I could finally get lockers lol.

We Deserve It Dividend

I’m against the $85,000,000,000.00 bailout of AIG. Instead, I’m in favor of giving $85,000,000,000 to America in a We Deserve It Dividend!

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up. So divide 200 million adults 18+ into $85 billon that equals 425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend. Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. SO ....... Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage – housing crisis solved. Repay college loans – what a great boost to new grads. Put away money for college – it’ll be there. Save in a bank – create money to loan to entrepreneurs. Buy a new car – create jobs. Invest in the market – capital drives growth. Pay for your parent’s medical insurance – health care improves. Enable Deadbeat Dads to come clean – or else. Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces. If we’re going to re-distribute wealth let’s really do it...instead of trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!

As for AIG – liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.” But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC. And remember, The Family plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

PS: Feel free to pass this along to your pals as it’s either good for a laugh or a tear or a very sobering thought on how to best use $85 Billion! !

 

[Darky]

I saw this and thought it was interesting. That kind of cash would be sweet...I could finally get lockers lol.

We Deserve It Dividend

I’m against the $85,000,000,000.00 bailout of AIG. Instead, I’m in favor of giving $85,000,000,000 to America in a We Deserve It Dividend!

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up. So divide 200 million adults 18+ into $85 billon that equals 425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend. Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. SO ....... Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage – housing crisis solved. Repay college loans – what a great boost to new grads. Put away money for college – it’ll be there. Save in a bank – create money to loan to entrepreneurs. Buy a new car – create jobs. Invest in the market – capital drives growth. Pay for your parent’s medical insurance – health care improves. Enable Deadbeat Dads to come clean – or else. Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces. If we’re going to re-distribute wealth let’s really do it...instead of trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!

As for AIG – liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.” But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC. And remember, The Family plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

PS: Feel free to pass this along to your pals as it’s either good for a laugh or a tear or a very sobering thought on how to best use $85 Billion! !

You got my vote...maybe not for president, but for whoever decides to put that in effect

 

[GSequoia]

You got my vote...maybe not for president, but for whoever decides to put that in effect

Quit being stereotypical.

 

[JNickel101]

I saw this and thought it was interesting. That kind of cash would be sweet...I could finally get lockers lol.

We Deserve It Dividend

I’m against the $85,000,000,000.00 bailout of AIG. Instead, I’m in favor of giving $85,000,000,000 to America in a We Deserve It Dividend!

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up. So divide 200 million adults 18+ into $85 billon that equals 425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend. Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. SO ....... Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage – housing crisis solved. Repay college loans – what a great boost to new grads. Put away money for college – it’ll be there. Save in a bank – create money to loan to entrepreneurs. Buy a new car – create jobs. Invest in the market – capital drives growth. Pay for your parent’s medical insurance – health care improves. Enable Deadbeat Dads to come clean – or else. Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces. If we’re going to re-distribute wealth let’s really do it...instead of trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!

As for AIG – liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.” But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC. And remember, The Family plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

PS: Feel free to pass this along to your pals as it’s either good for a laugh or a tear or a very sobering thought on how to best use $85 Billion! !

That would be cool if your math was right....

85,000,000,000 divided by 200,000,000 = $425 each....enough to get you one locker...maybe

We'd need $85 Trillion to make that other dream a reality....

 

[kujito]

I asked a couple of general questions on this topic at work today. The people I work with are used to dealing with LOTS of money, metal miners(see Metallica Resources, Gold Fields Ltd.), exec. types. Anyhow, they don't see any easy way out of this. One of the more disturbing things that I got was that the DOW and gold prices will likely cross at some point. Probably somewhere between $3k and $5k for an ounce of gold. That means that the price of gold may go up by a factor of 4 or better, and the DOW will drop by HALF or more (close @ 11,015.69).
Oh, before you rush out to stock up on gold (pure, not jewelery), know that you can still invest in gold, but won't have any on hand, just a note.

 

[buschwhaked]

That would be cool if your math was right....

85,000,000,000 divided by 200,000,000 = $425 each....enough to get you one locker...maybe

We'd need $85 Trillion to make that other dream a reality....

:dunno: You're right, like I said, it's just something I saw on another forum. Still, the principal is the same, bail out for the tax payers, not the bad businesses.

 

[Ironmen77]

Maybe this is what started this mess.

http://www.city-journal.org/html/10_1_the_trillion_dollar.html

 

[JNickel101]

Maybe this is what started this mess.

http://www.city-journal.org/html/10_1_the_trillion_dollar.html

Awesome. I was going to post that none of my fellow Republican friends are being directly hurt by this "mortgage crisis" - it seems to be something that affects low/low-middle income people who take out huge loans that they can't afford. Banks giving them these huge loans doesn't seem to be something you'd typically blame on "Republicans" as a whole.

:gag:

 

[JNickel101]

Have you guys been sleeping while I was away dealing with IKE this past 2 weeks?

"Paulson urges quick action on $700 billion bailout"

http://news.yahoo.com/s/ap/20080921...eltdown_320;_ylt=AtjVvGQ0Kpy98SxKYArxiGpv24cA


Stocks tumble after government bailout of AIG



http://news.yahoo.com/s/ap/20080917/ap_on_bi_st_ma_re/wall_street

"While relatively unknown on Main Street before Wednesday, AIG is a colossus on Wall Street and financial districts around the globe, with operations in more than 130 countries and $1 trillion in assets on its balance sheet. Besides life, property and other insurance offerings, AIG provides asset-management services and airplane leases. Its myriad businesses are also linked to mutual funds, annuities and other retirement products held by millions of ordinary Americans.
But perhaps the biggest concern about AIG is the dizzying array of complex financial instruments it structured for commercial banks, investment banks and hedge funds around the globe — many of which were directly or indirectly linked to the value of U.S. mortgages.
"AIG is in this mess because they got leveraged up to their eye balls," said Professor John Coffee of Columbia University Law School"


http://www.nytimes.com/2008/09/16/business/worldbusiness/16markets.html?hp

Fearing that the crisis in the financial industry could stun the broader economy, investors drove stocks down almost 5 percent Monday, sending the Dow Jones industrial average and Standard & Poor’s 500-stock index to their lowest levels in two years.

How a Market Crisis Unfolded


Global Markets React to Bank Woes


CNBC Video: Treasury Chief on Financial Turmoil CNBC Video: Corzine on Wall Street Turmoil
CNBC Video: Bush Remarks on Financial Turmoil

Related

Floyd Norris: Watching the Street: Lehman, Merrill and A.I.G. (September 15, 2008)

Fed Loosens Standards on Emergency Loans (September 15, 2008)

Lehman Files for Bankruptcy; Merrill Is Sold (September 15, 2008)



Traders on the São Paulo exchange bid prices in the Brazilian market down by 2.65 percent within five minutes of the opening on Monday, in reaction to losses among American banks. More Photos »
Enlarge This Image

Fred R. Conrad/The New York Times
Elizabeth Rose, a trader with Lehman Brothers, was among the many who contended with the news of the bankruptcy filing.



The Dow fell 504.48 points, its biggest one-day point drop since Sept. 17, 2001, the first trading day after the Sept. 11 terrorist attacks.

Back on topic - I'm surprised that you and BW aren't loving this - its a typical Democrat/Big Government approach.

I know it sure pisses me off.....

 

[Ironmen77]

This part of Clinton history has been misplaced:

http://www.clintonfoundation.org/roa-strong-comm-reinvest-act.htm

 

[Ironmen77]

White House warned about Fannie and Freddie

September 23, 2008 - 0:49 ET
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."
2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
2003
January: Freddie Mac announces it has to restate financial results for the previous three years.
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)
September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)
2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

• "Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
• "[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
• Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

 

[JNickel101]

:clap:

 

[Ecomike]

More like he tried to stop a massive hemmorage with a bandaid.........we haven't even begun to see the collateral damage that's coming from the years of deception and greed that has perpetuated Washington.

Fire them all.......

While I know the alternatives to the proposed bail out would be worse, I noticed the following today (oh, I have been with out internet and power again, hurricane Ike, damage here continues to bit):

"a senior adviser to Paulson and former investment banker at Goldman Sachs Group Inc., where the Treasury secretary was previously chief executive officer."

http://www.bloomberg.com/apps/news?pid=20601087&sid=acVoMK3FiuqQ&refer=home

So from what I have read Bush wants us to give the EX CEO of Goldman Sachs Group Inc. (who participated in causing the derivative problem) , who is now the US Treasury secretary , 700 billion with no government or court oversight to do with as he pleases! Seems to me the wolves have been running the HEN house and now they want more 700 billion more hen houses and absolute control of those hen houses. :doh:

 

[Ecomike]

More like he tried to stop a massive hemmorage with a bandaid.........we haven't even begun to see the collateral damage that's coming from the years of deception and greed that has perpetuated Washington.

Fire them all.......

Right, kinda like trying to stop a New Orleans dike leak with Duct Tape!

 

[Ecomike]

White House warned about Fannie and Freddie

September 23, 2008 - 0:49 ET
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."
2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
2003
January: Freddie Mac announces it has to restate financial results for the previous three years.
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)
September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)
2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

• "Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
• "[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
• Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

Assuming this is all true, and that Bush was serious and not just giving lip service to the topic (something all politicians do a lot), why wasn't GWB successful in getting something done while Republicans had control of the Congress for 6 years during the Bush administration?

I think the answer is that half of them were in denial (if it ain't broke yet, don't fix it yet), and the other half were scarred to death that just mucking with it in any way, shape or form, would cause its demise (which I suspect was the case by 2004 already).

Oh, and by the way, just fixing FM & FM would not have solved the wall street float of mortgage backed derivative securities on the international market that led to the investment banking organizations collapses.

 

[Ecomike]

So am I hearing this right, that Republicans here are now in favor of more, not less government regulation of the financial businesses and industry?:scared:

Have you guys noticed that the SEC halted all short trading of all company stocks last week for the next 4 weeks? What happened to the free market philosophy here?

 

[Ironmen77]

Assuming this is all true, and that Bush was serious and not just giving lip service to the topic (something all politicians do a lot), why wasn't GWB successful in getting something done while Republicans had control of the Congress for 6 years during the Bush administration?

I think the answer is that half of them were in denial (if it ain't broke yet, don't fix it yet), and the other half were scarred to death that just mucking with it in any way, shape or form, would cause its demise (which I suspect was the case by 2004 already).

I think on this point you are probably spot on. Plus I figure FM&FM were lining alot of politicians pockets.

Oh, and by the way, just fixing FM & FM would not have solved the wall street float of mortgage backed derivative securities on the international market that led to the investment banking organizations collapses.

Maybe, maybe not but that is the topic as of now.

 

[buschwhaked]

So am I hearing this right, that Republicans here are now in favor of more, not less government regulation of the financial businesses and industry?:scared:

Have you guys noticed that the SEC halted all short trading of all company stocks last week for the next 4 weeks? What happened to the free market philosophy here?

Actually, they aren't for regulation of oversight on this one at all. They just want to write the check and wash their hands of the deal. If GWB plan is passed there will be no congressional oversight, no new regulations, and CEO's will be able to keep their total pay packages a secret. Oh, and even if they're company fails they'll be able to walk away with their pockets brimming with tax dollars. Oh, and the kicker is, with GWB's version, the treasury department will not be subject to court rulings any longer, essentially placing them above the laws.

 

[Ecomike]

Actually, they aren't for regulation of oversight on this one at all. They just want to write the check and wash their hands of the deal. If GWB plan is passed there will be no congressional oversight, no new regulations, and CEO's will be able to keep their total pay packages a secret. Oh, and even if they're company fails they'll be able to walk away with their pockets brimming with tax dollars. Oh, and the kicker is, with GWB's version, the treasury department will not be subject to court rulings any longer, essentially placing them above the laws.

That is correct. Too many on both sides of the Congressional isle have killed that deal already.

What really got my attention was that GWB was scarred enough to push for such a huge non market solution just a few months before the end of his term, which tells me the FED and Treasury scarred the hell out of GWB, meaning they are scared sh*tless too that this won't keep till January!