It's almost become like a game show......

WHO WILL BE THE NEXT CONTESTANT ON THE NEWEST SHOW ON T.V...............

US Government Bailout ?

I believe our next contestant Phil is the US Automakers.

We're sorry about Lehman Brothers, we have some lovely parting gifts for them, thanks for playing.

So, back to our new contestant...

Two of our judges support the loan guarantee for the US automakers of 25 billion. These judges are Obama and McCain. We are still waiting on a few more votes, including the much sought after vote from public opinion.

http://www.nytimes.com/2008/09/18/bu...l?ref=business

So, what will be the final verdict for the Big 3 Automakers in this tantalizing game ?

Oh, we are out of time, tune in next week to learn if the Big 3 are able to win the prize, or if they share the same fate as Lehman Brothers. Right now, the scales tip in their favor to be a winner on...........

US GOVERNMENT BAILOUT !

You didnt answer the question. What specific actions did George Bush take which caused the Housing bubble.

__________________
"To take from one, because it is thought his own industry and that of his father has acquired too much, in order to spare to others who (or whose fathers) have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, "to guarantee to everyone a free exercise of his industry and the fruits acquired by it."

-Thomas Jefferson

UPDATE - after last night the $85bn quietly went to over $100 bn...well there goes social security for the boomers.

Visit The Commercial Mortgage/Real Estate Hotline at The Commercial Mortgage/Real Estate Hotline (Including Commentary on Politics and the World) and sign-up to stay on top of new developments in the mortgage and financial markets.

Da Comrade

When I woke up last week I was pretty sure that I was operating under a capitalist system which says that those that can survive will, and those that can't won't. Darwin's survival of the fittest I think they call it. Not that this is a good thing for any of the players involved on the non-survival side, but the way that it has always worked for me in my life is that I make decisions, take risks if I determine that they will give me the appropriate reward, and pay the price if I am wrong. My neighbor doesn't come in and reimburse me.

The Federal Reserve and Treasury have basically decided which firms will continue on and which ones will not. Bear Stearns was deemed to big to fail, Lehman Brothers wasn't and AIG and Merrill Lynch were. Lehman Brothers most probably could have survived, but was not allowed the time to do so. Merrill may not have but was provided a deal.

At the end of the day it is the employees and common and preferred shareholders that paid the price for the risk and greed of those at the top. Let's hope that the people who have been at the wheel while we got into this mess, will suddenly have the wisdom to get us out of it.

SEC Short Selling Folly

Back months ago the SEC reinstated the rule on a temporary basis that in order to short a stock you needed to be able to borrow and deliver it in an effort to help stem the fall of the financial stocks. It worked as financial stocks staged a strong rally. In the infinite wisdom of the SEC the rule was allowed to expire and financial stocks went back on their downward spiral.

There are certainly a lot of problems with these financial firms that have caused their stock prices to drop, a situation which these firms are completely responsible for. But the "bear raids" that are perpetrated by hedge funds and other institutional investors that drive the stocks down in part because of the rules of not having to borrow the stock, as well as the absence of an uptick rule could have been stemmed by an SEC chairman that noticed the results achieved the first time.

Oh yeah, the rule of having to borrow stock to be able to short it is going back into effect tomorrow. I think that is too little to late. Kind of like trying to put out a warehouse fire by spitting on it.

Sorry for straying. I'll happily discuss disparity with you in a more appropriate thread, anytime.

You didn't understand: "artificially low interest rates for much too long?"

Or you think Bush had nothing to do with the Fed policies under his watch?

Or maybe you disagree that his low(er) tax policies (combined with low interest rates) over stimulated the economy?

Or that reducing regulation allowed the financial companies to do unwise things?

It's actually Alan Greenspan and Phil Gramm at fault here mainly, and then Bush for not doing anything after the Enron scandal.

Gramm slid a long piece of legislation while he was a Senator that was all about less regulation, and made it so that the gov't couldn't get involved in these companies affairs. Gramm is a colossal failure in pretty much every way, Greenspan is trying to pretend like this is such a surprise to him, and Bush acts predictably neo-conish, playing the childish "I didn't know" card and blaming everyone else, of course.

When you're the President, you get a nice chunk of the blame when stuff like this happens, because you're supposed to be on top of things, not just another regular bystander who acts all shocked about how this came to be.

The fed is organized such that the president cant do much, so no. I do disagree that lower tax policies overstimulated the economy, and also that the president did so alone. There is no such thing as overstimulation. And I dont understand how the president did any deregulation that allowed financial companies to do unwise things. Perhaps you could provide me with some specific exmaples of actions that Bush did on his own that caused the housing bubble. If its so obvious it should be easy to find and source.

__________________
"To take from one, because it is thought his own industry and that of his father has acquired too much, in order to spare to others who (or whose fathers) have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, "to guarantee to everyone a free exercise of his industry and the fruits acquired by it."

-Thomas Jefferson

:headinsand:

I have always supported more regulation by the government.

In fact, I believe regulating corporations and industries is one of the most important jobs of the government.

What really ticks me off, is that we seem to have learned nothing from the S&L bailout, or ENRON.

The airlines got a 15 billion dollar bailout after 9/11 and way back in 1979 Chrysler got 1.5 billion.

Where does it end?

What makes me the most angry is that no one is likely to go to jail for financial crimes.

Money just doesn't disappear. It goes somewhere. Where did the money go?

For ENRON, I would say at least 50 people should have gone to jail, maybe as many as 150 people should have gone to jail.

This should have also been the case for the S&L scandal.

Of course, we only had a few scapegoats go to jail, so the message became clear..........STEAL ALL THE MONEY YOU WANT, JUST DON'T GET LEFT HOLDING THE BAG.

Sickening.

As to Greenspan, he has given us warnings. He warned us of a recession in February of 2007 and he warned of more bailouts on August 4 of this year.

You are free to blame Bush if you want, I no longer care.

Of course, the American people must share some of the blame as well. We were paying too much for homes. We allowed ourselves to get entangled in unwise mortgages.

Here are some figures on housing price increases from the fourth quarter of 2003, to the 4th quarter of 2004..........

Market Percent increase
Las Vegas, NV 47.3
Riverside/San Bernardino, CA 34.7
West Palm Beach/Boca Raton, FL 34.0
Bradenton, FL 32.0
Sacramento, CA 31.5
Melbourne/Titusvile/Palm Bay, FL 30.5
Washington, DC 26.9
Ocala, FL 26.8
Ft. Myers/Cape Coral/Punta Gorda, FL 26.5
Sarasota, FL 25.8

The top housing markets for 2004 - Feb. 15, 2005

ANY THINKING PERSON would see there is something wrong with these figures.

Remember, this is form just ONE YEAR.

FROM 2000-2004, MANY HOMES IN FLORIDA DOUBLED IN PRICE. Some even tripled in price.

You have to be a little insane to have bought a house that doubled in value in just 4 years. But I guess there are a lot of partially insane people in the US.

HERE IS AN INTERESTING PIECE I JUST FOUND FROM DEC. OF 2005.........

We believe that South Florida real estate remains a good investment,” said Robert Saltarelli, regional president of PNC Advisors in Naples. “Depending upon the individual client’s income and liquidity needs, we believe that a portfolio with 20-25 percent invested in real estate in this region is appropriate and should continue to deliver solid returns.”

Highlights of the real estate findings in Florida include: - Nearly three quarters of Floridians surveyed said they expect to see double-digit increases in the value of their primary homes over the next five years. - Just one in 20 wealthy South Floridians (5 percent) expects any decline in the value of their primary homes over the next five years. - Just one in five South Floridians say they got rich through real estate, but those who did are twice as likely to expect their real estate values to continue to increase. Nearly nine in 10 (89 percent) who say residential real estate is a major source of their wealth are expecting double-digit increases over the next five years, and 81 percent are expecting an increase of 20 percent or more, compared with 42 percent nationally. - Four in 10 (39 percent) South Floridians surveyed said that a major decline in housing prices would pose no threat to their family’s wealth. One in five (19 percent) said it would pose a threat.

Floridians Optimistic Double Digit Growth Will Continue - Florida Real Estate : The Real Estate Bloggers

I don't know what these people were smoking, expecting double digit increase over the next 5 years, especially after homes had already doubled in value.

Here is a paragraph which I beleive is quite enlightening........

Keeping in mind the history of interest rates and mortgage rates, Scott took a look at their impact on median sales prices in the state. "The acceleration in median sales prices (both for the May comparison and for the 2005 year) of approximately 27 percent is not sustainable," he says. "Such price increases are being driven by a once-in-a-lifetime low interest rate environment and opportunity. Thus, this is more of an 'interest rate bubble' than a 'housing bubble.' Most investors and consumers do not have a long-term perspective on the behavior of interest rates.

AN INTEREST RATE BUBBLE?

If this is true, and I believe it is, then once again the Federal Reserve must shoulder much of the blame for the mortgage and banking crisis.

The FED's obsession with keeping inflation low has led to this mess we are in.

Of course, the FED screwing things up is nothing new.

For Milton Friedman's birthday Ben Bernanke admitted that the FED helped cause the Great Depression. An admission most Americans seem to care little to nothing about.

REPEAL THE FEDERAL RESERVE ACT.

[Could you be more specific? What do you think is going to happen now?

I don't mean that in a hostile sense, just want to know.

No hostile sense felt, I'm just aware that my answer won't please you and due to our different political/economical/philosopical outlook on things, you'll for sure question me+ my ideas/judgement. That's life, I can live with it.

If those companies were allowed to fail we'd for sure be in a depression, but the worst hit would have been those investors and irresponsible lenders, who caused/profited from it. It would hurt, but it would clean the market as well and so lay the necessary path to correction for a future substainable growth.

Anyway for now nothing will happen, but as the imbalance of this actions have been nationalised, those bail outs could (will) hunt all the rest of the economy and all ordinary taxpayers in the long run. (if markets fail to swing back...)

You know those further US-debts (bailouts) have to be financed, nothing is for free and nothing comes without a cost.

__________________
"Homo Homini Lupus"
Thomas Hobbes

I don't know what to think of much of this thread or all the others on this economic crises.

I am flabbergasted that the partisan bullshit parade still reigns supreme on this forum. That Palin's refusal to cooperate about firing someone trumps the single worst financial crises since the depression.

I'm with you on that one, especially as it's the first US election campaign I'm actively following here on USPO.

All those useless side issues, bogus crap-threads taken place in the "polical,party,election" segment make me sick.
(If all this stupidity was taken place in reality in my country/election, I probably would go nuts and want all those pundits to get a train ride and suck gas.)

Damn it, even on such fundamental issues like bail outs, all those brainless pundits can only come up with is blaming the other political side and continueing their fantasy world line, that only if their side was in full control, things would be perfect.

Imho that's just bullshit, both sides are deep into it for taking their part of the blame and due to it, they are all just totaly useless.

__________________
"Homo Homini Lupus"
Thomas Hobbes

I don't see this as socialism at all. AIG was gutted and filing for bankruptcy. I view it more akin to the government having to unwillingly feeling required by circumstances to take claim and title to an abandoned crashed vehicle that some person trashed and unscrewed the licence plate and scratched off the vehicle identification numbers (VIN) so the person can make the wreck someone else's problem to resolve.

What I would like to see is what regulations--for once--the government and/or the candidates wish to finally start creating and imposing to prevent people in companies like Lehman and AIG getting huge salaries and bonuses for taking grossly reckless decisions that wind up blowing up huge companies like this and where they get filthy rich in megamillion dollar salaries and self-dealt bonuses and leaving the impending disaster for the entire American and even international public to suffer the direct and collateral consequences.

In many countries, just for starters, they have laws that put businessmen who make grossly reckless decisions that wind up doing this kind of damage in prison as well as seize all they earned plus the rest off them. Everyone understands the marketplace concepts of risk and return, but when left too unregulated, it allows certain unscrupulous people to do what many of these people did in charge. They don't care that they are putting large companies at grave risk with all the negative effects on those who work for it, whom they deal with, and society in general. Instead, they make themselves look brilliant with things like rotten loans to beef up the numbers, get their huge salaries and bonuses (often self-dealt) and leave everyone out there to wake up to what's going on when it's too late and they are already off in the Caribbean sailing somewhere laughing.

Simply being allowed to incorporate is a privilege allowed by statute. They are given to promote and assist positive business enterprising and protect individuals against good faith setbacks and failings. It turns their purposes on their heads when the purpose of corporations are abused, however.

Bankruptcy laws are also intended for good faith protections and are a privilege, not a right. In ancient days people who did what these CEOs did would be lucky if they weren't carved into tiny pieces, never mind requesting the government to excuse them from reckless debts and having the government protect them personally, etc. Abusing a corporation with reckless decisions for personal gain and dumping the wreck on the public to their handling, disposal and detriment afterwards is not good faith use of the laws.

Corporations deal with all sorts of public purposes for which they have domestic and/or international tradings, contracts, employees, etc....and therefore have responsibilities that come with it to deal and act in good faith.

Society understands that even things so simple like receiving the privilege of a driver's licence has inherent responsibilities and therefore have regulations to assure responsible conduct or else face penalties. States create vehicle codes that punish various abuses of discretion when driving a vehicle that result in licence revocation and/criminal penalties that may even include imprisonment. I see no reason why regulations simply can't catch up to gross recklessness by decision makers in a corporation, which is also something created by and applied for with the state.

__________________