Today is "one of the most extraordinary days in Wall Street’s history" -- and not in a good way. Lehman Bros. and Merrill Lynch will be gone tomorrow.
Okay, this is what we got after eight years of George Bush. The economic news for the past couple weeks has been nothing short of stunning. This election is about the economy:
Quote:
In one of the most extraordinary days in Wall Street’s history, Merrill Lynch is near an 11th-hour deal with Bank of America to avert a deepening financial crisis while another storied securities firm, Lehman Brothers, hurtled toward liquidation, according to people briefed on the deal.
The dramatic turn of events was prompted by the cataclysm of losses that has shaken the American financial industry over the last 14 months.
The moves came after a weekend of frantic negotiations between federal officials and Wall Street executives over how to avert a downward spiral in the markets. Questions still remain about how the market will react and whether other firms may still falter like A.I.G., the large insurer, and Washington Mutual, both of whose stocks fell precipitously last week.
Coming just a week after the government took control of mortgage lenders Fannie Mae and Freddie Mac, the magnitude of the industry’s reshaping is staggering: two of the most powerful firms on Wall Street, Merrill Lynch and Lehman, will disappear.
The weekend’s once unthinkable outcome came after a series of emergency meetings at the Federal Reserve building in downtown Manhattan in which the fate of Lehman hung in the balance. In the meeting Federal Reserve officials and the leaders of major financial institutions were trying to complete a plan to rescue the stricken investment bank.
The collapse of Fannie Mae and Freddie Mac was huge, but probably a little too far removed from people's day-to-day lives for them to understand. I felt that way -- I knew it was huge but couldn't quite get my arms around it.
The collapse of Lehman and Merrill Lynch is another story. Lots of Americans invested with Lehman and Merrill Lynch. Those firms are gone. How did this happen? No one was paying attention to the economy. There was a lack of regulation and oversight during the Bush presidency. The proverbial fox was guarding the hen house -- and took full advantage.
It is the economy, stupid. And, the Obama campaign should make every day between now and November 4th about the economy.
I have to add that if after this perpetually teetering economy, foreclosures, bank failures and growing unemployment, the biggest concern on peoples minds is whether Obama called Sarah Palin a "pig", then this country truly deserves whatever misery is headed towards us.
You truly do get the Government you deserve. After 2 weeks of lying about trivial shit, McCain seems to be enjoying a bounce for his deceiving efforts. All while retaining the very people who deregulated the banks and caused the mess we're in, in the 1st place as advisers and candidates for Treasury Secretary.
Apparently the issue of whether or not Obama was calling someone a pig is more important than them not having health care, a home, a job or any savings left after your 401K disappears into the void.
By CNBC.com | 11 Sep 2008 | 09:11 AM ET Font size:
The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.
"We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."
The estimated $300 billion cost of the Fannie/Freddie bailout will probably be considered as a loss that the government will have to take, therefore passing it on to taxpayers, he explained.
"We already have $3 trillion of debt, as far as the U.S. government is concerned. These debt figures across the U.S. economy are rising very sharply."
When the government can no longer pass the United States' "immense debt" on to taxpayers, it will turn to the holders of U.S. dollars, leading to the eventual downfall of the currency, Hennecke said.
"Definitely, it (the dollar) is not a safe place to be invested in, as real inflation is closer to 10 or 11 percent than the actual inflation numbers given by the U.S. government," Hennecke said on "Worldwide Exchange".
Investors should avoid exposure to debt and stay away from leveraging on any investment or asset, including property, Hennecke advised, adding that "banks have been too highly leveraged in the past, private households, everybody."
Hennecke's stock allocations are mainly Asian-based, especially in the Chinese market as the country's government has a large amount of cash and the macroeconomics are fundamentally strong.
there is an embedded video at the above link.... the guy is a foreign economist... If you want to get a view from OUTSIDE our media bubble take a look... he talks about the US market and the larger effect on the global markets... again, it's not going to be pretty...
1929 - 7 prior years - Republican President - Bank Failures 1987 - 7 prior years - Republican President - Savings and Loan Failures 2008 - 7 prior years - Republican President - Bank Failures
Yes, that's what they said about FDR after he saved the country from the ruin caused the (until now) most egregious bunch of deregulating crazy Republicans we've ever seen.
When he was Senator, McCain Advisor Phil "nation of whiners" Gramm pushed through The Gramm-Leach-Bliley Act (GLBA), which repealed the depression-era Glass-Steagall Act and allowed commercial and investment banks to merge, leading the way for the current mortgage crisis.
McCain's top economic advisor is directly to blame for many of our nation's financial problems.
According to the nonpartisan group OpenSecrets.org, "Barack Obama is the second biggest recipient of political money from Fannie Mae and Freddie Mac in the last ten years. And he’s only been in Washington for four."
Furthermore, "Obama delivered over $100 million in earmarks to Illinois last year and has requested nearly a billion dollars in pet projects since 2005. His running mate, Joe Biden, is still indulging in earmarks, securing over $90 million worth this year."
We just installed a conservative government in my home state which is going to allow uranium mining, so I'm ok.
Don't know about the rest of you guys though.
My take on how this happened:
1. there was too much cash around, and banks didn't know what to do with it.
2. banks invested it in subprime markets. That is, they gave money to people who couldn't afford to repay it, a fundamental error in banking models. This is why its called "subprime".
3. surprise! The people who borrowed the money didn't repay the loans. Suddenly there was no money about at all. One of my collagues heads up a few boards, including a really big one. he said at one stage total global liquidity was around $5b. That may sound like a lot to us mere mortals, but from the perspective of major M&A activity wouldn't be enough to fund one big takeover.
4. Banks like Lehmans and Merrill Lynch need cash to work. No cashee, no workee.
5. Pop tinkle! Banks go bust.
6. Investors see two vehicles for making money go pop tinkle, get nervous and pull cash out of the market. Market spirals.
7. I can't see a depression, but I do see a 5-8 year cycle to this. Dot com bubble, 8 years ago. 1992 blahs, 8 years before that. 1987 crash was 5 years before that.
the G-man ass-kicky User Lawyers, Guns & Money 15000+ posts Tue Sep 16 2008 08:29 PM Reading a post Forum: Politics and Current Events Thread: The Great Crash of 2008
Pariah nerdy Moderator Triteness kicks us in the nads. 15000+ posts Tue Sep 16 2008 08:33 PM Reading a post Forum: Politics and Current Events Thread: The Great Crash of 2008
Matter-eater Man argumentative User Fair Play! 5000+ posts Tue Sep 16 2008 08:53 PM Reading a post Forum: Politics and Current Events Thread: The Great Crash of 2008
Matter-eater Man argumentative User Fair Play! 5000+ posts Tue Sep 16 2008 08:58 PM Reading a post Forum: Politics and Current Events Thread: The Great Crash of 2008
we are probably in the middle of this mess I give it another year or two. Money was too cheap for too long and it had nothing to do with political parties.
The financial crisis that began 13 months ago has entered a new, far more serious phase.
Lingering hopes that the damage could be contained to a handful of financial institutions that made bad bets on mortgages have evaporated. New fault lines are emerging beyond the original problem -- troubled subprime mortgages -- in areas like credit-default swaps, the credit insurance contracts sold by American International Group Inc. and others firms. There's also a growing sense of wariness about the health of trading partners.
The consequences for companies and chief executives who tarry -- hoping for better times in which to raise capital, sell assets or acknowledge losses -- are now clear and brutal, as falling share prices and fearful lenders send troubled companies into ever-deeper holes. This weekend, such a realization led John Thain to sell the century-old Merrill Lynch & Co. to Bank of America Corp. Each episode seems to bring intervention by the government that is more extensive and expensive than the previous one, and carries greater risk of unintended consequences.
Expectations for a quick end to the crisis are fading fast. "I think it's going to last a lot longer than perhaps we would have anticipated," Anne Mulcahy, chief executive of Xerox Corp., said Wednesday.
G-Man and the McCain campaign may try to weasel out of any responsibility for this crisis, even though it was caused by their philosophies, The media isn't going to give these abominable liars a free pass to peddle their bullshit, not when the stakes are this dire.
So after McCain says everything's fine by almost directly quoting Herbert Hoover about "the fundamentals of the economy being strong", he now says a day later that we're in "a crisis" and he's the guy to lead us out. Not that he says what exactly he plans to do. But hey, that's OK, at least everyone knows he's spent the past 27 years as a deregulator. And finally after what seemed forever, he realizes that the economy ain't doing so well... I'm guessing that someone told him he sounded like a clueless asshole when he says everything is OK.
Not to say that he's an out of touch "elitist", what with owning more homes than he can remember. But hey, he's for the little guy now. Never mind all the times he's voted against raising the minimum wage and for tax breaks to big oil and corporations who outsource jobs. He's really for the little guy..now. uh huh.
ABC News slams McCain flip-flops on economy, says McCain supported policies that led to economic meltdown
ABC showed how John McCain supported the very deregulation rules that companies like AIG exploited in order to get in to the economic mess they're in. That links McCain directly to the current crisis. Here's the transcript since G-Man still may be averse to tru.. um.. I mean video:
Quote:
CHARLIE GIBSON: And with apologies for our technical difficulties, we're going to turn back to the difficult economy, and the way the presidential candidates are dealing with it, particularly John McCain. Here's David Wright.
DAVID WRIGHT: John McCain was against the government bailout of AIG, before he was reluctantly for it. Here he was yesterday on "Today."
JOHN MCCAIN: We cannot bail AIG or anybody else. We have to work through it.
WRIGHT: Asked about the same topic today on "Good Morning America" -
MCCAIN: I don't think anybody I know wanted to do that. But there are literally millions of people whose retirement, whose investments, whose insurance were at risk here. And they were going to have their lives destroyed.
WRIGHT: Senator McCain appears to have changed his tune on regulation in a fundamental way. Today on the stump, he's a champion of reigning in Wall Street with tough regulations.
MCCAIN: We're going to put an end to the reckless conduct, corruption and greed that have caused a crisis on Wall Street.
WRIGHT: But for more than 25 years in the Senate, McCain has fashioned himself as a champion of smaller government, less regulation.
MCCAIN: I am less government, less regulation, lower taxes, et cetera.
WRIGHT: In the mid 1990s, he supported a measure to ban all new government regulations. McCain supported legislation a decade ago that broke down the firewalls between commercial and investment banks and insurance companies -- the very rules companies like AIG exploited to get in the current mess. And as recently as March of this year, after the collapse of Bear Stearns, McCain was all for deregulating Wall Street.
MCCAIN: Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.
GEORGE WILL: When the deregulation was the wave through Washington, he surfed that wave. Now it's not, and the populist inside John McCain is out.
WRIGHT: Today, the Wall Street Journal accused McCain of selling out his free market ideals. Said today's top editorial -- "denouncing greed and Wall Street, isn't a growth agenda,"
GEORGE WILL: It's a conversion of convenience, some will say.
Which is the nice way of saying it. I'd call it a FUCKING LIE!
Chris Matthews also let one of you pig Republican liars have it for pretending to now be akin to Independents or something, "The change party" I suppose. You guys won't even stand and defend your philosophies or even your President which got us into this mess in the 1st place. Pathetic scumbags the lot of you.
No, you lying weasel Republicans aern't going to slime your way out of being the ones who wrecked the economy and trying to pass yourselves off as "change".
Here, let your next President explain it to you:
Funny how all the idiotic GOP distraction crap about Pigs and secret muslims and angry wives doesn't work when peoples lives, jobs and savings evaporate because of Republican policies.
So much so that the "fundamentals" that McCain now champions after looking like an out of touch asshole when he was talking about the REAL fundamentals before he decided to give it a new meaning, let him have it at a GM plant. The fundamentals" sported Obama shirts, caps, buttons and started chanting "Obama '08" to a quickly fleeing McCain.
As an aside, The McCain spent the rest of the day sending a terrorist prosecutor to Alaska to do more important work. Stymie the Palin troopergate investigation!! Always thinking about the country and it's security first!
Last edited by whomod; 2008-09-184:37 PM. Reason: video of McCain fleeing "the fundamentals"
I guess Rick Davis will be sorely disappointed that he won't be able to distract people with pablum anymore. This election will be about issues and not personalities as the McCain camp so desperately wanted it to be.
Rick Davis, campaign manager for John McCain's presidential bid, insisted that the presidential race will be decided more over personalities than issues during an interview with Post editors this morning.
"This election is not about issues," said Davis. "This election is about a composite view of what people take away from these candidates."
In reaction to Rick Davis' comments about the election not being about issues, Barack Obama campaign manager David Plouffe released the following statement: "We appreciate Senator McCain's campaign manager finally admitting that his campaign is not in fact about the issues the American people care about, which is exactly the kind of cynical old politics people are ready to change."
The Community Reinvestment Act's premise sounds unassailable: helping the poor buy and keep homes will stabilize and rebuild city neighborhoods. As enforced today, though, the law portends just the opposite, threatening to undermine the efforts of the upwardly mobile poor by saddling them with neighbors more than usually likely to depress property values by not maintaining their homes adequately or by losing them to foreclosure. The CRA's logic also helps to ensure that inner-city neighborhoods stay poor by discouraging the kinds of investment that might make them better off.
The Act... grew out of the complaint that urban banks were "redlining" inner-city neighborhoods, refusing to lend to their residents while using their deposits to finance suburban expansion. CRA decreed that banks have "an affirmative obligation" to meet the credit needs of the communities in which they are chartered, and that federal banking regulators should assess how well they do that when considering their requests to merge or to open branches. Implicit in the bill's rationale was a belief that CRA was needed to counter racial discrimination in lending, an assumption that later seemed to gain support from a widely publicized 1990 Federal Reserve Bank of Boston finding that blacks and Hispanics suffered higher mortgage-denial rates than whites, even at similar income levels.
In addition, the Act's backers claimed, CRA would be profitable for banks. They just needed a push from the law to learn how to identify profitable inner-city lending opportunities. Going one step further, the Treasury Department recently asserted that banks that do figure out ways to reach inner-city borrowers might not be able to stop competitors from using similar methods—and therefore would not undertake such marketing in the first place without a push from Washington.
Uh oh, here's comes some dancing nanas and YouTube clips...
whomod content User Obsessed with Cock and Gayness. Hmmm? 5000+ posts 09/18/08 01:37 PM Reading a post Forum: Politics and Current Events Thread: The Great Crash of 2008
WASHINGTON — Former Fannie Mae chief Franklin Raines and two other top executives have agreed to a $31.4 million settlement with the government announced today over their roles in a 2004 accounting scandal.
Raines, former Fannie chief financial officer Timothy Howard and former controller Leanne Spencer were accused in a civil lawsuit in December 2006 with manipulating earnings over a six-year period at the company, the largest U.S. financer and guarantor of home mortgages.
Raines, a Seattle native and prominent Washington figure who was President Clinton's budget director, is relinquishing company stock options, proceeds from stock sales and other benefits. His part of the settlement is worth $24.7 million,
The stock options were valued at $15.6 million at the time they were issued to Raines, allowing him to buy shares at $77.10 and higher. Fannie Mae shares have been battered by the turbulence in the housing market — making the options that Raines was returning of negligible value, people familiar with the settlement said. They spoke on condition of anonymity because they did not publicly wish to criticize the accord.
Proceeds from Raines' sale of his company stock, valued at $1.8 million, will be donated to programs that help homeowners facing foreclosure or other initiatives designed to boost homeownership. For Howard, stock sale proceeds of $200,000 will go to such programs.
"While I long ago accepted managerial accountability for any errors committed by subordinates while I was CEO, it is a very different matter to suggest that I was legally culpable in any way," Raines said in a statement. "I was not. This settlement is not an acknowledgment of wrongdoing on my part, because I did not break any laws or rules while leading Fannie Mae. At most, this is an agreement to disagree."
Howard is settling for a total $6.4 million, including stock options valued at $5.2 million when issued, and Spencer $275,000.
The deal was announced by the Office of Federal Housing Enterprise Oversight (OFHEO), the agency that oversees Fannie Mae and Freddie Mac, the two big government-sponsored mortgage finance companies.
"OFHEO's mission is to ensure that (Fannie and Freddie) operate in a safe and sound manner," the agency's director, James Lockhart, said in a statement. "That cannot occur without corporate management providing prudent and responsible leadership and setting the appropriate ethical and overall 'tone at the top'."
Fannie and Freddie both had multibillion-dollar accounting scandals that stunned Wall Street and brought record civil fines against them in settlements with the government.
The amounts that Raines, Howard and Spencer are paying under the settlement are far less than what the government was seeking when it sued them in December 2006. OFHEO sought fines of around $100 million against the three and restitution totaling more than $115 million in bonus money tied to an improper accounting scheme.
The regulators alleged an accounting fraud at Washington-based Fannie Mae that included manipulations to reach quarterly earnings targets so that Raines, Howard, Spencer and other company executives could pocket hundreds of millions in bonuses from 1998 to 2004.
The three executives had disputed the charges and pegged them as politically motivated. Raines' attorney called Lockhart "a fatally biased regulator" and asked a federal appeals court to remove him from the case.
Spencer "was recognized as an outstanding controller for Fannie Mae where she conducted her duties with the highest integrity," her attorney, David Krakoff, said in a statement. "Ms. Spencer maintained throughout this action that the OFHEO reports and allegations had no merit."
Raines and Howard were swept out of office in December 2004 in the accounting fiasco at Fannie Mae. Two years later, the company announced a restatement for 2001 through June 30, 2004, that erased $6.3 billion in previously reported profit.
I'm sure Obama does know a lot about the current financial crises first hand.
