bail me out too.

[Guest Honest AK]

The sense of entitlement on the part of these executive types is unbelievable.

from the NY Times:

Congress wants Wall Street to feel it where it hurts: the wallet.

Skip to next paragraph The New York Times

The stratospheric pay packages of Wall Street executives have become a lightning rod issue as Congress shapes a $700 billion bailout for financial firms. Proposals circulating on Capitol Hill vary, but they all would impose some limits or approval authority on salaries of executives whose firms seek help.

The moves in Washington mirror the popular outcry — in constituent e-mail messages and postings in the blogosphere — over the prospect of Wall Street’s tarnished titans walking away with tens of millions of dollars a year while taxpayers pick up the bill.

But Wall Street, its lobbyists and trade groups are waging a feverish lobbying campaign to try to fight compensation curbs. Pay restrictions, they say, would sap incentives to hard work and innovation, and hurt the financial sector and the American economy.

“We support the bill, but we are opposed to provisions on executive pay,†said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a trade group. “It is not appropriate for government to be setting the salaries of executives.â€

http://www.nytimes.com/2008/09/24/business/24pay.html?ref=business

In other words, we expect working people to bail us out after we run our company into the ground but we demand to keep being paid at the same obscene rate.

I wouldn't be surprised if the government made a token effort to make an example out of one or two of them but for the most part, I don't expect much will be done about it. These are, after all, big contributors to both parties were talking about here.

Like TonyT said, GM, Ford, Chrysler, and the airlines are next. The hogs are just starting to line up for their place at the trough.

[Guest canynracer]

http://money.cnn.com/2008/09/23/news/companies/fbi_finance/index.htm?cnn=yes

FBI probing bailout firms

Investigators start search for fraud at Fannie Mae, Freddie Mac, Lehman Brothers and AIG, sources say.

#yahooBuzzBadge-form{text-transform:uppercase;}#shareMenu{display:none;}

WASHINGTON (CNN) -- The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers and AIG - and their executives - as part of a broad look into possible mortgage fraud, sources with knowledge of the investigation told CNN Tuesday.

The sources would not speak on the record because the investigation is ongoing.

FBI spokesman Special Agent Richard Kelko had no comment on that information, but said that 26 firms were currently under investigation as part of the bureau's mortgage fraud inquiry.

Earlier this month, FBI director Robert Mueller told Congress that 1,400 individual real estate lenders, brokers and appraisers were now under investigation in addition to two dozen corporations.

"The FBI currently has 26 pending corporate fraud investigations involving subprime lenders," Kelko said. "As we have seen, this number can fluctuate over time, however we do not discuss which companies may or may not be the subject of an investigation."

Previously, CNN has reported that Countrywide is part of the investigation.

The Crisis: A timeline

The sources said the probes of Fannie (FNM, Fortune 500), Freddie (FRE, Fortune 500), Lehman (LEHMQ) and AIG (AIG, Fortune 500) are believed to be in the early stages. One source said the government would be "remiss" if it didn't look into what happened at these companies because of the financial problems they are involved in and the actions of individuals running them.

The United States is in the midst of a spiraling economic crisis fueled largely by the housing market. Earlier this decade, mortgage lenders relaxed restrictions on obtaining mortgages as home prices soared about 85 percent from 1996 through 2006 in inflation-adjusted dollars, creating a bubble. Then the bubble popped, and lenders - as well as mortgagees - took the hit.

Last week, mortgage insurer AIG narrowly avoided bankruptcy when the federal government took 80 percent of its equity in exchange for an $85 billion loan from the Federal Reserve while Lehman filed the largest bankruptcy in American history. Earlier this month, the government took over mortgage giants Fannie and Freddie.

Money Crisis: Your questions answered

Bank of America (BAC, Fortune 500) bought Countrywide in July. Other bank failures and takeovers have led to the Bush administration's current proposal to spend $700 billion to shore up the financial markets. The proposal is under consideration by Congress, where lawmakers from both sides of the aisle have balked at the proposal's lack of oversight provisions, among other issues.

As the mortgage industry began to unravel, the FBI, with assistance from the IRS, launched a broad investigation into mortgage fraud. In June, its Mortgage Fraud Task Force arrested more than 400 mortgage brokers, lenders, appraisers and other industry insiders who, the it said, were responsible for more than $1 billion in losses.

Last month, a Mortgage Asset Research Institute (MARI) study found that the number of fraudulent loans issued during the first three months of 2008 skyrocketed 42 percent compared with the same period in 2007. First Published: September 23, 2008: 9:12 PM ET

Edited September 24, 2008 by canynracer

[Guest Mezzaluna]

What do you guys think will happen if somebody doesn't step in and bail these guys out?

I'll give you a hint; do a google search for Black Tuesday.

They'll go under and the market will correct itself. It will suck... people will be broke... and some people may even starve to death. But artificially propping these guys up just prolongs all the same things. The market has been artificially inflated by government intervention... so the way to correct this is more government intervention?

[mrming]

They'll go under and the market will correct itself. It will suck... people will be broke... and some people may even starve to death. But artificially propping these guys up just prolongs all the same things. The market has been artificially inflated by government intervention... so the way to correct this is more government intervention?

Starting from the top...

We aren't a free market. We bust monopolies.

We do have regulation, in the interest of the people (some times)

We already sell common resource to companies (FCC electromagnetic spectrum auctions)

The market is *NOT* efficient. Individuals have been screaming about the risk, legislation was repeatedly brought up to prevent it and... these commodities and practices continued to record financial sector stock prices. The knowledge was there, but no one cared because the right voices said it was safe.

So in short, we aren't a free market economy, haven't been for over a century and the reason you aren't mentally retarded from lead paint is largely because this isn't a free market economy.

This debt market was snake oil, plain and simple. Lack of regulation allowed it, and the inherit risk taking 5-10 years to become actualized loss blinded the market. 1,000's of people have already taken their profit from this and ran. It won't be coming back.

So what happens if we just let these things fail, let them fall on the ground? Right now US debt is heavily owned by overseas, national banks.

They'd be writing off 1/3 or more of their reserves if we let it fail. Several foreign federal banks would fail. We'd end up causing another global depression. Like it or not, this is civic responsibility. Some one has stolen all the food from the orphanage. Do we cough up the cash to see the orphans fed, or let 'em all rot?

People, companies, and national banks bought US debt, that was supposedly backed by our willingness to pay what we owe AND insured against a reasonable level of defaults. It was universally proclaimed as being safe. It was a pyramid scheme created and administered by our own people.

Are we a nation that cleans up after itself, or are we going to whine, flip the world the bird and watch every thing burn? Are we responsible for our gov and its actions; or is it responsible for us?

[Guest jth_3s]

Now if we can just get the rest of America to understand this and that our "economy" isn't as bad as the Dem's want to make it out to be.

I think now its pretty well accepted by both parties that our economy is in bad shape.

[Warbird]

Starting from the top...

We aren't a free market. We bust monopolies.

We do have regulation, in the interest of the people (some times)

We already sell common resource to companies (FCC electromagnetic spectrum auctions)

The market is *NOT* efficient. Individuals have been screaming about the risk, legislation was repeatedly brought up to prevent it and... these commodities and practices continued to record financial sector stock prices. The knowledge was there, but no one cared because the right voices said it was safe.

So in short, we aren't a free market economy, haven't been for over a century and the reason you aren't mentally retarded from lead paint is largely because this isn't a free market economy.

This debt market was snake oil, plain and simple. Lack of regulation allowed it, and the inherit risk taking 5-10 years to become actualized loss blinded the market. 1,000's of people have already taken their profit from this and ran. It won't be coming back.

So what happens if we just let these things fail, let them fall on the ground? Right now US debt is heavily owned by overseas, national banks.

They'd be writing off 1/3 or more of their reserves if we let it fail. Several foreign federal banks would fail. We'd end up causing another global depression. Like it or not, this is civic responsibility. Some one has stolen all the food from the orphanage. Do we cough up the cash to see the orphans fed, or let 'em all rot?

People, companies, and national banks bought US debt, that was supposedly backed by our willingness to pay what we owe AND insured against a reasonable level of defaults. It was universally proclaimed as being safe. It was a pyramid scheme created and administered by our own people.

Are we a nation that cleans up after itself, or are we going to whine, flip the world the bird and watch every thing burn? Are we responsible for our gov and its actions; or is it responsible for us?

You are correct. This is not about bailing out a few banks. This has major major ramifications, bigger than all of the past 50 years or so major issues which have propped up. This is about banks who loan money to banks. The effect of ending investment banking would be horrendous to our economy as it is fueled by that movement of money. Not debt, but investment. IF investment capital stops everything shuts down. Even with the bailout several investment banks have said they will be commercial institutions from now on, so we are not out of the woods yet.

Was this about greed? Sure. Was it all about greed? No. The start of this crisis really goes back to the late 90's when the Clinton admin put pressure on financial institutions with the aid of Robert Reiche to force them to lower standards to get more Americans into new homes. Naturally these are mainly made up of people who probably shouldn't own homes to begin with. Then they added all of the fancy dangerous loans into the mix and sold them to people who really couldn't understand them. As interest rates climbed back up to stop inflation these loans payments skyrocketed, often by $1000 or more a month. Also huge numbers of people who did know better and thought they could save thousand in interest by refi on a balloon at a stupid low rate for 2 yrs then get back into a traditional loan gambled and lost. I have little sympathy for those morons and they don't deserve a damn thing. People couldn't pay and then lost the house, too many houses on the market at once and then prices which were artificially high due to collusion of the real estate industry and appraisers w/ the help of unscrupulous mortgage brokers, then the bubbles that already existed burst and all came down. The saddest part is in places like Cleveland where minorities sold other minorities re-fi loans for imrpovements on houses that were already nearly paid off. Those people didn't need to re-fi they were talked into it by people they trusted. Very sad, albeit ignorant.

This became possible because the rules were changed to allow a fuzzy line to develop between what is commercial and what is investment banks. BEfore the lines were quite clear.

What AIG was doing was propping up debt by buying derivatives. AG is not broke, but what they need is liquidity. The fed bank, a private institution, would hold those loans as collateral for the liquidity. In return the tax payers would have to produce money through treasury. So inflation is also a possibility.

The second half of the problem came in 2001 when rules were changed allowing changes in how funds were allowed to invest especially in the area of commodities and companies who purchase debt. Add to that changes in the structure of how oil is bought and sold. So housing market goes crazy, all funds and hedges put all money into that. The market bursts and all investment dries up as hedges pull all their money. Where to put it now, ah yes weak dollar, pour it into oil, hence driving the costs sky high. The benefactors of oil increases has realy been the speculators and the hedges, which unlike speculators can make money by buying 'puts' on margins not only traditional shares.

The ramifications of all of this is unclear, lots of things added to the problem. What we know is that despite what I certainly see as a socialistic move, here the government and fed are the only institutions left to handle the issue as the major investment sources in this country are the ones in trouble. I hate it, but also see that we cannot simply say let the business fail as the ramifications would probably mean deep recession or depression and a world collapse of economy. I do not want another great depression.

Anoter thing we can be sure of, changes in rules and more regulation. The fact that some stretched the rules and nearly collapsed us all, will certainly mean the entire industry will be kept under tighter reins again. One apple can ruin the bunch. Here several big apples nearly ruined a whole countries economic stability and may have yet.

Edited September 24, 2008 by Warbird

[Guest Mezzaluna]

Thank you warbird & mrming.

You both have given a better explanation than anything I've been able to find or read in the media about this whole debacle.

Personally I would still prefer the government not spend $700 billion. But if they must I definitely don't want them to give Paulson a blank check book with no oversight. And also they are in congress saying this has to be done right now or else and rushing the legislation through. Which again scares the crap out of me. Its like they are saying "Don't worry about what it says, just sign on the dotted line, I swear "we" need it right now or else the entire world is gonna collapse."

[Im Neero]

They'll go under and the market will correct itself. It will suck... people will be broke... and some people may even starve to death. But artificially propping these guys up just prolongs all the same things. The market has been artificially inflated by government intervention... so the way to correct this is more government intervention?

The great depression was a market correction. So was the economic collapse of the USSR. Just because it is an economic market correction doesn't make it ok, or even acceptable.

[wjh2657]

I'm a conservative, but I seriously believe that this is financial blackmail. We are told that people will lose their jobs. I'm sorry, but they already have, at current rate of moving out of US, industry will have taken all of the jobs away to other countries by 2010 anyways. Anybody that believes that this is a "loan" is a fool, not one dollar of the money from later resell of these properties will end up back in the Treasury. This is one great big end of tour award to their financial masters by a corrupt government. most of the CEOs that set this mess up (and profited greatly) are now cabinet members or presidential advisors. We have a gun at our head and no good solution in sight. It is time to tax the rich, not just them, but let them carry part of the burden for their mess. This was not a natural disaster, but the result of one great big greedy drive for personal wealth. Banks and other institutions acted totally irresponsibly in lending money to people who couldn't pay the money back. they then sold the mortgages to somebody else. Sooner or later it hits the truth that the home owner cannot pay for a home that is way more than he needed to begin with. I have many empty new houses around me. Young couples with one child contracted for 5 and 6 bedroom house with three car garages but the couples were making less than $75,000 between them, and the Banks lent them the money. Now the bandits that lent the money want the Middle class (the real taxpayers) , to cover their mistakes so that they can still reap a profit. Do I have an answer? No I don't, I don't think there is an answer that will benefit the average American in any way. We have been raped, and now they are ordering us to pay the rapist for his services!

Edited September 25, 2008 by wjh2657

[towerclimber37]

I watched Pres. Bush's special report about this 700 BILLION dollar bailout. I'm LIVID!!!

I sit here and find that the FBI is investigating this. if it's a slap on the wrist like Enron then I think they deserve capitol punishment. I sit here and like WJH, I've seen the prices for houses become over inflated. why? because they the investment companies wanted MORE money..they were greedy.

a house that used to cost 75,000 dollars suddenly became a 125,000 dollar house. I know what it costs to build a house. I've done it before on my own...

Folks need a place to live. I've seen idiots do just what was said earlier also.4 and 5 bedroom houses for a 3 person family...at exhorbitant prices.

now, the folks who have to pay the mortgages have come to their senses and are saying "this is nuts!! they'll actually HAVE to work for 30 years to pay off the house. why? because the prices were inflated.

now, the people who orchestrated this say they need to be bailed out and look to the very people that they buttsurfed!!

now, to get out of being culpable, they sold that debt to foreign investors.

you know what? I say give them the steps and the string.

pay off the debts but make the ones responsible pay with their lives and their fortunes.

Accountability has to come sometime.

do I sound too "extreme"?

let me spell it out for you. INDENTURED SERVITUDE

that's what I feel they're promoting for the average working man. not only that but they drive inflation!

the buyers are equally at fault for falling for it...the only mitigating factor for them would be that they were practically goaded into it by irresponsible lending and market values that skyrocketed because the whole market was corrupted.

as for the rest of the world? I don't particularly give a crap about the rest of em. I don't see them jumping in to bail us out of this predicament.

not like we have helped them...

remember when we rebuilt china's railroad? remember when we backed the Franc in the 70's and saved their economy? what thanks did we get?

how about when the soviet union was starving after their collapse? these people wanted nothing more than to see us fail and take our lives if possible.

we sent them grain...crap loads of grain. Who else would have done that?

I haven't even mentioned the 2 world wars that we gave so many to stop, when all we wanted to do was be left alone and come out of our depression.

just my 2 cents

Edited September 25, 2008 by towerclimber37

[Smith]

Everything is cause and effect. When you try to inject socialism into a free market these things happen. The price of houses jumped when there where more people than houses to go around. there were more people able to buy houses because congress (going all the way back to Jimmy Carter) forced the mortgage companies to loan to these people. They made the loans but used "appropriate" interest rates to cover their tales. When the companies realized they could use congress to regulate out competition by cost prohibitive restrictions and congress realized they could get kick backs by working with them to regulate the companies competition, then you have our current problem.

The companies can be corrected through a truly free market (big time reform=less fed and regulations). congress can only be corrected by having a less efficient legislature. By that i mean term limits. They know how to play the game too well. we need people who only know the rules and get termed out before they learn all the loop holes.

[Guest jdavis]

my question is this: if the government is in a position to "loan" these buisnesses that much money, wich may or may not be repaid, then why do we have children right here in the united states living in poverty and not knowing where there next bite of food is coming from? In my oppinion the fat people are just looking to get fatter and lazier, making their millions on our sweat and blood. all of these big money buisness are in no more financial trouble than we are ,and will the government ever be there to bail our a-- out? we have gotten so comfortable looking at the money part of the united states we have forgotten about the flesh and blood part.

[Guest 44M]

one simple explanation is....this country is runed by a corporations..they are so big and powerfull they can do whatever they please...they are biger than a goverment itself....they own everyone in Washington...and that is why this will pass....we are in war with Iraq ONLY because corporations are making fat profit from that, don`t be a fool and think that this war has anything to do with patriotism, that word is thrown to us, simple folks to play with it, we are in war because war is profitable business, and only because of that....700 billion..?? nobody will ever repay that back, that is not a loan it is a bailout....sad...millions of honest American working people has to fork out their hard earn penny to save some giant multi gazillion dollar corporation because of their greed, the same working man and women who were riped off by those same corporations they have to bail out now.....and it makes me sick when I hear Bush saying that this is because people were taking loans they couldn`t repay, BS...is this now American working mans fault...??? how rude....if those greedy banks allowed people to get 6% fixed rate mortgage everything would be ok, people would have kept their homes and banks their cash flow, but no, they wanted to rip off the last penny from that same working class that now has to pay to bail out those same greedy bastards.... you know, I was worning about this problem couple years ago on the Ruger forum, and I explained what was going on and how dangerous it is, but got slammed by almost everyone as a socialist , and was told that it is peoples own fault for taking on the mortgages they can`t afford it, I wonder how many guys on the Ruger forum lost their homes since then...I never logged back on that forum,nor I ever will again, I worked since I was 13 years old, and my father was a working man, and I don`t care to argue with some fat ass moron who is blaming a working man for everything and who doesn`t care about people problems until he gets hit.....simple, this problem is few years old and now its time to deal with it, why? because Bush will leave all that , economy and war`s and everything else for a next president to deal with...who ever that happends to be, I wish him all the luck and God bless his soul, he will have a big mess to clean up.....

Db

Edited September 26, 2008 by 44M

[Guest jackdog]

Welcome to socialism. Time for the Revolution. For those that keep voting for the dems and GOP remember your voting for bought and paid for politicians. It cracks me up how the clowns in DC are wanting these wall street thugs held accountable, when they let them selves be purchased like two bit whores to do these thugs bidding. The DC crowd is just as guilty as the wall street boys.

[Guest Honest AK]

Even if any of this money is ever paid back, Glorious Leader is doing everything he can to make sure his "base" is taken care of first. He's urging congress to rush this deal through without looking at the fine print so his contributors keep getting paid big bucks. He doesn't want them to be inconvenienced. Pay up, suckers!

The fact that he has any cheerleaders left is astounding.

[Warbird]

First this is rushed because of market and t bill calls. It is pay now or die time, that is why it is being rushed. They waited till the last minute. Second this reform request on Freddie MAc and Fannie Mae are nothing new. The pres called for reform in public and asked for passage of things as far back as 2002, at least 25 times and congress failed to act. So to put all the blame on the president is just stupid. The hold up now is half congress wants to put in all sorts of stuff to bail out more groups, half the ccongress is saying no way.

No one said this is all working men's fault, it was the fault of borrowers, greedy realtors, mortgage industy hacks, not all of course just some and the banks who bought the loans. It is the fault of the gov for pushing banks to loosen standards. The banks shouldn't have given 6% fixed to many of these people, many of them shouldn't have gotten loans at all. Others were talked into it when they didn't need those types of loans because they were ignorant and yet others tried to scam the system and thought they could make money by refi now and then refi again. These were wealthy folks who could easily get conventional loans but didn't, tough **** on them if they got burned. They should have had enough to cover themselves if they got burned.

Yet another group of folks are those who live in the bubble areas, such as most of California. These people who got loans there and in some parts of Florida had to get unconventional loans because they are not offered for huses cost over about $500k. In California that won't buy you a trailer, so those folks who had high cost houses and high mortgages simply could not pay when the rates went back up. Who's fault s that. I say it was collusion that drove costs, between appraisers in those area, realtors, mortgage banks in those local areas.

Now as to the Buyout, let's be clear on two things. First as to those who say these loans will nevere be repaid. THIS IS NOT A LOAN. This is a purchase of the banks loan holdings. The government will sit on it for a couple of years anbd then sell them off. Actually when the markets in housing go back up, and they will undoubtedly, the government stands to make a kiling off it. The banks are willing to do this now because they need liquidity to continue funding of investment. This is serious crap.

Second, I despise we are in this situation, I think it sucks because it was bs for the last 11-12 nyears which got us here. However to those who despise socialism as I do and who think this is a move toward socialism I say, you haven't seen anything till you see what the gov would do if we had another depression, a very vry real possibility if this isn't done. A depression would have us like Europe in a matter of 4 years. There would be no going back. Look back to the last depression, we had a littany of new socialism programs which we still have today. Nope this is actually the best choice of 2 big evils. And I hate it.

[Guest Honest AK]

So to put all the blame on the president is just stupid. .

Who blamed all this on the president?

[Im Neero]

Barack Obama just did on tv.

[Smith]

Even if any of this money is ever paid back, Glorious Leader is doing everything he can to make sure his "base" is taken care of first. He's urging congress to rush this deal through without looking at the fine print so his contributors keep getting paid big bucks. He doesn't want them to be inconvenienced. Pay up, suckers!

The fact that he has any cheerleaders left is astounding.

You do know that corporations predominately support Dems, right? or do the talking points "feel" better to you. BTW Bush urged congress to fix the mortgage problem since he has been in office. On 22 separate occasion going back to 2002, he requested reform for this particular buisness section in teh economy.

Anger is fine when it is placed appropriatley. This is a congressioal problem. They wanted these loans made, they made the regualtion, they had comlete oversight, they blew it. This is not a Presidential issue.

[Guest Honest AK]

You do know that corporations predominately support Dems, right? or do the talking points "feel" better to you.

on page 3 I said:

"I wouldn't be surprised if the government made a token effort to make an example out of one or two of them but for the most part, I don't expect much will be done about it. These are, after all, big contributors to both parties were talking about here."

As you can see, I don't place all the blame on Glorious Leader but on both parties.

BTW Bush urged congress to fix the mortgage problem since he has been in office. On 22 separate occasion going back to 2002, he requested reform for this particular buisness section in teh economy.

Link or it didn't happen.

On Oct. 11 he said:

"There's a variety of reasons why people are uncertain," Bush said in a taped interview with CNBC's Maria Bartimoro. "But when they take a hard look at the statistics--and the reality--I hope it brings them some comfort to know this economy is strong and is setting all kinds of records."

"The solution to the current housing problem "is not more government or more regulation but to help people refinance their homes." He added that "so far the softness is regional...There are parts of our country that are doing just fine in the real estate markets."

http://www.cnbc.com/id/21254673

Anger is fine when it is placed appropriatley. This is a congressioal problem. They wanted these loans made, they made the regualtion, they had comlete oversight, they blew it. This is not a Presidential issue.

[Smith]

Link or it didn't happen.

http://tsfiles.wordpress.com/2008/09/21/bush-called-for-reform-of-fannie-mae-freddie-mac-17-times-in-2008-alone/

Here's a pretty concise one.

Bush Called For Reform of FannieMae/FreddieMac 17 Times in 2008 Alone

Gateway Pundit: Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone… Dems Ignored Warnings

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.

[Guest Honest AK]

That's some interesting reading. Now show me where in this thread I placed all the blame for this situation on the Great Decider.

[towerclimber37]

Even if any of this money is ever paid back, Glorious Leader is doing everything he can to make sure his "base" is taken care of first. He's urging congress to rush this deal through without looking at the fine print so his contributors keep getting paid big bucks. He doesn't want them to be inconvenienced. Pay up, suckers!

The fact that he has any cheerleaders left is astounding.

He's trying to rush it through to keep it all from collapsing. I can understand this.but I still don't trust it.

I think Pres. Bush is more hated by the Dems than any other president in history. The democratic party has done everything it could to undermine and destroy this president's credibility so that they could impeach him, in the same way that President Clinton was impeached.

For many Democrats, its no longer about running the country and helping their fellow citizens, it's about getting their way and gaining as much power and wealth as possible while riding the country into the ground.

that's just my take on the situation.

[Guest Honest AK]

He's trying to rush it through to keep it all from collapsing. I can understand this.but I still don't trust it.

I'm not convinced that there will be a collapse if it's not done today. Bush has been saying it needs to be done right now for several days. As far as I can tell, the world is still spinning.

Besides, it's not just democrats that want to look over the particulars of this plan. There are many republicans in opposition to just handing over 700 billion without asking any questions.

http://www.moneymorning.com/2008/09/26/bailout-plan/

I think Pres. Bush is more hated by the Dems than any other president in history. The democratic party has done everything it could to undermine and destroy this president's credibility so that they could impeach him, in the same way that President Clinton was impeached.

I don't doubt what you say.

For many Democrats, its no longer about running the country and helping their fellow citizens, it's about getting their way and gaining as much power and wealth as possible while riding the country into the ground.

that's just my take on the situation.

I agree but the same can be said for the Republicans as well. Anybody that thinks otherwise needs to lay off the .

[Guest jackdog]

Did you see the four arse holes they picked to negotiate this bailout. There all heavy backed by the banking industry. Wall street is not going to go under and if it does this is merely a stop gap that will cost over a trillion dollars and not work. Some of the smartest economists in America are saying this is stupid, and I agree with them. Hell wheres the accountability for all these politicians who have been sucking on the wall street teat for years, and giving them all the laws they wanted. I hope all the greedy f**kers die and go to hell