POST SCRIPTS

Oh, dear. It sounded so good up to Lazard Freres. I've heard a thing or two about them/it.

Just goes to re-enforce one of my primary points. The Rebug/Dem thing is largely irrelevant. But them rich folk, you got to watch out for them, whatever their affiliation.

Libby wrote, "But them rich folk, you got to watch out for them, whatever their affiliation."

I'd say you have to watch out for "folks" in general. There are plenty of people behaving badly in various ways from every economic class. It isn't a we/they issue...it's a right/wrong issue. People need to get solidly behind a demand for ethical and moral decency in our society as a whole.

This situation, however, is "government" using power and influence to pressure (like the mob) business to engage in unwise and unethical business practices.

The argument tips toward LESS government intrusion with minimum "supportive" regulation. Governmnet that is on the side of the people does what will ensure a thriving economy and abundance of jobs. Left alone a business must do what is wise and smart to remain viable in the market...competition keeps them honest...failure to do business ethically and honestly eventually leads to failure. Customers won't continue to buy the product and other business people will not want to do business with an unethical, dishonest business. The market works. (and this natural control is a lot cheaper too)

I understand how the liberals in power during the Clinton administration pressured mortage companies to make shaky loans to previously unqualified applicants. I also understand how Raines, Obama's buddy at Fannie May, used his position to further his political agenda by having a quasi-government mortage insurance organization guarantee these loans so the lenders would be more willing. And then Raines personally plundered the agency and walked away with his $20 million bonus -- pretty good for a semi-government job poorly done. The part I don't get is why it is suddenly a national emergency that has to be solved in 3 days or our whole economy will collapse. What happened all of a sudden? Did every one of these adjustable rate mortgages go bad on the same day?

I love how the "repug/Dem thing" becomes irrelevant when the trail leads largely to Dems.

Is this more of the selective enforcement of law you seem to support Libby?

Tina, I will be voting wisely in November.

Hit the dictionary. "Folk" is a plural noun. "Folks" is illiterate.

"This situation, however, is "government" using power and influence to pressure (like the mob) business to engage in unwise and unethical business practices."

Now, this is your interpretation. The way I see it, no matter what we do to encourage civic virtue in corporations, they find a way to subvert our intentions ... and make a mess. Cause I'm telling you, you're just a fool if you think the nation's lenders made loans they didn't want to.

I wish you'd read some less partisan analysis of the problem. A couple of fellows have written about how we (were) just too rich. (Well, it wasn't real money. It was credit made available by Clinton and BushCo's "anything goes" of the last few years.) So, the capitalists are looking for places to put all this, and hit on the really dumb idea of lending it to poor people, at an adjustible interest rate, thinking they were gonna clean up. I don't know how they could possibly have thought that. Dumb. Dumb people must be regulated.

I imagine Jack will have something to say but what I get is that this pressure has been building on the market over some months (years?).

Loans were bundled in shakey and unusual ways, as defaults occurred and values dropped these loans became anchors on the market, investment money dried up and confidence waned. This also put pressure on the dollar which had begun to rally.

The "big" crisis is that overnight last week the flow of money (worldwide) actually froze...nothing was moving. That's my simple explanation which may be off to some degree...I'm just an average citizen. Jack?

Thanks for the correction on "folk"...my position stands.

Libby wrote, "So, the capitalists are looking for places to put all this, and hit on the really dumb idea of lending it to poor people, at an adjustible interest rate, thinking they were gonna clean up. I don't know how they could possibly have thought that. Dumb. Dumb people must be regulated."

Libby your defense of government democrats is legend by now. It wasn't business people who hit on the idea of lending to poor people it was Jimmy Carter and Bill Clinton...Bill is out today trying to cover his butt on this one...shameful, butt coverer that he is. Adjustable interest rates are EXPLAINED BY THE LENDER..they are required to do this BY LAW. But with government pressure on them to "loan or lose your good rating" who nows whether they worried about whether the people actually understood...although they are required to sign a paper saying they do. ARM's were created when Carters high interest rates made it impossible for even good credit risk people to get loans. They were considered risky but worth the risk for people with good jobs and vredit history and a substantial down payment.

Your assessment is born of resentment or envy about others and nothing else.

Tina you are right. The freeze on the flow of money is the first consequence that begats a host of other dire events that follow like tumbling blocks.

Two years ago I saw this coming. I'm not brilliant, I have no great insider knowledge, I'm just an average person and I wasn't alone. Almost everyone I knew at the time agreed the situation was rediculous. This was a massive housing bubble that was nothing more than another pyramid scheme. There had to be an end and it came to a predictable close right on schedule.

Consider you're a home buyer talking with a real estate agent. Listen in, here's the pitch:

"I know it (price) seems high, but home prices are moving higher every month! A lot of homes are being bid up before they are even built.

If you wait you are going to risk being priced right out of the market. What we need to do right now is focus on how we can get you into a home now, today, before it goes up again.

We can get a low cost adjustable rate mortgage with a low teaser rate and by the time it rolls out to the next increase you can refinance your equity into a better loan.

Some people are just cashing in their equity and walking away with a bundle right after they buy their home! It's all up to you. But, I can guarantee you this, the longer you wait the more it's going to cost you or in the worst case, you might not be able to even get into the house you want at all. This is why we have to act fast.

Look folks, we can work the loan any number of ways, don't worry about the loan, lets get you into a home now before it's too late.

If you want my advice on making some real money, just get an interest only loan. You buy the most house you can afford! In this way you will leverage your money. The bigger the home (bigger price) the more you will make in a year or two. Housing is only going to go up, so we need to get you into something now!"

Sound familiar to anyone? This was the pitch my son and daughter-in-law got. Her parents encouraged them too. I didn't. I said wait, this market is a house of cards, home prices will come down. I went through all my reasons and it fell on deaf ears because they were certain if they didn't buy right now they were going to be left behind.

They are probably upside down on their mortage to the tune of about $60,000 because they bought at exactly the wrong time. Well, at least they got a low fixed rate and not an interest only. The other good part is California is a non-recourse state so if they let the bank have it, they walk away free. Of course that is what is killing the market here in Calif. They won't walk away... they're toughing it out, but they are wishing they had listened to me.

"Libby your defense of government democrats is legend by now."

Only in your highly partisan brain. I told you all back aways that I suspected the Clinton Admin started this whole thing, by making it possible for insurance companies to sell securities and brokerages to sell insurance. That's the deregulation you are all, so suddenly, so down on. Bad business, very bad business.

And now Paulson has got permission from the SEC for his investment bank to create/own a depository-type bank to raise capital to keep the investment bank (is he Goldman Sachs?) afloat. He's not getting this little girl's business.

What's the first thing you do? Stop digging.

No comment, uh? Small wonder. The big news today is that the only other investment bank left standing, Morgan Stanley, as acquired a depository-type bank of their own ... Washington Mutual.

Hunker down, people. We're looking at, at least, five really nasty years ... whoever gets elected. But if you're thinking at all egalitarian ... you want Obama. $2.5 billion, my ass.

Paulson is a democrat, but it's his ideas that matter most and I think he is above playing it partisan...least I hope he is!

JP Morgan got one heck of a deal on WaMu, I figure they paid about .10 cents on the dollar at most! I feel bad for the stockholders they got buttkas.

I think you may be right about the time-line Libby. A lot of very smart people are saying we're going to be paying off this sub-prime deal for years.

By the way, how did I do on articulating some of the issues held by the left? I'm sure I missed some.

Jack said, "Paulson is a democrat, but it's his ideas that matter most and I think he is above playing it partisan...least I hope he is!"

I hope so too but there is a memo that's been reported that colors my thinking. I don't have the source so I won't repeat it at this time.

Why wouldn't it take years...it took years of pretending the issue didn't exist to make this mess. This is definitely the kind of problem that has no great answers.

Libby wrote, "Clinton Admin started this whole thing, by making it possible for insurance companies to sell securities and brokerages to sell insurance. That's the deregulation you are all, so suddenly, so down on. Bad business, very bad business."

We aren't down on "deregulation". "Deregulation" means government goes away. When the government uses power (and rules) to make business (or people) behave in specific ways it's called regulation. What Clinton did was "regulation of a different stripe" but it was "regulation" none the less. It's the same kind of regulation that made ENRON possible...funny Dem fingerprints were on that one too.

People are people. Until we learn to focus and place blame on individuals who break the law or who are lax in their fiduciary responsibilities we don't have a prayer of making these events less likely to happen. Instead of blaming groups, classes of people, or inanimate objects like SUV's we must learn to blame those persons actually responsible. Before we can do that we have to unravel forty or fifty years of liberal victimology and misdirection.