|
 |
||
|
Latest Stories
Recent blog posts
|
July 23, 2008 - 7:46am.
Do we never learn? In the 1980s, Congress, for what seemed good reason at the time, deregulated the thrifts -- savings and loan institutions -- and what followed were several intense years of wildly risky speculation in real estate and development, fueled by the creation of new and at the time exotic financing like brokered deposits and the bundling of mortgages for sale to Wall Street. The inevitable bust cost the taxpayers about $125 billion but they and their lawmakers could do little but sigh, write the checks and vow it would never happen again. Once again, a real estate boom fueled by exotic and risky investments has gone bust and the taxpayers are again being asked to step in and pay for the mess. The head of the Congressional Budget Office has warned Congress that propping up the federally chartered mortgage giants Fannie Mae and Freddie Mac might cost $25 billion or, worst- case scenario, $100 billion. Remember, we're already on the hook for the $30 billion the Federal Reserve poured into the Bear Stearns bailout. CBO director Peter Orzag told the lawmakers that there's better than an even chance that the taxpayers won't have to step in. Somehow, having one of the nation's top numbers crunchers quoting odds on the health of the nation's largest mortgage holders is not all that comforting. Treasury secretary Henry Paulson is urging Congress to act quickly on a support package for the two secondary mortgage holders. Between them, they own or guarantee almost half the country's home mortgages, which they have resold in the form of $5 trillion in debt. Over half of that is held by U.S. financial institutions, the rest by foreign investors. It's fair to ask how our lawmakers and regulators could let federally chartered institutions get caught up in a speculative boom, especially with such clear-cut precedents. For now, we can only sigh and write the checks. Maybe next time we'll have learned.
Capitol Hill Blue's columnists, blogs and reader comments Capitol Hill Blue is an independent, non-partisan news site that belongs to no political party and subscribes to no political or philosophical point-of-view. Our columnists are welcome to their opinions but readers should understand that their views do not necessarily reflect the editorial policies of this web site. We also welcome comments to selected opinion columns and in our popular ReaderRant discussion forum. Please remember, however, that we believe in civility on this web site and comments may be reviewed, moderated or removed if we feel they contain obscenities, racism, bigotry, anti-Semitic remarks or attack other posters. Our goal is reasoned discussion on issues facing this nation and we do not feel that goal is served by personal attacks and by seeing how many cute adjectives you can attach to an elected official or politician's name. Copyright © 2008 Capitol Hill Blue
|
User login
 |
Technorati Tags: 
Delicious
Digg
Reddit
Magnoliacom
Newsvine
Furl
Google
Yahoo
Technorati
Once again the numbers are
Submitted by woody188 on July 23, 2008 - 9:12am.Once again the numbers are greatly underestimated. Of the $5 trillion debt, if 20% are sub-prime, which is in line with the amount sold vs. traditional mortgages, then the loss will be in the amount of $1 trillion. I actually believe it will be much more than 20% as both Fannie and Freddie were used as dumping grounds for sub-prime toxic waste to prop up the other banks already.
They are too big to fail, but too in debt to save.
The only way to save them would be to print more money, which will devalue the dollar even further, send inflation soaring, and tank the economy. We are screwed either way.
One time that I agree with
Submitted by Ardie on July 23, 2008 - 11:40am.One time that I agree with Jim Cramer of "Mad Money" that government deregulation was nothing short of a "covert attempt" to eliminate the federal government's responsibilities to its citizens.
Cramer also questioned the value of "short selling" whose only purpose is to drive down the value of stocks by spreading rumors throughout the MSM. He emphasized that all this works to destroy the economy.
Beginning around 2000, had the government enforced the already extant laws on the books we would not be in this mess today. The housing market would have been stable and oil prices around 60 USD a barrel.
Now the problem is so grave that will will have to take the advice of the great economic historian, Paul Bairoch, and institute protectionism (= the protective tariff creates jobs at home while the revenue tariff eliminates the Income Tax for those making under 60,000 a year).
Whenever one of the
Submitted by old_curmudgeon on July 24, 2008 - 8:39am.Whenever one of the "Administration" admonishes Congress to "act quickly" leaving the "or else" unstated and undefined, I start looking closely at the why. The so-called Patriot Act and the Military Commissions Act, for example, come quickly to mind.
It's like whenever one of the kool-aid drinkers off-handedly states that leaving Iraq would be "catastrophic to the United States security" but they never explain "why." They know that no one will ask them to clarify and explain because "well, everyone knows why it would be catastrophic, don't they?"
Maybe it's because we would no longer control the oil? That would be a strategic problem. But then that would probably put the Bush legacy in a different light, wouldn't it.
Regarding the article, if the Congress falls into line with the Administration, once again, and signs on to this "support package" the taxpayer will once again take it without the aid of KY. But, that's the plan, isn't it?
But, that's just this old curmudgeon's opinion.