Are the Obama voters happy with the Trillion dollar bill?

[Eureka]

Here's the situation with Barney Frank:

Barney Frank, along with numerous other congresspeople, received substantial campaign contributions from the "public/private" Fannie Mae and Freddie Mac mortgage underwriters.

These underwriters, in effect, finance mortgages by selling them on the open market as bonds that have an implicit backing of the US Government.

Barney Frank, among others, have been ARDENT champions of the work these underwriters do, and in fact have encouraged these underwriters to do MORE business.

In recent years, problems arose at these underwriters. Turns out that Fannie and Freddie have been financing FAR too many mortgages than they have the capital to underwrite. And I'm talking to a factor of 20 or 30. These companies have been running another ponzi scheme. Why? Because they make a ton of profit off these mortgages, and since the government gives them implicit backing, why not just recklessly write as many mortgages as you can and make infinite profits!?

MANY observers, including government regulators, have complained for YEARS that Fannie and Freddie are chernobyls waiting to happen. These regulators were SHUT DOWN by, guess who... Barney Frank. Who, in turn receives his "stipend", erm, I mean "campaign contribution" from Fannie and Freddie.

Gettin' the picture?

You guys need to understand, our entire financial system is rotten to the core. A rotten financial system that has bought and paid for rotten politicians. I don't think most people understand the magnitude of the problem here, this is the Roman Empire, part two we are dealing with.

This is a long piece, but believe me, when you get to the bottom of it, you should have a serious "a ha!" moment.
http://www.truthout.org/013009T

That part I understand.

However, didn't the whole Fannie Mae/Freddy Mac thing start when the Clinton administration urged/forced them to make it easier for people to buy homes. Thus allowing people to finance mortgages they couldn't afford. Then they in turn sold off the bad mortgages etc etc.

 

[The Gardener]

...didn't the whole Fannie Mae/Freddy Mac thing start when the Clinton administration urged/forced them to make it easier for people to buy homes. Thus allowing people to finance mortgages they couldn't afford. Then they in turn sold off the bad mortgages etc etc.

Yes. You are referring to the Community Redevelopment Act, or CRA.

It's true that Congress mandated certain quotas of loans be made to minority home buyers... but despite what Sean Hannity and some of the conservative pundits like to think, this was NOT at ALL the primary cause of what's afflicting us. YES, certainly, it was a contributing factor, but not a very consuming one.

Only 1 in 10 subprime loans were made with the intent of conforming to the CRA. (This fact per Sheila Bair, the Bush appointed FDIC chairwoman, in testimony to Congress. Google Bair + CRA if you want the documented proof of this) Additionally, CRA loans have actually had a slightly LOWER foreclosure rate than did subprime loans not given out in order to meet the CRA mandate. So, was it a factor? Yes, absolutely. Was it a major factor? No.

The problem we are dealing with is EXPONENTIALLY bigger than just the CRA, and the highest volume of troubled mortgages aren't subprime, but rather they were the "innovative" Alt-A, Option ARM, and other "teaser rate" creations. These mortgages were non-conforming to Freddie/Fannie standards, and were instead underwritten by private mortgage banks such as Countrywide, IndyMac, Wamu, Wachovia, etc. These mortgages were the ones given with little documentation, or given to people in contradiction to normal bank lending standards of leveraging. These mortgages were your house flippers, your condo speculators, your modest-income folk completely overleveraging themselves in order to buy that McMansion in the suburbs. These mortgages were the ones given to the newly built suburban communities that are increasingly turning into ghost towns, driving down not only the home price of the defaulting buyer, but also the home price of all of the neighbors as well, turning entire new suburban development projects into black holes of foreclosures, defaults, and walk-aways. Not only are the homes of the irresponsible underwater, but some of these ENTIRE communities, massive multi-hundreds of millions developments, have lost critical mass and are collectively falling into failure for the developer who tried to finance them.

And don't think that this problem is just contained to mortgages... the SAME toxic lending occurred throughout the full spectrum of credit... modest income folk being given 10K gold cards on a "signature is all you need" basis... credit card companies handing out cards like Tic Tacs on college campuses... just sign and not only will you have an extra 10K line of credit to get yourself addicted to, but we'll ALSO give you a free T-shirt and portable athletic water bottle!... and retailers telling you, at checkout after reading you the price of the clothes or hardware you just bought, that they'll give you a TEN percent discount on this purchase if you sign up for the retailer's credit card, and put the purchase on the credit line they will extend you right THEN and THERE. The toxic lending also spread to commercial real estate, financing for new suburban strip mall storefronts that are now a third occupied, if that. And it went to financing toxic leveraged buyouts... the scale of this problem is HUGE.

It was a "bubble time", like the Roaring 20s... banks make money by earning interest on money lent. So, they lent out lots of money... and the lending spurred the economy, which made the lending "seem" sound, so they lent out more, and more... and the result was, as an example, the housing price bubble. It just seemed like things would just keep getting better forever, as long as you kept lending the good times kept getting better....

And I can admit from my own personal experience, I had a HUGE line of credit on a card I got as a college student. AND I must admit is was an awful powerful feeling walking around a shopping mall with the thought that if I really want something I see, its mine. Just need to swipe the card. Took the girlfriend out for dinner... oh, you want the lobster? Why of course why not! AND I think I'm in the mood for an appetizer, and lets get a GOOD bottle of wine tonight.

The extension of credit changes a human's mentality. If western humanity worked on a STRICT cash and carry basis, where you could ONLY buy things if you had the CASH IN HAND to pay for it right then and there, this crisis would never have happened. The "bubble times" human was turned into the equivalent of one of those lab rats that was in a cage with the big water dripper full of nicotine-infused water... just kept drinking and drinking.. it was SO much easier to promise to yourself to pay something off later, than it was to FIRST save, and then pay for something AFTER you had the cash in hand.

UNTIL the day came when your typical American started having problems making their payments. THAT'S when this bubble of false exuberance all came tumbling down.

All of us "westerners" here on this board I hope remember the past decade and enjoy the good memories. For a short while, we were all kings. Walking through that shopping mall with that gold card in our pocket... looking at the leather jackets, the fancy clothes, the expensive athletic shoes, the expensive steak dinner, the gourmet organic groceries, the flat screen TV with the home theater sound system... walking through that mall with the feeling that if you wanted ANYTHING you saw, it COULD be all yours with the painless ease of a simple swipe.

There are FEW humans in the history of this planet who have EVER experienced such a feeling of financial power. I hope you all enjoyed it while it lasted.

They were fun times. In the future, when you want to go shopping for that BIG flat screen TV, you'll need to FRONT the grand and a half that you have ALREADY earned and saved in order to take it home. Kind of a buzz kill, eh?.. lol

 

[Old Baldy]

Gardener: You've got to save the two most recent posts you made above and paste them as responses where ever you go on the internet (i.e., paste them in response to people giving tin foil reasons for the current financial debacle).

I don't mean you Eureka. Your question about Clinton wasn't tin foil but you've seen some peoples' theories on this debacle. They are crazy and just plain wrong oftentimes.

People have got to look at credit cards as a way to spend cash that they have already saved or accumulated.

I'm older and never had a credit card offered to me (i.e., when I was young and had little money). That just didn't happen when I was young IIRC.

When I purchased a home decades ago, I had to (1) have 20 percent down (i.e., without incurring an add-on premium) and (2) the realistic ability to repay the loan. I don't think banks rarely, if ever, went below 10 percent down back then. And you had to have an unusual reason for being allowed to put so little down (i.e., recent job promotion, impending inheritance, etc.).

I, and many others, pay off our credit card statements monthly and merely use the credit card as a convenience. Not as a revolving credit line, with outstanding balances remaining unpaid month after month.

But like Gardener says, you're going to be forced to behave more like I have all my adult life whether you like it or not. The gravy train is over. And the days of fat cats and greedy consumers should be over IMHO.

 

[The Gardener]

Thanks, Old Baldy. I think you'd appreciate the YouTube clip below.

Ron Paul, the only man in Congress who "gets it":

[youtube:2945xsbx]http://www.youtube.com/watch?v=aW2V50AS7K0[/youtube:2945xsbx]

Everyone else is either in LaLa land, or are probably too scared to confront the reality, or don't have the spine to upturn an apple cart that DESPERATELY needs upturning.

 

[Old Baldy]

Thanks for the link Gardener. He's got it.

Barney Frank - what a douche bag. :thumbdown2:

How in the world can Pelosi allow Frank to remain as chairman of the House Financial Services Committee. Unbelievable.

 

[CCS]

Please have a look at the central quote from the Employee Free Choice Act, and tell me if you think this is a good thing for america, which the democrats what to pass. Better yet, after reading the last bolded part, tell me if there is any reason why they should not be allowed to hold a secret election after the cards are collected.

« News Roundup: Battles and Truces
News Roundup: SEIU, UNITE HERE, and Michigan »

Straight from the Horse’s Mouth: EFCA will eliminate elections
A lot has been said about how the Employee Free Choice Act effectively eliminates secret ballot elections for unionization. All the rhetoric boils down to a single phrase in the law:

[quote:3agiua2w]If the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative and that no other individual or labor organization is currently certified or recognized as the exclusive representative of any of the employees in the unit, the Board shall not direct an election but shall certify the individual or labor organization as the representative described in subsection (a). (emphasis added)

Basically, if a union turns in signed cards from a bare majority of employees, the NLRB is explicitly barred from conducing a secret ballot election. Thus, under EFCA the only way to obtain a secret ballot election is if a union turns in cards from more than 30% of the employees but less than 50%. As soon as they turn in cards from a majority, the NLRB “shall not direct an election.â€

The problem, as I’ve written about before, is that unions almost never petition for an election without signed cards from at least 60% of the employees. That’s because the unions know that some employees sign a card to “get the union off my back,†and ultimately vote “no†inside a secret ballot booth.

When I wrote about this before, I linked to a number of unions’ internal organizing guidelines (some of the unions even removed their admission after I linked to them). But I just came across a much better source: American Rights at Work’s (ARAW) website. ARAW is the the 800lb union front group gorilla fighting for the Employee Free Choice Act. In a working paper by John-Paul Ferguson and Thomas Kochan that ARAW published on its website they wrote:

In practice nearly all unions require at least a showing of majority support before petitioning for an election.

This entry posted on Monday, February 23rd, 2009 at 7:18 pm by J. Justin Wilson and tagged as Center for Union Facts, EFAC, Ending Secret Ballots


http://www.employeefreedom.org/
[/quote:3agiua2w]

 

[CCS]

Thanks for the link Gardener. He's got it.

Barney Frank - what a douche bag. :thumbdown2:

How in the world can Pelosi allow Frank to remain as chairman of the House Financial Services Committee. Unbelievable.

Maybe she wants him to do what he does.

Big hearted people vote for democrats because either some democrats are pro-choice (the conservative democrats are not), or because they want taxes to give money to the poor. Unfortunately, the ability to decide who gets taxed how much and who gets the tax money is a lot of power, and attracts power mongers a lot more than big hearted people to office.

I would vote libertarian, but they need to wake up to the need to protect the country. That is why I want to see more GOP For Choice.

 

[Old Baldy]

Good point CCS about Pelosi being happy with Frank. How sad and, of course, stupid.

What do you think Pelosi's IQ is? I'd say about 75 (and I'm being kind).

To put it into perspective, I'd estimate my big dog's IQ at 85 to 95. He's one smart dog and WAY smarter than Pelosi IMHO. I mean it.

And, no Bryan, this time I ain't apologizin'.

 

[CCS]

What do you think Pelosi's IQ is? I'd say about 75 (and I'm being kind).

I wish that were true. I'm afraid it is much higher than that. Maybe she is just a puppet. But I think she is very smart and power hungry. When she gives dumb justifications for what she does, it is just so she looks dumb and does not go to jail for fraud. Fact is she has power and there is little we can do about it.

 

[Old Baldy]

Well now CCS, this is one time where we disagree. Sorry, she's an idiot.

 

[Eureka]

People put too much emphasis on IQ. It's too narrow a term, there are vast arrays of intelligence. But an IQ test only tests for a specific kind.

George bush has an above average IQ, yet this man is clearly an idiot.

It also bothers me because it could cause a hindrance in someones confidence to learn. They are told they have a low IQ, then they feel there is no point in learning at all, they have intellectual barriers that go beyond how much information they consume. How much work they put forth in learning, and yet, it doesn't matter. They have a low Iq, so there is no point to even try.

Nancy Peloisi strikes me as a fairly intelligent woman. Is it really as easy as Peloisi chucking Barny Frank out?
I would assume there's much more red tape to it then that.

 

[cuebald]

http://hoklife.com/2009/02/18/the-size-of-the-stimulus/

 

[Old Baldy]

People put too much emphasis on IQ. It's too narrow a term, there are vast arrays of intelligence. But an IQ test only tests for a specific kind.

George bush has an above average IQ, yet this man is clearly an idiot.

It also bothers me because it could cause a hindrance in someones confidence to learn. They are told they have a low IQ, then they feel there is no point in learning at all, they have intellectual barriers that go beyond how much information they consume. How much work they put forth in learning, and yet, it doesn't matter. They have a low Iq, so there is no point to even try.

Nancy Peloisi strikes me as a fairly intelligent woman. Is it really as easy as Peloisi chucking Barny Frank out?
I would assume there's much more red tape to it then that.

Here's a pretty good read, it's long, on Congressional procedures, history, etc. The Speaker has huge influence on who gets approved by members for chairperson positions.

Anyway, if you have time, read some of this stuff. I doubt Pelosi has, or if she has, she isn't intelligent enough to understand it IMHO.

http://books.google.com/books?id=gWdhMs ... #PPA167,M1

 

[CCS]

That’s because the unions know that some employees sign a card to “get the union off my back,â€￾ and ultimately vote “noâ€￾ inside a secret ballot booth.

No one going to comment on this? Obama is going to sign the "Employee Free Choice Act", which will take away employee's rights to vote no in a union decision. Can we take a break from the IQ discussion?

 

[The Gardener]

which will take away employee's rights to vote no in a union decision.

No it doesn't.

Please explain to me how the EFCA removes an employee's right to vote no in joining a union?

And what's wrong with labor unions? You are a "free market capitalist", right CCS? Well, you see companies doing mergers and acquisitions all over the place in order to improve their standing within markets. Why can't labor do their own "mergers" in order to improve their market standing?

Formation of labor unions is COMPLETELY in harmony with free market capitalism. Does not a "free market" imply that participants in an economy should be allowed to make economic decisions to maximize their own personal utility? Then, why would the government, in a "free market" economy, try to impede decisions made by workers?

 

[CCS]

If your coworkers unionize, and want to go on strike, and you decide to keep working, you might get your legs broken. If you want to work for the company, and are more skilled and willing to work for less, but the union does not want to lose any of their plum jobs, they can keep you from getting hired.

If you work for a company, and you do not want there to be a union, and 60% of your coworkers do not want there to be a union, the 40% who do want it can give a signed card to the union leaders. They then know which 60% don't want one, and can harrass them to give them a signed card. And if you give them a signed card to get them off your back, then you don't get to vote. Once 51% of employees give signed cards, they say no secret election is even needed and they automatically unionize.

Gardener, I just don't see how you could not see the problem here. Sounds like you want to force unionization on all workers whether they want a union or not.

The unions are killing the auto industry, and rather than letting that bad business model fail, the tax payers are bailing them out. So instead of the auto stock holders getting sucked dry, soon it will be the tax payers getting sucked dry too.

 

[CCS]

All union contracts are signed under duress. An employer should be allowed to break them at any time, since they were arm twisted into signing them.

 

[The Gardener]

If your coworkers unionize, and want to go on strike, and you decide to keep working, you might get your legs broken.

Id say its FAR more accurate a scenario, given the course of ACTUAL human history as opposed to absurdities as proposed by Rush Limbaugh, that its usually the striking workers who are the ones who have typically gotten their legs broken... by the management.

As for the auto industry, that's a perfect case study in poor management. In crapping on the UAW for decades, management and the unions got into a Mexican standoff and both now stand to lose.

Sure, you can bring up a company that has had poor relations with their union, and are now paying the price, and I can just as easily bring up unionized companies that are the state of their industry, such as UPS, and use them as an example of how a good union, fostering good relations with a great management team, can operate one of the Fortune 500's perenially Most Admired Companies on the planet.

I'm not saying that every worker should be in a union, QUITE to the contrary. There are places where unions make sense, and there are places where unions don't make sense, and there are PLENTY of unions that, in my opinion, have made some suicidally stupid decisions.

But, correct me if I am wrong, CCS, you are supposed to be a believer in the Constitution, in freedom, in limited government, in freedom of religion, freedom of speech... is not a union an expression of this? Businesses merge with each other with the intent of cornering markets and getting pricing leverage on consumers, and I don't hear you fretting about that. So, what's wrong with workers getting together and making a decision that they are going to bargain with their employer as a unit, in order to set up some consistency and fairness in the criteria in which workers get promoted and get compensated? They are making economic decisions as rational actors in an economy, which is totally in line with how Adam Smith (the father of capitalism) described individual actors in a capitalist economy.

You also need to keep in mind that a lot of the reason why unions aren't as prominent as they used to be is due to their SUCCESSES in changing the culture of the employment pact. Nowadays, when you take on a job with an employer, there are legal protections for you embedded in our laws.... such as protections that ensure you work a fair amount of work hours per day and aren't forced to work 18 hour shifts, protections in the area of workplace safety, protections against harassment, etc. Although I am not part of a union and have NO need or desire to do so myself, I still tip my hat to the union movement for giving me these legal rights. If you want to wonder what the US might look like WITHOUT unions, perhaps you should do some field work in a Chinese factory... where there is rampant pollution, and rampant cases of employee abuse often times bordering on slavery.

Sounds like you want to force unionization on all workers whether they want a union or not.

Typical Limbaugh debate attack. I raise a question about your logic, and you try to make it sound like I advocate the complete 100% opposite position... i.e., Red is best... but you say that blue is also nice... ergo, you want to force ALL people to like BLUE. Absurd argument.

 

[Doug Douglas]

CCS, what really boggles my mind is: how can you have just lived through the past 8 years and think that a strategy unlike the one taken by the Bush administration is foolish?

Furthermore, what do you think McCain/Palin would be doing if they were in office right now? They'd be hiking up the defecit too: by continuing these unpardonable tax breaks for the rich, dumping a trillion or so more dollars into Iraq (without actually accounting for it on the budget spreadsheet), and promoting a stimulus bill so tiny and ineffectual that we would actually NEED another bubble to get us out of the aftereffects of the last one.

 

[Old Baldy]

Well here we are into week three or four of the economy saving stimulus package and the Dow plunges another 254 points. As of 1:35pm the Dow is well below 7,000.

I know Doug - blame it on Bush!!?? Isn't the mantra of you liberals?

Of course Obama, Reid and Pelosi had nothing to do with it??!! Come on, face reality, these clowns have no clue. They're socialists for pete's sake.

Maybe Obama can give another speech and the Dow can plunge some more tomorrow.

I'm sure his health care proposal will work wonders for the economy. :thumbdown2: