Tag Archive | "financial crisis"

Bank Nationalization Gains Ground in the US

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Nationalization, long regarded in Washington as a folly of Europeans, is gaining rapid ground among US opinion-formers. Stranger still, many of those talking about federal ownership of banks are Republicans.

Lindsey Graham, a Republican senator for South Carolina, said that many of his colleagues, including John McCain, the defeated presidential candidate, agreed with his view that nationalization of some banks should be “on the table”.

Mr Graham said that people across the US accepted his argument that it was untenable to keep throwing good money after bad into institutions such as Citigroup and Bank of America, which now have a lower net value than the amount of public funds they have received.

“You should not get caught up on a word [nationalization],” he told the Financial Times in an interview. “I would argue that we cannot be ideologically a little bit pregnant. It doesn’t matter what you call it, but we can’t keep on funding these zombie banks [without gaining public control]. That’s what the Japanese did.”

Barack Obama, the president, who has tried to avoid panicking lawmakers and markets by entertaining the idea, has recently moved more towards what he calls the “Swedish model” – an approach backed strongly by Mr Graham.

In the early 1990s, Sweden nationalized its banking sector then auctioned banks, having cleaned up their balance sheets. “In limited circumstances the Swedish model makes sense for the US,” said Mr Graham.

More at FT.com…

Dow Tanks after Obama Signs in New Bill

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Stocks slid within striking distance of the November bear-market low on Tuesday, as grim manufacturing data signaled the recession is worsening and warnings on risks facing European banks underscored the continuing toll of the financial crisis.

Financial stocks sank to 14-year lows after Moody’s Investors Service said banks could be hit by the recession in Eastern Europe, pulling the S&P Financial index down 8 percent.

Data showing a sharp contraction in Japan’s economy set the tone early in the day and helped yank oil prices down nearly 7 percent to below $35 a barrel. Chevron and Exxon Mobil were the Dow’s biggest drags, sliding more than 4 percent.

Wall Street is worried that General Motors Corp. and Chrysler LLC might not be able to prove by Tuesday’s deadline that they can repay billions of dollars in loans and return to profitability. GM has already received $9.4 billion from the government, and could get another $4 billion if the Treasury Department signs off on its viability plan. Chrysler has borrowed $4 billion, and is seeking another $3 billion.

Obama Economic Advisor Limits ‘White Male Construction Workers From Economic Stimulus Benefit

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Layoff notices don’t care what color your skin is, but the Obama Administration sure does. See what this revealing video shows about where your hard earned tax dollars will be going. Why does the Obama administration discriminate against anybody? Why are they discriminating against hard working white male construction workers?

See what Charlie Rangel and Robert Reich say about where your tax dollars should go… and why they -should- discriminate against white construction workers…

This is one compelling video that should get everyone stirred up — regardless of race.

Government Engineered Mortgage Crisis: No Racism Here, Move Along (Update 3)

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Nine years ago this month, the New York Times proved to be rather prophetic:

Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

[…]

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990’s. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University’s Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent . In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent .

This whole mess was inspired by rabble-rousing left-wing groups who felt (not thought) that blacks were not getting enough mortgages.

Note, however, that when whites (31%) or Asians (46%) are on the losing end of this equation, it is apparently NOT evidence of any racism. Right, ACORN?

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites , in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

– Steven A. Holmes, “Fannie Mae Eases Credit To Aid Mortgage Lending” , New York Times , 30 September, 1999.

UPDATE 1:

We’re all Homeowners Now

Cover Up of Fannie Mae/Freddie Mac in 2004 Exposed

UPDATE 2:

Burning Down The House: What Caused Our Economic Crisis?

This video is an informative look at the factors that are causing our current financial and economic crisis. It discusses policy changes 13 years ago that unleashed the sub-prime mortgage-backed securities market, which accelerated prices erratically, inviting speculation and loose lending practices which were both condoned and encouraged by existing regulation and carried out by risk-blind executives and Fannie Mae and Freddie Mac.

UPDATE 3:

Heartland Democratic Presidential Forum 12/07

Here’s a video from a forum exclusively for thousands of community organizers including Gamaliel and ACORN people.  Obama said that ACORN and friends (responsible for voting fraud and the subprime crisis) are going to be shaping policy for an Obama presidency.

The Brilliance of McCain’s Move

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This was published on DickMorris.com and Dick goes into great detail as to why McCain’s move to suspend his election until this is resolved is a great idea.

McCain has transformed a minority in both houses of Congress and a losing position in the polls into the key role in the bailout package, the main man around whom the final package will take shape. He arrived in Washington to find the Democrats working with the Bush Administration to pass an unpopular $700 billion bailout. The Democrats had already cut their deal with Bush. The Dems agreed to the price tag while Bush agreed to special aid to families facing foreclosure, equity for the taxpayers, and limits on executive compensation. But no sooner had McCain arrived than he derailed the deal.

Knowing how unpopular the bailout is with the American people, the Democrats are not about to pass anything without broad Republican support even though their majorities permit them to act alone. Instead of signing on with the Democratic/Bush package, the House Republicans are insisting on replacing the purchase of corporate debt with loans to companies and insurance paid for by the companies, not by the taxpayers. That, of course, is a popular position. McCain would be comfortable to debate this issue division all day. And, if the Dems don’t cave into the Republican position, that’s probably exactly what he’ll do on Friday night’s scheduled debate in Mississippi.

But the Democrats are not about to be stubborn. They know their package is a lemon and need the political cover of Republican support. So the Republicans can write their own ticket — and they will. John McCain will be at the center of the emerging compromise while Obama is out on the campaign trail kissing babies. If the deal is cut before Friday’s debate, my bet is that McCain shows up in triumph. If it isn’t, he shows up anyway and flagellates Obama over the differences between the Democratic package and McCain’s.

By Monday, at the latest, the Democrats have to cave in and pass the Republican version. They don’t dare pass their own without GOP support, so they will have to cave in to the Republican version.

Then McCain comes out of the process as the hero who made it happen when the president couldn’t and Obama wouldn’t. He becomes the bailout expert.

And, of course, the bailout will work. With the feds standing behind the bad debt, whether by purchase or loans and insurance, Wall Street will breathe a sigh of relief. Bears won’t dare bet against the economy with the entire weight of the federal government on the other side. They may be bears but they are not rabid.

Finally, McCain, as the reigning expert on bailouts, then can take the tax issue to Obama, saying that a tax increase, such as the Democrat is pushing, would destroy the bailout, ruin the economy, and trigger a collapse.

This bold move by McCain is about to work. Big time.