Chuck Schumer, bank killer

posted at 7:40 pm on July 11, 2008 by Ed Morrissey

Federal regulators seized IndyMac today in the largest bank failure in decades.  The FDIC will reopen IndyMac on Monday under its own control, keeping its $32 billion in assets while eating as much as $8 billion in losses.  Guess what triggered the run on the bank that required FDIC intervention?

In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said “the immediate cause” of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank’s solvency.

“Although this institution was already in distress, I am troubled by any interference in the regulatory process,” said OTS Director John Reich.

Mr. Schumer couldn’t be immediately reached for comment.

Two weeks ago, Schumer publicly released a letter he had written to regulatory agencies, demanding action to prevent IndyMac’s collapse.  Instead of shoring up the bank, the letter induced depositors to make a run on the bank.   Within days, over $1.3 billion in deposits disappeared, forcing the FDIC to close the bank and pay off the insured deposits.

That move cost American taxpayers billions of dollars.  Don’t forget to thank Uncle Chuck when you have a chance.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2

unseen on July 12, 2008 at 12:05 AM

rockmom on July 12, 2008 at 12:09 AM

Unfortunately, I’m afraid you are both right.

And again, I think that it is the politicians and the crooks (but I repeat myself) to blame; The politicians for forcing the lenders to make high risk loans at low risk rates, and the crooks for raking off the short-term gains, leaving BOTH the taxpayers in general and the FDIC (and other responsible institutions) ‘holding the bag’ in the long term.

Yeah, While I didn’t see this overall economic disaster coming until about 9 months ago, I did forsee the real estate market crashing several years ago.

And people in my area are still throwing huge amounts of money into the rathole. We have a 20% vacancy rate in our commercial buildings, and a 40% vacancy rate in buildings that are less than 3 years old, but they keep throwing up new ones anyway.

We own two commercial buildings ourselves that we built about 20 years ago. I’m afraid that one of them (holding a gourmet restraunt/caterer) will be vacant soon; and I expect it will continue to remain vacant for a few years at best. The other, the only thing I see in the total portfolio as being secure, has a long term lease to a local public utility (Telephone Company switching facility) that would cost them tens of millions to relocate.

As far as the more liquid investments, I’m seriously thinking of cashing out and buying some farm/ranch land so we can at least feed ourselves. I don’t care if I lose money on the deal, I just would like to have something left in four years.

LegendHasIt on July 12, 2008 at 12:41 AM

phronesis on July 12, 2008 at 12:32 AM

yes bear streans was good common ground. But what is to say moral hazzard can not be prevented by legal means. Can not the fed arrest and try those responsible after the bailouts? Can not the fed confiscate the ill gotten gains of crminal conduct like they do to drug runners. there are many ways to avoid moral hazzard besides loss of assets. You do not sieze an entire towns assets because the mayor was running a dirty city.

unseen on July 12, 2008 at 12:43 AM

TheBigOldDog on July 12, 2008 at 12:34 AM

the bind can be corrected by stopping housing prices from falling in other ways and by decreasing commodite prices by increasing supplies. interest rates is a very blunt instrument. as far as the money supply causing inflation. that is an arguement I really don’t want to get into because there is no hard answer. Surfice it to say I don’t agree with your asumption.

unseen on July 12, 2008 at 12:45 AM

TheBigOldDog on July 12, 2008 at 12:37 AM

That’s called a bailout of the finacial system with the sacrifical pig being the shareholders in bear streans. the bond holders were bailed out, the people that had money in bear streans accounts were bailedout and a large portion of the employees were bailedout.

a firesale would have seen the bond holders get nothing or next to nothing. Not alomst 100% of their investment back.

unseen on July 12, 2008 at 12:48 AM

The only thing that’s going cause the dollar to strengthen is for the Fed to raise rates. You think the housing market is in trouble right now, wait until rates start to rise.

You must be really underwater….

TheBigOldDog on July 12, 2008 at 12:26 AM

It won’t be that bad, and it needs to happen right away to burst the oil and commodities bubble. Houses are going to be difficult to buy and to borrow against for a long time to come, no matter what the interest rates are. It’s much more important right now to bring down the cost of fuel and food.

rockmom on July 12, 2008 at 12:49 AM

WoosterOh on July 11, 2008 at 11:58 PM

Geeze!! All I was trying to point out is that Phil Gramm’s comment, though I don’t disagree with it, was not a smart move, and will be used as a club by the “Rats” in the media to bludgeon McCain for weeks to come using, as you point out, emotion. I’ve never “hammered Republicans for using scare tactics” about anything. If you’ve ever seen a comment of mine that led you to believe that, I apologize.

Schumer didn’t “use emotion to tank a bank”. He’s just a hapless idiot who can’t keep his piehole shut; only this time, it’s really going to cost us.

I’m on you’re side of this issue and I don’t think we disagree. Peace.

labrat on July 12, 2008 at 12:51 AM

I don’t care if I lose money on the deal, I just would like to have something left in four years.

LegendHasIt on July 12, 2008 at 12:41 AM

I know THAT feeling. the trends say there won’t be much left if nothing is done to stop or change those trends. markets have a way of going further to the upside and downside than anyone ever expects. housing can fall another 50%. commercial real estate as not even began to lose vaule. the marklet can hit 7,500 very easily in the next 6 months. oilcan hit $200 in the blink of the ye and gas can top $10.00 without too much trouble.

chaos is the rule not the exception in human history. we tend to forget that because of the gifts we have been given as a nation.

unseen on July 12, 2008 at 12:53 AM

the bind can be corrected by stopping housing prices from falling in other ways and by decreasing commodite prices by increasing supplies. interest rates is a very blunt instrument. as far as the money supply causing inflation. that is an arguement I really don’t want to get into because there is no hard answer. Surfice it to say I don’t agree with your asumption.

unseen on July 12, 2008 at 12:45 AM

Not really. That’s the tool the fed has to deal with it. You aren’t actually advocating the government get into the commodity production business are you?

Tell me how you want the government to stop the free market from working to stop housing prices from falling that doesn;t involve the government pumping billions into the market which goes completely against your prescription for fixing the economy?

By enderwater I meant in your home. You sound like a man desperate to be bailed out.

Please also go and look at a chart of the S&P 500 from March to today and tell me what happened AFTER the Bear Sterns “bailout” Which occurred on March 14th. It rose until this correction. It rose in large part because the Fed opened the discount window to non-tradition banks thus guaranteeing their liquidity which restored investor confidence in the financial system.

TheBigOldDog on July 12, 2008 at 12:55 AM

unseen on July 12, 2008 at 12:43 AM

Well it isn’t illegal to take risks, even risks that seem really stupid in hindsight. For example, the CEO of IndyMac was really able to talk a very good game a few years ago, and the market seemed to support his contentions. Better to let him and the investors who supported him suffer through the erosion of the value of their stock than to prosecute them for taking economic but legal risks. Support the system when its neccessary, especially when the government had an instrumental role in creating the problem, but let those who took bad risks to suffer economically rather than legally.

phronesis on July 12, 2008 at 12:59 AM

It won’t be that bad, and it needs to happen right away to burst the oil and commodities bubble. Houses are going to be difficult to buy and to borrow against for a long time to come, no matter what the interest rates are. It’s much more important right now to bring down the cost of fuel and food.

rockmom on July 12, 2008 at 12:49 AM

Commodities are starting to fall. The smart money, people who rode them up, are talking about bailing on them. In part, global demand is falling and the writing is on the wall, or so people who make their bread and butter in that sector are saying….

TheBigOldDog on July 12, 2008 at 12:59 AM

Well, I have to hand it to Sen. Scumer, er Schumer. Just writing a letter and then making it public, what did he think would happen? I know two people who may be out of a job when this is over. Oh, and one has a husband waiting for a kidney transplant. As a conservative, I can do a “sob” story with the best of socialists. But, the real question is this. Is this what the Democrats will do if they achieve total control of government? Very scary thought. Like it or not, got to vote for Johnny Mac. He may not be the best conservative, but he would never had let something like this happen.

righty64 on July 12, 2008 at 1:00 AM

TheBigOldDog on July 11, 2008 at 11:45 PM

1. A bank isn’t on a sound footing if a Senator’s letter causes a run.

2. An economic downturn/slowdown brings about more bank failures. The FDIC exists to handle those failures (whether that’s the best way is debatable). That’s the nature of the beast. It’s not so much Schumer possibly causing increases insurance premiums and bank fees as much as bad business decisions.

3. If you want to go after Schumer for being part of a political club that worshipped at the alter of home ownership.

seanhackbarth on July 12, 2008 at 1:01 AM

TheBigOldDog on July 12, 2008 at 12:37 AM

That’s called a bailout of the finacial system with the sacrifical pig being the shareholders in bear streans. the bond holders were bailed out, the people that had money in bear streans accounts were bailedout and a large portion of the employees were bailedout.

a firesale would have seen the bond holders get nothing or next to nothing. Not alomst 100% of their investment back.

unseen on July 12, 2008 at 12:48 AM

You don’t understand the meaning of bailout if you think having investors loose virtually all of their investment a bailout. You do realize that Bear Sterns was trading around $170 not that long ago. The only bailout component was the government guaranteeing a certain portion of the loses in the portfolio for JP Morgan to take over the pig and keep the entire financial system from meting down.

TheBigOldDog on July 12, 2008 at 1:03 AM

the people that had money in bear streans accounts were bailedout and a large portion of the employees were bailedout.

a firesale would have seen the bond holders get nothing or next to nothing. Not alomst 100% of their investment back.

unseen on July 12, 2008 at 12:48 AM

You do understand the difference between depositors, creditors, employees and equity holders right. You do understand the order of precedence in bankruptcy right?

TheBigOldDog on July 12, 2008 at 1:08 AM

TheBigOldDog on July 12, 2008 at 12:55 AM

yes the government needs to get in the production of commodities by getting the hell out of the way. It is their policies and regulations that is causing an artifical lowering of supply. same with food.

As far as the market goes I don’t need to look at the chart. I traded the market everyday for the past 2 years. I pulled my money out into cash on 5/19 when oil spikes and entered bubble land. If you look from mid may to today you see a down arrow and if you look from oct to today you see a 20% correction. yes we had a nice upturn for two motnhs because the fed bailed out bearstears and provided liquidity.

As far as housing there are a number of ways to stop the prices falling, from requiring lenders to rewrite loans, to government paying up forclosed empty housing and destroying it, to the federal government buying the bad loans from the banks and from feddie and helping to clear up their balance sheets. to an outright injection of a stimlus capital raising for the banks. we spent $150 billion on 4600 checks to boost spending. what if that $150 billion was given to the banks in exchange for shares, or for and increase inFDIC rates etc.

We can attack the problem from several ways or like with energy use a shotgun approach. there are numerous government interventions that can stablize prices and let the market get back on its own feet.

As far as my house I’m fine. Not planning on moving for the next 50 years. however, I can see how the present problems will impact not only my job, my assets but the entire nation.

To think that because I have a secure job, secure house, and secure assets everything is going to be ok and the wider economy will not at some point reach out and touch me is insane. that is why I say the “suck it up” people have no idea what is coming down the pike.

Indymac is just the first taste. It gets alot worse form here. Unemployment can go from 5.5% to 10% in a blink, food can go up 200% without much effort. Gas and heating oil could become unaffordable to large parts of the population and retail can become a land of empty buildings within a year.

unseen on July 12, 2008 at 1:09 AM

….vote for Johnny Mac. He may not be the best conservative, but he would never had let something like this happen.
righty64 on July 12, 2008 at 1:00 AM

Nonsense… McCain is is less understanding about economics than the night clerk at my local convenience store. And arrogant as he is, will not take good advice from true experts either.

He is one of the people to blame for this situation, at least indirectly….. He has been in a position for years where he could have done something about it if he wanted to, and was smart enough.

No, I’m not saying Obama is better. Just trying to get you to realize that neither one of them is going to make anything better for anyone in the general public.

If our economy remains fairly strong, it will be in spite of them, not because of them.

LegendHasIt on July 12, 2008 at 1:13 AM

TheBigOldDog on July 12, 2008 at 1:03 AM

check you facts. the $2 share price was an intentional price to avoid a “moral hazzard” the bond holders in bear stearsn were made good.

the “firesale” was a shame to fool the public and reduce the public outcry. the real bailout occured to the bond holders. which is where the “real money” is.

unseen on July 12, 2008 at 1:16 AM

yes the government needs to get in the production of commodities by getting the hell out of the way. It is their policies and regulations that is causing an artifical lowering of supply. same with food.

This is it for me…

Commodities are produced and traded globally. Commodity producers aren’t in a rush to see prices fall. The US government, while they may affect some commodities, do so marginally except oil & gas. Commodities rose in large part because the globe did not slow down when we did, and demand stayed high. The commodity pros say that’s at an end and are bailing. The truth of it will be known shortly.

As far as the market goes I don’t need to look at the chart. I traded the market everyday for the past 2 years. I pulled my money out into cash on 5/19 when oil spikes and entered bubble land. If you look from mid may to today you see a down arrow and if you look from oct to today you see a 20% correction. yes we had a nice upturn for two motnhs because the fed bailed out bearstears and provided liquidity.

How can you trade the market everyday and not know about the “march bottom” and the affect Bear Sterns and the opening of the discount window played in that rise?

As far as housing there are a number of ways to stop the prices falling, from requiring lenders to rewrite loans, to government paying up forclosed empty housing and destroying it, to the federal government buying the bad loans from the banks and from feddie and helping to clear up their balance sheets. to an outright injection of a stimlus capital raising for the banks. we spent $150 billion on 4600 checks to boost spending. what if that $150 billion was given to the banks in exchange for shares, or for and increase inFDIC rates etc.

Like I said, pumping billions into the market and playing a communist type role in trying to manage the economy and force companies to do things that may not be in their owners best interests. This is a Government you want to stop spending money and cut the deficit unless they are paying the military and I guess, buying residential homes to bulldoze. This is a government you want to “get out of the way” of commodity producers but play an active role in telling who banks what loans the need to write and re-write. Like I said, you have a major inconsistency in your thinking. Like I said, you sound like a guy looking for your own personal bailout.

TheBigOldDog on July 12, 2008 at 1:25 AM

TheBigOldDog on July 12, 2008 at 1:03 AM

check you facts. the $2 share price was an intentional price to avoid a “moral hazzard” the bond holders in bear stearsn were made good.

the “firesale” was a shame to fool the public and reduce the public outcry. the real bailout occured to the bond holders. which is where the “real money” is.

unseen on July 12, 2008 at 1:16 AM

Bondholders are creditors who have a claim on the assets of the firm. If they aren’t paid, they have the legal right to force the debtor into bankruptcy, liquidate the assets and get their money back before anybody else receives a cent. Thinking of bondholders and depositors as owners is a fundamental misunderstanding of these major differences. The bondholders and depositors were getting paid because their issue was liquidity related. The problem is, the resulting bankruptcy and liquidation would not only have completely crashed the hosing market, it could have melted down the entire American financial system by causing a run on all banks…. the great depression all over agian.

TheBigOldDog on July 12, 2008 at 1:31 AM

Michael Savage exposed a bit of legislative history from Gramm before his departure from politics to vice chair the IBS global bank, having set the stage for all of these sh*t bank bailouts.

Patricia Kilday Hart wrote John McCain’s Gramm Gamble, The Texas Observer, 5/30/08

When his new party won control of the Senate, Gramm rose to chairman of the Senate Banking Committee, where he was able to put his anti-regulation views into law. The Gramm-Leach-Bliley Act of 1999 repealed laws put in place after the Great Depression setting up protective barriers between commercial banks, investment banking firms, and insurance companies.

Consumer groups strenuously opposed the landmark legislation. “It was strongly deregulatory and … did not address safety and soundness,” says lobbyist Ed Mierzwinski of the public interest group U.S. PIRG.

But more powerful interests were pushing for the law, and they had a deadline. In 1998, Citicorp Inc. purchased Traveler’s Insurance Group. Under the old law, the new company had a two-year grace period to divest either its insurance or banking functions. Instead, it went to Washington, D.C., and got the law changed—with Gramm’s help.

“Some people jokingly refer to it as the Citigroup Relief Act,” says University of North Carolina law professor Lisa Broome. “Normally, they would have had to spin off their insurance activities.”

Another beneficiary: Gramm’s future employer, UBS, which was able to absorb the brokerage house Paine Webber. (As of March 31, UBS employees and company-related PACs have given the McCain campaign $82,865, according to the Center for Responsive Politics.)

Banks had been chipping away at the barriers through Federal Reserve rules for decades. But Gramm’s sweeping deregulation “stripped away restraint,” says Broome.

Wilson Butt wrote Fleecing of America by Phil Gramm, Bluefield Daily, July 7, ’08

Gramm’s timing was perfect. Members of Congress wanted to go home for the holidays. They lumped H.R. 5660 — the Commodity Futures Modernization Act — into a package with several others and created H.R. 4577, the Consolidated Appropriations Act of 2000.

The bill was passed unanimously by the Senate in December of 2000. These men were Phil Gramm’s stooges. Either that or they were in on the plan to fleece the oil goose and their fellow Americans.

Good old Bill Clinton, who I heard extolling ways to eliminate our oil and energy problems at Concord University, graciously signed the bill into public law on December 21, 2000. Now we have a major problem and he and our fine lawmakers blame it on someone else.

Here is the problem with HR 5660. This “Commodities Futures Modernization Act of 2000” attempted to resolve a dispute over jurisdiction between the SEC and the CFTC. Two key elements of the bill appear to have a direct impact on the markets and the financial services industry, specifically investment banks and hedge funds. The act created the “Enron loophole.”

That loophole exempts energy speculators who make trades electronically from U.S. regulation. Some people argue that the unregulated energy speculation, made legal back in 2000, can account for much of the inflated rise in oil prices.

I am against the government bailing out failing big business, particularly BANKS who are only money changers, they do not produce a damn thing except usury. We are set up for a big fall, propping up what ought to dissintegrate, rewarding corruption. No amnesty for corruption. I know better than to think that the world will implode if this bank does not get reimbursed for all of its corruption. I am aware that the liberal progressive legislation set up financially incompetent loans in mass. That must be repealed as well. The lesson of the Great Depression was erased by the likes of Phil Gramm & Co. on Capitol Hill for their own graft. I am not shocked, but I am appalled.
My $.02

maverick muse on July 12, 2008 at 1:43 AM

Dirt bag Schumer knew exactly what he was doing and screwing taxpayers is the least of this scumbags concerns

Shut UP!

Uh, wait a minute — how could Schumer know that? And since when are regulators supposed to tell the public in advance that a particular institution has been earmarked for possible failure? All that would do is guarantee a collapse. If depositors are within FDIC insurance limits they have nothing to worry about, anyway.

That pretty much sums up the content of a letter to Schumer today from John M. Reich, director of the Office of Thrift Supervision.

“As a regulator of insured depository institutions, we do not publicly comment on the financial condition or supervisory activities related to open and operating institutions,” Reich wrote. “We believe it is critically important to maintain the confidentiality of examination and supervision information.”

He went on: “Dissemination of incomplete or erroneous information can erode public confidence, mislead depositors and investors, and cause unintended consequences, including depositor runs and panic stock trades. Rumors and innuendo cause damage to financial institutions that might not occur otherwise and these concerns drive our strict policy of privacy.”

John D. Hawke, the U.S. comptroller of the currency (regulator of national banks) from 1998 to 2004, had more pointed words for Schumer in a story in the American Banker newspaper today.

“If Schumer continues to go public with letters raising questions about the condition of individual institutions, he will cause havoc in the banking system,” Hawke said.

“Leaking his IndyMac letter to the press was reckless and grossly irresponsible. I don’t see how he can be trusted with confidential information in the future. What this incredibly stupid conduct does is put at risk the willingness of regulators to share any information with the [congressional] oversight committees. After this, you’d be crazy to share information with Schumer.”

The senator’s office didn’t respond to a request for comment today. On Monday, Schumer aide Brian Fallon offered this explanation for Schumer’s action: “The home loan bank system has an obligation to lend responsibly and police its members. But it has not been doing its job. We have found the only way to get the home loan bank system to act appropriately and positively is to make public the concerns we’ve already expressed privately.”

Schumer is using the power of his office because they wouldn’t pony up to Schumer’s DSCC

FBI needs to investigate him NOW!

Topsecretk9 on July 12, 2008 at 1:51 AM

maverick muse on July 12, 2008 at 1:43 AM

Gawd people know so little about the economy. Glass-Steagall had nothing to do with this. Please look up he act and educate yourself before you listen to idiotic radio host.

The hosing market was due to people making loans in a rising real-estate market in a low interest rate environment they could barely afford even at the ARM rates they were getting for the first 5 years…

As for commodity trading, the majority of it is coming from LONDON! All any US regulation will do is force it ALL TO LONDON. Gawd…..

TheBigOldDog on July 12, 2008 at 1:53 AM

We can all blame this on the Federal Reserve and the crooks that are in bed with them.

Tim Burton on July 12, 2008 at 2:00 AM

Like I said, you have a major inconsistency in your thinking. Like I said, you sound like a guy looking for your own personal bailout.

TheBigOldDog on July 12, 2008 at 1:25 AM

Let me explain this too you again reallll slowwww. I am far from needing any type of bailout. On a personal level I could care less if every person that took out a housing loan in the last 5 years loses everything. I could also care less if every banker goes out of business for the criminal behavior they did.

that being said. Without the bailout of both housing and the banking industry the country as a whole is going to go thru some major rough times. the pull of socialism like during the great depression will be unaviodable. The USA will be sucked into massive bailouts and massive socialists programs to deal with the coming economic melt down. The “let the market fix it”, and the “suck it up” crowd does not understand this IMO. they think it will not impact them so why should they have to “pay”

I believed last year and I believe even stronger now that failure to fix the problem then and now by government bailout will in fact bring to those “suck it up” the exact opposite of what they want. It will bring massive governmental intervetion into every aspect of our economy when the economic storm breaks. Human nature, history, and present examples prove this beyond any doubt. Just look at the great depression and all the socialist crap that that period caused like social security, unemployment benefits etc. How much taxes have we paid in the last 70 years because of the great depression? And if the government would have stepped in an bailed out wall street in 1929 would we now have social secuirty or other soicalist programs. Would it have not been better to spend less money in 1929 then the trillions we have spent since then on new programs.

Instead of this massive socialist takeover that is coming, if we would have spent $100-$200billion last year or $300-$500billion today the problem would have been fixed and there would be no need for more governmental intervetion.

As it is the longer we wait the more government intervention will will ultimately have and the more taxpayers will pay.

As far as bondholder of bear streans in a firesale it is rare that the bondholders are made 100% good on their investment. They are usally able to only recoup some of the debt loaned with lquidiation of property etc only giving a small portion of the money back to the bondholders. Bear streans bondholders were made 100% good and they had their debt backed up by the FED. The preferred shareholders of the company were also protected, as well as the majority of the employees jobs. This was not a firesale for any but the shareholders of the company. and that was caused because the FEd wanted to “punish” the owners of the Bear Streans for the risky bets they made.

Bear streans was a bailout of the financial system with a large dose of medicine for the bad actors in the drama.

As far as trading the market. I know all about the mid mar low and I traded it and made a nice profit off that low and the resulting uptick. I pulled the majority of my money into cash at the top of that uptick on 5/19 when oil spiked. The mar low and the resulting uptick was a counter rally to the long term trend of the bear market. We are setting up to have another such counter trend. the market is way oversold, and most of the present bad news is priced in. This will also be a counter trend and will give hope to alot of people thinking the worse is over. However as long as oil stays high and housing stays low the rally will be short lived and we will continue with the trend which is down.

Most commoditity bull markets last 10 years as it takes that long to bring changes in supply and resulting technology innoventions that lower demand. We are only in the first half of the commodity boom. Any addtional uptick in economic activity at this point and until addtional supplies are brought online will result in increased prices of those commodites.

The only way to bring the prices of commodities down in the long term is increase supplies. the worldwide slowdown will temporiliy bring prices down but any economic uptick without increased supplies will simply bring prices back to these levels and cause the slowdown to reappear. Thus the only way to grow the economy is thru increase in supplies.

To sum up, There is not inconsistency in my thinking. I believe that the price will be paid by ALL of us for the excesses of the last years. It is now time to decide what that price will be. those that think they will pay no price are living in a fantasy land and the longer they remain in their fantasy land the more the price will be for all of us. Do I like that government needs to intervene? no. But am I a student of history enough to understand that government gains the most power during periods of hard economic times? yes and the harder the economic times the more power government gains. Therefore logic will dictate that a small dose of government intervention now or even less last year is better then the massive government intervention that is coming if the “market” is allowed to run its course.

unseen on July 12, 2008 at 7:21 AM

This was a bubble that was going to end badly no matter what happened.

About92-93% of all mortgages are fine. That means 7-8% are having some kind of difficulty. About half of those are in forclosure. More then half of those in foreclosure are not single home owners but investors. Although hard numbers are higher because of the volume of real estate transactions over the previous 6-8 years, the percentages are normal. Yes it is a bubble but the more involved the government gets and the longer it is dragged out the worse the pop will be and the more it will have an effect on our overall economic difficulties which are really being caused by the cost of energy. The government is doing absolutely nothing about the energy crisis and making issues in the housing/finance/stock market worse.

peacenprosperity on July 12, 2008 at 7:31 AM

if we would have spent $100-$200billion last year or $300-$500billion today the problem would have been fixed and there would be no need for more governmental intervetion.

No government intervention?! Where the hell will the government get 500 billion? You think the leftists running our government will hand over that kind of money and walk away? No, the result will be more fascism, more government control of the banking industry. And more government control means it will never work right again. Let me give you a little lesson in capitalism. Someone almost has to lose for capitalism to work. All these bad loans aren’t on all bad or nonexistant properties. Some will lose real estate, the banks will lose a percentage of their profits, bank stocks will fall and investors portfolios will take ahit. Then property values will fall, homes will become affordable to people who cannot afford them now. Foreclosed distressed properties will be resold, banks will be more careful about loan prgrams and at some point the hits will be taken and the banking industry will move on. It will suck for some and will mean opportunities for others.

peacenprosperity on July 12, 2008 at 7:40 AM

that failure to fix the problem then and now by government bailout will in fact bring to those “suck it up” the exact opposite of what they want.

So letting the government take over the banking industry now will stop them from taking over the banking industry down the road.

schumer and the rest of the fascists in the democrat party are playing for keeps now. They don’t ever give back control. A bailout and business as usual, right. There will be a government worker in every ceo office of every bank.

peacenprosperity on July 12, 2008 at 7:48 AM

peacenprosperity on July 12, 2008 at 7:40 AM

In a perfect world You might be right. But in this country at this period of time during an election year an massive economic downturn will cause all those things you don’t want. More governmental control and more socialism.

But you know what people said the same things you are saying today. Since then the FEd has bailed out bear streans, opened up their window to brokers whicxh has resulted in regulators being placed in EVERY Broker house. If the government would have stepped in last year that bail out and the subsequent governmental regulation/takover of the broker houses would not have been needed. The process will be repeated. Now they are talking of opening up the window for freddie mac and fannie mae. What types of governmental regulations, and homeloand standards will that cause as the government and the taxpayer gets a $5 trillion dollar bill. Since alot of those loans are owned by forgien countries I can see the UN or other “world bodies” butting into the USA market. thus we not only face a possiblily of our government taking more control from the fallout but other countries getting a say in how our market is run and regulated.

But you know what keep living in the dreamland of the perfect market world where capitalism rights all wrongs. Aviod understand governmental implications of hard economic times and believe that this time it will be different and in the end government will not take over more of the economy has the times get harder.

unseen on July 12, 2008 at 7:54 AM

peacenprosperity on July 12, 2008 at 7:48 AM

Exactly right… Our government has proven over and over, that they can not successfully manage any form of business. These folks couldn’t even manage to break even while in charge of their own food (restaurant) in the Congress complex. Just look at what these people did with our SS program. Can you imagine how quickly these people would destroy our medical industry if given the chance! These people can’t manage their own personal finances, but yet they want control over more and more of our lives.

Socialist bastards!

Keemo on July 12, 2008 at 8:00 AM

peacenprosperity on July 12, 2008 at 7:48 AM

It is simple. The longer we wait, the worse the economic picture will be and the more government control will occur. Last year we didn’t have the FED regulating the broker houses this year we do. Glad we didn’t bailout those greedy wall street fat cats.

Last year we didnt have the fed placing rules on the types of home loans we could have now we do.

Think of it like going to the doctor the longer you wait the worse its going to be. Believing that the bump on your breast is going to go away by not going to the doctor is a good way to die.

unseen on July 12, 2008 at 8:02 AM

How far will the government extend it’s rule over the people if permitted to do so?

Quick “real life” story…

My firm was attacked by a branch of the state government. A (2) year legal battle followed, costing my firm approximately 170K in legal expenses. Finally, the acting Judge ruled in my favor by deciding that the state didn’t (couldn’t) prove their case against the firm. The state then appealed the decision and the case went to an appeals board. My firm was not allowed representation at the hearing. The panel consisted of (2) members, both of which are paid by guess who, the state. These two people over ruled the Federal Judge’s decision, thus revering the decision. My options were to take the case back to Superior Court and face another long and costly legal battle, or close the doors to the corporation, calling it quits. The state was going to win that case no matter what the legal system decided. The state created a means by which they could starve the business dry, thus getting the result they wanted no matter what the court decided.

My point; government is becoming more powerful and corrupt with each year that passes. Red states give the American people the best chance of living the American dream by way of having government get out of the way and let the current laws perform, letting the people do what we do best. Democrat controlled states are a disaster; look at Michigan and California for the latest examples.

Less government please…

Keemo on July 12, 2008 at 8:28 AM

I sent hime a “thank you” this morning. Of course, while flipping thru the news channels, MNSBC reported on the story and mentioned Schumer, but they failed to make the link between his big mouth and the collapse of the bank.

Objective as always.

madmonkphotog on July 12, 2008 at 8:48 AM

MSNBC, I mean.

madmonkphotog on July 12, 2008 at 8:48 AM

Since then the FEd has bailed out bear streans, opened up their window to brokers whicxh has resulted in regulators being placed in EVERY Broker house.

So I don’t understand how you think a bailout isn’t going to result in the same in the companies bailed out or, as I believe, in every bank and financial house in the country no matter what condition they are in. These guys don’t just want to take over failing businesses, they want the golden gooses also.

believe that this time it will be different and in the end government will not take over more of the economy

No, that’s exactly what I believe and I believe the situation is being made worse by the government so they can take over the industry. I get the sense from you that you believe things will go on the same as a ever after a bailout. This is 1930′s germany, the final push is being made by the fascists. barry wins the presidency and the democrats have filibuster proof majorities and things will change so quickly your head will spin. You can think that kind of thinking is crazy out loud but take my word, you better be quietly getting yourself liquid and getting your assets safe from a quick government manuever.

peacenprosperity on July 12, 2008 at 8:48 AM

Can you imagine how quickly these people would destroy our medical industry if given the chance!

Keemo on July 12, 2008 at 8:00 AM

It’s going to happen. I can draw no other conclusion from current events than that the aging marxists in the democrat party are banking on societal collapse as their last chance to enact what they euphamistically call transformation and progress.

They see themselves and their generation dying; being godless narcissists, they see no relevance in an afterlife or even posterity. It is a matter of utmost psychological urgency for them to enact their radical reconstruction now.

This is a familiar story, and it doesn’t have a happy ending. As for me, I plan to do everything I can to make life better for those — and there will be many — who suffer at the hands of the coming totalitarian state.

jeff_from_mpls on July 12, 2008 at 8:51 AM

unseen

Imagine calling your broker and the phone number is a government agency. Deal with any government workers lately?

peacenprosperity on July 12, 2008 at 8:53 AM

Deal with any government workers lately?

They are all barry worshipers.

peacenprosperity on July 12, 2008 at 8:55 AM

Ed – Did you alter that pic of Chuckie (hairplug) Schumer?

Are you using Fox Producers now?

Last time I saw Chuckie he had a TV camera implanted on thick skull so that he could do the talking head act at moments notice!

What a useless idjit he is.

iam7545 on July 12, 2008 at 9:07 AM

jeff_from_mpls on July 12, 2008 at 8:51 AM

I’ve traveled down the road you just did. My mind goes there too.

But there are other roads too. Obama didn’t win yet, and isn’t likely to. The Dem. congress is widely discredited. Some lib states will travel further towards the abyss (Michigan and CA come immediately to mind), but so far what that has meant is people leave, their govt’s face bankruptcy, and the remaining voters begin to look towards Republicans again.

And then there’s always the military–a red state institution. I imagine that before we are permanently placed in some dark and dismal totalitarian state, they will have something to say about it.

Frankly, I’m not an optimist by nature. But there are more acts to this play left to come before we succumb. I am far more concerned at this time with our financial situation than I am with our political one.

JiangxiDad on July 12, 2008 at 9:10 AM

peacenprosperity on July 12, 2008 at 8:53 AM

While I understand you concerns, the problem is the arguement is wrong. It is not a choice of government intervention or no government intervention. that choice is gone. the government will intervene.

what needs to be the arguement is the size of the intervention. The longer we wait the worse the econopmy will become and the more intervention will occur.

unseen on July 12, 2008 at 9:12 AM

JiangxiDad on July 12, 2008 at 9:10 AM

I agree. Hard economic times has been the the wrose times for freedoms in this country. the harder the economic times the more of our freedoms we lose as more people look to government. The arguement of no intervention will fast fade away when the economy is in hell. Then it will be a battle to insure some type of freedom is saved. That battle would have been easier if done during realtively good economic times. During a hard depression you can kiss all freedoms good bye and welcome the socialism at the door. We still have an oppurtunity for the intervention to be realtively small and quickly over. The longer we wait the more freedoms in the end will be wiped out.

unseen on July 12, 2008 at 9:22 AM

JiangxiDad on July 12, 2008 at 9:10 AM

Your argument is most welcome. The warning signs are unmistakable, but perhaps I too-easily discount the will and the ability of good and decent people to fend off the leftist threat. This nation has seen far more immediate threats, and has thrived in the face of them.

If we win, the ordeal would have the effect of a near-death experience. America would come back chastened, renewed and inspired, and maybe even ready to get back to basic principles.

jeff_from_mpls on July 12, 2008 at 9:46 AM

JiangxiDad on July 12, 2008 at 9:10 AM
unseen on July 12, 2008 at 9:12 AM

I think you guys are both being overly optimistic. The democrats have had practice in the last two presidential elections finding out what and where they can get away with their cheating and it’s likely no matter who their candidate was this time they would win. The population is wholly ignorant and will vote for “change” in congressional elections and the greatest change will be booting conservatives for lying leftists. look at what happened in Mississippi as opposed to Louisiana during Katrina. la, run by democrats for 75 years, doesn’t even get hit by katrina, it’s a mess, people die. They do elect Jindal but will likely reelect william jefferson clinton, an indicted crook caught red handed. Mississippi, gets hammered directly by katrina, whole towns are wiped off the map and the republicans keep things moving, get things done and what happens? republican seats go to democrats. The fascists are poised for victory and things are going to get very bad in this country.

peacenprosperity on July 12, 2008 at 9:55 AM

unseen on July 12, 2008 at 9:22 AM

And I agree with you.

JiangxiDad on July 12, 2008 at 9:56 AM

jeff_from_mpls on July 12, 2008 at 9:46 AM

Jeff I don’t know. But it’s just not the final act yet.

JiangxiDad on July 12, 2008 at 9:57 AM

peacenprosperity on July 12, 2008 at 9:55 AM

You sit on my left shoulder. How did you come to life?

JiangxiDad on July 12, 2008 at 9:59 AM

♫♫ Yo money for nuthin….♫♫

♫♫ Your chicks for free…♫♫

There is no free money. (unless, of course, you are a politician)

hillbillyjim on July 12, 2008 at 10:02 AM

You sit on my left shoulder. How did you come to life?

JiangxiDad on July 12, 2008 at 9:59 AM

No, I sit on your RIGHT shoulder.

peacenprosperity on July 12, 2008 at 10:24 AM

And then there’s always the military–a red state institution. I imagine that before we are permanently placed in some dark and dismal totalitarian state, they will have something to say about it.

Frankly, I’m not an optimist by nature. But there are more acts to this play left to come before we succumb. I am far more concerned at this time with our financial situation than I am with our political one.

JiangxiDad on July 12, 2008 at 9:10 AM

Hard to argue with that.

unseen on July 12, 2008 at 7:21 AM

Just finished reading this thread. Your perspective is always thought-provoking read, thanks for putting in your 2 cents.

Spirit of 1776 on July 12, 2008 at 10:30 AM

peacenprosperity on July 12, 2008 at 9:55 AM

Speak-n of Katrina… We all know how Katrina was used by the socialist media and their partners in crime (Democrats) as a weapon against GW Bush and his administration; in contrast, take a look back just a few weeks ago at the natural disaster that struck Iowa (Cedar Rapids) and other parts of the country. The good people of Iowa (of all ideologies) came together and took the hit like true ol’ fashioned Americans. Very little whining, blaming, and begging (if any) took place by these proud people. The MSM blew right past this story since the story had no relevance to their current agenda. I might also add that Cedar Rapids didn’t use the “race card” in any way-shape-or form as the people of New Orleans did.

Keemo on July 12, 2008 at 10:34 AM

Ed:

One of your poorer posts. Schumer was just a little spark. IndyMac was a big ‘ol pile of deadwood and gasoline. It has been doomed for more than a year now.

Great discussion and posts – interesting reading.

Unfortunately, while I agree with unseen in part and peacenprosperity in part (this is not 1930′s germany, sorry), the best prescription I can see is to do nothing at this point to stop the crisis in housing and credit.

Here’s why:

credit – the banks have now credibility. None. Until they fail and honest, cautious, traditional banking gets cool again – our financial system will remain suspect.

housing – until home prices fall to the level where they are 3x the average man’s salary – the price were most people can afford them, we should not try to intervene to stabilize prices. Housing had a huge bubble, too many were built and prices doubled while wages barely moved. Housing has a loooooong way to fall still.

The Dems win this year. Accept it. Here’s the bright side – the next president will be stuck with an empty treasury, a paralyzed Congress and the worst 4 years this country has experienced in a generation. This means the GOP wins in 2012.

Channeling Monty Python:
“Always look on the bright side of life.”

olddeadmeat on July 12, 2008 at 10:36 AM

doggone:

meant to say the banks have no credibility.

haven’t had a second cup of coffee yet.

cheers.

olddeadmeat on July 12, 2008 at 10:42 AM

Schumer is the perfect mascot of the left. Add Durbin, Pelosi, Reid, Dodd and Biden, and you have the perfect nauseating combination that brings on depression. Unfortunately, there is no cure in sight yet for this illness.

Travis1 on July 12, 2008 at 10:46 AM

I’m surprised at the end of his comments on the bank, he didnt add ” BAN GUNS ” just for giggles.

tx2654 on July 12, 2008 at 10:46 AM

The Dems win this year. Accept it. Here’s the bright side – the next president will be stuck with an empty treasury, a paralyzed Congress and the worst 4 years this country has experienced in a generation. This means the GOP wins in 2012.

Small comfort while watching the disintegration of our economy .

Of course, some of this could have been avoided had our fearless leaders seen fit to institute responsible energy policy years ago. A lot of the folks on the edge now wouldn’t be so if it weren’t for the drastic rise in energy costs and the resulting ripples throughout our economy (which we haven’t begun to experience in full) Just my $.0125 worth, adjusted for inflation.

hillbillyjim on July 12, 2008 at 10:49 AM

(this is not 1930’s germany, sorry),

Sorry, I disagree with that. I think there is too much “That can’t happen here”, while it is happening here. The demofascists are brutal, they lie, cheat, do anything to get power. They are not good patriotic Americans. They hate our form of government, our economic system, our history. They hate the very people who vote for them. It can and it is happening her. Everything can change in the blink of an eye and that blink is coming soon.

peacenprosperity on July 12, 2008 at 10:50 AM

Small comfort while watching the disintegration of our economy .

Cheer up. A few more Ginsbergs will join the court.

Just my $.0125 worth, adjusted for inflation.

hillbillyjim on July 12, 2008 at 10:49 AM

I only take gold now, sorry.

JiangxiDad on July 12, 2008 at 11:07 AM

I only take gold now, sorry.

JiangxiDad on July 12, 2008 at 11:07 AM

But, but, but,…

(sigh)

hillbillyjim on July 12, 2008 at 11:20 AM

Hey Eddie, don’t forget to also thank Uncle George Bush and the Fed for their role in creating this economic mess in the first place: killing the dollar’s value and flooding the market with cheap money and, of course Indy’s own business model: specializing in so-called Alt-A mortgages, which didn’t require borrowers to provide documentation on their incomes. Had Karl Rove written this letter instead of Schumer, you’d be calling it prophecy.

DanKenton on July 12, 2008 at 12:14 PM

Congress is Public Enemy #1, and Schumer is the poster boy.

T J Green on July 12, 2008 at 1:09 PM

We all know that Chuckie Schumer is about as slippery as they come. No one would buy a used car from the fellow, but, he is a dem in a dem state peopled by folk far slimier. He is safe from reprisal….

It should be illegal for a person ignorant about honest business practices to regulate business…but then we have Congress, for our sins.

JIMV on July 12, 2008 at 1:35 PM

we could have saved alot of this from happening last year by helping homeowners in over their heads, by requiring banks to rewrite loans that were written by fraud and closed with fine print. But no.

We had to “suck it up”

unseen on July 11, 2008 at 11:57 PM

Give me a break. There were not that many loans written that way contrary to what every consumer says. I work for a massively large mortgage company and we are still kicking arse because of our conservative underwriting practices. So while other companies are ramping down we are cleaning up.

I talk to people everyday who tell me they’ll just walk away from the house unless we waive large chucks of their balance due to declines in the marketplace. Until these people get zapped in their wallets this will be commonplace for awhile.

I think it was Neil Cavuto who said something along the lines of “People can give you the in and outs of their TV or digital camera but they don’t anything about their mortgage.” People I talk to everyday hardly want to give me 5 minutes to do their application let alone find out the facts of the mortgage. Sorry I just don’t have a lot of sympathy for people like this.

VikingGoneWild on July 12, 2008 at 2:47 PM

Schumer is about as unlikable and unscrupulous as any fictional character penned by the greatest minds. Of course he belongs to the real life Democratic party and is elected by the same self serving, small minded New Yorkers that allow Rangel and Clinton to serve as their leaders while the three work to destroy this country for their own self serving gains.

Hening on July 12, 2008 at 2:49 PM

If Chuck isn’t the worst senator in congress he is close. Writing that letter may have made sense but releasing it was about as stupid as you can get. Of course Chucky has lots of experience being stupid. He is so bad that he makes Hillery look very good. Why did NY throw Gus out for this guy? That makes them almost as bad as Chuck.

duff65 on July 12, 2008 at 2:55 PM

Chuck Schumer, bank killer

New York senator Chuckie Cheese is without doubt…a top DemOrat blithering idiot. The people of New York have to be just as stupid, to elect this fool into government.

byteshredder on July 12, 2008 at 3:20 PM

Sorry I just don’t have a lot of sympathy for people like this.

VikingGoneWild on July 12, 2008 at 2:47 PM

since housing is a national industry. Their problems will and has become everyone’s problems.

unseen on July 12, 2008 at 3:23 PM


Give me a break. There were not that many loans written that way contrary to what every consumer says.

I think it was Neil Cavuto who said something along the lines of “People can give you the in and outs of their TV or digital camera but they don’t anything about their mortgage.” People I talk to everyday hardly want to give me 5 minutes to do their application let alone find out the facts of the mortgage. Sorry I just don’t have a lot of sympathy for people like this.

VikingGoneWild on July 12, 2008 at 2:47 PM

You’re absolutely correct Viking. Most people are simply looking for a free ride so they claim ignorance, racism, coercion or whatever gets their mortgage paid off by someone else. What the hell is next? Credit card debt? Guaranteed double-digit 401K returns? The bailout only makes things worse in the long run and circumvents the very principles of free-market economics. What should really get people pissed off is why our economy overall is in this state. The numbers don’t lie regardless of the lack of a “textbook recession” and the ones pulling the strings have done so using fear and patriotism as their smokescreen. Schumer is about as responsible for this “run” as Bush is for bringing peace to the Middle East.

DanKenton on July 12, 2008 at 3:56 PM

since housing is a national industry. Their problems will and has become everyone’s problems.

unseen on July 12, 2008 at 3:23 PM

Their problems become everyone’s problems….doubt it. The problem is they, like a majority of Americans, relied on their home value to keep going up to “bail” themselves out any financial problems by refinancing. Now that home value have dropped in most areas the cash out refinances are harder to get due to having less equity. Financial Responsibility is each individual persons responsibility, not everyone else’s. If someone loses their home due to bad financial decisions then that creates an opportunity for someone else to purchase the home.

The problem I see on a daily basis is most of these people don’t want to help themselves. They haven’t cut back on their expenses or gotten a PT job. If someone has truly go out and cut expenses such as cable, cell plan, internet, dining out, car pymt etc & have a PT job than I have no problem with a helping hand. Don’t confuse a helping hand with a piggy back ride however.

VikingGoneWild on July 12, 2008 at 4:11 PM

The problem I see on a daily basis is most of these people don’t want to help themselves. They haven’t cut back on their expenses or gotten a PT job
VikingGoneWild on July 12, 2008 at 4:11 PM

and they are going to change how? by losing their home? /no they will just vote in socialists that can further their ways.

again their problems will become ours. the nation as a whole will pay for the excess and bad finalcial descions. they will pay with more governmental control and regulations, they will pa in higher taxes, and lower home vaules and lower assets like 401ks and Ira they will pay in lower interest rates fro savers as banks try to make money to stay afloat, they will pay in higher fuel and food costs as the dollar slides.

Yes these people were irresponsible and the people making the loans were just has irresponsible. there is a concept of fiducial responsibility. Just because you can make 20% interest off of someone’s lack of education does not mean that that is the right or moral thing to do.

It use to be that bad loan practices were called loansharking. the banks and mortage companies have every right to make a reseanable profit but the home buyer alsways as an equal right not to get taken for a ride.

then you have to ask why did they need to relie on lines of credit. was it greed? envy? lack of financial education or the a need?

regardless the bailout being talked about last year was about $100-200billion. The bailout being talked about toady is closer to $500 billion and the bailout that may be needed for Fannie and Freddie is $5 TRILLIOn.

the longer we postpone the bill the greater the final cost is going to be.

Will we need another global war and millions of dead to pull us out of this economic downturn like we did in 1940? Will socialism’s pull like in the 1930′s cause a massive redistrubution of wealth? Will the government sieze gold again like in the great depression and make it illegal to own gold, own oil futures, corn futres by the individual?

The longer we wait and the bigger the economic problems the more socialism gets a foot in the door and the higher the final price is.

the belief that this country’s population will not turn to socialism during tough economic times is not supported by history. In fact the opposite is true. Economic downturn esp major busts have a major impact on the growth of socialism.

It is in every capitalists interest to support small government intervention now instead of having to watch the government tak over the entire economy in the future.

unseen on July 12, 2008 at 4:31 PM

Since we’re just basically copying the same post….
Financial Responsibility is each individual persons responsibility, not everyone else’s.

The entire foreclosure market due to fraudulent loan practices is a tiny fraction of the housing market. If other lazy people want to go to foreclosure because they’re to damn lazy to help themselves then so be it. House prices go down. Yes it suck big time in the short term but it gives people a great opportunity to buy their first home or even allow people to buy investment properties. By the way, before I get the of course I want foreclosures so I can buy my companies foreclosures comment, employees at my company are prohibited from purchasing our REO (real estate owned) properties. Doing so gets you fired, no exceptions.

Just like with the stock market while everyone is pissing themselves and selling….I’m buying.

VikingGoneWild on July 12, 2008 at 4:59 PM

Wouldn’t a simpler solution and maybe a less costly one be to pay the difference between the amount of the loan and the current appraisal to a fixed 30 year loan, let the lending institution eat the closing. But this would have to be limited to people who are actually living in the home for (fill in the blank) amount of time. I will grouse less about helping people that are trying then flipping.

Cindy Munford on July 12, 2008 at 5:25 PM

VikingGoneWild on July 12, 2008 at 4:59 PM

I see your point and would agree with you if history did not refute it.

Massive forclosures, massive wealth destruction is not a net good thing in a capitalistic society. It causes politco shifts toward socialism. It can and has caused revolutions and rebellions. sure some people were able to increase their wealth during the great depression but many lost everything and called on the federal government to insure it did not happen again. FDIC, social security etc socialistic programs were born that have cost the taxpayers trillions upon trillions of dollars in the last 70 years.

free markets do not operate in a political free vacuum.

unseen on July 12, 2008 at 5:29 PM

There aren’t going to be “massive” foreclosures though. More than we have seen in many years, yes. But the media are lying about the actual numbers, and also about the impact of a lot of these foreclosures. Thjey are lazy and just spout whatever the left-wong consumer groups make up and give them. The “2 million foreclosures” number was just made up out of thin air, but it’s become an article of faith now in Washignton. And it isn’t like we are going to have 2 million familes left homeless and wandering the streets begging for bread. Almost all of these people are employed, and they will land on their feet. Meanwhile, the next cohort of young families forming and looking to buy their first homes will actually be able to afford them without having to take out one of these exotic mortgages that caused all the problems.

rockmom on July 12, 2008 at 8:06 PM

Was not Ken Lay persecuted for talking about the health of Enron.

Johan Klaus on July 12, 2008 at 10:24 PM

The “2 million foreclosures” number was just made up out of thin air
rockmom on July 12, 2008 at 8:06 PM

no it wasn’t. the numbers are not made up.

as far as homeless and employment. unemployment from the last 4 months numbers is increasing. The more homes get forclosured, the more home prices fall the more people lose their jobs. Employment is decreasing, not increasing.

The problem at the moment is not being homeless or unemployed, It is having enough money to continue fueling this consumer led economy. As the money in equity of a home dries up, as people’s credit score are destoryed, there will be less money left over to buy stuff. Add in $4.00/gal for gas ,higher unemployment etc and things can go from bad to worse very quickly.

while I admire your positive attitude, in this case it is misplaced. the country faces an economic problem not seen in 70 years. If not for FDIc the INDYMAC takeover on friday would have caused a massive run on all banks. Much like the run in the 1920′s that pushed us into a depression.

we are seeing the same problems that lead to the depression occurring today. So far due to the actions of the FEd and government we have been able to wether the worse of it. if not for the Bear Streans bailout the stock market would have already crashed. Credit would not be available. The bank failures of indymac and the problems of major banks like citi, washington mutal would hgave caused massive runs on the banks if not for FDIc. Fear would be running rampent and the economy would be in shambles.

The problems are not fixed and the FED and government are running out of painless bullets. the fear is lucking out there. If the leaders decide to “let the market fix it” the fear will blossom into a white hot fire and the economy will dissolve

This is not a “small problem” this problem deals with every bank, every broker house, it touches the very fabric of our economic wealth, credit. The housing market is the underpinning of the entire wealth of the US. The stored wealth in our homes impacts every thing to some degree.

when added together, housing, credit issues, high fuel and food costs, stagnet wages, and global growth. these problems become monsters. The longer we wait to deal with them the bigger the price we will pay.

unseen on July 12, 2008 at 10:55 PM

Does this administration not have a Justice Dept. I want to see Chuck Schumer doin the perp walk in handcuffs, and why is William Jefferson still serving in the house?

dhunter on July 12, 2008 at 10:57 PM


and why is William Jefferson still serving in the house?
dhunter on July 12, 2008 at 10:57 PM

The same reason that Larry “tappy-toe” Craig is still serving in the senate.

DanKenton on July 13, 2008 at 10:35 AM

Hmm, miscalculation by Schumer or a setup for nationalization…?

CP on July 13, 2008 at 2:45 PM

Chuck the schmuck.

bloviator on July 13, 2008 at 2:53 PM

Comment pages: 1 2