Largest bank failure in American History.
Are we screwed yet?
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Largest bank failure in American History.
Are we screwed yet?
If we spend 700 billion (+ or - 200 billion) we will be.
You are against the bailout, eh? So am I, but I'd vote for it.
....... huh?Quote:
Originally Posted by TuffStuffMcGruff
I agree with Koga... huh?Quote:
Originally Posted by TuffStuffMcGruff
yes I am against the consolidation of federal power and spending money we don't have. The sky is not falling.Quote:
Originally Posted by TuffStuffMcGruff
Can I name this an honorary Bushism?Quote:
You are against the bailout, eh? So am I, but I'd vote for it.
That's a bushism if I've ever seen one:)
hehe. I meant it.
It was just too good, Tuff.
Every company wrapped up in subprime loans will have to take their punishment before this bad debt is flushed out of the system. Some will persevere and some will fail. Smart, well managed companies such as JPMorgan and Bank of America will feed off of those less fortunate and grow. This is the free market.
Or....
The government will prop up failed companies with poor business models with money it does not have, become the owner of many of them, and become responsible for liquidating huge amounts of unsecured debt. This, of course, calls for a large bureaucracy and new regulations that will undoubtedly remain with us long after their usefulness runs out. This isn't even socialism. Socialism is smarter than this...
Not nearly, keep your smarts and don't fall for the regulating trap.Quote:
Originally Posted by Divinus Arma
Dear holy baby Buddha and the nine incarnations, after all this there are still some people who think regulation is from Satan?Quote:
Originally Posted by Fragony
Regulation is what got you into this mess, if nobody had forced banks to loan money to people who can't pay it back none of this would have happened. You will just have to suck it up and get used to a more dynamic enviroment.Quote:
Originally Posted by Koga No Goshi
You are off your rocker. Completely. The banks were forced to do NOTHING. This was greed and opportunism and reckless, unregulated speculation that the housing market was going to inflate forever. This was banks not even doing BASIC CREDIT CHECKS or verifying the income of anyone who walked in and said I make 400,000, give me a loan for that 680,000 dollar house.Quote:
Originally Posted by Fragony
You are, just.. wrong. I'm sorry but you are.
Again, look into how Barney Frank ran the Financial Services Committee, especially in respect to Fanny/Freddie.Quote:
Originally Posted by Koga No Goshi
That's the socialist triumph version, they weren't allowed to refuse a loan. Not even our crypto-communist government would come up with such a pearl of equality goodness.Quote:
Originally Posted by Koga No Goshi
Dude.... sub prime lenders. Sub prime meaning less than prime. You go to your normal bank where you do checking and savings, and they would check your income and credit and expenses before giving you a loan.Quote:
Originally Posted by Fragony
Subprime: we give loans to people who really shouldn't have them. In fact lots of times we don't even check the numbers!
Subprime should not have even existed, if there had been regulation. Or it should have been MUCH more strictly structured in how it could give out loans to people who only marginally qualified. It most certainly should never have allowed any old company to give out loans and then pawn them off.
This was the banking equivalent of "convenient store medical treatment." With no one checking credentials or doing blood tests or anything. And it had predictably similar results.
Where's my money http://en.wikipedia.org/wiki/Community_Reinvestment_ActQuote:
Originally Posted by Koga No Goshi
poof
No one forced the banks to lend they did this because some guy lets call him bob came on the wheeze of packaging debt for sale but it wasn't a case of like for like. Taking good solid debt packages from people who could pay they added in some medium risk and then some really risky ones this all gets chopped up packaged and repackaged till eventually the bubble of debt surrounding it is many multiples of the original.Quote:
Originally Posted by Fragony
Of course nobody now has a clue what is going on it and then it becomes a case of don't be Johnny last in the pyramid. This really comes down to having unsuitable interest rates as savings are eaten by inflation you must invest in equity with potential to grow however the lower the interest rate the bigger the equity gamble it must be to cover it. This in itself is not evil however possibly it should have been harder for banks to chop good bad and middling debt together and sell it the risk factor was obviously totaly wrong on these packages.
In engineering we learn that current flows through the path of least resistance so regulation has really merely diverted the flow of money into another area where it built up and eventually burst. However its wrong to say taking away all regulation would ease pressure on the system as a whole this runs into the problem that a market needs regulation to be free and fair. With out laws how can we sell a contract and be confident of payment in two years time how do we do any of the things we take for granted. People used to think that because Great Britain said it didnt interfere in business in the empire days it was true complete lies. Britains navy maintained safe oceans for trade it armies ensured stability for investment its laws allowed people to plan. Regulation is required the problem is we cant stop busts and we just have to realise that as time goes on the bigger the boom the bigger the bust simple really but painful in reality.
Banks are not forced to lend because thats number one a lie banks lent because they were chasing even more equity the key is return on investment not the amount made. If I invest ten thousand and make twenty my return is twice my initial stake this is where these NINJA loans and sub prime ideas looked good the amount seemed to suggest high return on investment. Then by selling it all supposedly the original bank was covered however as I already stated they sold it in a new form disguising it's risk or maybe they just didn't know cos it had been repackaged many times over. We must also remember sub prime does not mean unable to pay it means your not a proper person to lend to your not prime. This can be because of court judgments irregular working arrangements etcQuote:
Originally Posted by Fragony
appoligies in advance for my simplified ecomonic points I have a fair idea what going on but that seems to be all anyone has.
Banks played their part, but if you don't want reckless behaviour you shouldn't shape odd conditions.
Social-enginering meet reality.
Most likely the consensus in future times will be the Interest rates were too low for too long its likely Alan Greenspan will suffer hugely in terms of reputation for this debacle. Ecomonic theory would have suggested raising interest rates long before this happened but political reality demands low ones this disconnect between the economic reality and the political is the problem. This unfortnately cant be solved by less or more regulation as it is entirely a human problem.
Banks played their part for sure. What many people fail to realize is that during the run, banks actually encouraged bad loans. This way they got paid for closing costs, took in a couple years of payments, then foreclosed on the home and sold it for even more money to the next sucker. A great business model all around, until the house prices stopped going up.
JP is loving life. They offered to buy WaMu back in March but were turned down. Now they got them at a bargain. This is actually a good thing though, this keeps WaMu's insured deposits from getting hit, so the FDIC fund remains intact for now. A WaMu failure would have taken about half of it, IIRC.
So, a question:
If WaMu's bad paper (and a mini-run by depositors) made it "unstable" according to regulators, and JP Morgan could afford to fold WaMu's bad paper into its own operation - presumeably at something less than a net loss... do we taxpayers really have to still pump $700Bn of unearned cash into this system? Might the behind-closed-doors dithering on the bailout, actually have been a good thing, and that bailout now be moot? Might the market just correct itself (leaving shareholders flat, of course)?
That's exactly what happened. In fact, I want to share with you a simple stick figure play of how the entire thing started.Quote:
Originally Posted by Koga No Goshi
http://www.slideshare.net/guestd5ab5...ubprime-primer (A few bad words, but I think it's pretty good. My econ 351 professor takes credit for this. A class full of juniors and seniors found it pretty funny).
Anyway, I don't really care about the ideological aspects of the bailout. At the end of the time is it worth putting up a possible 700 billion to save the entire broad economy while opening up the possibility to actually make cash in the long term or do we say "screw this" and let everyone fail? I'd go with the former. I'm not sure many of you really understand how much some of these companies are intertwined in the overall economy.
Correct me if I'm wrong. But they wouldn't have made those risky loans had Fannie/Freddie not been so eager to snap up those mortgages and repackage them.Quote:
Originally Posted by Koga No Goshi
Shhh, you can't ask questions like that. :clown:Quote:
Originally Posted by KurkiKhan
Don't dismiss the ideoligy because it is basicly nationalising these banks that will be under firm governmental control, it's essentially creating a shadow government, 700 billion, good for us europeans, bad for you.Quote:
Originally Posted by Kush
.,.,
Exactly! The bailout is going to be bad for US citizens as the resultant inflation will devalue the dollar causing the standard of living to decline in coming years.Quote:
Originally Posted by Fragony
We've already got that. We've spent billions and billions and billions and billions off the budget on all kinds of unregulated contractors and mercenary corporations who are accountable to no one, least of all the taxpayers, in no-bid contracts. So don't get all dramatic acting like this is the barbarians coming over the 7th hill. You ideologues had no problem with shadow government and huge unaccountable spending for the last 8 years.Quote:
Originally Posted by Fragony
For the record, I'm against the bailout. But because I think the people who perpetrated this fraud- and unlike you, I do not consider them innocent victims of regulations they had to follow, it was JUST the opposite, taking advantage of a situation where there was insufficient regulation-- should not walk away pretty. Unfortunately I think the CEO's and execs already did, and now the only ones who will REALLY suffer if we don't do the bailout is our economy, and thus normal people who had nothing to do with the crisis, and perhaps low end employees of some bigger firms. So, this situation is already a we're screwed and lose-lose, whatever happens. Which is PRECISELY what happens in any environment of Rich Privilege and deregulation.
It is your problem so you have every reason to be passionate about it, but I don't recall calling them victims, just for arguments' sake.
You said they "had" to give these loans, which is a lie. Or at least a deliberate misrepresentation to fit your ideology. See my other posts about what kind of people were getting these mortgages before you try to play act like this was mommy government forcing the banks to give loans to poor people.Quote:
Originally Posted by Fragony
Let's go easier on the "lie" and "play act" bits, to ensure a civil conversation.
And I point out that Fragony is Dutch, merely joining the conversation with his point-of-view - and with no dog in this fight.
I'll try but I do honestly believe some people are being intellectually dishonest about the nature of this crisis to continue defending ideologies about deregulation.Quote:
Originally Posted by KukriKhan
I am afraid it is one of these inconvenient truths. There is a whole lot of wiki to bark at if you must.Quote:
Originally Posted by Koga No Goshi
If laws require companies to do something that was massively profitable for them, I would think you'd be in favor of that anyway. I consider this argument ridiculous to take out the profit motive and pretend these companies weren't making big bucks on signing the loans and then pawning them off. Everyone knows that's what was going on, anyone who works in financial fields in America anyway.Quote:
Originally Posted by Fragony
He's a hardcore capitalist in principle and theory, but when the real world appears he is in favour of things that work, ie. socialist measures ~;)Quote:
Originally Posted by CountArach
[/troll]
That's true of every single ideological capitalist in America. There is no other variety. Ever seen one of these big belly floppers walk away saying "no no, we won't take a bailout?" I haven't.Quote:
Originally Posted by HoreTore
The real reason Washington Mutual failed
Quote:
National Review's Mark Krikorian notes that (1) Washington Mutual became the largest bank to fail in American history yesterday and (2) its last press release touted the fact that it was named one of America's most diverse employers, having been "honored specifically for its efforts to recruit Hispanic employees, reach out to Hispanic consumers and support Hispanic communities and organizations"; for being "named [one of] the top 60 companies for Hispanics"; for "attaining equal rights for GLBT employees and consumers"; for having "earned points for competitive diversity policies and programs, including the recently established Latino, African American and GLBT employee network groups"; and for being "named one of 25 Noteworthy Companies by Diversity Inc magazine and one of the Top 50 Corporations for Supplier Diversity by Hispanic Enterprise magazine."
While juxtaposing these two facts -- (1) WaMu has a racially and ethnically diverse workforce and (2) WaMu collapsed yesterday -- the National Review writer headlined his post: "Cause and Effect?" He apparently believes that the reason Washington Mutual failed may be because it employed and was too accommodating to large numbers of Hispanics, African-Americans and gays. Is that why Lehman Brothers, AIG, Bear Sterns and so many others also failed -- too racially diverse of a workforce?
God, people are actually making that argument?
I haven't heard anything like that from anyone.
This is a funny column against the bailout. He's just a columnist, but they are as entitled to an opinion as any of us.
Must be a Pat Buchanan disciple.Quote:
While juxtaposing these two facts -- (1) WaMu has a racially and ethnically diverse workforce and (2) WaMu collapsed yesterday -- the National Review writer headlined his post: "Cause and Effect?" He apparently believes that the reason Washington Mutual failed may be because it employed and was too accommodating to large numbers of Hispanics, African-Americans and gays. Is that why Lehman Brothers, AIG, Bear Sterns and so many others also failed -- too racially diverse of a workforce?
Hmm, maybe because they focused on getting people who looked different on the surface, instead of the best talent.Quote:
Originally Posted by CountArach
CR
They weren't forced to, and don't pretend that they were.
Also are you saying that these Hispanics, Gays and Blacks weren't the best people for the job?
Jeez. Show me the tapes of the interviews and the resumes of those who went for the job before I am can agree with you there. It is bigoted to say that without knowing or speaking with the people in question. That is a shame on both sides - the people who believe that AND the absurd policies that make that perception widespread.Quote:
Originally Posted by Crazed Rabbit
I can't get on board with that.
Ever heard of affirmative action?Quote:
Originally Posted by CountArach
But they probably weren't forced in this instance.
I'm not saying anything about any group in reference to their individual ability.
What I'm saying is a company should focus on how good their employees are, and how a person looks has no bearing on that. Instead they chose to trumpet something unrelated to their business acumen. So this might be seen as them focusing more on political correctness than making sure there business, doesn't, you know, collapse and get sold off.
Heck, perhaps their employees were the very best, but if management is focusing on getting the ideal ratio of minorities hired, then they aren't focused as much on staying solvent, are they?
CR
Are you just looking for an excuse to be racist or something? I know you're not pretending that them hiring a bunch of black and hispanic and gay people to be loan brokers or tellers or bank managers had any bearing whatsoever on what the shareholders and executives were doing in closed meetings. With this mortgage crisis, let's see, so far poor people have been blamed, now minorities, next let's blame it on Al Qaida. Or maybe it was all those black people from Katrina. After they got evacuated they all went to work for Washington Mutual and ruined that too. Sounds good. We got this one solved. ;)Quote:
Originally Posted by Crazed Rabbit
So you're saying that WaMu failed because it was too focused on hiring minorities than good workers? Are good workers white now?Quote:
Originally Posted by Crazed Rabbit
I'm sure you could dig up some black guy at Countrywide and Fannie Mae to blame this on, too, if one was so inclined. Nevermind the fact that the rest of the shareholders and execs were probably 98% white.Quote:
Originally Posted by SwedishFish
Actually, Koga, don't pretend to know what goes on in companies; I highly doubt you've been in any boardroom meetings.
If a company was pursuing plans to make good PR material and how to hire the people who looked right, then that definitely could impact what effort they could put towards staying solvent.
I'm not saying that's what happened, but its not inconceivable. Suprise - following lefties' little pet projects at companies could actually lead to bad results!
You got some sort of reading comprehension problem?Quote:
So you're saying that WaMu failed because it was too focused on hiring minorities than good workers? Are good workers white now?
CR
Un-backed Paper money doesnt work. It's inherently inflationary. It just DOESNT WORK!!! Has anyone here ever heard of Von Mises??? The problem is not interest rates or subprime loans, its the fact that the more FIAT currency you print, the worse things get.
Back the money with gold or silver. If you cant do that, find something! anything to back your money is better than NOTHING!!!
the only reason that the global paper money scheme has worked so far is that the american economy has kept things relatively stable. We all know that once the US Economy tanks, everyone else goes with it.
Does any other country back their money with something substantial anymore????
The problem was lack of regulation, period. It doesn't matter if you were giving subprime loans to hispanics, blacks, whites or purple people. Plenty of white people took bad loans, plenty of white people brokered bad loans, plenty of white Wall Street execs made money off making bad loans. Turning this into a race issue is a ridiculous argument and you rightfully look foolish trying to make it.Quote:
Originally Posted by Crazed Rabbit
And while we're on the topic of board rooms, if you think you could walk into these companies that have flopped since last week and see a bunch of brown and black faces, it is you my friend who have probably never been to a board room meeting.
*looks at the current financial hellhole*Quote:
Originally Posted by Crazed Rabbit
Yeah..... Those righties sure have everything sorted out....
:laugh4:
How about this guy?Quote:
Originally Posted by Koga No Goshi
http://en.wikipedia.org/wiki/Franklin_Raines
How much does "CEO of Fannie Mae" fit in your percentages? Poor choice of direction for this argument. :tongue2:
Because this is just what the discussion needs, someone pulling out the race card. ~:rolleyes: Leave race out of this, we don't need Sharpton getting an .Org account.
Have you even bothered to read the discussion? I didn't pull out the race card. People are making the argument that these companies failed because of their policy of hiring minorities and boasting a diverse workforce. That is not just ridiculous as an explanation for the mortgage crisis, it is indeed racist.Quote:
Originally Posted by drone
It is inconceivable, because the recruitment department isn't connected to keeping the company solvent. Or to be more correct, it's about as conceivable as the companies going under because they spent PR on those tv-comercials posted here. While possible, it would require an insane stupidity to be anything more than a bad investement at worst.Quote:
Originally Posted by Crazed Rabbit
I've read it, and I think the article posted by CountArach is full of it. I know you didn't start with it, and it is indeed a ridiculous explanation. But you need to be a little more careful about generalizing the culprits as "white rich guys", when one of the main players in this does not fit that description. It only hurts your argument and gives the impression that you are not very informed on the subject matter.Quote:
Originally Posted by Koga No Goshi
:focus:
Something posted as a joke really took this places...
What do you mean posted as a joke? I could post links to stories where Margaret Sanger said that the U.S. needs abortion on demand in order to control minority population birth rates. It doesn't mean that all people who support abortion support negative racist eugenics. If they are true, though, then they aren't jokes.Quote:
Originally Posted by CountArach
I appreciated the post. Sometimes it is best to understand underlying corruptions in thought that might hold your message back from a wider acceptance. I believe that promoting people based on things that shouldn't have a role in the decision speaks more to bad business practices than anything about minorities. Affirmative action is part of the problem because it is a bad idea for everyone, but I can't blame the employment of minorities for the market crisis. White accountability, respect and intelligence in business has plummeted recently - so we shouldn't be looking for any excuse to pass the buck onto people who largely don't make the decisions.
"Let all of the poisons that lurk in the mud hatch out"
Indeed. And here I go again with the seemingly worn-out, but still-relevant advice to posters: when you intend a joke, or irony, or sarcasm, somewhere in the post you must overtly indicate that non-serious intention.Quote:
Originally Posted by CountArach
This is a multi-lingual but english-centric place where readers from every continent (save Antarctica) gather to cuss and discuss the news of the day, and the implications that news might have on their lives. Readers cannot see your tongue placed in your cheek, or your winking eyelid, or hear your obviously sarcastic tone.
To all: please be more explicit in specifying "just kidding" - even if you're only half-kidding. Neglecting to do so promotes unnecessary flame-battles and insult-hurling, both of which make my Moderator trigger-finger twitch (<---just kidding there :) ).
------------------------------
Now, can we return to topic without charges of racism and bigotry? Or are we finished with Washington Mutual went under. Seized and sold.?
BAH!
There's nothing wrong with affirmative actions, because of one thing; without it, when there's a tie between two equally qualified applicants, the white male will be hired. With it, the other guy might get the job.
Oh gah every company likes to show of with a perfect immigrant the problem is that they can't find them.Quote:
Originally Posted by HoreTore
Fixed.Quote:
Originally Posted by HoreTore
Affirmative action isn't a cure for discrimination, it's counter discrimination. I'm honestly not convinced that in this day and age the majority of employers value their supposed bigotries more than their wallet.
I guess we are indeed done with WaMu. If Affirmative Action is desired as a topic for discussion, please begin a new thread. Thanks for all contributions :bow:
Thread closed.