The Credit Crunch

[Earniel]

Well it's fine that you think that, but that's not how you lay your words down so it appeared that you thought Norwegian banks would not be affected since they did not have a direct relationship with American banks. No need to backpeddle on what you wrote, simple misunderstanding only!

Heck, I'm not backpeddling, if I were, I had editted my posts to rephrase them better so this wouldn't be an issue. But the crisis is not a simple issue to discuss, and dealing with a double language barrier doesn't make it any easier.

[B] I can't comment on my neighbouring country's banks? Too many balls in the air?

Again, I said nothing of that kind. Mention all banks that you like, Swedish, Norwegian, Patagonian, Martian... But don't tell me I don't know the difference between Swedish and Norwegian when I wasn't even the one mentioning them. And that's as far as I'm going to go in this discussion of the discussion.

[Coffeehouse]

Originally Posted by Eärniel

You know, I was wondering why Norwegian instead of Swedish all of a sudden, but it is not my place to comment when somebody seems to forget what country he's living in

Earniel, when you write this I should be allowed to ask why. I didn't say, if you'd paid attention to my words, that you didn't know the difference, but I pointed it out since you wrote a few confusing sentences. It looks silly when you start arguing about it

[sisterandcousinandaunt]

Coffeehouse, your debating style is not always respectful.

[Coffeehouse]

Originally Posted by sisterandcousinandaunt

Coffeehouse, your debating style is not always respectful.

I beg your pardon? It's a fair point when I see some odd sentences being written here.

And sis, you aren't exactly in a position to talk about respectful argueing. I also really don't appreciate this way of writing about me. Perhaps you should keep that to PM's next time..

[Earniel]

Remember the rules, people, be nice.

As for the confusing sentences, I suppose we're even on that one, Coffeehouse.

[brownjenkins]

I hope the bailout doesn't pass. It's not really needed and it will cause any real reform to be put off for another ten to twenty years.

[Coffeehouse]

Originally Posted by Eärniel

Remember the rules, people, be nice.

As for the confusing sentences, I suppose we're even on that one, Coffeehouse.

True enough, I think we agree on the essence of the situation anyways.

[Nurvingiel]

Originally Posted by brownjenkins

I hope the bailout doesn't pass. It's not really needed and it will cause any real reform to be put off for another ten to twenty years.

Well, I think the Senate voted on it yesterday. Did they?

A bailout could be good, if it was administered well. Taking on debt until the markets recover could work, and it could restore investor (and foreign lender) confidence. However, I don't think a lot of people (even Americans who voted for the guy) have a lot of confidence in the Bush administration.

At least they got rid of the "blank cheque" aspect, but I still think there isn't enough financial reform going along with this hefty package.

If your CV joint fails, causing you to lose control and drive into a tree, you don't replace your front bumper without also replacing the CV joint. It would only be a matter of time before the same thing happens again.

Well, you can't steer a car without the CV joints working. You need strong financial laws to guide the economy by allowing investors to have confidence.

[sisterandcousinandaunt]

I like the analogy.

[Coffeehouse]

Originally Posted by Nurvingiel

Well, I think the Senate voted on it yesterday. Did they?

A bailout could be good, if it was administered well. Taking on debt until the markets recover could work, and it could restore investor (and foreign lender) confidence. However, I don't think a lot of people (even Americans who voted for the guy) have a lot of confidence in the Bush administration.

At least they got rid of the "blank cheque" aspect, but I still think there isn't enough financial reform going along with this hefty package.

If your CV joint fails, causing you to lose control and drive into a tree, you don't replace your front bumper without also replacing the CV joint. It would only be a matter of time before the same thing happens again.

Well, you can't steer a car without the CV joints working. You need strong financial laws to guide the economy by allowing investors to have confidence.

Brownjenkins was probably referring to the same bail out package, which was scheduled for the House to vote on today, and which passed.

According to the latest poll on confidence in Pres. Bush, it turned out at 24%, the lowest in history along with Truman who had a similar rating during the Korean War. So, not much confidence.

There is some reform in the package that has been passed by both houses now, but the next administration and the next Congress will have to make some tough choices about which direction they want to take the country legislative and reform-wise.

[inked]

The confidence level for Congress is lower than President Bush's.

“There is one thing necessary to understanding what is happening and it is this: no one at U.S. banks, no one at the Federal Reserve, and no one in politics can accept the reality that real estate assets in this country remain oversupplied, overpriced and overleveraged.”

“It is that simple.”

--Kevin Depew, Five Things You Need to Know: Will the Bailout Succeed

http://www.minyanville.com/articles/index.php?a=19114

Oil bubble, dotcom bubble, housing bubble ... what's next? Greed is clearly a decades long driving force.

Consider:
If you had purchased $1,000.00 of AIG stock one year ago you would have $44.34 left.
With Wachovia, you would have had $54.74 left of the original $1,000.00.

With Lehman, you would have had $0.00 left.

But, if you had purchased $1,000.00 worth of beer one year ago…drank all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have $214.00 cash.

:::::::::::::::::::::::::::::::::::::::::::::::::: ::::::::::::::::::::::::::::


Saddest Thing About This Mess: Congress Had Chance To Stop It

Political full-court press by Dems kept reforms of errant banks at bay
What Caused The Loan Crisis? FIFTH IN A SERIES

BY TERRY JONES INVESTOR’S BUSINESS DAILY

Could the crisis at Fannie Mae-Freddie Mac and the subprime meltdown have been avoided?
The answer is yes.
As early as 1992, alarm bells were going off on the threat Fannie and Freddie posed to our financial system and our economy. Intervention at any point could have staved off today’s crisis. But Democrats in Congress stood in the way.
As the president recently said, Democrats have been “resisting any efforts by Republicans in the Congress or by me . . . to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”
No, it wasn’t President Bush who said that; it was President Clinton, Democrat, speaking just last week.
Interesting, because it was his administration’s relentless focus on multiculturalism that led to looser lending standards and regulatory pressure on banks to make mortgage loans to shaky borrowers.
Freddie and Fannie, backed by an “implicit” taxpayer guarantee, bought hundreds of billions of dollars of those subprime loans.
The mortgage giants, whose executive suites were top-heavy with former Democratic officials (and some Republicans), worked with Wall Street to repackage the bad loans and sell them to investors.
As the housing market continued to fall in 2007, subprime loan portfolios suffered major losses. The crisis was on — though it was 15 years in the making.

Democrats Blocked Reform

Just as Republicans got blamed for Enron, WorldCom and other early-2000s scandals that were actually due to the anything-goes Clinton era, the media are now blaming them for the mortgage meltdown.
But Republicans tried repeatedly to bring fiscal sanity to Fannie and Freddie. Democrats opposed them, especially Sen. Chris Dodd and Rep. Barney Frank, who now run Congress’ key banking panels.
History is utterly clear on this.
After Treasury Secretary Lawrence Summers warned Congress in 1999 of the “systemic risk” posed by Fannie and Freddie, Congress held hearings the next year.
But nothing was done. Why? Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place.
“We manage our political risk with the same intensity that we manage our credit and interest rate risks,” Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama adviser, bragged to investors in 1999.
In November 2000, Clinton’s HUD hailed “new regulations to provide $2.4 trillion in mortgages for affordable housing for 28.1 million families.” It made Fannie and Freddie take part in the biggest federal expansion of housing aid ever.
Soon after taking office, Bush had his hands full with the Clinton recession and 9/11. But by 2003, he proposed what the New York Times called “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”
The plan included a new regulator for Fannie and Freddie, one that could boost capital mandates and look at how they managed risk.
Even after regulators in 2003 uncovered a scheme by Fannie and Freddie executives to overstate earnings by $10.6 billion to boost bonuses, Democrats killed reform.
“Fannie Mae and Freddie Mac are not facing any kind of financial crisis,” said Rep. Frank, then-ranking Democrat on the Financial Services Committee.
North Carolina Democrat Melvin Watt accused the White House of “weakening the bargaining power of poorer families and their ability to get affordable housing.”
In 2005, then-Fed Chairman Alan Greenspan told Congress: “We are placing the total financial system of the future at substantial risk.”

McCain Urged Changes

That year, Sen. John McCain, one of three sponsors of a Fannie-Freddie reform bill, said: “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”
Sen. Harry Reid — now Majority Leader — accused the GOP of trying to “cripple the ability of Fannie Mae and Freddie Mac to carry out their mission of expanding homeownership.”
The bill went nowhere.
This year, the media have repeated Democrats’ talking points about this being a “Republican” disaster. Well, McCain has repeatedly called for reforming the mortgage giants. The White House has repeatedly warned Congress. This year alone, Bush urged reform 17 times.
Some GOP members are complicit. But Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats.
That’s why taxpayers are now being asked for $700 billion.
:::::::::::::::::::::::::::::::::::::::::::::::::: ::::::::::::::::::::::::::::::::::

More... http://www.financialarmageddon.com/2...etser-ext.html

Even more... How did they come up with 700 billion dollar figure for the bailout?

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

--Forbes http://www.forbes.com/home/2008/09/2...23bailout.html

::::::::::::::::::::::::::::::::::::::::

http://www.kendallharmon.net/t19/ind.../16510/#282601
linkage at comment #11 on this thread is enlightening

also,
"And yet Fannie got into trouble guaranteeing loans to MIDDLE-income borrowers.

Fannie and Freddie never did much for affordable housing. Their activities were consistent with maximizing profits for their shareholders."
http://www.federalreserve.gov/pubs/f...200630abs.html
http://www.federalreserve.gov/pubs/f...200630abs.html

[sisterandcousinandaunt]

Originally Posted by inked

But, if you had purchased $1,000.00 worth of beer one year ago…drank all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have $214.00 cash.

It's been my observation that people who invest in beer seldom have any cash left over, whatever the market.

However, when I think back on the passages of bottle bills I've been involved with, it hasn't generally been Republicans we would need to thank for their passage...and you and I may be the only ones here who remember a time before bottle deposits.

I even remember refillable soda bottles.

Good morning, sir.

[Coffeehouse]

You can thank a couple of Norwegians for that amount of refund Bottle deposit was invented here in 1972!

But this is off-topic I guess.

[Insidious Rex]

Originally Posted by sisterandcousinandaunt

It's been my observation that people who invest in beer seldom have any cash left over, whatever the market.

Depends on the beer! Have you checked the resale price of Three Floyds Dark Lord recently? Westvleteren 12? Theres a collectors market for EVERYthing... believe me...

And inked are you really attempting to seriously pass along a THIS IS ALL THE DEMOCRATS FAULT sheet of lies here? Why no word about Rick Davis who was HEAD of a lobby firm that bought politicians in order to limit regulation on Fanny May and Freddy Mac and was STILL on their pay roll up until this August? And now he is McCains campaign manager??

[inked]

No, IR, I just put it in to make the beer reference look better!

Seriously, merely to get on 'Moot record that it is not a sole consequence of Bush or the Republicans, but rather that there is a genuine responsibility to all sides of the political spectrum in this Warned Of and Long Threatening event.

Some folks have a hard time understanding that all events are not immediately traceable to the current President or Congress. Though one may well argue that Congress has the greater responsibility since it had the greater oversight.

That and I should have saved beer cans!

Coffeehouse, we had bottle deposits back in the 1960s when I was a child not yet teen. We collected bottles from the roadsides to get the 3 cents deposit for each - and like good investors - promptly bought more Coke and candy so we could grow up big and strong. It was one way to get around parental restrictions on Coke and candy.

Why did the Norwegians take so long to pick up on the idea?

[inked]

http://www.strategerycapital.com/

[Coffeehouse]

Originally Posted by inked

No, IR, I just put it in to make the beer reference look better!

Seriously, merely to get on 'Moot record that it is not a sole consequence of Bush or the Republicans, but rather that there is a genuine responsibility to all sides of the political spectrum in this Warned Of and Long Threatening event.

Some folks have a hard time understanding that all events are not immediately traceable to the current President or Congress. Though one may well argue that Congress has the greater responsibility since it had the greater oversight.

That and I should have saved beer cans!

Coffeehouse, we had bottle deposits back in the 1960s when I was a child not yet teen. We collected bottles from the roadsides to get the 3 cents deposit for each - and like good investors - promptly bought more Coke and candy so we could grow up big and strong. It was one way to get around parental restrictions on Coke and candy.

Why did the Norwegians take so long to pick up on the idea?

Obviously what I meant was the system now used world-wide to handle large amounts of bottle, and likewise deposits. The technical word is the 'Reverse vending machine'.

[Jonathan]

"God bless Iceland", said by Icelandic prime minister Geir Haarde, who also likened the financial crisis to an economic natural disaster.

A Meltdown in Iceland

I've kept basically all of my savings in an account at Kaupthing, the biggest bank in Iceland. So naturally I have kept an eye on Iceland throughout this economic crisis.

The past few days have given me the hiccups as not just the banks, but Iceland itself has slipped closer to a national bankruptcy. The island nation is a tiny one, with only 300,000 inhabitants. Most of the national GDP used to consist of the money flow through the large and internationally powerful Icelandic banks. So it is understandable that the financial crisis has hit Iceland particularly hard, in a whole other way than the crisis has affected other countries. The total debts of the banks are now more than ten times the country's GDP!

A couple of days ago I decided to transfer my savings to another bank. I knew the deposits were guaranteed already, but wasn't sure whether it was Iceland or Sweden that stood for the guarantees and I didn't want any trouble.
However one third of my savings were bound and unwithdrawable and NOT subjected to any guarantees! Hence, I've been somewhat stressed about the Icelandic situation
But happy happy! Today the bank contacted me and said that it has just been nationalised and will terminate every account held in Sweden and return the money (plus interest!) to the account holders. I can sleep tight tonight

I wish the Icelanders could say the same thing...

[Coffeehouse]

Yeah, for sure. The Norwegian Kaupthing (which oddly isn't a daughter branch of the Icelandic one.., but affiliated nonetheless) has already been given assurances from the Norwegian gov't, so whomever has an account there can sleep safe now.

We've offered the Icelandic gov't possibilities of loan if they want it. They'll have to ask though.

Last I heard there are planned demonstrations in Reykjavik today, people calling for the Icelandic Central Bank Chairman's head on a plate. Understandable!

[Earniel]

I was actually quite surprised to see an Icelandic bank having so many foreign costumers. I had pegged them down as more isolationist.

Over here our political quagmire and lack of decent government are not helping the financial crisis one bit. France and the Netherlands are faring far better in protecting their interest, while we may end up footing another bill because of that.

While my savings should at the moment be garanteed almost entirely by the government as they're with one of the struggling banks that secured a deal, I had been considering to move them to another bank that gave higher interest before the whole crisis broke lose. Now I have to wait and sit things out because the bank I wanted to move to does not have the same saving-garantee and is -thanks to the (politically inspired) badly-timed comment from the National Bank Director- now being drawn into the crisis as well. Gah!