It would have been a nice cleansing.
Instead the pain is delayed.
The quote of the day comes from Marc Faber via Fleet Street News:
Meanwhile, the cop who had the Wall Street beat when the biggest heist in history was going on… and who engineered the loans to AIG and GM… is now the chief of police. Tim Geithner said he was working night and day on Obama’s rescue plan, “because we know how directly the future of our economy depends on it.”
But as our old friend Marc Faber points out, neither Mr. Geithner, Mr. Bernanke, nor any of the men who rule us, seems to have any idea what they are talking about. As Chairman of the New York Fed, writes Faber, Mr. Geithner “did not seem to ‘know’, in the period preceding the crisis, how the future of the economy depends on a sound financial system!”
Faber goes on to explain that not only did the key players fail to understand what was going on – when it was obvious to him, us and millions of others – they then misdiagnosed the problem and prescribed the wrong treatment. They thought it was a liquidity crisis; so they threw billions in cash at dying institutions.
At every step of the way, the feds have been clueless, hopeless, and defenseless. It was the feds who lent money at negative real interest rates for more than 5 years. It was the feds who pretended to “regulate” and “control” the marketplace… claiming to protect investors from fraud and malfeasance. It was the feds who licensed the banks… set banking standards… blessed derivatives because they “distributed risk more widely” (Greenspan)… urged people to buy adjustable rate mortgages (Greenspan again)… praised sub-prime lending because it encouraged home ownership… and even told consumers to “go out and buy an SUV” in order to give the economy a boost (Fed governor Robert Tier).
The feds piled up the tinder… poured on the gasoline… and lit the match. And now, what do you know… they’ve all joined the fire department!
A reply from a reader who is on the money:
Marc Faber: “The feds poured the gasoline and lit the match. Now they?ve joined the fire department - Credit WritedownsFaber makes a point that is missed by the mainstream media. They keep treating Geitner, Fed officials and politicians as competent even though they all missed the signs. At the same time, the Austrian School economists managed to see it coming and explain what would happen and why. Sadly, the public is being asked to accept the failures as saviours and is being told to ignore the individuals who got it right because these individuals prescribe actions that are not popular. So instead of choosing the Harding approach, which was painful but got the country out of trouble by ensuring that the market would liquidate malinvestments the Obama administration is being cheered on for choosing the Hoover/FDR way of meddling, which turned a normal depression into a great one that lasted for more than a decade.
Democrats screamed for it.And you do remember that TARP was under the Republican administration right, promoted and put together by the Bush administration, a conservative right wing administration. Yea yea, I know they are not "real conservatives"... rats fleeing the sinking ship syndrome.. now we are libertarians and not conservatives..bla bla bla bs.
The wrote the law.
Bush... signed it.
Freddie and Fannie.And you do remember who and what created the whole mess right?
Bush and McCain tried to correct their practices but Dems were vehement in the defense of these entities.
After all, they were Democrat money pits.
You misunderstand a loathing of socialism with the a loathing of the man, though he is a work.I know your hatred for Obama and the Democrats is near fanatical state
If I hated him, I wouldn't have said I liked what I heard about education.
I simply cannot stomach socialism, and he is a Marxist/socialist to the core.
Dems were talking about the constrictions of Sarbanes-Oxley.but your "side" are just as much if not more to blame for the situation the US and world are in today. It is the right, the conservative/libertarian side of the political spectrum in the US that was at the forefront of the deregulation movement that in turn lead to this melt down.
And lifting them.
I am for deruglation, but also for regulators to do their job.
Did you know Fannie and Freddie had 200 individuals looking at only these two companies for irregularities?
That comes from Warren Buffett's mouth, and as he says... I look at more than two companies a day.
TRANSCRIPT/VIDEO PART ONE: Three Hours With Warren Buffett - Live From Omaha - Warren Buffett Watch - CNBC.com
These people were obviously worthless, and probably Democrats fearful of what happened on the Hill when they had hearings.QUICK: If you imagine where things will go with Fannie and Freddie, and you think about the regulators, where were the regulators for what was happening, and can something like this be prevented from happening again?
BUFFETT: Well, it's really an incredible case study in regulation because something called OFHEO was set up in 1992 by Congress, and the sole job of OFHEO was to watch over Fannie and Freddie, someone to watch over them. And they were there to evaluate the soundness and the accounting and all of that. Two companies were all they had to regulate. OFHEO has over 200 employees now. They have a budget now that's $65 million a year, and all they have to do is look at two companies. I mean, you know, I look at more than two companies.
BUFFETT: And they sat there, made reports to the Congress, you can get them on the Internet, every year. And, in fact, they reported to Sarbanes and Oxley every year. And they went--wrote 100 page reports, and they said, `We've looked at these people and their standards are fine and their directors are fine and everything was fine.' And then all of a sudden you had two of the greatest accounting misstatements in history. You had all kinds of management malfeasance, and it all came out. And, of course, the classic thing was that after it all came out, OFHEO wrote a 350--340 page report examining what went wrong, and they blamed the management, they blamed the directors, they blamed the audit committee. They didn't have a word in there about themselves, and they're the ones that 200 people were going to work every day with just two companies to think about. It just shows the problems of regulation.
QUICK: That sounds like an argument against regulation, though. Is that what you're saying?
BUFFETT: It's an argument explaining--it's an argument that managing complex financial institutions where the management wants to deceive you can be very, very difficult. Or even when the management doesn't know what's going on, and--just take Bear Stearns. Bear Stearns had--I read it, anyway--750,000 derivative contracts. Now, you know, I could clone Albert Einstein, you know, and--many, many times and have him work 12-hour days for me and he would not be able to keep track of what's going on in an institution like that. It's--the ones that are too big to fail may be too big to manage, in some cases. And they're particularly difficult to manage if they're promising Wall Street and their investors that they're going to do things that can't be done.
Did you know the regulators were attacked?
For their questions.
YouTube - Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis
See above.AIG got into trouble, thanks to legislation put in place and promoted by high ranking former and present Republicans, that allowed the whole derivative trading to explode.
Let them play with derivatives.Thanks to Graham and his friends and the help of Clinton, AIG was allowed to not only trade in derivatives but to insure most of the banking world's own trading in mortgages that anyone with half a brain could see were not viable in a downward turning market. That is why AIG is in trouble.... it is Congress, AIG, Mortage lenders and lastly but not least, the American citizen.
We shouldn't have to bail their failures.
Yep, and Obama wants to reneg on the contracts.And like it or not, AIG does have a contract with these workers, and there is most likely not much anyone can do other than fire their asses.
We aren't a Marxist society.Which in turn brings up the hypocrisy of the US business world. You are an auto worker, kiss your pension goodbye... you are in AIG, BOA or other big financial institutions and nooo you cant touch our multi million dollar bonus or golden parachute.
Different folks have different contracts.
Neither should have been bailed out.