Lehman Brothers and Merrill Lynch kaputt

This forum is now shut down.

15 Sep 2008, 12:25 #1

Wow, Wall Street's just absolutely smokin'. Economy's in just absolutely spectacular state. First, Fannie Mae and Freddie Mac were socialized by
the US government, now the vaunted Lehman Brothers and Merrill Lynch fold like cheap suits.

They must have the whole thing planned...
Joined: 18 Jul 2001, 21:54

15 Sep 2008, 13:55 #2

So you crawl out from under a rock when bad news in America emerges...so typical. A little reality for you from OpenSecrets.org. This shows what members of
Congress accepted the most money from Lehman Brothers;

In the current Congress, 271 lawmakers have collected nearly $3 million since 1989, with 72 percent going to Democrats. Democratic presidential
candidates and senators Hillary Clinton and Barack Obama top the list of all-time recipients for the company
, collecting $410,000 and $395,600
respectively. Sen. Charles Schumer, D-N.Y., a member of both the Senate Banking, Housing and Urban Affairs Committee and the Senate Finance Committee, hauled
in $181,450, while Sen. Chris Dodd, chair of the Senate banking committee, has collected $165,800.
I know that probably shocks you...

Oh and look Obama has already pounced on the news, sorta like you did. I wonder if he agrees with histop
economic adviser on how this all happened;

The Center for Responsible Lending estimated that in 2005, a majority of home loans to African-Americans and 40 percent of home loans to Hispanics were
subprime loans. The existence and spread of subprime lending helps explain the drastic growth of homeownership for these same groups. Since 1995, for
example, the number of African-American households has risen by about 20 percent, but the number of African-American homeowners has risen almost twice that
rate, by about 35 percent. For Hispanics, the number of households is up about 45 percent and the number of homeowning households is up by almost 70

And do not forget that the vast majority of even subprime borrowers have been making their payments. Indeed, fewer than 15 percent of borrowers in this
most risky group have even been delinquent on a payment, much less defaulted.
These loans were given to people that could not qualify for regular mortgages. And were they able to obtain these loans? Partly because of
legislation like the Community Reinvestment Act of 1977, revised in 2005.

But you....its all Bush's fault.
Last edited by crazywater on 15 Sep 2008, 14:06, edited 1 time in total.

"...if we all believe in the things you believe you're seeing..."
EJ/BT '76

Elton John: The Crazy Water Community

Elton John News Blog


15 Sep 2008, 20:51 #3

I was merely remarking on your super duper optimistic appraisals of the health of the U.S. economy.

They must have the whole thing planned...
Joined: 18 Jul 2001, 21:54

16 Sep 2008, 13:43 #4

from Investors Business Daily;

The Real Culprits In This Meltdown

By INVESTOR'S BUSINESS DAILY | Posted Monday, September 15, 2008 4:20

Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's
dysfunctional, Democrats during the Clinton years are a prime reason for it.

Read More: Business & Regulation

Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the
"trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.

But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and
originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most
revered institutions.

Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business
practices had previously guarded against making. It was either that or face stiff government penalties.

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so
doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."

Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street.
But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train

And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in

As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a
total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.

Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.

Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.

In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes
in its accounting procedures and ways of managing risk.

But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from
bankruptcy by Bank of America.

At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.

The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie
and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.

And the worst is far from over. By the time it is, we'll all be paying for Clinton's social experiment, one that Obama hopes to trump with a whole
new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in
size and scope.

There's a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we'll learn the wrong lessons. And
taxpayers will be on the hook for even larger bailouts down the road.

But the government-can-do-no-wrong crowd just doesn't get it. They won't acknowledge the law of unintended consequences from well-meaning, if
misguided, acts.

Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For
now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.

While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher
regulations, which only led to lenders taking on hundreds of billions in subprime bilge.

Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.
Give mortgages with little or no money down to people who could not qualify for those mortgages under normal procedures because of the alleged
"right" of every America to own a home is one of the main reasons for this.

But as with all things, it's Bush's fault.

"...if we all believe in the things you believe you're seeing..."
EJ/BT '76

Elton John: The Crazy Water Community

Elton John News Blog

They must have the whole thing planned...
Joined: 18 Jul 2001, 21:54

16 Sep 2008, 13:51 #5

Another nugget from the NY Times 5 years ago,
via Hot Air;

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a
decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie
Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would
exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac - which together have issued more than $1.5 trillion in
outstanding debt - is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and
critics have said Fannie Mae does not adequately hedge against rising interest rates.
How ever a certain political party objected;

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation
of the companies could sharply reduce their commitment to financing low-income and affordable housing.

"These two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis," said Representative Barney Frank of
Massachusetts, the ranking Democrat on the Financial Services Committee.
"The more people exaggerate these problems, the more pressure there is
on these companies, the less we will see in terms of affordable housing."

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

"I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the
bargaining power of poorer families and their ability to get affordable housing
," Mr. Watt said.

But as with all things, it's Bush's fault.

"...if we all believe in the things you believe you're seeing..."
EJ/BT '76

Elton John: The Crazy Water Community

Elton John News Blog

They must have the whole thing planned...
Joined: 18 Jul 2001, 21:54

16 Sep 2008, 20:03 #6

And the people responsible for the Fannie and Freddie mess are on Obama's campaign team;

"You look at Obama's economic advisers, the guys he has counted on from day one and who have raised him a ton - and I mean a ton - of money:
Franklin Raines and Jim Johnson, both of them are waist to neck deep in the mortgage debacle."

Both Raines and Johnson have served as CEO of Fannie Mae, with Raines taking over from Johnson. Both are key political
and economic advisers to Obama.

"How can Obama go out with a straight face and say it was Republicans who made this mess, when it is his key advisers who ran the agencies that made
the big mess what it is?" says a Democrat House member who supported Sen. Hillary Rodham Clinton. "It's his people who are
responsible for what may well be the single largest government bailout in history. And every single one of them made millions off the collapse that are
lining Obama's campaign coffers. If the McCain campaign lets this one go, they deserve to lose."
I agree...McCain's campaign will be incompetent if they do not bring this up and right away!

"...if we all believe in the things you believe you're seeing..."
EJ/BT '76

Elton John: The Crazy Water Community

Elton John News Blog


17 Sep 2008, 17:44 #7

What the heck you goin' on about, hoss? I didn't mention Bush, Obama or anyone else. I was just pointing out that the U.S. and world financial systems
resemble nothing more than giant pyramid schemes.

The recent U.S. government bailouts are the most massive instances of socialization since Russia in 1917. It's just so funny how "socialism" is
such a very evil word in the U.S.

They must have the whole thing planned...
Joined: 18 Jul 2001, 21:54

18 Sep 2008, 13:38 #8

From Bloomberg:

"The Democratic-controlled Congress, acknowledging that it isn't equipped to lead the way to a solution for the financial crisis and can't
agree on a path to follow, is likely to just get out of the way."

"...if we all believe in the things you believe you're seeing..."
EJ/BT '76

Elton John: The Crazy Water Community

Elton John News Blog