Bailing out Fannie Mae and Freddie Mac is an outrage!
Will Rogers once said, “I don't make jokes, I just watch the government and report the facts.” Spoken in the 1920s, his words are still true today. Indications out of Washington this week are that Uncle Sam is about to do something that if it weren’t so serious would be an absolutely hilarious joke. Of course, I am referring to the planned taxpayer bailout of Fannie Mae and Freddie Mac.…
Article comments
26 - Andy Marsh
Clavos - everybody knows that ONLY bush lies...all the "progressive" pols are as honest as the day is long...gee wiz man, get a grip!
27 - Clavos
[Hangs head in embarrassment]
I know, Andy, I know.
It's just that...just that...
Interestingly, yesterday I was in a car full of Jewish liberals, (who are good friends) for a couple of hours, and the talk turned (inevitably, in an election year) to politics. Much to my astonishment, I discovered that, to a man, they ALL think that McCain will be our next President.
As Arte Johnson used to say on Laugh In,
"Veeery interestink..."
28 - bliffle
Now clavos has sunk so low as to bow to Andy.
I don't expect politicians to be honest, I expect liars to be turned out and punished.
And I don't like facilitators much either.
Constantly alibiing serial liars creates an unacceptable Moral Hazard.
29 - Les Slater
Clavos,
"You persist in this fantasy that your politicians and government are going to act honestly and for the good of the people, even in the face of more than 200 years of history to the contrary."
"Interestingly, yesterday I was in a car full of Jewish liberals, (who are good friends) for a couple of hours, and the talk turned (inevitably, in an election year) to politics. Much to my astonishment, I discovered that, to a man, they ALL think that McCain will be our next President."
"Veeery interestink..."
I presume, you gave no other indication, that these 'Jewish liberals' were going to vote for either McCain or Obama.
Your only comment was 'Veeery interestink.... I would think, according to your 'You persist in this fantasy that your politicians and government are going to act honestly and for the good of the people...', a more appropriate remark might be 'Veeery Stuuupit".
Les
30 - Clavos
I presume, you gave no other indication, that these 'Jewish liberals' were going to vote for either McCain or Obama.
Good (if obvious) presumption, Les. They are all voting for Obama. Do you see a liberal voting for McCain?
Your only comment was 'Veeery interestink.... I would think, according to your 'You persist in this fantasy that your politicians and government are going to act honestly and for the good of the people...', a more appropriate remark might be 'Veeery Stuuupit".
True, but that was neither my point nor Arte Johnson's line. My point was that I was astonished that liberals (at least these few) are already resigning themselves to a McCain win.
31 - Cannonshop
Now clavos has sunk so low as to bow to Andy.
I don't expect politicians to be honest, I expect liars to be turned out and punished.
And I don't like facilitators much either.
Constantly alibiing serial liars creates an unacceptable Moral Hazard.
Okay, so... when are you going to start going after Rangel, or Pelosi, or...see, Jet, here's the problem with that line-Democrats never go after their own. EVER.
Your side talks a good line about Ethics, but when it comes to cases, universally it's "Deny Everything, Admit Nothing, Make Counter Accusations" followed by "Write another set of ethics rules that will ALSO be ignored, add another law to the pile that were broken to remain in power."
and so on. Address the scumbags on your own side, then lecture me about mine. Republicans, at least, have a long post-watergate history of DX'ing, indicting, and convicting members of their own party that get caught out. Barney Frank (life-partner ran a whorehouse out of his office) is still in office, Charles Rangel ($75,000 worth of tax evasion) is still in office, Schumer (illegally obtained credit report on a fellow named Steele by "Stealing" said fellow's Social Security Number...AFTER pressing for an identity-protection law) is still in office.
Only Frank was Censured (and may be that only Frank can honestly claim ignorance. Spouses do all kinds of things behind each other's back.)
Schumer tossed two of his aides on a short suspension...mind you, they committed a federal crime, but hey, it's okay because it was Political, right???
Rangel, who's sat on the right committees for decades should have known better. If he's indicted for it, it won't be by a Democrat.
Teddy Kennedy: where does negligent homicide, drunk driving,and accessory to forcible rape fall in your particular pantheon of sins, Jet? If he was a Republican, he'd have been run out of office even if acquitted on all charges.
As a democrat, from a Democrat state, and since the events happened in Democrat controlled jurisdictions, he skated.
Let's see now...
Ken Lay: Indicted by a Republican. Likely to face conviction by...a Republican, died instead.
Newt Gingrich: Indicted by...Republicans (with special help by democrats who blamed him for their defeats in '94)
Palin indicted several Republicans for bribe scandals, and one of 'em even went to JAIL.
If there's a real case for War Crimes in Iraq, the person most likely to indict GW Bush? A Republican. (that'd be whoever McCain appoints Attorney General. An Obama appointee would just soak up investigation funds unless he can come up with something cool for the newspapers.)
IF GW were a Democrat, the Democratic party would be screaming-not for his trial, but to prevent it.
You KNOW this is true. Only Republicans go after members of their own party. Democrats play office politics party-preference games.
32 - Les Slater
"I was astonished that liberals (at least these few) are already resigning themselves to a McCain win."
I'm not astonished, but on second thought, I do find it interesting. Liberals are a vanishing breed. It's not a very defensible position. I suspect many self-proclaimed liberals don't believe the line wholeheartedly, maybe so with these particular Jews. If they are not economically on some precipice then they have little to be emotional about in the election. They can view it with some detachment. They may even harbor some secret desires that McCain actually win.
If the economy gets much worse, many on the left will move sharply right.
33 - bliffle
Apparently, cannonslops only argument is red herrings.
None of the culpable persons he mentions are in positions of Great Power. Their crimes are small, no more important, say, than lying about sex.
34 - Cannonshop
I don't know, Bliffle, Rangel's the chair of the Ways and Means committee-he WRITES tax-law, and he's been evading taxes. How's that differ from a guy going to a Baltimore Bathroom to get a blowjob?
The guy in the bathroom's just a pervert, Rangel's duping the public trust while squeezing Joe Citizen for more of Joe Citizen's money. You tell me?
If Rangel were a Republican, he'd be convicted in the press, convicted by his party, and on his way out of office, without even seeing a courtroom. as a Democrat, he gets a pass in the Media, his Party, his Congress, and he'll likely have the ink dry on his exemption before the first hearing (which his buddy Reid will chair) is even convened.
Contrast with Gingrich's questionable book-deal, which got old Newt run out of office and shunned by most of the Party without a conviction, or even a trial.
The allegations were later debunked, but a Republican Congress threw out their OWN LEADER for having questionable ethics. What's your side done?
35 - jamminsue
Can we change focus a little? I was listening to financial news tonight and here's something to think about: Pensions and Profit Sharing Plans will take another Enron-type hit over this; Fannie Mae and Freddy Mac are/were really popular "institutional" investments. I'd relly like to hear what you all think about that little stinkbomb...
36 - Cannonshop
#35- I think it's time to fire some fund-managers, without the golden-parachute treatment. What Fannie and Freddy were doing was public knowledge, and while it had a 'high' return, High Returns tend to indicate large risks. Unfortunately, those risks were hidden by the rather stupid truth that Government would bail them out in a downturn.
We need to stop telling people they can count on Uncle Sugardaddy to take care of them, or we're going to have this happen again...and again...and again.
(and by "People" I mean "bankers, investors, and Citizens", in that order.)
37 - Andy Marsh
Cannonshop - I get the impression from reading your comments that you're in WA. My question is, do you get up really early, go to bed really late, or not sleep at all?
38 - Cannonshop
Somewhat insomniac second-shifter, and yeah, we went on strike. Got picket duty on 9/11/08. (as pissed as I get with the IAM, it IS my union.) I stay up too late. Tomorrow, I'll be getting up waaay too early.
39 - bliffle
Good point, jamminsue, in #35.
Many pension funds, especially for public employees and union members, are really huge and hire expert investment analysts as managers. If they are not corrupted by outside influences they can become astute and influential shareholders. In fact, many BoDs resent the influence and questions of those pension funds because it infringes on their perks.
I wonder how the pension funds played in this problem.
40 - Cannonshop
Bliffle, just... Read This and tell me who you see in the number three spot, and what you think it means. (Jamminsue, you should read it too.) I'm interested in your interpretation of the data.
41 - jamminsue
What I was trying to point out is the institutions like FNMA were the ultimate safe investment for investors like pension fund administrators, because they were stable, and previously were not volatile.
The implosion of the RE market, coupled with individuals competing with the government for the shrinking amount of working capital are the reasons for the problem, coupled with so many people failing to make thier mortgage payments for whatever reason.
Working capital is shrinking because of the obscene amount of money being spent in Iraq
Where do those investors go now for a stable, non-volatile investment?
42 - jamminsue
#40 - Cannonshop - that is a red herring, not germane to what I was trying to get across.
Yes, there has been abuse in the system, that is because the laws relating to banking have either been repealed (Again, thank you Pres Regan & Neil Bush) but that has NOTHING to do with where do the pension funds go now?
43 - Cannonshop
Jamminsue, the one thing I learned about investing so far, is that there's no 'safe' investment. There's Low-risk, and High-Risk, and High-risk stuff pays out faster and bigger, but it's high-risk for a reason. The RE bubble is a perfect example of this- Real Property has long been viewed as a safe investment. Unfortunately, it's not a safe investment when your mortgage lender is issuing things like zero-down-interest-only bubble-payment mortgages (a cancer that was pretty common in the Midwest and especially Southern Colorado in the late seventies and early eighties, with predictable results that strongly resemble what has happened nationwide this year.)
Bankers issuing Mortgages were working on the same idea that Houseflippers were working from- massive profits in a short period of time with minimal investment out of pocket. When you could turn a 30% profit (after tax) on an investment in less than six months, and do it over and over again, that's very seductive. It's also the very definition of volatile. Prices nationwide skyrocketed until they reached the point that there wasn't enough of the stable "I want to live here" market with both means and will. That's when it crashed, and with good reason-the whole thing was based on ratcheting profits with no end in sight, once you can't make a profit, the money goes away.
I don't disagree that Deregulation of the Savings industry was a bad move. In the first election I voted in (at age eighteen), I was a fool and wasted my vote because of the Silverado mess (Neil Bush), but didn't trust Clinton enough to vote for him. (I voted for a third party).
But I STILL want to know what your take is on the raw data I linked, because it's germane to the larger discussion of both the FannieMae/FreddyMac situation, and the Elections coming in November.
44 - bliffle
IMO pension fund managers are going to have to radically alter the way they do business to adapt to the reality of the radical changes in big company management and goals.
In the last 30 years business pirates have invaded businesses with the intention of looting the big business by cashing out the assets and blue sky, and thence operating the company close to the line, scraping off profits and allowing no Retained earnings for a rainy day.
Therefore these businesses have become unstable and easily crashed, so they are no longer stable investment vehicles. Big investors can no longer afford to be anything like passive.
So I see two strategies for pension fund (and such) investors in the future:
1-invest with the intention of taking over the Corp., just as a pirate would, with the idea of operating the Corp in the best interests of the fund, whatever that might mean.
2-invest much earlier in the business cycle when risks and rewards are greater but the fund has a better shot at retaining control of successes. Use a modification of the famous VC principles (modified to better suit the more conservative goals of the fund, but not so starched as previous institutional attempts at VC).
Basically, funds have to be faster and more adventurous.
45 - Cannonshop
"In the last 30 years business pirates have invaded businesses with the intention of looting the big business by cashing out the assets and blue sky, and thence operating the company close to the line, scraping off profits and allowing no Retained earnings for a rainy day."
Indeed. It's a pattern that is inherently unsustainable in spite of its popularity.
46 - jamminsue
OK, Barrack is the third most favored. How much of that is employees?
As everyone knows, Obama is the all time champ at receiveing money from individuals. The data is not that "raw" as how much is the two big boys and how much is individuals, that may or may not have contributed looking for favorable tratment. Also, specifically when were the funds we given?
IT is still a red herring.
47 - Cannonshop
#46
So there is a flaw, in your opinion, about the methodology of the study they used, or about how they presented the results.
Here's my take: I work in a Union job, when the Union comes around with the collecting plate, generally it's going to the PVF (Political Victory Fund), and will probably be listed as such on disclosure documents. If I make a contribution myself, to a candidate, my contribution probably will NOT be listed as being from either Boeing (my place of work) or the IAM (my Union), it's going to likely be either under a donation "bundler's" name if I used a middle-man, or my own.
Similarly, then, I wonder if such practices are consistently enforced in disclosure documentation? In which case, wouldn't the idividual contributions of employees ALSO be listed either by third-party bundling, or under those employees' names? and if so, then wouldn't those donations also be outside the data-set in use for a study such as the one linked?
I'm just sayin...
48 - jamminsue
I am not sure exactly how bundling works, but from what I have read, PAC's collect contributions from people (checks are made out to the candidate) then pass the checks on to the candidate. Hence "bundling." The comment “employee donations” is what triggered the question.
I do not know how those are reported to the FEC as I haven't looked into it carefully before. It just occurred to me to ask the question because of reading how Barrack has managed to get such incredible amounts of donations from people.
Maybe someone reading this will know and pass the information along.
What fun to work for Lazy B - - NOT, I know there has never been a time that labor and admin has gotten along there...happy strike time. I lived in Seattle for 25 years, prepared income taxes (retired from that now, thank goodness!) and did plenty of Boeing Employee tax returns...and heard the war stories.
49 - bliffle
One thing consistent about the government bailouts is that the gov rushes to bailout Big Guys but gives the back of the hand to small guys. Thus assuring the ascendancy of monolithic society.
It's all in keeping with the republicans abandonment of small to moderate businessmen and their evolution into Royalist neo-republicans. Of course, the dems always disliked those little business guys as 'bourguoise'. So where's a small businessman or guild-type skilled worker to turn?
50 - kingdom media
from a historical point of view, it's hard to object to the government's mass bailouts since similar debt-producing methods were used to bring the U.S. out of the Depression... our economy has been supported and driven by debt ever since
51 - bliffle
Better to use the bailout money to help distressed homeowners than to throw it into the bottomless pit of waste that the bankers have created.
52 - Ala
:) well said. However won't the reprucutions of the collapse (if they aren't bailed out) of these two Mortgage giants mean that the U.S economy will slide into an even greater recession. This in addition to the effects on the global economy? The problem may lie not in the bailout, but in the fact that these giants were subject to poor management?
53 - Aka Akapelwa
sorry i made the comment above. Just ommited my name.