discussion comment
15 years ago
"But in the place of federal funds the government provides considerable unpriced benefits to the enterprises... Government-sponsored enterprises are costly to the government and taxpayers... the benefit is currently worth $6.5 billion annually.".[30] Fannie Mae and Freddie Mac are allowed to hold less capital than normal financial institutions: e.g., it is allowed to sell mortgage-backed securities with only half as much capital backing them up as would be required of other financial institutions. Specifically, regulations exist through the FDIC Bank Holding Company Act that govern the solvency of financial institutions. The regulations require normal financial institutions to maintain a capital/asset ratio greater than or equal to 3%.[31] The GSEs, Fannie Mae and Freddie Mac, are exempt from this capital/asset ratio requirement and can, and often do, maintain a capital/asset ratio less than 3%. The additional leverage allows for greater returns in good times, but put the companies at greater risk in bad times, such as during the current subprime mortgage crisis. FNMA is also exempt from state and local taxes. In addition, FNMA and FHLMC are exempt from SEC filing requirements; however, both GSEs voluntarily file their SEC 10-K and 10-Q." http://en.wikipedia.org/wiki/Fannie_Mae#Assumed_guarantees
Exempt from state and local taxes . . . Gee, no government fingerprints there. LOL! A person would have to be totally blind not see how involved the government was directly and indirectly in the mortgage mess. I'll repeat: This government involvement regardless of the size of the collapse did provide massive benefits. IOWs, not only do I blame the government for the mortgage mess---I also give the government credit for the benefits that the mortgage markets yielded. This was government to the right, government to the center, government to the left, government from above, government from below; just government everywhere. And, the fraud was not a secret---from what has been reported. And, the smartest thing may have been to ignore the fraud! IOWs, the government may have done the right thing by ignoring The Wall Street Journal and others who were yelping for "adult" supervision i.e. even more government. Congress had hearings and in its wisdom---nothing was done. That as I'll repeat may have been good government. Fixing a problem ain't always the brightest move by long shot.
***The government, imo, did right despite the resulting collapse.***
Keep dreaming if you believe the mortgage market was a free market. :)
discussion comment
15 years ago
My long time neighbors lost their home to foreclosure. They had a "normal" mortgage from a local private bank. The loan was sold to some private bank in the Mid West and that bank foreclosed on them. Pretty straight forward it would seem. Looked at the documents available online---I just didn't see any government fingerprints at all. It just appeared to be a standard loan----not sold to any of the federal whatevers.
What is interesting is that within a few months of booting my neighbors----guess who the new owner is? Yep, you hit the bullseye most likely . . . it was the government. Should this come as some big shock? Well, maybe if you believe some nonsense about the government not being completely twisted up in the mortgage market. It is a government game and no one except perhaps flag wavers or innocent sheep should be surprised to the government was the new owner! The government game is just in your face. New owners----government involved? I don't think so---but, I don't know. The government has so many tentacles that you can't be 100% sure. New owners lose the home and government may again be the new owner.
And, you think this is a free market? Yes, and I suppose you believe in God also. :)
How many times does the government get to pull a total fraud before ordinary people wake up and recognize that government is very fraudulent.
discussion comment
15 years ago
"The Federal National Mortgage Association (FNMA) (NYSE: FNM), commonly known as Fannie Mae, is a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise (GSE), but founded in 1938 during the Great Depression. The corporation's purpose is to purchase and securitize mortgages in order to ensure that funds are consistently available to the institutions that lend money to home buyers.[2]
On September 7, 2008, James Lockhart, director of the Federal Housing Finance Agency (FHFA), announced that Fannie Mae and Freddie Mac were being placed into conservatorship of the FHFA. The action is "one of the most sweeping government interventions in private financial markets in decades".[3][4][5] As of 2008[update], Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) owned or guaranteed about half of the U.S.'s $12 trillion mortgage market.[6]" http://en.wikipedia.org/wiki/Fannie_Mae
Oh yes, and a reasonable person would conclude the U.S. government was just completely out of the picture when it came to mortgages! HELLO THERE, PLEASE WAKE UP!!! This was just another government frauds in a long long long line of government frauds. Flag wavers will take any and all opportunity to blame capitalism when the guilty party over and over is the government. Yes, the government should also get the credit for the widespread home ownership in the U.S. So you keep drinking that Kool Aid that the government wasn't twisted every which way in this government sponored scam. :)
discussion comment
15 years ago
"You also completely ignore the original question which is why if there was this implicit guarantee that you imagine (but that does not exist in reality) the companies I mentioned went broke?"
Are you for real? It was more like an explicit guarantee. Almost like the explicit guarantee the U.S. government gave for its Silver Certificates or its Gold backed bonds. Did the government honor those contracts? Of course, not! Did some people rely on the honesty of the U.S. government. Yes. The country is filled with flag wavers who believe in the U.S. government.
Furthermore, I don't need to dig into particulars when it is the framework/system that is at issue. This wasn't a free market---at all. Only government lovers would wish to pretend that it was. So you would like to pretend that the government was a bit player in the U.S. mortgage market. That is 100% asinine.
As far as big shareholders losing 100% of their wealth, please. That is as absurd as the government having to borrow the money it creates out of thin air. I owned few shares of this textile company and the company went bankrupt. Did the big shareholders lose everything? Yes, if you are the most innocent sheep in the world. The reality was it was a fraud from beginning to end. I didn't get out solely due to extreme laziness and my holding was tiny---besides I kept telling myself I wanted to see how the game played out. It played out like I thought. Big shareholders cry crocodile tears and make off with their ill gotten gains. This was a company that for years was supposed to have a net real estate asset value of $15----normally it traded for $1 or $2. The big shareholders moved operations to Mexico about 2 years before looting the company----I guess less regulation is in place over there. Anyway, maybe I held the shares 40 years? I don't know it was a long time and it never looked right. The only people making money for all those decades was the big shareholders. I feel that I deserve the loss for not selling a couple decades earlier.
discussion comment
15 years ago
"Let's just change the wording 'strippers' to 'First Amendment Freedom Fighers' or 'First Amendment Dancers'. LOL"
LOVING IT!!! :)
discussion comment
15 years ago
BTW, let us say government was totally out of the picture. No idiotic rules or freebies or anything. A Libertarian dream economy.
I don't believe that such a dream economy would not collapse. I don't know. I'd have to look at the Libertarian dream economy very closely. I think ultimately no matter how perfectly crafted it to would collapse.
However, the government game mandates collapse. That is part of the game. BTW, the government game might be a better game all things considered than the Libertarian game. I don't know. I'd have to look at it very closely.
discussion comment
15 years ago
"--> burger flippers were able to buy $300,000 houses----thanks to screwed free market risk models"
Hardly. :) Thanks to businessmen who saw the government opportunity and ran with it big time. And, they'll do it again and again. Unless the big boy is truly risking his own money it is a game that truly should end the same way every time.
discussion comment
15 years ago
"If there was really this supposed implicit guarantee on all mortgages and, hence, no risk, why did Lehman and WAMU go bankrupt? Why did Bear Sterns and Wachovia practically go bankrupt and all but wipe out their shareholders?"
Oh gee! The shareholders are important? :) A few or lot of shareholders getting screwed proves exactly ZERO. :) Did the boys playing the government for a sucker truly get screwed?
My guess is they took a lot of that money and it is very safe and sound. A lot of this game is mere facade. Like phony U.S. debt auctions . . . government needs to borrow money that it can't print non-stop . . . please get real. It is an open fraud. :)
Many of these "failures" are exactly what the big boys wanted. And, government is an eager helper. You remember the old saying. He who has the gold makes the rules? You remember? Well he who owns the money creating machine makes the rules. A few rich victims thrown out for show impresses not a bit.
discussion comment
15 years ago
You think the businessman who got NINE (9) mortgages could have done it without the help of government? :) Who knows maybe he could have figured a legal way to do that fraud without the government's help. I don't know. I did get to see the joke played out again and again many years earlier. Government guarantees real estate loans and surprise surprise businessmen come a calling. Free market working beautiful. Some nitwit such as government guarantees a loan and businessmen take advantage of the opportunity. Free markets 101. :)
Screw the free market, btw. Let the government guarantee, finance, do everything. I don't believe in the free market even a little bit thanks to President Bush. :) Hey, the man opened my eyes. I want more government programs and the bigger and more generous the better. Let burger flippers buy $3 million dollar homes---that is good government, imo. :)
discussion comment
15 years ago
burger flippers were able to buy $300,000 houses----thanks to government.
discussion comment
15 years ago
"The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk."
Gee, government agrees to accept the losses and businessmen go wild. A big surprise? LOL! If I'm a businessman, then I'd be lending millions to burger flippers. It is good business. Let the government take the losses if the market collapses. It is a joke, a game, a fraud. It wasn't even secret. Here in Miami, some burger flippers were able to buy $300,000----thanks to government. I like that. I want the government to do more of that. Please don't blame "greedy" businessmen, however. It is just good business and a lot people benefit. Government prints a bunch of new money and play the game again. Everybody wins longer term. Appreciate the game. :)
Not even mentioning the government's Community Reinvestment fraud. Yes, an obvious joke with good businessmen willing to play the game. I'd definitely play. :) The country is a fraud and should be treated as such---a fraud that may accomplish a lot of good by the way---let us never forget all the good these government frauds accomplish.
discussion comment
15 years ago
Hi Dougster,
Yep, that is the easy cop out. Blame the victim. Sometimes the victim should be blamed by the way. :) Depends on the game.
Anyway, that really isn't the issue. The issue is what are the rules and who made 'em and what would free market theory indicate is a likely result.
discussion comment
15 years ago
Hi Dougster,
It is the government's fault. This mortgage fraud was NOT even a little bit of a secret. The government knew. The media knew. It was a game. A game that did a lot of good, btw.
discussion comment
15 years ago
"If hubby is busy working 12 hours a day at some stupid job, then he shouldn't be too surprised when the lawn man or whoever steps up and helps the wife."
That happened to a friend of mine. He work his tail off for his wife and children. Gave 'em the best that money could buy. The children didn't consider him a real father because they hardly ever saw him. The wife was lonely. I don't think she did the lawn man or the pool man or even the gardener. Nope. She found a highly intelligent and financially successful attorney who did have or at least he made time for her. She fell in love with the good looking attorney. My friend was an ugly looking man, btw. The wife files for divorce and lives happily ever after with the smart attorney. My ugly friend-----well his life pretty much turned out as ugly as he is. :(
Yes, the ugly man definitely wouldn't have shared his wife with any man for any reason. He wouldn't comprehend an "open" relationship . . . he'd probably ask why get married?
discussion comment
15 years ago
Hi how,
Sometimes it is blue. Sometimes it is black. Sometimes it is red. Sometimes it like a rainbow. :) I'm told that if human eyes weren't so defective we'd see the sky in many more colors. Perhaps genetic engineering is path worth exploring---humans need not only better eyes, but more importantly significantly increased brain power. Yep, the includes the most intelligent humans. :)
If you really believe that "conservatives" are typically nicer than liberals, then you need to really open your eyes and mind. As far as the ILLEGAL immigrants praise the Lord that they're willing to come and "steal" American jobs. LOL! I just wish the government would work harder to encourage more ILLEGALS to come and try and do some positive things. Maybe ILLEGALS could be used to help fill the government's prisons----but, make it attractive to 'em. You know conjugal visits, drugs, better food, air conditioning, whatever it takes to welcome them to this nation. :)
discussion comment
15 years ago
Hi Dougster,
The market self destructed. So what? Most Libertarians that I knew (I don't know many) were predicting a market melt down. To not see the government as the main evil doer or facilitator is just blindness or ignorance. The market behaved beautifully given the government's framework. Businessmen took the proper measures/risks given the game----I'd have done the same with GUSTO!!! :)
This shouldn't imply even a tiny tweeny tot that the market will not fail if the government merely stays the hell out of the way. Just in the example at hand, it was a government game. A government game that may have done tremendous amounts of good by the way----a collapse doesn't mean the game wasn't the best that could be set.
discussion comment
15 years ago
I can only laugh when people give an example of an "open" relationship failing. The old his stripper wife ran off with the rich dude from Texas which ostensibly proves it was dumb to be "open." Yes, well, umm, like "closed" relationships don't have the wife running off with the rich dude from Texas . . .
Probably the number one reason for relationship failure is financial AND that even includes when the husband is raking in a huge income. If hubby is busy working 12 hours a day at some stupid job, then he shouldn't be too surprised when the lawn man or whoever steps up and helps the wife.
discussion comment
15 years ago
"Jessica Alba."
Yes, she is looking good. :)
discussion comment
15 years ago
"'typical (moronic) American'" debt-load"
The Wall Street Journal opined that massive credit card debt was a blessing to companies and government. Whether it is "moronic" is an interesting question.
There was this man on Miami Beach. He sort of owned a Hotel. OK, I'll try and be clearer. He did own the Hotel, but he had a rapidly expiring land lease under the Hotel. Meaning if he can't buy or extend the land lease he loses the Hotel. :) Fun so far? He was attempting and would be successful at getting a mortgage on his Hotel, which more than likely he wouldn't be the owner of because of the expiring land lease. You may ask well what is the big deal? People get mortgages all the time. Yes, but he had EIGHT (8) mortgages on this ONE (1) Hotel. And, these generally weren't small mortgages. BIG mortgages and he was hunting for number NINE (9). He was honest with the potential lenders and the lenders may have even understood what they were doing. Were these mortgages going to be repaid? LOL! Please, the answer is a firm maybe. Maybe the vile government may come to the rescue. I'm not sure how the game ultimately played out, but that Hotel owner would, imo, feel only joy at screwing the government. Did he care about people? I can't say for sure----he seemed to, but I just don't know. Maybe he's the type who'd be tasering tiny disobedient old ladies and steal every penny of their savings----I don't know.
Point being I wouldn't describe the Hotel owner's debt as being moronic. A fraud? Yes. Intelligent. Yes. Anyway, just because a debt is extreme and even if the person may ultimately lose their home (property) doesn't for a second necessarily mean the debt was moronic.
I looked at the debts of a buddy. HUGE debts with not a chance for her to repay unless by an act of god or government. Were her HUGE debts moronic? I'm not sure. I'd need to give it some careful thought. I *think* the answer is that it wasn't moronic-----yes, she is losing TWO (2) homes and all her equity in those homes. Maybe with a lot of luck President Obama or maybe the court system can come riding to the rescue. There is a slim chance that the court system may turn her nasty lemons into sweet tasting lemonade and she might end up with a good deal of $$$. :) That is good government for a change. :)
Moronic? She could be looking pretty damn smart depending on the ruling of the government's court. :)
discussion comment
15 years ago
Hmmm . . . I think Libertarians are much more tolerant in the important sense. Sure a Libertarian may think socialists are evil, Bible thumpers are vile, gays are an disgusting, etc. The important point as far as tolerance is, imo, does the Libertarian wish to enforce his views by passing all manner of laws threatening others. There are even Libertarians who are hardcore racists. So, basically if tolerance is define as not having any strong beliefs as to what is moral and what is immoral, then yes a Libertarian probably isn't anymore tolerant than anyone else, imo. If tolerance is defined as not resorting to law and government to shove your values down other peoples throats via penalties of law, then I'd say on average Libertarians are much tolerant than others.
Socialists are generally very stupid. :) Sorry. However, with sufficient technology these stupid socialists may actually be correct. The game can change radically just with a little natural tweaking here an there.
discussion comment
15 years ago
"I wouldn't allow it.You could destroy your relationship. Is it worth it?"
Good point. However, if they're under extreme financial pressure not letting her do it might be even a greater likely hood of destroying their relationship. People do things for money all the time, that essentially ruin their lives.
discussion comment
15 years ago
Good point about LEGAL v. ILLEGAL. Seems like ILLEGAL immigration is best for stripclub patrons. I'd love to know how many LEGAL immigrants work in stripclubs compared to ILLEGAL immigrants.
If legality is oh so super important the government can legalize all the illegal immigrants. :) But, gee I think that would hurt the big bad corporations. America needs its ILLEGAL immigrants just as it needs cheap products from China. You don't have to think to hard to see one fraud after another in this country----fraud ain't necessarily bad; might even be a necessary evil.
I read a wonderful article sometime back about how much Social Security allegedly benefits from ILLEGAL immigrants----basically SS gets the cash and doesn't have to pay 'em benefits.
discussion comment
15 years ago
"Barnes v. Glen Theatre, Inc. marked a retreat from the Court's previous view that nude dancing, to the extent it is not obscene, is a form of freeexpression protected by the First Amendment."
Read more: http://law.jrank.org/pages/12825/Barnes-v-Glen-Theatre-Inc.html#ixzz0IG0HEvNS&C
discussion comment
15 years ago
Hi TUSCL_Brother,
I may be wrong, but I believe the U.S. Supreme Court held that strippers are protected by the First Amendment.
discussion comment
15 years ago
I think both Republicans and Democrats are pretty much sleaze city when it comes to stripclubs.