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JUDGMENT CALLS

Robert J. Samuelson

Beware the Bailout

In rushing to fix one problem, has the Fed created others?

 
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  • Posted By: thinkgra @ 04/13/2008 10:39:28 AM

    Comment: The root of the subprime problem is two-fold: first, in an attempt to create an ever-expanding market, lenders relaxed their standards, allowing such things as no principal payment, no down payment, and no income documentation. (This is made possible by weakening of or violation of banking regulations.) Second, certain lenders took advantage of this, plus the FHA guarantees for low-income lenders to created a revolving door by which properties were endlessly recycled through a series of unqualified buyers, with the FHA repeatedly making good on the losses. (This is called criminal fraud, and is a felony.) These shaky mortgages were bundled into opaque investments, which made it impossible for investors, even those with the star MBA wattage of invesment house executives, to know just what they were buying. The sudden and mysterious (to the outsider) fire sale at Bear Stearns has the look of an insider takeover, facilitated with taxpayer funds. Having run out of little fish to eat, the sharks are now eating each other.

  • Posted By: Annceline @ 03/21/2008 9:17:55 PM

    Comment: Finally, someone who believes as I do. I was once a union member, and was amazed to see how indiscrimately they wielded their power. The employer was unable to fire anyone, no matter what. That weakened the union from within. I proposed to anyone who would listen that there needed to be a middle ground wherein the union and the company would have to agree to hire a worker after a probationary period. That was 30 years ago, and for the past ten years I've been saying to anyone who would listen that the unions' time has come.....Bear Stearns is the catalyst.

  • Posted By: tassiedevil @ 03/19/2008 8:22:54 PM

    Comment: Until Amercia stops printing money to solve its problems things will only get worse.It's time there was a real debate about the growning deficit.Law makers do not have the skills or guts to takle this problem head on.Just puting out the spot fires does nothing but make things worse.The last time this happens the answer was to come of the gold standard and to deregulate,turning back the colck and regulating evrything will only make matter worse.It's time middle America demanded more of it's politicans,the current 2 year elections cycle means there is very little chance of meaning full reform.you need to extend congressonial terms from 2 to 4 years,You need to ban lobbist from the capital and you need full disclourse right accross the board.What do I care I'm just an aussie,I care becasue everytime you sneeze we catch a cold.If America is going to be the worlds police fore then we should all contribute to the cost?Unitl you stop printing money to fund police actions nothing will change.I'm passing thru next month and it will be intresting to see what the man on the ground thinks.

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