The Monster That Ate Wall Street

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  • Posted By: SuzyQ1 @ 09/28/2008 3:14:55 PM

    Thank you for this article explaining the intricate transactions that caused this wild ride. Now I see why AIG was so important. Yes, as one commentator mentioned, selling mortgages to people who had no business with them contributed to the financial fiasco we have, but that is far from being a primary cause. We should say, "Yes" to demanding close regulation and providing for a way to kick out anyone who does not use due diligence to keep on top of these clever deals.

  • Posted By: catvol@chartertn.net @ 09/28/2008 3:14:53 PM

    Excuse me, but isn't a certain President and a Senator and a Congressman getting a free pass on this? Who was it who pressured Fannie and Freddie to make those subprime loans? Your article is nothing but a whitewash job. john Willis, Kingsport, TN

  • Posted By: Matt Daddy @ 09/28/2008 3:13:08 PM

    A little clarity. The Katrina debacle holds blame for city, state and federal officials, too. Unfortunately for the Bush administration--masters of the game of blame delegation--the Home Land Security department and related legislation was their own creation. It clearly makes the Federal government in charge of any and all disasters that overwhelm or threaten to overwhelm state and local resources.

  • Posted By: duckpile @ 09/28/2008 3:12:03 PM

    The GOP controlled congress when Katrina occurred, which was part of the reason they lost the reins, and they were in the process of taking over congress just as the Credit Default Swap was being created. I wish we could just let them twist in the wind, but it would mean tighter credit if you wanted to buy a car or a house, and probably a depression like we haven't had in seventy five years.

  • Posted By: Lynn @ 09/28/2008 2:39:00 PM

    Thank you NOWFORTHETRUTH, for sharing your FannieMae/FreddieMac list of contributions to the Congressional fatcats. Markci, have you read it yet? And to rsvp Markci, where was the Democrat controlled Congress during the Katrina debacle? Scrambling to relocate their yachts out of the Gulf? All we heard from them was "Oh, I feel your pain."

    • Posted By: markci @ 09/28/2008 3:10:58 PM

      I guess anyone who believes the Congress was controlled by Democrats in 2005 is dumb enough to believe anything.

    • Posted By: rail60 @ 09/28/2008 2:59:27 PM

      Weren't the Republicans in control of Congress when Katrina occurred?

      • Posted By: markci @ 09/28/2008 3:03:28 PM

        *** And to rsvp Markci, where was the Democrat controlled Congress during the Katrina debacle? ***

        They were not running the administration, and were in the minority in Congress, you imbecile. Not that Congress has much to do with it anyway. The problem was that George Bush put some horse show guy in charge of FEMA.

  • Posted By: btorched @ 09/28/2008 3:10:28 PM

    Keep printing money Washington! Have yet to hear anything about how bad inflation will be a year from now. HOw are we going to get the entire world (even citizens of USA) to buy into this crap? NOBODY on "main street" wants this. Make WALL STREET pony up its fair share first and foremost, and then ASK the citizens to help with the rest. I have yet to hear how the GREEDY b@stards on Wall Street are going to help us. Oh that's right they pump all the MONEY they stole back into the Market and become even richer, while people like me have to worry how the hell I can afford to put gas in my car, pay for my child, and my house at the same time. And in ten years Wall Street will do the same DAMN thing, and of course have to turn to US the tax payers for help once again.

  • Posted By: colinml @ 09/28/2008 2:22:46 PM

    The republicans controlled both houses between 1994 and 2006. The democrats recovered a slim majority in 2006, but still, with a republican president. It is the pinnacle of irony for republicans to blame democrats for not rebuilding, in a brief two years, what it took the republicans 12 years to destroy.

    • Posted By: Nowforthetruth @ 09/28/2008 3:09:46 PM

      If it worked that way, then the Democrats would have been able to pass their "lets fund ACORN on the sly" bailout bill without the House Republicans, as the Democrats have a majority in both houses of Congress.
      http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

      For better or worse, a simple majority does not give one side or the other total control.

  • Posted By: markci @ 09/28/2008 1:38:15 PM

    "I worked in government relations for Fannie Mae for more than 20 years, leading the group for most of those years. When I see photographs of Sen. McCain's staff, it looks to me like the team of lobbyists who used to report to me. " -- William Maloni, former head of lobbying group at Fannie Mae in a letter to the New York TImes

    • Posted By: Nowforthetruth @ 09/28/2008 1:49:22 PM

      Here is a link to a list the top 25 in Congress who got contributions from the folks at Fannie and Freddie. Obama is listed second, after Dodd, even though Obama is just a Junior Senator. McCain is not on the list.
      http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

      • Posted By: revolutionX @ 09/28/2008 1:55:48 PM

        funny how the facts always seem to get in the way with propaganda

        • Posted By: markci @ 09/28/2008 3:06:38 PM

          The FACT that McCain's campaign is nothing but lobbyists? Yeah, that's hilarious.

  • Posted By: si16040 @ 09/28/2008 3:06:07 PM

    Stop the pointing fingers, do something. It's greed of the CEO 's who walk out with millions, and the home=buyers who knew they will not be able to continue payment. So, what?? walk away. I wish we all could have that mentality, then blame others.

  • Posted By: Dollar bill @ 09/28/2008 3:00:01 PM

    Once again the people of USA are being sucked into the Black Hole, known as Washington D.C. You can take all the foreclosures, bankruptcies and other bad loans for the past 50 years and they won???t add up to 700 billion. This thing about foreclosures and bankruptcies has been going on for centuries. This is just another slight of hand by our ???friends??? in Washington to cover up their own blundering mistakes. The average person is about as smart as a bag of hammers when it comes to finances. They???re not too bright when it comes to understanding the words, supply and demand. Right now our economy is based on at least 80% of what we consume from foreign countries. We hardly make anything anymore. Foreign countries own much of our stock. They can make or break us any time they please. Example: Japan could not win the war, but look at them now; they supply us with many different products. America must wake up and ???demand??? retribution from our congress for the slop jar attitude at handling ???our??? money. If they don???t start writing letters and making phone calls then they deserve what they get.

  • Posted By: phillyphan @ 09/28/2008 2:58:52 PM

    Newsweek: How ???credit default swaps??? ??? an insurance against bad loans ??? turned from a smart bet into the monster that ate Wall Street.

    How is this different than what the house republicans want. Us (American taxpayer) to sell insurance against bad loans. The only way this works is if we regulate in addition to insure.

  • Posted By: Dollar bill @ 09/28/2008 2:57:42 PM

    It's not my money, says JP Morgan, why should I worry? We need to put them on a slow boat to a third world country with no chance to return.

  • Posted By: jerzyboy349 @ 09/28/2008 2:54:41 PM

    Yes, don't blame the gun when someone gets shot. Blame the one who fires the shot. String 'em all up! Every last one of them. We're all waiting for the indictments.

  • Posted By: olderwiser @ 09/28/2008 2:33:55 PM

    The real problem that we have is that we can't drive to Europe. I am going to the beach tomorrow with a bucket and bail out the sea. Then we can all drive to Europe. For inspiration, I will race with congress. They are trying to bail us out of trillions of dollars of debt that all experts admit is not capable of calculation. If I bail the sea out before they get us bailed out, then I am packing up and driving to Europe where I will have fun while they sweat and bail.

    • Posted By: olderwiser @ 09/28/2008 2:44:49 PM

      Bigness is the culprit. Politicians blab that they are helping small businesses. Not true. Small businesses work like hell and occasionally fail. They are never bailed out. Too small to help. Very big businesses fail and they are bailed out because they are too big to fail. Individuals fail and are too small to bail out. Only bigness is virtuous enough to receive help from our politicians when they fail, even if they failed from crooked operations. Crooked means that they knew that they were failing, but decided to pass the losses onto others and not take the fall themselves, knowing that they were too big for the government to afford to let them fail.
      However, there is a bigness in the vote. If the voters throw all of these politicians out of all of the offices that they now occupy, then that is bigness. When we throw them out, then they cannot afford to stay. All of their lobbyists cannot afford to stay because all of the bribees are gone. They are the bribers and the politicians are the bribees. We, the voters are then too big to screw with any more. Vote. Vote Vote.

      • Posted By: olderwiser @ 09/28/2008 2:52:28 PM

        When we vote big, we will vote for only those who promise to regulate business again. The troubles that we have now are caused by government that disdained any interference at all with big businesses. The promises to regulate need to be thorough and provide for creative people who constantly study the interactions between businesses which amount to gigantic Ponzi Schemes, just like the ones in the article above where gradually all protection is frittered away by unbelievably large leverage caused by interlocking insurance schemes when finally there are no reserves to cover the losses. All such arrangements need to be found and prevented and adequate backup reserves for risk must be maintained. Vote big. First, throw all of those now in office out. Then listen carefully to the promises of their replacements. Vote big and vote smart, or go broke dumb.

  • Posted By: fallon2012 @ 09/28/2008 2:50:38 PM

    Great video of C-Span2 hearings on Freddie and Fannie:

    http://www.youtube.com/watch?v=_MGT_cSi7Rs&eurl

  • Posted By: gonzo510 @ 09/28/2008 2:49:42 PM

    The only way to fix this mess is to regulate the banking and finance industries, eliminate K street corporate lobbying and enact strict campaign finance reform, otherwise politicians will do what's in their best interests, not ours.

  • Posted By: Quaizywabbit @ 09/28/2008 2:47:49 PM

    for us average Joe/janes, letting these institutions Grossly overinflate real-estate prices by paying appraisers to overexaggerate their true worth, knowing fully in advance they were putting us in a bind financially. There wasnt too many buyers. They created that by opening the wastegate to anyone with no money down, but the catch was you were buying something not worth even half its asking price 5 years ago. Why bother with $40,000 loans when you can get away with $200,000? If they default, we'll pass the buck.....

    Appraisers should be strictly regulated by independant groups who have no conflict of interest with any party invloved. If they get caught doing this crap, they should be liable for all that money......

  • Posted By: jeffreypease @ 09/28/2008 2:39:24 PM

    Thank you, Matthew, for your insightful article. Is it possible for you to give us a general idea of the amount of commissions were made from all of these CDS dealings in these past 14 years? In other words, when these financial manipulators were digging the foundation out from under our financial system, how much did they take home? And how much will they pocket from this $700,000,000,000 bailout? Jeff Pease/Charlotte, NC

  • Posted By: BudinOK @ 09/28/2008 2:34:58 PM

    This isn't a financial Rescue Bailout Plan. This is a Financial Sellout Plan for the American Taxpayers.

  • Posted By: BudinOK @ 09/28/2008 2:33:59 PM

    This isn't a financial Rescue Bailout Plan. This is a Financial Sellout Plan for the American Taxpayers.

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