Dr. Tom is on a roll...

[Okla-homey]

Right now on CSPAN and calling out pork in the "Super-Necessary, Ultra-Important, The Country is Doomed if We Don't Spend This Bajillion, Economic Recovery, Gubmint Jobs Creation and Stimulus Act."

Unfortunately, he can't stop it, but at least he can point out to the folks this vital piece of legislation contains loads of porcine stuff like; a million to figure out how to stop Montana wolves from eating Montana lambs; a couple mil to the US Virgin Islands to decide if Alexander Hamiliton's birthplace should be designated a national monument; a couple mil to help San Diego celebrate some birthday. You know, critical stuff like that.

[Jerk]

We're not going to have to push the reset button. It will push itself automatically.

[Tulsa_Fireman]

Give 'em hell, Dr. Tom.

Between you and Uncle Jim, hopefully some sense will be slapped into the masses.

[Okla-homey]

the rational folks left up there (from both parties) who dare to oppose this thing gotta tough row to hoe to stop such a "bold", "essential", and "historic" bill being advanced by the "bold", "historic" and "essential" President-Elect.

Its like the marketing strategy of "branding" a thing. You find a winner of an idea, like Apple computers, then anything you roll-out with an Apple on it has a better than even chance of being a hit -- whether its worth a durn or not.

mercy.

This Congress is about to saddle our grandchildren's grandchildren with a debt of an enormity yet unseen. Besides, I thought our experience in the 1930's proved we can't spend our way out of a recession/depression. Has something changed? Aren't these the same people who said during the campaign it is absurd to do the same thing done before while expecting different results? Hello? Is this thing on?

[StoopTroup]

Well...no matter what happens...at least we weren't in bad shape when GWB left. Everything was fine until now.

[Okla-homey]

Well...no matter what happens...at least we weren't in bad shape when GWB left. Everything was fine until now.

That really doesn't matter ST. What matters now is what our government chooses to do about the situation and whether those actions help or merely dig the hole deeper. One things for sure, if this thing gets done, the national debt/deficit will be an order of magnitude greater than it was the day before it was signed into law.

Sometimes, amidst crises, the best thing to do is to do nothing, until you've had time to figure out WTF is really going on. In the USAF, we were taught in an emergency, to remember to "fly the f'ing plane" while dealing with the problem. I just don't want us throwing a lot of good money after bad in the rush to be seen as "historically bold" in dealing with our problems.

[StoopTroup]

That's the deal with me though. Dr. Tom and Jimmy Boy look like a couple of old crackpots who have accomplished nothing to most folks. I'll give them credit for trying....but things are probably get worse before they get better. I hope the thing doesn't go through. Obama shouldn't be supporting it. If he is...then we're probably in for the same long 4 years we were in for whether he got elected or not. I had no faith during the election that McCain would have been able to stop any of this. I hoped Obama might become a Leader...but the change in Power seems to be headed towards a stalemate or at best an out of control Administration with nobody at the helm.

It's all pretty sickening to watch.

[Dio]

Where was this righteous anger by Coburn when it was time to vote on the bailout?

[Okla-homey]

That's the deal with me though. Dr. Tom and Jimmy Boy look like a couple of old crackpots who have accomplished nothing to most folks. I'll give them credit for trying....but things are probably get worse before they get better. I hope the thing doesn't go through. Obama shouldn't be supporting it. If he is...then we're probably in for the same long 4 years we were in for whether he got elected or not. I had no faith during the election that McCain would have been able to stop any of this. I hoped Obama might become a Leader...but the change in Power seems to be headed towards a stalemate or at best an out of control Administration with nobody at the helm.

It's all pretty sickening to watch.

Maybe we'll "just muddle through" as we've always done. In the end, I think it's useful to recall that the economy and markets have always been cyclical. It may just be that if we do nothing, things will level out. They always have before.

One things for sure, this bill will spend money we don't have, and its really nothing more than a wager it will help in any appreciable way. I fear that forces within our government may have concluded its time for wide-scale nationalization of our economy on the European model. IOW, everyone gets what they really need, but, on the down-side, no one is really incentivized to bust their butt to do well because they'll be penalized. I think that's what they mean when they say in this new America, "everyone will have skin in the game."

[StoopTroup]

Man I hope Homey.

[homerSimpsonsBrain]

Where was this righteous anger by Coburn when it was time to vote on the bailout?

Actually Coburn's been pretty consistent. I dont really agree with him on alot of stuff but I like him because he's honest. Back in the days of "Contract on America" he was one of the very few that honored his term limit agreement.

I'd rather have someone that is honest than someone who tells me what I want to hear.

As for the rest of the pseudo-conservative republicans, they can suck it. They had the chance to balance the budget for the last 8 years and did nothing. Hearing them complaining about spending now is laughable.

[Okla-homey]

Actually Coburn's been pretty consistent. I dont really agree with him on alot of stuff but I like him because he's honest. Back in the days of "Contract on America" he was one of the very few that honored his term limit agreement.

I'd rather have someone that is honest than someone who tells me what I want to hear.

As for the rest of the pseudo-conservative republicans, they can suck it. They had the chance to balance the budget for the last 8 years and did nothing. Hearing them complaining about spending now is laughable.

You are of course correct that the Elephants have done their share of spending, but, to be fair, the mortgage disaster is DIRECTLY traceable to Clinton-era executive orders to make fed backed mortgages widely available to make the dream of home ownership a reality for people who, we now know, frankly couldn't afford their home loans.

That is undisputable.

That's why I think long-time House banking committee-member Barney Frank, and his Senate counterpart Chris Dodd, who are both on the record loudly proclaiming "all is well" when the Bush WH rolled in before the house of cards caved-in deserve to be tarred and feathered.

Part of this TARP-thingy is to be targeted for the above mortgagors so they won't lose the houses they never should have been allowed to buy in the first place. IMHO, that's just screwy.

[Frozen Sooner]

You are of course correct that the Elephants have done their share of spending, but, to be fair, the mortgage disaster is DIRECTLY traceable to Clinton-era executive orders to make fed backed mortgages widely available to make the dream of home ownership a reality for people who, we now know, frankly couldn't afford their home loans.

That is undisputable.

That's why I think long-time House banking committee-member Barney Frank, and his Senate counterpart Chris Dodd, who are both on the record loudly proclaiming "all is well" when the Bush WH rolled in before the house of cards caved-in deserve to be tarred and feathered.

Part of this TARP-thingy is to be targeted for the above mortgagors so they won't lose the houses they never should have been allowed to buy in the first place. IMHO, that's just screwy.

Ah, the CRA/HMDA/Fannie Mae/Freddie Mac canard again.

It is logically impossible for Fannie Mae and Freddie Mac to be responsible for the sub-prime mortgage mess. I'll leave it as an excercise for the student to figure out why.

[1890MilesToNorman]

Annual Bozo Convention starts anew. Clown shoes for all.

[Vaevictis]

You are of course correct that the Elephants have done their share of spending, but, to be fair, the mortgage disaster is DIRECTLY traceable to Clinton-era executive orders to make fed backed mortgages widely available to make the dream of home ownership a reality for people who, we now know, frankly couldn't afford their home loans.

That is undisputable.

It's not only disputable, it's not even rational.

[Okla-homey]

Ah, the CRA/HMDA/Fannie Mae/Freddie Mac canard again.

It is logically impossible for Fannie Mae and Freddie Mac to be responsible for the sub-prime mortgage mess. I'll leave it as an excercise for the student to figure out why.

The advent of mortgage-backed securities was not the fault of Fannie and Freddie. However, the aforementioned "give a mortgage to any ya-hoo who can sign his name regardless of his debt-to-income ratio" and the resultant worthlessness of that paper was. If I'm wrong, please enlighten me.

[Vaevictis]

The market-wide mortgage mess that you keep hearing about is due to people being unable to value mortgages because they can't figure out what kind of default rate to expect on the security.

Fed-backed mortgages can't default.

[Vaevictis]

The advent of mortgage-backed securities was not the fault of Fannie and Freddie. However, the aforementioned "give a mortgage to any ya-hoo who can sign his name regardless of his debt-to-income ratio" and the resultant worthlessness of that paper was. If I'm wrong, please enlighten me.

As far as the "give a mortgage to any ya-hoo who can sign his name regardless of his debt-to-income ratio" goes, here's how that happened:

(1) Mortgage-backed securities came into existence. This permits the originator to sell the future income stream -- and the risk of default to a third party.
(2) Mortgage-backed securities are rated by bond ratings agencies.
(3) Bond ratings agencies are paid by the people selling the mortgage backed securities.
(4) The free market worked in this case, as mortgage-backed security sellers would hire the bond ratings agencies that best served their needs -- eg, the ones that gave them the highest ratings.
(5) People originating mortgage backed securities figured out that, because they paid the ratings agencies, they could basically pay for whatever rating they wanted, irrespective of how bad the pool really was.
(6) People originating mortgage backed securities realized that, because they could get whatever rating they wanted irrespective of the quality of the pool, they could basically sell crappy pools as if they were top-quality ones. And because the eventual owner bears all the risk, who cares?
(7) The free market works again: Bang, give a mortgage to any ya-hoo who can sign his name regardless of his debt-to-income ratio.

[Okla-homey]

The market-wide mortgage mess that you keep hearing about is due to people being unable to value mortgages because they can't figure out what kind of default rate to expect on the security.

Fed-backed mortgages can't default.

I don't even know what that means. I know this though, just since Halloween, I've been involved in a half-dozen insurance investigations in NE OK in which people burned down their houses in order to escape default judgments on mortgages they couldn't possibly afford when they were made. My fav is a guy who never earned more than $100K a year in his life who managed to wrangle a $550K Freddie with less than $5,000 down.

[Vaevictis]

I don't even know what that means. I know this though, just since Halloween, I've been involved in a half-dozen insurance investigations in NE OK in which people burned down their houses in order to escape default judgments on mortgages they couldn't possibly afford when they were made. My fav is a guy who never earned more than $100K a year in his life who managed to wrangle a $550K Freddie with less than $5,000 down.

The value of a mortgage backed security (MBS) is greatly dependent on the likelihood of default by the debtor. The major cluster**** you have in the MBS space these days is that, because the ratings agencies ****ed up in rating the MBS pools, NOBODY knows what the likelihood of default in the MBS pools is.

Nobody can find out, either, because (1) the due diligence is cost prohibitive, and (2) like a used car, the seller has incentive to conceal any flaws.

This means that nobody is going to buy these securities from each other, and because banks have a lot of their assets tied up in these securities, it makes their balance sheets very illiquid.

Federally backed securities don't have this problem, because if the debtor defaults, the Feds cover the debt. The likelihood of default is 0%.

[Frozen Sooner]

The advent of mortgage-backed securities was not the fault of Fannie and Freddie. However, the aforementioned "give a mortgage to any ya-hoo who can sign his name regardless of his debt-to-income ratio" and the resultant worthlessness of that paper was. If I'm wrong, please enlighten me.

Vaevictus was pretty right on with his assessment of the causes of the credit crunch.

Fannie Mae and Freddie Mac cannot, by definition, give sub-prime loans. The definition of prime paper is that either Fannie or Freddie will underwrite it.

I would have to review the particulars of your insurance case in order to figure out how Freddie ended up guaranteeing that particular loan.

[Vaevictis]

And for what it's worth, the ratings agencies are a classic example of a case where federal regulation would have been helpful.

If the ratings agencies had to live under the same rules accounting firms do, S&P, Moody's, etc,we would have executives on trial and the companies would have been put under (see Arthur Anderson).

IMO, what the ratings agencies did would be best described as "conspiracy to commit fraud."

[Frozen Sooner]

Also worth noting is that the housing bubble came about in the first place mainly because of excess liquidity driven by underpriced CMOs.

[Vaevictis]

Personally, I think we just need to extend most of the corporate securities regulations to the housing market.

Bond ratings agencies serve roughly the same role as an independent auditor, and should be subject to equivalent regulations. And a mortgage issuer serves roughly the same role as a financial advisor (I mean, come on, most American's wealth is in their homes, and treat their home as an investment), and so should be held to the same "know your client" standards and have a fiduciary duty to their client.

IMO.

[bluedogok]

I would have to say that both parties share in the blame.....
The Republicans didn't do much to stop it when they did have control and they just let their corporate friends make more and more without stopping it. BOTH parties took the money from them in the form of contributions and probably "other" benefits. To try and lay blame on one while absolving the other is disingenuous at best.