Dow down 600 points...think its gonna get worse...

[RiversideGator]

RSG.   Just keep hanging onto the same disproven arguments that you have been spouting.

Maybe in between telling everyone how wealthy you are, how smart you are, and how much more money you are making than everyone else on this board you are, the magical crisis that you have spent the past 18 months proving didnt exist will simply go away.

I am not sure I would go there if I were you, Stephen.

While you might think that other people will pretend that you are too stupid to realize that a 'sub prime' loan is one which doesnt qualify for Fannie Mae or Freddie Mac, I think that we are past such delusions.  Go ahead and deliberately claim the opposite of the truth if you like.  See what it makes you.

You are wrong again on the facts.

Again I ask, what is your proposal?  I have asked you this about 16 times.  Stop evading answering the question.

[whitey]

But lets be honest.  Wachovia did not simply get tired of the banking business and then sell out to someone for a profit.

Surely were not pretending that are we?

The reality is that Wachovia was forced to sell its assets to a bank with more stability by the FDIC.

Its been in the papers for weeks.  Does anyone deny that this is the fact?

As much as I hate to admit it, Stephen is right as far as Wachovia and the same thing happened with Washington Mutual late last week.  The FDIC does not have enough reserves to cover deposits for even one large bank.  In fact the FDIC has gone through nearly half of their reserves this year already and we've "only" had about 15 small banks and one medium sized bank literally go under.

The FDIC knows that if one of the big boys does go down, the whole banking system would be crushed.  They moved in and orchestrated hostile takeovers of WaMu and Wachovia to prevent a complete collapse.  Do you really think that the leaders at WaMu or Wachovia agreed to sell their companies for $1 per share?  Hell the guys from WaMu weren't even part of their deal, they were notified by phone that they no longer had a company.

[apvbguy]

As much as I hate to admit it, Stephen is right as far as Wachovia and the same thing happened with Washington Mutual late last week.  The FDIC does not have enough reserves to cover deposits for even one large bank.  In fact the FDIC has gone through nearly half of their reserves this year already and we've "only" had about 15 small banks and one medium sized bank go under.

The FDIC knows that if one of the big boys does go down, the whole banking system would be crushed.  They moved in and orchestrated hostile takeovers of WaMu and Wachovia to prevent a complete collapse.  Do you really think that the leaders at WaMu or Wachovia agreed to sell their companies for $1 per share?  Hell the guys from WaMu weren't even part of their deal, they were notified by phone that they no longer had a company.

while you may be correct with this assessment the term failure is being bandied about incorrectly, this was a takeover, forced yes but far from a bank failure.

[RiversideGator]

apvbguy.

You have absolutely no idea what you are talking about.

Perhaps you should wait till the freshman year of economics before you weigh in any further.

And where did you get your bachelor's degree from?

If one were to listen to your dissembling, one would be forced to believe to totally contradictory things at the same time.

There are THREE products you seem to be discussing.

1.  a subprime mortgage, issued by a lender willing to ignore FMs minimum credit requirements.

2.  CRA loans which are the actual minimum credit requirements

and

3.  Mortgage backed securities which included sub prime loans.

You and River are doing your best to pretend that somehow magically, the FMs are responsible for both originating AND bundling the sub prime loans that caused this present debacle.

This is clearly insane, since by definition a 'sub prime loan' is one NOT backed by the FMs.

The Fannie/Freddie loans AND the subprime loans were problems and the lending requirements were loosened for both types of mortgages.  This is really not that complicated.  A bunch of people mortgaged up real estate which then declined in value.  Many of these people had poor credit and decided to walk away thereby proving that they should not have had the loan to start with.  Now the banks, the investors and the taxpayers are left holding the bag for those deadbeat's bad behavior.

Second, you are attempting to imply that McCain in some way tried to reform the FMs in such a way that would have prevented this crisis. 

He did not.

Yes he did.  I have posted the bill he co-sponsored.  Please stop misleading.  Now, this would not have solved all the problems, but it would have been a good start.  Meanwhile, Obama was on the other side of this issue in favor of mass lending to people with bad credit in order to get as many people owning homes as possible.

In fact, his economic advisor created the law which allowed the FMs to traffic in MBS bundling in the first place, making your boneheaded contention one of the more fatuous lies ever printed.

Explain to me, in your own words, how you think Phill Gramm (??!!) caused this crisis and further explain how this is somehow linked to McCain.

Thirdly you are trying to claim that Barak Obama in some way worked to enable the sub prime market.

This is also a lie.

Stop Lying please.

Obama did.  This has been proven.  And stop accusing others of being liars.  This is not in keeping with the spirit of civility.

[Doctor_K]

If we hadnt been so hellbent on humiliating 'old europe' with the coalition of the willing and shocking the world with torture, secret prisons and etc, maybe we could more easily count on our european allies to help us come up with a marshall plan that doesnt leave us so dependent on chinese capital.

It's not just the Chinese though - that's another misconception that's blown into a bigger proportion than it is (notice I didn't say 'out of porportion').  Japan owns more of our debt than China does, but no one ever seems to mention them.  Is it because they're such a staunch ally?  (Can't find the dang article now..)

Point is, we're indebted to way more than jut China.  My question is why they're the only one ever mentioned?

[RiversideGator]

Pay attention to the fact that the US Mint just suspended production of all gold coins.

Funny that you consider this a harbinger of doom:

Get Government Out of Coin Manufacture

By George Selgin, Numismatic News
September 29, 2008

Coin dealers and collectors are still reeling from the U.S. Mint's announcement that it had run out of American Eagle gold coins. But what ought to surprise every American isn't that a government agency came up short. It's that the U.S. government should be making little metal discs at all.

Coin shortages are nothing new. A few months before running out of gold Eagles, the U.S. Mint had to ration silver Eagles. Not long before that, pennies were in very short supply. Nor are other government mints any better. Back in 2007, for instance, Argentina had such a severe change shortage that its panhandlers nearly starved to death, while in southern China 100-yuan coins commanded a whopping 25 percent premium.

Why are coin shortages so common? Governments typically blame unexpected changes in demand. But suppliers of all sorts of other goods manage to avoid running out despite even more dramatic demand changes. So what's special about coins? An old chestnut says that, if the government were put in charge of the desert, pretty soon there'd be a sand shortage. Recall the plight of consumers under socialism: socialist governments tried to make everything and eventually ran out of everything.

Now socialism is dead, but not when it comes to coining. So coin shortages keep breaking out, as they have ever since governments first monopolized coin making in ancient times.

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=5364

[RiversideGator]

the market is probably realistically valued at about 6thousand.

Thats why even los federales are bandying about this whole one third loss figure so frequently.

Its probably destined to shrink back to its real value no matter what we do.

This is a bold prediction.  I'll have to bookmark this.   

[RiversideGator]

I love this following quote:  I suppose now that the major banks have failed and there are gas lines and rationing going on all over the southeast, DowntownDweller has changed her mind.  Or maybe she still thinks the most important thing we need to worry about is starting a war with Iran?

"The major banks" did not fail.  I suggest you go look up what a real bank failure is.  Wachovia Corp sold its retail banking operation to Citibank.  It did not fail although it was not entirely healthy.  WaMu did fail briefly but it was seized by the Feds and immediately sold to JPMorgan.

[RiversideGator]

RSG.   Just keep hanging onto the same disproven arguments that you have been spouting.

Maybe in between telling everyone how wealthy you are, how smart you are, and how much more money you are making than everyone else on this board you are, the magical crisis that you have spent the past 18 months proving didnt exist will simply go away.

I am not sure I would go there if I were you, Stephen.

While you might think that other people will pretend that you are too stupid to realize that a 'sub prime' loan is one which doesnt qualify for Fannie Mae or Freddie Mac, I think that we are past such delusions.  Go ahead and deliberately claim the opposite of the truth if you like.  See what it makes you.

You are wrong again on the facts.

Again I ask, what is your proposal?  I have asked you this about 16 times.  Stop evading answering the question.

Let it fail and start over with a clean slate clear of foreign entanglements or accept chinese vassalage.

If we hadnt been so hellbent on humiliating 'old europe' with the coalition of the willing and shocking the world with torture, secret prisons and etc, maybe we could more easily count on our european allies to help us come up with a marshall plan that doesnt leave us so dependent on chinese capital.

Apples and oranges.  Iraq has NOTHING to do with this.  Oh and European banks are in the crapper also BTW.

[apvbguy]

That is true, Doctor K.  The Japanese do own a substantial proportion of the treasury notes against our federal debt.  The UK owns even more. 

However, in the private investment game, the numbers are significantly weighted towards the chinese.

cite? or is this just another in a long line of unsubstantiated proclamations from the financial oracle of JAX?

[Doctor_K]

That is true, Doctor K.  The Japanese do own a substantial proportion of the treasury notes against our federal debt.  The UK owns even more. 

However, in the private investment game, the numbers are significantly weighted towards the chinese.

How about the Middle East countries like the UAE and whatnot?  Due to the oil markets/demand?  Would they not be high up on that scale as well?

[apvbguy]

How about the Middle East countries like the UAE and whatnot?  Due to the oil markets/demand?  Would they not be high up on that scale as well?

good catch, but don't confuse the oracle with too much factual data

[whitey]

I love this following quote:  I suppose now that the major banks have failed and there are gas lines and rationing going on all over the southeast, DowntownDweller has changed her mind.  Or maybe she still thinks the most important thing we need to worry about is starting a war with Iran?

"The major banks" did not fail.  I suggest you go look up what a real bank failure is.  Wachovia Corp sold its retail banking operation to Citibank.  It did not fail although it was not entirely healthy.  WaMu did fail briefly but it was seized by the Feds and immediately sold to JPMorgan.

The retail banking operation is the only portion of the bank that the FDIC must insure, that is why they forced the sale.  What happened was a pre-emptive move by the FDIC to save its own ass and to prevent a massive run on other banks.  I guess if it makes you feel better, it was not a failure, but if the FDIC did not force the sale when it did, Wachovia would have died yesterday after the bill in the House was voted down. 

They and WaMu were insolvent, it is not debatable

[Doctor_K]

How about the Middle East countries like the UAE and whatnot?  Due to the oil markets/demand?  Would they not be high up on that scale as well?

good catch, but don't confuse the oracle with too much factual data

Alright, then you answer it.  As this is a discussion *forum,* it's not like one person has to/needs to/wants to do all the answering.  I asked a question and am genuinely curious.  Don't waste my time insulting your personal adversary.  

[apvbguy]

apvbguy.  you try citing any source for the nonsense you print on this site.

the minute you do, you will be taken more seriously.

the oracle is has proclaimed to the pot that the kettle is indeed black