No Wealth created in 8 years, So called Windfalls and why Jax should Rethink.

[NotNow]

As of today, the Obama administration has incurred more debt in one month than the USG did in the previous twelve months.  And many more promises to keep.

The stimulus money was originally approved under the Bush administration he should get some of the credit and or blame.

Actually, Obama owns the stimulus package completely.  This is a Democratic show all the way.   Bush is responsible for his own messes though, the bank bailout for example, and the Republicans who spent like there was no tomorrow are just as responsible for their actions.

[NotNow]

which one is that, NN?

In the original post, where did you find it?  If you remember now.  I know it has been a while ago now.

[civil42806]

As of today, the Obama administration has incurred more debt in one month than the USG did in the previous twelve months.  And many more promises to keep.

The stimulus money was originally approved under the Bush administration he should get some of the credit and or blame.

Actually, Obama owns the stimulus package completely.  This is a Democratic show all the way.   Bush is responsible for his own messes though, the bank bailout for example, and the Republicans who spent like there was no tomorrow are just as responsible for their actions.

Yep the Republicans screwed up big time on the spending. But what bothers me about this stimulus package is that it was so hands off by "the one".  He basically put his political fate in the hands of Pelosi and Reid, Pork filled through and through.  No doubt this package is all his now.  God knows that the bank bailout was screwed up to a level of a+++++. Plus the guy bails on the white house after two weeks, with the wife smiling and saying they finally let us out.  2 weeks! what are they going to look like after two years.

[civil42806]

Just a bit confused Stephen.  You posted an article... I agreed with 90% of it and you spend all day disagreeing with me and the article you posted.  Does it not say what you thought it said?  Am I dyslexic and have somehow misconstrued the main points of the article?  Perhaps if I say "white" you will say "black" just so we can add to our post count...

Yeah I think thats basically it

[BridgeTroll]

which one is that, NN?

In the original post, where did you find it?  If you remember now.  I know it has been a while ago now.

Here it is...

http://www.nytimes.com/2009/02/16/opinion/16krugman.html

[BridgeTroll]

Watched the PBS produced Frontline last night.  This episode was titled "Meltdown".  Very informative.  If you wish to learn a bit more about what happened, why it happened, and how it happened... this is a good start.

The Meltdown page...

http://www.pbs.org/wgbh/pages/frontline/meltdown/

Here is the entire one hour show...

http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

[Johnny]

Fannie & Freddie, really? I agree they are not 100% responsible, just as this article states, but...

"Fannie and Freddie were government sponsored entities (GSE's). This meant that they had to be competitive, like a private company, and maintain their stock price. On the other hand, the value of the mortgages that they sold was guaranteed by the government. This caused them to hold less capital to support their mortgages in case of loss. As a result, they had pressure to take on risk to be profitable but knew they wouldn't suffer the consequences if things turned south."

and

"Government regulations preclude Fannie and Freddie from buying mortgages that don't meet down payment and credit requirements. However, as the mortgage market changed, so did their business. Between 2005-2007, few of the mortgages acquired were conventional fixed-interest loans with 20% down. Fannie Mae's loan acquisitions were:

62% negative amortization
84% interest only
58% subprime
62% required less than 10% downpayment.
Freddie Mac's loans were even more risky, consisting of:
72% negative amortization
97% interest only
67% subprime
68% required less than 10% downpayment."

http://useconomy.about.com/od/criticalssues/a/Fannie_Cause.htm

[jaxnative]

This subject may have been broached before but what happened to the PMI requirements for mortgages.  If I remember correctly from my first mortgage you had to have the coverage if you put down less than 20 percent.  Were these requirements changed or does it depend on the type of mortgage?

[BridgeTroll]

Cool... hey check out that Frontline show.  They are always well produced.

[Doctor_K]

The FMs certainly are, and considering that their combined bad debts comprise almost .7% of the mortgage crisis, They are truly the amazing ones to think about.

On the other hand, Wachovia and Lehman Bros.....

Doctor K.  Regulation got us only so far as it was in place.  No great Depressions from 1938 until they were lifted, and then magically the same greed that precipitated the great crash sets in and suddenly the markets crash again.

Fair point, Stephen, and all true.  However, in any 401(k) or similar account, there were always disclaimers that said "no guarantee of rate-of-return," or whatever the saying was.  I was smart enough to understand that.  I also was able to contribute regularly to my 401(k) as well as an online savings account offering higher-than-usual interest rates simultaneously.  In my opinion, that puts me way ahead of the game compared to a lot of people who did one or neither of those.

People who only shunted money into retirement accounts are now in a much worse situation than I am.  I also have the advantage of being relatively young and will be able to continue to contribute to both Savings and Retirement for the rest of my (hopefully long and healthy) working life.  The markets will come back.  They always do.  If it takes 2 years or 20.  Or more.  They always have. 

If that means I'm still "drinking the kool-aid," as it were, then so be it.  If that means I'm opening myself up for another disaster like this one in the future, then so be it.  It's a risk I'm still willing to take.  And more importantly, it's my decision to make; and I make it fully coherent of the risks involved.

[gatorback]

Thanks BT.  I'm watching it now.