Cheney on predatory lending: ‘the markets are working.’
Cheney on predatory lending: ‘the markets are working.’
In a new interview with Fortune magazine, Vice President Cheney says that the government shouldn’t intervene to curb predatory lending practices because it would interfere with the “working of the markets“:
“The fact is, the markets work, and they are working,” said Cheney in an interview in his White House office. “And people - some of the big companies obviously - have taken risks. Risk means risk. And there’s an upside as well as a downside in some of the choices they’ve made. We have to be careful not to have this set of developments lead us to significantly expand the role of government in ways that may do damage long-term for the economy.”
The same goes for Democratic efforts to curb the predatory lending practices that left naive homeowners in trouble, says Cheney: “We don’t want to interfere with the basic, fundamental working of the markets.”
A few nights before the interview, “Cheney had dinner with [Alan] Greenspan at the home of friend, mentor, and deposed Defense Secretary Rumsfeld.”
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MARKETS ARE DOING VERY WELL FOR TRAITOR CHENEY...
November 26th, 2007 at 2:03 pm“The fact is, the markets work, and they are working.†And this quote is coming from biggest crook in the Bush Administration that has profitted since day one in office from his old company as CEO: Daddy Warbucks Dick.
November 26th, 2007 at 2:04 pmA few nights before the interview, “Cheney had dinner with [Alan] Greenspan at the home of friend, mentor, and deposed Defense Secretary Rumsfeld.â€
they were served human babies for dinner.
November 26th, 2007 at 2:06 pm"You would be more respected and taken more seriously if you tried to at least tame your bias."
Pot, meet kettle.
November 26th, 2007 at 2:08 pmSince the predatory lenders thrive near military bases, this is just another way for the Cheney/Darth/Assaholic crowd to screw the troops and their families.
November 26th, 2007 at 2:10 pmYou know what? I mostly agree with Cheney. The homeowners signed contracts. If they didn't hire a lawyer and couldn't abide by the tenets of their loan, they deserve to get screwed. Home ownership isn't for everyone. However, some basic "front page" disclosure laws need to be amended.
I read a story about a California man who bought a $550k house with a $24k income. Of course he couldn't pay for the house. Some say this is a tragedy, I say a poor man got to live in a luxury house for a year (for free).
November 26th, 2007 at 2:10 pmSpoke by someone who cannot ever spend all his blood money in his or his children's lifetime.
November 26th, 2007 at 2:12 pm-7 Please, what about the complicity of the lending instituition that authorized lending to those who couldn't afford the mortgage?
Tell me they didn't know or care if the consumer could afford the cost. Everyone was in it for the quick buck, short and sweet.
Punish the lenders along with the consumers who didn't bother to educate themselves.
November 26th, 2007 at 2:15 pmCheney, Rumsfeld, and Greenspan - that's what I call a real "Axis of Evil".
November 26th, 2007 at 2:17 pmYou would be more respected and taken more seriously if you tried to at least tame your bias. The New York Times and CBS teaches this to their writers.
Comment by Southern Man — November 26, 2007 @ 2:06 pm
And we see how much this has helped the NYT and CBS earn your respect. Point taken.
November 26th, 2007 at 2:17 pmPredatory lending is basically legalized loan-sharking. Just like paycheck cashing places are. Yes, people should act responsibly when they enter contracts and take out loans. But what keeps these places in business is misleading advertising aimed at our weakest and most uneducated citizens. There's enough blame for both sides here.
Cheney apparently supports legalized loan-sharking. So why stop there, Dick? Why not come out in support of numbers rackets? Drug pushing? And any other practice that allows the strong to make money off the weak?
November 26th, 2007 at 2:18 pmHaving dinner with those 3 would make me lose mine.
November 26th, 2007 at 2:20 pmThe real question is simply whether or not he thinks that dishonest lying on the part of giant corporations and politicians is part of the "basic fundamental working of the markets".
There is no such thing as a free market. There is always manipulation. Otherwise we would not have a fed.
November 26th, 2007 at 2:23 pmJust like the S&L crisis, huh?
November 26th, 2007 at 2:23 pmDarth should know all about "predatory lending" since he's the largest predator in this country - bilking billions into his offshore accounts and helping to tank this country.
November 26th, 2007 at 2:26 pmlefty: Cheney wouldn't know truth if it hit him right between the eyes. He's a corrupt thug through and through. Hard core thug who has sold his soul to the dark side.
November 26th, 2007 at 2:27 pmBush - scarecrow - no brain
November 26th, 2007 at 2:27 pmCheney - tin man - no heart
Rumsfeld - lion - no courage
Greenspan - pay no attention to the man behind the curtain
Ron Paul has explained this much better than Cheney... The markets took risk because the Federal Reserve promises to print more money for the risk takers at the top (Wall Street/Big Bankers) if they lose on their risks... so they get bailed out and the home owners get dumped in the street.
November 26th, 2007 at 2:29 pmGreenspan + Rumsfeld + Cheney =
UNINDICTED CO-CONSPIRATORS IN 9/11
They know about all things predatory.
November 26th, 2007 at 2:30 pmActually - most people don't realize that the monetary policies are set by a PRIVATE CABAL - the BANKSTERS - the "Fed."
The "Federal Reserve" is a not "Federal." It is private - and Greenspan personally assured the destruction of the housing market when he blew this bubble up to its massive climax.
I remember well the day he gave the speech that lit the fuse. He effectively said:
"If you're in a 30 year mortgage, you're a fool...adjustable rate mortgages are the path to riches."
The FED has been feeding us bogus numbers. All of the numbers released by the government relative to the economy are false – chosen to create appearances and outcomes, not chosen based in reality. The entire government has become politicized, and the truth is only revealed when it’s too late to do anything about it.
Greenspan lied about the actual rate of inflation, which it has recently been revealed by Richard Fisher, the President of the Dallas Federal Reserve, was actually a half point higher than the government was telling us at the time they were driving mortagage lending rates to zero.
At a time when the Fed SHOULD have been taking away the punchbowl - Greenspan made a personal appeal to be reckless with your home financing and flip into a three year or five year ARM - borrow against your equity - and spend it.
HOW MUCH DID GEORGE BUSH AND DICK CHENEY INFLUENCE FED POLICY FOR POLITICAL GAIN? WAS IT BUSH WHO DEMANDED 0% INTEREST RATES, AND GREENSPAN WHO COMPLIED?
Greenspan met with Cheney HOW MANY TIMES? They met for breakfast at Cheney's house on January 14, 2001, a week before the inauguration, and nine days before Greenspan's thumbs-up-on-tax-cuts testimony to Congress.
Greenspan retired in January. The housing bubble he created has yet another 30%-plus to fall.
The conspiracy to entrap homeowners into indentured servitude is complete.
November 26th, 2007 at 2:31 pmYou heard it here first folks!!!
Darth Cheney is endorsing the Great Depression II: The Housing and Credit Bust.
Apparently, Cheney (and all of his dittoheads on this and other blogs) think that the next Economic Depression is a wonderful thing!
This is Reason #192 to impeach Bush, Cheney and Co.
November 26th, 2007 at 2:32 pmThis is a significant finding.
In the 1996-2000 period it was apparently necessary for the chairman to visit the White House about 12 times per year, or once per month. For no apparent reason, Mr. Greenspan's visits to the White House tripled from just 12 in 2000 to 37 in 2001, when Bush took office. Starting in January 2001, the same month Mr. Greenspan began cutting rates and flip-flopped on the Bush tax cuts, he visited the White House at least three times per month, with the only slowdown in June and July of that year.
What were previously monthly meetings continued to skyrocket to over one per week in both 2002 (55 meetings) and 2003 (68 meetings).
These White House meetings since 2001 were with officials at the highest level, something Mr. Greenspan did not do in 2000 or apparently since 1996 based on his monthly meetings there. For example, in 2003 he met with the President once, Vice President Cheney seven times, Condoleezza Rice six times, and Chief of Staff Andy Card three times. In March 2003 he had 14 White House meetings, and in July 2003 he met with six members of the Cabinet, including Colin Powell.
Such increasingly frequent meetings at the most senior level, including the Oval Office, are appropriate for a politician but not a central banker, whose political independence is paramount. The noteworthy increase in these meetings since 2001 is puzzling and problematic.
http://bigpicture.typepad.com/comments/2004/05/fed_chiefs_cale.html
The chairman has met with Vice President Cheney at least 17 times since early January 2001; Defense Secretary Donald H. Rumsfeld, 11 times; Rice, 12 times; Card, six times; Powell, once; Deputy Defense Secretary Paul D. Wolfowitz, twice; and Cheney's chief of staff I. Lewis Libby, once, according to the Fed's copies of Greenspan's schedule.
Greenspan had at least four official appointments with Cheney and one with Rumsfeld before the attacks on the World Trade Center and the Pentagon, according to the Fed records.
It is not clear from the records whether Greenspan might have had more such meetings, since a number of appointments are described only as "White House meeting," or "White House lunch," without specifying the participants.
Greenspan has known Cheney and Rumsfeld for decades, having served with them in previous Republican administrations. Before Sept. 11, Greenspan was already calling more frequently on the White House and various cabinet secretaries, including then-Treasury Secretary Paul H. O'Neill, another long-time friend from the Ford administration and private business.
"Vice President Cheney has known Alan Greenspan for many years in a variety of roles, throughout their careers, and the vice president has high regard for him," said Cheney's spokesman Kevin Kellems. "In terms of the content of their meetings, I don't know what they discuss. One would assume that a number of current issues of mutual interest would come up. But there's nothing more I can do to accurately describe them."
With Rumsfeld, "It's a personal and professional acquaintance that they've maintained over the years," Lawrence T. DiRita, the chief Pentagon spokesman, said Tuesday. "They see each other from time to time. That's not unusual. It's a meeting without an agenda. They enjoy each other's company, they respect each other's intellects, and it's private -- there's no staff in there when they meet."
Greenspan also has a personal connection with Wolfowitz, whose father was one of the chairman's professors at Columbia University.
http://www.msnbc.msn.com/id/5074781/
It's strange that Alan Greenspan hasn't been blamed for the housing bubble. After all, he set the "easy money" policies that put the whole thing in motion and he's the one who should be held responsible when it goes up in smoke.
For example, when Greenspan lowered rates to 1% in 2002 he knew that money would surge into the economy and create the appearance that everything was hunky-dory. Predictably, the economy sputtered along from the economic activity generated by the housing boom and from the 30% increase in government spending.
But, what else did Greenspan's lower rates achieve?
Well, they achieved the results for which they were designed; they kept the economy humming along while Bush dragged the country to war, they kept the American people asleep while $400 billion per year in Bush tax cuts were siphoned from the US Treasury, and they generated what the "The Economist" calls this "the biggest bubble in history"; the housing bubble.
All of these were purely political choices made at the Federal Reserve under the auspices of Fed-chairman Greenspan.
Greenspan, who prides himself on studying every abstruse fact and figure about the economy, was fully aware of the speculative bubble that was emerging before his eyes. He also knew about the "interest only loans", "the no-down payments", the shaky lending practices, and the exaggerated prices, but just like the 1990s, when he had every opportunity to raise marginal rates on stocks and stop the bleeding, he kept the game in motion.
Greenspan knows all about "irrational exuberance"; he's its primary champion. The Fed seduces the public with cheap money, so that credit spending increases and, then, "presto", millions of Americans slip inexorably into indentured servitude.
Isn't this what's happening right now?
The American public is presently mortgaged up to the hilt with most of their personal wealth invested in their homes and with the highest level of personal debt in any period since the Great Depression.
Not good.
Especially when we consider that the current bubble is "larger than the global stock market bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stock market bubble in the late 1920s (55% of GDP)."
Or, when we consider that "over the past four years, consumer spending and residential construction have together accounted for 90% of the total growth in GDP." (The Economist")
Or, when we consider that 2 out of every 5 jobs in America are now related to construction. One blip in the housing market and we'll all be hawking pencils on the street corner.
Regrettably, this Greenspan-generated pyramid scheme is headed for the dumpster. The fundamentals for securing a loan have all been abandoned; putting traditionally unqualified applicants in a position to buy a home. 42% of all new home buyers cannot even come up with a few thousand dollars for a down payment. Equally disturbing is the fact that "nearly one third of all new mortgages this year call for interest-only payments (in California, it's almost half)" (NY Times)"
The Fed's "cheap money" policy has spawned a "creative financing" monster and the speculation in the housing market has grown accordingly. A full 36% of homes are bought either for investment or as second homes; "the very definition of a financial bubble." (Economist)
"Speculation"? Not according to Colonel Greenspan. According to him, it's just a bit of "froth" in the market.
"Froth"? The biggest bubble in history!?!
Of course, none of this even vaguely resembles the activities of a "free market". The market is not free when a privately owned banking system like the Federal Reserve sets the prime rate according to its own political-economic agenda.
Most people have no idea to what extent Greenspan has abandoned his principles to carry out his task as the country's foremost class-warrior. Earlier in his career, Greenspan proclaimed, "Deficit spending is simply a scheme for the confiscation of wealth".
Hmmmmm?
The lesson of the housing bubble is simple: whenever monetary policy is put into the hands of privately owned institutions like the Federal Reserve, those policies will invariably reflect the narrow interests of the men who own them and the members of their class.
That's why Thomas Jefferson warned, "Banking institutions are more dangerous than standing armies."
http://www.counterpunch.org/whitney08172005.html
November 26th, 2007 at 2:32 pmtell it to Neil Bush!
November 26th, 2007 at 2:33 pmhttp://www.communitycurrency.org/joycelynn.html
CIA
At least four of those named to the Commission and staff have links to the intelligence apparatus.
Several years ago, Zgibniew Brzezinski talked about Operation Cyclone, which he initiated in 1979 at the end of Jimmy Carter’s presidential term. The CIA helped foster Islamic fundamentalism in Afghanistan to destabilize the region because of the Soviet Union -- and oil.
The program continued throughout the 1980's when G.W. H. Bush was vice president and CIA assets like bin Laden and Saddam Hussein directly or indirectly carried out U.S. covert activities and shadow government policies.
The March Commission hearings on counter-terrorism ignored this important information.
Council on Foreign Relations
Another player on the foreign policy scene is the Council on Foreign Relations.
Half of those named to the Commission -- Kissinger, Mitchell, Kean, Hamilton, Lehman, and Gorelick -- are members of the CFR. Rice was on the nominating committee in 1991.
Ellen Mariani has named Peter C. Peterson, chair of the Council since 1985, in her RICO suit (PD #14). As part of the shadow government, the Council has influenced national security policy so that its titular head has profited in arms and oil.
Since 1950, the Council on Foreign Relations has been David Rockefeller’s child. The Council bills itself as a research and educational institution. However, the CFR serves the interests of Rockefeller’s global empire of oil and financial interests (Exxon, Chase Manhattan Bank, JP Morgan Chase).
The two world trade center towers were sometimes called David’s and Nelson’s as the brothers were the driving forces behind the monuments to capitalism.
While the Council has 2,000 to 3,000 members -- movers and shakers in politics, media, and corporate board rooms, the Historical Roosters of Directors and Officers show key CFR players are key players on the global scene: Allen W. Dulles, the first CIA director, was a primary CFR participant from 1927 to 1969; William (McGeorge) Bundy, National Security Advisor in the Kennedy and Johnson administrations and an architect of the Vietnam War, was editor of the Council’s publication, Foreign Affairs, from 1972 to 1984. Others notables include Averill Harriman; Brzezinski; George H.W. Bush; Kissinger; Federal Reserve Chairman Alan Greenspan, and Dick Cheney.
Photos from the CFR 1991 annual report near the end of the first Bush administration portray a snapshot of the Council near the end of the first Bush administration. David Rockefeller’s picture is prominent throughout the report. The cover is a picture of the Council’s headquarters on New York’s upper East side. Other photographs include Cheney in Paris, October 1990; the President of Mexico and David Rockefeller, and Cyrus Vance with the Security General of the U.N. and David Rockefeller. That 1991 meeting was prescient looking at the Gulf and the Future of the U.N.
Another photo is of Ahmed Chalabi, founder and former chair of Petra Bank, at a March 1991 round table discussion on the topic For Democracy in Iraq: the Case of Iraq’s Opposition. Today, Chalabi is leader of the Iraqi political organization and the interim Iraqi government with close ties to the Bush administration. He gave the current Bush administration misleading and fabricated information before the U.S. invaded Iraq last year.
November 26th, 2007 at 2:34 pmEven Alan Greenspan knows the truth – he did not follow it as public policy, nonetheless, he knows:
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver, copper, or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.†[Alan Greenspan, Gold and Economic Freedom (1966)]
November 26th, 2007 at 2:35 pmAnd we all know who bailed out the S & L crisis don't we? Funny how the taxpayer gets taken everytime while the Ken Lay's, Bush brothers make the money on your back and run.
November 26th, 2007 at 2:35 pmSo essentially a certain core of very wealthy elite desire that the only government that they have is one based entirely on militarized security that controls all venues of information (except their own), all levels of coercive force (except upon them), and all manner of repressing and oppressing 90% of the population (leaving their precious 10% alone) in order to continue to suck out every last penny of value from the nation... They only want a market system that extracts wealth from the masses with no redistribution other than upwards towards greater monopolization. They want to own all property and resources, marginalize opposition, and use whatever means necessary (militarized security) to subjugate the rest of the population into compliance and quiescence.
November 26th, 2007 at 2:36 pmHey the housing market has been holding up the economy for 6 years so that Bush could pretend we had a strong economy. With all jobs, engineers, higher paid positions being outsourced foreclosures are happening to all level incomes not just the first time owners. Take jobs away and the consumer stops buying.
November 26th, 2007 at 2:40 pmSummed up nicely, spyder.
November 26th, 2007 at 2:41 pmAll markets are driven by speculation and insider trading.
Does your stock feel safer today than in 2000?
November 26th, 2007 at 2:43 pmHere is something else I have learned from Ron Paul... he always says that after the new money gets printed up the first people to spend it get all the benefit of the new money and the first people to get it are always the bankers and the military industrial complex...
Why? Because when the money gets "printed" it is not yet in the economy. So they then "give" this money to the bankers via manipulation of interest rates or by Congress giving it out in no bid contracts to the military industrial complex. THEN these "first holders" get to go out and buy stuff with this new money and THEN it IS in the economy... and that makes the entire dollar market go down because it just got watered down by a huge influx of new dollars... and everyone that spends them from then on are spending dollars that are dilluted and so worth less... it is one huge scam for all the elites at the top which includes the big bankers and... Congress with their military industrial complex pals...
November 26th, 2007 at 2:43 pmRon Paul has explained this much better than Cheney… The markets took risk because the Federal Reserve promises to print more money for the risk takers at the top (Wall Street/Big Bankers) if they lose on their risks… so they get bailed out and the home owners get dumped in the street.
Comment by ggibson1 — November 26, 2007 @ 2:29 pm
Ron Paul is not correct about this. The Fed is not in fact bailing anyone out (yet... hopefully it stays that way). The liquidity injections into the market have not made any institution more solvent or ensured any institution has avoided losses.
Cheney is perhaps correct in the classical economic sense. In the long run, the market should work this one out. But to quote a famous economist: "In the long run, we are all dead".
And the if the systemic impact is as bad as real economists like Larry Summers fear, then "the market" Dick is referring to will succeed in taking out a heckuva lot more than the bonuses of a few Wall St brainiacs. That might be the market "working" in a wrecking-ball kind of way, and not how anyone who cares about the country would want.
November 26th, 2007 at 2:46 pmCHENEY, HALLIBURTON, THE BUSH FAMILY, AND ASBESTOS
Dick Cheney, Halliburton, Inc., and, reportedly, the Bush family are surprisingly well acquainted with asbestos-related concerns. [7]
On December 18, 2002, CBS News reported that Halliburton "has agreed to pay about $4 billion in cash and stock to settle hundreds of thousands of asbestos claims against it." Reportedly, Halliburton inherited its asbestos liability from Harbison-Walker, a unit of Halliburton's subsidiary Dresser Industries, and from Halliburton's Kellog Brown & Root subsidiary.
On December 13, 2001, the World Socialist Web Site reported that "During the 2000 election campaign critics noted that in the last several years Cheney and Halliburton had contributed $157,500 to congressional candidates who had co-sponsored legislation to cut off victims' rights to a fair recovery when injured or killed as a result of asbestos exposure."
And on August 11, 2002, The Olympian (from Olympia, WA), carried a Washington Post article noting that:
"Dresser had close ties to a family Cheney knew well: the Bushes. Cheney's boss while he served as Secretary of Defense, President George H.W. Bush, was once being groomed to run Dresser, a company that Bush's father and grandfather had reshaped decades earlier.
When Dresser went public in the 1920s, it turned to W.A. Harriman & Co., whose president was George Herbert Walker, grandfather and namesake to former president Bush. Prescott Bush, the former president's father, helped organize Dresser and select its new president, H. Neil Mallon. Prescott Bush eventually sat on the board and by 1941, still held 1,900 shares of Dresser stock. Mallon was so close to former president Bush that he described him in his autobiography as "surrogate uncle and father-confessor." One of his sons, Neil Mallon Bush, is named after him. After World War II, Mallon employed George H.W. Bush and Dresser executives expected him to take over the company, according to journalist Darwin Payne, who wrote a history of Dresser. Instead, the former president left to prospect for oil.
While Cheney saw sound business reasons for acquiring Dresser, there was a problem in its past -- the use of asbestos in Harbison-Walker division products."
GW included the issue in his State of the Union speech in 2005.
"To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs. Small business is the path of advancement, especially for women and minorities, so we must free small businesses from needless regulation and protect honest job-creators from junk lawsuits. (Applause.) Justice is distorted, and our economy is held back by irresponsible class-actions and frivolous asbestos claims -- and I urge Congress to pass legal reforms this year."
Famous Quote of George Bush Senior:" You can fool some of the people all the time, and these are the ones you want to concentrate on"
I also remember he said "Sarah, if the American people had ever known the truth about what we Bushes have done to this nation, we would be chased down in the streets and lynched."
George Bush Senior speaking in an interview with
Sarah McClendon in December 1992 -
most important thing is for us to find Osama bin Laden. It is our Number one priority and we will not rest until we find him!" - GW Bush, September 13, 2001 -
"I don't know where bin Laden is. I have no idea and I really don't care. It's not that important. It's not our priority." - GW Bush, March 13, 2002 -
President G W Bush's first pick to investigated the 911 Attack:
Henry Kissinger -
"It is not a matter of what is true that counts, but a matter of what is perceived to be true." -- Henry Kissinger
November 26th, 2007 at 2:46 pmIt's like a religion for them. Facts and history don't matter. In the early 30's, long after unregulated capitalism had ruined our economy and even after Roosevelt's policies had put hundreds of thousands to work, Hoover was still touring the country and writing criticisms of FDR policies saying "let the markets remain free of regulation."
November 26th, 2007 at 2:47 pmInteresting how the politicians and corporatists want Americans to be ignorant, in order to take advantage of them. Then when it blows up, they blame the individual for being uninformed.
November 26th, 2007 at 2:47 pmWhere is the ghost of Jacob Marley when you need him?
Next Cheney will ask that we close the consumer product safety commision, because it interferes with the free market, oh, and do away with family medical leave, minimum wages, OSHA, maximum work hours, the EPA because the market will work out how best to dispose of poisons responsibly --- you know, by dumping them in poor neighborhoods where there won't be any significant loss of paying customers. Thirty years from now we can make more money cleaning it up when the area gentrifies.
November 26th, 2007 at 2:48 pmHalliburton's receipt of all the no-bid contracts was direct quid pro quo - highly illegal.
When Cheney was the CEO, he acquired Dresser to save the Bush Family's ass. Dresser made Asbestos, and the liability law suits were going to wipe them out. Cheney took one for the team when he acquired Dresser and all its asbestos liability claims (HAL was punished in the stock market)...the biggest of which was the WORLD TRADE CENTER, a $15 billion albatross that the Port Authority was hard pressed to get rid of.
When the Port Authority unloaded the buildings onto Silverstein, the fix was already in. Cheney literally ran the entire operation on 9/11 (as witnessed by Mineta) and used Dov Zakheim's SYSPLAN technology to guide the CONVERTED FUEL TANKERS to their targets (remember the huge fireball that exploded OUTSIDE the building?).
It was Cheney who instructed Christine Todd Whitman to lie about the levels of asbestos at ground zero, because he didn't want people to make the connection that the entire operation was simply arson on a grand scale, which eliminated a $15 billion liability from Halliburton's books.
November 26th, 2007 at 2:49 pmWith the American public more interested in Dancing with the Stars and where to buy the Elmo doll, does it surprise us that the money changers are comfortable screwing around with the economy?
Americans will not wake up until their job or mortgage is affected. And then it will be too late.
November 26th, 2007 at 2:50 pmGibson reminds us that libertarianism is also a religion. Unregulated capitalism ALWAYS ruins itself with cronyism, corruption and monopoly. Moreover, it always results in more poverty. ALWAYS. Ron Paul's solution? Why unregulated capitalism, of course. Can Ron Paul or his disciples point to ANY example of unregulated capitalism being a success for ANY society in history?
November 26th, 2007 at 2:51 pmThe peak period of the US real estate bubble which began in about 2002 when Alan Greenspan began the most aggressive series of rate cuts in Federal Reserve history was 2005-2006. Greenspan’s intent, as he admitted at the time, was to replace the Dot.com internet stock bubble with a real estate home investment and lending bubble. He argued that was the only way to keep the US economy from deep recession. In retrospect a recession in 2002 would have been far milder and less damaging than what we now face.
Of course, Greenspan has since safely retired, written his memoirs and handed the control (and blame) of the mess over to a young ex-Princeton professor, Ben Bernanke. As a Princeton graduate, I can say I would never trust monetary policy for the world’s most powerful central bank in the hands of a Princeton economics professor. Keep them in their ivy-covered towers.
Now the last phase of every speculative bubble is the one where the animal juices get the most excited. This has been the case with every major speculative bubble since the Holland Tulip speculation of the 1630’s to the South Sea Bubble of 1720 to the 1929 Wall Street crash. It was true as well with the US 2002-2007 Real Estate bubble. In the last two years of the boom in selling real estate loans, banks were convinced they could resell the mortgage loans to a Wall Street financial house who would bundle it with thousands of good better and worse quality mortgage loans and resell them as Collateralized Mortgage Obligation bonds. In the flush of greed, banks became increasingly reckless of the credit worthiness of the prospective home owners. In many cases they did not even bother to check if the person was employed. Who cares? It will be resold and securitized and the risk of mortgage default was historically low.
That was in 2005. The most Sub-prime mortgages written with Adjustable Rate Mortgage contracts were written between 2005-2006, the last and most furious phase of the US bubble. Now a whole new wave of mortgage defaults is about to explode onto the scene beginning January 2008. Between December 2007 and July 1, 2008 more than $690 Billion in mortgages will face an interest rate jump according to the contract terms of the ARMs written two years before. That means market interest rates for those mortgages will explode monthly payments just as recession drives incomes down. Hundreds of thousands of homeowners will be forced to do the last resort of any homeowner: stop monthly mortgage payments.
http://www.financialsense.com/editorials/engdahl/2007/1124.html
November 26th, 2007 at 2:55 pmFDR's policies put over 200,000 people to work in less than 30 days during the depth of the Great Republican Depression. Every one of those hundreds of thousands went out and bought milk, eggs and radios. Every one of them bought shoes which were manufactured here in the U.S. THAT'S HOW YOU STIMULATE AN ECONOMY!
November 26th, 2007 at 2:55 pmHoover was still touring the country and writing criticisms of FDR policies saying “let the markets remain free of regulation.â€
Comment by Ret. Col. Jack Ripper — November 26, 2007 @ 2:47 pm
Colonel, to me this sounds a lot like Kevin Bacon's character in Animal House. When the homecoming parade had turned into a disaster and people were panicking amid smoke bombs and Deathmobiles, Chip stood on the sidewalk in his ROTC uniform insisting "All is well". Until he got run over by a mob.
November 26th, 2007 at 2:57 pmA main problem is the media that should be pointing out Bush lies on everything from not finding Bin Laden to how many wounded troops or even the true count of troops killed are not doing their job.
How many headlines were there on Scott McClellan's books about the Plame incident? Nothing gets printed about Bush or Cheney. If it were not for the Internet, even those who want to be educated would not be.
November 26th, 2007 at 2:57 pmHoover treated his war vets the same as Bush is treating today's vets.
November 26th, 2007 at 2:58 pm...said the VEEP as he reached into a coat pocket, pulled out a squirming puppy, and bit its head off in one motion.
November 26th, 2007 at 3:02 pmThe financial links between those who lied, and those who benefited as a direct result of the lies (primarily in the oil and military industries - to say nothing of Israel) are clear. The evidence that the President's speech knowingly included a lie about the Niger Yellow Cake is proveable in a court of law under oath.
That the Vice President knew for a fact that the claim was based on a forgery in advance of the President's speech is a given (he ordered that the forgery be created and sent Ledeen to do it). That he instructed others to ensure that the sentence made it into the speech is also a given. What did the Vice President know, and when did he know it?
Every time the Vice President knowingly lied to the American People to advance the cause of war, he committed a crime against the United States which both directly harmed other US citizens and directly enriched himself.
Indict Dick Cheney for Fraud.
Section 1031. Major fraud against the United States
(a) Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent -
(1) to defraud the United States; or
(2) to obtain money or property by means of false or fraudulent pretenses, representations, or promises, in any procurement of property or services as a prime contractor with the United States or as a subcontractor or supplier on a contract in which there is a prime contract with the United States, if the value of the contract, subcontract, or any constituent part thereof, for such property or services is $1,000,000 or more shall, subject to the applicability of subsection (c) of this section, be fined not more than $1,000,000, or imprisoned not more than 10 years, or both.
(1) the gross loss to the Government or the gross gain to a defendant is $500,000 or greater; or
(2) the offense involves a conscious or reckless risk of serious personal injury.
The outing of Valarie Plame falls into precisely the same category, as it was specifically designed to ensure that the lead up to war continued apace...
Consummate diplomats like Wilson typically do not speak of "lies." So outraged was Wilson, though, that this bogus story had been used to "justify" an unprovoked war, that he made a point to note that the already proven dishonesty begs the question regarding "what else they are lying about."
It was a double whammy. And, as is now well known, the White House moved swiftly-if clumsily (and apparently illegally)-to retaliate.
It was clear from the start that Vice President Dick Cheney and Kemosabe (Amer. Indian for "Scotter") Libby, as well as Karl Rove, were taking the lead in this operation to make an object lesson of Wilson and his wife.
But there is abundant evidence that senior White House officials were aware of the CIA's doubts regarding the Niger story long before the State of the Union. Nearly a year earlier, in February 2002, the CIA had dispatched former Ambassador Joseph Wilson to Niger to investigate the claim about uranium purchases. When the CIA debriefed him in March, his findings were emphatic: As Wilson explained in a New York Times op-ed on July 6, "It did not take long to conclude that it was highly doubtful that any such transaction had ever taken place." CIA Director George Tenet claimed on July 11 that Wilson was sent to Niger by junior nonproliferation experts at the CIA acting "on their own initiative" and that senior administration officials were unaware of his mission. But this is not true. Wilson was told by CIA officials that the mission had been specifically requested by the office of the vice president. Indeed, Dick Cheney's chief of staff, Lewis "Scooter" Libby, told Time magazine that Cheney had "asked a question about the implication of the [uranium] report." And, as Wilson tells The New Republic, "When an executive agency is tasked to find something out and it gets an answer, it goes back to the person who requested it." For the White House to suggest that Cheney's office was unaware of the results of Wilson's inquiry strains credulity.
Moreover, there is strong evidence that the CIA clearly conveyed its doubts about the Niger allegation to the White House on more than one occasion prior to the State of the Union. When Bush wanted to include the claim in an October 7, 2002, speech in Cincinnati, Tenet personally intervened, imploring Condoleezza Rice's National Security Council (NSC) deputy, Stephen Hadley, to cut the allegation from the speech, which he did. The idea that no one involved with the State of the Union was aware of this earlier, emphatic intervention is implausible. And when the latter speech was being written, the CIA again raised questions about the Niger assertion. According to The New York Times, when NSC proliferation staffer Robert G. Joseph called his CIA counterpart, Alan Foley, to ask about including the allegation in the State of the Union, Foley told Joseph the CIA was not confident about the information.
Indict Vice President Cheney. Put him under oath.
November 26th, 2007 at 3:04 pmIn an aside, Vice President Cheney noted that it was "perfectly reasonable to significantly expand the role of government in ways that might enrich me and my buddies.â€
November 26th, 2007 at 3:04 pm"Mr. Cheney, are you actually in the employ of Mr. David Rockefeller, directly under George HW Bush?"
"Was 9/11 and all that has followed just part of Mr. Rockefeller's Globalist agenda?"
"Since our invasion of Afghanistan, which was clearly planned well in advance of 9/11, the oil barons have managed to secure their pipeline, and George HW Bush and his CIA are enjoying record opium production. Are we to believe that these are all just happy coincidences?"
"The day prior to 9/11, Donald Rumsfeld held a press conference to announce that his Comptroller, Dov Zakheim, had somehow lost track of some $2.3 TRILLION in DOD funds. Can you tell us whether those funds have been utilized to implement a military coup, the pretext for which occured the very next day, on 9/11 2001?"
"Mr. Cheney, what can you tell us about the SWIFT LUCK GREENS CONCENTRATION CAMP which was built by your former company, Halliburton, in your home state, Wyoming, adjacent to the Seminoe Reservoir south of Casper at these coordinates -
Latitude: 41.92
Longitude: -106.521944
Isn't this part of the civilian inmate labor program, in concert with DHS and the Army?"
November 26th, 2007 at 3:05 pmCheney on Meet The Press:
Videotape, March 16, 2003):
MR. RUSSERT: And even though the International Atomic Energy Agency said he does not have a nuclear program, we disagree.
VICE PRES. CHENEY: I disagree, yes. And you'll find the CIA, for example, and other key parts of our intelligence community, disagree.
And we believe he has, in fact, reconstituted nuclear weapons. I think Mr. ElBaradei, frankly, is wrong. And I think if you look at the track record of the International Atomic Energy Agency and this kind of issue, especially where Iraq is concerned, they have consistently underestimated or missed what it was Saddam Hussein was doing. I don't have any reason to believe they're any more valid this time than they've been in the past.
Regarding Cheney's frequent trips to the CIA, Russert asks if he applied pressure to achieve a desired intelligence work product:
MR. RUSSERT: No pressure?
VICE PRES. CHENEY: Shouldn't be any pressure. I can't think of a single instance. Maybe somebody can produce one. I'm unaware of any where the community changed a judgment that they made because I asked questions.
MR. RUSSERT: If they were wrong, Mr. Vice President, shouldn't we have a wholesale investigation into the intelligence failure that they predicted...
VICE PRES. CHENEY: What failure?
MR. RUSSERT: That Saddam had biological, chemical and is developing a nuclear program.
VICE PRES. CHENEY: My guess is in the end, they'll be proven right, Tim.
So I say I'm not willing at all at this point to buy the proposition that somehow Saddam Hussein was innocent and he had no WMD and some guy out at the CIA, because I called him, cooked up a report saying he did.
That's crazy. That makes no sense. It bears no resemblance to reality whatsoever.
http://msnbc.msn.com/id/3080244/
November 26th, 2007 at 3:07 pmASK GREENSPAN ABOUT THE PPT AND 990N:
Fed Market Intervention
June 2004:
Received this message from a member of my investment forum who is currently on the floor of the Chicago Mercantile Exchange:
"Only have a minute but, write more later but... The entire S&P price action in the futures is being controlled by one counter party. All the guys hate them: their CME clearing number is 990N and they clear through Gelber trading.
That one account is solely responsible for the current level of the S&P.
They are the ones that are throwing the S&P up overnight.
Then they are the ones that are sitting on the bid all day long, supporting the market action. The S&P pits have been decimated, absolutely ruined.
There is no volatility, so all the traders have left. Now the hot pit is the Eurodollar pit. Go figure, that used to be like watching paint dry.
All the traders I have talked to view the market as being rigged.
They keep waiting for the price action to break loose, but it never does. They are stunned by the lack of volatility. And furious. "Time after time after time 990 just sits there on the bid. Don't they ever go away. They just absorb the entire market and then push the price wherever they want it to go.’ Gee, I wonder who that counter party is. ’ They are all terrified of shorting, because every time they do, they get drilled. I thought it was just my systems that weren't working that well, but they are far more dispirited than I. "
Intervention at it’s finest, your tax dollars at work, providing the ultimate tax to us all
November 26th, 2007 at 3:09 pm“We don’t want to interfere with the basic, fundamental working of the markets.â€
Then he should've told Exxon and BP to field their own armies if they wanted Iraq's oilfields.
November 26th, 2007 at 3:09 pmIn reading through the most recent piece by John Mauldin, the correlation of (mortgage backed) paper to real estate is apparent in one way.
The value of the paper is determined by the last price similar paper traded at. In the absence of an active market, all paper is subject to being priced by the most desperate fire sale price. All holders of paper are therefore holding their collective breaths, dependent on the worst case scenario fire sale wiping out much of the value of their formerly valuable paper. In essence, REAL estate was turned into fiat currency, in much the same way that the US Dollar (which used to be an actual receipt, redeemable for gold), was turned into paper, the value of which is always determined by the last price at which it traded in the market.
And so it goes with your house and every house in the neighborhood, in every neighborhood across the country. When the bankruptcies and foreclosures ripple through the system, and the bag-holders put those homes on the auction block, and there are few buyers, the value of your perfectly good home nearby will be determined by the worst case scenarios (now "comparables") being fire-saled around you.
On the way up, all of the market participants and even Fed Chairman Greenspan were encouraging anyone with pulse to buy a home using any form of exotic (toxic) financing available. The Chairman went out of his way to encourage adjustable rate mortgages as being preferable to fixed rate 30-year mortgages. The entire BANKING system was encouraging the least credit worthy among us to lie about their income, and in turn, those liars were encouraging appraisers to lie about the value of the homes against which they were borrowing.
The ACTUAL blowup in the value of all this paper occurred in February, and would have led to a total collapse at that time. Who prevented the immediate collapse, and how? Who injected so much liquidity into the system that the APPEARANCE of the problem being solved enabled the APPEARANCE of normalcy in the market for this paper? The Fed (the oligarchs who own the biggest banks), literally "papered-over" the hole in the dike until such time as they could offload the majority of this toxic waste onto the bagholders of last resort, in precisely the same way they encouraged the poorest among us to literally sign their lives away on an overpriced home they could not afford (but not before the banksters paid their politicians to eliminate any/all protection that a declaration of bankruptcy used to provide) Got indentured servitude?.
The big boys not only ALL knew this decline was imminent, but repositioned their bets in time to make a killing on the short side, and then even repositioned themselves for the short squeeze which Bernanke engineered yesterday, which they knew was coming, because the banksters at the top of the game are the ones telling Bernanke what to say, AND when to say it. They'll hold the markets at this artificial level for a couple more days to allow a few more of their friends to get out and on the opposite side of the trade, then simply let it collapse.
The "Federal" Reserve is not "Federal" (and there are no "reserves") - it's merely the richest guys in the world (the Banksters") gaming the system to their benefit, and your deteriment. They told their "Fed" to lie about the inflation rate and the unemployment rate and consumer confidence (they made the Michigan Consumer Confidence Survey go away and replaced it with their own phony "Conference Board Survey"), and they all lied about the "Goldilocks" world economy. They literally lied about everything. It was all done with smoke and mirrors, and only THEY were the ones allowed to know the ACTUAL condition of every market.
The extent of the arrogance is brought into sharpest focus in the following, by writer Ron Suskind:
"In the summer of 2002, after I had written an article in Esquire that the White House didn't like about Bush's former communications director, Karen Hughes, I had a meeting with a senior adviser to Bush. He expressed the White House's displeasure, and then he told me something that at the time I didn't fully comprehend -- but which I now believe gets to the very heart of the Bush presidency.
The aide said that guys like me were ''in what we call the reality-based community,'' which he defined as people who ''believe that solutions emerge from your judicious study of discernible reality.'' I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ''That's not the way the world really works anymore,'' he continued. ''We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors . . . and you, all of you, will be left to just study what we do.''
http://www.nytimes.com/2004/10/17/magazine/17BUSH.html?ex=1151899200&en=079d03a2a9db7c23&ei=5070
Welcome to reality. Get it?
November 26th, 2007 at 3:10 pmAnd according to the lions, the colliseums were working just fine.
The question is, working for whom ?
November 26th, 2007 at 3:18 pmStuper fu*k.
November 26th, 2007 at 3:23 pmGibson reminds us that libertarianism is also a religion. Unregulated capitalism ALWAYS ruins itself with cronyism, corruption and monopoly. Moreover, it always results in more poverty. ALWAYS. Ron Paul’s solution? Why unregulated capitalism, of course. Can Ron Paul or his disciples point to ANY example of unregulated capitalism being a success for ANY society in history?
Comment by Ret. Col. Jack Ripper
Sorry but you are wrong on two counts... one is I have been here on this site for the past few years and didnt know anything about libertarianism until after I got into Ron Paul so there is no religion here.
2) What causes the corruption is the power of the people being in the hands of Congress. They can call it anything they want.. what they have been doing is still bribary....
This is where I really see a possible win win from Ron Paul... If you reduce the power in the hands of the Federal government then you take away the need to bribe them... instead all 50 states would have to be bribed... which would be much more difficult.
The justice system is not made just for violent assualts.. it is also for the people to get justice against companies... this IS regulation... by the people... as it was intended.
Take a look at the simple fact that there IS more than one way to skin a cat. YES over powerful corporations are dangerous. But there is more than one way to solve that problem. The Founding Fathers had all these same problems and they already created a solution called the Constitution. We simply have been ignoring the Constitutions rules and the layout of the system way too much ever since the civil war. You have to really see that all these problems are related... The Constitution is a comprehensive solution to these related problems in a systematic and logical set of rules.
November 26th, 2007 at 3:25 pmSo....in other words, don't stop the robbery, because you might interfere with the robber's profits...?
OK. I see.
November 26th, 2007 at 3:27 pm“The fact is, the markets work, and they are working,†said Cheney in an interview in his White House office. “And people - some of the big companies obviously - have taken risks. Risk means risk. And there’s an upside as well as a downside in some of the choices they’ve made."
Actually, this is proof that markets do not work. Two parties entered into a transaction: A mortgage lender took a risk on a prospective homebuyer. But this decision, repeated across the country as the policy of giant lender institutions, affects more than just the parties to the transaction. That is the market failure. The devaluation of my dollars, my inability to get a reasonable interest rate on home mortgage, despite the fact that I am in a good-risk category, and myriad other market distortions all flow from the transactions that the rest of us were not a party to and, yet, have to bare the effects of. That is the definition of a market failure. Now, if the market then corrects itself, you could argue that the market still works. But it does not. The externalized costs on society are never internalized by the particpants in the transaction.
November 26th, 2007 at 3:34 pmWhich points to the larger market failure which is that most corporate actors seek to externalize burdens, costs, and risks wherever possible, often with great success.
Two simple facts:
1. Record high, and rising, oil.
2. Record low, and dropping, dollar.
One simple conclusion:
Recession.
November 26th, 2007 at 3:41 pmCheney: "the markets are working."
Translation: Leave it alone, I'm making a profit.
November 26th, 2007 at 3:44 pmThe home mortgage market was allowed to be manipulated by those who stood to gain the most.
When you allowed Freddie and Fannie to advertise to the last warm body with a pulse that "the last one in is a rotten egg," despite knowing for a fact that these last market entrants were in fact the GREATEST FOOLS, this is criminal.
The fact that these mortgage lenders were allowed to hide this worthless paper amid bundles and sell them off to unsuspecting bag holders is criminal. The entire system was designed to screw the final bagholders, and everybody knew it.
By definition, the entire real estate bubble was the result of one mammoth pyramid scheme.
As with any pyramid scheme, they last until the final row runs out of greater fools, and then it's Gameoverville.
November 26th, 2007 at 3:45 pmTwo simple facts:
1. Record high, and rising, oil.
2. Record low, and dropping, dollar.
One simple conclusion:
Recession.
Comment by pete — November 26, 2007 @ 3:41 pm
Not so simple...
Negative savings rate,
Record debt,
Country at war...
Depression.
November 26th, 2007 at 3:47 pmThese predatory lending practices have taken out 188 finance companies and lowered the value of homes nationwide because certain greedy people didnt care about who got loans but what they made from the bad loans.
November 26th, 2007 at 3:56 pm“The fact is, the markets work, and they are working,†said Cheney "
"The markets" are down over 120 points today, and they're down over 2000 points over the last month.
November 26th, 2007 at 4:02 pmBreaking News: CNN is reporting that Dick Cheney is being taken to the hospital, yet again, for a fibrillation problem. He's expected to be released this evening.
**He's lucky he has socialist medical insurance. Is this an example of the market's failure?
November 26th, 2007 at 4:15 pmThe markets†are down over 120 points today, and they’re down over 2000 points over the last month.
Comment by Proud American Liberal — November 26, 2007 @ 4:02 pm
Unfortunately the worst is yet to come. I wouldn't be surprised to see a fall of 10% in a single day soon.
November 26th, 2007 at 4:22 pmggibson, I only compare libertarian philosophy to religion because it is steeped in dogma - in this case, the myth that there is some kind of beneficial magic to an unregulated capitalist market.
But let me add something else to the mix that I'm sure St. Paul would find ways to gloss over and obfuscate - modern libertarian philosophy is profoundly undemocratic and, as such, is not in concordance with constitutional values as libertarians are prone to assert. How do I know this? Simple. Whenever you say to an objectivist, "well, what if the majority of the people get together and vote for a single-payer health plan? What's wrong with that?", the true objectivist almost always something like "well that's what's wrong with democracy." I've heard the Director of the Ayn Rand institute say this a number of times on the Thom Hartman show.
November 26th, 2007 at 4:27 pm2 million miles: "Unfortunately the worst is yet to come. I wouldn’t be surprised to see a fall of 10% in a single day soon."
Evidently, the last time a housing bubble burst like this was in 1926. It was followed by a sharp decrease in market liquidity which was followed by the 1929 market crash and the onset of the Great Depression. I hate to be a doom & gloom kind of guy, but history is history.
November 26th, 2007 at 4:31 pmggibson: "The justice system is not made just for violent assualts.. it is also for the people to get justice against companies… this IS regulation… by the people… as it was intended."
This is another fallacy of libertarian philosophy. If the government is there to promote the general welfare and insure the domestic tranquility, it needs to stop crimes before they happen with regulation. The regulation inherent in the justice system only provides punishment. If your child has died as a result of a bad product, all the justice system can offer you is revenge and possibly the knowledge that it may not happen to someone else. A regulatory system, by contrast might keep the product which may kill your child off the market.
November 26th, 2007 at 4:41 pm68 - RetCol Jack - I've been saying that it's coming as well - a real 1929-style depression....
November 26th, 2007 at 4:52 pmYes, markets are doing well for the oil industry.
November 26th, 2007 at 5:22 pmFor oil industry bosses, it has been a bonanza for the last few years...with hefty returns and bonuses.
So when Cheney says markets are working, take his word as an experienced guy,he knows how oil industry works.
Citigroup planning major job cuts
CNBC:
No numbers set, but as many as 45,000 workers could lose their jobs
http://www.msnbc.msn.com/id/21975262/
Who needs employees anyway? When they lay them off Citigroup's stock price will probably go up! Which would probably help their ex-CEO's nest egg. Lord knows he needed the money.
'Citigroup Inc, the largest bank in the United States, said on Thursday that its former Chairman and Chief Executive, Charles Prince, will take home roughly $40 million as he retires from the company.
The package is less than a quarter of what former Merrill Lynch Chief Executive Stan O'Neal was awarded when he was ousted from the investment bank last week.
The terms of Prince's retirement include the vesting of options estimated to be worth $1.28 million, the vesting of deferred stock estimated to be worth $16.05 million and the vesting of restricted shares worth $10.7 million.
The package also includes a little more than 83 percent of his 2006 bonus and stock awards of about $23.8 million, adjusted for the total shareholder return for 2007, which is so far a decline of about 38 percent. That totals another $12.3 million or so.'
http://in.ibtimes.com/articles/20071110/citigroup-charles-prince-robert-rubin-merrill-lynch-subprime-crisis-mortgage.htm
November 26th, 2007 at 5:36 pmWhat’s wrong with that?â€, the true objectivist almost always something like “well that’s what’s wrong with democracy.†I’ve heard the Director of the Ayn Rand institute say this a number of times on the Thom Hartman show.
Comment by Ret. Col. Jack Ripper
Personally I think it has more to do with this being a Republican Democracy than anything. As the Founding Fathers said democracies are mob rule. Of coarse they meant that in a abstract sense. Which is why they set up a near democracy. A Republic based on democracy. That way it is the rule of law instead of the rule of the mob. Remember their big achievement in the Constitution was the seperation of powers to prevent any one group or person from violating the unalienable rights of any other individual.
It sounds like you prefer authoritarianism over freedom when you talk about our justice system like that. The way you have LAWS and Freedom is by letting people choose for themselves. If they choose to do something that harms people you punish them and THAT acts as the detering force to make it more likely that people choose FREELY to not take that same course of action. This is what freedom is all about. We dont need nor do we want a Minority Report society which is what it sounds like you are suggesting.
A regulartory system works in times of emergency and other than that it just becomes a bribary game. Have you been asleep that last few years? All the good intentions of the democrats from FDR on have become corrupted. The federal government has even falsified the words of scientists for their own corrupt ends...
FDRs New Deal should be looked at as a stop gap measure. It is time to get back to a sane system and IF the private sector blows up again THEN take extreme antiConstitutional measures. And only as long as neccessary so it does not become corrupt over time.
If you go over to CrooksAndLiars.com right now you will see an ad on the right hand side about FDR with a tear on his face. This ad is talking about what Ron Paul has been saying. Good intentions do not always make good policy. Too much power in too few peoples hands corrupts them... and we all know it.
November 26th, 2007 at 6:22 pmThomas Jefferson: "The will of the people is the only legitimate foundation for any government, and to protect its free expression should be our first object." (Letter to Benjamin Waring, March 1801)
Gibson, most of the Founders were thinking of theocracies like Massachusettes when they talked about the "tyranny of the majority." And when they talked about democracy, they were thinking of representative democracy with built-in checks on that "tyranny." Libertarians have subverted the Founders words to give the impression that the Founders hated democracy. Except for Madison, the opposite is true.
When you say "It sounds like you prefer authoritarianism over freedom when you talk about our justice system like that," you're just repeating a tired old libertarian cannard. In the absence of regulation, corporations would be completely authoritarian without any checks to their agenda - and their agenda has nothing to do with the well-being of society. Our government is supposed to be there to protect us, to provide for the general welfare and to provide domestic tranquility. The regulation of capitalism is a necessary way to help do that because corporations, by nature, have no interest in the betterment of society or the wellbeing of our citizens. In fact, as they have shown over and over, corporations will ALWAYS take profit over what's good for society. Adam Smith pointed this out over 200 years ago in "Wealth of Nations," and it's always been true. Libertarianism is a corporatist dream.
November 26th, 2007 at 6:48 pmBart: "Well I know I’m going to be unpopular in this thread, and I cannot believe I’m saying it, and my keyboard might melt, but yes, I actually agree with Dick Cheney on this one."
That's understandable because modern libertarianism is as right wing and corporatist as you can get. Libertarians want markets free of regulation - so does Cheney. Libertarians want corporations to have free reign - so does Cheney. Libertarians don't believe in things like the minimum wage or labor laws - neither does Cheney. Libertarian philosophy is a corporatist's dream - so is Cheney.
November 26th, 2007 at 6:55 pmgibson: "A regulartory system works in times of emergency and other than that it just becomes a bribary game. Have you been asleep that last few years?"
You're confusing the corruption of our system by modern conservative libertarians with how our system SHOULD work. Modern libertarian conservatives do not believe in civil government other than a way to enhance their profits and the profits of the corporations for which they work.
November 26th, 2007 at 6:58 pmBart: "But Congress passing laws to control lenders will do one thing and one thing only.
Dry up the flow of monies that is keeping our economy going."
If that were true, then we would have seen dried up capital markets during times of regulation and liquid markets during times of deregulation. But, the opposite is true. Unregulated periods have always led to the collapse of capital markets - unless, of course, you can give me an historical example.
November 26th, 2007 at 7:00 pmBart: "Lenders can and will make their own adjustments, and left alone they will work this one out too. The punishment is already there. The lenders lost money. That is not the time to come down on their heads."
See, this is exactly what I'm talking about when I say "dogma." We've just seen what happens when lenders "make their own adjustments if left alone" without regulation and it's a disaster. But, you're still pretending that it works. And your libertarian friend, Gibson asked me if I've been asleep for the last few years. Amazing.
November 26th, 2007 at 7:06 pmNothing personal, Bart, but if you believe in unregulated capitalism, you are, by definition, a libertarian. On the other hand, if you believe in minimum wages and labor laws, you're not a libertarian. We're at war. Pick a side! (just kidding)
November 26th, 2007 at 7:08 pmBart, how are people going to refinance if their property values have dropped by 25%? The entire shell game was based on expected appreciation.
November 26th, 2007 at 7:10 pmBart, the value of the dollar is at historic lows. Cutting the interest rate will not help unless we agree to start taxing the wealthy instead of borrowing money from them.
November 26th, 2007 at 7:12 pmI'm truly sorry, Bart, but I think that ship has sailed. We're already at historic highs in foreclosure rates and unregulated lenders are NOT going to bail anyone out. The exist to make profit, not to help people.
November 26th, 2007 at 7:16 pmI'm not advocating "coming down on lenders." I believe history shows that capitalism only works for a society when it is regulated. Again, during periods of regulation, lenders and the economy did just fine. The only people who don't want regulations are corporatists. And, like it or not, this issue is steeped in philosophy. The economic philosophy which has held sway since the beginning of the Reagan administration has taken us from the worlds largest creditor nation to history's largest debtor nation.
November 26th, 2007 at 7:20 pmYou’re confusing the corruption of our system by modern conservative libertarians with how our system SHOULD work. Modern libertarian conservatives do not believe in civil government other than a way to enhance their profits and the profits of the corporations for which they work.
Comment by Ret. Col. Jack Ripper
So says YOU. Strawmen arguments are BS. And you using them is really a shame. Or maybe Ron Paul just isnt a Libertarian. Either way you have not proven anything to me about how Ron Paul has been wrong about anything.
NEOCONED... and the progressives never brought up this video that I noticed over the past several years... why is that? Ron Paul was correct. We should have listened to him then... This stuff is all related and has a cure...the Constitution.
http://www.youtube.com/watch?v=aewpvcxAwTk
November 26th, 2007 at 7:21 pmgibson: "So says YOU. Strawmen arguments are BS. And you using them is really a shame. Or maybe Ron Paul just isnt a Libertarian. Either way you have not proven anything to me about how Ron Paul has been wrong about anything."
Touchy, touchy. I'm not TRYING to prove anything and to say I don't agree with Paul is not the same as "proving that he's wrong." He doesn't like any regulation of capitalism. I don't agree with that approach. He doesn't believe in labor laws or minimum wage laws. If he could, he would dismantle the EPA, the Dept. of Education, the FAA, FCC, the CDC and stop funding for things like public libraries. He even advocates privatizing the nations highways into toll roads. I just don't agree with any of that because I don't agree with the central tenets of modern libertarian philosophy - that's all.
November 26th, 2007 at 7:38 pmThanks, Bart. I've got many old friends who have been seduced by libertarianism. It's usually because of the very attractive pieces of it having to do with foreign entanglements, gun rights and legal drugs, the only pieces of the puzzle that I don't find repulsive. But thank you for recognizing that I'm not attacking you personally.
November 26th, 2007 at 7:41 pmgibson, I've reviewed my statement to you above: "Modern libertarian conservatives do not believe in civil government other than a way to enhance their profits and the profits of the corporations for which they work."
And, I agree that in a way it's not fair. Paul is a straight-ahead libertarian as opposed to a corporatist. He's a "true believer" as opposed to someone using the philosophy to enhance corporate power. So, in a way, it was a strawman argument. But, I still don't agree with his philosophy, even if he's an honest man.
November 26th, 2007 at 7:48 pmAnd, Bart, I don't agree that regulating capitalism is "coming down on" capitalism. I think regulation saves capitalism from it's own destructive excesses.
November 26th, 2007 at 7:50 pmOK, Bart, but I think it already HAS melted down. Anyway, gotta go pick up one of my kids. Nice conversation and good luck with the lending business.
November 26th, 2007 at 8:00 pmYou sure are taking it pretty easy on Microsoft's jackbooted approach to those who tried to do exactly what you described, though.
November 26th, 2007 at 10:19 pmI wonder if the dinner meeting of Cheney, Greenspan and Rumsfeld delved into the significant lapses in each leaders management style?? Cheney's misjudgements severely damaged our country by pushing for a war based on hugely erroneous assumptions. Rumsfeld's autocratic management at DoD ignored all expert advice that post-war Iraq would need a great deal of attention. And Greenspan now has admitted that he didn't see the severity of the sub-prime crisis coming and, in his ignorance as Chairman of the Fed, contributed greatly to exposure and serious cracks in the whole financial system.
It always interesting to note the comments of folks like Cheney (and Bartlbee) who claim to oppose "bailouts." My perception is that folks who oppose bailouts might actually have differing views depending on who is being bailed out.
I guess that Cheney doesn't like goverment "bailouts of stupid borrowers", but he and Greenspan don't seem to be opposing government intervention in "bailing out the lenders." Now we have the government sponsored Federal Home Loan Bank heavily funding a formerly free-wheeling and irresponsible lender in Countrywide Financial. A few weeks ago, Hank Paulson of the Treasury Dept was instrumental in cajoling competitor banks into helping Citigroup with a super SIV fund. This isn't exactly free-enterprise at work leading to the reported goal of Cheney to keep the government out of private business matters. Now that a goverment sovereign fund of AbuDhabi is going to bailout Citibank with a $7.5 billion capital infusion making a foreign government the largest shareholder in our largest financial institution.
It seems that even the most hardline right wing conservatives can't find a way to keep governments out of the way in letting free enterprise operate. Not even at solving the Republican era free-market, low regulation, financial system approach that has now gone very much out of whack. Despite the fact that conservatives such as Cheney and Greenspan have noble intentions, their hard held convictions and judgements can be way off base and do significant harm to the USA as we now have learned the hard way.
November 27th, 2007 at 12:06 pmBartlebee said:
Lenders were giving people with lower credit scores and incomes a chance to acheive the American dream. You buy a house, then you spend your life figuring out how to pay for it. Poor people do it all the time, and make ends meet. So lenders are giving those people a chance.
Response (written by HopingForChange):
Yup. You are dead right in that some cases of mortgage lending, we had people who were being given "a chance."
Maybe you didn't intend your statement to be interpreted this way, by my view is that the "giving people a chance" perspective is a gross oversimplification.
My response therefore hopes to add to the understanding of the type of mortgage origination complexity we are dealing with in debating how much the govenrment and regulators should be involved.
Unfortunately, much more has now been exposed about the lending origination practices at Ameriquest, Option One, and Countrywide Financial, New Century etc. and it went way beyond giving "people a chance." These firms were not banks under lending laws that regulate banks and lastly they had no fiduciary duty to the customer.
I personally think it is pretty damned dangerous to draw conclusions about millions of folks who will face foreclosure because their specific circumstances may all be quite different. This global problem just can't be understood without looking granularity of these loans.
My understanding is that about one half of the foreclosures in my market area are being conducted on "flippers." These are investors who hoped to make a quick buck. I haven't got much sympathy for this 'flipper"group and I hope that the Bush administration doesn't do anything to help them.
But the other half of foreclosure activitiy is a very mixed bag.
Most consumers take out loans without knowing the right questions to ask. Many of the folks being now forclosed upon are lower income and much less educated and less able to understand the complex mortgages they were being sold. There are very few knowlegdable consumers who exist when it comes to complex option ARM mortgages tied to Libor interest rates. Do you actually know anybody who studied a pile of mortgage documents before signing them????
It is worth noting that about 20% of sub-prime loans were made to borrowers who could have qualified for a conventional loan. Irresponsible loan officers, however, pushed option Arms only requiring stated income that came with a big prepayment penalty that goosed up the prospective yeild to investors. The loan officers were making out like bandits....some earning a 4% commission on a half million dollar loan would get $20,000 for salesmanship and a bit of paperwork. Profits for these non-conforming loans were huge.
In some cases, I suspect that there were some borrowers who knew what they were getting into and loved the idea of an option Arm because it meant they could buy luxury cars and take trips to Vegas. This is the "don't worry, be happy crowd" and government regulation isn't likely to alter their behavior.
But a big share of sub-primes were made to the financially illiterate working poor and otherwise unfortunate folks who had no clue what would happen when a rate re-set happened. They were victims of an unregulated free-enterprise-commision- driven- mortgage-lending- industry. The Bush administration and the Fed and the Treasury let this disaster happen.
The CEO of Countrywide now says that the system would not have gone bust if housing prices kept rising. My view is that, in time, we wil find that a virtually unregulated mortgage lending industry (operating away from the oversight of banking regulators) who were so slick that they made disasterous underwriting decisions and knowingly lent money to borrowers who couldn't pay it back.....UNLESS HOUSING PRICES KEPT RISING.
Guess what? The rising price scenario didn't play out. Where were the consumer protections.....they simply didn't exist. It's sad. A hard lesson to learn when a home purchase blows up. Free enterprise thinking and market driven practices produced a terrible result for some segment of the foreclosed consumers. We just can't globalize their indivdual circumstances and come up with a "one size fits all" solution when it applies to government involvement and or regualtion needed.
November 27th, 2007 at 1:39 pmHoping for change...amen.
and #7 above...shame on you.
Greedy loan officers with MBAs=Drug dealers/suppliers
Uneducated, low income customers=Drug users
Who's the professional here? Who has the ability to inflict harm on America's economny? With "liberal and proud's" outlook, screw the entire country because of a few hundred thousand uneducated people wanting the "American Dream" and shame on them.
The ultimate foe in this are the greedy mortgage lenders/officers. Fudging paperwork to make a few thousand dollar commission, not the people being handed homes they can't afford. They do bear some responsibility, but please...if the mortgage lenders HAD DONE THEIR JOB America wouldn't be experiencing this.
Period.
November 27th, 2007 at 2:06 pmComment by BARTLEBEE — November 27, 2007 @ 2:30 pm
Its not that complex. Either you can read the terms of your contract, or you cannot.
If the contract says that your loans interest rate will “RESET†in 2 years and you’ll be paying more, I don’t know whats so complicated about that.
Either you’re prepared to pay it, or you’re not.
Response:
You really think that a reset rate is so completely black and white-- I suppose????
Let's say you personally took out an option arm with interest only terms (and variable levels of principal paydown or even negative amortization) and a 2/28 step up rate. Do you think you would really know the step up payment required two years in advance?
Before you answer the question, I think you need to have a great deal of ability to predict the most indexed option arm rate, which is the London Interbank Offered Rate (Libor)
My view is that its pretty damn hard to know if you are prepared to pay for a step up to any indexed rate in advance especially considering that it is Libor. And it matters not if you have an MBA.
It seems that the banking system in Europe is now so shaky that banks are afraid to lend to one another and so Libor is quite high. It takes more than an economist with any Ivy League degree to predict this stuff with any certainty and much more than the average borrower.
Good to know, however, that you got a 30 year fixed conventional mortgage and didn't take the risk of getting an ARM as was recommended by Alan Greenspan a few years ago. The mortgage you have is pretty simple in contrast to an I/O option ARM and no doubt that could influence your view on this stuff.
I suspect that most people who own fixed premium whole life insurance contracts would have a great deal of difficulty in understand variable premium universal life insurance contracts.........its a whole different level of complexity
November 27th, 2007 at 3:56 pmBartlebee:
I don't have a clue where you fit on the political spectrum, but it really doesn't matter. Whether or not the Democrats intervene in punishing lenders and/or bailing out borrowers is a different issues from what I am telling you in this note. But I hope you will do something to broaden your knowledge about real estate finance, credit standards, and the underwriting practices. It might be helpful.
As an example, I am really wondering if you did comprehend my comment about the "flippers" now driving a major share of foreclosures. While you jumped to the defense of the investor group of folks who buy properties that are in bad shape and they invest sweat equity to improve them, you missed the boat on the nature of another group of "flippers" that is actually being foreclosed in great numbers.
A typical "flipper" now in foreclosure bought brand new property in markets such as Miami, Phoenix, or Los Vegas. The game was that the property could be bought and sold at a quick profit because prices kept rising. For a few years running, a condo complex in Miami would be built and 90% sold to flippers who then dumped the properties at a profit. They did the flip for a few years and made money.
But when the system failed, now we have condo buildings in Miami that are 90% empty and the few real owners of units pay all of the maintenance while the "flippers" went in to default and foreclosure. Maybe you want to defend these short term flippers who add no value and even bail them out with government money, but I don't.
But I am also astounded that you apparently think you understand how the finance world works in such black and white terms. You might note that there is a huge financial crisis going on these days with major players that was triggered by a lot of bad judgement on the part of the lenders. This financial meltdown is mostly the fault of the lenders......and the investment bankers who enabled loans exceeding 100 % of value. Mortgage bankers added piggy back second mortgages full well knowing they couldn't be paid back, but the monkey was off of their back as soon as the loan was sold to an investor (many of them were foreign investors.)
Here is a basic question: If I (or someone else) put together a college level test about residential real estate finance covering subjects such as underwriting, interest rates, risk spreads and non-conforming loan funding ....would you pass or fail?
No doubt you have already an opinion about your level of knowledge about this stuff. But, in my opinion, nobody else who reads your posts can be too sure about it.
For myself, I am learning new things everyday in a Wall Street financial meltdown triggered by sub-primes that has carried internationally to off balance sheet structures at major banks which threaten the world's financial system. I learned about the shaky practices in lending in the UK where Northern Rock wasn't protected from its demise with the type of banking regulations that the US enacted after the S&L crisis in the 80's.
FYI. The mortgage situation in the UK is much worse than it is in the US. Few borrowers in the UK borrowed at fixed rates because the UK doesn't have the likes of a govenment sponsored GNMA that probably guaranteed the your 30 year fixed conventional loan. But, of course, you probably knew all or most of this before I posted it.
Regulation and government involvement in this stuff is necessary and much more complex than you probably ever imagined.
November 28th, 2007 at 10:52 amDon't jump to conclusions too fast before we get all of the facts about why the mortgage system has melted down. The S&L crisis of the 80's led to some necessary banking reforms. No doubt we will learn a great deal about the current mess in the future so it can be fixed on a bi-partisan basis in Congress.
Comment by BARTLEBEE — November 28, 2007 @ 9:18 pm
Being a “flipper†myself I can tell you don’t have knowledge in the area. You talk about Flipping like it means buying a house, then selling it a week later as it is, and making a quick profit.
Well it doesn’t work that way. Thats not flipping. Flipping has become an industry that improves the quality of communities across America. Flippers renovate neglected and condemned properties and make their profit off of hard work, risk and personal capital. Flippers put millions of people to work every year, and increase real wealth for everyone in the communities in which they work.
Response by HopingForChange:
It seems that your perspective as a real estate flipper has been flushed out. It perhaps also adds some color as to why you think in the narrow black-and-white mindset. You have given me little reason to believe that your knowledge of real estate finance is much more than a bit of this and that.
My impression of most of the folks who engage in this flipping activity are mostly amateurs and many of them feel shut out of the wider markets and more sophiisticated investments--- because they lack skills and knowledge. If you fit into that category, I don’t know for sure.
It sure doesn’t impress me when you claim to have made a ton of money on one or more real estate transactions in the past. There are plenty of stock market day traders who make the same claim who have little idea about he risk they are taking. It’s more gambling than investing. Real estate flipping is also highly risky and now the folks who have been doing it have been crushed.
FYI. I retired from a career in real estate and mortgage finance. I know an amateur when I see one.
Although I love to debate folks on real issues, it seems that now you identified and even defending yourself as a flippitey flipper, I think I can find folks more worthy of arguing with. Thanks for the exchange.
November 29th, 2007 at 10:53 am