40 replies to this topic

[Emax]

This file contains the gist of an economic plan that was recently sent to me.
[attachment=15936:The_Birk_Bailout.doc]

Anyone notice the math error?

This post has been edited by Emax: 29 September 2008 - 09:45 AM

[Peter]

Yeah, $85 billion divided by 200 million people is only $425, not $425,000!

[Lift Dinosaur]

Darn you, SKIER. I was going to vote for that one!

Dino

[k2skier]

I just heard on the radio that the bail out package was voted down.

[floridaskier]

And the Dow promptly dropped 777 points. Oh politics

[Emax]

floridaskier, on Sep 29 2008, 08:24 PM, said:

And the Dow promptly dropped 777 points. Oh politics

Looks bad for the good guys... and the bad guys.

[Bill]

Squeling from the feeling....

[aug]

I think Im feeling sick now . don't look at your 401k accounts

[Emax]

As with all pyramid schemes, the folks at the bottom end up being jock straps.

[skierdude9450]

Well I had over $40K in a Merrill Lynch account for college. I better start looking for scholarships.

[k2skier]

The Bail Out; Damned if you do Damned if you don't

[poloxskier]

floridaskier, on Sep 29 2008, 06:24 PM, said:

And the Dow promptly dropped 777 points. Oh politics

On the plus side it is now back up 485 points. I doubt it will stabilize any time soon though.

[Emax]

poloxskier, on Sep 30 2008, 05:38 PM, said:

On the plus side it is now back up 485 points. I doubt it will stabilize any time soon though.

Seems a lot like 1929, doesn't it?

[Ontariodude]

Emax, on Sep 30 2008, 08:18 PM, said:

Seems a lot like 1929, doesn't it?

As much as it does, I'm sure we are all hoping it isn't.

[Callao]

2008 hasn't been a very good year for the financials, and everybody is suffering. How did this all start?
Yesterday, an article from 1999 was brought to our attention by a finance professor here in our business school. Apparently, a friend of hers, after all these years, found the article stashed away in a filing cabinet. With a little digging on my part, I found the article in the New York Times archives.
Now, we find it particularly telling:
_________________________________________
The New York Times
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. . .

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. . .

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

. . . By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

. . .Home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
________________________________________

The entire article can be found in the NYTimes Archives.

[Emax]

Good reference. Here's another.

http://en.wikipedia....t_Crash_of_1929

[k2skier]

It goes back much farther than 1999. I want to get Kevin Phillips book, it looks like a good read.

September 19, 2008

BILL MOYERS: If you read only one book on the route to this financial meltdown, I recommend this one: BAD MONEY: RECKLESS FINANCE, FAILED POLITICS, AND THE GLOBAL CRISIS OF AMERICAN CAPITALISM. The author, Kevin Phillips, has a history of being way ahead of the curve. As a young man working for Richard Nixon, he wrote THE EMERGING REPUBLICAN MAJORITY, a book that uncannily predicted how the GOP would regain power in Washington. Kevin Phillips saw our current crisis coming a long time ago. And in one book of historical insight after another, laid out the clues he was tracking. As recently as last spring in the AMERICAN PROSPECT magazine, Phillips wrote that what he thought was about to happen would be "unusual and potentially tragic."

http://www.pbs.org/m...008/watch2.html

This post has been edited by k2skier: 03 October 2008 - 06:42 PM

[Emax]

Looks like a good read.

I'm beginning to feel vindicated.
Not better - just vindicated.

[Lift Kid]

Emax, on Sep 30 2008, 07:18 PM, said:

Seems a lot like 1929, doesn't it?

If it follows a similar patern as 29', we should expect to see a very dry next year. With dust storms....

But yes, the economy isn't what it used to be. Maybe it will recover?

As an example, Vail Resorts' stock went from $65 a share last year to $30 today. http://investors.vai.../stockquote.cfm

This post has been edited by Lift Kid: 03 October 2008 - 12:56 PM