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Author Topic: Is the700 billion dollar bailout really needed?
Propertymanager
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Yes, Mach, I'm from Ohio as well.

All this blame game is a joke. The FBI is investigating - oops, I mean looking for a few scapegoats. The true criminals are President Bush and President Clinton (especially Bush), who started pushing this "homeownership", social engineering nonsense. They virtually required Freddie and Fannie to loan money to people who clearly should NEVER have been homeowners and were NEVER qualified. Many of these people don't even make good renters, let alone responsible homeowners!

Beyond Clinton and Bush, we've got the leaders at Freddie and Fannie who bought the bogus loans. We've got the idiots at the big investment banks who bought the bogus paper. We've got many in congress who pushed homeownership for their unqualified constituents, and we've got the congressional black caucus who were in bed with Freddie and Fannie pushing loans for their constituents. They're all a bunch of scumbags who have destroyed our country!

Let's let them all fail. Expose the politicians for the morons they are. Let the investment banks fail. Let the homeowners go into foreclosure. Remove ALL the leadership at Freddie and Fannie and provide oversight of these companies.

As Ohio Trader said, KEEP CALLING YOUR CONGRESSMEN! It IS making a difference. I called mine yesterday, today, and I'll call them again tomorrow! Tell them what you think. We can still kill this bailout if enough people call!

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Machiavelli
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quote:
Originally posted by Propertymanager:

As Ohio Trader said, KEEP CALLING YOUR CONGRESSMEN! It IS making a difference. I called mine yesterday, today, and I'll call them again tomorrow! Tell them what you think. We can still kill this bailout if enough people call!

I still say PMS and Ohio are one in the same person or related to each other lol

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glassman
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They virtually required Freddie and Fannie to loan money to people who clearly should NEVER have been homeowners and were NEVER qualified.

comeon PM... they didn't require anything, Bush told 'em to do it in '02 to stimulate the economy so they could collect more taxes so that could help pay for the war...

Fact Sheet: America's Ownership Society: Expanding Opportunities

"...if you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."

-President George W. Bush, June 17, 2004

Expanding Homeownership. The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities.


http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html


the mortgage brokers that did it were paid commissions just like realtors are...

they just wanted a deal, any deal, and they didn't care how they got it..

fannie and freddie ( secondary mortgage market participants) buy the notes from the mortgage originators (brokers)...
you should know this from your real estate license class... it's the second week..

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Propertymanager
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quote:
fannie and freddie buy the notes fromte mortgage originators (brokers)...
you should know this from your real estate license class... it's the second week..

In practical terms, it's the same thing. Fannie and Freddie control the lending standards by dictating which loans will be bought on the secondary market. So, they directly control who the money is loaned to and they are providing the money that is loaned to these people, by buying the mortgage.

FYI, I never attended "real estate license class". I am in the rental property business, I am not a real estate agent.

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Propertymanager
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I agree with you that Bush is primarily responsible for this mess. His "homeownership" initiative is basically the spark for this entire disaster! As I said before, I agree with Bdgee that Bush will go down as the worst president in history, not only for his initiation of this disaster, but for our rapid move toward socialism, with all these bailouts.
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glassman
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Beyond Clinton and Bush, we've got the leaders at Freddie and Fannie who bought the bogus loans. We've got the idiots at the big investment banks who bought the bogus paper. We've got many in congress who pushed homeownership for their unqualified constituents, and we've got the congressional black caucus who were in bed with Freddie and Fannie pushing loans for their constituents. They're all a bunch of scumbags who have destroyed our country!

it's not a race issue, alot of this mess is not subprime mortgages either...

sure they say it is, but what they don't mention is a little talked about accounting rule change last year that forced the Commercial Banks (brokerages) to stop lying about the value of assets they don't trade:
they are called Level Three Assets... they were not "marked to market"; that's a special way of saying priced to sell...

the accountants would assign a price that they "thought was cool" and then borrow money against it...

this has been kept out of the mainstream eye:

Monday, April 21st, 2008

Rising Tide of Level 3 Assets a “Disaster Waiting to Happen”

By Jennifer Yousfi
Managing Editor

In the first quarter, Goldman Sachs Group Inc. (GS) packed another $27 billion worth of illiquid assets onto its balance sheet - a 39% increase that brought the total to $96 billion.

And Goldman wasn’t alone. Morgan Stanley (MS) reported that these hard-to-value/hard-to-sell assets soared 45%, reaching $32 billion. For Lehman Brothers Holdings Inc. (LEH), the first-quarter increase was $500 million, bringing its total to $42.5 billion.

The balance-sheet holdings in question are known as "Level 3" assets. And with the smoke from the subprime-mortgage crisis still hanging over Wall Street like the fallout from a nuclear missile strike, some industry observers are worried that the difficult-to-sell Level 3 assets are little more than a crisis-in-waiting that’s standing in the wings of the U.S. financial-services sector.


http://www.moneymorning.com/2008/04/21/rising-tide-of-level-3-assets-a-disaster- waiting-to-happen/

this level three stuff is the real problem and the sub-prime problem is reall too, but it's a smoke screen for the BIG LIES, REALY BIG LIES...

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glassman
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the "level three crisis" was known over a year ago PM...


Merryl was supposed to be the broker that was most conservative in their lies, that's why they were "buyable"...

note the DATE here:

Nov 3, 2007
Level 3 storm about to hit Wall Street
By Martin Hutchinson

Goldman Sachs has disclosed its Level 3 assets, two quarters before it would be compelled to do so in the period ending February 29, 2008. Their total was $72 billion, which at first sight looks reasonable because it is only 8% of total assets. However the problem becomes more serious when you realize that $72 billion is twice Goldman's capital of $36 billion. In an extreme situation therefore, Goldman's entire existence rests on the value of its Level 3 assets.


http://www.atimes.com/atimes/Global_Economy/IK03Dj03.html

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Propertymanager
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Sorry, if you were looking for an argument, I don't have one. I agree that this is not a race issue and I agree that this is not limited to subprime. Those are only components of this entire mess!
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glassman
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quote:
Originally posted by Propertymanager:
Sorry, if you were looking for an argument, I don't have one. I agree that this is not a race issue and I agree that this is not limited to subprime. Those are only components of this entire mess!

the "project" from Bush was heavily race oriented, however, it was abused by all [Wink]

President Bush has a comprehensive agenda to help increase the number of minority homeowners by at least 5.5 million before the end of the decade.

While the overall homeownership rate has reached an all time high of nearly 68 percent, the statistics show a clear and persistent homeownership gap:

* Despite increases in minority homeownership during the decade of the 1990s, large persistent gaps between non-Hispanic whites and minorities remain and have narrowed only slightly;
* According to HUD, in 1994 the minority homeownership rate was 26.8 percent below the rate for white households;
* The African-American homeownership rate was 27.5 percentage points below the white rate, and the Hispanic rate was 28.8 percentage points below the white rate;
* The second quarter Census data for 2002 shows that non-Hispanic whites have a 74.3% homeownership rate, while African-Americans have a 48% rate and Hispanics a 47.6% rate; and
* Asian-Americans and other races have a 53.7% homeownership rate.


http://www.whitehouse.gov/infocus/homeownership/homeownership-policy-book-execsu m.html

The President is issuing "America’s Homeownership Challenge" to the real estate and mortgage finance industries to join in his effort to increase the number of minority homeowners by 5.5 million families by the end of the decade. Many organizations have already responded to the President’s challenge by committing to:

* Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;

* Launching twenty-five different local initiatives across the nation, geared toward eliminating the specific homeownership barriers faced by minority families in those communities;

* Raising $750 million in below-market-rate investments by 2007, which will work in collaboration with local homeownership initiatives and be targeted to heavily minority program areas;

* Pursuing strategic partnerships in 20 top housing markets between homebuilders, lenders, local officials, and community leaders to develop approaches that address the local challenges to building homes for minority families living in urban centers;

* Establishing faith-based housing partnerships between the participants and at least 100 churches, mosques, synagogues, and other faith-based institutions;

* Aggressively developing new mortgage products so that conventional market alternatives are available to combat the predatory loan products that are disproportionately targeted to minorities;

* Creating new mortgage products to meet the unique needs of recent immigrants;

* Dramatically expanding financial education efforts for minorities, providing financial counseling to at least 380,000 minority families, and taking measures at the local level to reduce predatory lending; and

* Establishing multilingual, consumer-oriented internet Web sites designed to help minorities overcome barriers to homeownership, including creation of a central data bank of affordable housing programs made available to real estate agents when working with clients


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glassman
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Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market

http://www.whitehouse.gov/infocus/homeownership/homeownership-policy-book-execsu m.html

so lemme see if i understand this?

he spent 440 billion to MAKE this happen? and now we have to spend twice as much to UNDO it?

this is just creeepy...

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Propertymanager
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quote:
so lemme see if i understand this?

he spent 440 billion to MAKE this happen? and now we have to spend twice as much to UNDO it?

this is just creeepy...

I think that about sums it up! However, I've heard that the real number to "fix it" will be more like $2.1 Trillion! In reality, I don't think the bailout will fix the problem. All it will do is keep the Wall Street FatCats in business!
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glassman
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the next issue is who will buy the Govt Issue bonds that will finance this?
the Chinese? the Russians? or the Saudis?

i thought we needed to drill here and now to stop sending money to the Saudi's...

the Russkies are cash rich from their oil and nat gas, but we are looking to get Georgia into NATO...

hmmmm..... are they shortselling?

China? that's about it... last year they told Paulson no when he asked them....


wait! i know who will buy them... the very same people we are buying the bad mortgages from.... [BadOne]

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T e x
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see another thread...

same question: who buys?

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Adventures in microcapitalism...

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bond006
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I keep reading on this thread that this whole mess is scoclism.

I would agree with that if we were getting complete ownership of these companies . I think the government is running fannie and freddie but this 700 billion is wanted to buy there bad investments and that is all we will own a bunch of securities that nobody eles would buy.And like beloved leader said last night that some day in the future they will be worth something maybe. Maybe by the time maybe comes around maybe Bush will be gone.

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Lockman
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quote:
Originally posted by bond006:
I keep reading on this thread that this whole mess is scoclism.

I would agree with that if we were getting complete ownership of these companies . I think the government is running fannie and freddie but this 700 billion is wanted to buy there bad investments and that is all we will own a bunch of securities that nobody eles would buy.And like beloved leader said last night that some day in the future they will be worth something maybe. Maybe by the time maybe comes around maybe Bush will be gone.

Well Bond if Obama wins you'll get everything you want. A government completely controlled by the Democrat party. Will they step up to the plate and fix this or stay in the dugout and point at the out of office Bush and blame everything on him.

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glassman
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Lock, it sux, but what else can you expect?

seriously? Karl Rove played the Republican Party like a fiddle...

all that crap he spun out had to come back and bite the party sometime...

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glassman
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OK, here's Cox on the CDS swap market, and he might actually be right for a change...

Cox: Default Swaps Are Naked Shorts
In prepared testimony that he will deliver to the Senate this morning, the SEC chairman will call for Congress to give his agency authority over swaps.
Tim Reason - CFO.com | US

September 23, 2008

Credit default swaps, potentially the next domino to fall in the ongoing financial crisis, are the debt equivalent of naked shorts on stocks, according to the chairman of the Securities and Exchange Commission.

In prepared testimony that he will deliver before the Senate Banking Committee this morning, SEC chairman Christopher Cox equated the sale of the unregulated bond derivatives with naked short selling and called on Congress to give his agency authority to regulate the derivatives.

"Economically, a CDS buyer is tantamount to a short seller of the bond underlying the CDS," said Cox. "Whereas a person who owns a bond profits when its issuer is in a position to repay the bond, a short seller profits when, among other things, the bond goes into default. Importantly, CDS buyers do not have to own the bond or other debt instrument upon which a CDS contract is based. This means CDS buyers can 'naked short' the debt of companies without restriction."



http://www.cfo.com/article.cfm/12286366/c_12285332?f=home_todayinfinance


he is actually coming right out and saying that this crash scenario has been engineered...

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bond006
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I hope they blame everthing from Regan on up to and including Bush.

If so called capitalism can't seem to manage its own affairs with out the help of public funds thoes corporations should be public property.

This is not the first time thay have came to the gonernment hat in hand like wipped yellow dogs.

And the only reason they are in this mess like the S&L mess before this is they were allowed to operate as they pleased with no regulations and they caused pain for most of society. Plus there CEO's and upper management want big golden parachutes on the way out.

If I had my way they would be stripped of all they own. Them and there families would be under banishment forever. End of story.

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a surfer
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Not every CEO was a criminal.

Some made great management decisions hence making their company money

Most operated under the guidelines that were laid out for them.

Their is a fine line of who crossed the ethical line.

If you want these CEO's and their families banished forever then you should walk up and down your street and banish everyone who took on a loan that was over their head.

Don't get me wrong there are several that need to be apprehended and made to pay.

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glassman
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it's not just about home loans tho Surf.

it's about bad business practices. they leveraged these loans at 40 to one...

i expect that as we discover what has really happened we'll find that they were basically creating their own money inside the brokerages..

sure, they'll say it was "standard" accounting practices...

but the reality is that they exploited loopholes in the existing rules. and they knew the eventual effect, but decided to pass the burning match...


i do want house prices to come down more... i'm looking for the perfect deal..

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bond006
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I don't get you wrong sufer I know where you are coming from me and you will never agree on justice and law

I think these people are thives you don't the people that took the loans were marketed to and it was made simple and easy to do lots of people did it. maybe even you. The power of sales manship and the fact that everbody wants the American dream over came all concerned.

Then unregulated greed took over and it was just make the loan no matter what becase we are going to sell it. And to bad for thoes that bougt it. Thats the problem. And thoes worthless securities are what we tax payers are going to buy what a deal.

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a surfer
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What.....??? Trouble reading the last one bond.


I had a 135k line of credit in 05 and paid it back in full in 06.

My dad always told me to secure lines of credit when you DON'T need them.

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glassman
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quote:
Originally posted by a surfer:
What.....??? Trouble reading the last one bond.


I had a 135k line of credit in 05 and paid it back in full in 06.

My dad always told me to secure lines of credit when you DON'T need them.

i was made fun of in '05 for being conservative by real estate agents, a mortgage broker that we didn't use, and even family questioned my sensibilty to not bury myself in debt...

last year and before? i even had people ask me why i wouldn't go itno debt to build my business...

i allow some of my credit cards to carry debt on occasion JUST to make my credit score higher...

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a surfer
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quote:
Originally posted by glassman:
it's not just about home loans tho Surf.

it's about bad business practices. they leveraged these loans at 40 to one...

i expect that as we discover what has really happened we'll find that they were basically creating their own money inside the brokerages..

sure, they'll say it was "standard" accounting practices...

but the reality is that they exploited loopholes in the existing rules. and they knew the eventual effect, but decided to pass the burning match...


i do want house prices to come down more... i'm looking for the perfect deal..

Completely understood Glass.

Its these loopholes that have to be looked at as we move forward.

How do we prosecute ethics???

LOL. Hell yea I am ready for another buying opp myself.

I paid through the nose in 06 but that was after a double from 04 to 06.


Perfect deal?? The $100 dream house.

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bond006
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Sufer thats what I am talking about because you did or did not manage your affairs has nothing to do with guilt I am glad things worked out for you.

The lenders and what they did whith the contracts is who I blame.

And no not all ceo's are to blame thats why we investigate

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bdgee
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The blame lies squarely on republican party deregulation and anti-tax mantra and all else and all others are simply dupes of the Party.
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Machiavelli
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quote:
Originally posted by bond006:
I hope they blame everthing from Regan on up to and including Bush.

If so called capitalism can't seem to manage its own affairs with out the help of public funds thoes corporations should be public property.

This is not the first time thay have came to the gonernment hat in hand like wipped yellow dogs.

And the only reason they are in this mess like the S&L mess before this is they were allowed to operate as they pleased with no regulations and they caused pain for most of society. Plus there CEO's and upper management want big golden parachutes on the way out.

If I had my way they would be stripped of all they own. Them and there families would be under banishment forever. End of story.

Best said and this is what happens with no or very little regulation in any industry...

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Let the world change you... And you can change the world.

Ernesto "Che" Guevara de la Serna

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glassman
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i think the worst part in all of this is that the bailout of 700B isn't enough by half...

who actually HAS all the CASH?

that's what the "liquidity problem" is...

somebody has the cash somewhere...

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Machiavelli
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quote:
Originally posted by glassman:
quote:
Originally posted by a surfer:
What.....??? Trouble reading the last one bond.


I had a 135k line of credit in 05 and paid it back in full in 06.

My dad always told me to secure lines of credit when you DON'T need them.

i was made fun of in '05 for being conservative by real estate agents, a mortgage broker that we didn't use, and even family questioned my sensibilty to not bury myself in debt...

last year and before? i even had people ask me why i wouldn't go itno debt to build my business...

i allow some of my credit cards to carry debt on occasion JUST to make my credit score higher...

The problem is not debt itself but how much debt a person can take on and still make their payments... when there is a free for all whether in mortgages, car loans, credit cards etc... Human nature is to overextend themselves... also the so called "American dream" has been implanted in most of us to have more then everyone else as possible... when that happens people think irrationally and buy above their means...

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Let the world change you... And you can change the world.

Ernesto "Che" Guevara de la Serna

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bdgee
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quote:
Originally posted by glassman:
i think the worst part in all of this is that the bailout of 700B isn't enough by half...

who actually HAS all the CASH?

that's what the "liquidity problem" is...

somebody has the cash somewhere...

In numbered accounts in Switzerland or the Bahamas or South America, maybe?


Trickle down my hind end!

Posts: 11304 | From: Fort Worth, Texas | Registered: Mar 2005  |  IP: Logged | Report this post to a Moderator
glassman
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The problem is not debt itself but how much debt a person can take on and still make their payments...

being in debt limits your freedom tho...

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Don't envy the happiness of those who live in a fool's paradise.

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Machiavelli
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if you take too much debt.. but if you take debt within reason it can be good for you for whatever reason like business expansion, homebuying, trading in financial markets etc...

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Let the world change you... And you can change the world.

Ernesto "Che" Guevara de la Serna

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Pagan
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Lawmakers agree on bailout principles to protect taxpayers and ensure oversight.

By Tami Luhby, CNNMoney.com senior writer
Last Updated: September 25, 2008: 2:36 PM ET
NEW YORK (CNNMoney.com) -- Lawmakers have reached agreement on a bipartisan counterproposal to the Bush administration's $700 billion financial bailout plan.

Both parties and the House and Senate agreed Thursday to a set of principles on revisions to the rescue plan, which calls for the Treasury Department to buy up bad mortgage securities from banks in an effort to get them to lend again.

The proposal will help homeowners, curb executive pay packages at participating firms and provide oversight of Treasury's actions, said Sen. Christopher Dodd, D-Conn., a key architect of the congressional effort. He did not provide details but said lawmakers will sit down with Treasury officials to discuss it.

"We've reached a fundamental agreement on a set of principles, one, for taxpayers, which is tremendously important," Dodd said. "We're very confident we can act expeditiously."

At least one prominent Republican says matters still aren't settled.

"House Republicans have not agreed to any plan at this point," said John Boehner, R-Ohio, minority leader.

Instead of receiving the entire sum at one time, Treasury will receive the money in installments, with $250 billion in bailout funds available immediately, the Wall Street Journal reported. Lawmakers also said the deal calls for the government to receive stock warrants of participating companies, the Journal said.

Administration officials said they were pleased that progress is being made.

"We'll want to hear from Secretary Paulson, and take a look at the details," said Tony Fratto, a White House spokesman. "We look forward to a good discussion at the meeting this afternoon."

The provisions that Congress wants to add to the administration's plan should make Americans "legitimately feel better about the overall approach," said Rep. Barney Frank, D-Mass., who heads the House Financial Services Committee.

Taxpayers would be protected under the congressional version of the bailout, said Rep. Spencer Bachus, R-Ala., the top Republican on the House Financial Services Committee. Congress' additions to the proposal call for the Treasury to be "reimbursed for their expenditures," he said.

Lawmakers said they wanted to send a message to the markets to calm down. Wall Street heard the message, sending the Dow Jones Industrial Average up more than 300 points after the agreement was announced. It then settled back to a gain of 200 points.

First Published: September 25, 2008: 1:28 PM ET

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It is impossible to make anything foolproof because fools are so ingenious.

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buckstalker
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quote:
Originally posted by glassman:



i do want house prices to come down more... i'm looking for the perfect deal..

Come on up to Michigan Glass...I see homes going for .40 to .50 cents on the dollar everywhere...

I looked at a brand new 3400 sq. ft. brick & stone home the other day on 3 1/2 acres that would cost at least $550,000.00 to build today...going price...$200,000.00

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It's all in the timing...

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T e x
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quote:

JPMorgan Chase buys Washington Mutual
The nation's largest thrift is seized by federal regulators and immediately sold.

By E. Scott Reckard and Tiffany Hsu, Los Angeles Times Staff Writer
6:39 PM PDT, September 25, 2008
Washington Mutual Bank, the country's largest savings and loan, was seized late today by federal regulators and immediately sold to JPMorgan Chase & Co., the New York banking giant that has long coveted the thrift's California and Florida branches.

With assets of $307 billion and deposits of $188 billion, Washington Mutual is the largest bank to fail in U.S. history.

http://www.latimes.com/business/la-fi-wamu26-2008sep26,1,7648045.story

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

Posts: 21062 | From: Fort Worth | Registered: Apr 2005  |  IP: Logged | Report this post to a Moderator
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