What Fresh Hell Is This?

September 15, 2008

Birds Of A Feather

John McCain today:
You know, that there’s been tremendous turmoil in our financial markets and Wall Street and it is — people are frightened by these events. Our economy, I think, still the fundamentals of our economy are strong. But these are very, very difficult times.
Herbert Hoover in 1928:
With impressive proof on both sides of magnificent progress, no one can righly deny the fundamental correctness of our economic system.
Both were wrong.


Anonymous said...

All I can say is, FDR was right. And now we're all going to pay the price for the naivete of Republicans who championed the deregulation that has led to this mess(and those Democrats who have worked to gut Glass Stearns).


One of them will be along shortly to attack Obama, blame liberals and proclaim victory (talk about a one-trick pony btw; he might want to think about getting a new schtick because the old one stinks).

Anonymous said...

I believe that Glass-Steagle was meant to prohibit Commercial Banks from underwriting securities, and from Investment Banks acting as Commefcial Banks, after the lessons of the 1920's. Let's say, BoA had an investment banking subsidiary (call them Merrill), and Merrill had a portfolio of securities that it had underwritten, and that Merrill had overpriced so that they hadn't sold. There might be a temptation for BoA to arrange a "sale" of the overpriced securities to it's commercial bank subsidiary. That would weaken the commercial bank, but, hey, they'd be FDIC's problem at that point. Glass-Steagle, which came along at the same time as FDIC, prohibited such activity. (It forced the breakup of Morgan into seperate banking and investment banking businesses, for instance.)

Of course, Glass-Steagle was largely repealed a few years ago, so, Bank of America was able to buy Merrill Lynch, who was only on the block because of disastrous underwritings.

But, I'm sure that, this time, things will be different.

John K. said...

John K: Except that Dodd and Hillary and Hussein Obama all got campaign money from Fannie Mae and Freddie Mac. Wonder how many mortgages they could have helped if they hadn't taken that money?

John K. said...

John K: FDR was so right he prolonged the recession by four years. And we are now paying for the FDR alphabet programs. Gee, isn't government such a good thing. Can we say Community Reinvestment Act and Barney Frank.

dayvoe said...

John, I've told you this before. EVERY TIME you change the subject you let us know that you know you've lost the arguement.

Good going.

Anonymous said...


Perhaps you can explain how the Community Reinvestment Act forced, say, Lehman, or Merrill, to buy up huge amounts of mortgage-backed paper.

Bonus points if you can give an actual answer. That would be one where simply repeating "Hussein Obama" and "LOL" are the [g]ist of your reply.

John K. said...

John K: Because they converted the paper mortgages into securities. If the CRA had not been in place, these mortgages would have been backed by solid equity. LOL NEXT!
Don't yah just love ACORN. LOL

Anonymous said...

Ummm, johnk? I asked how the CRA forced the huge investment bamks to "buy up huge amounts of mortgage-backed paper.

You reply:

"Because they converted the paper mortgages into securities. If the CRA had not been in place, these mortgages would have been backed by solid equity."

You've never heard the term "paper" used for debt securities, have you?

I've often thought that you have no business or economic knowledge beyond whatever you hear on rush or Fox.

Now, I'm sure of it.

KGC said...

I believe the fundamentals ARE fairly strong. What we have is a LOT of bankers/financiers who are reacting in an overly cautious manner... it's a spiral... most associated with the financial industry are NERVOUS and cutting back.. needlessly, IMHO. But, that won't fit the "woe is me" MSM template, will it?

Are there excesses or problems? Sure. There will always be excesses or problems. Deal with it.

For those of you who will attack me, I'm a CPA with an MBA from a MAJOR school, >25 years experience, including CPA Firms, International Investment Banking, and more than 13 years owning an industrial distribution Company.

Geez-o-man, the primary shareholder of my Company is a former banker... won't lend more than $50,000 on nearly $700,000 of inventory... in a profitable business.

Anonymous said...

What I love about financial geniuses like yourself, KGC, is all the rationalizing and excuse making.

I also love the fact that when you folks fuck up royally it effects all of us. And yet you have the nerve to tell people to "Deal with it."