Too Big to Fail?

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Hawnjigs

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IMO this is the priority fix for not only our economy, but the world's. If wrong, I'm receptive to being schooled, as I've only become interested enuf in national affairs to research recently.

My information is that ground zero of the crash of '08 was Wall St. USA. Apparently, the well meaning principle of free enterprise and the successful for the time economic policies of the Reagan and Clinton administrations prompted incremental deregulation of the the finance industry with the resulting bankers gone wild catastrophe. I've mostly only a Hollywood movie as info resource to understand "too big to fail" and the necessity of the big bailouts.

Apparently, its still bizness as usual and the threat of another meltdown and bailouts hasn't been effectively addressed by the current administration. Oversight and investigative agencies newly formed haven't announced any results yet. And if we can rely on campaign contribution records I've posted, the presidential challenger is not likely to initiate any actions against his big donors.

So I ask from a point of near total ignorance does anyone have any ideas for a fix?
 
redman

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Hawn as a student of the economy and history I would suggest that you go and take a hard look at Freddie Mac and Fanny Mae. Then study how drivitives were used in to make money or should I say create money that was never there. Mortgage based securities,ETFs. even some of your 401Ks and mutual funds.

Me I got out of the market in 2007 before the bubble burst. And don't think that Wall street will make you any money any time soon. They are not to big to fail can we say FLASH CRASH. If you want a safe place to put your money think commodities. Very heavy ones of the Noble type.

Redman
 
papaperch

papaperch

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The present administration likes to present the fact that they saved GM. The government bought a swath of GM stock @ 59 a share. It is presently worth 19@ share. Yet the lie that GM has paid the taxpayers back persists.

When and if the stock reaches 59 @ share again then will the entire debt be paid. Economic experts rate this at next to zero chance of happening.

I like Redman was fortunate enough to be out of the stock market before 2008 hit. I retired in 2007 and put money into retirement account. Just lucked out on timing.

Another hint : If Obama wins re-election. Personally I would not keep one red cent in stocks.
 
J

JSC

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"And if we can rely on campaign contribution records I've posted, the presidential challenger is not likely to initiate any actions against his big donors"
Side note to this ... These contributors were some of the biggest collectors of "Stimulus Money" (our kids and grand kids and their grand kids money) .... If they cannot make it on their own they will just have to fall .. SOME ONE HAS TO PAY THE BILL !!!!!!!
Hope this helps a little. :)
Back to whippin out a few more jigs .. Big Thunderstorm makin a lot of racket on its way here.
 
U

Uncle Grump

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+1 on what Redman said....

The whole mortgage crisis / housing bubble was due to Federal meddling - they forced the banks - under threat of IRS audits, to give people mortgages - people who had no hope of paying back a mortgage. So then the banks - stuck w/ all that worthless paper, had to do some thing with it, hence the dirivatives and all the associated "products" that they came up.

And this can't be blamed on Dubya, as Bush started a investigation, and the esteamed members of the House and Senate w/ 'D's side their names killed it. Names like Barney Frank and Chris Dodd.

Sadly - alot of my retirement money is still in the stock market - as it's what the rules of my company's 403b plan allow.

UG
 
H

Hawnjigs

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I don't say this with rancor, but the fix is allowing Wall St. to fail after they crash the economy again?

Been less than a year but I think I've gained a rudimentary understanding of the connections between mortgage banking, de-regulation, Fannie & Freddie, the sub-prime bubble + spin off derivatives, & the apparent impossibility of holding banks accountable for bailout money. The role of the Fed and the concept of banks being forced to sub-prime is still vague.

Myself, cashed out my little stock based IRA and am done with the idea of effortless gain based on greed and fear aka investing. Savings pays only 1/2 of a percent interest, but at least a dollar remains a dollar.
 
papaperch

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Hawnjigs- I too profess an ignorance when it comes to economy and Wall Street in general. While still not the sharpest pencil on the desk. The last 11 years I had a cram course on both. My father in law saved me from myself as far as my 401 K was concerned. I was waiting for a huge portion of my portfolio to return to what I had to pay for it when our company changed owners. We had a year to transfer our accounts all of us had to buy when the stocks were extremely high. Then 9-11-2001 happened. Stock values plummeted and I lost almost 60 % of what I had at the time. Using his advice I recovered to even and finally hit my target goal well before retirement.

You are absolutely correct in stating the two things that affect Wall St. the most is fear and greed. But I contend that greed ( to a reasonable extent ) is a good thing. What parent does not want to have their children have a better life than their own. Greed is what inspired ( and the freedom of course ) millions and millions of immigrants to come to our country. People risked everything they had to come to America. Seems like our more recent immigrants are the only ones that realize this. Of course I am speaking of the LEGAL immigrants. No other system has attracted such numbers in the entire word history.

Progressives in general and President Obama in particular blame the free enterprise system every chance they get for every ill known to modern man. Yet it is the one shining beacon ( or at least was ) to the rest of the worlds people who are restricted by their governments from pursuing any dream no matter how modest.

One of their political play is to picture the " Fat Cats " on Wall St. living in the lap of luxury while the rest of us are starving. Truth is most of the money invested in Wall St. is from little guys like you and I. It may be in the form of 401 K , vested pension funds and other things like annuities , market funds. So while there are some Fat Cats for sure there are in the vast minority.

It also pains me to here people say well " Romney is rich and I am sure not going to vote for him. " If that is a person's ONLY reason it is no different that a racist not voting for Obama because he is not white. From the "right "side of American politics Mitt Romney was not even my third choice. Herman Cain was then after he dropped out Newt Gingrich.

I had high hopes for Newt because I wanted to see him debate President Obama so bad. To watch President Obama speak when the teleprompter is off or buggy is down right painful . His so called intelligence quickly evaporates when he cannot read canned responses to " softball " questions.

The major blame for our economical meltdown was fannie mae and freddie mac. Their questionable loans to high risk individuals and forced to do so by government mandate propped up a " false " worth of so many properties that eventually. Once the artificial supports started to collapse so did our economy. My daughter who is a liberal as much as I am a conservative have these arguments all the times. The major difference is she pays no attention to what is actually going on and likes catching up with those snippets on the fast track news. When asked about Solyndra or Fast and Furious she has no idea what I am talking about.
 
redman

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PP Guess I got lucky my son was a die hard liberal. Then he graduated from university and I welcomed him in to the real world. Now he is a hard core Republican, member of the Tea party and works in his spare time for the county Republican central committee. Guess all it took for him was a good dose of reality.

Bad part is he sometimes think that I am too liberal.Lols

Redman
 
Jig Man

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PP, I guess we have a different definition of greed. I'm almost positive our fathers and mothers were running from tyranny and not being greedy when they came to America. I'm pretty sure that is still the main reason today.
 
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Fatman

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Hawnjigs

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PapaP, I agree with JigMan that "greed" connotes a disregard of damage done to others in ones quest for attainment. Maybe, our language lacks a word to describe desire for honest gain, like the languages of indigenous peoples often lacked a word to describe "ownership", since those peoples considered themselves as caretakers for the creator.

As a small bizness operator, I fully support the principle of free enterprise and success or failure based on my efforts to offer something worthy of customer demand. However, I think that WE need protection, be they police, gov agencies, concerned individuals or groups of same, to avoid becoming VICTIMS. For example, Wall St. has for decades been incrementally eliminating regulatory constraints. Look what happened, and will likely happen again. Doesn't one of the CEO candidates campaigning for more deregulation raise any red flags?

Both political parties appear to be wielding inflammatory caricatures. One side pokes the rich fat cats, the other a BLACK woman saying "Where's my free stuffs?" One side yells "Solyndra!" the other "Bain!". I guess the padded profiteering by Haliburton/Cheney is just old news.

Tried to further research the role of Fannie & Freddie but details are sketchy & convoluted. It's possbily too complicated even for dedicated investigators. May be wrong, but both GSEs primary function was to purchase debt instruments rather than originate them, for the purpose of keeping the $ supply available for loans flowing. They were under HUD mandate to expedite the "affordable" home buyers market, but it was private sector abuse and lack of oversight that created the bulk of the toxic "assets".

 
Radtexan

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Keith,Ive started many times to counter some of your posts line by line,but we can crunch numbers anyway we want ,blame past,present,or even future administration's for anything,but still wont solve a darn thing.

You know most here dont agree with the current policies,and especially his future plans of taking over private enterprise, and his Socialist and Fascist agenda..
The biggest issue is WE spend much more than we take in,and even confiscating the wealth of all the fat cats wont put even a dent into it..

I recently saw a video from a accountant,didnt seem to be partisan in any direction,that I thought explained the problem pretty well...


[video=youtube]
 
H

Hawnjigs

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RadT, yes I was aware of the unfixable deficit. And also that my vote, & yours, will not change that. But, we will still shout in the dark, just because we can. Our economy has gone Humpty Dumpty, but still you will vote against the fascist socialist, and I against the liar, to feel like we're going down swinging.






 
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