Obama Owns This Economy

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  • hands sandonhands sandon Posts: 5,268member
    Sorry, haven't read the thread yet, but came across this devastating report on Mitt Romney's performance on job growth in his own state-



    "“While 14 straight months of private sector job growth, the creation of over two million private sector jobs and a rejuvenated American auto industry belie Mr. Romney’s assessment of the administration’s accomplishments on the ‘Today’ show this morning, what can’t be disputed is that under Mitt Romney, Massachusetts ranked 47th out of 50 states in job growth,” said DNC spokesman Hari Sevugan.

    *

    In addition, in 2005 Romney received a C+ grade on the Pew Center on the States Government Management Report Card and a C on fiscal policy from the Cato Institute in 2004 and 2005."

    ~ http://www.bet.com/news/politics/201...effective.html
  • floorjackfloorjack Posts: 2,726member
    Quote:
    Originally Posted by SDW2001 View Post


    OK, how about you explain it, professor?



    As the value of the MBS or CDO go down the insurer needs to put up warrants (aka millions or billions of dollars) on the CDS to insure that the insurance will pay off if a loss is realized. If it's not then the money could come back the insurer.



    It was paying the warrants that took down AIG.





    Everyone forgets that it was the freeze of the money market fund that really scared the crap out of everyone. That was solved when the FDIC backed all money market fund transactions. It wasn't really caused by the loss in value or MBS or CDO.



    Everyone remembers all this right?



    How much of the panic was caused by uncertainty in the governments response to backstop some banks and not others. Why scramble to save your bank when if you ride it to oblivion the government may just rescue you?
  • sdw2001sdw2001 Posts: 16,172member
    Quote:
    Originally Posted by FloorJack View Post


    As the value of the MBS or CDO go down the insurer needs to put up warrants (aka millions or billions of dollars) on the CDS to insure that the insurance will pay off if a loss is realized. If it's not then the money could come back the insurer.



    It was paying the warrants that took down AIG.



    Different terminology, same basic principle. I was simplifying and attempting to avoid too much inside baseball, so to speak.



    Quote:





    Everyone forgets that it was the freeze of the money market fund that really scared the crap out of everyone. That was solved when the FDIC backed all money market fund transactions. It wasn't really caused by the loss in value or MBS or CDO.





    Everyone remembers all this right? [/quote]



    Yes, that definitely caused panic until FDIC backed the money. But this was not the only element to the crisis to say the least.



    Quote:



    How much of the panic was caused by uncertainty in the governments response to backstop some banks and not others. Why scramble to save your bank when if you ride it to oblivion the government may just rescue you?



    According to what I've seen, quite a bit. Are you arguing for an "all or nothing" approach?
  • e1618978e1618978 Posts: 6,047member
    Why do you think that the money market fund broke the buck? Because it had money in Lehmann debt.



    Raising the leverage limit

    caused Lehmann to over leverage

    caused a panic in Lehmann debt when their MBS started to go south

    caused the Reserve Primary fund to break the buck

    caused a run on money market funds

    caused the treasury to guarentee money market funds
  • floorjackfloorjack Posts: 2,726member
    Quote:
    Originally Posted by e1618978 View Post


    Why do you think that the money market fund broke the buck? Because it had money in Lehmann debt.



    Raising the leverage limit

    caused Lehmann to over leverage

    caused a panic in Lehmann debt when their MBS started to go south

    caused the Reserve Primary fund to break the buck

    caused a run on money market funds

    caused the treasury to guarentee money market funds



    The money market froze because people got scared that money wouldn't get paid back. Lehmann was a small player in the money market.





    You guys know what the money market is .... right? So often here complete ignorance of people posting here makes discussion impossible.
  • e1618978e1618978 Posts: 6,047member
    Quote:
    Originally Posted by FloorJack View Post


    The money market froze because people got scared that money wouldn't get paid back. Lehmann was a small player in the money market.



    You guys know what the money market is .... right? So often here complete ignorance of people posting here makes discussion impossible.



    Funny - go ahead, tell us what "the money market" is genius.
  • mj1970mj1970 Posts: 9,002member
    Quote:
    Originally Posted by e1618978 View Post


    Funny - go ahead, tell us what "the money market" is genius.



    Well...that took only about 30 seconds.
  • sdw2001sdw2001 Posts: 16,172member
    Quote:
    Originally Posted by MJ1970 View Post


    Well...that took only about 30 seconds.



    ---though I think he includes me in the "ignorant."
  • e1618978e1618978 Posts: 6,047member
    Quote:
    Originally Posted by MJ1970 View Post


    Well...that took only about 30 seconds.



    I know what it is, I was being sarcastic. The run on the money market funds was caused by a single money market fund breaking the buck. Lehmann wasn't a "player in the money market" - it had issued $500 billion of debt that was bought by money market funds - hence the breaking of the buck.



    I was being sarcastic because mr Floorjack was calling a non-existent kettle black.
  • mj1970mj1970 Posts: 9,002member
    Quote:
    Originally Posted by e1618978 View Post


    I know what it is, I was being sarcastic.



    Oh. okay. Sorry. I thought you were being caustic.
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by SDW2001 View Post


    There is no way to tell for sure what would have happened. I, for one, do believe that if we didn't bailout AIG, the entire financial system may have failed.



    No, we don't know what would have happened, however, we've established you favor government intervention in private commerce "when it's for our own good." OK!



    Following that logic inevitably leads to ObamaCare and illegal wars to end all wars. The elite know what's best for the rest of the lumpenproletariat. Got it.



    Cite the Constitutional authority that justified the Treasury's actions in this case, and for "bailout USA" in general.



    The deep-rooted problems that led to AIG still exist. Instead of addressing them now, our Clueless Leaders have left them to our children and grandchildren ad infinitum. And of the several Republican would-be challengers to this miserable status quo, only a couple "get it". Vote for Obamney and you'll get more of the same misery. Ditto T-Paw. Don't say I didn't warn you.
  • floorjackfloorjack Posts: 2,726member
    Quote:
    Originally Posted by e1618978 View Post


    Funny - go ahead, tell us what "the money market" is genius.



    If you don't know already stop posting.
  • e1618978e1618978 Posts: 6,047member
    Quote:
    Originally Posted by FloorJack View Post


    If you don't know already stop posting.



    You have successfully drug me down to your level, and won with experience.
  • sdw2001sdw2001 Posts: 16,172member
    Quote:
    Originally Posted by john galt View Post


    No, we don't know what would have happened, however, we've established you favor government intervention in private commerce "when it's for our own good." OK!



    No, I'm saying certain action was necessary to avoid the collapse of the entire financial system. I am a conservative. As such, I tend to oppose government intervention. That does not mean I oppose ALL intervention, however.



    Quote:



    Following that logic inevitably leads to ObamaCare and illegal wars to end all wars. The elite know what's best for the rest of the lumpenproletariat. Got it.



    Maybe in your mind, but nowhere else I've seen.



    Quote:



    Cite the Constitutional authority that justified the Treasury's actions in this case, and for "bailout USA" in general.



    Congress has the right to regulate commerce, levy taxes, etc. Had the financial system failed, such commerce would have been severely impacted.



    Quote:



    The deep-rooted problems that led to AIG still exist. Instead of addressing them now, our Clueless Leaders have left them to our children and grandchildren ad infinitum. And of the several Republican would-be challengers to this miserable status quo, only a couple "get it". Vote for Obamney and you'll get more of the same misery. Ditto T-Paw. Don't say I didn't warn you.



    I disagree. Many of the problems have been addressed. For example, try getting a sub-prime loan right about now. Try bundling bad loans and calling them the "Triple A Mortgage Fund." Try explaining to the government how you want to over-leverage your investment bank.



    Speaking of which, what are the deeply-rooted problems of which you speak..specifically?
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by SDW2001 View Post


    Had the financial system failed, such commerce would have been severely impacted.



    Sure! As I wrote the immediate consequences would have been devastating. And, temporary. I just hope you can appreciate that there need to be limits with invoking the Commerce Clause for every single collectivist aspiration. I can only ask that you consider the banking "crisis" in light of previous, real crises in American history.



    I provided one example of a response that would not have indebted us for generations to come. The AIG bailout was a knee-jerk response in classic big government fashion: throw money at the problem - money we don't have and for which future generations are ill-prepared to provide.



    Quote:

    Many of the problems have been addressed. For example, try getting a sub-prime loan right about now. Try bundling bad loans and calling them the "Triple A Mortgage Fund."



    Agreed. However, I question the value of much of the Dodd-Frank banking "reform" legislation. Classic case of shutting the barn door after the horses are long gone. And to extend the bucolic analogy, the same old foxes are guarding the henhouse.



    The problem is that government and private enterprise are horribly intertwined, and have been for years. Its inevitable consequences have now become unworkable. We created the beast, and we can kill it. I expect it will take as many years, but if we don't, who will?
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by SDW2001 View Post


    Speaking of which, what are the deeply-rooted problems of which you speak..specifically?



    The fact that the Obama administration is more in bed with big banks than any other President in history is one.



    Here's another:



    Quote:

    By far the most interesting bit in the draft (cease and desist) order is the bit requiring the banks to engage independent foreclosure review consultants to review "certain" foreclosures that took place in 2009-2010. There is no specification as to which foreclosures are to be reviewed or precisely what the standards for review are.




    Speaking of snuggling:



    Quote:

    ... The bank regulators are going to provide cover for the banks by pretending to discipline them very hard, but not really doing anything. The public will see a stern C&D order, but there won't be any action beyond that. It's as if the regulators are saying so all the neighbors can hear, "Banky, you've been a bad boy! Come inside the house right now because I'm going to give you a spanking!" And then once the door to the house closes, the instead of a spanking, there's a snuggle.



    Not to mention - creation of the Consumer Financial Protection Bureau... good idea. Making it a puppet of the Fed... bad idea



    http://www.nakedcapitalism.com/2011/...ault-line.html

    http://www.thenation.com/article/161...es-wall-street
  • sdw2001sdw2001 Posts: 16,172member
    Quote:
    Originally Posted by john galt View Post


    Sure! As I wrote the immediate consequences would have been devastating. And, temporary.



    I don't know that they would have been temporary. They may have lasted years, or longer.



    Quote:

    I just hope you can appreciate that there need to be limits with invoking the Commerce Clause



    I agree. But you asked. I don't know that their justification was. This is academic anyway. The government has been overly involved in our currency and financial system for a 100 years. I don't like it...but it is what it is.



    Quote:



    for every single collectivist aspiration. I can only ask that you consider the banking "crisis" in light of previous, real crises in American history.



    Just because the government has abused the Commerce Clause in the past doesn't mean it's not valid in any industry. And I consider this crisis to be a "real" crisis. My hunch is the millions who have lost their jobs and homes might agree with me.



    Quote:



    I provided one example of a response that would not have indebted us for generations to come. The AIG bailout was a knee-jerk response in classic big government fashion: throw money at the problem - money we don't have and for which future generations are ill-prepared to provide.



    Letting AIG fail would have been a disaster. It would have taken down the whole system.



    Quote:



    Agreed. However, I question the value of much of the Dodd-Frank banking "reform" legislation. Classic case of shutting the barn door after the horses are long gone. And to extend the bucolic analogy, the same old foxes are guarding the henhouse.



    I can't disagree with that.



    Quote:



    The problem is that government and private enterprise are horribly intertwined, and have been for years. Its inevitable consequences have now become unworkable. We created the beast, and we can kill it. I expect it will take as many years, but if we don't, who will?



    They can't be detached completely. In fact, it seems to me that you're arguing for more regulation. And intertwinement is not always bad. Take Medicare (Part D) for example. It gives qualified people money to use in the private market place. This is much better than the government just providing the payment.
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by SDW2001 View Post


    And I consider this crisis to be a "real" crisis. My hunch is the millions who have lost their jobs and homes might agree with me.



    No doubt, but their Government has helped them... how?



    Quote:

    Letting AIG fail would have been a disaster. It would have taken down the whole system.



    I keep hearing that... "taken down the whole system". What does that mean to you? Could you elaborate? You mean the system of corrupt, broken, concentrations of wealth known as large commercial banks run by inept managers in bed with Washington? How would such failure manifest itself? Another Great Depression? Well, we lived through that and we would again. Tell me why a more robust, equally effective private banking "system" would not arise from the ruins of a collapsed, corrupt banking "system". I can't conceive of this not happening.



    I sincerely respect your opinions SDW but to hear "taking down the whole system" repeated again and again simply sounds like a scare tactic to me. Scare tactics are the predictable refuge of the desperate collectivist. Just because Congress and our President fell for it doesn't mean you have to.
  • mj1970mj1970 Posts: 9,002member
    Quote:
    Originally Posted by john galt View Post


    I keep hearing that... "taken down the whole system". What does that mean to you? Could you elaborate? You mean the system of corrupt, broken, concentrations of wealth known as large commercial banks run by inept managers in bed with Washington? How would such failure manifest itself? Another Great Depression? Well, we lived through that and we would again. Tell me why a more robust, equally effective private banking "system" would not arise from the ruins of a collapsed, corrupt banking "system". I can't conceive of this not happening.



    I sincerely respect your opinions SDW but to hear "taking down the whole system" repeated again and again simply sounds like a scare tactic to me. Scare tactics are the predictable refuge of the desperate collectivist. Just because Congress and our President fell for it doesn't mean you have to.



    *sits back* *grabs popcorn and soda*
  • sdw2001sdw2001 Posts: 16,172member
    Quote:
    Originally Posted by john galt View Post


    No doubt, but their Government has helped them... how?







    I keep hearing that... "taken down the whole system". What does that mean to you? Could you elaborate? You mean the system of corrupt, broken, concentrations of wealth known as large commercial banks run by inept managers in bed with Washington? How would such failure manifest itself? Another Great Depression? Well, we lived through that and we would again. Tell me why a more robust, equally effective private banking "system" would not arise from the ruins of a collapsed, corrupt banking "system". I can't conceive of this not happening.



    I sincerely respect your opinions SDW but to hear "taking down the whole system" repeated again and again simply sounds like a scare tactic to me. Scare tactics are the predictable refuge of the desperate collectivist. Just because Congress and our President fell for it doesn't mean you have to.



    Quote:
    Originally Posted by MJ1970 View Post


    *sits back* *grabs popcorn and soda*



    What does taken down the whole system mean? It means basically the end of the world. Let me restate: Let's say AIG and all 5 of the major investment banks failed. Next:



    1. The commercial paper market dries up completely.

    2. In a week, big business cannot function. The stock market plummets.

    3. Manufacturers and transportation of goods are hit next. They cannot get the food, clothing and consumer goods to the stores.

    4. In three weeks, retail has no stock and cannot pay its employees anyway. Wal-Mart, Target, Sears, Boscov's, Costco, Sam's Club (etc), grocery stores all close.

    5. People panic. There is a run on savings banks. The banks fail.

    6. In four weeks: Civl unrest, followed by martial law (<---edited...I was a fool and wrote "marshal!"--doh!) People loot, smash ATMs, and generally go nuts.



    That's what we were facing. No, I can't prove it. But I do know for a fact that business that had nothing to do with investment banking started to have problems. Those that had some exposure saw their finance arms infect their entire business. Some were already talking about not being able to fund their operations within a week.



    It's not hard to see how this could have happened. But I guess you guys think it's all just a scare tactic.
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