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dragon6172
Posts: 1140
Joined: Sat Jul 14, 2007 9:56 am

RE: Dow Taking A Dive

Mon Mar 02, 2009 8:24 pm



Quoting Cairo (Reply 98):
considering he held the WH and the Congress,

He only had congress for 4 out of eight years.
 
IgneousRocks
Posts: 73
Joined: Mon Dec 15, 2008 3:06 pm

RE: Dow Taking A Dive

Mon Mar 02, 2009 8:30 pm



Quoting Mt99 (Reply 97):
The least you "conservatives" should do is get your story together right.

Actually, I'm a Libertarian. Nonetheless, this problem has been brewing for longer than one presidency - although both political parties are party to its occurrence.

Quoting Mt99 (Reply 97):
Not a single bank executive asked for this "pressure" to give loans to be stopped at the peril of their banks.

Are you certain? I seem to recall whistleblowers being in the news. Sadly, the boardrooms of the multinational companies are akin to a good ol' boy's club. The daftness and greed is everywhere...it just ain't on Wall Street.

Quoting Cairo (Reply 98):
These problems became apparent under Bush - defaults, a runaway real estate bubble, etc...- under Clinton, they were at worst, only questionable loans.

There's an article or two floating out there from the mid-90s that predicted a looming real estate crisis in addition to the warning signs we had when the tech bubble burst in '99.

Quoting Cairo (Reply 98):
To do anything but claim that policies happening under Bush were anything but Bush's, considering he held the WH and the Congress, just pegs you as another partisan more interested in assigning blame than fixing problems.

No more partisan than others writing the typical blank check of blaming Bush.
 
mt99
Posts: 6166
Joined: Wed May 26, 1999 5:41 am

RE: Dow Taking A Dive

Mon Mar 02, 2009 8:35 pm



Quoting IgneousRocks (Reply 101):
Are you certain? I seem to recall whistleblowers being in the news.

Lets Google them and find them. Lets find the CEO that said: "Our stock is rising and we are making Billions. Lets stop lending to stop this!."

Lets see who finds him/her first.

On count of 3.. 1...2...3.. go!
 
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Dreadnought
Posts: 10201
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RE: Dow Taking A Dive

Mon Mar 02, 2009 10:06 pm



Quoting Cairo (Reply 98):
You are aware that Bush was president, right, and that the congress was Republican? And that any law or program not changed becomes the new policy of the new administration, whether they orginally wrote it or not?

You seem to be confused between Law and Policy.

Law is an act of Congress (in this country). It has the force of law, with penalties etc. to compel or prohibit behavior.

Policy, including Presidential executive orders, congressional rules of order, and even policy decisions made several steps down the hierarchy, are simply guides towards achieving a desired outcome. They do not carry the force of law.

Often, policy is used to fill in the voids and loopholes within the law. For instance, if the speed national speed limit were once again made to be 55 mph by an act of congress, that is a law. If the local sheriff tells his troopers not to bother anyone below 65 mph, that is policy.

Back to the subject -

You are aware that the Republicans never really controlled the senate? They generally had a slim majority of one or two senators, far less than the 60 needed to pass major legislation. Attempts to pass better oversight protection on the mortgage markets in 2002 and 2003 were blocked in the Senate with Democrats firmly opposed, even after the House passed it.

The 60/40 rule in the Senate is always conveniently overlooked in the press and the blogs, and people like yourself who wish to convince themselves that all the evils of the world can be blamed on Republicans, because they held a meaningless simple majority in the Senate.
 
cairo
Posts: 889
Joined: Mon Jun 06, 2005 2:41 pm

RE: Dow Taking A Dive

Mon Mar 02, 2009 10:26 pm



Quoting IgneousRocks (Reply 101):
No more partisan than others writing the typical blank check of blaming Bush.

I voted for George Bush, but I am able to admit mistakes and learn from errors, those fixated with assigning blame will defend their favorite party to the death because it's part of their inability to admit errors, no doubt visible in every part of their life.

Quoting IgneousRocks (Reply 101):
re's an article or two floating out there from the mid-90s that predicted a looming real estate crisis in addition to the warning signs we had when the tech bubble burst in '99.

Yes, and more than an article or 2 from the early 2000s when the bubble arrived and it was clear the train would eventually come to a crash ending.

Quoting Dreadnought (Reply 103):
You seem to be confused between Law and Policy.

Thanks for thelesson in government, but this is a grey area where people on the right have difficulties perceiving since it is easier to categorize things as black or white...there is no set line between law and policy - they can be one and the same. In any event, Bush was famous for extreme use of executive orders and "signing statements" which exempted him from laws the Congress passed or flat out contradicted laws already on the books.

At any time Bush could have changed lending practice at Freddie/Fannie and increased oversight at the SEC (or inacted minutia regulation that would have stopped the excessive derivative trades in mortgage debt) purely be executive order.

WTF is the problem with you guys: who gives a sh*t, blame the birth of the problem on Clinton or Carter or LBJ to appease the part of your identity that can't handle errors, but then realize the executive in charge when the train derailed is the proximate cause of the disaster and the person most able to save the derailment!

Cairo
 
PPVRA
Posts: 8613
Joined: Fri Nov 12, 2004 7:48 am

RE: Dow Taking A Dive

Mon Mar 02, 2009 10:45 pm

Quoting Mt99 (Reply 102):
Lets find the CEO that said: "Our stock is rising and we are making Billions. Lets stop lending to stop this!."

Lets see who finds him/her first.

On count of 3.. 1...2...3.. go!

You're completely right:

"Well, it's true that monetary policy was expansive. But there was nothing that a central bank could do in those circumstances. The market would have been very much displeased, if the Fed had tightened and crushed the boom. They would have felt that it wasn't just the boom in the assets that was being terminated." - Alan Greenspan

http://online.wsj.com/article/SB1224...=special_page_campaign2008_mostpop

So obviously it looks like the Government was drinking the same kool-aid, if it wasn't outright incited by it. No one likes to be the party-pooper I guess.

[Edited 2009-03-02 14:47:46]
 
WunalaYann
Posts: 2128
Joined: Mon Mar 07, 2005 12:55 am

RE: Dow Taking A Dive

Mon Mar 02, 2009 11:19 pm



Quoting CALTECH (Reply 99):
Obamas' policies are a disaster. The stock market keeps going down. Levels not seen in over 12 years.

Perhaps because much of the past decade's growth was achieved on less-than-rock-solid grounds to start with? And perhaps investors are starting to see through a few smoke screens these days?  Smile
 
mt99
Posts: 6166
Joined: Wed May 26, 1999 5:41 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 12:20 am



Quoting PPVRA (Reply 105):
So obviously it looks like the Government was drinking the same kool-aid, if it wasn't outright incited by it. No one likes to be the party-pooper I guess.

Absolutely! Unfortunately, by not having a party-pooper, the proverbial sh*t was bound to hit the the also proverbial fan sooner or later.
 
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WarRI1
Posts: 14195
Joined: Thu Sep 20, 2007 10:51 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 2:42 am



Quoting WunalaYann (Reply 106):
Perhaps because much of the past decade's growth was achieved on less-than-rock-solid grounds to start with? And perhaps investors are starting to see through a few smoke screens these days?

I agree.
Maybe we should blame it on "Irrational Exuberance", to quote Alan Greenspan.
 
DfwRevolution
Posts: 9316
Joined: Sat Jan 09, 2010 7:31 pm

RE: Dow Taking A Dive

Tue Mar 03, 2009 3:00 am



Quoting WunalaYann (Reply 106):
Perhaps because much of the past decade's growth was achieved on less-than-rock-solid grounds to start with? And perhaps investors are starting to see through a few smoke screens these days?

Some of the problem, but far from explaining all of the loses. The markets also react strongly to future expectations which are looking bleak, to put it mildly. The economic policies set by the Obama Administration in the last four weeks have left a serious confidence gap.
 
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WarRI1
Posts: 14195
Joined: Thu Sep 20, 2007 10:51 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 3:08 am



Quoting DfwRevolution (Reply 109):
Some of the problem, but far from explaining all of the loses. The markets also react strongly to future expectations which are looking bleak, to put it mildly. The economic policies set by the Obama Administration in the last four weeks have left a serious confidence gap.

A confidence gap? with Obama's policies, 40 some days, what about the last eight years?
 
Ken777
Posts: 10203
Joined: Thu Mar 11, 2004 5:39 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 5:27 am



Quoting Kellmark (Reply 27):
Principles. The Obama administration has all of the wrong principles to make the economy a success.

And Bush/Cheney (or was it Chenwy/Bush?) did a better job? Look at a 2 or 5 year chart on the DOW and you can see where the plug was pulled and the money allowed to flood out of the market. The DOW certainly wasn't in the 14,000 range when Obama was sworn in.

And the massive bailouts that born during the Bush Administration? How is that Obama's fault?

Or the historic surge in foreclosures and falling home prices? Did Obama cause the start of that during the Bush Administration?

The principles of the last administration transferred wealth to the wealthy, caused havoc in the financial industry, opened a can or worms in the housing industry, etc.

Quoting Kellmark (Reply 48):
This is exactly what Ronald Reagan did in the 1980's, and what John F. Kennedy did in the 1960's.

When JFK took over from Ike's conservative administration the top tax rate was 90%. Yup, 90%. It was that high because of the cost of WWII, investments in Europe & Asia to help them rebuild after the destruction of the war - like the Marshall Plan - investments in this country's future with an outstanding GI Bill, etc. By the time JFK took office it was possible to reduce taxes, especially the top 90% bracket.

JFK cut the top bracket to 75% - even though the previous conservative administration didn't. That 75% still left a strong flow of tax revenues and moved the economy up at the same time. We continued to make massive infrastructure investments - like the Interstate road system - and other investments in areas like R&D and scientific research. We were even able to put a man on the moon in 1969.

The sad fact is that you can only cut taxes so far and you will either generate debt for the kids & grandkids to pay off, or you're going to cut government. People who want a smaller government will differ on what to cut. Some might find having both an Army and the Marines is a duplication of forces - why not shut down the Marines. If you want major reductions in government you'll be looking at really bright arguments like that.

By the way, if you're in the 25% tax bracket you're also paying 15.3% Medicare and Social Security taxes, meaning 40.3% of each new dollar earned. Are you really going to feel sorry for a guy making $250,000 or a million or a lot more than that having to pay 39%? Maybe we should just make 25% the top bracket, but take off the cap for Social Security. (Sarcasm off.)
 
WunalaYann
Posts: 2128
Joined: Mon Mar 07, 2005 12:55 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 6:30 am



Quoting DfwRevolution (Reply 109):
The markets also react strongly to future expectations which are looking bleak, to put it mildly.

But considering future expectations are based on past and present situations, and their analysis, if one realises that past and present results were subject to serious second-guessing in hindsight, how is one supposed to formulate proper predictions for the future?

A quick browse through Yahoo's daily comments of Wall Street activity brings up "uncertainty" as one of the most used words by investors.

Quoting WarRI1 (Reply 108):
Maybe we should blame it on "Irrational Exuberance", to quote Alan Greenspan.

Seeing as he is one of the biggest culprits in the formation of the debt bubble, that would be quite ironic.  Smile
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Dow Taking A Dive

Tue Mar 03, 2009 7:08 am



Quoting Cairo (Reply 104):
WTF is the problem with you guys: who gives a sh*t, blame the birth of the problem on Clinton or Carter or LBJ to appease the part of your identity that can't handle errors, but then realize the executive in charge when the train derailed is the proximate cause of the disaster and the person most able to save the derailment!

We need to keep Cairo 104 to be slammed on the table every time the duck shovellers try to invade (duck shovelling is an Aus term for blame shifting to summary a previous discussion).

Quoting WarRI1 (Reply 108):
Maybe we should blame it on "Irrational Exuberance", to quote Alan Greenspan.

Ah no, WarRI1, this is Mr Tweedly here, we cannot associate Alan G with "Irrational" so please substitute Animal spirits as you sing Elderly Man River. Apologies to S Freberg
http://home1.gte.net/longrj2/fluff/elderlymanriver.html
"...Body's all aching and wracked with pain." Well, we got by with that one.
"Tote that barge, lift that bail. You get a little..." [Stan slows down and stops here, since the rest of it is "drunk and land in jail".]
Stan: Okay, Tweedly, you can take your finger off the buzzer.
 
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stasisLAX
Posts: 2970
Joined: Mon Jul 09, 2007 9:04 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 8:30 am



Quoting Mt99 (Reply 86):
Please. Spare us.. If the banks were really lending money reluctantly, I wouud give them enough credit to prepare for defaults by curving their parties.. ect..

The truth of the matter is that they were making too much money to care.

And now the global banking system is effectively bankrupt. No one in authority from any government wants to say that - but it's the truth. These institutions are almost all dead men walking - critics and investors are now calling some of the world's largest banks "zombie banks". The fact that these "zombies" can't raise capital the old-fashioned way (selling common shares at market prices) is all the proof needed to illustrate this point. Instead, the banks have to compel investors to buy their common shares through far-below market rights issues (which is an massive abuse of market that invariably results in a freefall) or by baiting national governments to bail them out. Either way, existing shareholders are taking it on the chin because their equity is being hugely dilluted when these strategies (if one can call such desperation moves a strategy) take place.

But for years the executives in the banking industry simply didn't care. The regulators in the Treasury Departments worldwide didn't care. And the Federal Reserve just didn't care. As was mentioned, the industry was making record profits and no one in government wanted the party to end. Now, capital must be raised for the banking industry come hell or high water! It’s gotten so bad that the very viability of the financial system seems rely on whether the next version of TARP can be pulled off in U.S. Congress without a hitch.

It’s a misallocation of taxpayer's monies of monumental proportions IMO. While the banking sector is definitely in desperate need of capital - it's a bitter pill to investors and taxpayers to swallow because this global financial meltdown is a disaster of the bank's own making.  sigh 
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Dow Taking A Dive

Tue Mar 03, 2009 9:51 am



Quoting WunalaYann (Reply 112):
But considering future expectations are based on past and present situations, and their analysis, if one realises that past and present results were subject to serious second-guessing in hindsight, how is one supposed to formulate proper predictions for the future?

A quick browse through Yahoo's daily comments of Wall Street activity brings up "uncertainty" as one of the most used words by investors.

I do love the word uncertainty being used to assess scenarios when the options are getting much worse and very much worse! I reckon that has its own certainty. Well I did suggest that AIGs monster losses would not be good news! I would imagine that some nervous nellies will be using the disaster at AIG to second guess the magnitude of other problems to come.

There was an interview where Morgan Stanley strategist Gerard Minack on
http://www.abc.net.au/7.30/content/2009/s2506546.htm

suggested that losses to date in the US banking system will be about 20% of the ultimate total (a transcript should be there soon and then you can get his actual numbers) banking losses in this event.

Whether you term selling on that anticipation or using history is up to you and rather immaterial, folk will still sell. And until the animal spirits reverse - down we go!!
 
cairo
Posts: 889
Joined: Mon Jun 06, 2005 2:41 pm

RE: Dow Taking A Dive

Tue Mar 03, 2009 3:09 pm



Quoting StasisLAX (Reply 114):
As was mentioned, the industry was making record profits and no one in government wanted the party to end.

Amen. Especially since it was so entwined with the real estate boom, which was creating paper wealth worldwide for so many, it would have probably been political suicide to put the breaks on the party.

(with term limits, political suicide is not an issue since re-election is not possible)

Let's not forget that with 2 wars on and recent terrorism, pressure was high, at least in the US to give the people something to feel good about...like their home equity.

Quoting StasisLAX (Reply 114):
Now, capital must be raised for the banking industry come hell or high water!

I'm not so sure a "Bad Bank" might not work better, such as the Resolution Trust Corporation, which had to be created during the last financial crisis:

http://en.wikipedia.org/wiki/Resolution_Trust_Corporation

...simply buy up the bad assets and then manage (eventually sell) them over the long term of years that banks can not afford to do.

Cairo
 
DfwRevolution
Posts: 9316
Joined: Sat Jan 09, 2010 7:31 pm

RE: Dow Taking A Dive

Tue Mar 03, 2009 5:30 pm



Quoting WarRI1 (Reply 110):
A confidence gap? with Obama's policies, 40 some days, what about the last eight years?

Bush 43 left office with the reputation as a spend-a-holic and in less than six weeks Obama has authorized more spending than the last 8 years combine. If anything the Bush administration delayed the inevitable but the opportunity to avert disaster was missed by both parties.

Quoting Cairo (Reply 116):
Amen. Especially since it was so entwined with the real estate boom, which was creating paper wealth worldwide for so many, it would have probably been political suicide to put the breaks on the party.

Not just because it was creating the illusion of wealth, but because Freddie/Fannie are Democratic sacred cows. Had Bush circumvented the legislature to clamp-down on a program historically favored by Democrats, I wonder if his administration could have survived the backlash.
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 5:40 pm

Why are we surprised ?.... this is the plan . Drive the market down .... drive people into the arms of the government. The number one obstruction to the socialist is people like us who make money ,invests and do it on our their own. They must marginalize us , and they are.
 
Alias1024
Posts: 2834
Joined: Mon Oct 25, 2004 11:13 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 7:21 pm



Quoting AGM100 (Reply 118):
Why are we surprised ?.... this is the plan . Drive the market down .... drive people into the arms of the government.

 
WunalaYann
Posts: 2128
Joined: Mon Mar 07, 2005 12:55 am

RE: Dow Taking A Dive

Tue Mar 03, 2009 10:44 pm



Quoting Cairo (Reply 116):
I'm not so sure a "Bad Bank" might not work better, such as the Resolution Trust Corporation, which had to be created during the last financial crisis:

As was discussed above, uncertainty is the only certainy as this stage. But the Wall Street Journal seems to be reasonably optimistic that the new investment funds created to buy toxic assets could actually work, with a few remaining issues to work out. The main idea this time is that such funds would be public/private partnerships, with the Government stepping in to provide "price safety", although that remains to be defined in details.

The same goes for the Fed's new plan (I'm sick of "new plans", but if one works then it's fine with me) to help ease credit markets.

Officials and some investors see great promise in the effort to jump-start securities markets. "What the Fed has done, and I think it will be effective, is to provide a balance sheet to finance assets for investors who identify credit risks they're willing to take," said Curtis Arledge, co-head of U.S. fixed income at Blackrock.

Opinions?  Smile

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