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127 Comments
- JohnnyQwest, on 10/06/2008, -1/+54understand my patience with the government is shrinking
- Lucas123, on 10/06/2008, -2/+44understand investment bank executives got multi-million dollar golden parachutes while my 401k went down like the freakin' Hindenburg.
- mercuryswings, on 10/07/2008, -3/+42“I believe that banking institutions are more dangerous to our liberties than standing armies. “ - Thomas Jefferson
- chicagojack, on 10/06/2008, -1/+37understand my bank account is shrinking
- shig, on 10/07/2008, -4/+35On their little timeline, I call it little because it covers only the past few decades in spite of going all the way to 1913, they leave out a 50 year swath of banking history. Bretton Woods, the Great Depression, both left out. You can't really understand the crisis until you understand how it was engineered from the start.
You have to watch this to understand the current theme of the crisis, imo. It's hands down the best out there.
The late Aaron Russo's, "America: Freedom to Fascism", 111min
http://video.google.com/videoplay?docid=-165688030 ...
Here's some introductory material:
The Money Masters - How International Bankers Gained Control of America, 215min
http://video.google.com/videoplay?docid=-515319560 ...
Money, Banking, and the Federal Reserve, 42min
http://video.google.com/videoplay?docid=3286459385 ...
FIAT EMPIRE - Why the Federal Reserve Violates the U.S. Constitution, 59min
http://video.google.com/videoplay?docid=5232639329 ...
Creature From Jekyll Island A Second Look at the Federal Reserve, 42min
http://video.google.com/videoplay?docid=6507136891 ...
G Edward Griffin's audio presentation of the Creature From Jekyll Island (more in-depth), 71min
http://video.google.com/videoplay?docid=-848491157 ...
Add your favorite Federal Reserve, banking, and money videos in reply. I know I've forgot a bunch of other good ones. - cityguyyoga, on 10/07/2008, -1/+13If you really want to get a deep and concise understanding of the financial crisis, look at Zeitgeist Addendum
http://video.google.com/videoplay?docid=7065205277 ... - eq2s, on 10/07/2008, -2/+13The global financial meltdown gets worse. I've just read that uncertainty has now hit the Japanese banking sector:
In the last 7 days Origami Bank has folded. Sumo Bank has gone belly up. Bonsai Bank announced plans to cut some of its branches. Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived.
Samurai Bank is soldiering on following sharp cutbacks whilst Ninja Bank is reported to have taken a hit, but they remain in the black. Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal… - sockpuppets, on 10/07/2008, -2/+11Mine keeps going up but there's a minus sign in front of it, is that good or bad?
- inactive, on 10/07/2008, -0/+9From the Wall Street Journal:
September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
- uselessexpert, on 10/07/2008, -4/+12Looking deeper into this article it shows the media bias.
At no point in that time line, do I see Mr. Fannie Mae, Franklyn Raines mentioned.
Even though The New York Times warned about the bad practices of Fannie Mae back in 1999.
Article: http://query.nytimes.com/gst/fullpage.html?res=9C0 ...
There is also, no mention of the ton of money, that Dodd, Obama, and a bunch of other DEMOCRATIC senators received as kick backs from Fannie Mae.
Furthermore, there is a picture of the present president Bush with John McCain, which shows McCain meeting with regulators.
Wasn't Bush in Texas politics back then?
Look, I am no fan of Bush, and I am certainly not a fan of Obama, but facts are facts, and if crappy articles like this are suppose to explain what exactly happen, then they should stick to ALL the facts and point fingers to ALL the parties involved, not just the Republican side of the aisle.
At the end of the day all politicians are dirty, and just because one advocates "Change" doesn't make him an angel either. - inactive, on 10/07/2008, -2/+9Trying to paint this as a Democrat -vs- Republican thing is fruitless. The DemocratRepublicans serve the wealthy and powerful, and work together to fleece YOU, the taxpayer.
- oldhick, on 10/07/2008, -2/+9We have to listen to you and your poor understanding of "free market capitalism" and the "bail out" as you call it, so why not listen to the other idiots?
First, this isn't an example of "free market capitalism". Maybe you don't understand the term or maybe you don't understand the current situation. Either way, you're poorly educated... In our current situation, banks and investment firms were highly regulated and both Fannie Mae and Freddie Mack were both GSE (Government Sponsored Enterprises). Fannie Mae used to be a government agency. Further, they are mandated to hit housing goals set by HUD which FORCED them to change their lending practices to benefit low and middle income families. THAT IS NOT AN EXAMPLE OF HOW FREE MARKET CAPITALISM WORKS. That is not example of the "conservative 'get government out of the way' deregulation".
One has to assume you are intentionally trying to mislead people or you actually have ZERO understanding of what you are talking about.
Second, no one has any idea if this "bail out" (another term that shows you have little knowledge of what is actually going on) will help in any way shape or form. It's a gamble and at BEST, it post-pones a market correction. At WORST, it sinks the country.
Don't pretend like you are some how more intelligent or more knowledgeable than the rest of us. It's clear you are not. - WiretapStudios, on 10/07/2008, -1/+8Settle down, jive turkey.
- inactive, on 10/07/2008, -1/+7The Legislative branch was republican even during the Clinton years, the Democrats have been in the majority for only about a year and a half...
- RustyMcloon, on 10/07/2008, -1/+7Here's one of the article's main references. It's a time line that's a lot easier to read than the interactive Dipity time line:
http://www.motherjones.com/news/feature/2008/07/wh ... - inactive, on 10/07/2008, -1/+7Well Great. Now all we need is a HowTo for fixing it and then forward it to the morons on wall street and Washington.
- GiJoeBob, on 10/07/2008, -2/+8It's the Legislative Branch that sets up laws and regulations, not the Executive.
- ModernDayDarwin, on 10/07/2008, -1/+7***** my patience with them was at nil before this disaster. Anything else they do is just "on par"
- uselessexpert, on 10/07/2008, -0/+5All I can understand is that everyday that goes by, my 401k is worth less and less...
- Albumen, on 10/07/2008, -3/+8I suggest that Digg restricts you from posting until they get a certified letter from your Dr. that you are on your meds.
- jason210, on 10/07/2008, -1/+6Guess what. Most Americans are willing to take whatever happens because of wall streets screw up, simply to get revenge on wall street. by most I mean 65%.
- connieLingus, on 10/07/2008, -0/+5don't forget that banks and lending institutions have been using leverage of up to 30-to-1 in order to create interest payments to them out of thin air for the past 30 years, and every one of them got caught with declining home values.
in short, if a bank has $10mil in actual deposits, it can lend up to $300mil in mortgage paper, and the pocket the interest payment as pure profit as it pays down the principle with YOUR money.
so imagine a bank with $10mil of "real" money, issued $250mil of mortgages, then saw a 30% decline in the value of the mortgages..that is a REAL MONEY loss of 250x0.30=$75mil!
so a bank with total deposit base of only $10mil now has to come up with $75mil to pay back...no wonder we are all *****. - Navicerts, on 10/07/2008, -0/+5I enjoyed it but they could do with a little less dramatic effect (ie the music and such). The only thing that does is push people away and align them with the freak shows.
- ripple123, on 10/07/2008, -5/+9when you have had 8 years of republican govt, at some point you gotta blaming liberal democrats for the current state of the economy
- Albumen, on 10/07/2008, -3/+7To be fair I did watch the clip. The woman uses the same tactics she accuses the Bush administration of using to pump up fear. Half truths coupled with paranoid claims of a conspiracy. Troops on American soil!! Oh no... There are always troops on our soil and they get deployed often in times of crisis.. like after say, a hurricane!?
I urge you to take the pills your Dr. gave you. - viker7, on 03/30/2009, -0/+4Zeitgeist: Addendum: http://www.zeitgeistmovie.com/
I don't remember if Alex Jone's "Endgame: Blueprint for Global Enslavement" includes info on the Federal Reserve, but it ties in with all these films too.
http://video.google.com/videoplay?docid=1070329053 ... - 3leggedHorse, on 10/07/2008, -1/+5Understand the EPIC FAIL that is taking place.
- Versh, on 10/07/2008, -0/+4And for further information, try:
http://www.thisamericanlife.org/Radio_Episode.aspx ...
An hour-long radio broadcast in a streaming audio format. I found it helpful to explaining the origin of the credit crisis. - fahrvergnuugen, on 10/07/2008, -1/+5Dugg for the interview with Warren Buffett. It was an hour well spent.
- inactive, on 10/07/2008, -0/+4Its negative good.
- Murdats, on 10/07/2008, -1/+5holly crap, diana is still dead? since when?
- turkeyssr, on 10/07/2008, -0/+4Experts didn't know this was going to happen (arguably), why should we believe you're any better at predicting anything anymore than anyone else? To me, it would have been far more intelligent to give every American $200k, tax it as earnings, and move on. Let Wall Street tank and let people learn to live on what they have, not borrowing to stock store/business shelves et al. It would be a major paradigm shift - live within your means.
- inactive, on 10/07/2008, -2/+6Understand it was an Inside Job. Plenty of people saw it coming.
- diggduggjoe, on 10/07/2008, -0/+3I dug you up in spite of your slur. The fact is both parities are at fault
- SanTe, on 10/07/2008, -1/+4...which is another way of saying it's double plus good.
- WiretapStudios, on 10/07/2008, -0/+3See! Even the fundamentals of joke-telling are affected. This poor sap could only afford a joke from 2003...
- Albumen, on 10/07/2008, -4/+7Nice argument! I find name calling to be one of the most effective methodologies at making a logical point.
Dumbass. - sangjmoon, on 10/07/2008, -0/+3The problem was that increasing government insurance of investments decreased the appearance that bad investments were risky. However, the riskiness of the bad investments didn't change. No matter how you insure it, a person financing a house they can't afford with a 5 year ARM expecting the housing prices to continue to go up doesn't change in riskiness no matter how much the government insures it. By decreasing the appearance of riskiness of bad investments, smaller downturns have turned in bigger downturns that even the largest of companies can't handle. Each government bailout just sets the stage for the next bigger financial crisis by causing investors to ignore real risk. It is true that a run by investors in the short term can cause too much a shock on the economy, but what is at least as important is to make sure that real risk isn't being masked by the government's attempt to calm investors. This is why increasing government insurance is a really bad idea. Unlike other financial tools like the Fed's lending rates, government insurance doesn't go down. It always goes up. As a result, it becomes a crutch that just makes us fall harder when it fails. What the government needs to do is to treat insurance like lending rates which can go up and down to buffer against shocks. Failing that, the government needs to extricate itself from the insurance business.
- oldhick, on 10/07/2008, -0/+3Lots of people knew this was going to happen and predicted it.
- sheasie, on 10/07/2008, -6/+9Instead of investing domestically, the Bush Administration spent USD1t invading Iraq. Unable to secure Iraq's resources (read: oil) in any meaningful way, the USD1t investment not only didn't pay for itself, it further left the US in massive debt - with the US Dollar entirely diluted. With oil/transportation costs rising (relative to the devaluing Dollar), consumer spending fell and real estate began to feel the sting. NOW continue reading the article...
Make no mistake folks: The Bush Administration's irresponsible foreign policy created this global crises. Period. - inactive, on 10/07/2008, -1/+4Bush's buddies all got fabulously wealthy wrecking the country and the planet. Like pirates raiding a merchant ship, they rape and kill and pillage then make their getaway, laughing at the burning hull behind them.
- mattsouth, on 10/07/2008, -0/+3warren buffet is a genius.
- bacon_skoda, on 10/07/2008, -0/+3mark to market is what is causing this credit freeze.
- enantiodromia, on 10/07/2008, -0/+3Speaking of "Here we go again", your profile is very interesting:
Comment in News (7 diggs, 4 replies) - on 09/21/2008
Here we go again with the digg.com economic professors.
Comment in News (-4 diggs, 2 replies) - on 09/22/2008
Here we go again with the digg.com economic professors...
Comment in Videos (25 diggs, 5 replies) - on 09/23/2008
Here we go again with the digg.com economic/monetary policy/banking system professors..........
Comment in Images (-10 diggs, 4 replies) - on 09/23/2008
Here we go again with the digg.com economic/banking system/monetary policy professors......
Comment in News (-5 diggs, 0 replies) - on 09/24/2008
Here we go again with the digg.com Treasury Department experts.............
Comment in News (-3 diggs, 2 replies) - on 09/26/2008
Here we go again with the digg.com economic/banking system/monetary policy professors.....
Comment in News (-6 diggs, 1 reply) - on 09/26/2008
Here we go again with the digg.com economic professors..........
Comment in News (-4 diggs, 0 replies) - on 09/27/2008
Here we go again with the digg.com Wall Street/economic/banking system/monetary policy professors............
Comment in News (-3 diggs, 2 replies) - on 09/29/2008
Here we go again with the digg.com economic professors............
Comment in News (-3 diggs, 2 replies) - on 09/29/2008
Here we go again with the digg.com economic professors..........
Comment in News (3 diggs, 1 reply) - on 09/29/2008
Here we go again with the digg.com economic professors...
Comment in News (12 diggs, 5 replies) - 22 hr 54 min ago
Here we go again with the digg.com economic professors...
Comment in News (33 diggs, 1 reply) - 19 hr 58 min ago
Here we go again with the digg.com Wall Street/finance professors...
Comment in News (-1 diggs, 0 replies) - 9 hr 47 min ago
Here we go again with the digg.com economic professors.....
Comment in News (-1 diggs, 0 replies) - 5 hr 48 min ago
Here we go again with the digg.com economic professors......
Comment in Images (-5 diggs, 0 replies) - 5 hr 46 min ago
Here we go again with the digg.com economic professors...........
Comment in News (0 diggs, 0 replies) - 44 min ago
Here we go again with the digg.com economic/monetary policy/banking system professors......... - dooms13, on 10/07/2008, -0/+3I think it is funny that everyone has turned into an expert on Macroeconomics. I just heard a lecture the other day from an expert in the field, and in his opinion none of the current troubles with the market were avoidable. Back in 2005 he set an alert on his blackberry for 9/30/2008. That alert was 2 simple words, "sell stocks." If you remember, he was a day late, which sort of sucks for him but still makes a good point. A lot of people knew this was coming. They saw the trends in the market and were able to predict that we were going to have some financial problems this year and through next. I don't think it can be blamed on one president or one congress. Granted IMHO I don't think that the current spending on the war in Iraq or the hurricanes which battered the southern coast helped out at all, or that the greed on Wall Street was much of a help either. All I am saying is that I think it is unfair to blame the current situation on a single cause. The global economy is made up of trillions and trillions of dollars. To think that one person could have caused the downturn is a little bit of a stretch, and to think that a $700 billion buyout will help in the long run seems a little naive.
- inactive, on 10/07/2008, -1/+4Q. “In the current mortgage meltdown, did lenders approve bad loans to comply with CRA, or to make money?”
A. Both
This isn’t about blaming Liberals or Conservatives; the whole stinking pseudo-government quasi-free-market crony capitalist system is to blame.
And sorry, but The American Prospect doesn’t trump the Wall Street Journal in the category of credible sources, especially since your source is from six months ago and mine is from nine years ago. - ukfoole, on 10/07/2008, -0/+3Do you really think a dime of that is ever going to directly help someone with a failing mortgage? Unlikely.
It will be pocketed by C-Levels and written off with tax deductions because the "protections" on this bill are so laugably week that the CEOs will be laughing as they cashed the checks.
Did you notice in the last 8 weeks of banks collapsing that every one was bought by another bank. That is free market capitalism. Those jokers realized that with a government bail-out, that there would be treasure flowing in at taxpayers expense. But a failing bank for $200 million, sell off the crap debt to the US Government for $400 million, pocket the good debt, and keep the change. - oldhick, on 10/07/2008, -0/+3This was predicted by MANY people.
- StopTheLie, on 10/07/2008, -0/+3Short book on the Federal Reserve System (available for free) at http://MeetTheSystem.org
- PHiZ187, on 10/07/2008, -0/+3Great podcast from NPR on the bailout: http://digg.com/business_finance/This_American_Lif ...
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