BlogHer - What's next for the U.S. economy? Dow down 504 points, Lehman Bros. files for bankruptcy, McCain and Obama speak up - Comments

I Don't Take Orders From Anyone...

Gena Haskett — Thu, 18 Sep 2008 18:16:16 -0500

Facts do matter. Context matters. The point of the post was to talk about our concerns about multiple businesses tanking in one week. Yes, Congress has a share of the responsibility for lax or non-existent oversight of the financial industry. There is also a concern that the U.S. cannot (and for some folks) should not bail out private businesses.

It has come to my attention that there are some people, not naming names, who for a multiplicity of reasons do not like or endorse Obama for President. I hear that a few folks find the idea of McCain for President equally as repulsive.

I get it. But that is not what we started out talking about. There are liberals here. There are Independents/Undeclared voters here. There are Conservatives and Libertarians. And all of those folks also known as Americans, are being affected by the business practices on Wall Street.

We all will have tax money diverted to these same companies to prop up their survival. When you see a family losing their their home are you going to ask if they are a Obama or McCain supporter? Will you have more sympathy for the person who just lost a job this week because they have a conservative point of view?

Many of us are willing to stay and discuss. The discussion is not easy. Talking about money, finance and our interconnectedness is not easy. Hearing the other person's point of view. Hard.

Do what you have to do.
Gena - Out On The Stoop

Anne/Backyard Conservative

Publia — Thu, 18 Sep 2008 13:29:23 -0500

Anne, Don't waste your time with these cheerleaders. They are only doing what Barack Obama publicly instructed them to do: "I want you to argue with them and get in their face." Facts don't matter. They don't know how Wilmette ties into Chicago (maps, anyone?). They don't know that the average income here is skewed by a few by-the-lake residents, such as the Legendary Tony Rezko.They don't understand that Wilmette peple don't shoot from the hip, and that they probably don't say anything unless either they know Barack Obama or people who know him and his wife or worked with him. Spend your time where you are appreciated and leave these people to their bubble. They are strictly NOKD.

Publia

Wall Street Meltdown > You & Me

miteegirl — Wed, 17 Sep 2008 17:34:38 -0500

Michael Greenberger breaks it down for you and me:

Deregulation supports risky business
>
Banks get involved in risky lending (aka subprime mortgage debacle). In the mortgage mess, they wrote loans to unqualified people and reassured them that they WOULD be able to pay their mortgages because they wanted to churn commissions.

Banks lose money on foreclosures and defaulted loans.

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Banks tell shareholders and depositors, "Don't worry about us, we're insured! Your money is safe!"
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Oops. Their insurance is with AIG.
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If AIG fails, then banks fail. So, banks can't make loans. No mortgages. No car loans. No student loans. No small Business loans. We have no idea how this is going to affect credit card rates yet. And your bank account (checking, savings) is at risk. (Watch WaMu if you want to know how close to home this is.)

>
"But wait!" you say. "My deposit is insured by the FDIC up to $100k!"
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But the FDIC is running low on money because it has already loaned money to banks which have already failed.
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FDIC says that they need to go to the United States Treasury because they need more money to insure your and my deposit accounts.
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Where will the US Treasury and the FDIC get their money? They will raise taxes. Obama wants to raise taxes for those who singles who make more than $200K and families with more than $250K per year. McCain says he won't raise taxes at all, but even Greenspan says that is not possible for McCain to follow through on.

We already owe billions to China (thanks, GWB!) and, believe me, we don't want China as our landlord.

How did this happen?

Deregulation takes away the safety barrier that usually prevents other people playing with our money. Our pensions, our 401ks, our savings. So, thank anyone in the government who pushed for deregulation of the markets for this weeks' fun ride and any future repurcussions.

For example, Phil Gramm.

Of Gramm-Leach-Bliley Act in 1999, which was created to reduce government regulations in existence since the Great Depression separating banking, insurance and brokerage activities. You know, the regulations put in place after the Great Depression to prevent another Great Depression? Yeah. Gramm-Leach-Biley took those regulations--that safety barrier--away.

This Act was pushed through Congress by Gramm (R-TX) and Leach (R-IA). It passed a Republican Senate and Republican House with more than two-thirds of a majority vote. This prevented Clinton from being able to veto it (a 2/3's vote renders a bill veto-proof).

And Phil Gramm? He is the chief economic adviser to John McCain's campaign. Yeah, THAT John McCain. The one running for president. Thanks Phil! Thanks John!!! Great job, guys! Woot!

McCain and Social Security Privatization

miteegirl — Tue, 16 Sep 2008 22:02:15 -0500

You have to wonder after the events of the last two days on Wall Street.

If John McCain had gotten his way in 2000, or 2004, and Social Security was in risk-based private investments (like stocks), what would senior citizens be facing down right now? Just curious.

Cascade Effect Is Real

MLOKnitting — Tue, 16 Sep 2008 16:54:11 -0500

Not bailing out some of these corporations would be much, much worse for your average person due to the way the markets have been set up to work. The real issues have to do with Reagan's repealing all of the rules and protections that FDR had put in place. People keep voting for the two parties and that kow-tow to big business and they are surprised?

I remember saying that the 1920s were repeating in the 1990s - but every one said that the old rules don't apply. Well, actually, the old rules of behavior applied but the laws that had protected the idiots from themselves had been repealed to serve unending greed at the top.

Everyon seems to forget these lessons - including the governments who have invested heavily in these markets. This has put many people who were never before at risk at risk if these funds fail. Privatization is always bad in government. ALWAYS!

MLO / Melissa

Excellent, interesting coverage of implications

miteegirl — Tue, 16 Sep 2008 16:27:50 -0500

Some of the most interesting coverage and best explanations I've heard of the fallout from the last few days has been on the following radio programs. So, if you want to hang with the guys around the watercooler and hold up your end of a conversation about this, these are a "must listen":

Aftermath of this weekend's financial storm

Worldview 9/16/08

And, if what has happened with the housing crisis mess could in any way, shape or form be an entertaining audio program, leave it to Ira Glass to make it so:

The Giant Pool of Money

A special program about the housing crisis produced in a special collaboration with NPR News.
We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.

We're rearranging our

miteegirl — Tue, 16 Sep 2008 16:13:40 -0500

We're rearranging our finances right now to see if we can afford to buy stock right now.

Yes, buy.

There are some incredible deals to be had at this moment.

We are already pretty diversified. Even though the last few days have been pretty shocking, most of our stocks across four retirement portfolios are still up since we bought in. The wildest ride is for our Emerging Markets stocks and the stocks tied to the S&P500. But even the S&P 500 stocks aren't as bad as they were in '03. One of our short term investment stocks is still going gangbusters, even in this down market, and was up today.

Our trick to holding the panic at bay is to do what Lisa is recommending. Diversify. I've been rebalancing my portfolio every few years, and I was socking money away in my 401k since I was 23. But I won't rebalance until the market pulls out of this nosedive. We buy low and sell high, even though my nerves often needle me during the low points.

If you are much closer to retirement than we are, that will require different tactics entirely.

Please don't copy and paste

shelleyp — Tue, 16 Sep 2008 16:01:31 -0500

Please don't copy and paste pages of text into comments. A link to the source is all that's necessary, and we're not having to scroll endlessly through text that you didn't originate.

Yes, both Republicans and Democrats benefited from Fannie/Freddie contributions. Including both Obama and McCain. Now, what was the point you're trying to make? That we shouldn't vote for either? That our Congress is the best money can buy?

I thought the Washington

shelleyp — Tue, 16 Sep 2008 16:00:01 -0500

I thought the Washington Post did an excellent analysis of the events leading up to the Fannie/Freddie take over.

This is really a bipartisan mess, with the less experienced and knowledgeable Congressional members (of both parties) being taken for a ride by shrewd, and greedy, members of the financial community.

I do believe this demonstrates the importance of greater, rather than less, oversight, especially when tax payer money is at stake; when the financial health of the country is at stake. This throwing open the doors of the federal coffers and hoping that the free market will behave itself is naive, at best; completely irresponsible at worst.

However, both parties have to accept responsibility for this disaster.

And the quote of the day goes to...

Lisa Stone — Tue, 16 Sep 2008 14:27:07 -0500

Jane Becker!

"The bottom line is, it won't be helpful to play politics with this situation. It goes beyond political ideology."

Spill Jane - what're you reading and what do you recommend?

Lisa Stone
BlogHer Co-founder
Surfette

BlogHer is non-partisan but our bloggers aren't! Follow our coverage of Politics & News.

Vered, my small purse and study of macroeconomics says yes

Lisa Stone — Tue, 16 Sep 2008 14:23:57 -0500

Diversification, diversification, diversification, even if I have to cut each red cent into thirds. I agree -- not pulling out what little I have, but am going to think hard if/when I can about real estate and $$$$aving. I never do enough of the latter.

Lisa Stone
BlogHer Co-founder
Surfette

BlogHer is non-partisan but our bloggers aren't! Follow our coverage of Politics & News.

I hear you: California and "banana-republic financing"

Lisa Stone — Tue, 16 Sep 2008 14:21:05 -0500

...made national news today. I woke up to the announcement that the legislature broke its deadlock, but may earn a Gubernator-ial veto. From SFGate.com:

"The budget, already a record-breaking 78 days late, would close a gap of about $17 billion for the fiscal year that began July 1 without imposing new taxes. It does, however, require taxpayers to make earlier payments to the state government..."

I didn't vote for Schwarzenegger, but I do like the way he's demanding budget reform. I'm so tired of the partisan politics that detract from real policy-making -- and I'm convinced that's what the governor's trying to do. My favorite proof? That Treasurer Bill Lockyer (a former state senator and Democrat) can agree this closely on the budget. From the same article:

"Schwarzenegger wasn't the only state official to criticize the plan. Treasurer Bill Lockyer, a Democrat, said at a finance conference in San Francisco this morning that the budget was absurd, irresponsible and "gives gimmicks a bad name."

"It's banana republic financing," Lockyer said. The spending plan relies on "phony money and phony estimates," he said."

Lisa Stone
BlogHer Co-founder
Surfette

BlogHer is non-partisan but our bloggers aren't! Follow our coverage of Politics & News.

I have to agree

Lisa Stone — Tue, 16 Sep 2008 13:33:47 -0500

I have to agree -- Anne/Backyard Conservative, can you connect your links to the conversation I began yesterday? I don't see how bomb-throwing at a candidate with which you disagree addresses the issues here.

Lisa Stone
BlogHer Co-founder
Surfette

BlogHer is non-partisan but our bloggers aren't! Follow our coverage of Politics & News.

What an act of desperation.

CityMama — Tue, 16 Sep 2008 11:12:57 -0500

This is what I don't get about McPalin-backing conservatives: you continue to spread LIES that have been debunked by credible, independent sources hoping that one of the lies will stick in a non-critically-thinking voter's mind and lead to one more McPalin vote. But at what cost? Is this really what McCain has to resort to to win? Will he be able to live with himself in the end? Will you? This tactical approach is very dangerous.

I, too, expect more from a BlogHer political editor. You can contain the untruths and smears to your personal blog. The fact that you are using this omni-partisan forum to spread McCain's agenda of lies is very unprofessional and extremely disturbing. I suggest you stick to comparing the two candidates on the issues. Don't you think you owe that to BlogHer readers?

Stefania Pomponi Butler

I blog:
CityMama
Kimchi Mamas
MOMocrats

corruption

unfit mutha — Tue, 16 Sep 2008 10:33:55 -0500

Ok -- I was reading all the above and can see that we're all feeling angry at the state of where we are. Neither side is blameless. However . .

In all of it, I did not see mention that Mc Cain was one of the Keating 5 -- you know that last banking debacle due to Republican de-regulation. Remember the S&L loan scam? I do; millions down the tube all in the name of let the market set the rules.

And here we are again different time different scam -- same m.o. -- let the market set the rules -- and who prospers? The few big conglomerates who have enough capital to buy out the losers -- us. Pretty soon we'll have one bank and we can thank those deregulators for that.

While, I'm disheartened by the donations that Obama and some of the Democrats have taken -- I'm am heartened that they talk out against deregulation.

I just don't understand how Mc Cain can talk with any credibility on this subject and no one brings up the Keating 5.

unfit mutha

because motherhood should not have to be a onesize fits all job description

What's next for the U.S. economy? Dow down 504 points, Lehman Bros. files for bankruptcy, McCain and Obama speak up

Lisa Stone — Mon, 15 Sep 2008 15:34:05 -0500

With the news that Lehman Brothers, a firm that survived the American Depression, has filed for the largest Chapter 11 bankruptcy in U.S. history, and Bank of American is buying Merrill Lynch, the Dow Jones Industrial Average closed below 11,000 today.

Bloggers have been talking about it since the federal bailout of Fannie Mae and Freddie Mac last week, and certainly since they turned on CNBC this morning. In her post Not So Funny Monday, Elana Centor blogs, "Working out on the elliptical today I tuned into Squawkbox on CNBC-- that would not normally be my channel of choice. But today [it is] with financial institutions Lehman Bros collapsing, Merrill Lynch swallowed and AIG. teetering."

Fausta is captivated too: In "A Vicious Cycle of Their Own Making," Fausta urges the end of "government intervention and interference," blogging that "Bailouts will only preserve the mentality that no matter how badly you screw up, there won’t be any consequences. For as long as that mentality is propped up with governmental handout after handout, no one is going to seriously demand that people are held responsible for their actions."

Now presidential candidates John McCain and Barack Obama have voiced their opinions, too:

John McCain on CNN: "The fundamentals of our economy are strong but these are very, very difficult, tough times." Video at link.

Barack Obama: "The most serious financial crisis since the Great Depression" of the 1930s

What do you think -- how involved should the American government be? Will you change your behavior at this point, or do you think gas prices will affect you worse? And what do you want to hear from the presidential candidates, if anything?

Comments are open!