No one here cares about Lehman huh?

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Looks more and more like Lehman is a boulder thrown into a pond. The waves keep coming and getting bigger and bigger.

So the government buys AIG, $85 Billion, who insured all the bad paper banks are holding. Between that and taking over Fanny and Freddie, We The People have just bought bad debt. One does not pay $85 Billion for something worth less than zero.

Those two moves block the one thing that can restore the system, selling everyone their mortgage at auction prices. In this market, I would think $0.25 on the dollar would be more than enough. Instead of bailing out the people and reducing their debt, they bailed out the fraud, now the government owns your mortgage.

These are the same people who changed the bankruptcy laws so you could not discharge debt, now they control debt. I would say conflict of interest.

Lets hear the Free Market speech now. Deregulate, let the market decide, cut taxes and let business take the risks.

Bad loans become worthless, that was done by business, held by business, and the government has no right to go in business. They spent $125 Billion to buy Trillions in losses! Now The People own the loss.

All deposits are insured through FDIC. If the banks fail, that is the stockholders, those that work there, but the depositors are insured. Same for the brokers. FDIC is funded, they are worth bailing out.

This is a $10,000,000,000,000 loss. It is being passed from the crooks that created it, to The People. The government is bailing out massive fraud, when their job is to put these people in jail, and liquidate the assets.

Next year's deficit is under a half trillion, this is twenty times that.

Oil was $147, it dropped to $97, should the government bail out those that lost $50 a barrel?

No one would, they speculated and lost, mortgages are no different. They are no different than a tanker load of oil, filled at $147, and coming to port at $97, it is business in a Free Market.

The role of the government is to prosecute fraud. They are to make and enforce laws.

The Federal Reserve System is private, because we do not trust the government with the money supply.

AIG was bought for $85 Billion, the money went to stockholders for worthless stock. We did not make a loan, we bought almost 80% of the stock. No one mentions the price per share. Who did we just give $85 Billion?

They say we will get the money back by selling off assets, they were bankrupt, what assets?

The only way to collect on bad mortages is to not let people go bankrupt, and put them in debt servitude.

This should have been settled in the Courts, a common business bankruptcy. After a write off, bad debt would become good. If as the government says, selling the assets will recover the stock purchase, then a Court could reorganize the company under Chapter 11.

This is a secret Oval Office deal that sticks all the losses on the victims of fraud, The People.

Since when does the government have the power to speculate in the stock market? To own and operate companies?

It has been shown that the head of Freddie cooked the books so he made his numbers, that triggered a $25.000,000 bonus, and that he did this for several years, why is he not in jail? Did we buy his stock options for $40 billion?

A government that does not make and enforce just laws, is not a government, it is a crime family.

I propose that The Commandant of the Marines be elected Dictator for a period of ten years.

Remeber

DEBT IS THE SLAVERY OF THE FREE

Never trust anything the fed does, it is not part of your government it is a private organisation designed to keep 99% of the American population under the thumb so the fat greedy cash pigs can grow fatter. The real terrorist threat to you and I is not the Arabs running about with AKs it is the hooked nosed bankers who have made the world population their personal b*****s. Two well known families in particular. We are all going to suffer for them in the coming months and years.

Here in the UK the Bank of England is no better, another "quasi-public" institution that has a government and it's people over a barrel.

Just out of interest who do you think pushes the US' foreign policy? I'll give you 1 guess. What is the point of democracy if it can be swayed by $$$?

CHecking my portfolio today I came across this gem:

http://www.countrywidenewloans.com/

It was a paid link on the marketwatch page...

It would seem that countrywide, the now defunct home lender, is still paying for link ads and their website still offers government backed home loans at very attractive rates

In a fund raising move Republicans and Democrats handed out a Trillion dollars in exchange for market losses today.

At their usual 10% finders fee, the parties will now be funded forever with $100 Billion.

The United States was just purchased in a leveraged buyout deal.

The world has slipped even further into their pockets. You could'nt make it up! yet....All over the news there is - REJOICING.

Maybe the tip of the iceberg is a better metaphor. Lehman isn't the cause. Just a part of the problem that was visible early on.

Would you get *somewhere* by gazing into another part of your own anatomy? Or should you be gazing at someone elses belly?

I never formally studied economics so please correct me if I’m wrong.
The way I see it is that the next bunch of debts to go into default is going to be Visa, Mastercard, American Express, Discover etc.
Chances are the government is going to bail them out also. As the U.S. government goes further into debt sooner or later someone is going to take the easy way out of printing a whole lot more dollars. This in turn is going to cause inflation to go through the roof. I’m talking about third world kind of roof where the rate of inflation is thirty to eighty percent. Can someone please tell me if I’m right or wrong about this.

This is really a new one. We had Stagflation, the Laftner Curve, followed by interest rates that hit 17% to control inflation.

The current situation should be Deflation, surplus goods, few dollars. Values should be adjusted downward. It is happening, the market is rejecting bad debt, and it is not sub prime, it is building a house for $100,000 on a $200,000 lot, and selling it for $500,000. Then that becomes a mortgage, at 7%.

When people figure out they can buy the lot, and finance the building, housing values fall.

A rule, Everything that goes up must come down.

So people got stuck with houses that they owed more than it was worth. Often twice.

The normal is, give it back to the bank, which has been happening, the banks sold the mortgage to Fanny and Freddie, or to Investment Bankers who then sold securities based on a package of mortgages. As a hedge, the mortgages were insured, passing the risk to AIG.

It is a game of musical chairs, and when the music stopped, AIG, Investment Bankers, had no chair, and were to take ownership of bad mortgages, and pay those who bought insurance.

The government response is bailing out investors, who bought insurance from a company that went bankrupt. By all rights, they took a risk, and should own the losses. Losses not covered, the shortfall, should go back on the investors.

This bailout will not work, for their are tens of trillions of losses, and a mear trillion and a quarter is not going to stop the fall of housing prices. My neighborhood, $500,000 homes, 100 per block, $50 Million.

In California and Florida, the same block is now $25 Million. At $25 M a block it adds up. 4,000 blocks is a Trillion lost, and we have a lot more blocks.

The winnings were focused on the super rich, now the losses are.

As someone on AOL said, The Bush Doctrine, Privitize profits, Socialize losses.

Equality is written in our law. Bailing out some is not.

Even if the government took all ten of trillions of losses, it would not stop the market slide.

This is welfare for the super rich.

With a several year backlog of unsold homes, prices still falling, and a younger generation that is smaller, poorer, there are no buyers at current prices.

Home owners are being bled by high taxes, utilities, ARM's, and with their credit maxed out, the credit cards are the next to fall. Pay the cards, or keep the house?

By the Gold Standard, gold was $340 when Bush took office, now around $900. This says the dollar has been devaued 60%.

We know the government is in debt, going deeper, so where does the next trillion come from?

Selling bonds? The current rate of return is low.

To not write down the value of houses, mortgages, welfare for the rich, leaves devaluing the dollar.

People who own things, the rich, get richer, everyone else gets a pay cut, and higher taxes, for inflation pushes them into a higher bracket.

So when the rich lost the game, they grabbed all the marbles and ran. Skull and Bones cheats.

We can let them, or hold an election, and by simple majority vote, change the form of government, start over. It is in The Constitution.

My version would be a 3% tax on net worth. It would be the only tax.

One rule that has stood the test of time, all paper money not backed by gold or silver becomes worthless. On the way down I would pay the national debt.

Since this will cave in the banks, but not the depositors, FDIC, all mortgages will be resold for 25% of face, at 3%. Homeowners have first option to buy. Most people could afford a house at those rates, so demand will pick up.

The only way to stop speculators from doing it again, is having two classes of currency, a domestic, and an international. This seperates the wealth of the people from international capital pools.

It will also make a mess of the drug market, for the domestic currency will be worthless outside the country. While the international currency can be valued against a basket of other currencies, which is common today.

We The People will no longer finance the rich. They can sell out, convert the domestic currency to international, and go play global, on their own.

They have been getting a free ride, they have assets, not income, stock bought at $1 now worth $300 is not taxed. Food, clothing, shelter, are taxed. An income tax is unfair, when 98% of the wealth is owned by 2% of the people.

A 3% tax on assets will bring in more than the current income tax.

The greatest investment We The People can make is in the Health, Education and Welfare of the next generation. That, and providing for the common defense, is the role of government.

Citizens will own the country, and if you can not prove you are a citizen, the system is closed to you and you will be deported. All 45,000,000.

There will be full employment, rising real wages, and the cost of living will be smaller.

All energy will be sold in bulk to the government, home power will be cheap, high speed rail will be cheap, diesel will be cheap, gas will be expensive. We do have to come to terms with energy consumption.

Large areas will be bought up, and closed. Nature will be restored, as a buffer. The air filter state.

There will be incentives for population reduction. None or one child, you get a bonus, two you don't, three is going to cost you.

New cities will be built, old ones torn down.

Population will be shifted away from places regularly destroyed by hurricanes, San Andres Fault, New Madrid, the Yellowstone Caldera, and those added to the nature preserve.

We need a vision of a hundred year plan, that generations from now will think we were really cool people.

I likes your thinking

Especially population controls, fancy being prime minister of the UK instead?

Bailouts won't work except to make the fat cats even fatter. Fat cats, parasites, vampires, whatever. Our government is being held hostage to the insatiable greed of corporate mafias with all the subtlety, compassion and fairplay of vampires salivating over the prospect of freely feeding on -- we the people.

Obviously we the people need to heal. The economy needs to take its medicine and heal. Does anyone in their right mind really believe these massive bailouts are going to do anything except make the rich richer and the relatively free not free at all? It's going from the frying pan into the fire.

If congress is wise enough to make a long range plan spread over at least a few years, cap domestic and world market bailout at 1.2 trillion with realistic oversight and accountability in place, then we might have a somewhat decent plan. It wouldn't stop the blood flowing but would slow it down to reasonably manageable. Probably the best we can expect and far better than writing a blank check for insanity which is what the administration is hoping for. If congress could cap the whole thing at 700 billion, marvelous but not very likely. A 1.2 trillion cap spread over 4 years and giving the administration no more than 200 billion for the first quarter (including what has already been spent) and 100 billion for the second quarter would leave several hundered billion budgeted out over the next 3 and 1/2 years. Giving the administration 700 billion from the getgo is a very flawed plan. Obama or McCain would be able to modify the plan with a maximum of 300 billion having been spent as opposed to 700 billion (or more as the pundits are saying).

We're in this pretty deep already and if the bailouts continue without the appropriate stopgaps in place there will be no end in sight. Like sitting on the tracks in front of a speeding train going downhill...

The tyranny of time. The tyranny is in forcing a quick fix. It took a long time to screw things up this badly and it will take a long time to heal properly. Looking to the quick fix is living in a dream world. However whatever it takes to jolt us awake.

The only thing that can stop the monstrosity of corporate greed is for the people to wake up and stop it. We have to summon the wisdom and courage to stand up to those who offer us nothing but pain. The torture will intensify until it reaches a point where we utter a collective "ENOUGH"!

There's probably no way to stop the bailouts so keeping a firm grip on the faucet flowing taxpayer funding is all congress can do at this point.

There is no need for a bailout, the only loss has been on the books of a small part of the economy, and they were at fault. They are Enron and Worldcom, hollow shells with political connections.

The only thing a bailout would do is keep fraud covered up, what they fear is having the books reviewed in bankruptcy court, which will expose fraud, payoffs, kickbacks.

They need a lot of money to cover their crime.

We have gone too far already, but getting Fanny, Freddie, AIG out of the way, cleared for orderly liquidation, leaves the players exposed who sold them bad paper. They over valued the assets they sold and insured. That is fraud.

They need a bailout, or bail money. If Congress bails them out, they will need bail money.

Who lost what?

Most major investors play long, they have a lot of money to park, and Treasury Bonds, tax free Munies match their needs.

For retirement pools, there are limits to what cane be bought, Bonds, Stock and debt from AAA companies. They got bit on Enron and Worldcom, who used fraud to appear to be AAA.

Mortgage backed securities are high risk, high return. The value changes suddenly with interest rates.

There is no talk of bailing out the people who bought them. They were speculators.

They also have lawyers, accountants, and what seems to have happened is they caught on to the fraud, that waht they were sold was not as described, and returned it to the brokers, and demanded their money back.

This is how brokers got stuck with the fraud pool, they created it, then were forced to buy it back.

Brokers are allowed to create money. Most of it is good. Most of it is fairly priced, and all risks fully explained. Buyer and seller agree.

Securities based on mortgages are as good as the mortgages, and if they are performing, it can be a good investment.

The problem is non-performing mortgages were used to back securities, which were sold as good performing mortgages.

This is what was returned to the brokers, give me my money back or be charged with fraud, and this is why the brokers are holding worthless mortgages, they sold them.

They cannot sell them back to the banks they bought them from. The banks know.

To sell them to anyone they would have to Mark to Market, sell them as non-performing, for a few cents on the dollar.

They are stuck. They spent real money to buy them. Money that investors held with them, which they owe investors. They created securities, paid commissions to sell them, often a large kickback to smaller brokers to move them to their customers, then had them returned at face value, and had to buy them back.

Everything they spent was other people's money, which they still owe.

They looted customer accounts to finance fraud, they produced counterfit money, were forced to buy it back with real money, which also came from customer accounts.

To finance this they sold customer assets, stocks. The only way to cover their losses is to crash the market, so they can buy back stocks to replace what they sold.

Stocks are held in the Street Name, the broker, to speed up sales.

The old adage is, "He who sells what isn't his'in, buys it back or goes to prison."

Having sold the stock, lost the money, they owe their customers trillions they do not have.

Like a bank, depositors money is used for loans, but still owed to the depositors.

Bankruptcy is a settling of ligitimate debts when the assets cannot cover them.

It happens, and through the courts they is a way that all creditors get something.

While they were free to sell the customer stocks they held in the Street Name, it was only for ligitimate purposes.

What they did is called Embezzlment, taking other people's assets, and going to the casino.

They took other people's real assets, used them to buy junk, sold securities based on that junk, and had it returned. What magnifys the power of winning also magnifys the power of loss.

They cannot go bankrupt, for the courts would find thousands of felonies, and so that would be providing evidence of their guilt.

They are a hollow shell, living off the skim, they do not have the assets to cover their thefts.

These crimes were commited while the current head of Treasury and the Federal Reserve were the main players on Wall Street. They are the guilty parties, who now want to loot the new stock holders, We The People, to cover their crimes.

The government is a crime family, out to cover their past crimes by commiting new ones.

It is a really, really, big crime that can bankrupt Wall Street and the Government.

Time to take Skull and Bones to Gitmo for some waterboarding.

Eighteen months playing golf in minimum security does not work for me, I want all their assets, and those of their families, under the RICO Laws.

I am a Capitalist Pig, I love Greed, my class makes money the old fashioned way, we work for it.

I would say that 98% of us Capitalist Pigs could withstand a full audit of the books, and it would be found we are law abiding, honest, even ethical, and we expect the same from others.

That is the reason we refuse to speak to most people.

These guys are Skull and Bones. None of them ever did anything, built anything, added to the economy, they are just managers with friends, they arrange bribes, take Congress golfing, and see what they can get away with.

When you see what you can get away with, you will find out what you can't get away with.

Right now they control, The White House, Treasury, Federal Reserve, SEC, The U. S. Attorney, and most likely the fake FBI investigation. They want to leave Congress as the fall guys.

Let us wait on the bailout, till the new President takes office, and cleans house.

Electing a new Congress would help, this one has blood on their hands.

Inventor and alba:

I think you are right on. I agree completely.



Here also is my take on it:

The problem with “positive thinking” or “the secret” as it is currently called.

The art of Karate is based on positive thinking. If you truly believe
that your hand will go through four concrete blocks it will. If you
doubt it even in the slightest then you will hesitate and break your
hand. There are however limitations even to Karate. What if for
example it wasn’t four concrete blocks but ten, or a steel bar instead
of concrete blocks? You cannot change the law of physics no matter how
much you believe. All the positive thinking in the world will not help
you; you will break your hand. Karate is a little like religious
fundamentalism. Faith or a “trusting belief “ may be fine when God and
heaven is concerned but in our relatively short inconsequential little
lives here on earth we need to heed the laws of physics. The $700
billion bail out plan will not work. It will not work because it is
not enough. All the gold in Fort Knox would not be enough. The same
mistake was made with Iraq. There was too much positive thinking. All
the U.S. troops and all the money will not change the minds of the
Iraqis. Sooner or later they will have traded one tyrant for another
that is all. We will however have lost many thousands of our soldiers
and trillions of our dollars. Wall street has been gambling for a long
time but as a good gambler has to know when to quit and go home. As
the song says "know when to hold them, know when to fold them". That
is the law of physics at work here. The Bush administration will break
our hand.