My!
posted in Economy, Politics |Well. Weren’t they testy? Both of them. And both of them just sort of danced around Lehrer’s question about what–if any–fundamental changes to their plans the current financial situation may cause.
Humph.
As for the current financial situation: I have been watching and reading, slack-jawed, for a week. First the bailout’s on. Then it’s off. Then it’s on again! Oops, nope, it’s off. No, it’s on. NO! It’s off! And the markets have sat there, waiting with bated breath, wondering: which way is it going to go?
The congresscritters have been inundated with angry calls, faxes, emails, letters about the bailout. A representative from Pennsylvania (Paul Kanjorski, D), says that 50% of his calls have been “No!” and the other 50% have been “Hell, no!” And 200 big-name economists got together and signed a letter that said “No go” as well.
A lot of people are pointing to the Community Reinvestment Act as “the” spur for our current financial meltdown. I liked this commentary from a person monickered “Mock Turtle” in a comment thread at Calculated Risk:
“in round numbers
100 million home owners
50 million have mortgages 50 million don’t (again round numbers)
25 million issued loans in last 8 years
one third of these are sub prime; 8 million
4 percent of subprime has foreclosed: 320 thousand
—
so are you saying that all it took was
320 thousand people failing to pay their mortgages
to bring down the financial system of the United States of America???
—
or was it
…way the mortgages were mixed, tranched, sliced, diced, resold, leveraged and derivitivized that brought the system to its knees
guess you gotta choose
who is more powerful
wall street
or
a bunch of wanna-be starry eyed home owner poor people”
Another commenter wrote: “All the trillions of investments between banks turns out to just be invested in investments which were invested in other investments which were invested in other investments which were invested in a house in California or Florida by some guy who lied about his income.”
It’s a mess. There are people saying that Bush, Bernanke and Paulson are running a scam. My personal feeling is that they’re terrified. There was an anecdote going around that Paulson got on bended knee to Nancy Pelosi, begging her to help pass the bailout.
So far, in September, we’ve had: Fannie Mae/Freddie Mac bailed out…Lehman bankrupt…AIG bailed out…Washington Mutual taken over, but listed as a “failed bank” on the FDIC website…and now Wachovia Bank is looking for someone to buy them out…Brad Setser says that in this month, the Federal Reserve has outlaid some $370 billion to backstop all these failures.
When you’ve got ordinary, everyday mommy bloggers posting that they wonder if they should be pulling thousands of dollars out of their bank accounts, “just in case”…Well, let’s just say it adds up to a serious loss of confidence in the financial system.
Dudes. Get testy all you want. But please, please give some serious thought to what you’ll do if you’re the one to walk into the Oval Office next January.
