Large Scale Central

700 billion dollar bailout

General Discussion
#101
Dave Healy said:
Charles Cole said:
This should be the next "Shot heard round the world!"
Thanks for that, Chuck.

I doubt it rates the as the next shot heard 'round the world. It’s more like a video of the bloody obvious.

Q: Why was sub-prime mortgage industry created in the first place?
A: Sub-prime mortgages were created BECAUSE MILLIONS OF AMERICANS WANTED THEM!

The real issue here is where the dollars to make those sub-prime loans came from. The answer is, from places like China, Japan, Saudi Arabia and yes, even Australia.

Those folks want their money back. That’s what the bail-out package is really about.


Fannie Mae and Freddie Mac hold a combined five trillion in mortgage guarantees. At our current rate of trade deficits…we create a debt in excess of this amount in less than 10 years.
At the current rate of budget deficits…we create a dept in excess of this amount in less than 10 years.

Mortgages are the tool being used by the Fed to rifle certain banks to prop up other banks.
JP Chase buys 300 billion in WaMu assets for 2 billion.
Citi Group buys Wachovia for 2 billion, Wells Fargo offers 14 billion and the FDIC is trying to stop Wells Fargo.

The Federal Reserve is owned by banks, foreign and domestic, whose identities are kept secret. Over the years many names have been mentioned. Accurate lists? Who knows.
However, we can just follow the money in these recent “deals” and get an idea of who is “in”, and who is not.
Ralph

#102
Ralph Berg said:
..................

As I told HJ some time ago we will soon see a common currency for the US, Canada and Mexico. The Fed has taken every step possible to trash the dollar. Economists for years have wondered why the Fed hasn’t taken any steps to prop up the dollar. When things get bad enough the new NA currency will be rolled out as the economic savior.
Another do this or disaster scenario.
Ralph


Don’t count on it Ralph, that won’t be an “easy sell” in Mexico or Canada. Less so than when you first suggested it, as a matter of fact as far as Canada is concerned there are discussions planned to improve economic relations with the EU. The events of the last 18 months should provide the additional push to get things going.
The “model” (“Made in the USA, without any regulation!”) that was being peddled by the WB and the IMF has lost any of the glamour some people painted on it. At the moment it looks like the rest of the globe has to coordinate things in such a manner as not to be dragged down the tube by the “Financial Rocket Scientists” in the USA.

#103
Steve Featherkile said:
I could go on, but you get the idea, don't you, Kevin.
Steve

I have better things to do than scour the internet looking for a handfull of “bad news” reports. The truth is, you didn’t respond to any of my comments.

Nobody publishes good news. Nobody writes articles about how good the service is, and if they did, publishers would yawn. But my own experiences with the system have all been positive.

I’ve inherited several kids on my caseload that have come in from the U.S. Their parents bring in mountains of paperwork and assessment reports 150 pages long. The detail is excrutiating, and I never bother to do more than scan a few pages. The purpose of these reports is obvious. Private clinics charge more for assessment than for treatment. So the more assessment you can do the more profitable it is.

Back when I did all the therapy myself, I could deliver quality service to 7 kids a day. More than that and they would all blend together in my mind. (If I knew them well I could raise that number somewhat.) Colleagues that have worked for private clinics in the U.S. tell me they were expected to see 14-16 kids per day: despite a recommended maximum of 5 per day from ASHA (American Speech & Hearing Association). That means quick access to a therapist, but that therapist would be so frazzled that they would be performing well below optimum. That’s not such a big deal with speech therapy, but what if you were having a triple bypass from a surgeon who was “frazzled”.

As far as I can tell, the main problem with the Canadian system is a significant level of staff vacancies. This is a particular problem in rural areas. You probably have the same problem in the U.S., but not on the same scale. After all, you guys refer to a centre of 20,000 people as a small town while up here it’s a city.

#104
Hans-Joerg Mueller said:
Ralph Berg said:
..................

As I told HJ some time ago we will soon see a common currency for the US, Canada and Mexico. The Fed has taken every step possible to trash the dollar. Economists for years have wondered why the Fed hasn’t taken any steps to prop up the dollar. When things get bad enough the new NA currency will be rolled out as the economic savior.
Another do this or disaster scenario.
Ralph


Don’t count on it Ralph, that won’t be an “easy sell” in Mexico or Canada. Less so than when you first suggested it, as a matter of fact as far as Canada is concerned there are discussions planned to improve economic relations with the EU. The events of the last 18 months should provide the additional push to get things going.
The “model” (“Made in the USA, without any regulation!”) that was being peddled by the WB and the IMF has lost any of the glamour some people painted on it. At the moment it looks like the rest of the globe has to coordinate things in such a manner as not to be dragged down the tube by the “Financial Rocket Scientists” in the USA.

They didn’t care that the 700 billion was overwhelmingly opposed. Many of your good jobs in Canada are dependent on US companies. Your wealth of natural resources will help, but you need to sell them to somebody. How much is China going to need if the US and Europe aren’t buying their consumer goods? How many of the European nations have been operating with a trade deficit? Or governments operating with budget deficits? Not to mention the many third world countries.
Mortgages are not the problem.
Fannie Mae and Freddie Mac underwrite the vast majority of Mortgages in the US. It is estimated that together they hold a combined $5 trillion. Estimates are that the two underwrite 95-99% of the mortgages. Bad mortgages are estimated at 10%, which would be about $500 billion.
Federal debt is now around 10 trillion dollars. Do you really think $500 billion is the real problem?
Do the math.
In its filing, Lehman listed liabilities of $613 billion and assets of $639 billion. Lehman Brothers alone had liabilities totaling more than the entire dollar amount of bad mortgages. Lehman and Bear Sterns were two of the smallest of the major Wall Street firms.
This is not about mortgages.
Ralph

As for the “Financial Rocket Scientists” in the USA, the Financial Rocket Scientists around the world have been playing the same game. Probably the Canadian Financial Rocket Scientists too.

http://news.yahoo.com/s/ap/20081005/ap_on_bi_ge/eu_europe_meltdown

#105

Kevin Morris, you have mail.

#106
Ralph Berg said:
As for the "Financial Rocket Scientists" in the USA, the Financial Rocket Scientists around the world have been playing the same game. Probably the Canadian Financial Rocket Scientists too.

http://news.yahoo.com/s/ap/20081005/ap_on_bi_ge/eu_europe_meltdown


Quite possible, but isn’t it odd that all those “high-profit instrument” schemes originate in the USA? Reason: lack of regulations and oversight. I read about self-regulation and the market will regulate … errrrr … as I’ve been saying for a very long time: in a free market everyone is perfectly free to screw anyone else, just as long as you find the right “instruments” to do it with. Junk bonds, derivatives, sub-prime mortgages, hedgefunds and on and on and on. And who came up with those and a slew of other schemes?

#107
Hans-Joerg Mueller said:
Ralph Berg said:
As for the "Financial Rocket Scientists" in the USA, the Financial Rocket Scientists around the world have been playing the same game. Probably the Canadian Financial Rocket Scientists too.

http://news.yahoo.com/s/ap/20081005/ap_on_bi_ge/eu_europe_meltdown


Quite possible, but isn’t it odd that all those “high-profit instrument” schemes originate in the USA? Reason: lack of regulations and oversight. I read about self-regulation and the market will regulate … errrrr … as I’ve been saying for a very long time: in a free market everyone is perfectly free to screw anyone else, just as long as you find the right “instruments” to do it with. Junk bonds, derivatives, sub-prime mortgages, hedgefunds and on and on and on. And who came up with those and a slew of other schemes?

LGB?

#108

LGB - you mean Long, Gone and Bankrupt?

#109

Hey Guys,

Regards to a common currency between Ca. U S + Mexico check out this link.

H J dont miss this.

Hal Turner Shows New AMERO Currency
http://www.youtube.com/watch?v=ge2J2lNusJs

I’m going to buy some trains quick.

Chuck

#110
Ralph Berg said:
Fannie Mae and Freddie Mac underwrite the vast majority of Mortgages in the US. It is estimated that together they hold a combined $5 trillion. Estimates are that the two underwrite 95-99% of the mortgages. Bad mortgages are estimated at 10%, which would be about $500 billion.
Ralph, can you please provide your source for those numbers?
#111
Charles Cole said:
Hey Guys,

Regards to a common currency between Ca. U S + Mexico check out this link.

H J dont miss this.

Hal Turner Shows New AMERO Currency
http://www.youtube.com/watch?v=ge2J2lNusJs

I’m going to buy some trains quick.

Chuck


Funny how that video goes much more blurry showing that coin, isn’t it?
As regards presenting a coin, way back in 1973 I spent a few weeks for training at a mfg in Germany. Amongst other things, each of us trainees produced a “coin” in less than two days. That was with old technology, with new technology that “coin” would take just a few minutes.

Hal Turner?

WIKIPEDIA caption on Google said:
Harold "Hal" Turner is an American white nationalist and white supremacist from North Bergen, New Jersey. He ran his program, The Hal Turner Show, ...
All the "good stuff" is nicely presented in that entry.

Steve, yes it was probably LGB (lousy greedy bankers/bastards/bums) :stuck_out_tongue: :smiley:

#112
Dave Healy said:
Ralph Berg said:
Fannie Mae and Freddie Mac underwrite the vast majority of Mortgages in the US. It is estimated that together they hold a combined $5 trillion. Estimates are that the two underwrite 95-99% of the mortgages. Bad mortgages are estimated at 10%, which would be about $500 billion.
Ralph, can you please provide your source for those numbers?
The numbers I quoted I have read numerous times in the general press. I don't cruise the wacko sites, right or left. Nobody has mentioned the figure $500 billion, but just about every news source quotes 10% of the mortgages being bad. I found three different estimates for the percentage of mortgages written by Freddie and Fannie, so I quoted the range. As for the $5 trillion figure, I have read that from several reputable news sources. If you let me know which figure(s) you have doubts about, I will try and go back and locate the source. Ralph
#113

President Bush has a cousin who is an executive at Lehman. Four days before the bankruptcy Lehman was handing out $20 million for two unnamed departing employees.
Ralph

http://news.yahoo.com/s/ap/20081006/ap_on_go_co/meltdown_lehman

#114

Here’s the man that is going to run the rescue.

http://news.yahoo.com/s/ap/meltdown_administration;_ylt=A9G_R3BafupINlsBwwhv24cA

#115
Ralph Berg said:
Dave Healy said:
Ralph Berg said:
Fannie Mae and Freddie Mac underwrite the vast majority of Mortgages in the US. It is estimated that together they hold a combined $5 trillion. Estimates are that the two underwrite 95-99% of the mortgages. Bad mortgages are estimated at 10%, which would be about $500 billion.
Ralph, can you please provide your source for those numbers?
The numbers I quoted I have read numerous times in the general press. I don't cruise the wacko sites, right or left. Nobody has mentioned the figure $500 billion, but just about every news source quotes 10% of the mortgages being bad. I found three different estimates for the percentage of mortgages written by Freddie and Fannie, so I quoted the range. As for the $5 trillion figure, I have read that from several reputable news sources. If you let me know which figure(s) you have doubts about, I will try and go back and locate the source. Ralph
I don't have doubts about any of your numbers. I'm trying to establish what the numbers are, so I can do the sums.

For example, it was recently reported on an Australian TV newscast that the two FMs hold appx. 50% of all US mortgages, not 95-99%. On the other hand, the $5 trillion total was also quoted in this same newscast. That $5,000,000,000,000 can’t be both 50% and 99% of the total US mortgage holdings. It would be instructive to know what the truth is.

This is probably a fool’s errand. People like you and me are unlikely to ever know what the real numbers are, which makes any sums we do ethereal.

Similarly, no one actually knows how much of the US national debt is owed to foreign nations, but it’s probably a very large number. I suspect this bailout package is aimed at appeasing those overseas lenders. News reports suggest Australian banks are in the queue for some of the money.

#116
Dave Healy said:
Ralph Berg said:
Dave Healy said:
Ralph, can you please provide your source for those numbers?
The numbers I quoted I have read numerous times in the general press. I don't cruise the wacko sites, right or left. Nobody has mentioned the figure $500 billion, but just about every news source quotes 10% of the mortgages being bad. I found three different estimates for the percentage of mortgages written by Freddie and Fannie, so I quoted the range. As for the $5 trillion figure, I have read that from several reputable news sources. If you let me know which figure(s) you have doubts about, I will try and go back and locate the source. Ralph
I don't have doubts about any of your numbers. I'm trying to establish what the numbers are, so I can do the sums.

For example, it was recently reported on an Australian TV newscast that the two FMs hold appx. 50% of all US mortgages, not 95-99%. On the other hand, the $5 trillion total was also quoted in this same newscast. That $5,000,000,000,000 can’t be both 50% and 99% of the total US mortgage holdings. It would be instructive to know what the truth is.

This is probably a fool’s errand. People like you and me are unlikely to ever know what the real numbers are, which makes any sums we do ethereal.

Similarly, no one actually knows how much of the US national debt is owed to foreign nations, but it’s probably a very large number. I suspect this bailout package is aimed at appeasing those overseas lenders. News reports suggest Australian banks are in the queue for some of the money.


You may be right, it may be hard to determine the real number.
But let us assume the low 50% number is correct. $1 trillion would buy out the 10% of bad mortgages. The Fed is lending banks $900 billion. The tax payers are throwing in $700 billion. We are already at $1.6 trillion.
Lehman alone had $613 billion in liabilities. Lehman is a bankruptcy. Their liabilities are not in the bailout. The same goes for WaMu and the other institutions already closed.
There appears to be much more money in play than would be required to fix the mortgage problem. And they are telling us there will be many more failures, even with the “rescue”.
Ralph

#117
Ralph Berg said:
Dave Healy said:
Ralph Berg said:
The numbers I quoted I have read numerous times in the general press. I don't cruise the wacko sites, right or left. Nobody has mentioned the figure $500 billion, but just about every news source quotes 10% of the mortgages being bad. I found three different estimates for the percentage of mortgages written by Freddie and Fannie, so I quoted the range. As for the $5 trillion figure, I have read that from several reputable news sources. If you let me know which figure(s) you have doubts about, I will try and go back and locate the source. Ralph
I don't have doubts about any of your numbers. I'm trying to establish what the numbers are, so I can do the sums.

For example, it was recently reported on an Australian TV newscast that the two FMs hold appx. 50% of all US mortgages, not 95-99%. On the other hand, the $5 trillion total was also quoted in this same newscast. That $5,000,000,000,000 can’t be both 50% and 99% of the total US mortgage holdings. It would be instructive to know what the truth is.

This is probably a fool’s errand. People like you and me are unlikely to ever know what the real numbers are, which makes any sums we do ethereal.

Similarly, no one actually knows how much of the US national debt is owed to foreign nations, but it’s probably a very large number. I suspect this bailout package is aimed at appeasing those overseas lenders. News reports suggest Australian banks are in the queue for some of the money.


You may be right, it may be hard to determine the real number.
But let us assume the low 50% number is correct. $1 trillion would buy out the 10% of bad mortgages. The Fed is lending banks $900 billion. The tax payers are throwing in $700 billion. We are already at $1.6 trillion.
Lehman alone had $613 billion in liabilities. Lehman is a bankruptcy. Their liabilities are not in the bailout. The same goes for WaMu and the other institutions already closed.
There appears to be much more money in play than would be required to fix the mortgage problem. And they are telling us there will be many more failures, even with the “rescue”.
Ralph

Yes.

#118

Dear All,

30 years ago in an economic’s class I learned that the US Federal Reserve System (started in the early 20th century) creates money only as debt.

In other words, the money it creates is owed back to someone or something, plus interest.

Let’s say this chunk of new money (plus interest) is successfully amortized (paid back). Now there is [b]less money in the

economy than before[/b], as the interest has been “sunk” or taken out of the economy. (Principal put in, principal plus interest taken out.)

How do we correct this (interest caused) shrinking of the money supply? By creating more money, which is a new debt, which if successfully paid back, will shrink the money supply

even further. And on, and on, and on…

Thus we have the ever growing US National debt.

The oil market uses US$ as its trading currency. We’ll know we’re in deep trouble when they change to another currency.

The solution? We need a system that creates money without debt.

More later.

Sincerely,

Joe Satnik

#119
Ralph Berg said:
............

There appears to be much more money in play than would be required to fix the mortgage problem. And they are telling us there will be many more failures, even with the “rescue”.
Ralph


Yes and so far the credit card debt isn’t even in the equation. When that shoe drops … watch out!

#120
Dave Healy said:
Ralph Berg said:
Dave Healy said:
I don't have doubts about any of your numbers. I'm trying to establish what the numbers are, so I can do the sums.

For example, it was recently reported on an Australian TV newscast that the two FMs hold appx. 50% of all US mortgages, not 95-99%. On the other hand, the $5 trillion total was also quoted in this same newscast. That $5,000,000,000,000 can’t be both 50% and 99% of the total US mortgage holdings. It would be instructive to know what the truth is.

This is probably a fool’s errand. People like you and me are unlikely to ever know what the real numbers are, which makes any sums we do ethereal.

Similarly, no one actually knows how much of the US national debt is owed to foreign nations, but it’s probably a very large number. I suspect this bailout package is aimed at appeasing those overseas lenders. News reports suggest Australian banks are in the queue for some of the money.


You may be right, it may be hard to determine the real number.
But let us assume the low 50% number is correct. $1 trillion would buy out the 10% of bad mortgages. The Fed is lending banks $900 billion. The tax payers are throwing in $700 billion. We are already at $1.6 trillion.
Lehman alone had $613 billion in liabilities. Lehman is a bankruptcy. Their liabilities are not in the bailout. The same goes for WaMu and the other institutions already closed.
There appears to be much more money in play than would be required to fix the mortgage problem. And they are telling us there will be many more failures, even with the “rescue”.
Ralph

Yes.

Lets take this one step further.
My monthly payments on my mortgage are less than 1% of the initial principal.
1% of $1 trillion is $10 billion. If these bad mortgages were current, there would NOT be an additional $1 Trillion of liquidity. There would be $10 billion a month additional liquidity in the banking system.
Not to mention, 90% of these mortgages are making money to offset some of this loss. So how did Lehman come to have $613 billion in liabilities with around $630 billion in assets?
Bad debt is surely the problem. The percentages just don’t support mortgages as being the culprit.
Ralph