We started the year with five investment banks in NYC... There are two left standing. Three have now closed - Bear Stearns, Lehman, Merrill Lynch - closed thanks to deregulation of the banking industry.

Since the Government had to buy our Fannie Mae and Freddie Mac, the government now controls a major chunk of the mortgage industry just like all the socialist government in Europe.

The amazing thing is that this was done by "small-government" republicans in the name of "capitalism" ...

Do you think the USA can stand another four years of incompetence like this?

This administration is not only wrecking the US economy, this might cause a global recession. It's not over because housing prices have not stabilized.

Three of the five most important investment banks in New York have failed. Amazing. Look before you leap. Fascinating story. There was no market regulation or discipline. Surprised? Not really. But solutions are not certain in this world. Stay tuned.

Old Chinese curse: May you live in interesting times.

How true, the one guy said it was going to get worse before it gets better, 18 months or so. The other thing going on is it is effecting a lot of other country's. So while Bush says were not in a recession the rest of the world knows better, we are in a RECESSION.

In other news, the stock market dropped 500 points today oil went to $95 a barrel and the gas at the pump went up, don't you just love it. This time its because of the storm we just had, of course the gas for the pump has been there for a month or more but, hey when the butterfly flaps his wings in China our gas goes up $.50 a gal. I am beginning to really hate oil company's that the people that work for them, Bush for one.

I am really starting to hate rich people too, for the same reasons. I don't care that there rich, its when they start using there money to hurt me.

How do you feel?

River

The New York Times is reporting that the Federal Reserved asked two investment banks to put together a 70 million dollar buyout of AIG, which is not an investment bank but is so shaky, it might just crash and burn.

Yep, these ass wipes have been ripping us off for years, I do not feel sorry for them.

River

Dave (imported) wrote: Tue Sep 16, 2008 5:04 pm The New York Times is reporting that the Federal Reserved asked two investment banks to put together a 70 million dollar buyout of AIG, which is not an investment bank but is so shaky, it might just crash and burn.

Yes, you are correct. I think spending even a nickle of public money to save any of these institutions, but we will pay to save them, just as we paid to save the president's sorry ass brother during the Saving and Loan fiasco. This is welfare and it is welfare that the greedy bastards do not deserve. Let them all fail. Save those people who have morgages but not the share-holders of failed financial institutions. That is competition at work.

I work for a bank, which, although it isn't regularly in the news, is one of the world's largest. It was the first to acknowledge losses ($10 billion) in the sub-prime mortgage business about 2 years ago. Before long, they had laid off many of their mortgage agents, and cut back on sub-prime mortgage loans. Although they still do home refinancing in the USA, they have cut WAY back on it, and they started cutting back two years ago. I don't know why it took the other banks so long to take notice of the problem.

This bank actually made money last year but only because of the business they do in Asia and the rest of the world. They, like most, lost money in their U.S. operations, and they've cut way back on the credit they're offering in the USA.

Our economy runs on credit. No one has anything saved. Everyone used the equity in their homes like a piggy bank, but because homes have lost value, all those piggy banks are empty, and banks like mine are becoming super stingy about issuing credit. If you think things are bad, now, get back to me this time next year. If people can't borrow, they can't spend, and if they don't spend, we're definitely in a recession.

We've skated by somewhat this year though exports, because the dollar was weak, and foreign economies hadn't seemed to be weakening as badly as ours. That's coming to a screeching halt. The dollar is going up, and the other economies are weakening. We're about to lose the last thing that was keeping our economy afloat.

The recession will feed on itself. Until the decline in housing prices turns around, people aren't going to spend, and because people think we're in a recession, even if they haven't been directly affected yet, they aren't going to spend. Hell, I've cut back on my spending, and until the last few days, when I lost a few thousand on the stock market, I hadn't been directly affected. Even that loss doesn't affect the money I have in my pocket to spend. It's in an IRA, and I expect it to recover it's value - if we ever get out of this mess.

Perversely, I almost hope McCain wins, so I can tell everyone, "I told you so," when he muddles the mess that's bound to ensue.

While my instincts are certainly to let the investment banks fail under the weight of their own incompetence and greed, doing so would be even more disasterous then bailing them out.

We're not in a recession. A recession is two consecutive quarters of the economey shrinking. So far we've not even had one quarter. This last one we actually had 3.3% growth if I remember correctly.

Letting the investment banks fail means that no new businesses are going to start up, so whenever there are layoffs and company failures, there will be no new jobs to replace them.

Likewise, letting the mortgage banks fail means that hundreds of thousands of homes will be foreclosed. Again, my instincts say to let the people who wallowed in fiscal irresponsibility and bought houses they couldn't afford languish, but really, that's just going to lead to more problems.

A reminder ONE MORE TIME. I will delete posts that are linking a story that does not also contain the full text of the story from the link. Links go stale after a time - especially from news sources. Without the text, the link is worthless, and so is your post. No text, no post.