It's Over. Fannie Mae/Freddie Mac to Likely be Put in Conservatorship.

[StateBoiler]

Looks likely for Fannie Mae/Freddie Mac to be put in "conservatorship":

http://www.nytimes.com/2008/07/11/bu...=1&oref=slogin

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Senator McCain agrees:

http://www.bloomberg.com/apps/news?p...=avnMyKESZ2qk&

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[opebo]

Reminds one of the savings-and-loan crisis under the last Republican administration.  They just keep plundering public institutions.

[Bono]

I hope they go broke, and the sooner, the better.

[StateBoiler]

I hope they go broke, and the sooner, the better.

And the second they do, watch every commodity under the sun go up large amounts in price and for the dollar to get murdered.

[2952-0-0]

Ugh...and I lost 190k shorting Fannie so far...

Granted it's a fantasy stock market, but oops...

[Albus Dumbledore]

1929 2.0 anyone? The Bush administration seems like it has the incompetence needed to turn a recession into a depression.

[2952-0-0]

Word on the street is that the US Government is bailing them out with $15 billion while diluting the shares.

Anyone who shorted on Friday is getting a handsome payout.

[King]

1929 2.0 anyone? The Bush administration seems like it has the incompetence needed to turn a recession into a depression.

If the government had bailed out the banking industry in 1929, there probably wouldn't have been a depression.  This is the best thing to do right now.

[opebo]

1929 2.0 anyone? The Bush administration seems like it has the incompetence needed to turn a recession into a depression.

If the government had bailed out the banking industry in 1929, there probably wouldn't have been a depression.  This is the best thing to do right now.

True, but a more insightful point is that had the government been 'bailing out' the working class during this whole period, there would never have been a crisis in the first place.

[Bono]

1929 2.0 anyone? The Bush administration seems like it has the incompetence needed to turn a recession into a depression.

If the government had bailed out the banking industry in 1929, there probably wouldn't have been a depression.  This is the best thing to do right now.

True, but a more insightful point is that had the government been 'bailing out' the working class during this whole period, there would never have been a crisis in the first place.

Actually, that's exactly what happened. Hoover jawboned businesses into not lowering wages even though prices were falling. Thus during the Hoover term, wages fell by 15% while prices fell by 25%. This dramatically increased the cost of doing business, leading to massive bankruptcies and resulting unemployment.

[Democratic Hawk]

1929 2.0 anyone? The Bush administration seems like it has the incompetence needed to turn a recession into a depression.

I'm far from certain that 2008 will be 1929 2.0 but the Bush administration seems to have all the finesse of an idiologically-driven cackhanded incompetent and sod all else besides

Personally, I wouldn't want a 1929 2.0 at all even if it would prove a political point - millions of Americans are having a tough time of things as it is

What I will say is that the 'credit crunch' - the faultline of which emerged in a loss of confidence in the US subprime mortgage market - will have implications way over and beyond the shores of the US. And that as much as anything is why non-Americans in the Free World, which the US leads, do have an investment in who leads the US and, thus, sets the agenda, the tone, etc.

Who, of course, is at fault here? Government? Lenders? Borrowers? All three to a degree if you want my honest opinion. And with personal responsibility comes a social responsibility - the two are not mutually exclusive

And the Republican Party - yes, in the US system it's the president, who primarily sets the agenda, not Congress - must be held accountable at the ballot box whether an incumbent is on the ballot or not. As a Republican senator, John McCain, as the presumptive GOP nominee is more complicit in the failings of the Bush administration than Democrat, Barack Obama, despite evidence of some vociferous dissent. Were McCain not a senator, but a governor, charges of complicity would be muted

Libertarians will undoubtedly disagree but good governance of the economy is the single most important responsibility, if not necessarily the single most important role (that would be defense), of government; and it's not so much a case of whether regulation is excessive or not, it's more a case of whether its effective . As for government, in itself, the issue isn't so much whether its 'big' or 'small', its more an case of whether or not its effective

Dave

[Ban my account ffs!]

1929 2.0 anyone? The Bush administration seems like it has the incompetence needed to turn a recession into a depression.

If the government had bailed out the banking industry in 1929, there probably wouldn't have been a depression.  This is the best thing to do right now.

True, but a more insightful point is that had the government been 'bailing out' the working class during this whole period, there would never have been a crisis in the first place.

Actually, that's exactly what happened. Hoover jawboned businesses into not lowering wages even though prices were falling. Thus during the Hoover term, wages fell by 15% while prices fell by 25%. This dramatically increased the cost of doing business, leading to massive bankruptcies and resulting unemployment.

Yep, and it was free market principles and low government intervention that got us out of the depression... right?

I think this whole crisis just proves once and for all that Republicans are completely incompetent when it comes to the economy.

It's all about textbooks and theory and absolutely nothing about real world common sense.
And when they get murdered in the election this fall, we'll see if it gives them pause.. I'm sure it won't...they'll all try to bleed their wounds on everybody else.

[King]

Yep, and it was free market principles and low government intervention that got us out of the depression... right?

Technically, it was World War II that really got us out of the Depression not New Deal.  It sent people who were out of work into the military, added more manufacturing jobs in the arms buildup (which started in the 30s with arms exports to Great Britain and China), and gave the workers who weren't enlisted less to compete with when it came to finding quality work.

FDR's progressive policies provided a band-aid, but we probably wouldn't have healed without the war economy.

[Ban my account ffs!]

Yep, and it was free market principles and low government intervention that got us out of the depression... right?

Technically, it was World War II that really got us out of the Depression not New Deal.  It sent people who were out of work into the military, added more manufacturing jobs in the arms buildup (which started in the 30s with arms exports to Great Britain and China), and gave the workers who weren't enlisted less to compete with when it came to finding quality work.

FDR's progressive policies provided a band-aid, but we probably wouldn't have healed without the war economy.

And the war was the product of a free market?

No.  The war was really a product of the depressions all over the world in the first place.

When things go into freefall, people start to support crazier and crazier things... and look where that got us.

This is why a little foresight and common sense through good governance is key.  The government needs to support the middle and lower classes and flatten out the booms and busts so that we ultimately have slower, but more constant growth.

It doesn't take a rocket scientist to figure this out...

Some like to say "let them eat cake"

But don't come bitching to me when they end up at your door with a gun and start eating your cake.. when it could have been prevented in the first place.

[King]

And the war was the product of a free market?

No.  It doesn't matter.

The point I was trying to make is that the depression probably could've corrected itself in a free market because of World War II.

[Beet]

Price stickiness is a well known long term characteristic of market economics.

World War II was the New Deal on steroids.

[Torie]

This headline is a bit ahead of itself.

[Хahar 🤔]

I hope they go broke, and the sooner, the better.

And the second they do, watch every commodity under the sun go up large amounts in price and for the dollar to get murdered.

He's Portuguese, of course...