WWTBAM Bored

i intuit that aig is not the only insurer to "insure" these subprime mortgage backed credit default swaps that led to their undoing.
When other investment banks have to restate their assets based on the revaluations of these securities, there wont be a fan big enough to withstand the shit storm.Then other companies will be nationalized,like Bear,fannie,freddie, and Joe Q Taxpayer will find himself owner of Wall Street.And on the hook for trillions in obligations.

Only in america are profits privatized and losses nationalized.

John McCain was a vocal proponent of barring any regulatory oversight over these credit swaps when the bill passed in the dead of nite just before W's inauguration.

i see the djia is down to where it was when The Disaster was inaugurated

BigDrawMan wrote: John McCain was a vocal proponent of barring any regulatory oversight over these credit swaps when the bill passed in the dead of nite just before W's inauguration.

You say that like you know what you are talking about. Impressive.

What blog or news site did you cut and paste from?

Didn't you always want to own an insurance company?

BackInTex wrote:

BigDrawMan wrote: John McCain was a vocal proponent of barring any regulatory oversight over these credit swaps when the bill passed in the dead of nite just before W's inauguration.

You say that like you know what you are talking about. Impressive.

What blog or news site did you cut and paste from?

no one knows what the hell is in these credit swaps

from what I understand, it worked like this:

mortgages were given to people who couldnt afford the payments based on info they made up to buy a property that was too expensive because prices were bid up by people who couldnt pay for what they bought.
Then these mortgages were bundled up with legit mortgages and sold to various institutions.To make things more enticing for the buyer, the bundler bought "insurance" from companies like aig in case of default.Aig dint have to set aside reserves to cover said losses if they occurred(due to aforementioned deregulation), unlike usual insurance.They assumed home prices would continue to skyrocket and the unqualified buyers who coouldnt make the payments would refinance to a lower rate mortgage because they now had equity in their home, and they would pocket the premiums.
Along with these unqualified buyers, shysters seeing these mortgages were ezier than Bristol Palin, took out large loans on dilapidated buildings in collusion with the seller and appraiser and mortgage broker and split up the proceeds, and made zero payments.
These loans were also securitized and sold to investment banks,etc.
Everyone made money on the runup in the phony price escalation except the last to hold the paper.

The taxpayers.

I am sure McCain and the GOP who pushed this thru had no idea what they were doing.
They just liked to deregulate stuff.
Remind anyone of 1929??


i dont get the whole blog reading thing

BigDrawMan wrote:I am sure McCain and the GOP who pushed this thru had no idea what they were doing.
They just liked to deregulate stuff.

Hmmm... the history I remember has Bill Clinton repealing Glass-Steagall in 1999. Many of his large contributors were in charge of financial institutions and had requested this.

Perhaps you are just conveniently mis-remembering, or perhaps that wasn't mentioned in the blog or web-site you read.

BackInTex wrote:

BigDrawMan wrote:I am sure McCain and the GOP who pushed this thru had no idea what they were doing.
They just liked to deregulate stuff.

Hmmm... the history I remember has Bill Clinton repealing Glass-Steagall in 1999. Many of his large contributors were in charge of financial institutions and had requested this.

Perhaps you are just conveniently mis-remembering, or perhaps that wasn't mentioned in the blog or web-site you read.

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I am sure what you meant to write was the Gramm-Leach Act.Which Bubba also signed.
Of course the driving force behind that was your own Phil Gramm.
If McCain wins, mebbe he can bring Phil along to patch up his act.

The key problem and I agree with BDM is the privatization of profits and the socialization of losses.

Just formulating some stream of consciousness thoughts on the Mortgage mess.

It would be mind-numbing to try and follow the trail of what politician did what and said who proposed what-(my purpose here is not to point that McCain tried to reform Fannie and Obama didn't-etc etc)

I am leaning more towards the idea/principle that once a GSE entity like Fannie Mae or Freddie is created-it is only a matter of time until it blows up in your face. Inherent in such an entity are inefficiencies and congressional favors and so forth. Details may have changed the timing-but it was inevitable from Day 1 (whenever Day 1 was).

Simply put-Socialism and government subsidies (of approved behaviors-ie home ownership) do/does not work over the long term and it will bite you in the ass over time.

Spock wrote:The key problem and I agree with BDM is the privatization of profits and the socialization of losses.

Just formulating some stream of consciousness thoughts on the Mortgage mess.

It would be mind-numbing to try and follow the trail of what politician did what and said who proposed what-(my purpose here is not to point that McCain tried to reform Fannie and Obama didn't-etc etc)

I am leaning more towards the idea/principle that once a GSE entity like Fannie Mae or Freddie is created-it is only a matter of time until it blows up in your face. Inherent in such an entity are inefficiencies and congressional favors and so forth. Details may have changed the timing-but it was inevitable from Day 1 (whenever Day 1 was).

Simply put-Socialism and government subsidies (of approved behaviors-ie home ownership) do/does not work over the long term and it will bite you in the ass over time.

yesterday bdm agrees with jeemie

today spock agress with bdm

someone needs to go lay down