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The Bail outs your thoughts

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RonG

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Open discussion here, but I want to see how much you guys understand about exactly what would have happened if AIG hadn't been bailed out and what exactly is about to happen either way if congress approves or doesn't approve the 700 billion dollar bail out.

A few rules here:

#1 Lets not point fingers, just discuss repercussions

#2 This is not a an election debate leave Obama and McCain out of it

#3 Don't go quoting blogs, I think it is more interesting to see what your actual personal opinion is

#4 Stay on topic please.


Let's get an open discussion about your real thoughts, pro's and con's what you think might or might not happen.
 
Obama grant being probed
$100,000 DEAL | State to charity: What happened to garden money, other cash?


A $100,000 state grant for a botanic garden in Englewood that then-state Sen. Barack Obama awarded in 2001 to a group headed by a onetime campaign volunteer is now under investigation by the Illinois attorney general amid new questions, prompted by Chicago Sun-Times reports, about whether the money might have been misspent.

The garden was never built. And now state records obtained by the Sun-Times show $65,000 of the grant money went to the wife of Kenny B. Smith, the Obama 2000 congressional campaign volunteer who heads the Chicago Better Housing Association, which was in charge of the project for the blighted South Side neighborhood.

Smith wrote another $20,000 in grant-related checks to K.D. Contractors, a construction company that his wife, Karen D. Smith, created five months after work on the garden was supposed to have begun, records show. K.D. is no longer in business.

Attorney General Lisa Madigan -- a Democrat who is supporting Obama's presidential bid -- is investigating "whether this charitable organization properly used its charitable assets, including the state funds it received," Cara Smith, Madigan's deputy chief of staff, said Wednesday.

In addition to the 2001 grant that Obama directed to the housing association as a "member initiative," the not-for-profit group got a separate $20,000 state grant in 2006.

Madigan's office has notified Obama's presidential campaign of the probe, which was launched this week. But Obama's actions in awarding the money are not a focus of the investigation, Smith said.

Questions about the grant, though, come as spending on local pet projects has become an issue in Obama's campaign against John McCain.

Obama and Kenny Smith announced the "Englewood Botanic Garden Project" at a January 2000 news conference at Englewood High School. Obama was in the midst of a failed bid to oust South Side Democratic Rep. Bobby Rush for a seat in Congress. The garden -- planned near and under L tracks between 59th Place and 62nd Place -- fell outside of Obama's Illinois Senate district but within the congressional district's borders.

Obama vowed to "work tirelessly" to raise $1.1 million to help Smith's organization turn the City of Chicago-owned lot into an oasis of trees and paths. But Obama lost the congressional race, no more money was raised, and today the garden site is a mess of weeds, chunks of concrete and garbage. The only noticeable improvement is a gazebo.

In a previous interview, Smith said the state grant money was legitimately spent, mostly on underground site preparation.

But no one ever took out construction permits required for such work, city records show. And a contractor who Smith said did most of the work told a reporter all he did was cut down trees and grade the site with a Bobcat.

Citing the garden's failure to take root, NeighborSpace -- an umbrella group for dozens of community gardens citywide -- moved Sept. 9 to return the site to the city. Its action followed a July 11 Sun-Times report on the grant.

Obama spokesman Michael Ortiz said Wednesday the senator's staff in Washington will monitor the Madigan probe and an additional review under way by Gov. Blagojevich's administration to make sure "the taxpayer funds allocated for the construction of the garden are recuperated from CBHA if the agencies determine that the funds were not properly spent." Obama's goal is to ensure the site "be used in a way that benefits the community and that any taxpayer dollars allocated are spent wisely," Ortiz said.

The relationship between Smith and Obama dates to at least 1997, when Obama wrote a letter that Smith used to help the housing association win city funding for an affordable-housing development near the garden site. Plans called for more than 50 homes; a dozen ultimately were built.

Smith also has donated $550 to Obama campaign funds.

The Sun-Times learned about Karen Smith's involvement in the project through an Aug. 12 Freedom of Information Act response from a lawyer for Blagojevich¹s Department of Commerce and Economic Opportunity. The department, according to the lawyer, had ³discovered² 52 pages of ³additional documents² ommitted from an initial response in May to a Sun-Times¹ Freedom of Information Act request about the grant.

Neither Smith nor his wife has been accused of any wrongdoing. Smith and his lawyer did not return repeated calls seeking comment.

In an interview in July, Smith said he was never able to raise the money needed for the garden. But the state grant awarded by Obama was spent properly, he said, on the underground work, with most of the work done by a contractor whose name Smith got wrong.

The Sun-Times tracked down the contractor, Rodolfo Marin, in Austin, Texas, where he now lives.

"What I was hired for was: Clean up the area and cut the trees -- that's all," Marin said. He said he rented a Bobcat -- a sort of small bulldozer -- for the project.

And how much did Smith pay him? "If he spent about $3,000 with me, that was too much."

Chicago Sun Times
 
Needs to happen. Period. Should be no debate. Who will be included in the bail out is up for debate. Personally I think Freddie, Fannie and AIG, but the president of my company and the head of our finance department disagree on AIG.

To make those understand, the bailout is not about keeping people in homes that can not afford the homes, or helping investors who took risks on the homes. Its about helping the banks with the losses mounting because of the write downs and write offs with all the failed mortgages. Currently there are 285 mortgage companies that went under. The number continues to grow every day with WaMu and Wachovia teetering on the brink of bankrupcy.

I am not sure most understand what Fannie and Freddie do, so most think the are actually a mortgage bank. Fannie and Freddie are goverment sponsered entities (GSE) that buy 100% of the conforming loans from the mortgage banks, bundle them together, and sell them on a secondary market. When this is done, something called a mortgage backed security (MBS) is created. Who buys these MBS's? Hedge funds, mutual funds, 401k's, investors, china, europe, etc. The "silent" investor is what provides the liquidity, or simply put, cash so the various banks can fund these mortgages. Without them, Banks would be strapped for cash and would be limmited on how many refinances or purchase they do.

In the past, 50% of all mortgages where GSE mortgages. Now, with the fall of the subprime market, over 80% of the mortgages are backed by the GSE's. What would happen if we let Fannie and Freddie fail? 80% of the money for mortgages would be gone. caput. finished. Very few people would qualify for a mortgage, and those that do would have to pay 8-9% or more like back in the days before these entities where created (circa 1988).

Why is this bad for the economy? You think the housing market is bad now, just wait until no one can buy a house. That means all builders, home improvement places (including wal mart), all banks, realtors, title agents, real estate lawyers, etc....would become obsoulete. 20 times the houses of now would go into foreclosure and sit empty with no qualified buyers to buy the houses. Think the great deppression was bad? This would make the depression look like a cake walk.

Like I said, there is no debate about doing the bailout. After all, Fannie and Freddie are already goverment sponsered agencies essential to our economy. The only question is, does anyone else get bailed out. If we dont do this, the americain public will loose trillions upon trillions of dollars. This is actually probably worse than most people realize.
 
Liberal PACs Ready Attack Ad on McCain’s Health


By Jim Rutenberg

Two liberal groups – one of them directed by a brother of the Democratic Party chairman Howard Dean – will begin running a graphic attack advertisement Thursday morning raising questions about Senator John McCain’s health. Showing vivid and unflattering images of the fresh scar that appeared on Senator McCain’s face immediately after his last operation for melanoma skin cancer eight years ago, the commercial ends with a screen headline that reads, “Why won’t John McCain release his medical records?” (Mr. McCain, 72, did invite a limited group of reporters to inspect more than 1,100 pages of his medical records in May, though he gave them only a three-hour window in which to review the documents.)

Video

The commercial is among the harshest to run against Mr. McCain yet, seeking to exploit the sensitive issues of health and age. Officials with the groups running the ad, Brave New PAC and Democracy for America, said they were only showing the spot initially on MSNBC over the next few days, a limited run intended to draw news media attention on a network that has increasingly catered to liberal tastes.

Officials at the groups, both of which are political action committees that rely on individual donors, said they hoped to show the spot on stations in battleground states in the coming weeks as well. But it is unclear if individual stations will accept the spot: Leighton Akio Woodhouse, a spokesman for Brave New PAC, said late Wednesday that CNN declined to accept the commercial after reviewing its contents this week.

The ad comes from the same two groups that recently released an advertisement questioning whether Mr. McCain’s time as a prisoner of war in Vietnam adversely affected his ability to lead.

Democracy for America has as its chairman Howard Dean’s brother, James H. Dean. Federal rules prohibit coordination between outside groups and campaigns or parties.

Daniel Medress, a spokesman for Democracy for America, said James Dean has not spoken with his brother about his activities at the group, which Howard Dean started in 2004. “We don’t coordinate with them,’’ Mr. Medress said of the Democratic National Committee, adding that at family dinners the Dean brothers, “sit there and make small talk, because they can’t talk about their jobs.”

Brad Woodhouse, a spokesman for the Democratic National Committee, said Howard Dean carefully follows all rules and regulations.

Brave New PAC is affiliated with California-based filmmaker Robert Greenwald, who runs several entities out of his “Brave New” office complex in Culver City; one of them, Brave New Foundation, a non-profit group that runs social issues campaigns, has as the chairman of its board Lawrence Lessig, a prominent Stanford Law School professor who has served as an informal adviser to Mr. Obama on technology policy issues.

Ben LaBolt, a spokesman for Mr. Obama, said the campaign had nothing to do with the spots and that Mr. Lessig had only advised Mr. Obama during the primaries, not in the general election. Mr. Woodhouse, the spokesman for Brave New PAC, said that Mr. Lessig is only affiliated with the Brave New Foundation, which operates in isolation from the political action committee. “There’s a fire wall there,’’ he said. “He has no relation to any of the projects we’re doing through the PAC.”

Danny Diaz, a Republican National Committee spokesman, said, “The fact that Howard Dean’s brother and an adviser to the Obama campaign are behind despicable and cheap smear ads against Senator McCain is deeply disappointing, but in no way surprising. Barack Obama has promised Americans an elevated debate offering nothing but gutter, Chicago-style politics.”

The spot opens with a photograph of Mr. McCain sporting a band aid over the scar on the left side of his face that caused by his surgery to remove the skin cancer in 2000, and the words, “John McCain is 72 and had cancer four times.”

One of two medical doctors featured in the spot, Dr. Michael D. Fratkin, says, “The relevance of knowing the details of his course with melanoma are very important.” He adds that another bout of cancer would “profoundly impact his capacity to lead.” The spot goes on to show two other unflattering pictures of Mr. McCain’s fresh scar.

In May, Mr. McCain’s doctors said he was in excellent health and that there was no recurrence of melanoma. That came at the same time that Mr. McCain’s campaign shared his medical records with reporters, though it restricted the review of 1,173 pages of documents to three hours by about 20 journalists who were not permitted to take photocopies. Outside experts had suggested that Mr. McCain’s initial prognosis may have been bleaker than his doctors had concluded, but Mr. McCain’s physicians said in May that they were heartened because the senator had gone seven years without another bout. They put the chances that the skin cancer would return at 10 percent.

(For more detail from those medical records and Mr. McCain’s prognosis, see this Times article from May.)

Officials with the groups said they were seeking a wider release of Mr. McCain’s medical records and defended the advertisement as raising legitimate issues about Mr. McCain.

“We think this is an election issue,’’ said Mr. Woodhouse of Brave New PAC. When asked why the groups chose to show such graphic imagery of Mr. McCain’s scars, Mr. Woodhouse said, “We have pictures of him with a scar to show that he has a history of surgery.”

The groups reported that they spent $50,000 to show the spot, $35,000 of it coming from Democracy for America and the remainder coming from Brave New PAC.

SOURCE
 
I know it has to been done but, my question is were is the money going and how is it going to stop the problem from reoccuring? What about the home owners who are not in foreclosure but, are close to it? If you have a leaky faucets you don't just clean up the water, you have to fix the root cause first then, clean up.
 
Hey Wolfman, way to stay on topic. Douchebag.

As far as the issue, I blame banks for lending and I blame the lenders for taking. It's a 2 handed issue. IMO, it's the market correcting itself and giving the banks a free pass is criminal. Ok, let's hand over a blank check to the administration that got us into this mess. Makes perfect sense.
 
Wolfman I asked you post your own thoughts. Stop posting articles and articulate your own response!

Damage, i also asked for no finger pointing.



Open discussion here, but I want to see how much you guys understand about exactly what would have happened if AIG hadn't been bailed out and what exactly is about to happen either way if congress approves or doesn't approve the 700 billion dollar bail out.

A few rules here:

#1 Lets not point fingers, just discuss repercussions

#2 This is not a an election debate leave Obama and McCain out of it

#3 Don't go quoting blogs, I think it is more interesting to see what your actual personal opinion is

#4 Stay on topic please.


Let's get an open discussion about your real thoughts, pro's and con's what you think might or might not happen.
 
Hey Wolfman, way to stay on topic. Douchebag.

As far as the issue, I blame banks for lending and I blame the lenders for taking. It's a 2 handed issue. IMO, it's the market correcting itself and giving the banks a free pass is criminal. Ok, let's hand over a blank check to the administration that got us into this mess. Makes perfect sense.

Rule #1 - No pointing fingers. Greed is the cause of all of this, the greed of the middle class and anyone else that has been financing their lifestyle, a lifestyle they can't afford. There should be no bailout. Bring back layaway and make people buy what they can afford.
 
IMO, it's the market correcting itself and giving the banks a free pass is criminal. Ok, let's hand over a blank check to the administration that got us into this mess. Makes perfect sense.

I understand your anger, hell i am angry however, if left to correct itself a lone would probably create a globel depression. I do believe people should go to jail over this, including some congressmen and senators.

What do you think will happen if we stand by and do nothing? What do you think will happen if we do bail them out?

Rule #1 - No pointing fingers. Greed is the cause of all of this, the greed of the middle class and anyone else that has been financing their lifestyle, a lifestyle they can't afford. There should be no bailout. Bring back layaway and make people buy what they can afford.

Explain to me then your PERSONAL thoughts on what will happen to the economy if nothing is done?
 
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I understand your anger, hell i am angry however, if left to correct itself a lone would probably create a globel depression. I do believe people should go to jail over this, including some congressmen and senators.

What do you think will happen if we stand by and do nothing? What do you think will happen if we do bail them out?



Explain to me then your PERSONAL thoughts on what will happen to the economy if nothing is done?

I'm not nearly smart enough to be able to predict what would happen. But I think if we let the market correct itself without interference, we would have a depression. If we pay for it, it will be a band-aid covering up an axe wound and it will happen again in the near future. SO it's do we go through the economic crisis now or do we wait and go through it later, all while spending $700 billion. I choose the former
 
Hey Wolfman, way to stay on topic. Douchebag.

As far as the issue, I blame banks for lending and I blame the lenders for taking. It's a 2 handed issue. IMO, it's the market correcting itself and giving the banks a free pass is criminal. Ok, let's hand over a blank check to the administration that got us into this mess. Makes perfect sense.

That is true about the to certain degree, but subprime was the mortgage type that had looser guidlines and such, and that is dead and no one is proposing a bail out for thse lenders. They already dont exist. This is not giving banks a free pass at all, its about getting the banking system back on track.

The problem with the average person having any opinion on this topic is they do not understand how the mortgage market actually works or where the money comes from. Fannie and Freddie followed the lending guidlines set up by congress. That is where the term conforming comes from. Conforming to a set of guidleines set up by congress. Letting Fannie and freddie fail will be as devestating if not more than letting the federal reserve fail.

FYI, the federal reserve is also a goverment sponsered entitiy just like fannie and freddie. Its hard to grasp a world where 25% off the houses sit empty, only 15-20% of america can qualify for a mortgage, and the economy is in termoil. But that is exactly what would happen if we do nothing.

Oh, by the way. The current mortgage system started under reagon, but the Clnton administration is the period that got it to where it is today. Both parites have their hands up to their elbows in this mess. Blaming Bush for this mess is like blaming Ronald McDonald if you get a bad cheeseburger. (and I hate George W Bush)
 
Wolfman,

Your first two posts have nothing to do with the bailout. Nothing whatsoever. The question posed is what do you think of the bailout, and your answer is an article on a botanical garden and another on political action commitee thats concerned with McCains health? Pathetic, and typically republican.

I think if nothing is done and there is no bailout then home prices will drop. People looking to buy homes will be in a great position to buy a house. People who have invested in real estate will take a hit. All in all i say no bailout. Let the free market decide its own outcome. raising inflation and putting the future of the housing market in the hands of the government is a big time mistake. If any good can come from a financial crisis like the one we have no its that prices can go down and there will be less crediting. I think this country could use a little of both. Not to mention the third and least important concept. The people responsible for this mess shouldnt be bailed out. They dont deserve it and it sends the wrong message. No bailout!
 
That is true about the to certain degree, but subprime was the mortgage type that had looser guidlines and such, and that is dead and no one is proposing a bail out for thse lenders. They already dont exist. This is not giving banks a free pass at all, its about getting the banking system back on track.

The problem with the average person having any opinion on this topic is they do not understand how the mortgage market actually works or where the money comes from. Fannie and Freddie followed the lending guidlines set up by congress. That is where the term conforming comes from. Conforming to a set of guidleines set up by congress. Letting Fannie and freddie fail will be as devestating if not more than letting the federal reserve fail.

FYI, the federal reserve is also a goverment sponsered entitiy just like fannie and freddie. Its hard to grasp a world where 25% off the houses sit empty, only 15-20% of america can qualify for a mortgage, and the economy is in termoil. But that is exactly what would happen if we do nothing.

Oh, by the way. The current mortgage system started under reagon, but the Clnton administration is the period that got it to where it is today. Both parites have their hands up to their elbows in this mess. Blaming Bush for this mess is like blaming Ronald McDonald if you get a bad cheeseburger. (and I hate George W Bush)

Ohh I know Clinton signed off on the beginning on this disaster. But that was for one year. Bush had 8 years to control/fix the issue. And he not only supported it, he threw water on the oil fire.
 
Wolfman,

Your first two posts have nothing to do with the bailout. Nothing whatsoever. The question posed is what do you think of the bailout, and your answer is an article on a botanical garden and another on political action commitee thats concerned with McCains health? Pathetic, and typically republican.

I think if nothing is done and there is no bailout then home prices will drop. People looking to buy homes will be in a great position to buy a house. People who have invested in real estate will take a hit. All in all i say no bailout. Let the free market decide its own outcome. raising inflation and putting the future of the housing market in the hands of the government is a big time mistake. If any good can come from a financial crisis like the one we have no its that prices can go down and there will be less crediting. I think this country could use a little of both. Not to mention the third and least important concept. The people responsible for this mess shouldnt be bailed out. They dont deserve it and it sends the wrong message. No bailout!

Hi I am a republican do not lump me in with anyone although I think I am far from typical!

This is more than just houses and their value droping. You are talking about a global effect here, if it was just the value of homes I wouldn't care one bit. However what we are talking about is something so large that it can (IMO) bring our economy to a crawl if not fail. I personally do not want to live through a depression. The effects would rock through the whole globe and have a major impact on all of the people we do trade with , that are also heavily invested in our economy.
 

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