Bush wants strong dollar, independence from foreign oil and alternate energy (2 Viewers)

[RebSaint]

 

[blackadder]

$4 gas you say???

That's interesting. I hadn't heard that.

 

[RebSaint]

The guy is completely clueless. It's pathetic. He claims that he wishes to stop relying on foreign oil and we're friggin occupying Iraq while many American oil companies are lining up at the trough for their cut. Really, how stupid does he think the average American is?

What did it for me when he tried to tell the American people that the administration didn't expect Katrina's storm surge to compromise the levees in and around the city.

 

[RABDOG]

He tries. He just can't get anything done because of the Democrats and how badly Clinton left our nation before he came into office.

HUH?

 

[CitySaint]

Silly Ron Paul there is nothing wrong with the dollar or our dependence on foreign oil. Oops, that was Bush who said that? Sorry my mistake, lol.

 

[egautr1]

It's funny how some of you guys are actually surprised at the garbage that comes out of W's mouth!

I mean come on, this guy has been running our country into the ground for seven years, and telling lie after lie after lie! The guy is a complete waste of space and is IMO the WORST president in the history of the U.S.A.!! He has done more to damage the reputation of the states around the world than all the other presidents combined. And i do have a history degree for those of you who think i have no idea what i am talking about. It is just my opinion however although i am sure some of you may agree with me.

I don't really care what he does for the rest of his term just as long as he does not get us into a conflict with Iran. That would be the worst possible situation for our country!

 

[dapperdan]

The government is hamstrung here because if they try to get out in front of it then Wall Street and the Larry Kudlows of the world will come out bitterly complaining of "over-regulation" and of how the government is "stifling innovation", harming competitiveness and interfering in the marketplace.

I'm not sure how it can ever play out another way. You have to wait for Wall Street to predictably push the limits of its greed until a breaking point then digest the lessons, fight the last war and wait for the next one.

Damned if they do and damned if they don't.

No.

First off, Wall Street is scared itless right now (hope that's not a TOS violation). Also, Wall Street is very liberal in this current age. Hedge funds especially contribute much more Democratic than Republican. You'd be surprised.

Also, no one on Wall Street gives a wit about Larry Kudlow right now.His opinion counts for nothing. Paulson, yes. Bernanke, yes.

Second, this is much larger in scope than most people realized back in the summer, frankly, Wall Street is simply looking for solutions, whether they come from Republicans or Democrats. Barney Frank came out with a proposal today, yes, it was met with skepticism, people groused about the details, but the point is that Wall Street is listening to any credible idea with an open mind at this point.

Uh, in case you haven't noticed, we're well beyond the point of Wall Street pushing the limits of its greed. Right now, we're basically at the abyss, looking at a very large capital black hole. The fed finally saw the enormity of the problem over the course of, I'd say, the last four months. They were late to the party, but they're finally beginning to get their arms around the problem.

 

[CitySaint]

I don't see the Feds having the capability to avoid the downturn. They are so desperate they are asking foreign central banks from other countries for help. It's like a punch that you see coming and you know there is nothing you can do to avoid or block it.

 

[blackadder]

No.

First off, Wall Street is scared itless right now (hope that's not a TOS violation). Also, Wall Street is very liberal in this current age. Hedge funds especially contribute much more Democratic than Republican. You'd be surprised.

Also, no one on Wall Street gives a wit about Larry Kudlow right now.His opinion counts for nothing. Paulson, yes. Bernanke, yes.

Second, this is much larger in scope than most people realized back in the summer, frankly, Wall Street is simply looking for solutions, whether they come from Republicans or Democrats. Barney Frank came out with a proposal today, yes, it was met with skepticism, people groused about the details, but the point is that Wall Street is listening to any credible idea with an open mind at this point.

Uh, in case you haven't noticed, we're well beyond the point of Wall Street pushing the limits of its greed. Right now, we're basically at the abyss, looking at a very large capital black hole. The fed finally saw the enormity of the problem over the course of, I'd say, the last four months. They were late to the party, but they're finally beginning to get their arms around the problem.

I'm not talking about the response to after the fact regulation aimed at the last excesses.

I'm talking about what the reaction would have been if the government would have actually been on top of this and announced at the peak of the real estate boom that they were going to tighten regulation of mortgage lending and on the arcane financial products that chopped and re-sold the mortgages.

I think we would have heard plenty about the regulators "raining on the parade."

Yes, things are bad, which I suppose is why they will respond well to anything like this that might bolster confidence.

It's different when the money is rolling in.

 

[dapperdan]

I'm not talking about the response to after the fact regulation aimed at the last excesses.

I'm talking about what the reaction would have been if the government would have actually been on top of this and announced at the peak of the real estate boom that they were going to tighten regulation of mortgage lending and on the arcane financial products that chopped and re-sold the mortgages.

I think we would have heard plenty about the regulators "raining on the parade."

Yes, things are bad, which I suppose is why they will respond well to anything like this that might bolster confidence.

It's different when the money is rolling in.

ok, fair enough. I misunderstood a bit your earlier post.

It's not quite that easy. First off, for example, longstanding FHA lending guidelines allow for a 97% LTV. FHA also allows the acceptance of 3rd party downpayment assistance for the other 3%, which allows for the payback at close by the seller. With a 6% selling concession by the home seller, we're talking about a de facto zero down program. So with that as a starting point, is it fair that the FHA should corner the market on zero down programs. Obviously, no.

But really, the really really ugly part of this entire problem,at least the part that is currently siezing up the mortgage credit market, is not the subprime mess. It is the AAA paper.

Yep, it's the quality stuff. It's the borrower with 10% down, 15% down, 20% down. Good credit score. Makes his payment every month like clockwork. Right now, this is the paper that is at the heart of the credit crunch.

The problem is that with these CDOs, many hedge funds have taken good solid paper, and then leveraged the living heck out of that good investment, so that any significant blip would be magnified. I would compare it to having a blackjack system that wins 98% of the time, and then doubling down on every hand. Eventually, you're going to get tripped up. Gross oversimplification. But it's very similar to the same fallacy that caused the Long Term Capital Management problem, but this is a much larger problem.

As I understand the trade, and if anyone could provide more details I would really appreciate it because my little pea brain is trying to figure this all out. Here's an oversimplified version of how it went:
you buy the fannie mae paper, with a rate roughly 1.4% above the treasury, then simultaneously sell the treasury to elimate interest rate risk. Bingo. Free money. A flipping money machine.

So the hedge funds take this money machine and leverage it up. Carlyle Capital, an old, large, respected firm, apparently applied 32 to 1 leverage. Which is now being unwound.