Stunned

iVillage Member
Registered: 03-25-2007
Stunned
48
Fri, 09-19-2008 - 9:18pm

Are all of our legislators and our president so out-of-touch?   Sheesh...the newspapers, magazines and television had raised the red flag in late 2006 about the subprime mess and how it would eventually affect the big lenders and how that could eventually put our financial markets on the brink and it would ripple worldwide.  Why were they stunned last night? 


 


http://www.nytimes.com/2008/09/20/washington/19cnd-cong.html?_r=1&hp=&adxnnl=1&oref=slogin&pagewanted=print&adxnnlx=1221872647-wcSoNjhio9oKYGnF8MIMpw


 


September 20, 2008


Congressional Leaders Stunned by Warnings


WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.


Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.


“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.


As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”


Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”


When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”


“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”


Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.


“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”


As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. “You know we’d be lucky ...” he said as his voice trailed off. “Well, I’ll leave it at that.”


As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.


Lawmakers in both parties described the meeting in Ms. Pelosi’s office on Thursday night with Mr. Paulson and Mr. Bernanke as collaborative, and that they were prepared to put politics aside to address the needs of the American people.


While Democrats initially said after the meeting that they planned to use the administration’s proposal of a huge rescue effort to win support for an economic stimulus package, they pulled back slightly on Friday morning, saying that their top priority was to help put together the bailout package and stabilize the economy.


But it was clear they continued to examine ways to make clear that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit.


In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.


Among the potential steps Congress can take include approving legislation to allow bankruptcy judges to modify the terms of primary mortgages — authority that the bankruptcy laws do not currently allow and that the banking industry has strenuously opposed.


But the Democrats said it was too soon to discuss such details, and that they were awaiting a draft of the proposal from the Treasury Department.


“We have got to deal with the foreclosure issue,” Mr. Dodd said. “You have got to stop that hemorrhaging..If you don’t, the problem doesn’t go away. Ben Bernanke has said it over and over again. Hank Paulson recognizes it. This problem began with bad lending practices. Those are his words, not mine, and so this plan must address that or I’ll be back here in front of a bank of microphones at some point explaining the next failure.”


Even before the drafting of the plan was complete, the Bush administration and the Fed began efforts to sell the idea of a huge rescue to potentially skeptical rank-and-file members of Congress. Mr. Paulson and Mr. Bernanke held a conference call with House Republicans to explain their thinking.


Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, said in a television interview that cost to the government of purchasing bad debt could run to $1 trillion — a potential warning sign since Mr. Shelby is a longtime skeptic of government intervention in the private market.


Until Mr. Shelby was interviewed on Friday morning, officials on Capitol Hill had been careful not to discuss specific figures, though the rescue envisioned by the Treasury Department clearly entails a government appropriation of hundreds of billions of dollars.>>>


 

Sopal


Sopal

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iVillage Member
Registered: 06-16-2007
In reply to: sopall1953
Sat, 09-20-2008 - 2:34am

I think one of the major flaws in

iVillage Member
Registered: 08-19-2007
In reply to: sopall1953
Sat, 09-20-2008 - 2:54am
Of course
iVillage Member
Registered: 11-08-2003
In reply to: sopall1953
Sat, 09-20-2008 - 3:31am

What I would like to know is, why aren't the crooks who gave out these mortgages, knowing full well the people couldn't afford the payments, in jail?!


Even before 2006, economists stated the dangers of deregulation and trickle-down economics. Our leaders didn't care.

 Rose

iVillage Member
Registered: 06-16-2007
In reply to: sopall1953
Sat, 09-20-2008 - 3:47am

I don't know, Rose.

iVillage Member
Registered: 11-08-2003
In reply to: sopall1953
Sat, 09-20-2008 - 4:19am

You and I never would have been sucked into their web. They targeted illiterates, unemployed, people who didn't understand what they were getting into. They were told their rates might go up a little bit, but they would be ok. I read about an elderly man, whose only income was his Social Security check of about $650/month. They convinced him he could afford to buy a house, even though he told them that was his only income. They made money on every sale they wrote up. The loans were immediately sold to other companies. So, they didn't care. They greedily took the money and ran. It's sad that big business has no regard for the people they serve. Some people are naive and too trusting.


Unfortunately, big businesses today will do whatever they can to make a buck. Why is it, when a company goes under, the employees lose everything

 Rose

iVillage Member
Registered: 06-16-2007
In reply to: sopall1953
Sat, 09-20-2008 - 4:28am

Believe me, I hear what you're saying about taking advantage of people who seriously do not know better.

iVillage Member
Registered: 11-08-2003
In reply to: sopall1953
Sat, 09-20-2008 - 4:36am
You're absolutely correct. I don't think tax payors should bail them out, either. I know that's being discussed, but we can't afford it, and they should have known better. Speculator's were a driving force also. America has a huge problem with greed and entitlement issues.

 Rose

iVillage Member
Registered: 06-16-2007
In reply to: sopall1953
Sat, 09-20-2008 - 4:43am
Yes, speculators for SURE played a huge part in this meltdown.
iVillage Member
Registered: 03-25-2007
In reply to: sopall1953
Sat, 09-20-2008 - 10:39am

<What I would like to know is, why aren't the crooks who gave out these mortgages, knowing full well the people couldn't afford the payments, in jail?! >


I don't believe that there is a federal law about predatory lending that could/would cover idiots giving bad mortgages.

Sopal

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iVillage Member
Registered: 11-08-2003
In reply to: sopall1953
Sat, 09-20-2008 - 5:35pm

This whole fiasco makes me so angry. It could have been prevented if it wasn't for the greed! Bush and his dirty dealings to protect big business are unbelievable. People should be protesting in the streets, at the way we've been raped by him! McCain and Palin are just like him. How can anyone who isn't ultra-wealthy support them? Haven't they had enough?!


In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.


It's sinful, that our own government has stooped so low. The Bush administration's

 Rose