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No, they said they didn't think they would need federal funds just then. Because they had serendipitously arranged major lines of credit before Republican incompetence locked those markets up.
Capitalists buy out and operate money-losing companies for the tax breaks. Corporate divisions that haven't made a penny's worth of profit in years are carried by some unrelated but profitable division. Waste,fraud, and abuse galore. It all just gets passed on to the consumer anyway. "Private sector efficiency" is a figment of a befuddled imagination.
So again, Saggy, can you explain to me why these coroporations have prospered and have turned their snouts away from the federal trough?
Explain to me again, just one more time, why these firms are doing just fine and did not need modern marxism to prosper? I believe your statement above is what we call "deversion"- when one is faced with facts that contradict one's core beliefs or principles, one must practice avoidance or diversion to avoid conflict. It is the same as hiding underneath the covers when you are scared, Saggy.
Tell me how Republicans locked up the "line of credit" market. I really want to hear this spin..
Isn't Saggy hilarious? We must remember, however, that as a true limosine liberal marxist, Saggy benefitted from private commerce. Now, however, he must turn his back on this system in order to be viewed as truely fashionable and in vogue with his urban liberal associates. Being free thinking and conservative is sooooooo yesterday.
Ooh this should be good. Tell me how Republicans locked up the "line of credit" market. I really want to hear this spin..
Huh? Have you been sleepwalking for the past seven years or so???
In response to 9/11, the Fed lowered interest rates in an attempt to contain economic ripple effects. This should have been a short-term reduction, but Bush's tax cuts for the rich and an across-the-board diversion of productivity gains away from wage increases (too inflationary) and into corporate profits left rich people with large and increasing pools of capital and everybody else with insufficient funds to purchase the output that productivity gains had produced. As inventories built, economic activity slowed, and the only solution was to convince people to borrow from the rich the money that they should have been given as wage increases to begin with so that stuff on the shelves could actually be sold off. Low interest rates were necessary for that which is why you had Alan Greenspan pledging to keep rates near zero for as long as it took for economic activity to pick up.
But large and institutional investors were not happy with rates of nearly 0% and began looking for better yields. That's where mortgage-backed securities came in. Noted for their safety and reliability, mortgage debt was now offering rather attractive yields, so many started buying it. The more the secondary markets bought, the more had to be produced, and with the Wall Street investment banks exponentially increasing their own profits and bonuses by selling not just MBS's but derivatives of them as well, the demand for more and more original paper increased without much regard for what underwriting standards were beiing used to create it.
Instead of cracking down on such potential and actual abuses, the administration simply lifted leverage limits on Wall Street and assured us that the markets were wise enough to regulate themselves.
Happy to do the providing meanwhile were unregulated private brokers such as Countrywide, Ameriquest, and New Century Financial. These had grown up into subprime markets after the Russian economic crisis of 1998 wiped out much of the finance company industry, and they had moved from there into broader lending markets. They targeted low- and moderate-income and other communities with unnecessarily high-cost paper front-loaded with teaser rates that made the early years of repayment affordable to many borrowers, but the later ones very much less so. More and more of this questionable paper was created and then securitized via Wall Street into the secondary markets as players on the front end gleefully stripped off huge profits, then sold all the risk off to someone else. Alarms were sounded along the way in the press and in Congress. Nobody did anything about it.
By mid-2004, the Fed was forced to begin a long process of gradual interest rate increases. The federal funds rate would go from 1% in June 2004 to 5.25% in July 2006. At each step along the way, the number of high-cost mortgages that would become unaffordable when those teaser rates expired increased, and all the while, those rising rates were undercutting the price of all long-term assets, houses included. Homeowners seeking to refinance their way out of onerous payment increases found that they couldn't. Defaults and foreclosures ensued. Soon enough they came to exceed the tolerances built into the system for them. Major investors holding all those MBS's were not receiving the payments due to them. They looked to sell these assets off, but there was no longer a market for them as everyone else was in the same situation. One after another, big name institutions around the world were forced to book tens of billions of dollars worth of losses that undermined their own financial stability. As the poison spread, no one was willing to lend, and no one could be trusted as a borrower. This is a credit crunch.
Bold intervention at this point (roughly the Summer and Fall of 2007) by the Bush administration could have contained and dealt with the crisis within the credit markets. But no such action was taken. We got do-nothing responses such as the Hope Now Alliance instead. As a result, the crisis leaked out into the economy at large and the supply of ordinary everyday credit that drives every modern economy dried up for many consumers and for businesses large and small. Expenditure and employment sank, and major banks around the world were brought to the brink of collapse. Massive government interventions were necessary by that point, all because a bunch of Republicans had resorted to horribly thought out fiscal and monetary policies, then simply sat by, unwilling to believe despite all the mounting evidence that a bunch of cowboy capitalists were in the process of driving the financial industry straight over a cliff.
I guess you must have missed all that. But never fear -- here is a little cartoon tailored to the level of Sesame Street minds that will cover most of it for you. It fails to distinguish properly between subprime lending and abusive subprime lending, but otherwise it provides a defensible overview. All in about eleven minutes. See if you can follow along...
I believe your statement above is what we call "deversion"- when one is faced with facts that contradict one's core beliefs or principles, one must practice avoidance or diversion to avoid conflict. It is the same as hiding underneath the covers when you are scared, Saggy.
I believe you ran out of actual things to say. Again.
I hate to say this, because normally I'd think the White House was slipping a fast one by us to tout the program's accomplishments, but if the stories I'm reading are correct, the states are sending bogus stimulus "jobs created" numbers to the feds. Here's one story:
The White House numbers are only as good as the data it gets from the states. So, while the stimulus money isn't creating those jobs the White House says it is creating, meaning the program really does stink, it appears the White House may only be basing their claims on the numbers they get, meaning they aren't deliberately lying about it.
Huh? Have you been sleepwalking for the past seven years or so???
In response to 9/11, the Fed lowered interest rates in an attempt to contain economic ripple effects. This should have been a short-term reduction, but Bush's tax cuts for the rich and an across-the-board diversion of productivity gains away from wage increases (too inflationary) and into corporate profits left rich people with large and increasing pools of capital and everybody else with insufficient funds to purchase the output that productivity gains had produced. As inventories built, economic activity slowed, and the only solution was to convince people to borrow from the rich the money that they should have been given as wage increases to begin with so that stuff on the shelves could actually be sold off. Low interest rates were necessary for that which is why you had Alan Greenspan pledging to keep rates near zero for as long as it took for economic activity to pick up.
But large and institutional investors were not happy with rates of nearly 0% and began looking for better yields. That's where mortgage-backed securities came in. Noted for their safety and reliability, mortgage debt was now offering rather attractive yields, so many started buying it. The more the secondary markets bought, the more had to be produced, and with the Wall Street investment banks exponentially increasing their own profits and bonuses by selling not just MBS's but derivatives of them as well, the demand for more and more original paper increased without much regard for what underwriting standards were beiing used to create it.
Instead of cracking down on such potential and actual abuses, the administration simply lifted leverage limits on Wall Street and assured us that the markets were wise enough to regulate themselves.
Happy to do the providing meanwhile were unregulated private brokers such as Countrywide, Ameriquest, and New Century Financial. These had grown up into subprime markets after the Russian economic crisis of 1998 wiped out much of the finance company industry, and they had moved from there into broader lending markets. They targeted low- and moderate-income and other communities with unnecessarily high-cost paper front-loaded with teaser rates that made the early years of repayment affordable to many borrowers, but the later ones very much less so. More and more of this questionable paper was created and then securitized via Wall Street into the secondary markets as players on the front end gleefully stripped off huge profits, then sold all the risk off to someone else. Alarms were sounded along the way in the press and in Congress. Nobody did anything about it.
By mid-2004, the Fed was forced to begin a long process of gradual interest rate increases. The federal funds rate would go from 1% in June 2004 to 5.25% in July 2006. At each step along the way, the number of high-cost mortgages that would become unaffordable when those teaser rates expired increased, and all the while, those rising rates were undercutting the price of all long-term assets, houses included. Homeowners seeking to refinance their way out of onerous payment increases found that they couldn't. Defaults and foreclosures ensued. Soon enough they came to exceed the tolerances built into the system for them. Major investors holding all those MBS's were not receiving the payments due to them. They looked to sell these assets off, but there was no longer a market for them as everyone else was in the same situation. One after another, big name institutions around the world were forced to book tens of billions of dollars worth of losses that undermined their own financial stability. As the poison spread, no one was willing to lend, and no one could be trusted as a borrower. This is a credit crunch.
Bold intervention at this point (roughly the Summer and Fall of 2007) by the Bush administration could have contained and dealt with the crisis within the credit markets. But no such action was taken. We got do-nothing responses such as the Hope Now Alliance instead. As a result, the crisis leaked out into the economy at large and the supply of ordinary everyday credit that drives every modern economy dried up for many consumers and for businesses large and small. Expenditure and employment sank, and major banks around the world were brought to the brink of collapse. Massive government interventions were necessary by that point, all because a bunch of Republicans had resorted to horribly thought out fiscal and monetary policies, then simply sat by, unwilling to believe despite all the mounting evidence that a bunch of cowboy capitalists were in the process of driving the financial industry straight over a cliff.
I guess you must have missed all that. But never fear -- here is a little cartoon tailored to the level of Sesame Street minds that will cover most of it for you. It fails to distinguish properly between subprime lending and abusive subprime lending, but otherwise it provides a defensible overview. All in about eleven minutes. See if you can follow along...
Saggy, if the big banks and corporations were robbing from the people, and, as you contend, incomes fell, why did personal income INCREASE from 200-2008? I guess the "data" upon which your theory is based is a little flawed. Garbage in- garbage out.
Keep in mind that the author of the credit crisis, Jimmy Carter, began the whole process of providing credit to those who could not afford homes. I love the way you blame this on Bush, when Bush tried to stem the tide in 2006. Where was Barney Frank and Chris Dodd, Saggy?
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