Rick Santelli/Chicago Tea Party/Revolt/Vote

[ParkTwain]

Originally Posted by 58robbo

no, the banks and the homeowners should both suffer the consequences and neither should be bailed out is what i am saying and so, for that matter, is what santelli is saying. he has been an outspoken critic of all the bailouts. the problem however is that government interference and not the lack of regulation are what is really to blame.

Santelli is wrong about what the mortgage problem is trying to accomplish, and you're still completely wrong in your diagnosis of the overall problem. The problem was that too many bogus mortgages were written due to the huge demand for mortgage paper by Wall Street so that they could earn huge fees by rolling that paper into Collaterized Debt Obligations (CDOs), which were then sold to banks and institutional investors around the world. Look it up. Don't just get your facts from Rush Limbaugh.

Wall Street when crazy with greed in trying to maximize their fee income from producting and selling the CDOs. The dangers this activity was setting up for the entire banking system was not being monitored from Washington, and now we're all in the soup.

Now those CDOs are considered mostly worthless, perhaps somewhat mistakenly, by the marketplace due to lack of visibility into the constituent individual mortgages. The quality of the CDOs themselves turned out to have been fraudulently marketed by Wall Street (Bear Stears, Lehman Bros., etc.). Now the banks have these "worthless" assets on their books, so that they no longer have sufficient asset reserves to be making loans to each other and in the marketplace. So the economy's "lubrication" has dried up, and now businesses and consumers must go through a painful "deleveraging" phase.

Restructuring some of America's larger banks is now a necessity. They can be nationalized, perhaps on a temporary basis, or they can be broken up and their assets doled among other banks who want to step up and buy them.

[Kootr]

Originally Posted by 58robbo

no, the banks and the homeowners should both suffer the consequences and neither should be bailed out is what i am saying and so, for that matter, is what santelli is saying. he has been an outspoken critic of all the bailouts. the problem however is that government interference and not the lack of regulation are what is really to blame.

.

Right on the money!

[domergurl]

Originally Posted by ParkTwain

Santelli is wrong about what the mortgage problem is trying to accomplish, and you're still completely wrong in your diagnosis of the overall problem. The problem was that too many bogus mortgages were written due to the huge demand for mortgage paper by Wall Street so that they could earn huge fees by rolling that paper into Collaterized Debt Obligations (CDOs), which were then sold to banks and institutional investors around the world. Look it up. Don't just get your facts from Rush Limbaugh.

Wall Street when crazy with greed in trying to maximize their fee income from producting and selling the CDOs. The dangers this activity was setting up for the entire banking system was not being monitored from Washington, and now we're all in the soup.

Now those CDOs are considered mostly worthless, perhaps somewhat mistakenly, by the marketplace due to lack of visibility into the constituent individual mortgages. The quality of the CDOs themselves turned out to have been fraudulently marketed by Wall Street (Bear Stears, Lehman Bros., etc.). Now the banks have these "worthless" assets on their books, so that they no longer have sufficient asset reserves to be making loans to each other and in the marketplace. So the economy's "lubrication" has dried up, and now businesses and consumers must go through a painful "deleveraging" phase.

Restructuring some of America's larger banks is now a necessity. They can be nationalized, perhaps on a temporary basis, or they can be broken up and their assets doled among other banks who want to step up and buy them.

Kind of a Ma-Belling of the Banks then? Santelli was preaching to his choir.