Privatize the profits...socialize the losses
(I thought I invented the headline "Privatize the profits..." but in doing some research I see that there's a million other people out there using it. Oh well...I still like it.)
I try to stay focused on local issues most of the time but sometimes the national and global events are just too compelling to let pass.
Can you believe that bill that Congress passed to bail out the "400,000 homeowners" at risk of losing their homes?
It's going to cost the taxpayers $ 25 billion. The CEO's of those two companies(yes Fannie and Freddie are private entities - not government programs) pulled in $32 million in the last two years as these companies went down the tubes.
What's sad is that this was all so predictable. When the Federal Reserve stopped reporting M3 several years ago, it was a hint of the problems we're facing today. Printing all that money just prolonged the agony a few more years.
Isn't it strange that all of these Harvard and Yale MBA's couldn't see this coming? What about GM not being able to forecast the need for vehicles with better gas mileage? All the money in the world can't buy an education that has more value than common sense.
Here's another fun website to checkout.
posted by Gayle Washburn @ 4:24 PM
7 Comments
Links to this post
7 Comments:
I blame all those involved with the sub prime mortgage loan deals. We also need to investigate the real estate businesses here in Fillmore for fraud. Gayle why are you complaining about 32 billion in taxpayer monies going toward fixing our domestic economic problems yet fail to mention that it costs us taxpayers 12.3 billion a month to fight the wars in Iraq and Afghanistan? Your priorities seem a bit skewed.
@ anon: You kinda drifted from the topic so you could get in some criticism. Are you okay now? Besides, you missed the point - or three points.
1. How do these two CEO's get away with $32 million pay packages when their companies would be bankrupt right now if not for this bailout?
2. The Federal Reserve facilitated these problems by keeping interest rates too low, printing lots of cheap money and then hiding the fact by discontinuing M3 reporting.
3. Poor decision making and policies by MBA's with all of their common sense over-educated out of them.
Gayle,
Ron Paul addressed your concern before the House of Representatives in April 2006.
“The incentive for central bankers to create new money out of thin air is twofold. One is to practice central economic planning through the manipulation of interest rates. The second is to monetize the escalating federal debt politicians create and thrive on.
Today no one in Washington believes for a minute that runaway deficits are going to be curtailed. In March (2006) alone, the federal government created an historic $85 billion deficit. The current supplemental bill going through Congress has grown from $92 billion to over $106 billion, and everyone knows it will not draw President Bush’s first veto. Most knowledgeable people therefore assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not yet been fully discounted, guarantees the further depreciation of the dollar in terms of gold.
There’s no single measurement that reveals what the Fed has done in the recent past or tells us exactly what it’s about to do in the future. Forget about the lip service given to transparency by new Fed Chairman Bernanke. Not only is this administration one of the most secretive across the board in our history, the current Fed firmly supports denying the most important measurement of current monetary policy to Congress, the financial community, and the American public. Because of a lack of interest and poor understanding of monetary policy, Congress has expressed essentially no concern about the significant change in reporting statistics on the money supply.”
Gayle, you lack of knowledge on economics never ceases to amaze me. The problem is not what the fed did to the interest rates, if anything this helped our economy tremedously. The problem is that the mortgage companies and their desire to turn a quick profit at any cost. JUNK LOANS, NO INTEREST LOANS, REVERSE MORTGAGES, NO PROOF OF INCOME LOANS, etc... this is the problem. Maybe you should discuss this with Brian Sipes I am sure he has a few of these types of loans. The mortgage companies knew that people could not pay for the loans they incurred, but the interest was in making the loans at any price and in any way possible. There was a story from a processor who stated that a teller at dysney land that only made 30K had their loan docs changed by the broker to state that she made 900K a year in order to qualify. Low and behold now she cann't repaythe loan.
Bottom line the mortgage companies took advantage of idiots that did not understand that you actually have to pay back a loan and variable rates means that the interest rates will go up!!!!
AND NOW WHO HAS TO PAY FOR THESE LENDORS AND LENDEES MISTAKE????
THATS RIGHT THE TAX PAYORS!!!!
I say screw that, they made their bed and now they need to lie in it.
As far as the CEO's that is par for the course. A CEO lays off 10000 employees and saves a company a few million and than gets a bonus for the same amount that they save. You have to remember that these are private companies. Thus, we have no say in their affairs.
marc o: Ron Paul is great. My husband is watching him right now on video. I want to go see I.O.U.S.A.
anonymous: The problem goes a lot farther than motgage brokers. Maybe you can go see the movie too.
p.s. anonymous...Freddie and Fannie are PUBLIC (NYSE) companies with shareholders like you and me. Freddie's shareholders have lost $4 billion in their investment in the last year. If you have any mutual funds, bonds or 401k's that CEO pay came out of your pocket.
you are correct, but only to a certain extent. Yes our mutual funds or individual stock purchases provide a small piece of the company, the interest we receive is based on the stock price. If we own individual stocks than yes we may receive a dividend if the company makes a profit. HOWEVER, while the stock holders can meet with the management of the company and as a whole effect a change in the policy, generally the day to day operations of the business is left to the MANAGEMENT of the company not the shareholders or stakeholders. Additionally, the company board has more say so on company affairs than any individual stock holder or group of stock holders, and finally, the number of shares of stock the company releases in its IPO or initial purchase order may not represent the majority of controlling interest in the company. For example if the company retains 51% of the value of the company, than the company is the majority decision maker. Thus, while as share holders we may have some influencce on how a company runs, in general we are not involved in contract negotiations with CEO's, we are not involved in the day to day operations of the company, and in general we are not involved in major decisions of a company with the exception of a vote to merge with another company, etc...
Private companies do business the way they do business. CEO's get huge benifit packages and bonuses based on performance. While the CEO may have known about the unethical business practices of the company, the books show a huge profit thus generating the bonus. In the long term, the unethical business practices may cost the company millions, and thus the CEO is fired and the company changes its policy and looks for a better CEO if the company survives. Ultimately, though you now I nor Gayle are ever going to change these practices unless own the company. So complaining, commenting, and carrying on about it does not make a difference. The only difference that we can make in this situation is through our elected officials and calling them to tell them
THEY MADE THEIR BED NOW LET THEM LIE IN IT, DO NOT GIVE ANY OF MY TAX DOLLARS TO BAIL THEM OUT FOR THEIR STUPIDITY!!!!!
Post a Comment
Links to this post:
Create a Link
<< Home