The Dow Jones Industrial Average first closed above 10,000 almost ten years ago on March 29, 1999. Less than 18 months ago, it closed above 14,000. Today, the average is below 9,900. It's interesting that the financial wizards who blamed the market's troubles on the House of Representatives' initial rejection of the bailout bill, don't make any connection between that abominable bill's ultimate passage and the abominable state of the market since then. Some of the Jeremiahs yelling "sell" remind me of the guy who urged me a week after the Pro Bowl to bet the Giants in the Super Bowl. Now you tell me! The time to sell was a year and a half ago. Stock market analysts are like the general always fighting the last war. Their predictions of the future are usually just retellings of the last few years or months. Although this may not be the time to buy--the market could stagnate in this 9,000-10,000 range for quite a while--now, after the market has lost almost a third of its value in such a short period--is not the time to sell. Remember Rockefeller: "Buy low, sell high."
Congratulations for voting for the culprit. I hate to say it (I don't really), but your ideology made you fall for stupid ideas. You are the population you always hated and wrote stupid books about.
Yea man, Bush totally founded the Department of the Treasury in 1789.
Why are you no longer Ben-T?
You leftists are so incredibly obtuse and uninformed. But, you seem to like it that way so I suppose if that works for you, its ok.
Before GW was a glimmer in the eye of the American voter, Greenspan (that’s the Chairman of the Fed for you vapid lefties) warned Clinton of an impending mortg@ge crisis. But, Clinton deregulated banks anyway and in the name of affirmative action / political correctness Congressional Democrats allowed anybody and everybody to get loans no matter how unqualified and required the two GSEs in question to back them no matter what. Throw in the fact that a heavily Democrat run financial industry bundled bad paper with good and the recipe for disaster was set.
Clinton, Frank, Dodd, Raines, Johnson…see a pattern here? Bush and the boys tried to rein it in but could not get any semblance of common sense rules through because F&F were, essentially, Democrat piggy banks.
That’s change you can believe in!
ASDF,
Horse is an idiot and you are right about the Dems. But, I don't think it is that accurate to say that they faced stiff opposition from GW or the GOP in general. The second bailout vote demonstrates how easy GOP opposition evaporates to corporatism and socialism.
Anyway, here is Bush showing his love for the expansion of easy credit pushed by Mae and Mac:
We need to throw support behind those conservatives who actually consistently stand up against K street, like the ones who did not change their votes on the bailout.
horse: ignorance of basic facts and prejudice abound in your skull, imho. Do you think Bush is to blame here? Certainly, but only in part. What about the heads of Fannie and Freddie, and Clinton and Rubin, and Dodd and that fat gay dude from Mass., and Pelosi and Obama and McCain . . . ? And how about TR and Wilson and FDR and all others who have given us this monolithic statist ideology for the last hundred years? And why not blame the business men who are just as happy to make money from the government than from happy customers?
And, anyway, do you think that Flynn or the readers of this site are Bush supporters? Man, get a clue.
Horse, there's not even a hint of maneuvering room in your declaration. Bush did it. We voted for him. If we don't like the housing crunch, because it happened on Bush's watch, it's Bush's fault.
What if we don't agree with that assessment? You haven't explained anything, just asserted a rather specious connection. Almost proper hoc fallacy.
As long as we're going to name our favorite proper hoc fallacy, I'll blame this on Y2K. First it's year 2000, and now this.
"Why are you no longer Ben-T?" - Eric Wilds
Dunno, must have forgotten to type it in one day. I have it set to save my personal info so it just has me set as that now.
Bush hasn't blamed the Democrats for his mess because he's just as responsible. Besides, I think this financial implosion goes much deeper than granting subprime loans to minorities with a sketchy credit history.
I believe if we were to buy back all the subprime loans that have been foreclosed on it wouldn't amount to more than 300 billion. The problem is that banks and other financial institutions have been selling mo-rtgages and buying derivatives based on the value of those mo-rtgages and other financial devices, like credit card debt. When banks loan money to new investors they buy credit default swaps to insure against the risk. Financial institutions can practically mint millions of dollars in extra income without producing anything, innovating, or finding ways to cut cost. There isn't a problem until the default rate gets over 5%, but when it does all the risk that's been insured cannot be insured. The derivatives market -- and these are the shadow derivatives -- are more than the total value of the world GDP. That's why Warren Buffett referred to them as financial "weapons of mass destruction."
The problem is much more than Democrats and Republicans (both parties are to blame) encouraging banks to lend money to unqualified applicants. If that was all, this would just be a hiccup, and not a possible global financial meltdown.
Wilds,
Of course, Mort-gage Backed Securities are in the center of it. And that is what spread the poison. However, Freddie Mac was instrumental in the layering and selling of mort-gage-backed securities. Most MBSs still are 90% good properties, but because of the practice of Mark-to-market, nobody wants them on their books. It's not as if they lack an intrinsic value, but it's a spiral. The price goes down, so nobody wants them on their books, thus you can't sell them to other institutions, thus the price goes down.
That's why people have said that the government needs to step in and buy these from their holders. The government has no share-holders or regulation mandating that they have to account their assets at the market price, thus the MBSs can actually gain back a vast majority of their value, once they're in the hands of a seller that can't be motivated in the same way.
