Attention Forum Socialists

[Sir Bandelot]

13 years of Labour rule and Britian has the worst debt ratio of any European country, other than Greece. Yay socialism!

It was over for Britain 60 years ago.

[Pliny]

I've read posts where people accuse the government of forcing banks to accept risk without being allowed to account for it in pricing. This is the US where collusion regularly happens... somehow the government is supposed to have handcuffed financial companies against making a profit for some reason.

Community organizers picketed the Banks and even the residences of Bank managers that refused loans to those who were not qualified.

[Pliny]

No, it can't all be blamed on "fly by night" mortgage companies. Goldman and the foreign banks bought mortgage-backed securities because they were insured by AIG in a completely unregulated market of credit default swaps as collateral. No one had any incentive to ensure that the loans were paid because housing prices kept going up in an inflated market, and bad mortgages were insured by CDS contracts. The mortgage companies were allowed to write mortgages for any borrower, and face no risk since they were sold off as investments to third parties. And those third parties buying mortgage securities were insured by A.I.G.

And, once again after all of the blather about how great free enterprize is, and how well it works when free of government interference, they all go running to the government to bail them out. It's a shame that Wall STreet still controls Washington, so no real financial reform is possible, and another bubble and bust is just a matter of time.

I am not going to make any excuses for AIG or those not around anymore, like Lehman Bros. They paid the price for their trust in government. But in the end it was their actions that led to their demise. They should know better that a government guarantee is not worth a plug nickel - especially today.

[WIP]

I've read posts where people accuse the government of forcing banks to accept risk without being allowed to account for it in pricing. This is the US where collusion regularly happens... somehow the government is supposed to have handcuffed financial companies against making a profit for some reason.

It's a bogus claim considering that the banks don't have to assume the risk of non-payment anyway; since they usually sell the mortgages to third parties who bundle them as investments in mortgage-backed securities.

[WIP]

I am not going to make any excuses for AIG or those not around anymore, like Lehman Bros. They paid the price for their trust in government. But in the end it was their actions that led to their demise. They should know better that a government guarantee is not worth a plug nickel - especially today.

What price did AIG pay? They were the primary recipient of the banking bailout -- even though they're an insurance company. They were too big to fail because they were the underwriter of of a lot of risky investments, and the general public learned a new word: Credit Default Swap. And Lehman! Can anyone really call the executives losers when their top executives walked away with salaries and bonuses intact after Lehman declared bankruptcy? Lehman's CEO, Richard Fuld, walked away with 484 million dollars. So what price did he pay for trusting the government? Somehow, we're supposed to feel sorry for bankers because of the actions of politicians that were bought and paid for.

[Pliny]

It's a bogus claim considering that the banks don't have to assume the risk of non-payment anyway; since they usually sell the mortgages to third parties who bundle them as investments in mortgage-backed securities.

What is this "Eyes Wide Closed"?

It was small mortgage companies that sold their mortgages to a more than willing government, and Banks and Wall street were encouraged with some arm twisting to participate.

I don't know how you can say banks didn't have any risk to assume. Bank failures were at about 600 in 2009 with some big players like Washington Mutual going down.

The government should have let Wall street go down. That would have opened the door and let some light in on the real culprits hiding in the dark.

[Pliny]

What price did AIG pay? They were the primary recipient of the banking bailout -- even though they're an insurance company. They were too big to fail because they were the underwriter of of a lot of risky investments, and the general public learned a new word: Credit Default Swap. And Lehman! Can anyone really call the executives losers when their top executives walked away with salaries and bonuses intact after Lehman declared bankruptcy? Lehman's CEO, Richard Fuld, walked away with 484 million dollars. So what price did he pay for trusting the government? Somehow, we're supposed to feel sorry for bankers because of the actions of politicians that were bought and paid for.

We are definitely mot supposed to feel sorry for bankers. They can and did look after themselves.

Wasn't it government that felt sorry for them to the tune of 800 + billion dollars?

[Pliny]

I'm inclined to agree; in fact, I have found Bertrand Russell's theories on "Power" to be quite illuminating.

But by this token, and using your own example: with the smallest government possible, and with private ownership being sacrosanct, what's to stop Business (which would be, and in some matters is now, less accountable than democratic or democratic-republic government) from ruling with impunity?

It would quite naturally occur, would it not?

Ruling? The implication of that is that they are making the laws. Business has no ability to make law. It can only "rule" with and through the co-operation of society. Clearly, operating with out the consultation of others and mutual agreement will result in a public backlash against the offending business that has no real power to enforce itself upon society.

[bloodyminded]

Ruling? The implication of that is that they are making the laws. Business has no ability to make law. It can only "rule" with and through the co-operation of society. Clearly, operating with out the consultation of others and mutual agreement will result in a public backlash against the offending business that has no real power to enforce itself upon society.

Wealth is power. Big Business already has profound political influence, both in the domestic and foreign fronts. Why wouldn't this increase? As for the backlash...that could well happen, but we don't trust in speculative corrective measures after the fact.

[WIP]

What is this "Eyes Wide Closed"?

It was small mortgage companies that sold their mortgages to a more than willing government, and Banks and Wall street were encouraged with some arm twisting to participate.

I don't know how you can say banks didn't have any risk to assume. Bank failures were at about 600 in 2009 with some big players like Washington Mutual going down.

Let's see...no sign of arm twisting here:

A trio of former Washington Mutual officials and a trove of documents on Tuesday portrayed a pattern of breakneck loan-making and alleged fraud at the biggest U.S. bank ever to fail.

The 18-month investigation by the Senate Homeland Security and Governmental Affairs subcommittee found that WaMu's lending operations were rife with fraud, including fabricated loan documents. It concluded that management failed to stem the deception despite internal probes.

WaMu's release of toxic mortgage securities into the financial bloodstream contributed to the near-collapse of the system in the fall of 2008, Levin and other senators contended. Levin pressed Killinger and the other former executives on when they became aware of loan fraud at the bank and why they failed to act.Fueled by the housing boom, Washington Mutual's sales to investors of subprime mortgage securities leapt from $2.5 billion in 2000 to $29 billion in 2006. The 119-year-old thrift, with $307 billion in assets, was sold for $1.9 billion to JPMorgan Chase & Co. in a deal brokered by the Federal Deposit Insurance Corp.

Killinger said it was "unfair" that Washington Mutual didn't get the benefits of government actions that helped other financial institutions in the days of the crisis in the fall of 2008. He was referring to steps such as a doubling of the limit on deposit insurance to $250,000 and new federal guarantees for bank debt.

Between 2003 and 2007 under his tenure, WaMu cut in half its staff in the home loans division and sold 30 percent of its portfolio of loans, Killinger testified.

WaMu's pay system rewarded loan officers for the volume of loans they closed on. Extra bonuses even went to loan officers who overcharged borrowers on their loans or levied stiff penalties for prepayment, according to the report of the Senate panel's investigation.

WaMu was one of the biggest makers of so-called "option ARM" mortgages. They allowed borrowers to make payments so low that loan debt actually increased every month.

In some cases, sales associates in WaMu offices in California fabricated loan documents, cutting and pasting false names on borrowers' bank statements, the panel found. The company's own probe in 2005, three years before the bank collapsed, found that two top producing offices — in Downey and Montebello, Calif. — had levels of fraud exceeding 58 percent and 83 percent of the loans. Employees violated the bank's policies on verifying borrowers' qualifications and reviewing loans.

Washington Mutual was criticized over the years by its internal auditors and federal regulators for sloppy lending that resulted in high default rates, according to the report. Violations were so serious that in 2007, Washington Mutual closed its affiliate Long Beach Mortgage Co. as a separate entity and took over its subprime lending operations.

http://news.yahoo.com/s/ap/20100413/ap_on_bi_ge/us_washington_mutual_investigation

So how was the collapse of WaMu the fault of the federal government? Except maybe for the fact that none of the banksters in this company appear to have faced criminal fraud charges or incarcerated.

The government should have let Wall street go down. That would have opened the door and let some light in on the real culprits hiding in the dark.

This "let them fail" chit is just a scam played by the right, since their advocacy of deregulation and complete unregulation of new derivative investments has turned the world finance system into a house of cards that will cause the whole thing to crash if a major player goes down. As I recall, the Bush Administration started with your advice when they let WAMU and Lehman Bros. collapse, and when the whole system started to unravel, Hank Paulsen had to rush in with a promise to put up 700 billion dollars as equity to save institutions that had toxic assets. The libertarians and conservatives are just blowing smoke now by claiming that they would have let bad banks fail rather than regulate banking and new derivative investments. The Republicans of the last Congress blinked and had to change their votes against Bush's bailout plan, and they would have to do it again, since nobody can afford to have the whole financial system collapse.

[Pliny]

Let's see...no sign of arm twisting here:

A trio of former Washington Mutual officials and a trove of documents on Tuesday portrayed a pattern of breakneck loan-making and alleged fraud at the biggest U.S. bank ever to fail.

The 18-month investigation by the Senate Homeland Security and Governmental Affairs subcommittee found that WaMu's lending operations were rife with fraud, including fabricated loan documents. It concluded that management failed to stem the deception despite internal probes.

WaMu's release of toxic mortgage securities into the financial bloodstream contributed to the near-collapse of the system in the fall of 2008, Levin and other senators contended. Levin pressed Killinger and the other former executives on when they became aware of loan fraud at the bank and why they failed to act.Fueled by the housing boom, Washington Mutual's sales to investors of subprime mortgage securities leapt from $2.5 billion in 2000 to $29 billion in 2006. The 119-year-old thrift, with $307 billion in assets, was sold for $1.9 billion to JPMorgan Chase & Co. in a deal brokered by the Federal Deposit Insurance Corp.

Killinger said it was "unfair" that Washington Mutual didn't get the benefits of government actions that helped other financial institutions in the days of the crisis in the fall of 2008. He was referring to steps such as a doubling of the limit on deposit insurance to $250,000 and new federal guarantees for bank debt.

Between 2003 and 2007 under his tenure, WaMu cut in half its staff in the home loans division and sold 30 percent of its portfolio of loans, Killinger testified.

WaMu's pay system rewarded loan officers for the volume of loans they closed on. Extra bonuses even went to loan officers who overcharged borrowers on their loans or levied stiff penalties for prepayment, according to the report of the Senate panel's investigation.

WaMu was one of the biggest makers of so-called "option ARM" mortgages. They allowed borrowers to make payments so low that loan debt actually increased every month.

In some cases, sales associates in WaMu offices in California fabricated loan documents, cutting and pasting false names on borrowers' bank statements, the panel found. The company's own probe in 2005, three years before the bank collapsed, found that two top producing offices in Downey and Montebello, Calif. had levels of fraud exceeding 58 percent and 83 percent of the loans. Employees violated the bank's policies on verifying borrowers' qualifications and reviewing loans.

Washington Mutual was criticized over the years by its internal auditors and federal regulators for sloppy lending that resulted in high default rates, according to the report. Violations were so serious that in 2007, Washington Mutual closed its affiliate Long Beach Mortgage Co. as a separate entity and took over its subprime lending operations.

http://news.yahoo.com/s/ap/20100413/ap_on_bi_ge/us_washington_mutual_investigation

So how was the collapse of WaMu the fault of the federal government? Except maybe for the fact that none of the banksters in this company appear to have faced criminal fraud charges or incarcerated.

This "let them fail" chit is just a scam played by the right, since their advocacy of deregulation and complete unregulation of new derivative investments has turned the world finance system into a house of cards that will cause the whole thing to crash if a major player goes down. As I recall, the Bush Administration started with your advice when they let WAMU and Lehman Bros. collapse, and when the whole system started to unravel, Hank Paulsen had to rush in with a promise to put up 700 billion dollars as equity to save institutions that had toxic assets. The libertarians and conservatives are just blowing smoke now by claiming that they would have let bad banks fail rather than regulate banking and new derivative investments. The Republicans of the last Congress blinked and had to change their votes against Bush's bailout plan, and they would have to do it again, since nobody can afford to have the whole financial system collapse.

Still wide shut.

Look a little deeper. I would expect a government report to completly ignore it's role - especially the current administration.

Your claim was that the banks assumed no risk. It looks like they assumed plenty.

The point was that Washington Mutual made mistakes and yes the deregulation to encourage lending came from governmment. Check out Barney Franks report on the state of the economy and Fanny and Freddie in 2007. "Everything is fine! Continue and as a matter of fact heat it up a little".

What were those picketers doing ouside the banks?

Edited May 8, 2010 by Pliny

[Pliny]

Wealth is power. Big Business already has profound political influence, both in the domestic and foreign fronts. Why wouldn't this increase? As for the backlash...that could well happen, but we don't trust in speculative corrective measures after the fact.

Wealth is indeed power which is why we grant only one agency the ability to use or delegate the use of force in society and that agency is government.

You are right about big business having profound influence on government today. This is wrong. Business must exist on it's own merits not on privlege from government.

[punked]

These are the products of your policies!

Greek bonds rated 'junk'

BBC

Spain downgraded as Europe debt crisis widens

AP

Europe debt crisis spreads to Portugal

AP

Britain confronts debt of Greek proportions

MSNBC

Enough is enough!!!! :angry:

All of these places elected the Socialist because the conservatives ruined the country. You can't blame greek debt on the socialist when almost all of it was run up by the Conservatives New Democracy party. The same with the other countries. People got tired of the Conservatives and how they ruined the country put the socialist in to address all the problems the conservatives created. Problem was none of them addressed it.

[bush_cheney2004]

....The same with the other countries. People got tired of the Conservatives and how they ruined the country put the socialist in to address all the problems the conservatives created. Problem was none of them addressed it.

You just contradicted yourself....

[WIP]

Still wide shut.

Look a little deeper. I would expect a government report to completly ignore it's role - especially the current administration.

Your claim was that the banks assumed no risk. It looks like they assumed plenty.

No, my point is that they are gambling with other people's money, not their own. That's one of the reasons why repealing Glass–Steagall was a bad idea. Commercial banks were free to use depositors money for their bets in newly created derivatives markets. The government role boils down to politicians bought and paid for by banks, insurance companies and hedge fund managers who go to Washington and change the rules to benefit the institutions that fund their re-elections and provide careers in between and/or after their political careers are over. The theory you have bought hook-line-and-sinker is that federal and state governments are telling Wall Street - the institutions that control over 30% of the total U.S. economy - what to do. That is the backwards story provided by corporate apologists who want to carry on with business as usual.

The point was that Washington Mutual made mistakes and yes the deregulation to encourage lending came from governmment. Check out Barney Franks report on the state of the economy and Fanny and Freddie in 2007. "Everything is fine! Continue and as a matter of fact heat it up a little".

I don't recall saying that Wall Street only buys Republicans, but what did the Bush Administration propose doing about Fannie and Freddie during their 8 years...besides bragging about the "highest rate of home ownership in history"? And what of the Republican majority congress from 1994 to 2006 -- was Barney Frank in charge during the Republican era?

What were those picketers doing ouside the banks?

Not sure which picketers you mean, but now that you mention it why weren't these right wing tea party activists taking part in the protest on Wall Street a few weeks ago? If they were really so opposed to the banking bailout, why are they never seen protesting against their big money benefactors?

[Shady]

All of these places elected the Socialist because the conservatives ruined the country. You can't blame greek debt on the socialist when almost all of it was run up by the Conservatives New Democracy party. The same with the other countries. People got tired of the Conservatives and how they ruined the country put the socialist in to address all the problems the conservatives created. Problem was none of them addressed it.

Labels don't matter. Policy does. Yes, in Europe, all parties practiced socialist policies to one degree or another. You just prove my point. Take a look at Europe punked. That's your utopia. Greece, Spain, Portugal, Britian, and possibly America under Obama, who seems to think European socialism is the way to go. National bankruptcy is what socialism, taxing and spending, and the so-called redistrubution of wealth leads to. No matter what side of the aisle participates in it.

And to the idiot who claimed America is to blame for Greece:

America never forced Greece to employ 60% of its workforce in the public sector.

America never forced Greece to pay public employees the equivalent of 14 months for 12 months of work.

America never forced massive salaries and pensions well above those exact jobs in the private sector, funded by tax payers in said private sector.

America never forced Greece to spend billions of dollars more than it had, each year for decades.

You're a complete idiot. Stop talking.

[Shady]

More wonderful news from another socialist paradise!

Venezuela annual inflation rate hits 30 percent

CARACAS, Venezuela (AP) - Venezuela's annual inflation rate has surpassed 30 percent after consumer prices surged in April.

The Central Bank and National Statistics Institute on Friday reported a 5.2 percent increase in consumer prices during April, driving up the annual rate to 30.4 percent.

President Hugo Chavez's government has been struggling against the highest inflation rate in Latin America and a weakening economy in general.

AP

[punked]

Labels don't matter. Policy does. Yes, in Europe, all parties practiced socialist policies to one degree or another. You just prove my point. Take a look at Europe punked. That's your utopia. Greece, Spain, Portugal, Britian, and possibly America under Obama, who seems to think European socialism is the way to go. National bankruptcy is what socialism, taxing and spending, and the so-called redistrubution of wealth leads to. No matter what side of the aisle participates in it.

And to the idiot who claimed America is to blame for Greece:

America never forced Greece to employ 60% of its workforce in the public sector.

America never forced Greece to pay public employees the equivalent of 14 months for 12 months of work.

America never forced massive salaries and pensions well above those exact jobs in the private sector, funded by tax payers in said private sector.

America never forced Greece to spend billions of dollars more than it had, each year for decades.

You're a complete idiot. Stop talking.

I actually look to Canada as the country I want. I don't want Socialism, I like a mixed system where the system tries to make the worse off people better off with out punishing the rest. Canada is great it just needs a little tweaking but it is the best country by far.

[Michael Hardner]

I actually look to Canada as the country I want. I don't want Socialism, I like a mixed system where the system tries to make the worse off people better off with out punishing the rest. Canada is great it just needs a little tweaking but it is the best country by far.

Hear hear. We need to sharpen our dialogue, and ensure that we don`t fall victim to lazy thinking. Those things will allow us to deploy resources to where they can do the most good.

[Pliny]

No, my point is that they are gambling with other people's money, not their own.

I was replying to your claim that the were not taking any risks. You did say that did you not?

That's one of the reasons why repealing Glass–Steagall was a bad idea. Commercial banks were free to use depositors money for their bets in newly created derivatives markets. The government role boils down to politicians bought and paid for by banks, insurance companies and hedge fund managers who go to Washington and change the rules to benefit the institutions that fund their re-elections and provide careers in between and/or after their political careers are over. The theory you have bought hook-line-and-sinker is that federal and state governments are telling Wall Street - the institutions that control over 30% of the total U.S. economy - what to do. That is the backwards story provided by corporate apologists who want to carry on with business as usual.

The Federal Reserve central banking system sets the monetary policy for the commercial banks. They set the interest rate and and the credit policy the banks follow. The Fed also advises govenrment on finaincial matters and suggests courses of action for government.

It is the ability to create "money" out of thin air in the form of loans and credit that is basically at fault here. The Pumping of the money supply by the Federal reserve and government fiscal policy are not set by the banks.

I agree the repeal of the Glass Steagall act was a contributing factor but it only brought forward sooner what would have eventually occurred later. The Glass-Steagall act did nothing to stop the recession under Carter. What role did the banks have in that one?

I don't recall saying that Wall Street only buys Republicans, but what did the Bush Administration propose doing about Fannie and Freddie during their 8 years...besides bragging about the "highest rate of home ownership in history"? And what of the Republican majority congress from 1994 to 2006 -- was Barney Frank in charge during the Republican era?

As a matter of fact Barney was in charge - took over in 2006. He did nothing to curb the highest rate of home ownership in history - in fact blocking any inquiries about problems. Two years later..kaboom.

Not sure which picketers you mean, but now that you mention it why weren't these right wing tea party activists taking part in the protest on Wall Street a few weeks ago? If they were really so opposed to the banking bailout, why are they never seen protesting against their big money benefactors?

The picketers were thr communnity activist groups the Greenlining Institute and ACORN. Shaking down financial insitutions to make loans to high risk borrowers for home mortgages and small businesses. I know that sort of thing gets tucked away and buried as fast as possible inthe manistream media but it's still there as a matter of record.

I know community activists and Unions are picketing Wall Street but it is govenrmnt that bailed them out. The correct target to picket is the Government which is where the Tea Party activists - not to be confused with comunity organizers - are picketing.

Edited May 9, 2010 by Pliny

[Shady]

Here's some more socialist absurdity infecting Europe.

Under Greek law, anyone in certain “hazardous” jobs could retire with full pension at 50 for women and 55 for men — including hairdressers who use a lot of chemical dyes and shampoos. In Britain, everyone over 60 gets an annual allowance to pay heating bills and can ride any local bus for free. That’s really sweet — if you can afford it. But Britain, where 25 percent of the government’s budget is now borrowed, can’t anymore.

The New York Times

These are the same type of policies that mainly the NDP continue to push. Larger public unions. Larger public union salaries. Larger public union pensions and benefits. Earlier retirements. Shorter work weeks. Longer paid holidays. Higher taxes to pay for it.

We even have idiots in this forum insisting that paid vacations for the elderly, poor, and children is a human right. Bubber is a big proponent of that. All of this nonsense has to stop.

[punked]

Here's some more socialist absurdity infecting Europe.

These are the same type of policies that mainly the NDP continue to push. Larger public unions. Larger public union salaries. Larger public union pensions and benefits. Earlier retirements. Shorter work weeks. Longer paid holidays. Higher taxes to pay for it.

We even have idiots in this forum insisting that paid vacations for the elderly, poor, and children is a human right. Bubber is a big proponent of that. All of this nonsense has to stop.

What are you talking about? The NDP in NS is the ONLY government who has tried to reform the public service freezing their pension for the next 5 years and forcing them to restructure their pension plan. You live in a fantasy world.

[Pliny]

What are you talking about? The NDP in NS is the ONLY government who has tried to reform the public service freezing their pension for the next 5 years and forcing them to restructure their pension plan. You live in a fantasy world.

You mean the NS NDP arer abandoning their socialist platfom?

[punked]

You mean the NS NDP arer abandoning their socialist platfom?

There platform was to balance the books and pay down the Conservative debt and they are doing just that. Maybe you would know something about it if you looked past partisan labels.

Edited May 9, 2010 by punked

[Michael Hardner]

You mean the NS NDP arer abandoning their socialist platfom?

In the 1970s, the NDP was calling for nationalization of industries. I think Layton was pushing for a corporate tax of 22%. Reagan cut corporate taxes to 34% in 1986 according to this CATO institute.

So taxes under Reagan were 55% higher than they would be under Layton the socialist.

The term 'socialist' has proven to be a relative term. Reagan would be an arch-socialist compared to Layton. Ike would be Stalin.