“In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street’s most storied firms, Merrill Lynch & Co. and Lehman Brothers Holdings Inc., headed toward extinction. New York-based Lehman, founded 158 years ago, said early today that it filed for bankruptcy protection after failing to find a buyer. Merrill Lynch, 94 years old and also based in New York, agreed to sell itself to Bank of America Corp. for $50 billion in an emergency deal hashed out yesterday,” according to Bloomberg.com.
Will the Republicans finally admit that our national economy is in major trouble?
“The five New York-based securities firms that dominated Wall Street have been reduced to two: Goldman Sachs Group Inc. and Morgan Stanley.”
That sure sounds like a mess to me! Why didn’t any of this happen on President Bill Clinton’s watch? Why didn’t the Democrat controlled Congress see this coming? Why did President George W. Bush drop the ball? And how are Barack Obama and John McCain going to reverse this mess?
*”Palin by comparison..” The huberus of John McCain in thinking he could simply pick Caribou Barbie…to run our economy in the event of something going wrong with him was ridiculous! What is she going to do…”have a bake sale!”?
Art, you are spot on…..Who would have thought that Lehman Bros., AIG
and all the biggies on Wall Street would be biting the big weenie! The boys
at Merrill Lynch were at least smart enough to bale while they had a prayer.
This all goes back to what we were saying about “Freezing rates” for all home
and commercial loans for the next five years. If they do….they will lose only’
about 40% of their capital. If they don’t…they may lose it all.
*The answer to your question about why it didn’t happen on Bill and Hillary’s
watch is simple. It started with them….but the economy didn’t hit “critical
mass” until 2006! In a huge 6 Trillion dollar economy….per year….only when
they kept inflating the Real Estate Market artificially..by selling million dollar
homes to kids just getting out of college..and lending them sub-prime inflatible
loans…..did that big bubble burst with over 6 Trillion in Hedge Fund pyramid
scheme money – based on nothing but hot air! It was a locomotive moving
down hill and Fed Chair Alan Greenspan was the worst offended!
To me the question is more fundamental. When will we admit that deregulation is inherently flawed and must be abandoned.
I believe that we need a strong federal government not only for external defense but also for internal regulation.
Well said, anonyms, very well said.
I ran across a Jefferson quote the other day that I hadn’t heard, and I hadn’t even had time to see if it was real (Jefferson’s like the George Carlin or Robin Williams of the pre-internet age insofar as everyone claims he said things he didn’t…)
But if someone can help me, it was something like, “Government exists to protect the people from the excesses (abuses?) of the moneyed interests.” That is something I believe, and it would be nice to have a quote from the big guy backing that up.
Some folks on the right, including on this blog, seem to believe that the most important freedom, outweighing all other freedoms, is unlimited economic freedom. I think that’s sick, but that’s the nettle we gotta grasp if we’re ever gonna change these people’s mind on anything.
Just who is Franklin Delano Raines?
He happens to be the former chairman and chief executive officer of Fannie Mae.
On December 21, 2004 Raines accepted what he called “early retirement” from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities.
He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses
In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $50 million in payments made to Raines based on the overstated earnings initially estimated to be $9 billion but have been announced as 6.3 billion.
Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused.
On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie’s insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options.
Raines also gave up an estimated $5.3 million of “other benefits” said to be related to his pension and forgone bonuses.
An editorial in The Wall Street Journal called it a “paltry settlement” which allowed Raines and the other two executives to “keep the bulk of their riches.”
In 2003 alone, Raines’s compensation was over $20 million.
He is now one of Barack Obama’s economic policy advisers….
Nuff said.
Hell yeah, this way we know what your crooks are coming up with.
Obama, like McCain, has a few lobbyist friends. They all do. That’s how the game is played.
Everyone, I have been doing some research and I am happy to report that it’s all going to be ok.
Barack Obama had this to say this morning: “Too many folks in Washington and on Wall Street weren’t minding the store.”
Sarah Palin said this: “Washington has been asleep at the switch, and management on Wall Street has not run these institutions responsibility.”
Phew! For a second there I thought we were in real trouble, but after reading these quotes from our major party candidates, I’m feeling a whole lot better now.
With candidates like these, I can assure all of you it really doesn’t matter whether the Republicans or the Democrats win because the big winners this November will be the American people.
Ya gotta love all the finger pointing in the wake of this economic collapse.
Here’s the thing, folks; there are SO many places you can point, SO many people involved, SO many powerful interests with their fingers in this, that we’re at the point where the American people, collectively, need to do a little looking inward (something we suck at) and start sharing the blame. The truth is there are far too many people in this country looking to make a fast buck. We want it all and we want it now. It’s time to address the behaviours that are causing tech bubbles and housing bubbles to burst.