Posts Tagged ‘government’
The vote is history and the financial bailout has failed. As a follow-on to our article “Bailout Urgency Sounds Like Iraq War…” it is entirely possible that banks, mortgage companies, and investment houses do not want a bailout. They do not want the scrutiny. They do not want investigations, controls, and oversight. They do not want government involved in pay-related issues. However, they do want the money. Evidence? Consider the credit card bill of rights. Bankers oppose it.
In an article titled “They Gave Your Mortgage To A Less-Qualified Minority” we see the effect of Clinton-era changes. Did these changes set the stage for the subprime crisis? You be the judge, but the system was abused, and went well beyond minorities. “Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.
U.S. authorities spent $900 billion to prop up the financial system and housing market. Authorities may get much of that money back if asset prices do not slide further. The SEC finally woke up and stopped short selling of 799 stocks. I guess the original list of 19 was too shortsighted. The SEC wake-up call came one day after John McCain said he would fire the head of the SEC.
Financial woes spread to money market funds for the first time during this financial crisis. A $62 billion money market fund Primary Fund from Reserve on Tuesday saw its holdings fall below its total deposits, a condition known as “breaking the buck” that hasn’t happened to a money market fund since 1994. Money market funds are supposed to be conservatively invested and almost as safe as cash. Combined with a stock market loss of 450 points, something is clearly wrong.