“I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to,” Mr. Obama said in a statement. “It’s a philosophy we’ve had for the last eight years – one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else.”THIS IS EXACTLY WRONG.
What causing the financial breakdown is the SUB-PRIME MORTGAGE CRISIS which was caused by banks LOOSENING THEIR LENDING PRACTICES TO MAKE IT EASIER FOR POOR PEOPLE TO BUY HOMES.
IOW: LIBERALIZING AND LOOSENING LENDING PRACTICES AND EXPANDING SOCIALISM.
We all saw the ungteen bazillion ads on TV: "No down payment necessary and poor credit... that's OK.!"
They lent money like there was no tomorrow. Only there is ALWAYS a tomorrow and that's when the fiddler must be paid.
(For Lehman and Merrill "tomorrow" was THIS PAST WEEKEND!)
SURE SURE SURE: there was a LOT of abuse - and not just on Wall Street: speculators and unscrupulous lenders and real estate dealers and developers took advantage of the loosened sub-prime rules and expanded sub-prime funds available and abused the hell out it. And this was a MAJOR factor. Along with declining home values. As speculators saw the home they bought (with no money down!) decrease in value THEY BAILED OUT, and accepted foreclosure. This would normally leave the lender on the hook, except these days all these sub-prime loans were subsequently bundled by the likes of COUNTRYWIDE and sold off - often as an instrument with no transparency - top folks like FANNIE MAE and LEHMAN: it was and remains nearly impossible for the holders of these loans/this "paper" to know with any certainty what it's now worth.
SO IT'S WORTHLESS.
Lehman has aid $60 billion for this kind of paper. Now it's worthless.
Screw 'em: I don't want my taxes to pay for their mistakes.
Lehman is the biggest investment bank failure since Drexel - which went out of business due to a thing called THE JUNK BOND.
Wonder why they called it a JUNK bond!?
'Cause it was JUNK. That's why the bond had to pay higher than market interest rates - because it was HIGH RISK. There was a HIGH risk that they bond might fail.
SO.... 18 years later and the biggest investment back on Wall Street goes bust due to a thing called SUB-PRIME - sub as in below safe risk.
That's why I say SCREW'EM.
So the market went down bigtime. I say: Big deal. It's now at levels not seen since 2006.
GEE: I don't remember any soup lines in 2006. We were doing just fine in 2006, financially. We'll do fine again - sooner than you think.
OIL is crashing.
This will put more money on ALL OUR POCKETS and decrease costs for thousands and thousands of companies and businesses.
And as a result of oil prices coming down to earth (they will hit $70 by Halloween), there are the stocks you should be buying NOW. Like airline stocks. Car stocks. Especially the battered ones.
REMEMBER: YOU GET RICH BUYING LOW.
And we are very near the bottom.
It's a good time to BUY!
JUST DON'T BUY THINGS CALLED JUNK OR SUB-PRIME!
AND JUST BUY WHAT YOU CAN AFFORD!
BTW: McCain got it RIGHT today:
Senator John McCain said that taxpayers should no longer be responsible for helping to bail out financial services firms that are in trouble.VOTE ACCORDINGLY.
“The taxpayers have already been burdened by the unexpected events at Bear-Stearns and the sadly predictable collapse of Fannie Mae and Freddie Mac,” he said, speaking at a one-quarter filled arena here.
“We believe the time has come and gone where the taxpayer should be viewed as the solution to the problems that are not of their making.”
But he cautioned against panic, given this weekend’s news that Lehman Brothers was filing for bankruptcy and the sale of Merrill Lynch, saying he believed the economy remained strong.
“There’s tremendous turmoil in our financial markets and on Wall Street,” he said. “People are frightened by these events. Our economy, I think still, the fundamentals of our economy are strong. But these are very, very difficult times. And I promise you we will never put America in this position again. We will clean up Wall Street. We will reform government.”
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