CAPITAL REGION Counties bracing for tax impact Wall Street’s woes may add to budget shortfalls BY JAMES SCHLETT Gazette Reporter
The big question on Wall Street now is where more hurt will pop up next. All Schoharie County residents have to do to answer that question is look at their tax bills. Six months after the subprime mortgage crisis claimed investing banking behemoth Bear Stearns, it returned to Wall Street Monday to send Lehman Brothers into bankruptcy and Merrill Lynch & Co. into the hands of Bank of America. By the end of the chaotic day, which saw the Dow Jones Industrial Average down 504 points, William Cherry knew his job just got harder. “When the state is facing a fiscal crisis, inevitably the county is going to bear the brunt of it,” said Cherry, Schoharie County’s treasurer. As Wall Street’s troubles whittle away New York’s trove of taxable income, county and municipal governments are increasingly facing pressure to foot bills that the state can no longer afford to pay. In Schoharie County, that could equate to a 10 percent to 15 percent property tax rate increase — the county’s first increase since 2006. As Wall Street’s woes spread — now touching 30,000 workers at three investment banks — Gov. David Paterson said, “The world as we know it in finance is changing.” Workers at Bear, Merrill and Lehman received roughly 10 percent of the wages and 15 percent of the bonuses paid on Wall Street. Attempting to brace New York for shortfalls in tax revenues from Wall Street, Paterson last month called for 6 percent across-theboard budget cuts. Those cuts came on top of a similar but smaller spending reduction in March. “We’re seeing higher costs and lower revenues, and that leaves taxpayers caught between a rock and a hard place,” Cherry said. Taken together, Paterson’s cuts will result in an $800,000 shortfall in the $8.7 million in state aid Schoharie County officials had budgeted for this year. Experts worry that lawmakers from Main Street to the Capitol will prolong the state’s economic downturn by raising taxes, as they did in 2003 and the early 1990s. “The state’s financial outlook has gone from bad to worse,” said Edmund McMahon, director of the Manhattan Institute’s Empire Center for New York State Policy, a conservative think tank in Albany. Wall Street’s Monday tumult will likely have few direct impacts in the Capital Region. Lehman Brothers six years ago pulled out of the Albany market by closing its offi ce on State Street. Merrill has an office on South Pearl Street, but a Bank of America spokesman could not say what would happen to that operation. The Charlotte, N.C., bank, which is buying Merrill for $50 billion in stock, already has a banking and investment center at the Century Hill Plaza office complex in Latham. McMahon’s biggest concern about Albany was that legislators would respond “in the worst possible way”: a combination of tax increases and “ill-advised” spending cuts. He referred to Wall Street as the goose that lays golden eggs for the state; a goose lawmakers squeeze harder when the golden eggs stop coming. Rather than tax hikes, McMahon favors slowing growth for government spending and enabling local governments to better address their budgetary needs. He suggested making state laws less favorable to public employee unions and lowering expectations for school aid increases. “We don’t just need belt tightening. We need fundamental restructuring,” McMahon said. Between 2000 and 2003, Wall Street’s total wages fell from $48.7 billion to $38 billion as New York reeled from the dot-com bubble burst and the Sept. 11, 2001, terrorist attacks. By January 2003, the state was facing an $11.5 billion shortfall, which lawmakers attempted to tackle partly with temporary income and sales tax increases, according to Frank Mayo, the executive director of the Fiscal Policy Institute, a laborbacked think tank in Albany. “I don’t think we’ll end up where we ended up in 2003,” Mayo said. Unlike five years ago, when the state was facing a real multibillion shortfall, Mayo said the state is now facing projected shortfalls. While he said the state is proactively addressing the fiscal crisis, the extent of damage Wall Street can infl ict on New York is not certain. Back in Schoharie County, Paul Hogan was having a surprisingly quiet day at Fenimore Asset Management. Hogan is a research analyst for the independent investment advisory firm and he also co-manages its $100 million FAM Equity Income Fund. He had expected to receive many panicked calls from investors, but instead only received a few. Hogan remained optimistic that the stock market will rally again, as it did in the wake of Bear Stearns’ near collapse and the federal government’s seizure last week of mortgage giants Fannie Mae and Freddie Mac. Wall Street’s recovery from Monday “will probably take less time than people think.” “This is just one more step in a number of steps that have to be taken to fix the financial system. There will be more to come in the market, but the market will get through them,” Hogan said.
I think we (or any people) need to start writing letters to Kathy Rooney (County Manager), Sue Savage and Philip Hughes to start advising of specific places where we think they can cut the budget for next year that will not be a detriment to the residents of the county. This is especially true with the other article that was in the paper today.
Plan calls for $500B bailout Congress must act on financial rescue package
BY TOM RAUM AND JEANNINE AVERSA The Associated Press
WASHINGTON — Struggling to stave off financial catastrophe, the Bush administration on Friday laid out a radical bailout plan with a jawdropping price tag — a takeover of a half-trillion dollars or more in worthless mortgages and other bad debt held by tottering institutions. Relieved investors sent stocks soaring on Wall Street and around the globe. The Dow Jones industrials average rose 368 points after surging 410 points the day before on rumors the federal action was afoot. A grim-faced President Bush acknowledged risks to taxpayers in what would be the most sweeping government intervention to rescue failing financial institutions since the Great Depression. But he declared, “The risk of not acting would be far higher.” The administration is asking Congress for far-reaching new powers to take over troubled mortgages from banks and other companies, including purchasing sour mortgage-backed securities. Administration officials and congressional leaders are to work out details over the weekend. Congressional officials said they expected a request for legal authority to buy up the bad loans at a cost in excess of $500 billion to the government. Democrats were discussing whether to try to attach middle class assistance to the legislation, despite a request from Bush to avoid adding controversial items that could delay action. An expansion of jobless benefits was one possibility. In other major steps, the Treasury Department and Federal Reserve moved to give money-market mutual funds the same kind of fed- eral protection, at least temporarily, that now applies to savings and checking accounts and certificates of deposit at banks. Money-market accounts sold through retail banks are already FDIC insured. The spreading global selling panic had started to threaten some money-market funds, usually thought of as rock-solid investments. Administration offi cials feared a run on these funds, held by millions of Americans. “Every American should know that the federal government continues to enforce laws and regulations protecting your money,” Bush said at the White House. The 75-yearold Federal Deposit Insurance Corporation now insures savings and checking accounts and certificates of deposit up to $100,000. Separately, the Securities and Exchange Commission acted to block short-selling in financial securities. That is a trading method that bets the value of stocks will go down. It has been blamed for accelerating the plunge in stock prices of banks and other financial institutions. “This is a pivotal moment for America’s economy,” Bush said. “In our nation’s history, there have been moments that require us to come together across party lines to address major challenges. This is such a moment.” Congressional leaders of both parties welcomed the administration’s bold moves after a series of ad hoc rescues. The talk on the presidential campaign trail, barely six weeks before the election, was of bipartisanship, too. Democrat Barack Obama said it was critical that leaders in both parties work in concert. “Truly, we are all in this together,” he said. GOP presidential nominee John McCain said leaders should put aside partisan differences and “any action should be designed to keep people in their homes and safeguard the life savings of all Americans.” The federal government already has pledged more than $600 billion in the past year to bail out, or help bail out, some of the biggest names in American finance. That includes the rescue of investment bank Bear Stearns in March, the takeover of mortgage giants Fannie Mae and Freddie Mac earlier this month and the takeover of the world’s largest insurance company, American International Group, just this week. But the contagion continued to spread, bringing political consensus that drastic and comprehensive federal action was needed. There are precedents for such a federal takeover. In the late 1980s, the government created the Resolution Trust Corporation to tackle the savings and loan crisis. It acquired the defaulted mortgages, foreclosed real estate and other assets of nearly a thousand failed S&Ls, restoring order and stability to the system. Resolving that crisis took six years and $125 billion in taxpayer money — roughly equal to $200 billion in today’s dollars. And there was the Reconstruction Finance Corporation, a Depression-era relief program formed in 1932 by President Hoover that tried to revive the market by giving loans to banks and other businesses. On Friday, Treasury Secretary Henry Paulson gave few details about the structure of the new program. Asked about an overall price tag, he said, “hundreds of billions” of dollars. Congressional leaders said they were ready to move quickly but still needed details of the administration plan. For instance, there was no indication of what the government would get in return from financial companies for the federal assistance. Paulson and Federal Reserve Chairman Ben Bernanke briefed lawmakers in both parties on the idea by conference call Friday. In a session with House Democrats, they described a plan where the government would in essence set up reverse auctions, putting up money for a class of distressed assets — such as loans that are delinquent but not in default — and financial institutions would compete for how little they would accept for the investments, said Rep. Brad Sherman, D-Calif., who participated in the call. “You give them good cash; they give you the worst of the worst,” Sherman said of the plan, which he complained that Bush and his economic advisers were trying to panic lawmakers into rubberstamping.
Bailout could reach $700B Economic plan may top war cost BY LORI MONTGOMERY AND DAVID CHO The Washington Post
WASHINGTON — The Bush administration on Saturday raised the price tag on its emergency plan to revive the U.S. financial system, asking Congress for authority to spend up to $700 billion to relieve crippled financial institutions of their mortgage-based assets, a sum that would exceed the current cost of the Iraq war. Meanwhile, senior administration officials pressed their counterparts in Japan, Germany, the United Kingdom and elsewhere to establish similar programs to rescue their own troubled firms in what would be an unprecedented bailout of the worldwide financial system. The move comes in recognition of the fact that complex interconnections among financial institutions have created a global crisis that the United States cannot solve alone. An official at the Bank of England who spoke on condition of anonymity said the bank has been in constant contact with its U.S. counterparts to try to win a “global response to a global problem.” The European Central Bank declined comment. Congressional leaders responded positively to the administration’s rescue plan, though the price tag was $200 billion higher than they had been told to expect just three days ago. But House Democrats said they would push to include a number of contentious provisions that could make it difficult to pass the plan quickly, including limits on executive compensation for firms that unload their bad assets on the government and new powers for bankruptcy judges to modify mortgages on primary residences. Democrats also want President Bush to drop his opposition to a second round of federal spending aimed at stimulat- ing the economy. “Obviously, this is of direct benefit to some people in the financial industry,” Rep. Barney Frank, DMass., chairman of the House Financial Services Committee, said of the rescue plan. “We need to be talking about direct benefi ts to people who are not in the private sector.” BUSH DEFENDS PLAN President Bush, speaking to reporters during a White House appearance with Colombian President Alvaro Uribe, urged Democrats to set aside those demands. In talks with congressional leaders, Bush said he “found a common understanding of how severe the problem is” and the need for urgent action. “We need to get this done quickly and, you know, the cleaner the better,” he said. Bush also defended the size of the request, saying drastic action was needed because of the magnitude of the financial crisis, a cataclysm that started with bad mortgage loans to U.S. homeowners, spread to the banking and financial services industry and now is enveloping markets around the world. “This is a big package because it’s a big problem,” Bush said. “The risk of doing nothing far outweighs the risk of the package.” Bush, who campaigned as the nation’s first president with an MBA and a free-market advocate, also appeared to address complaints from conservatives that the plan inserts the government too much into the economy. “I’m sure there are some of my friends out there that are saying, ‘I thought this guy was a market guy: what happened to him?’ ” Bush said. “My first instinct was to let the market work, until I realized, upon being briefed by the experts, how significant this problem became.” FEW PAGES, BIG EFFECTS The proposal itself is just three pages long. But it lays out the most sweeping government intervention in the private sector since the Great Depression. In addition to $700 billion, the plan seeks vast new powers for the Treasury secretary to purchase mortgage-based assets from U.S.-based financial institutions over the next two years, to hire people to manage that portfolio and to issue regulations to stabilize the mortgage market as the secretary “deems necessary.” The measure sets no limit on how long Treasury could hold the assets, which must have been issued before Sept. 17. But the goal would be to sell them after housing prices recover and to earn back much of the money. To cover the cost of the program, Treasury would have to borrow $700 billion, a sum Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee, on Saturday called “breathtaking.” Over the past five years, Congress has appropriated just more than $600 billion for the Iraq war. The rescue package could exceed that in a matter of months. To accommodate the new debt, the proposal seeks to increase the legal debt limit to $11.3 trillion. The limit was last raised in July — to $10.6 trillion — when Congress gave Treasury Secretary Henry Paulson authority to salvage struggling mortgage finance giants Fannie Mae and Freddie Mac. The nation’s debt currently stands at $9.6 trillion. MAMMOTH HOLE AHEAD It is unclear how the new spending would affect the annual defi cit, which is already at near-record levels. Taken together with Treasury’s promise to spend up to $200 billion to keep Fannie Mae and Freddie Mac solvent, budget experts said the broader rescue plan could easily leave the next president facing a budget hole that approaches 6 percent of the overall economy, a tide of red ink not seen since the Reagan administration. At a meeting Thursday in the Capitol, administration officials told lawmakers that the bailout would cost about $500 billion, but they did not have a good estimate at the time, according to sources familiar with the matter. Final calculations were completed just before the proposal went to Congress. A number of other provisions were also in play, including whether the bailout should include securities backed by loans other than mortgages. In the end, Treasury decided to focus only on residential and commercial mortgages. Commercial mortgages have become a concern for regulators as the delinquency rate hit 8.1 percent at the end of June, the highest rate for any category of bank loans, according to the Federal Deposit Insurance Corp. The rate more than tripled from 2.4 percent at the end of June 2007, and the trend has already caused some bank failures. Treasury also considered permitting foreign firms active in the United States to participate in the program but decided instead to push other nations to rescue their own companies. Saturday, British Prime Minister Gordon Brown said his government would do “whatever it takes” to “sort out the financial system.” Brown said he realized earlier this week, when he was notified that Britain’s biggest lender, HBOS, was facing collapse, that “we are in a different world.”
How the Democrats Created the Financial Crisis: Kevin Hassett
Commentary by Kevin Hassett
Sept. 22 (Bloomberg) -- The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.
Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.
But really, it isn't. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.
In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.
The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.
Turning Point
Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.
It is easy to identify the historical turning point that marked the beginning of the end.
Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.
Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.
Greenspan's Warning
The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''
What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.
Different World
If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.
But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.
That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''
Mounds of Materials
Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.
But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.
Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.
Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.
There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.
Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.
(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He is an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)
To contact the writer of this column: Kevin Hassett at khassett@aei.org
GREAT article shadow. It just goes to prove, that 'we the people' (not me) voted in a democratic congress. Since then, there has been nothing but catastrophe after catastrophe. We are now ever closer to a socialist nation. Something the dems would feel quite comfortable with. If we want our children/grandchildren to grow up in the same country that we grew up in....there needs to be a change NOW! From the top all the way down. I hope it isn't too late, although I have my doubts. The reps aren't really doing anything exciting for me these days either.
The dems are truly the 'shadow party'. Just google it and come to your own conclusions.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Ben Stein, economist, author, former presidential speechwriter, and occasional actor is angry about the current economic earthquake that has rattled U.S. and global markets and he wants everyone to know.
He's particularly peeved with the $700 billion proposed Wall Street bailout and its architect, Treasury Secretary Henry Paulson.
In a CNN interview, Stein said Paulson should be "fired yesterday."
Paulson is a disgrace to the Republican Party and to his country, said Stein. Another target of Stein's ire is Wall Street itself.
Stein says he'd like to see President Bush on national TV "with Mr. Obama to his left and Mr. McCain to his right and say we are going to make sure that you Americans are going to stop being looted by Wall Street."
"It's a first-class disaster. The worst Treasury regulation of the economy in my lifetime. ... The effect of this on the ordinary investor and pre-retiree ... is just catastrophic for the free enterprise system."
John Gapper, the Financial Times columnist, has a simpler solution: Get Henry Paulson to give some money back.
"Mr. Paulson now declares himself shocked, shocked that structured finance was going on Wall Street but he was there at the time, and the $18.7 million bonus he received for the first half of 2006 presumably reflected it," he wrote on his FT blog.
"I wonder if, as a public gesture, Mr. Paulson might consider handing that bonus over to the Treasury’s fund and lowering the U.S. taxpayer’s bill by $18.7 million?"
Pentagon budget, disaster aid set to advance By ANDREW TAYLOR, Associated Press Writer
Monday, September 22, 2008
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Congress is scrambling to pass the Pentagon budget, aid for flood and hurricane victims and $25 billion in loans for Detroit automakers in a late-session burst of activity that's flying under the radar compared with efforts to bail out Wall Street.
-------------------------------------------------------------------------------- More News Stock futures lower ahead of hearing on bailout 09.23.08 Design changes unveiled for Lincoln penny 09.23.08 Alitalia hangs out For Sale sign 09.23.08 Democrats reject $700 billion blank check 09.23.08
-------------------------------------------------------------------------------- Funding for veterans health care and homeland security programs is also in the mix as Democratic leaders ponder what other items should catch a ride on must-do legislation to keep the government running beyond the Oct. 1 start of the 2009 budget year.
A stopgap bill must pass to avoid a government shutdown, so Democrats are viewing it as a locomotive to pull past a skeptical White House measures such as the automaker loan and a doubling of home heating subsidies for the poor.
Passage of the bill is complicated by the question of how much further oil exploration to permit off the U.S. coast. Democrats are seeking to attach a plan to open waters 50 miles off the Pacific and Atlantic coasts to oil and natural gas development, though only if the adjacent states agree to it.
Republicans and the White House want to completely lift current restrictions on coastal drilling, and President Bush' veto pen gives them the edge.
Discussions on the budget are far overshadowed by the ongoing debate over a $700 billion bailout plan for Wall Street. But the amount of money at stake — including a $488 billion Pentagon funding bill that hasn't seen a second's worth of public debate or review — is almost as great.
Details of the emerging legislation remain secret, but its outlines have come out in interviews with aides to both the House and Senate Appropriations committees, as well as aides to top House and Senate leaders.
The legislation is coming together in a remarkably secretive process in which decisions are concentrated in the hands of just a few lawmakers such as House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and House Appropriations Committee Chairman David Obey, D-Wis.
The unusual process means thousands of lawmakers' pet projects of the very sort blasted by GOP presidential nominee John McCain on the campaign trail would escape scrutiny, including up to $5 billion worth of such "earmarks" in the defense budget alone.
Congressional leaders hope to pass the budget legislation this week, but several issues remained undecided Monday. For starters, it wasn't clear how much the White House would be willing to accept.
Bush has threatened to veto bills that don't cut the number and cost of earmarks in half or cause agency operating budgets, taken together, to exceed his request.
While top-level congressional leaders haven't made final decisions, elements of the year-end budget package are likely to include:
_Stopgap government funding. Most federal agencies would see their budgets frozen at current levels for several weeks or even into March. Lawmakers want to avoid a postelection "lame duck" session, but fear the White House will force them to return to session in November in hopes Congress would approve a free trade pact with Colombia.
_Security-related budgets. More than $600 billion to fund the 2009 budgets for the Pentagon, Homeland Security Department and the Department of Veterans Affairs.
_Disaster aid. Up to $25 billion in emergency funding for victims of Gulf Coast hurricanes, midwestern floods and other natural disasters.
_Automaker loans. More than $7 billion is provided to subsidize $25 billion in loans to help the "Big Three" U.S. automakers retool their plants to build cleaner, more energy efficient cars.
_Heating subsidies. Democrats want to double the budget to $5.1 billion for a popular program providing heating subsidies for the poor.
Democrats were also weighing whether to try to add another extension of unemployment benefits to the year-end budget package. Another option would be to add the unemployment insurance coverage to a subsequent $50 billion-plus measure to stimulate the economy with infrastructure spending, aid to states and additional food stamp benefits.
-------------------------------------------------------------------------------- Where do they think that this money is going to come from to pay for this?
CNN Poll: Republicans blamed for financial crisis-
Posted on Monday, September 22, 2008 4:40:59 PM by Chet 99
WASHINGTON (CNN) – A new CNN/Opinion Research Corporation Poll suggests that by a 2-to-1 margin, Americans blame Republicans over Democrats for the financial crisis that has swept across the country the past few weeks — one factor that may have contributed to an apparent increase in Barack Obama’s edge over John McCain in the race for the White House.
In the new survey, released Monday afternoon, 47 percent of registered voters questioned say Republicans are more responsible for the problems currently facing financial institutions and the stock market, with 24 percent saying Democrats are more responsible. One in five of those polled blame both parties equally, and 8 percent say neither party is to blame.
What I find amusing is when Clinton was in office we had to hear all about the baseball strike in front of congress and now Bush in office we get to hear all about wallstreet and economic issues.......
who is watching the hen house?????
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
Somebody, the reason that people say it's the Republicans fault is because they are uninformed and listen to the politicians instead of researching the facts for themselves. The whole mess started when Bill Clinton was president when the lending rules were changed so that everyone could enjoy the American dream of owning a house. Some of us one this site are old enough to remember when it happened. The lending institutions got even more creative and started giving loans to people who should have never got a loan and the wonderful government didn't bother checking on anything that was going on in the financial community because they needed money from them for their campaigns. There's enough blame to go around for both parties and both Presidents.
FBI investigating companies at heart of meltdown By LARA JAKES JORDAN, Associated Press Writer 18 minutes ago
The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.
Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation.
The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official said.
The law enforcement officials spoke on condition of anonymity because the investigations are ongoing and are in the very early stages.
Officials said the new inquiries bring to 26 the number of corporate lenders under investigation over the past year.
Spokesmen for AIG, Fannie Mae and Freddie Mac did not immediately return calls for comment Tuesday evening. A Lehman spokesman did not have an immediate comment.
Just last week, FBI Director Robert Mueller put the number of large financial firms under investigation at 24. He did not name any of the companies under investigation but said the FBI also was looking at whether any of them have misrepresented their assets.
Over the past year as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. Mueller has previously said the FBI's hunt for culprits in the nation's subprime mortgage crisis focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.
The investigations revealed Tuesday come as lawmakers began considering whether to approve emergency legislation that would give the government broad power to buy up devalued assets from troubled financial firms.
The bailout proposed by the Bush administration is aimed at helping unlock credit and stabilize badly shaken markets in the United States and around the globe.
In the past two weeks, the government has taken over Fannie Mae and Freddie Mac, the country's two biggest mortgage companies, with a bailout plan that could require the Treasury Department to put up as much as $100 billion for each of them over time if needed to keep them afloat as mortgage losses mount.
Last week, the Federal Reserve provided an emergency $85 billion loan to AIG, which teetered on the brink of bankruptcy. Lehman Brothers was forced to file for bankruptcy after attempts to engineer a private rescue fell apart. All the companies were laid low from bad bets on complex mortgage-related securities.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke made the joint decision last week that the only way to stop the carnage was to deal with the root cause of all the troubles, billions of dollars of bad mortgage debt sitting on the books of major financial companies. This debt has triggered the worst credit crisis in decades, causing credit markets to essentially freeze up despite the fact that the Fed joined with major central banks around the world to pump billions of dollars of reserves into the financial system.
Additionally, the FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud. Countrywide Financial Corp., formerly the nation's largest mortgage lender and now owned by Bank of America Corp., is also under scrutiny.
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