The clip above shows Franklin D. Roosevelt campaigning for the US presidency in 1933, using eerily familiar rhetoric. The clip opened the second portion of last week’s episode of The Explainer (which you can watch on YouTube), which focused on the Great Depression (in it, I asked my guest to expound on his blog post, Smartly protectionist). The Great Depression has provided a lot of grist for the mill in recent years, for example see A history lesson from the Great Depression – How the World Works – Salon.com
Today, I was going to focus on what’s going on in America but I’m down with the flu so it will have to be for next week.
For the past couple of weeks watching Bloomberg’s been a riveting experience as experts try to grapple with the goings-on in markets in the US and elsewhere. Non-experts, too: Question for a Management Class makes for quite interesting reading.
On the eve of the US House of Representatives voting on the bailout, a group of American economists released an open letter calling on representatives to reject the bailout plan. Columnist Will Hutton in The Guardian pointed out the argument at the heart of the economists’ opposition (and, by all accounts, among US voters who had House Republicans spooked about a popular backlash if they voted for the White House-proposed bailout plan):
And although some conservatives in Britain and America continue to make the ideological case against any government action as a response to the recent turmoil – governments necessarily do everything worse than the market – they have no alternative proposal about how to restore trust once it has gone. Trust is a reciprocal relationship, dependent upon a desire to be considered decent and honourable. Even in the dog-eat-dog financial markets, trust and integrity are matters of self-interest. However amoral you may be, it is in your interest to care about your reputation, because if you behave badly you will not do business with me – or others – on favourable terms again.
But the scale of the personal rewards now available in London and Wall Street – £15m-£20m at the top is the norm – along with the greed-is-good doctrine associated with extreme laissez-faire economics, has trashed the need for individuals to worry about integrity. They don’t need to be concerned about their reputations; they just need one deal or one year at the top and they need never work again. The incentive structure has so departed from one of the principal norms of fairness – proportionality between value added and reward – that it has eviscerated trust relationships and integrity.
Everybody tries to ‘game’ the system on their route to vast personal fortunes – whether short-selling, packaging up dud mortgages as prime mortgages or telling lies about their financial viability – and the result is that the system is getting wise. The best course today in any financial transaction is to presume zero integrity. Credit is drying up and with it the very lifeblood of the economy.
Worse, now that the system is in trouble, financiers are turning to taxpayers in the US and Britain for help without understanding the other key principal of fairness – that we will consider helping those who for no fault of their own get into trouble, but not those who freely created their own bad circumstances.
Hank Paulson certainly acted decisively in launching his plan, but the former Goldman Sachs CEO, who negotiated a special exemption from tax when he took the job, like his former Wall Street colleagues is not well endowed with the fairness gene. It polluted the very design of the scheme.
He knows that unless the US government does something comprehensive, the entire financial system is at stake, but his original plan was designed to bail out the system intact. It made no demands that any financial executives sacrifice pay or bonuses despite having driven their firms and wider economy to the point of bankruptcy. He does not want the government to provide new bank capital to help recapitalise a bust banking system. Instead, he wants the government to buy their toxic debt and so leave the banks unreformed. On top he wanted complete discretion to act as he chose without any oversight.
American economists of every persuasion signed a joint letter complaining not at the aim of the bail out, which is plainly vital, but for its lack of fairness. Conservative papers and politicians echoed the complaint. Suddenly, Wall Street is coming back to earth. The transactions from which it skims such riches are built on the savings of ordinary Americans to whom it has obligations, as it has to other Wall Street firms. What we know now about the yet to be agreed compromise is that Paulson has accepted Congressional oversight, will offer direct help to distressed US homeowners as well as banks, and will accept some constraints on the worst excesses of executive pay.
But the core proposal remains. The government will buy toxic debt rather than inject government funds into the banks’ capital base, in other words, reject even partially nationalising the entire US banking system as the Swedes had to in 1992. I don’t know – nobody does – whether the Paulson plan would be sufficient or whether ultimately the Americans will have to go for nationalisation. What I do know is that unless there is a radical and government-led change in ownership, structure, regulation and incentives so that the principles of fairness are put at the heart of the Anglo American financial system – proportionality of reward and fair distribution of risk – there is no chance of the return of trust and integrity upon which long-term recovery depends.
In the end the House of Representatives rejected the White House plan. FT.com / In depth – House rejects US bail-out bill, stitched the news together with failures and rescues in the UK, Benelux and Germany; and in House to Wall Street: Drop dead – MarketWatch says the Republicans were the ones who blinked:
Republicans voted against the bill by a two-to-one ratio, and in the process rejected their own leadership, who had worked for nearly a week to craft a bill that could gain a majority. Nearly 100 Democrats also voted against the bill, spurning their leadership.Many Republicans in the House were never persuaded that the credit crunch in the financial system is an impending disaster deserving of taxpayer aid. Politicians who had cut their teeth on free-market principles couldn’t accept the idea that the federal government should back up the banks who had foolishly bet everything on the housing bubble.Or they didn’t want to face the voters in six weeks and explain why a Republican would vote for the biggest government bailout ever.
In his blog, Howard Lindzom put it bluntly:
The market has been demanding a large scope bailout plan for weeks. The market has been chewing through financials one by one until it gets what it wants.
Let’s not kid ourselves, the markets are rigged. The bailout is a wimpy ass way to deal with the problem for sure, but a $1.2 trillion loss in market cap was just TODAY’s tradeoff. The market wants some extra rigging short-term and a meltdown is/was the trade-off.
The people in Washington know very little about a lot of things. That is their specialty, their claime to fame. They know shit ass less than nothing about the stock market and the MOOD of America that matters (money). Today, you saw what a bad mood can bring from traders. Tomorrow and for the next week you will see what panic brings as the selling accelerates.
This crisis though is not about the stock market, it is about THE CREDIT MARKETS. There is NO access to capital. We are shut down for business. Way worse than after 9/11 when the markets were closed. At least than, we were out shopping at the request of our President. Now we are just deer in the headlights at the whim of the House of Reps and Congress and Senate who just seem out to punish the rich. Bullshit politics. Everybody has a chance to be famous. They are really punishing everybody else.
The FED is out of bullets and we have absolutely zero leadership or hopes of any leadership soon.
On that sobering note, as the New York exchange plunged (777 points), and then Asia, too (biggest drop since 1987), An analyst on Bloomberg dryly said, “Cash seems to be the safest place to put your money now.” Commodity prices had their biggest drop in 52 years (since the index began). The Australian Prime Minister issued a statement appealing to the US Congress to pass the emergency measure, a sentiment echoed by the Japanese Finance Minister.George W. Bush will address his countrymen shortly before the markets open on Tuesday.
This seems a colossal game of “chicken,” with political leaders answerable to voters pitted on a collision course with financiers normally dismissive of nations, sovereignty, etc., demanding a bailout from the political leaders, otherwise everything comes crashing down. It’s interesting that as today wore on, the analysist began to speak rather confidently of the bailout being passed by the end of the week.
The Republican nightmare is obviously straight out of the Hollywood version of populist Huey Long’s barely fictionalized movie biopic, All the King’s Men:
Here at home, people have been nervous ever since insurance giant AIG ended up being taken over by the US government to prevent its collapse. See Business – Are my Philam investments safe? in INQUIRER.net
There are also concerns, now, over the possibility of bank runs and to head off potential panic, the Central Bank has tried to make soothing noises. See Business – How safe is my money in the bank? also in INQUIRER.net
Salve Duplito, who authored the two articles above, then goes on to point out that instead of hand-wringing, some sober planning is in order for ordinary people: Money Smarts » How are you dealing with the crisis?
As for the economists, Nouriel Roubini takes a kind of grim satisfaction in not turning out to be a Cassandra (see The Worst Financial Crisis Since the Great Depression and the subsequent The Shadow Banking System is Unravelling:Such demise confirmed by Morgan and Goldman now being converted into banks) while Roubini then looks at the proposed 700 billion dollar bailout plan and compares it to other bailouts in the past: Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks
Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalize the banking system. Such recapitalization — via the use of public resources — can occur in a number of alternative ways: purchase of bad assets/loans; government injection of preferred shares; government injection of common shares; government purchase of subordinated debt; government issuance of government bonds to be placed on the banks’ balance sheet; government injection of cash; government credit lines extended to the banks; government assumption of government liabilities.
A recent IMF study of 42 systemic banking crises across the world provides evidence on how different crises were resolved. First of all only in 32 of the 42 cases there was government financial intervention of any sort; in 10 cases systemic banking crises were resolved without any government financial intervention. Of the 32 cases where the government recapitalized the banking system only seven included a program of purchase of bad assets/loans (like the one proposed by the US Treasury). In 25 other cases there was no government purchase of such toxic assets. In 6 cases the government purchased preferred shares; in 4 cases the government purchased common shares; in 11 cases the government purchased subordinated debt; in 12 cases the government injected cash in the banks; in 2 cases credit was extended to the banks; and in 3 cases the government assumed bank liabilities. Even in cases where bad assets were purchased — as in Chile — dividends were suspended and all profits and recoveries had to be used to repurchase the bad assets. Of course in most cases multiple forms of government recapitalization of banks were used.
But government purchase of bad assets was the exception rather than the rule. It was used only in Mexico, Japan, Bolivia, Czech Republic, Jamaica, Malaysia, and Paraguay. Even in six of these seven cases where the recapitalization of banks occurred via the government purchase of bad assets such recapitalization was a combination of purchase of bad assets together with other forms of recapitalization (such as government purchase of preferred shares or subordinated debt).
In the Scandinavian banking crises (Sweden, Norway, Finland) that are a model of how a banking crisis should be resolved there was not government purchase of bad assets; most of the recapitalization occurred through various injections of public capital in the banking system. Purchase of toxic assets instead — in most cases in which it was used — made the fiscal cost of the crisis much higher and expensive (as in Japan and Mexico).
Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit — at a huge expense for the US taxpayer – the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy.
Others have tried to translate the amount in human terms:CJR: What Can You Buy For $700 Billion?
It would reimburse banks, home owners, and local governments for nearly 9 million foreclosures – It could prevent over 200 million foreclosures – It could buy 8.6 billion monthly Metrocards – The government could rebuild Katrina-ravished New Orleans and Gulf Coast… three and a half times – Roughly 538 Yankee Stadiums could be built – 5.4 million students could be sent to a public university – It equals nearly 520 times the amount of Amtrak’s current operating budget – It is $14 billion more than the U.S. spent during the Vietnam War
Another economist, Carsten Hermann Pillath, offers up an approach based on evolutionary economics and cultural science, bringing up game theory and the prisoners’ dilemma (see The financial crisis: a humble evolutionary economist’s perspective).
Over at Left Flank, you can find links to scientists weighing in with their efforts to relate the financial news with Chaos Theory! See Black Swans and Charlatans.
Jeff Jarvis, in Stewardship v. ownership of our news, money, and society took a cue from the unfolding crisis and criticizes mainstream media and it’s efforts to control how their content is processed, used, and redistributed on the World Wide Web.
The political fallout, if any, is something else, altogether. I’ve been silent for some weeks because I’ve been trying to get beyond simply reacting to the news, and instead, trying to make sense of where we are and where we ought to go; I’ll attempt to start piecing my thoughts together when I’ve recovered from the flu.
forget it vic. USAmericans are averse to high taxes and would rather pay expensive private insurance.
incidentally, do have to pay for your prescription medicine in Canada? In the UK the doctor gives you your prescription, you go to the pharmacy, they give you the ENTIRE dose for a flat rate (free if you can’t afford it.)
the first time I got sick, i thought this was really good. often, in our beloved country, under-dosing or going on a 3-day antibiotic treatment rather than 5 days..etc.. is a problem because sick people cannot afford to pay for the complete dose..
ah socialism, when it works, it really is good. 😀
ps. the prescription charge is £7.10 regardless of whether the doctor prescribed you combantrin or 7 weeks of viagra…(kaya sulit pag mahal yung gamot) and around 2/3 or more are exempt from this charge…
Vic,
of course I am very familiar with canadian healthcare. we do service many canadians during the winter seasons for hip replacements, open heart surgery and other major surgeries. Canadians travel to US to seek medical care in frustration with the limitations of their own healthcare system. Canadian healthcare has also been criticized on waiting times, 4 weeks for surgery and 4 hours in emergency, shortage of medical professionals and 40% less pay than nurses in the US, and restrictions on privately funded insurance.
If US will change its healthcare policy then pinoy medical professionals may suffer 30% cut of salary. ouch… 🙂 how can pinoy send money to Philippines…
Not now Not Obama
Talking about Medical Tourism. This is another area of growth for Philippine government to have a Medical City to cater major surgeries and long term care. I am positive that Filipinos are superior in the medical field in Asia.
The location should not be in the city but it should be in the province with an international airport ready. This medical facility will contain all the infrastructures needed for a medically ill person to recuperate. Clean unpolluted air surrounded with nature ,either mountain view or ocean front facility will attract foreign healthcare recipients , insurance companies and investors ( pharma co.)
Employment will now be generated. I will not recommend this Medical City for profit or privately owned. It is not good for the country. The profits made by the government will supplement the rest of the country’s public healthcare needs.
Gloria, Start doing your job to attract the baby boomers in the world to Philippines New Medical City. 🙂
just a suggestion….am sure CVJ will look into this and blog about it.. please.
nash, prescription drugs in Canada is Free while in Hospital care and covered by a different Drug Plan for maintenance and outpatient for those who can not afford them, like welfare recepients, the disabled, Seniors are always Free, while those that are gainfully employed are on their own, but most have some kind of a very Generous Extended Insurance Benefits compliments of the Employers and for those with unionized labour it’s Home Free.
Leytenian, we are aware of the Limitations of the Universal Health Care, but the waiting period for non-emergency, selective surgery is understandable. and those who can afford can always go south and pay on their own, since they can not Jump the Line in the So-called we are Equal Society (the advantage of being Rich still), but It is still debatable if health care workers in the U.S. is really making 40% more than their counterparts in Canada. Many doctors who moved during the cutbacks during Premier Harris tenure are now back here when the found out the Grass is not always greener on the other side. my two siblings are also Doctors in New York and they said they are not making any more than doctors in here..they were here before. so maybe it depends your practice..but for Average Working Man Like Me, and for those who can not afford to make a living, the disabled, the Seniors, the minors, I prefer our System anytime, despite its limitations..
nash, every prescription drug, prescrbed is covered by extended care…deductible varies, most unionized labour will just pay a toke of $1 per prescription, regardless of amount to the maximum of 20% of the total.
Lead painted toys, colonial mentality….
Those were Mattel toys, ask for an old barbie doll and look were it’s made. They were made in the philippines.
remember most US companies had factories here before they moved out, we had mattel,reebock ,Johnson and Johnson,etc.
@vic
is it also because they work more than 38 hours a week that usa nurses earn more?
i have cousins who have regretted moving to the usa because of the long working hours. apparently, they also don’t get the normal 4-5 weeks paid holidays.
Please read Pat Buchanan’s “Day of Reckoning”.
http://www.humanevents.com/article.php?print=yes&id=28743
nash: yes, people in USA work more than 38-hour workweeks. Translation: many people in America have two jobs (including commercial airline pilots who also are NFL football referees; public school teachers who tutor on weekends; accountants who do tax-prep come January-to-May).
That Pat Buchanan article contains nonsensical thoughts. How can Buchanan say this one? “…Had the politicians of both parties not coerced and pressured banks, S&Ls, Fannie Mae and Freddie Mac to make all those sub-prime mortgages, then to tie this rotten paper to good paper, convert it into securities and sell to banks all over the world, there would have been no global financial crisis. “
Coerced the banks? The politicians did not know then (and neither did mayors, governors, Dubya nor Dick Cheney and not even half the financial analysts and University accounting professors)…. and they do not fully understand still (witness the various solution-proposals) how these “toxic derivatives” worked.
Allen Greenspan’s Feb. 23, 2004 speech at the National Credit Union Association in which, as Chairman of the Fed., Greenspan said:
“American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. ”
and
“Indeed, recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages…”
…Regarding interest rates, in February 2004, Greenspan highlighted the evolving trends in the mortgage industry and said “there are lots of innovative programs, especially targeting low-income and first time buyers.” He went on to suggest that homeowners could save thousands of dollars by switching from fixed-rate to adjustable rate mortgages.
For the stupids in the U.S. you have basically three types of mortgages in the U.S. Adjustable rate mortgages, Fixed rate and Jumbo mortgages.
Jumbo mortgages are those that are above the threshold of Fannie Mae’s secondary benchmark buyout limit. This was just raisedd recently.
Yes it was the maven Greenspan that lowered the overnite to 1% and was warned about the impending ballon in real estate but he simply reffered to it as froth. Being a market ideologue he felt it was not the job of the FED to regulate and control bubbles. He also spoke about the conundrum in the spread between short term and long term rates that were narrowing instead of widening.
Since there was a huge savings glut there was a need to support them with new products that offerred better yields.
The history of the marekets from 2001 till today are worth looking into.
Buchanan has a way of characterizing his writings in strong language but the susbtance of what he said is true.
Greespan is a strong believer in the dogma that people always act rationally for their own self interest.
This in a country where you have massive stupidity about the basics of finance when it comes to credit.
The obsrvation of the prvious pundit proves it to be true.
The Fed lowered rates in 2002-2003 and from 2004 started the process of higher rates that caused the massive market correction….
All those mortgages or equity loans that were not fixed naturally corrected as well….
What a royal fuck up that was announced everyday in all the media relative to the movement of interest rates.
Hey stupids of the world it is the government that sets the price for credit (money) for the short term. From the start of the GWOT the U.S. also has had to spend more than it collected to fund its budget deficits.
The advice of W to the American people on the GWOT, keep on shopping and show the terorrists that they cannot intimidate the American people.
After almost a trillion later America is in a credit crunch and will take the world economy down with it.
Spend spend spend even if you are not spending money you do not own….
Correction
Last sentence should read :
“spend spend spend even if you are spending money you do not own.”
UP N,
The democrats coerced the bank to make subprime mortgages during the Clinton administration-The Community Reinvestment Act. In order to make loans and homes more affordable for lower income borrowers the unusual loan products were developed. Interest only, Option ARM, and the low teaser rate products were answers to helping people who did not otherwise qualify get a home, as REQUIRED by CRA. These low standards for qualification were applied to everyone who wanted a mortgage.
The Clinton Administration rewrote the CRA to REQUIRE loans be made to low credit quality borrowers. And engaged FANNIE and FREEdie to buy these loans.CRA is not a loan program. It sets numerical targets for lending by location, race, and ethnicity. CRA often required lending to uncreditworthy persons to get a satisfactory CRA rating, and it did indeed cause Freddie and Fannie to take on huge amounts of dreck.
Barack Obama has been talking a big game over the past week about his concerns for Main Street, but he actually played a key roles in an organization that contributed significantly to the financial crisis. Google search ACORN and the role of Obama as an ACORN organizer in Chicago.
In 2008, economist Stan Liebowitz wrote that the CRA encouraged a loosening of lending standards throughout the banking industry despite warnings of default. Banks were allowed to loan to consumers who were not credit worthy with “no verification of income or assets; little consideration of the applicant’s ability to make payments; no down payment.” According to Liebowitz, the chief executive of Countrywide said that in order to approve minority applications, “lenders have had to stretch the rules a bit”
and Now Obama will CHANGE healthcare? what’s wrong with his WELFARE. America cannot afford to provide welfare for everybody that takes advantage of the system… America is sick and it will not only catch the flu but fever.
I’m hoping that all pinoys who works in America will wake UP. We all know that most Pinoys do not understand welfare because we were not exposed nor even received welfare when we where in the Philippines. We came to america to work not because we will vote for the democratic party to receive WELFARE. hay naku…. 🙂
Greenspan is the worst, add CRA, add ACORN, add the jumbo loans and increase of Fannie’s conforming loans, add wall street, add china’s money , Gramm leach Biley , add america’s dream to own a home and it’s lavish lifestyle.
CRA, ACORN, Obama, Democrats and the Housing Market Crisis:
http://www.theminorityreportblog.com/blog_entry/blue_collar_muse/2008/09/27/cra_acorn_obama_democrats_and_the_housing_market_crisis
Mga pinoys in amerika… you don’t belong to the welfare side of the equation. our role is to send money to the Philippines…
here’s Obama and ACORN Fraud:
http://www.youtube.com/watch?v=qQtTuO8Bzj8
ACORN Accused of Electoral Fraud:
http://www.youtube.com/watch?v=0nbD18WMXA8&feature=related
OBAMA ACORN SCANDAL BAILOUT COMMUNITY ORGANIZER VOTER FRAUD:
http://www.youtube.com/watch?v=Dz5G_E9Hj54&feature=related
Obama’s ACORN = Voter Fraud & Mortgage Crisis
http://www.youtube.com/watch?v=0VMfLP3dt30&feature=related
so mga pinoy… parang si Gloria din tong si Obama.. may voter fraud…
seems like leyetenean is very much n to links , I counter her /his link with another links just in the spirit of fair airtime in this blog.
http://politicalticker.blogs.cnn.com/2008/10/03/obama-gains-in-nh-maintains-lead-in-pa/
leytenian: the most prevalent voter-fraud in USA are those tricks to disenfranchise the WEALTHY (e.g. by asking for documents that the rich do not have; by phone-banks that trick the rich to go to different precincts where they are not registered or by telling the rich that they can’t vote because their precinct has run out of forms; by “purging” the voters registration documents at precincts).
and leytenian: when all is said and done, Mccain’s biggest problem is that he is a Republican who wants to deregulate – deregulate — deregulate . Republican — who thinks the only way for creating jobs is to give tax-breaks to corporations. Republican — like Dubya and Cheney.
Gramm Leach Biley to Deregulate was signed by Bill Clinton in 1999. McCain voted yes on that Bill. Majority votes made deregulations into law not just McCain..
Community organizer Obama Sued Citibank Under CRA to Force it to Make Bad Loans. In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink.
http://www.youtube.com/watch?v=exxVZTKq1vA
“Obama’s legion of loyalists owe much to the CRA (Community Reinvestment Act) and ACORN (Association of Community Organizations for Reform Now)and LA RAZA. These organizations have the most responsibility for sending the American economy into the toilet. All are communist/socialist inspired acronyms with deep ROOTS in Marxism.”
You, go, girl, Leytenian. Passionately taking the cudgels for the McCain/Palin ticket and doing a good job. Mention also the Ayers, J. Wright, Pfelger connections, the Annenberg Challenge, Southside Chicago community organizing like ACORN, etc. And while doing so, link to videos showing the congressional hearings in 2003 and 2005 where out of the mouths of the personalities involved including Raines, the fate of those directly responsible ought to be sealed.
More power!
*******************************************
“For the stupids in the U.S. you have basically three types of mortgages in the U.S. Adjustable rate mortgages, Fixed rate and Jumbo mortgages.
Jumbo mortgages are those that are above the threshold of Fannie Mae’s secondary benchmark buyout limit. This was just raised recently.”-hvrds
Whoa, please go easy with the criticism, sir.
Though indeed there are two basic mortgage types – fixed and ARM, there are also hybrids like say the 5/1 ARM which is a combination of fixed and ARM. And there are many combinations out there.
Jumbo is not a kind of mortgage it is a type of loan. Loans are either conforming or jumbo, the latter you described rightly. The former being those falling under those that Fannie and Freddie can entertain.
You’re welcome, sir.
Blaming a law that was passed in 1977 [aka the ‘Community Reinvestment Act’ or CRA) for the current crisis is a red herring and factually erroneous:
Add to that the fact that the magnitude and domino effect of the crisis is due to the trading of derivatives which are ‘financial innovations’ by the banking [aka ‘private’] sector…
Read the rest here.
now, now ,do not confuse welfare with healtcare.
Welfare is the program of the US providing cash assistance like under the General Relief Program, Food stamps for people under low income brackets and Wic program–an assistance to women, infant and children,
there is also the low cost housing assistance which is managed by the government thru non profit agencies.
i worked in the non-profit which basically help these poor people n their basic necessities.
The healthcare of the US right now is in the form of MEDiCARe and medicaid.
MEDICARE can only be availed once you reached the age of 65. so f you get sick, unemployed and no insurance, there is a problem.
MEDICAID is given to people with disabilities regardless of the age and regardless whether these people have contributed to the FICA.(Medicare and SSS tax)
So the problem of the people who are not qualified in this program is health insurace when they get sick and they are unemployed . This is basically what Obama is espousing for.. A universal healthcare for those people who cannot afford insurance and those who are not covered with insurance beause they have preexisting conditions.
From what I understand, the medicare and medicaid stay for whatever they were intended for.
MCCain;s healthcare is to privatize the Medicare and medicaid.(translation: the companies can invest the Fica taxes in stock market and bonds).
cvj,
Not only CRA. Let’s just focus on Obama’s character and his connection to Acorn. Professional ethics and social responsibility is lacking from Obama. His actions is more towards finding weakness of the system. Imagine suing Citibank to make bad loans.
“It’s important not to get too carried away with the ACORN connection in the collapse. The real trigger came when Fannie Mae and Freddie Mac began buying up all of these loans and converting them into securities. Without that impetus, which began in 1999 and ran wild under the management of Franklin Raines at Fannie, lenders would have responded to the nuisance complaints by extending lending just enough to comply with the CRA.”
http://hotair.com/archives/2008/09/30/video-stanley-kurtz-on-obama-acorn-and-the-cra/
Fannie Mae CEO calling Obama and the Dems the “Family” and “Conscience” of Fannie Mae.
http://www.youtube.com/watch?v=usvG-s_Ssb0
I can’t help myself laughing this morning..
Asian became whites on loan underwritings… hehehe.
“”The highest percentage of people of any race getting approved for loans were the Asians, who for the law suit became “White.â€Â
“BofA was the first lender to use FICO scores and had been using them for some time, though at the time most lenders did not use them. Soon after starting to work at BofA memo came out saying that people of Hispanic or Black Heritage were to be given an extra 50 points on their fico score. If that did not get them the loan, the loan was to be reviewed by a senior underwriter who was supposed to look for “any way possible” to do the loan.”
Black people need homes Hispanic people need homes. And I have one child who is half Black and two others that qualify for their Indian cards; I want my kids to get their fair share.But now I am asking what really is fair, is it fair to give credit to people who have not earned it and deny credit to those who did earn it based on race?
Clearly the one of the highest, if not the highes default rate today is among the minorities who were made to qualify base on race, which would not have gotten the loan otherwise. While the loans were being made I looked at that as a benefit to them. Now I see that it has only destroyed many of them.
what was done in the name of ending racism may have actually BACK FIRED and may be one of the main problems with the market today.
http://www.brokeruniverse.com/grapevine/thread/?thread=540152
to leytenian: it still remains the case that philosophically as evidenced by his actions over the past 30 years, McCain is more in tune with the financial contagion that exists today with McCain’s philosophy about deregulation deregulation deregulation. It is these deregulations that removed the oversight of government accountants and lawyers over the Countrywide- and FHA-loans. It is McCain deregulation philosophy that did not slam on the brakes when the financial derivatives began to escalate into the trillions in asset value.
And when reduced to the utmost of simplicity, I do hear and understand where McCain’s ‘bomb bomb bomb Iran’ gleeful dancing can lead. Republican McCain continues the practices of Republican Bush giving tax breaks only to corporations and wealthy as the only way to generate jobs.
now Amadeo… I do see where Sarah Palin offers something different. that video-clip you have in your blogsite of Sarah in 😯 swimsuit…. interesting.
leytenian: did you just write that you have one child who is half-Black?
Up N,
leytenian: did you just write that you have one child who is half-Black?
no it was the child of the blogger.. read the link. it was a cut and paste . you know me… hehehhe.
Of course, republican contributed to deregulations. But I have to select the party beneficial to me at personal level and beneficial to Philippines. I have always been a republican.
Vic,
The reality is more Canadians, Canadian-Filipinos want to go south of the border than those who want to go north. I have several colleagues here from the north, never heard of someone who went up north. Same with our kababayans, they want to embrace Uncle Sam. I don’t have the statistics available but that is what we see here (my friends, relatives and myself).
There are so many reasons for this, one of them is the socialized medicine up north. No one wants to lose his choice, no one wants a gate keeper, no one wants to be in HMO and be included in a verrrryyyy long list of waiting list for appointments for CT, MRI, PET SCAN even for a routine appointment much more a referral to cardio,GI,GU. OB, derm, ortho. Maybe in the end you may want to be referred instead to a psych!
Obama’s Anti Capitalism and Radical Left… Voter’s Registration fraud and conflict of Interest. Obama is dangerous. Sounds like Marxist Agitation.
http://www.youtube.com/watch?v=H8Ep1tkNOUU
@ Leytenian,
I really think you have more substance than VP-candidate Palin.
Being Republican supporter aside, are you a Palin-believer? Surely, frow what I heard from Ms. Palin and what I’ve seen you blogged, there more smarts from Florida than from Alaska.:)
@leytenian
I think you are really more concerned about people who try to CHEAT the system. Those who abuse the welfare dole outs.
But there are genuinely poor and disenfranchised people in the USA. The wealth disparity is no different from China. These people need help to get up on their feet and become productive members of society.
“Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants… With these advances in technology, lenders have taken advantage of credit scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers… Where once more marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending… fostering constructive innovation that is both responsive to market demand and beneficial to consumers.”
— Alan Greenspan, April 2005
When the head of the institution of state who believes that the market is God and using the latest in computing power to calculate probabilties of risk and mediating and parceling out risk to more risk takers the net result is the underlying contracting parties in the equation are left clueless with the debtor frozen like deer in someones headlights because the government itself believed that business cycles have been abolished by the rapid advances in technology.
Man could now predict the future with accuracy….
The idea of God is the freemarket was enshrined.
Nash,
“These people need help to get up on their feet and become productive members of society.”
sorry to say that these people are not motivated to get up nor responsible enough to find work. The blacks and the Hispanics are known for that attitude in the US. You can search for that statistics online. I’m not trying to be racist but that’s really a fact. Ask your cousins in the US about how blacks and how the hispanic community work.
True , Obama give them the fish instead of teaching them how to fish. It’s their attitude Nash. It’s a fact. Obama wants change but he doesn’t realize that his own people will bring him down. They will demand more from him once he become president. This will create a big division between blacks and whites. This will eventually lead to more problems in America and the White House. The bail out plan includes 20% to Acorn’s bad loans.
Rego,
here’s my response to your link why Obama won in PA…
Voters Registration Fraud…
http://cayankee.blogs.com/cayankee/2008/10/the-obama-acorn.html
It is surprising that no one in the Philippines has asked the BSP or the finance department the prevailing price of CDS on Philippine sovereign paper and the cost of forex exchange forwards.
The govenment has promised a balanced budget meaning it will not have to borrow to fund deficits and the economic cirsis bulding up will almost assuredly widen spreads in the price for CDS.
It is shocking nobody in the media most particularly even the business media has asked this question…
The local banking instituions have already created special purpose vehicles to transfer NPL’s and NPA’s to these SPV’s who in turn have securitized these and financed their acquisitions with highly leveraged debt. AIG and PHILAM Life have bought into these securities or loans.
actually, leytenian, you can be as racist as you want, because the next 4 weeks will be filled with that — racism — as a subterfuge in the USA elections. The soft-version of it has been running already with the McCain campaign portraying Obama as not like mainstream America. The message — that the Hawaiian-born Obama with one parent a non-American (not even European!!!!) is, at heart, un-American. This is the same as saying that a Amadeo’s or Abe Margallo’s children born in USA may be good enough to be a CFO or Marketing-Vice-President or even CEO of a large corporation; okay-enough to be an Olympic gold medalist or mayor of Daly city but not good enough for the White House and playing with that nuclear-football.
i give up, leytenian is just a racist.
bye.
“Coerced the banks? The politicians did not know then (and neither did mayors, governors, Dubya nor Dick Cheney and not even half the financial analysts and University accounting professors)…. and they do not fully understand still (witness the various solution-proposals) how these “toxic derivatives†worked.”-UPn
In an interview with NYTimes, sacked Fannie Mae CEO Mudd admitted he was pressured not just by legislators (for not doing enough for low-income borrowers) but also by clients (Fannie’s biggest client – Countrywide’s Mozilo threatened to make them irrelevant as Countrywide has been dealing directly with Lehman, Goldman, Bear Stearns bypassing Fannie because of the latter’s refusal to buy subprime), the regulators (when they increased Fannie’s goals and then again to “relax” their standards), and investors (for complaining that they are not making as much as their investment bank counterparts are offering), plus the fact that the year prior to his appointment, Fannie lost 56% of its loan-reselling business to Wall Street and other competitors – all contributed to his decision to buy subprime thus making Fannie the biggest in the world.
Complete interview here.
“Coerced the banks? The politicians did not know then (and neither did mayors, governors, Dubya nor Dick Cheney and not even half the financial analysts and University accounting professors)…. and they do not fully understand still (witness the various solution-proposals) how these “toxic derivatives†worked.”-UPn
In an interview with NYTimes, sacked Fannie Mae CEO Mudd admitted he was pressured not just by legislators (for not doing enough for low-income borrowers) but also by clients (Fannie’s biggest client – Countrywide’s Mozilo threatened to make them irrelevant as Countrywide has been dealing directly with Lehman, Goldman, Bear Stearns bypassing Fannie because of the latter’s refusal to buy subprime), the regulators (when they increased Fannie’s goals and then again to “relax” their standards), and investors (for complaining that they are not making as much as their investment bank counterparts are offering), plus the fact that the year prior to his appointment, Fannie lost 56% of its loan-reselling business to Wall Street and other competitors – all contributed to his decision to buy subprime thus making Fannie the biggest in the world.
Complete interview here.
“Man could now predict the future with accuracy….
Bigshot economists in the US, as the joke goes, have actually predicted nine out of the last five recessions accurately.
UP n and Nash,
You deserve to know this…
Burning down the house: What Caused our Economic Crisis
http://www.youtube.com/watch?v=1RZVw3no2A4
thanks tongue for the link.
leytenian, here’s more:
http://www.larouchepub.com/other/2003/3010ofheo_rpt.html
In the congressional investigation of FannieMae and FreddieMac in 2003 which eventually led to the removal of Raines and his CFO in FannieMae, the shocking revelation came from OFHEO’s Armando Falcon (a Clinton appointee), that of an impending crisis in the derivatives market. Bush’ administration did a quick coverup they replaced him within 24 hrs and by whom? By Mark Brickell, JPMorgan Chase head of derivatives trading, that’s who! Brickell later worked closely with Phil Gramm (now McCain’s economic adviser) for more deregulation. Brickell also traded, er, brickbats with Lyndon Larouche who has been predicting a mortgage bubble as early as 1993.
That investigation by (D-Tex) Rep.Henry Gonzales also paved the way for Mudd’s rise as FannieMae CEO after OFHEO’s findings of accounting fraud dropped the ax on Raines and Howard.
Falcon recently predicted accurately how government will act on Fannie and Freddie. Read here.
The video link makes it appear as if it was Obama who caused this problem only last year. It’s about time you get a complete picture (w/ timeline):
http://www.motherjones.com/news/feature/2008/07/where-credit-is-due-timeline.html
Read this, andthis, too.
Fox News: ACorn Obama Connection
http://www.youtube.com/watch?v=n6rMSd-JRuk&feature=related
CNN: Lou Dobbs – ACORN Contribution to Financial Crisis
http://www.youtube.com/watch?v=VfN4-nrjspY
Who actually did the slicing and dicing of all mortgages, equity loans, car loans, credit card loans etc.
In the old days you had to face a human being. Today you are simply made a numerical score and artificial intelligence or software slices and dices your expected income and expenditures. In actual fact software to a great degree approves loan applications and mortgage applications today.
You are reduced simply to a score… Millions of people are now simply consumers…. The religion is materialism and a person is simply defined by what he can consume…
Now millions of people who use the internet and all its varied sites are being made composites for marketing.
Those that use financial instruments like credit cards and get loans are all already characterized and standardized.
Credit has already been monetized and future consumption has already been monetized in a person’s credit limit. The same with businesses and governments.
How do you guarantee performance- by taking out insurance.
Now that entire metaphysical economy of the future is crumbling before our very eyes. Credit lines are being cut and the real economy is naturally contracting…
Sophisticated and complicated computer models are totally useless…. How does one go back to manual control when the machines are now in charge????
Human intelligence has been replaced with artificial intelligence.
Just look at the old style guerilla warfare being employed by the Taliban versus the high tech warfare of the West in Afghanistan.
Remember the mathematical modeling of the body count employed by McNamara during the Vietnam war.
Are McCain -Palin stoking the racist fires of white man domination disguised as American ‘Exceptionalism’ just like Theodore Roosevelt. Theodore R. apparently was a believer in historical materialism.
Are McCain and Palin American ‘jihadists.’?
“Roosevelt was an individualist who considered the individualism of others an impediment to the social unity required for national greatness. Having read Darwin’s “The Origin of Species” at age 14 and having strenuously transformed himself from an asthmatic child into a robust adult, he advocated “warrior republicanism” (Hawley’s phrase). TR saw virtue emerging from struggle, especially violent struggle, between nations and between the “Anglo-Saxon” race and lesser races. Blending “muscular Christianity,” the “social gospel” — which sanctified the state as an instrument of moral reclamation — and Darwinian theory, TR believed that human nature evolved toward improvement through conflict. ”
“This dark vision of progress through strife made him advocate concentrated national power to serve his agenda, which was radically more ambitious than the Founders’ vision of limited government maintaining order, protecting property and otherwise staying out of the way of individual striving.”
“Like Winston Churchill, who said that mankind had entered “the region of mass effects,” TR said that “this is an age of combination” — of vast interlocking economic entities. Big was, he thought, beautiful and, anyway, inevitable. So government, and especially the presidency, must become commensurate to the task of breaking American individualism to the saddle of collective purposes. Here TR and “Country First” McCain converge. ”
George Will
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100303306.html?hpid=opinionsbox1
the title of this blog is the colossal game of chicken;it turned out to be the colossal game of pork.
for the rum industry,racing and wooden arrow manufacturing.
For the Philippines:
I have watched the explainer,on the issue of budgeting.
The congress has no power over the purse lahat nakprograma na tulad ng interest payments for ourloans,inernal revenue allotments,etc. konti na lang ang pwedeng mapacontrol ng legislature, it is all the executive’s budget .
hvrds,
“Are McCain and Palin American ‘jihadists.’?”
No they are both mavericks 🙂
Clinton knows that McCain tried to regulate Fannie and banks in 2005. It’s democratic party who opposed the bill to regulate.
http://www.youtube.com/watch?v=XsynspIqAoE&feature=related
Pilipinoparin,
I agree that there are more going south than north and the main reasons are Weather and Taxes. Our taxes here are very high not only to finance the Health Care but also the Universal Education and the very Generous Social Welfare Scheme..One Political Party, the New Democrats even put forward in their campaign platform of making a $400 a month per child allowance tax free until 18 years of age (children are getting already all kinds of allowances) and just imagine when this party wins the government and start overhauling the mothers’ allowances and making maternity leave into 2 years instead of one year.
And also most who wanted to go South were attracted to the U.S deregulated Free Enterprise Capitalism, like Physicians who are capped with their billings here after half a million for family practitioner and a little more for specialist, while they maybe can make more in the u.s.
I do my regular check ups every 3 months and do my refills and the longest referral i experienced for joints checks is 4 weeks. that is reasonable, but i have been in Emergency and emergency personnel didn’t even bother to check for Insurance papers, they don’t have to, there is none, just rushed me right to emergency treatment as soon as they assessed the situation.
In the end it your choice, but not everyone of us, not every citizen of a country can afford to have every boy and girl get treated without his or her parent worrying or losing sleep where to get the money to pay the bills..That is a nightmare we can sacrifice a little waiting for nonemergency procedures…