Warnings saw loan problems at Freddie, Fannie: report

[HAL 9000 96]

It suffices to say that I have enjoyed reading this debate, Matt and William. Please... continue.

I agree with points in both of your arguments.

[mRx 16]

What determines lenders rates is what the rate the Fed loans that money to them at. It's called manipulation. And it's done by the Fed.

The Fed gave all that money to Fannie and Freddie who in turn gave it to banks who in turn gave it as subprime loans because there was so much damn money to throw out. This is the Fed's fault. It's painfully obvious.

The lending/Prime Rate needs to be set and regulated, given specific market conditions. I don't have an Economics degree, but the ramifications of unregulated interest rates are staggering. This is painfully obvious.

Until you provide a better solution/proposal, you are just finger pointing. Finger pointing is a very common theme in politics today.

The front money for these loans were not provided by the Federal Reserve. The Federal Reserve only backs these organizations, when they are in trouble.

The market determines everything. No regulation is needed for this. If there is surplus savings, banks can confidently lend more, if there are low reserves, then banks should be more hesitant. These factors, and these alone are the factors that determine rates. The artificial agitation by the Fed only harms such a natural process.

William, let's just agree that all the money created comes to be because of the Central Bank. The Federal Reserve. Or any other euphemism for it. That proves the money is provided by them, because it came from them. And can come from nowhere else.

I've provided a better solution.

-Quit inflating our currency.

-Quit controlling our economy.

-Quit privatizing profits, and socializing losses.

While the fingers are pointed between the dems and cons, I'm content standing in the back, laughing at them both.

The market, as regulated by the Federal Reserve determines everything...Without those controls in place, chaos in banking will ensue. Proven time and time again.

Answer this: Why do most 1st world countries have Central Banks with similar principles and simultaneously consult with the US Federal Reserve on policy design and implementation?

Answer: Because it works.

-Quit inflating our currency. Our currency is quite deflated against many major currencies, presently.

-Quit controlling our economy. The economy needs regulation, or else lenders will charge 50% on that credit card in your wallet.

-Quit privatizing profits, and socializing losses. The fact that the Government chooses to bail out private enterprises, well, talk to your legislators. All Fed profits are rolled into the general Treasury account.

I agree to disagree here. You don't like the Federal Reserve System or agree with it's purpose? No problem.

Why do most 1st world countries have Central Banks with similar principles and simultaneously consult with the US Federal Reserve on policy design and implementation?

Simple. Government is inflationary. They do not provide a good or service. So that cost to enable that must be taken by force. If it was solely through taxation, we would see little to none of our paycheck, and most likely would revolt. So what better way to get that money than by counterfeiting our money through the Fed, and forcing us to use it, through legal tender laws.

The leaders of Central Banks of other countries are all part of the IMF and WB. The policy is "socialism for the rich, and capitalism for the poor".

[Peikko 1,575]

Anyone, anyone at all who thinks that a few poxy loans to people who couldn't afford the ridiculous repayment plans are the root of this financial crisis is an absolute moron.

[SpiritAlight 1]

William, you and your family can get together, make some popcorn and watch it as a family.

It is quite interesting.

How the whole currency thing got started, and then how banks got started, and then how they could lend money they do not even have.

How it all "works".

If not (no time to ever see it), oh well.

To each their own.

I will not take that personally.

I am well aware of US economics, history and so forth, although my degree was in another discipline. I will take the time to watch the video, at some future point. Curiosity you know...

Oh, I am a curious soul too...sure keeps me busy.

I watched your linked movie Matt.

And that quote from Woodrow is a worrisome one isn't it.

It was right at the beginning of Aaron Russo's (free online) doc film "America: from freedom to fascism", too.

Hmmmm...it would take a huge revolution...to change anything now...sigh.

[mRx 16]

What determines lenders rates is what the rate the Fed loans that money to them at. It's called manipulation. And it's done by the Fed.

The Fed gave all that money to Fannie and Freddie who in turn gave it to banks who in turn gave it as subprime loans because there was so much damn money to throw out. This is the Fed's fault. It's painfully obvious.

The lending/Prime Rate needs to be set and regulated, given specific market conditions. I don't have an Economics degree, but the ramifications of unregulated interest rates are staggering. This is painfully obvious.

Until you provide a better solution/proposal, you are just finger pointing. Finger pointing is a very common theme in politics today.

The front money for these loans were not provided by the Federal Reserve. The Federal Reserve only backs these organizations, when they are in trouble.

The market determines everything. No regulation is needed for this. If there is surplus savings, banks can confidently lend more, if there are low reserves, then banks should be more hesitant. These factors, and these alone are the factors that determine rates. The artificial agitation by the Fed only harms such a natural process.

William, let's just agree that all the money created comes to be because of the Central Bank. The Federal Reserve. Or any other euphemism for it. That proves the money is provided by them, because it came from them. And can come from nowhere else.

I've provided a better solution.

-Quit inflating our currency.

-Quit controlling our economy.

-Quit privatizing profits, and socializing losses.

While the fingers are pointed between the dems and cons, I'm content standing in the back, laughing at them both.

The market, as regulated by the Federal Reserve determines everything...Without those controls in place, chaos in banking will ensue. Proven time and time again.

Chaos in banking occurs when banks who lend out more than their reserves, aren't kept in check by the free market. But are actually awarded with government protection (like FDIC). Look at what happened in the 30's, the Great Depression, this was caused by the combination of artificially inflating the Stock Exchange, and banks lending out more than they had. When the money supply was increased, this bid up consumer prices, since there was more money chasing around the same amount of goods/services. This popularized imports, because our products were artificially overpriced by inflation. So dollars started to go to foreigners. And back then we had a gold standard, so dollars were redeemable in gold. And of course, foreigners, with no need for American Dollars, redeemed every dollar for gold. This caused a steady outward flow of gold from the US. Eventually, banks became nervous, and started to restrict lending, to avoid bankruptcy. Once the public was tipped off about what was happening, they ran the banks.

In a non government regulated economy, such banks would have been subject to the checks and balances of the free market. So essentially, they would be regulated, but by the free market. And if a bank began inflating more than other banks, then that bank would go out of business, because it would not have sufficient reserves to cover it's deposits. The free market always determines the outcome, even in regulation, and this is why we are made to suffer through depressions and recessions, because regulation hasn't and never will work.

So my point is this, these controls, actually enable and provoke chaos. Banks are allowed to inflate through the Fed's prime rate control. The banks are protected by the government. Again, socializing losses, and allowing profits to remain privatized. The American Dream.

-Quit inflating our currency. Our currency is quite deflated against many major currencies, presently.

This is incorrect, bro. You're looking at the wrong things. It may be deflated against other regulated currencies, and even the exchange rates are regulated, but against a true, unregulatable, uninflatable commodity, like gold, our dollar has drastically devalued. In 1913, $18.93 was redeemable for one ounce of gold bullion. To get that same ounce of gold today, you would need to exchange $806.60. This is roughly a 97% devaluation of our dollar since 1913, based on a commodity. Staggering.

-Quit controlling our economy. The economy needs regulation, or else lenders will charge 50% on that credit card in your wallet.

Again, if that was the case, I would go to a different lender. Free market competition would not allow for that to happen, I assure you. For the record, I have no credit card in my wallet.

-Quit privatizing profits, and socializing losses. The fact that the Government chooses to bail out private enterprises, well, talk to your legislators. All Fed profits are rolled into the general Treasury account.

Government bailouts are built into the system. This socializes the losses, and keeps the profits privatized as I've explained earlier. There are only two legislators that I know of who want to end the federal reserve.

We currently pay what, about 40% of fiscal budget on the interest of our debt? What profits do you speak of?

I agree to disagree here. You don't like the Federal Reserve System or agree with it's purpose? No problem.

All's good, man. I enjoy talking about this stuff.

[mRx 16]

William, you and your family can get together, make some popcorn and watch it as a family.

It is quite interesting.

How the whole currency thing got started, and then how banks got started, and then how they could lend money they do not even have.

How it all "works".

If not (no time to ever see it), oh well.

To each their own.

I will not take that personally.

I am well aware of US economics, history and so forth, although my degree was in another discipline. I will take the time to watch the video, at some future point. Curiosity you know...

Oh, I am a curious soul too...sure keeps me busy.

I watched your linked movie Matt.

And that quote from Woodrow is a worrisome one isn't it.

It was right at the beginning of Aaron Russo's (free online) doc film "America: from freedom to fascism", too.

Hmmmm...it would take a huge revolution...to change anything now...sigh.

Did you like it? The dedication portion in the beginning is to Murray Rothbard, my favorite economist.

If you are interested, I have a link to a free pdf book by him about economics. Easy to read and understand, and very informative. One of my fave books.

[SpiritAlight 1]

William, you and your family can get together, make some popcorn and watch it as a family.

It is quite interesting.

How the whole currency thing got started, and then how banks got started, and then how they could lend money they do not even have.

How it all "works".

If not (no time to ever see it), oh well.

To each their own.

I will not take that personally.

I am well aware of US economics, history and so forth, although my degree was in another discipline. I will take the time to watch the video, at some future point. Curiosity you know...

Oh, I am a curious soul too...sure keeps me busy.

I watched your linked movie Matt.

And that quote from Woodrow is a worrisome one isn't it.

It was right at the beginning of Aaron Russo's (free online) doc film "America: from freedom to fascism", too.

Hmmmm...it would take a huge revolution...to change anything now...sigh.

Did you like it? The dedication portion in the beginning is to Murray Rothbard, my favorite economist.

If you are interested, I have a link to a free pdf book by him about economics. Easy to read and understand, and very informative. One of my fave books.

Yes...please!

[mRx 16]

William, you and your family can get together, make some popcorn and watch it as a family.

It is quite interesting.

How the whole currency thing got started, and then how banks got started, and then how they could lend money they do not even have.

How it all "works".

If not (no time to ever see it), oh well.

To each their own.

I will not take that personally.

I am well aware of US economics, history and so forth, although my degree was in another discipline. I will take the time to watch the video, at some future point. Curiosity you know...

Oh, I am a curious soul too...sure keeps me busy.

I watched your linked movie Matt.

And that quote from Woodrow is a worrisome one isn't it.

It was right at the beginning of Aaron Russo's (free online) doc film "America: from freedom to fascism", too.

Hmmmm...it would take a huge revolution...to change anything now...sigh.

Did you like it? The dedication portion in the beginning is to Murray Rothbard, my favorite economist.

If you are interested, I have a link to a free pdf book by him about economics. Easy to read and understand, and very informative. One of my fave books.

Yes...please!

PM sent.

[William33 110]

What determines lenders rates is what the rate the Fed loans that money to them at. It's called manipulation. And it's done by the Fed.

The Fed gave all that money to Fannie and Freddie who in turn gave it to banks who in turn gave it as subprime loans because there was so much damn money to throw out. This is the Fed's fault. It's painfully obvious.

The lending/Prime Rate needs to be set and regulated, given specific market conditions. I don't have an Economics degree, but the ramifications of unregulated interest rates are staggering. This is painfully obvious.

Until you provide a better solution/proposal, you are just finger pointing. Finger pointing is a very common theme in politics today.

The front money for these loans were not provided by the Federal Reserve. The Federal Reserve only backs these organizations, when they are in trouble.

The market determines everything. No regulation is needed for this. If there is surplus savings, banks can confidently lend more, if there are low reserves, then banks should be more hesitant. These factors, and these alone are the factors that determine rates. The artificial agitation by the Fed only harms such a natural process.

William, let's just agree that all the money created comes to be because of the Central Bank. The Federal Reserve. Or any other euphemism for it. That proves the money is provided by them, because it came from them. And can come from nowhere else.

I've provided a better solution.

-Quit inflating our currency.

-Quit controlling our economy.

-Quit privatizing profits, and socializing losses.

While the fingers are pointed between the dems and cons, I'm content standing in the back, laughing at them both.

The market, as regulated by the Federal Reserve determines everything...Without those controls in place, chaos in banking will ensue. Proven time and time again.

Chaos in banking occurs when banks who lend out more than their reserves, aren't kept in check by the free market. But are actually awarded with government protection (like FDIC). Look at what happened in the 30's, the Great Depression, this was caused by the combination of artificially inflating the Stock Exchange, and banks lending out more than they had. When the money supply was increased, this bid up consumer prices, since there was more money chasing around the same amount of goods/services. This popularized imports, because our products were artificially overpriced by inflation. So dollars started to go to foreigners. And back then we had a gold standard, so dollars were redeemable in gold. And of course, foreigners, with no need for American Dollars, redeemed every dollar for gold. This caused a steady outward flow of gold from the US. Eventually, banks became nervous, and started to restrict lending, to avoid bankruptcy. Once the public was tipped off about what was happening, they ran the banks.

In a non government regulated economy, such banks would have been subject to the checks and balances of the free market. So essentially, they would be regulated, but by the free market. And if a bank began inflating more than other banks, then that bank would go out of business, because it would not have sufficient reserves to cover it's deposits. The free market always determines the outcome, even in regulation, and this is why we are made to suffer through depressions and recessions, because regulation hasn't and never will work.

So my point is this, these controls, actually enable and provoke chaos. Banks are allowed to inflate through the Fed's prime rate control. The banks are protected by the government. Again, socializing losses, and allowing profits to remain privatized. The American Dream.

-Quit inflating our currency. Our currency is quite deflated against many major currencies, presently.

This is incorrect, bro. You're looking at the wrong things. It may be deflated against other regulated currencies, and even the exchange rates are regulated, but against a true, unregulatable, uninflatable commodity, like gold, our dollar has drastically devalued. In 1913, $18.93 was redeemable for one ounce of gold bullion. To get that same ounce of gold today, you would need to exchange $806.60. This is roughly a 97% devaluation of our dollar since 1913, based on a commodity. Staggering.

-Quit controlling our economy. The economy needs regulation, or else lenders will charge 50% on that credit card in your wallet.

Again, if that was the case, I would go to a different lender. Free market competition would not allow for that to happen, I assure you. For the record, I have no credit card in my wallet.

-Quit privatizing profits, and socializing losses. The fact that the Government chooses to bail out private enterprises, well, talk to your legislators. All Fed profits are rolled into the general Treasury account.

Government bailouts are built into the system. This socializes the losses, and keeps the profits privatized as I've explained earlier. There are only two legislators that I know of who want to end the federal reserve.

We currently pay what, about 40% of fiscal budget on the interest of our debt? What profits do you speak of?

I agree to disagree here. You don't like the Federal Reserve System or agree with it's purpose? No problem.

All's good, man. I enjoy talking about this stuff.

As you quote your guy Rothbard, keep in mind that his opinions are supported by a minority. I don't necessarily agree with all elements of our financial system, but it is functional and has been for 80 years. Until we make a change for the better, we will need to live with it.

[William33 110]

-Quit inflating our currency. Our currency is quite deflated against many major currencies, presently.

This is incorrect, bro. You're looking at the wrong things. It may be deflated against other regulated currencies, and even the exchange rates are regulated, but against a true, unregulatable, uninflatable commodity, like gold, our dollar has drastically devalued. In 1913, $18.93 was redeemable for one ounce of gold bullion. To get that same ounce of gold today, you would need to exchange $806.60. This is roughly a 97% devaluation of our dollar since 1913, based on a commodity. Staggering.

Our currency is no longer on the gold standard. You also fail to account for the inflation of gold prices as a commodity.

-Quit controlling our economy. The economy needs regulation, or else lenders will charge 50% on that credit card in your wallet.

Again, if that was the case, I would go to a different lender. Free market competition would not allow for that to happen, I assure you. For the record, I have no credit card in my wallet.

Fair market competition has many interest rates over the top. Not to mention default rates, late penalties and other sh!t dealt out by CC companies. I am all about cash and carry.

-Quit privatizing profits, and socializing losses. The fact that the Government chooses to bail out private enterprises, well, talk to your legislators. All Fed profits are rolled into the general Treasury account.

Government bailouts are built into the system. This socializes the losses, and keeps the profits privatized as I've explained earlier. There are only two legislators that I know of who want to end the federal reserve.

We currently pay what, about 40% of fiscal budget on the interest of our debt? What profits do you speak of?

Excess capital is then turned over to the Treasury Department and Congress to be included into the Federal Budget as "Miscellaneous Revenue".

This year over 40 billion.

[mRx 16]

What determines lenders rates is what the rate the Fed loans that money to them at. It's called manipulation. And it's done by the Fed.

The Fed gave all that money to Fannie and Freddie who in turn gave it to banks who in turn gave it as subprime loans because there was so much damn money to throw out. This is the Fed's fault. It's painfully obvious.

The lending/Prime Rate needs to be set and regulated, given specific market conditions. I don't have an Economics degree, but the ramifications of unregulated interest rates are staggering. This is painfully obvious.

Until you provide a better solution/proposal, you are just finger pointing. Finger pointing is a very common theme in politics today.

The front money for these loans were not provided by the Federal Reserve. The Federal Reserve only backs these organizations, when they are in trouble.

The market determines everything. No regulation is needed for this. If there is surplus savings, banks can confidently lend more, if there are low reserves, then banks should be more hesitant. These factors, and these alone are the factors that determine rates. The artificial agitation by the Fed only harms such a natural process.

William, let's just agree that all the money created comes to be because of the Central Bank. The Federal Reserve. Or any other euphemism for it. That proves the money is provided by them, because it came from them. And can come from nowhere else.

I've provided a better solution.

-Quit inflating our currency.

-Quit controlling our economy.

-Quit privatizing profits, and socializing losses.

While the fingers are pointed between the dems and cons, I'm content standing in the back, laughing at them both.

The market, as regulated by the Federal Reserve determines everything...Without those controls in place, chaos in banking will ensue. Proven time and time again.

Chaos in banking occurs when banks who lend out more than their reserves, aren't kept in check by the free market. But are actually awarded with government protection (like FDIC). Look at what happened in the 30's, the Great Depression, this was caused by the combination of artificially inflating the Stock Exchange, and banks lending out more than they had. When the money supply was increased, this bid up consumer prices, since there was more money chasing around the same amount of goods/services. This popularized imports, because our products were artificially overpriced by inflation. So dollars started to go to foreigners. And back then we had a gold standard, so dollars were redeemable in gold. And of course, foreigners, with no need for American Dollars, redeemed every dollar for gold. This caused a steady outward flow of gold from the US. Eventually, banks became nervous, and started to restrict lending, to avoid bankruptcy. Once the public was tipped off about what was happening, they ran the banks.

In a non government regulated economy, such banks would have been subject to the checks and balances of the free market. So essentially, they would be regulated, but by the free market. And if a bank began inflating more than other banks, then that bank would go out of business, because it would not have sufficient reserves to cover it's deposits. The free market always determines the outcome, even in regulation, and this is why we are made to suffer through depressions and recessions, because regulation hasn't and never will work.

So my point is this, these controls, actually enable and provoke chaos. Banks are allowed to inflate through the Fed's prime rate control. The banks are protected by the government. Again, socializing losses, and allowing profits to remain privatized. The American Dream.

-Quit inflating our currency. Our currency is quite deflated against many major currencies, presently.

This is incorrect, bro. You're looking at the wrong things. It may be deflated against other regulated currencies, and even the exchange rates are regulated, but against a true, unregulatable, uninflatable commodity, like gold, our dollar has drastically devalued. In 1913, $18.93 was redeemable for one ounce of gold bullion. To get that same ounce of gold today, you would need to exchange $806.60. This is roughly a 97% devaluation of our dollar since 1913, based on a commodity. Staggering.

-Quit controlling our economy. The economy needs regulation, or else lenders will charge 50% on that credit card in your wallet.

Again, if that was the case, I would go to a different lender. Free market competition would not allow for that to happen, I assure you. For the record, I have no credit card in my wallet.

-Quit privatizing profits, and socializing losses. The fact that the Government chooses to bail out private enterprises, well, talk to your legislators. All Fed profits are rolled into the general Treasury account.

Government bailouts are built into the system. This socializes the losses, and keeps the profits privatized as I've explained earlier. There are only two legislators that I know of who want to end the federal reserve.

We currently pay what, about 40% of fiscal budget on the interest of our debt? What profits do you speak of?

I agree to disagree here. You don't like the Federal Reserve System or agree with it's purpose? No problem.

All's good, man. I enjoy talking about this stuff.

As you quote your guy Rothbard, keep in mind that his opinions are supported by a minority. I don't necessarily agree with all elements of our financial system, but it is functional and has been for 80 years. Until we make a change for the better, we will need to live with it.

Uh, actually I'm not quoting anyone.

His opinions are those of Austrian economics, a school of thought that was widespread up until John Maynard Keynes swept the floor with his interventionist policies. Now Keynesian Econ is primary in the world, and is accepted as fact.

Just because everyone follows one school of thought blindly like sheep, doesn't make it the best.

[mRx 16]

You also fail to account for the inflation of gold prices as a commodity.

The only way gold can be inflated is if someone slips some other metal into the mix, which is basically like counterfeiting. Again, the free market would penalize such actions, as people would figure out they've been duped, and the counterfeiters would go out of business. See, we don't even need government to mint coins.

Fair market competition has many interest rates over the top. Not to mention default rates, late penalties and other sh!t dealt out by CC companies. I am all about cash and carry.

The fair market is a politician's pipe dream. Big difference between free and fair my friend.

Excess capital is then turned over to the Treasury Department and Congress to be included into the Federal Budget as "Miscellaneous Revenue".

This year over 40 billion.

Which is then turned over to foreign US debt holders to pay them interest for investing in our pitiful fiat currency. Robbing Peter to pay Paul, or something like that.

Plus 40B is chump change. Our debt including liabilities is over 50T.

Something needs to be done fast, or else we are done.