Paulson says root cause of economic turmoil was 'housing correction'
By John Amato Tuesday Sep 23, 2008 1:58pmHe opens up today by lying. I can think of a better phrase: "predatory lending."
The housing market corrected for a reason and it had something to do with mortgages....
Use as an Open thread on the hearing...
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First! Good Luck America!
John McCain suspends campaigning to work on economy, requests postponing Friday debate; asks Obama do the same.
...I can't go to school and write the test today, my tummy hurts ....
John McCain is "suspending his campaign, temporarily, to return to Washington to work on this economic crisis" and has requested postponement Friday's debate with Obama. He is also calling on Obama to join him in Washington. MSNBC interupted the hearings for this announcement.
Breaking; McCain wants to postpone the Debate!
earl @ 2:
why dont we just postpone the election and crown george king
what work does mccain have to do? hasnt he and his gaggle of crooks fucked up enuf stuff?
I am watching this on BBC News and I just cannot believe this Paulson guy. Predatory lending is the perfect word. Over here in Blighty, they have doorstep lenders that prey on poor people that need small loans for groceries, school uniforms, shoes for the kids, that sort of thing. Often, these people are on state benefits and can't make ends meet. Of course, the moneylenders come in, give them some cash and proceed to charge up to 400% intrest on a £50 loan. I can imagine that the same type of people were sold these mortgages and are now watching the sherriff take all their possessions into the streets. Some American dream. Luckily, I never got into that "have to own your house" mentality. I hope none of my relatives back home in the States are affected by this. I feel so sorry for those that have been.
What a coward! He's forcing the vote on the Bail-out. Unreal.
thanks. I can not believe that Paulson is back telling the american public that their "intent" is to save the American taxpayers. Why the fuck did they wait so long? Why now? Why not six months ago? They knew these loans and bundling strategies were a mess.
The American people are going to see through this political stunt in a heartbeat. Sounds more like the kid who doesn't want to go to school tomorrow because he doesn't have his homework done.
The guy is an absolute monster...inside and outside.
I wonder if any of our Reps will ask why did you wait so long? Why last Thursday?
I have been wondering about the "open line of credit" that was extended to some of these companies? What happened during that period of time? Who walked away with what?
The estimated population of the United States is 304,787,549
so each citizen's share of this debt is $32,120.49.
The National Debt has continued to increase an average of $2.16 billion per day since September 28, 2007!
Concerned? Then tell Congress and the White House!
P.D. @ 5:
Translation: I know Senator Obama will kick my ass in the debate so I am running away to DC to try to look like I am important.
These guys are paid HANDSOMELY to NEVER NEVER NEVER address the systemic failures over which they so proudly preside.
therefore you must blame the losses on the symptom. The "correction" becomes the cause of the collapse, not the crimes of commission and omission perpetrated by Paulson (while Chief at Goldman-Sachs) and his cronies who were betting all along theat they could fuck things up enough that they could both escape punishment AND reap the huge financial rewards.
NOBODY, exactly NO-fuukin-BODY, 'earns' income in the 7 (post decimal) digits, or up.
Nothing anybody does is worth that kind of money for ANYTHING, when anybody else, at all, anywhere, is forced to work for minimum wage doing ANYTHING...
earl @ 2:
As I mentioned on the previous thread, I just heard the "breaking news" right now. And my response is that the GOP is trying to string this out as far as possible so that McCain/Palin makes it to office.
I think the GOP took its cues from George Will last night. If Will lacks confidence in the man, then its time to reprogram not only McPOW, but Gov. Hockey Mom as well.
Man, the McCain camp must be very, very scared. Let's hope the Media doesn't buy into this stunt.
I watching the briefing right now on C-Span. Its interesting how Paulson and others use the word "asset" to describe what the Government will buy with this massive bailout. When I think of the word asset I think of a house or some other tangible thing. What they seem to be talking about are credit default swaps or other derivatives which reach into multiple trillions of dollars.
This economic meltdown was planned back in 2000/2001 Joseph Stiglitz (American economist and a professor at Columbia University, Nobel Peace Prize winner and Former chief economist for the world bank.
http://www.dollarsandsense.org/archives/2001/0101anderson.html
The dramatic resignations in the spring of 2000 of two high-level World Bank employees raised further doubts about the institutions' commitment to poverty reduction and civil-society participation. Former Chief Economist Joseph Stiglitz claims that U.S. Treasury Secretary Lawrence Summers and IMF bigwigs succeeded in pushing him out of the Bank in retaliation for his charges that the Fund's policies helped precipitate and worsen the global financial crises that erupted in mid-1997. Stiglitz pointed out that while reckless international investors and domestic banks caused the crises, the costs were borne by the workers.
This was planned.
That's why military brigades will hit America streets in a permanent role Oct 1st.
When they rob us they want to make sure that we don't fight back.
Even Amy Goodman knows something is up!!!
http://www.youtube.com/watch?v=jYxTzDFofZQ
The polls have favored Obama since this economic collapse. McCain is making a desparate move to recapture some of this momentum. Rahm Emanuel is on MSNBC right now saying it is not necessary for McCain or Obama to come to Washington to "contribute" to these efforts. He also is saying that you can have the debate AND work to solve the problem.
P.D. @ 5:
Hell NO!!
Tonight George Bush will announce that he's suspending the upcoming election because of the financial crisis.
John McCain suspends campaigning, requests postponing Friday debate; asks Obama do the same. The "excuse": work on the economy; If McCain thinks he will get out the debate this way and run away from talking, it's disgraceful. 9/25
Amazed Canadian @ 1:
Unfortunately for the rest of all y'all, the SUer economy/culture is still of such significant size and complexity that its failure and collapse will/would trigger the collapse of just about every other structure of similar shape and inter-relatedness.
Sorry 'bout dat...
pissed@13, This is bad for McCain. He claims he wants to work on the Financail Bail-out. Yeah right. I think Americans will see this for what it is. A cowardly act by a deparate man.
The root cause is that wages have stagnated for 30 years and the only way to get spending into the economy was to make credit easier and easier to get. The root cause is a 30 year effort to create low wage, low benefit jobs in order to increase profit. Supply side economics is dead.
What I just do not understand is how Paulson can keep getting away with saying that this is about protecting the American Taxpayer. When the original three pages completely left the American taxpayer out and then some.
Why would Paulson have this little tidbit in there if he were so concerned about the American taxpayer
"The Treasury Secretary can buy broadly defined assets, on any terms he wants, he can hire anyone he wants to do it and can appoint private sector companies as financial deputies of the US government. And he can write whatever regulation he thinks are needed."
I know Paulson was not in this position when all of the deregulation took place. How are the Republicans who voted for so much de regulation getting off the hook
"cost us far less than the alternative". O.k. folks now they are turning the gun that Paulson is holding and turning it around and pointing it at the American taxpayers. "Give up the money in the Treasury now, because we are going to get it anyway"
Paulson to the American Taxpayer "the nations balls are nailed to the barn floor and here are the tools that you have to help yourselves. A knife or some matches. Choose"
pissed off patricia @ 13:
Or to ensure that Cheney's bidding is done, since Cheney himself was practically castrated yesterday.
Breaking news...McCain wants to cancel the debate.......what a load of crap. McCain hasn't showed up for a senate vote in months and all of sudden he is concerned. He is concerned all right, concerned he is down in the polls, concerned his manager has taken millions from the bankrupt banks, concerned Sarah has a Edward's problem, concerned that he is sinking like a rock.
I cannot put all of the blame on predatory lending, but that has played a big part in it. The big financial institutions may claim that they did not actually negotiate the toxic loans, but are merely trying to cover bad loans foisted upon them by con artists and Democratic lending laws. The inescapable fact is that nearly every one has been expecting some sort of 'housing correction' for some time now. For more than two years, I have heard some financial commentator or other talking about a burst of the housing bubble at least once a week.
Mr. Paulson, everyone saw something like this coming. Why are you asking us to panic and stampede now?
Mr. Blade @ 18:
the IMF has been known as a false front for forty years.
usurious loans with rates which guarantee perpetual debt were their only stock-in-trade.
CMINCA @ 4:
Bawk, bawk... he's running for cover that wiener!
If you are trying to say that predatory lending was the root cause of the housing bubble, you are making a fool of yourself.
The housing bubble caused the irresponsible lending (and borrowing). Sure, there was a feedback loop where one fed into the other, but rising house prices are what first got the mortgage bankers to loosen their standards and irresponsibly (and in pretatory fashion) sell the "american dream" idea to unqualified buyers.
Interesting... the government should just buy back these mortgages, renegotiate the interest and payment schedule, and use this money to pay back the taxpayers.
No, really, it WAS the housing correction. Just the market crash of 1929 was due to the "real estate correction," that being that there was only ONE piece of property, and it was being sold twelve times at once. Then when it turned out that the ACTUAL property was only one-twelfth of the properties sold, the market "corrected."
It's almost like these are "reality corrections," where reality keeps impinging upon the schemes of Republicans to manufacture wealth in their pockets out of the pockets of the average workers. Maybe they need to have a magazine called "Predatory Living"
Mr. Blade @ 18:
thanks. This goes along with Larisa Alexandrovna's theories
http://www.huffingtonpost.com/larisa-alexandrovna/welcome-to-the-final-s...
In 2000, the long fought for and long admired democracy of the United States of America began a slow and steady decline toward fascism - a Bush family tradition - with the installment of a president - a man the citizens overwhelmingly rejected (although the funny math told a still believed myth) - by a few corrupt judges on the US Supreme Court. That coup is now nearly complete and checkmate is all but unavoidable.
CMINCA @ 27:
So McCain finally wants vote in Senate after 6 months of absence.
Oh, this is good. McCain is showing that he's a complete tool for the Bush administration. The Dems should really dig in now and put off the scam bailout as long as possible. Let McCain stay "suspended" until November 9th!
I'm watching C-Span 2 live right now, and it sure seems like Rep. Barney Frank is in the tank for Paulson and these swindlers.
You guys are all fucking crazies...
"That’s why military brigades will hit America streets in a permanent role Oct 1st."
A little too much to the left are we??
I see a lot of "group think" going on here...try to pull back and be somewhat rational.
helga @ 28:
Will election delay come next?
janeya @ 38:
I have thought the same thing.
CMINCA@27, When Chaney showed up, they probably run for the doors screaming! Chaney is the most reviled of all Bush's minions. Oh, who am I kidding. Bush is the minion and Chaney is the master.
The question just posed was; 'Why are you (Paulson) right, and all the other economists wrong?'. They did not answer at all.
Kathleen @ 26:
considering the demiocratic party record in congress and the senate, paulsen has no reason to expect anything other than abject cowardice from the dems, especially when spectre and baynor start squealing. nadless reed and spackled pelosi will stand in front of the mike, spout utter crap and then plan the coordinated, if staggered, cave-in.
Paulson has a "gently" traded, pre-owned market he's giving us at the reduced price of only $700 billion dollars, don't wait, this exciting offer is limited and it will go fast so stop down to Paulson's on Route 377 near the old red barn and be the first to own the market!... did he sell used cars before he went to work for Goldman Sachs?
Oh my, McCain can't walk and chew gum at the same time. If he can't campaign and take care of business at the same time, just how is he going to handle the job of the presidency which requires multi-tasking 24/7???
Will one congress person ask WHY LAST THURSDAY? WHY DID THEY WAIT SO LONG?
Kathleen @ 35:
that was a great article by larisa. I read it yesterday.
prescott boosh is smiling up from hell.
River Troll @ 29:
What "democratic lending laws"?
Paulson's just the sock-puppet of the system. the system postponed taking action because every hour they postponed the inevitable, they pulled some several billions of dollars out of the pockets of trapped, terrified, bullied, and desperate Murkin families.
Paulson's one of 'em. One of the pirates, the predators, the vicious pack of feral, rabid beasts who drooled and slavered over every loan that stuck some poor schmuck with a tripling ARM...
They weren't gonna turn away from the carcass while there was any meat or fat or blood or marrow to be got. They'll pull back for now, but they'll be back.
Gay-ron-FUCKING-teed, cher, they'll be back, fattening up the chumps for slaughter.
I figured that was what this about. Bernanke and Paulson are still pushing this bailout so that if it is enacted those banks can recapitalize themselves. In other words, they know that banks are insolvent and they are trying to head off eventual bank runs.
Alec @ 25:
From you mouth to the flying spaghetti monster's noodley ear, but I have already heard the agents of evil out doing their best to confuse the issue. Claiming the push to help minorities with housing and the lack of red lining. All bad things are Clinton's fault. Some how these lending intuitions were forced to lend money to high risk people because of the liberals like Bush. They have no shame. As long as the United States doesn't manufacture anything any fix will be short lived.
McCain seeks to delay debate
http://www.msnbc.msn.com/id/26872907/
The real reason acc to many insiders is McCain's health problems and some important developments due to which he needs to be check urgently.
As my husband just said on the phone, can't McCain chew gum and walk at the same time? Can't he campaign and keep up with what is going on in DC at the same time? How long would it take him to cast a vote when this thing comes to a vote?
Like McCain is going to DC and crack the whip to get this bailout done? It is nothing more than an excuse to try to weasel out of this debate. What next? Will he want Obama to appear with him at a string of town hall meetings to make up for missing this debate?
Isn't it curious that the same day McCain suspends his campaign Bush will address the nation. I wonder what's really going on?
Why do you think there has been such a big emphasis on getting this done as quickly as possible? What's the rush? I'll tell you. The end of the fiscal year for the US government is Sept the 30th and if they don't get the American people to go along with the 700 billion bail out, the government of the good old USA will default and lose it's AAA credit status. This puts the problems off long enough for the current creeps to quietly leave D.C. in December and skulk away into the night.
So when the boy King shows up this evening telling you how serious this is and MUST BE DONE NOW. Laugh it off. We have been through fire sales before in this country and we never disappeared before and won't now. Let the rest of the worlds investors and governments pick at the bones of what is left of the banks and brokerages, but life goes on and so will the U.S.A. without this monsterous bailout which accomplishes nothing other than saving face and giving cover to those who knew this was coming and DID NOTHING TO PREVENT IT!
Weirded Out @ 39:
Yeah, you're right. Nothing to worry about. At least it's not Blackwater, innit. If you don't disturb the peace, you've got nothing to worry about, right. Like with the spying? If you got nothing to hide, why should you care if they inspect your mail?
Like your style, pal...
What is wrong with Hank Paulson's pinky?
Jeff @ 52:
I think the real reason is because McCain doesn't know jack about economics or the economy in general which is the main issue of the day. As soon as he attempts to answer an economic question he will put his foot in his mouth. Palin is the same way on foreign policy and national security issues. He is basically doing what he instructed Palin to do. Answer no questions.
asdf @ 57:
leprosy, i hope...
slad @ 32:
There certainly was a degree of predatory lending. There was also a panic that if people did not buy now, they would never be able to afford to, (I heard this from a lot of people in California and this was very true - housing was being priced out of the first-time-buyer market). There was also a lot of buying more than one could afford. For the first time in history, people were placing bets on the equity of their homes increasing and taking the equity out of their homes. These home equity loans are also much of the cause of the crisis we have today, but are often overlooked. Certainly there are many layers to this and all involved are at fault. I've advised people time and time again not to purchase homes they cannot afford, but to no avail. I know realtors and mortgage brokers (yes, there are some moral ones out there) who have done the same.
Since you have to define a problem in order to solve it, oversimplfying it or demonizing only one source of the problem only impairs the solutions process.
Jeff @ 52:
There's always a backstory. :)
But, I still think he's a coward. If he's such a maverick and a tough war hero (i.e. the POW brand), he should grow a pair and debate Obama.
But now, he's showing that he is wilting in a time of crisis--especially when a prominent conservative critic questions his competence and experience.
P.D. @ 24:
Hahahahahaha!! What Americans are you talking about? They are constantly tricked into voting against their own best interest in every election.
Sarah Palin has helped McCain turn an 8 point deficit among women voters to an 8 point lead despite the fact that Palin has no experience, is against equal rights for women and even used to charge rape victims for their own rape kits.
Working class folks continue to support Cons even though they have always voted against minimum wage increases and have passed laws that help the rich get richer while the poor gets poorer.
Blacks refuse to go out and register even though they finally have the chance to vote for the first black president in our history (all the while complaining that a black man can't be president in America).
Unions continue to endorse Cons even though they continually try to gut the unions or try to do away with them outright.
Do you really think the American voter is smart enough to understand he's doing it for political points and because he's afraid to debate? If so, you have not been paying attention for the last thirty years.
Cats r Flyfishn @ 36:
Nah! He's just trying to impove his polling results. It is an obvious ploy. R. Emanuel says that they can come back AND have the debate. Its called multi-tasking.
P.D. @ 42:
I read there was a serious arsenol of pickforks and torches. Seriously though, there was consensus that Cheney has used up his political capital. No one can afford to align themselves with Bush or Cheney these days.
Jamie @ 43:
Great question and totally the expected answer... they don't answer if it's not going their way...
Kathleen @ 40:
I hope not. But it sure looks that way, doesn't it?
Stop calling it the "Mortgage Crisis"
It's the "Credit Default Swap Crisis"
This sort of crap is what this is all about.
Actually, stop calling it a crisis.
Now they're saying that it will continue on C-SPAN3.
Delaying the debates is Patriotic, the spin on this one will be simple for the wingnuts.
CMINCA @ 60:
So very important to remember!
Folks it sounds like Congress is going to fold. We are witnessing the biggest bank heist in the history of the world and it is being conducted directly in front of the American people by fat cats on the inside.
Will one of them ask...Why did they wait for so long? Why last Thursday? The timing of this is now delaying debates...what else will it delay?
Taking a break
Oh great so they will have an hour when they get back. An hour to ask critical questions
Rep Sherman was on C-Spans Washington Journal with another plan.
A group of House Democrats headed by California congressman Brad Sherman has proposed several key amendments to the administration's bill to stabilize the markets. They include reducing the initial bank funding from $700 billion to $200 billion and purchasing only mortgage-related assets owned by U.S. entities. The House Financial Services Committee is scheduled to hear from Sec. Paulson on the Administration’s plan later today.
http://www.c-span.org/search.aspx?For=Rep%20Sherman
pissed off patricia @ 53:
mccain is planning to do to Obama what Boosh did to mccain: steal the platform, take underserved credit and lie his fucking ass off! he needs to practice and polish the lies. With too many facts that are obvious now, mcKeatingFive can't possibly lie effectively. he needs time for the press to set up the smoke screen by fogging up the issues and create a false equivalence between mccain's glaring faults and Obama's minor flaws.
HB Acker @ 54:
What is really going on is this? Obama contacted McCain at 8:30 a.m. to request they come together and support one another with a joint plan for this economic collapse and announce it together.
McCain decided to take advantage of this, try to upstage Obama and turn it around as if it was his idea all along.
Obama, Obama, Obama, never try to make a deal with the devil.
McCain's flunky is on MSNBC now touting the for John McCain it has always been "Country First" meme. Blah, blah, blah.
Any questions?
60 CMINCA Says:
you read it an' tell me it doesn't sound an awful lot like blaming the victims.
with the accompanying sub-text of the undeserving poor somehow getting their come-uppance for their temerity in pretending to prosperity.
People are fed "the american dream" from the womb, and they emerge into a world in which EVERYTHING that matters is measured by where you LIVE (cf, 90210, e.g.) and the goodies you can flash.
They are schooled, not in critical thought buy in unthinking, automatic passivity towards anything except sports and popular music, and thoughtless consumption of any gleaming, glittering bauble they Marketeers can produce and foist off on them.
So the culture tells 'em, and some crooked money guys shows 'em how, to get the Murkin dream--house...and they go for it...
and they bear YOUR blame, incur the punishment, while the thieves get the down-payment, the interest and the property back...
there's asomething fishy--dishonest?--about that, imho
BaScOmBe hearts Rachel Maddow hates MSM @ 12:
I signed no contract, therefore I owe $0 of this.
Oh, they will force me to pay? Well, we know what that's called.
Rep Sherman is the voice of reason!
McCain is trying to grandstand himself out of having to face Obama in a debate. It's as simple as that. All of a sudden the bailout is his top concern? BS! He's using it for an excuse and that's all it is.
Bush announced this morning that he will address the nation tonight at nine eastern time and now McCain sees an opening to try to look important while at the same time walking away from the most important debate of this campaign season. There is only one reason a candidate would do that....that's because he's afraid.
Kathleen @ 74:
I agree. I'm watching him right now.
If Obama falls for this, then he deserves a loss.
pissed off patricia @ 75:
The question isn't why he's doing it. The question is, will it work on the brain-dead electorate. The answer is yes, it will. Watch.
Freddy Knuckles @ 62:
freddie,
you are normally not this short on facts. what has gotten into you? Obama leads 53% to 42%. That means that the independents are switching to Obama en masse. blacks are not usually counted as "likely" voters, if they are counted at all. Women are recognizing the Spawn of Alaska as dangerous to women in general and the repugs are trying to steal the treasury before running out the clock and they are also trying to saddle the next president with a perpetual war stance.
Calm yourself. Step away from the keyboard for a few minutes. Get a grip.
Kathleen @ 70: