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  1. #1
    I put the Gee in Gear.... thekid's Avatar
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    Freddie Mac/Fannie Mae takeover

    Well the other shoe fell this weekend. Some reports are saying the Chinese who are holding alot of our debt flexed their muscle here and pressed the government to step in and shore up these two institutions. If true it is a troubling sign from a national security POV. There is no doubt we could not let these two institutions fail but if we did so as a result from pressure from a foreign government then we have truly lost our way.

  2. #2
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    I didn't hear the part about the Chinese pressuring the US about it. Do you have a link?

  3. #3
    Man of the People Forums Moderator bobsticks's Avatar
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    I don't know that I'd circle the wagons just yet. At no point in their history could you compare Chinese-style communism with the Russian version, the former being utilitarian and the latter being totalitarian. Even the old guard had a healthy respect for profit and certainly the new business class does as well.

    Point being, the Chinese are acting like any responsible investor would. I would imagine that T. Boone Pickens and Warren Buffet are on the phone too, you just don't hear about it.


    BTW, the last I knew through whatever method they used to trace back the byzantine maze of shell corps both the British and the Canadians owned more US property free and clear than the Chinese. You just don't read about it 'cause they look like us and sound like us. It's not sexy.

    It's not like Chaing Kai-Shek is gonna show up at yer door with an eviction notice. It's not in their best interest.

  4. #4
    M.P.S.E /AES/SMPTE member Sir Terrence the Terrible's Avatar
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    Quote Originally Posted by bobsticks
    I don't know that I'd circle the wagons just yet. At no point in their history could you compare Chinese-style communism with the Russian version, the former being utilitarian and the latter being totalitarian. Even the old guard had a healthy respect for profit and certainly the new business class does as well.

    Point being, the Chinese are acting like any responsible investor would. I would imagine that T. Boone Pickens and Warren Buffet are on the phone too, you just don't hear about it.


    BTW, the last I knew through whatever method they used to trace back the byzantine maze of shell corps both the British and the Canadians owned more US property free and clear than the Chinese. You just don't read about it 'cause they look like us and sound like us. It's not sexy.

    It's not like Chaing Kai-Shek is gonna show up at yer door with an eviction notice. It's not in their best interest.
    My name is Sir T, and I agree with this post.

    Keep in mind Sticks, the Brits and Canadians own more property than anyone else, but I think China is financing our debt based on trade imbalances we have with them. If they decided to call it in, we would be in a world of hurt, that is for sure. They are certainly waist deep in financing our mortagage debt as well. I heard this on CNN money the other day.
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  5. #5
    Man of the People Forums Moderator bobsticks's Avatar
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    Quote Originally Posted by Sir Terrence the Terrible
    My name is Sir T, and I agree with this post.

    Keep in mind Sticks, the Brits and Canadians own more property than anyone else, but I think China is financing our debt based on trade imbalances we have with them. If they decided to call it in, we would be in a world of hurt, that is for sure. They are certainly waist deep in financing our mortagage debt as well. I heard this on CNN money the other day.
    Whattup T.,

    Well, of course you're right and I didn't mean for it to sound like I was givin' Kid any heat. Earlier in the evening over at Nicky's I heard these three ja-brones talkin' like Mao was gonna show up at your door with a Kalashnikov...it's just foolish. Yes, housing is a commodity but they're not gonna repo your mailbox. They don't have 47 million Chinamen in the country to give houses to. Even if they did it's not worth their time, better to sit back and collect interest. I would also add that as the major importer of goods into this country it is certainly not in their interest to see our economy fail.

    ---sticks

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    I put the Gee in Gear.... thekid's Avatar
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    No worries here Sticks. I have no fear of a Red Tide overwhelming our shores it just took me aback when I heard two business reports from different people on the radio mention in an almost offhand way that the Chinese might be involved with the governments decision to act on the two companies. As I have heard more analysis of the situation the Chinese connection may be more along the lines as a large investor than anything else.

    Apparently in yet another screw up of this current adminstration when the Treasury Secretary got in front of Congress to "reassure" everyone and to seek approval for the bailout he was "sure we will never need" future investors took this as a sign that the government might at some point come in (as they now have ) and takeover the two companies. How this takeover would occur and what would happen to stockholders left it unclear to future investors if they should continue to invest in the two companies. So as the companies continued to bleed, new capital slowed to a trickle or dried up completely. Supposedly the government knew several weeks ago they were going to have to make this move but they did not want the takeover to occur while the two parties had their political conventions and they did not want to drop an "October Surprise" that could affect the outcome of the November elections. I will let the political conspiracists debate the timing of this decision...........

  7. #7
    Shostakovich fan Feanor's Avatar
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    Humm ...

    Quote Originally Posted by bobsticks
    Whattup T.,

    Well, of course you're right and I didn't mean for it to sound like I was givin' Kid any heat. Earlier in the evening over at Nicky's I heard these three ja-brones talkin' like Mao was gonna show up at your door with a Kalashnikov...it's just foolish. Yes, housing is a commodity but they're not gonna repo your mailbox. They don't have 47 million Chinamen in the country to give houses to. Even if they did it's not worth their time, better to sit back and collect interest. I would also add that as the major importer of goods into this country it is certainly not in their interest to see our economy fail.

    ---sticks
    Sticks, I'd say China's "Cultural Revolution" stage was anything but utilitarian -- but that is in the past.

    It's in nobody's interest to see the U.S. economy fail, (though there are Islamists its in theirs). But it's ironic that the Iraq war was effectively financed by China. Despite thousands of deaths, the war itself isn't the biggest problem, rather the biggest failure of the Republican regime is gross government deficits. The deficit affects everything through interest rates which is a huge contributor to (for example) the sub-prime crisis, thus Fanny Mae/Freddie Mac. (It is incredibly naive of people to believe the Republicans are "more fiscally reponsible".)

    What happens when big debt holders are under threat? They tend to turn up on the board of directors. Humm ...

    The glory days of the American economy and Pax Americana are in the past. The ecomomies of China and India posed to take their inevidable and rightful places as world leaders. (It will be a while, though, before they face big illegal immigration problems.) In 30 years, unlike today, the situation of the US economy will be no big deal to the rest of the world.

    As a Canadian I take no comfort from any of this since where the US economy goes ours will tag along. We here are having an federal election on October 14, and it looks like we're going to elect a Conservative Party majority government. The Conservative Party nowadays is just a cheap Republican Party knock-off.
    Last edited by Feanor; 09-09-2008 at 03:20 PM.

  8. #8
    Loving This kexodusc's Avatar
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    We're long overdue for this. In a world where economic borders are crumbling and emerging economies are closing the gap at an unstoppable, accelerating place, it's about time the powers that be dropped the arrogant attitude of the past.

    A bit of Government intervention into the markets could have prevented this from happening in the first place and saved a lot of pain. I don't get it. We'd expect a government to protect us from foreign attack, domestic violence, maybe even disease and famine, but protecting us from ourselves is crossing the line?

    Some politico types don't quite get it that free market economy doesn't mean an anarchist economy.

  9. #9
    Sure, sure... Auricauricle's Avatar
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    I am no expert in regard to things Chinese or financial, but if there is one thing that seems clear: the Chinese and similar cultures are far more interested in the long-term gains than immediate gratification. With a nod towards the rising nouveau economy, Chinese investiture in American and other interests would seem more interested in a symbiotic relationship that could sustain itself indefinitely. Simply put, these folks know how to wait, and rather than shooting themselves in the foot by pulling out early would rather work for the global good. In either case, the Old Dragon is awake and the sooner we deal with that the better....

  10. #10
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    Quote Originally Posted by Feanor
    Sticks, I'd say China's "Cultural Revolution" stage was anything but utilitarian -- but that is in the past.

    It's in nobody's interest to see the U.S. economy fail, (though there Islamist who think so).
    That's right. As the US economy goes, so goes the world economy.
    Quote Originally Posted by Feanor
    But it's ironic that the Iraq war was effectively financed by China.
    Gee, every once-in-a-while I do manage to learn something from you.
    Quote Originally Posted by Feanor
    Despite thousands of deaths, the war itself isn't the biggest problem, rather the biggest failure of the Republican regime is gross government deficits. The deficit affects everything through interest rates which is a huge contributor to (for example) the sub-prime crisis, thus Fanny Mae/Freddie Mac. (It is incredibly naive of people to believe the Republicans are "more fiscally reponsible".).
    Blah blah blah. Blah blah blah blah blah. Back to the same 'ol same 'ol. I'd say predatory lending by greedy banks is the biggest contributor to the sub-prime mess, not the govenment. OTOH, Democrats = more govenment = more taxes and still, no solution to the problem.
    Quote Originally Posted by Feanor
    What happens when big debt holders are under threat? They tend to turn up on the board of directors. Humm ...

    The glory days of the American economy and Pax Americana are in the past. The ecomomies of China and India posed to take their inevidable and rightful places as world leaders. (It will be a while, though, before they face big illegal immigration problems.)
    Yeah, okay. China a world leader with their Human Rights record? Not likely. IMO neither country's economies would survive without the almighty US dollar propping them up.
    Quote Originally Posted by Feanor
    In 30 years, unlike today, the situation of the US economy will be no big deal to the rest of the world.
    Pretty bold prediction (and a safe one since you, I and the rest of the audience here will be long gone huh?).
    Quote Originally Posted by Feanor
    As a Canadian I take no comfort from any of this since where the US economy goes ours will tag along. We here are having an federal election on October 14, and it looks like we're going to elect a Conservative Party majority government. The Conservative nowadays are simply a cheap Republican Party knock-off.
    Where the US anything goes, so goes Canada. War on terrorism et al. And by the first of the New Year Republicans will control the whole continent. Good times ahead!

  11. #11
    I put the Gee in Gear.... thekid's Avatar
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    Rich

    Our economic strength does not depend on the "almighty US Dollar" which people were bailing from when the oil producers were not happy that the price of oil was tied to the dollar. Weak dollar = High prices. Our economic strength stems from that we have relatively speaking a stable political system that allows for transitions of power that do not cause economic upheaval. We have not been producing real wealth in this country for sometime as much as transferring it around which has resulted in producing an economy where there are "winners and losers". IMO this differs from our economy in years past where people could use hard work and ingenuity to become a "winner". The transfer of wealth to countries like China who are propping up our debt is an example of how we have lost control of our fate.

  12. #12
    Music Junkie E-Stat's Avatar
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    Quote Originally Posted by Feanor
    ...rather the biggest failure of the Republican regime is gross government deficits.
    And yet the Democratically controlled Congress controls spending.

    Quote Originally Posted by Feanor
    The deficit affects everything through interest rates which is a huge contributor to (for example) the sub-prime crisis, thus Fanny Mae/Freddie Mac.
    And yet, the prime rate is still far lower than it had been for twenty years. I financed my first house in 1985 at eleven percent. The one I got two years ago is six. The crisis is caused by financial irresponsibility on the part of many folks and admittedly the greed of many a financial organization.

    Quote Originally Posted by Feanor
    (It is incredibly naive of people to believe the Republicans are "more fiscally reponsible".)
    That has certainly been true in the past decade. They are learning how to spend from the guys across the aisle.

    rw

  13. #13
    Man of the People Forums Moderator bobsticks's Avatar
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    Quote Originally Posted by E-Stat
    And yet the Democratically controlled Congress controls spending.
    Thank you.

    Feanor, I completely respect your opinions in opposition to the Republican Party. Frankly, in many areas of social doctrine I agree with you. That said recognise that our Congress controls the passage of all bills and wields the power to override even a Presidential veto.


    Have the Republicans exercised the sound fiscal judgement that they espouse? Absolutely not. But, given the American electorate's curious predilection for voting in an Executive of one party and a Congress of the other, placing exclusive blame is a little like faulting Ginger Rogers for tripping over Astaire's foot. It takes two to tango.

  14. #14
    Shostakovich fan Feanor's Avatar
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    Stat ...

    A comment or two in context below ..

    Quote Originally Posted by E-Stat
    And yet the Democratically controlled Congress controls spending.
    ... only for the last couple of years. But I agree the Dems haven't do well in that interval

    And yet, the prime rate is still far lower than it had been for twenty years. I financed my first house in 1985 at eleven percent. The one I got two years ago is six. The crisis is caused by financial irresponsibility on the part of many folks and admittedly the greed of many a financial organization.
    ... nevertheless interest rate rises precipitated the sub-prime collapse though, granted, not the only factor. Was it greed: sure, what isn't? But the bigger picture is the gross over-extension of consumer credit without which the US economy would have slumped much sooner: trouble is the piper has now to be paid.

    That has certainly been true in the past decade. They are learning how to spend from the guys across the aisle.
    ... and before that too, e.g. the Reagan era. Like I said the other day, the only true policy of the Republicans is "bribe the rich".

    rw

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    Man of the People Forums Moderator bobsticks's Avatar
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    That has certainly been true in the past decade. They are learning how to spend from the guys across the aisle.

    ... and before that too, e.g. the Reagan era. Like I said the other day, the only true policy of the Republicans is "bribe the rich".


    ...and the Dems controlled the House during the Reagan years. 1952 was the last time that the GOP had control of all the big three. Again, to play it of as if the Dems have been helpless bystanders instead of causal contributors is fallacious.

  16. #16
    Shostakovich fan Feanor's Avatar
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    The Dems

    Quote Originally Posted by bobsticks
    That has certainly been true in the past decade. They are learning how to spend from the guys across the aisle.

    ... and before that too, e.g. the Reagan era. Like I said the other day, the only true policy of the Republicans is "bribe the rich".

    ...and the Dems controlled the House during the Reagan years. 1952 was the last time that the GOP had control of all the big three. Again, to play it of as if the Dems have been helpless bystanders instead of causal contributors is fallacious.
    I'm not justifying the Democrats, only saying the Republicans are worse. Under the American system it's convient to be able to say, "Our man was President, but the other guys controlled Congress", or the converse as the case maybe. Under the parliamentary system we can't make that excuse.
    Last edited by Feanor; 09-09-2008 at 06:23 PM.

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    Sure, sure... Auricauricle's Avatar
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    Nuke 'em all!!

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    Yeah ya know what's funny in all of this Feanor? You've NEVER tried to justify anything the Democrats do. All you do is entise and incite people into thinking it's all the Republican's fault. How about giving us some examples of the good deeds the Dems have done in the past two years or so Feanor?

    Edit:
    Quote Originally Posted by Sir Terence the Terrible
    Or is this just another cowardly throw a rock and run moment?

  19. #19
    Music Junkie E-Stat's Avatar
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    Quote Originally Posted by Feanor
    ... nevertheless interest rate rises precipitated the sub-prime collapse though, granted, not the only factor.
    I'll have to disagree. What rise? Prime is still very low. Especially if you compare it to the punitive Carter days where it was 15%. The issue was the *creative* loan packages like interest only loans, ARMs, and delayed balloon payment schemes that first timers and bad planners couldn't handle. Had only the basic 15 or 30 year fixed term been available (like I have and presumably, you), the problem would not have existed.

    Quote Originally Posted by Feanor
    ...... and before that too, e.g. the Reagan era.
    I guess you wouldn't understand why it was necessary to break the iron curtain. Think about this for a moment: for thirty years, thousands of ICBMs were directly targeted at US cities. We reciprocated and had squadrons of B-52s aloft - continually via mid air refueling- for decades. That stopped in 1982.

    Actually, the most fiscally responsible group in recent times was the Republican Congress during the last Clinton term. Actually, a lot got done with Clinton's support.

    Quote Originally Posted by Feanor
    ...the only true policy of the Republicans is "bribe the rich".
    Bribe the rich to do exactly what? Not continue to foot the vast majority of the tax base? 70% of the burden comes from 10% of the populace. Nearly half pay nothing. Or get EIC, i.e. get "paid" each year. Negative tax. When one compares taxation vs. benefits, we see an income redistribution of about a trillion dollars per year downward.

    rw

  20. #20
    I put the Gee in Gear.... thekid's Avatar
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    Actually, the most fiscally responsible group in recent times was the Republican Congress during the last Clinton term. Actually, a lot got done with Clinton's support.
    I agree with that but I think you are giving the GOP too much credit there since if you recall Clinton's "support" came in the form that he called Congress' bluff and shut the government down rather than sign off on some legislation with which he did not agree. Once the GOP saw he was not afraid to go nuclear and he enjoyed the support of the public both the Dem and GOP in Congress realized they had no choice but to work together. However I will say that the GOP back then at least had an agenda. The current GOP talks like Republicans, divides people on social issues like Republicans but spends money worse than any Democratic administration since Johnson.

    The GOP today has the same problem IMO as the Dems in that they don't stand for anything other than obtainining/maintaining political power. The few pieces of legislation that do get passed (in no particular order) are centered on continuing the "war" on terrorism, neccessary budget/government function spending bills, pork barrel spending and irrelevant social legislation designed to appease their respective bases. In this era of fierce partisanship split government might be our only hope in getting meaningful legislation done. Based on the number of retirements on the GOP side they are expecting to get wiped out in the House races and lose additional Senate seats. I would not mind having McCain balance out a Reid/Pelosi Congress but his VP choice was really not well thought out in terms of someone prepared to be president and was not the "maverick" move it is being made out to be. It was a blatant attempt to bring back the conservative base (which it did) that did not support McCain and bridge the women's gap that has been widening in the last few years. It is in my mind another example that the McCain of 08 is not the same McCain as in 2000.

  21. #21
    Shostakovich fan Feanor's Avatar
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    The lessor evil

    Quote Originally Posted by Rich-n-Texas
    Yeah ya know what's funny in all of this Feanor? You've NEVER tried to justify anything the Democrats do. All you do is entise and incite people into thinking it's all the Republican's fault. How about giving us some examples of the good deeds the Dems have done in the past two years or so Feanor?

    Edit:
    Unfortunately voters in democratic counties have to hold their noses and vote for the lessor evil. No, I'm not going to justify the Democrat congress today or any Democrats in any interval.

    And what Americans, Canadian, Brits, all those in democracies need to do is examine and vote on two things: (1) the issues, and (2) the underlying philosophies of the politial parties. But the choices are clouded by the promises polititians make. If a party comes to power, they will not keep all their promises. This where the underlying philosophies become important because it helps us decide which promises a party will keep and which it will not.

    In the case of the Repulicans, especially Repulican presidents, the only truly basic philosophy is low taxes. Everything else is for show: fiscal responsibility, small government, social conservatism, religious sensibility are all dispensible in the cause of keeping taxes low, especially for the wealthiest classes. An aggressive foreign policy has been typically of recent, right-wing Republicans; wars cost big money. How do you fight wars but keep taxes low? By borrowing of course, so fiscal responsibility goes out the window.

    Sarah Palin looks successful among Repubicans because she represents Smalltown, U.S.A. The middle class folks who love God & The American Way (-- and we could perhaps add white skins). But I warn these folks that their "values" are not high priority to the real Repulican agenda setters and they will be betrayed when the latter decide it's expedient.

  22. #22
    Loving This kexodusc's Avatar
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    Quote Originally Posted by Feanor
    I'm not justifying the Democrats, only saying the Republicans are worse. Under the American system it's convient to be able to say, "Our man was President, but the other guys controlled Congress", or the converse as the case maybe. Under the parliamentary system we can't make that excuse.
    No but under the parliamentary system, a democratically elected leader of the plurality controls the executive authority of all the civil service (the real power), and can bully his way through a minority by threatening votes of non-confidence, only to call an early election (4th in 8 years) when it's convenient for him politically.
    Heaven forbid a leader achieve a majority where there are neither checks, nor balances to offset the executive authority of the Prime Minister.

  23. #23
    Loving This kexodusc's Avatar
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    Quote Originally Posted by Feanor
    In the case of the Repulicans, especially Repulican presidents, the only truly basic philosophy is low taxes. Everything else is for show: fiscal responsibility, small government, social conservatism, religious sensibility are all dispensible in the cause of keeping taxes low, especially for the wealthiest classes. An aggressive foreign policy has been typically of recent, right-wing Republicans; wars cost big money. How do you fight wars but keep taxes low? By borrowing of course, so fiscal responsibility goes out the window.
    I take exception to this as well. How many times did Bush Sr. raise taxes? Clinton reduced taxes in his 2nd term. You seem to be starting with a conclusion and drawing a map to get there.

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    Shostakovich fan Feanor's Avatar
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    Where do we disagree?

    Quote Originally Posted by kexodusc
    I take exception to this as well. How many times did Bush Sr. raise taxes? Clinton reduced taxes in his 2nd term. You seem to be starting with a conclusion and drawing a map to get there.
    Kex,

    OK, I'm talking about Reagan and Bush II. The First Gulp War was short and sharp, the kind of war everyone loves but which aren't typical. Reagan's war was ultimately "Star Wars" not the real thing but protracted and very costly; he borrowed to finance it. Now you have the Second Gulp War which is the longest in US history and costly.

    I've heard the statistic that the GW2 costs a lower portion of the GNP than WWII or even the Korean War or Viet Nam, (a bargain war?). Fine, so much the more reason to pay for it out of current funds but that would require significant taxe increases. The agenda setters of the Republican Party won't allow that, so the US government borrows. The actual situation demostrates my thesis very well. My train of thought might be new to you but it doesn't mean I'm pulling conclusions out of the air.

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    Quote Originally Posted by thekid
    ...I would not mind having McCain balance out a Reid/Pelosi Congress but his VP choice was really not well thought out in terms of someone prepared to be president and was not the "maverick" move it is being made out to be. It was a blatant attempt to bring back the conservative base (which it did) that did not support McCain and bridge the women's gap that has been widening in the last few years. It is in my mind another example that the McCain of 08 is not the same McCain as in 2000.
    Why do so many people here have McCain dead before he's even elected? Why are people not jumping for joy that the possibilty of there being a female in the second highest office in the land exists? What are Presidential Advisors used for?

    See how easily people are influenced by the liberal media?

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