GM Govt. Bailout?

[GeneW]

Originally Posted by stuffy

a company that makes cakes does not get their raw material (let's say flour) for free because it's useless without them to make something edible out of it.

If they raised their own wheat and ground it into flour would they owe the local government money because the wheat grew out of the land? How about the people in the local area, since it's on "their" land?

It's not the much of a difference... raising wheat requires land. So does mining tar sands.

Why does the farmer not pay by the bushel for raising corn or wheat but the oil company pays for mining tar sand? Maybe because there is enough money being made to "justify" the reasoning?

Originally Posted by stuffy

but the government got themselves into this trouble by deregulating the banking industry. the only reason why canada's banks are in such good shape compare to those in the u.s. and europe was that our government resisted deregulating the banking sector in the mid 90's.

as far as i'm concerned, industry has proven that they cannot police themselves.

First of all, it was the US Mortgage industry that got into trouble, not the banks.

The cause of all of this was when two US agencies that loan money for mortgages, Fannie Mae and Freddy Mac, were told to loan money to minorities in order to curb "unfair lending practices". This was done by the Clinton Administration in the 1990s.

For the Reader's digest version go here

http://www.lewrockwell.com/suprynowi...ynowicz95.html

The original New York Times Article about the disaster, nine years before it happened, go here...

link

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Canada didn't play this shit and hence isn't in the shit today.

For a very long time Fannie Mae and Freddy Mac have also "bundled" securities. Much longer than the current period. Fannie Mae certificates were rock solid investments, before it became fashionable to Social Engineer via the Banks.

The US Mortgage Industry "followed" suit, a safe thing to do. Too bad that a few bad actors really did entice a few dummies to sign on the dotted line, because their over reach and foolishness is going to hurt an industry which has done nothing wrong except blindly follow the two leaders- Freddy Mac and Fannie Mae.

The people who deserve punishment are Bill Clinton, Andrew Cuomo, and both Dems and Reps who watched this train wreck and sat on their hands because they figured that the Housing Market was a "measure of prosperity".

Gene