Not really. The collapse starts with an oversupply of homes. Either from overbuilding or loss of jobs or maybe even simply decreasing wages.

YOu need to read the quote and then the answer:

I did not repeat the quote since I quoted it.  Now in light of the quote and then my comment, one cannot see how your answer is germaine to the discussion.  Threads 101.

...uses AOL...double LOL

They could have, but many of them used it within the past few years to hedge up the price of oil and food and hedge down the value of corporations. Funny thing is each time they finish they talk up their hedge fund while they are exiting their own positions and put all the downside on the average Joe.

No he didn't. He's a bigot.

That's not the counter argument. The counter argument is that society has no inherent right to someone else's property simply because society decides it "needs" it for a "greater good".

How much the richest 400 have is none of my business. I don't have a right to their property simply because I need it any more than a burglar has the right to your property simply because they're "struggling".

Like I said in my analogy - which you expanded on nicely - the issue here is that once the predatory lendors started getting a lot of defaults, they started showing these "assets" with fairly generous valuations. This, in turn, led to a loss of confidence in the balance sheets in bankers and investors which as you mentioned, led to a freezing of credit.

What Smoothseas doesn't seem to want to recognize is that there is an origin to tihs and while deregulation is certainly a big part of the problem (especially of Fannie Mae), it ultimately originates with Fannie Mae lending to individuals who couldn't really afford it.  It's a huge mess.

What annoys me about Smoothseas is how loosely he throws around the accusation of "ignorance".  It's a common trait of left-wingers - agree with them or you're simply ignorant or dishonest. 

The richest 400 people had no more to do with this crisis than any other random 400 people. The government has no right to their property.

Oh wow.  So now poor people are a protected minority?

I will say I'm bigoted against stupid people, that's probably why I have such a hard time with your clueless responses.

What a pathetic crock of non-sequitor bullshit.  Moore's an arrogant, corpulent, elitist moron and so is anyone who thinks he has a clue.  Well, OK...  maybe not every one who does so is corpulent.

That what you were lookin' for, Arty?

Happens to be true, but happy to oblige.

"Oh wow.  So now poor people are a protected minority?"

No.

However I do believe that someone who sees nothing but red or blue

And  who can't see there is grey and not just balck or white

And  who thinks everyone who doesnt agreee with them must be a liberal

or  who can even prove them wrong must be a liberal

And  who thinks that the problem must be another class

is a bigot

"What Smoothseas doesn't seem to want to recognize is that there is an origin to tihs and while deregulation is certainly a big part of the problem (especially of Fannie Mae), it ultimately originates with Fannie Mae lending to individuals who couldn't really afford it.  It's a huge mess."

The problem with the GSA's books are not their own loans or the loans that they underwrote from regulated HUD lendors. They are the mbs's they bought from unregulated lenders. The problem mbs's are the ones flush with ARMS. The GSE programs offered fixed rate mortgages. The GSE's were also cooking the books but once again...they cooked their books by improperly valuing the mbs's from the unregulated lenders.

De-regulation was never the problem, folks - that bogeyman doesn't hunt in any honest assessment.  Ill-regulation, counter to sound financial risk-management principles, was.  Compounded by the Enron-style fraud perpetrated by Fannie Mae's & Freddie Mac's politically connected hack CEO's.

Sickeningly, both Presidential candidates are pandering to the notion that 'free-wheeling deregulation' led to this problem, when nothing could be further from the truth.  When the regulations say you are required to go out & gamble on high-risk loans & further say, don't worry about the risk, the Fed has your back, that's not what I call de-regulation.

So in other words, put someone in prison for acting legally? Retrospective criminal law changes are a terrible route to go. If they've done something illegal under current criminal law, fine. If they haven't, then change the law for the future, not the past.

Let me get this straight: Banks lend money to the poor who can't afford to repay the loans, causing them to go into default, flood the housing market, and basically play a large part in this problem. The government looks to buy up these loans, and it's a bailout solely of the rich? While it's not a bailout solely of the poor either, both the banks and the poor (when I use poor in this instance I'm referring to people taking on loans they couldn't afford to repay) played a part. I'm also curious as to just how many of the super rich referred to by MM are directly related to the banking/loans debacle. As to the more general issue though, I might agree with him that the rich should pay for their own bailout - i.e. that there shouldn't be one.

Why bail out either? If I've taken on a huge loan to buy a house way above my income bracket, I deserve to lose it if it goes sour, just as the banks deserve to suffer a loss on that loan since they also lent the money irresponsibly.

Poor MM, contradicting himself with his own analogy. If a bank lends you money to buy a house, it's secured against that house, so that if you fail to repay the loan they get the house to sell. They don't own/get to sell you though!

A bit too extreme, but I'd agree with the sentiment on this one. Saying something is too big to fail (and letting smaller institutions fail) just sends the message to banks to merge+create monopolies/oligopolies so they can be bailed out. Basically storing up huge long-term problems for people.

Disagree on the first point, the second might have some merit (but I'd only favour a limitation, not a complete ban), seeing as shareholders have seemed happy to accept such contracts that in effect reward failure. You'd have the counter-argument that directors may well be risk averse, and so to attract the best ones you'd want something like this, but maybe it would be worth looking at having at least some limits on such contracts all the same. As to the first point, an executive should be paid what the market rate is. If you limit their salary, you end up with firms unable to attract the best director, and ending up possibly taking on someone not so good, doing worse, and then not being able to afford to take on more employees/give them a pay rise.

What, so allow people to invest in a much more volatile asset, and protect them from the downside and allow them to benefit from the upside? That wouldn't work out very well. If you really want something like this, then have it as an option - people can choose additional government protection for their scheme - at the cost of losing some of the return if it does well. I.e. the government guarantees either that it won't fall in nominal value or in real value, and if it does better than this it gets to take a chunk of that gain for compensation. Alternatively simply have the government insuring private firms who do this (with the private firms paying a certain amount of income to the government for this mandatory insurance).

MM takes a leap back into fantasy world. Anyway, a national bank that lends to all kinds of people? So you'd have the government lending too much to people on low incomes, and doing it at an even lower rate than the banks? I.e. making less money in the good times, and losing just as much in the bad? You'd also have them being far more bloated+inefficient (no profit motive), having an unfair competitive advantage over the other banks (you get 0 risk on deposits, and a higher rate from the sound of it - why bother with T-bills anymore?), etc.; In fact why stop at nationalising the banking system - nationalise everything! Then tax everyone a fortune to pay for all these nationalised services, and wonder why people are disgruntled when basically told by the government how they have to spend their money!

Anyway lots of ideas full of potential. Unfortunately for most of them it's the potential for laughter.

Perhaps you should use a dictionary and look up what a bigot is then. 

What you just described is basically Michael Moore (except in his case everyone who doesn't agree with him is a right wing nut instead of a liberal).  Moore, however, isn't a bigot. He's an idealogue.

Let's talk about your assertions though:

1) In an article that proposes that the richest people in America pay for the bailout of the rest of the country you see nothing wrong with that.

but

2) If I point out that the ultimate source of the credit crisis are NOT the top 400 but more commonly the poor who bought houses they couldn't afford (you may have heard something about the sub-prime crisis?) then your response is to deny this based on looking at foreclosures in your local newspapers.

3) You accuse me of seeing things in black and white even as I put equal blame on the stupid poor people who bought houses they couldn't afford and the greedy predatory lenders even as you choose to put the blame wholy on de-regulation and the lenders.

4) You call me ignorant even as you simply regurgitate left-wing talking points and repeat what you've read on a website.  When I ask you to put up your real-life credentials, you ignore it and simply continue to link to websites as if you reading a website somehow makes you an expert but me ignorant because I don't agree with your analysis of those websites.

What you keep choosing to ignore is the root cause of the problem.  You keep focusing on the bookkeeping of the banks as if this is somehow a root cause.  You even compared it to Enron without understanding the ultimate root issue at Enron.

These banks and financial institutions (and Enron for that matter back in the day) aren't failing because their valuation of their assets is off. They are failing because they are losing real world dollars - spending more real world dollars than they are making.  How they manage this on their balance sheets is the result of how they are coping with this loss.  Enron and these banks chose to hide how bad they were - which is a bad thing.  But the banks are hiding losses that ultimately came from the collapse of the housing market.

In an earlier post, you try to shrug off the housing market collapse based on:

"Not really. The collapse starts with an oversupply of homes. Either from overbuilding or loss of jobs or maybe even simply decreasing wages."

You seem very incurious as to the actual root issue.  Yes, the housing market collapsed because of an oversupply of homes. What caused the over supply of homes? That's the key question and you seem to care very little about that. Overbuilding? Sure.  Loss of jobs? What? Decreasing wages? Huh? 

I tried to walk you through what actually happened and in return you called me a bigot.

What caused the oversupply of houses which in turn lowered the value of homes which in turn dried up all the liquidity with banks who could no longer sell foreclosed homes at even remotely the same price that they lent on them?

1) The poor people you so stridently defend are usually poor because they're stupid with money. That's not bigotry, that's just a fact. So they bought homes they couldn't really afford and when they failed to make payments, they got foreclosed on. So the inventory on houses goes up lowering the overall value of houses.

2) The stupid Bush administration that put pressure on the fed to keep the interest rates ridiculously low for too long a time caused easy credit because banks had to make more loans to make the same amount of money so they lowered their standard. 

3) When the interest rates started to climb, more stupid poor people who shouldn't have gotten houses in the first place lose their homes increasing the inventory of unsold houses further.

4) Now all the stupid middle class people who bought interst only homes see the value of their houses going down, some of them start to get foreclosed on causing the inventory of houses to get even higher.

5) Meanwhile, the builders start to wake up and see that they've built tons of houses they can't sell so they start selling them are firesale prices which in turn lowers the values of houses further.

6) The banks are now left holding on to tons of assets that are not worth nearly as much as they had once thought but come up with creative ways to show that they're not doing so badly as they really are.

7) Investors and other banks start losing confidence because they don't really know who is worth what because all of this bad debt is still on the books as assets. 

So was deregulation the culprit? That's subject to debate.  Like most things, the blame isn't equally distributed on government. The Democrats, who leaned on Fannie Mae to loan to the poor deserve a lot of the blame and Fannie Mae is the poster child of corrupt financial institutions and the Democrats blocked any attempt to regulate them.  

Now, I write this stuff and Smoothseas responses are "You're ignorant" or "You're a bigot" and his proof of this is to link to some websites and to spit out regurgitated factoids that are meaningless on their own.

I feel pretty confident that any reasonable person reading what I've written here is going to conclude that I'm not a bigot or ignorant.  They may disagree with my analysis but they're certainly not goign to find anything bigoted or ignorant in this.

Blaming the banks and financial institutions is the easy path. It's politically correct to nail them. But they're not the root cause. The root cause are stupid individuals who bought homes they couldn't afford. And you can be certain that they weren't one of those top 400 people Michael Moore wants to go against.

I see plenty wrong with the bill and plenty wrong with the fact that the taxpayer gets stuck with the bill. However I've done plenty of research on financial crashes and realize how important it is to recapitalize the banks. Maybe you should do the same. I would suggest googling nouriel roubini, the Japanese financial crisis, and open crs for starters. On the Open CRS site there are currently some documents that help to explain what options the US has using comparisons to the crises that have occured in other nations. Japans crisis is the best thing to look at since what it happening to us is similar in several respects.

No it is based on a lot of research from several sources. including info from HUD, OFHEO, financial news sites, congressional research reports, economists,etc.....Not FOX.

What I do for a living is none of your business..Its that simple.

Certainly. However when the home market was booming there were hard working middle class folk as well as high flying wealthy investors making inestments in real estate who have also simply walked away from many of these investments. That is why I look to the overall picture of unused inventory. When you do look at these inventories, as well as information from real estate market analysts you start to realize that the poor have played a very small part in this crisis. It is the markets that have had huge gains in real estate values during the boom that are seeing the greatest declines now and are showing the largest forclosure rates....These markets are not markets that serve the poor.

Now you are starting to see a wide range of people walking away from homes. Those who have lost their jobs over the last year, those who bought houses within the last 5 years and have seen declines in their values lead to a negative asset value,etc.

Both parties have played a part in deregulation and both parties have played a part in blocking attempts to regulate the GSE's over the past few years. You would know this if you looked past what FOX claims is fair and balanced. One good example is the bill that McCain cosponsored. It never even made it onto the floor during at a time when the Republicans controlled congress. When you dig further you actually realize that it is specific people on both sides as opposed to either party as a whole.

At least this time you leave out the word poor. If you did in the first place you might not  have been accused of being a bigot.

bigot-is a prejudiced person who is intolerant of any opinions differing from their own or intolerant of people of different ethnicity, race, or class.

In any case your original remark:

is rife with bigotry.

To even think that the poor somehow have the ability to cause the near collapse of the U.S. financial system is ludicrous.

Nail, meet .

Can't speak for him, but I think he meant the other 299,999,600 people, not just those meeting your definition of poor.

MM adopts the persona of a fierce class warrior, no doubt.  There are other class warriors that come to mind, perhaps the most famous being Ghandi.  Now picture the two in your mind standing side by side & tell me which is the genuine article.