All the King's Horses and All the King's Men

Credit 101. Credit squeeze is because the system (bank to bank, bank to company) has lost trust - they're suspicious of other's ability to repay line of credit/loan and so have plugged lending.

Why?

Financial institutions overinvested in securitized mortgages (package up the value of mortgages and "invest" in a financial package ased on the same) which have lost value, so company assets are lower and any potential dividends/etc dropped off the book.

Financial institutions in derivative swaps and default/debt obligations which are coming due - with no money to pay. (ex., AIG) Equivalent to you giving an IOU but don't have the cash when it's time to pay.

Both of the above exacerbated by the "mark to market" rules which requires companies to identify the value of assets by what the current market price would be -- even if there's no plan/need to sell. So if in 2006 you made an investment, you'd be showing a loss - even though you're not planning to liquidate it.

There's a lot of discussion about the mortgages, swaps, derivatives, etc... essentially boils down to the same thing. Enough financial companies don't have the assets at hand to cover required payments or cover losses - their into the negatives.

I think this is more about flipping houses that investors could not afford and now they want us to bail them and when MSM pushes something nite and day it is time to run.

Save the country vote the incompetent incumbents OUT!

Queen Pelosi wanted it to fail so that the Democrats could use the vote against the Republicans in the fall election. Pelosi is the worst and most hyperpartisan Speaker of the House in modern times. Just think, this creature is third in line to the presidency.

Underdog,
Social Wreck is right.
We may be in turmoil right now, but with Obama you ain't seen nothing yet.
This guy is as crooked as a snake, and
his venum if much worse. His dealings with the savory characters and his minister...do you really think these antics will stop when he is president?
Don't think so; with the power he will have all this will get worse.

Barack has all the elements. Muslim background, radical reverend Jermiah Wright as a mentor for 20 years, chicago political machine, harvard law degree, great speaker, militant wife, ACORN trainee and teacher, well connected to corrupt and indicted individuals in illinois, embedded in one of only two political parties, and the darling of the PUBLIC AIR WAVES thanks to biased organisations that are supposed to be digging up the background on these people. He has gotten a free pass. He is 36 days away from pulling it off, and then the fun starts. We do need change, but not this guy.

Tungsten,

OK, the Dow was down 777 yesterday. Let me check ... the Dow is open for business and up 266 today.

I still don't have a clear explaination of why the Treasurer needs $700B. How will that "free up the credit markets"? If there's no bailout does that mean my mortgage company is going to call my loan in? Does that mean good, honest lenders will refuse to lend to good, honest and worthy customers?

It's impossible for me and millions of others to sign up for something if the ramifications are not explained well. Shouting "Dooooooom" is not enough.

All in agreement say "I".

Let the greedy b...., that took our jobs overseas and made huge profits bail out their buddies, if really needed.

My point is why has credit stopped when the circulation of money is only being stopped by the 5% of the population that controls all the wealth.

DUHH

This blog has a habit of deleting posts that contain references to sources that expose the truth. SO. Go to you tube and search "burning down the house" which incidently got removed after over 1 million views the first time, due to somebody not liking it. It is too factual for them to swallow. This housing crisis and collapse is part of a much larger movement, with roots dating back decades. Main goal, chaos, change, transfer of wealth. CHAOS. we got that . CHANGE. you can not believe in possbly. TRANSFER OF WEALTH. Oh you bet it wont be long coming. I hope you all will welcome the coming socialist welfare state that is just around the corner. Careful what you wish, you just might get it.

WHy did pelosi intentionally sabatoge the vote???? ACORN provision was removed. Now watch em try and pass new legislation with that back in the plan, this time along party lines. Watch.

Woody -

777 points off the Dow pretty much did the trick.

Newt, especially, was too clever by half on this one.

Everyone that voted for the bill is not in a close race. Everyone that voted against deemed it too risky to vote for because they are in tight races and the bill is WILDLY UNPOPULAR across the country. Constituents are against it 10-1 according to Congression offices. Until someone steps up and explains why it needs to pass and pass quickly, the American people ain't smellin what Paulson's cookin.

"Why should Nancy and the Dems be held responsible for getting it passed"

Because they stepped up front at every opportunity to take credit for passing it. Because Pelosi then intentionally sabotaged it.

She is buying Barack the election with our retirement accounts.

Disgraceful.

Posted by: len
- - - - - - - - - - - - - - - - - -
The dems had the votes to pass the bill, but did not want to take responsibility.

If Obama is elected he can be Pelosi's puppet and she can remain speaker.
Hum...looks like everything has a price and unfortunately we have to pay it.

Watch the videos with all of the players. Search for "Fannie Mae, Freddie Mac Scam" on. You can see Barney Frank and Raines saying Frannie was fine and any attempt to stop it as meddling.

bravo, ginger! (comment #4)
great points about pelosi + frank's constituents. of course jpt can only pound W for failing to whip the TX reps. maybe he's angling for a job on MSNBC if Obama wins!

the bottom line is that the dems could have passed this bill without ONE republican vote. but somehow, mr. tapper decides this is a disastrous outcome for Bush.

The real story here that is not being reported is that Raines at Fannie Mae resisted any oversight of those bad loans. Those bad loans were packaged and sold as securities. Banks bought them and they failed. Those loans were the product of a social engineering project by the democrats.

McCain and many others called for oversight and were shouted down.

It makes no sense to bail out the banks that bought those securities and to leave those securities still on the market. Any bail out plan should first shutoff those loans and securities from Fannie Mae.

"Why should Nancy and the Dems be held responsible for getting it passed"

Because they stepped up front at every opportunity to take credit for passing it. Because Pelosi then intentionally sabotaged it.

She is buying Barack the election with our retirement accounts.

Disgraceful.

Raines is of course one of Obama's top advisors.

The problem is bad loans that were created by democrats to pander to people who could not afford the loans.

Social Wreck:

AMEN!!!
To bad no one listens.

Newt's role in this is too amazing. He evidently lobbied the R's against the bill behind Boehner's back, and when it failed he said "I'd have voted for it".

Wow. Just, wow. What a scumbag.

Anyone who's blaming Nancy for this needs their head checked. It was a REPUBLICAN bill engineered by GEORGE BUSH. Why should Nancy and the Dems be held responsible for getting it passed when even the Republicans can't support their own President?! Why should the Dems have to pass the bill all by themselves? It's a GEORGE BUSH bill for crying out loud. Why are there more Dems voting for it than Republicans? Oh, that's right... coz Republicans got their feelings 'hurt' and put their hypersensitive emotional wounds before the good of the country.