U.S. to bail out Fannie Mae, Freddie Mac

[iNow]

Pangloss - You seem to be straining to parse words at this point. I understand your comments, but another thing Greenspan said this morning is that financial crisis will most certainly impact the greater economy, and that he wants to update his quote from last year ("there is about a 50/50 chance of recession") to show that now there is an even greater chance.

[Pangloss]

Yes he did, he said it would impact the economy. I agree with that statement.

[bascule]

Financial crisis. Not economic crisis. It's a crisis for the financial industry, not for the economy. Greenspan made that clear.

 

*facepalm* are you serious? Because the headline of the article was "Greenspan: Economy in 'once-in-a-century' crisis"

 

Are you saying the CNN reporter is misrepresenting Greenspan's words?

[Pangloss]

The exaggeration is yours, not CNN's. You want us to believe the economy is "unraveling". CNN, in that article at least, is just reporting what Greenspan said, which is that the economy is being impacted by the current financial crisis. They changed his choice of words for that headline, obviously, but not through intent to deceive, so far as I know.

 

The worst-case scenario here is economic recession, not depression. That doesn't gel with your interpretation of his "'once-in-a-century' crisis" quote, since a recession would automatically not be as severe as the Great Depression of the 1930s, which was less than a century ago. So obviously he meant the crisis to the financial industry, not the crisis to the economy as a whole. On that level the crisis may indeed be more severe than the financial crisis that triggered the Great Depression. That was a very different time, with far fewer controls on the economy. He certainly knows about controls on the economy.

 

Put another way, what Greenspan said does not support your proposition that the economy is "unraveling". CNN made a mistake with the headline. That's it.

 

Of course, if you want to try and tell us how Alan Greenspan is unaware of the history of the Great Depression and its impact on this country, well hey, you go right ahead. I'm all ears.

Edited September 15, 2008 by Pangloss

[iNow]

Oh for the love of Thor.

Economy in bad place.

Some hurting more than others.

Super brilliant former Fed chairman says "worst crisis in a century."

 

Link above in my post #49 to view for yourself and decide what was and was not said.

 

 

---

line[/hr]

 

GREENSPAN: First of all, let's recognize that this is a "once in a half century," probably "once in a century" type of event.

 

STEPHANOPOULOS: Is this the worst you've ever seen in your career?

 

GREENSPAN: Oh, by far. There's no question that this is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go. ... and, indeed, it will continue to be a corosive force until the price of homes in the United States stabalizes.

 

 

<...>

 

STEPHANOPOULOS: <recounts several recent bank failings> Are we going to see more of these major financial institutions fail?

 

GREENSPAN: I suspect we will.

 

<...>

 

STEPHANOPOULOS: So, the chances of escaping a recession now, greater than 50%?

 

GREENSPAN: No. I think it's less than 50%, and I can't believe that we could have a "once in century" type of financial crisis without a significant impact on the real economy... globally... and I think that indeed is what is in the process of occurring.

Edited September 15, 2008 by iNow
multiple post merged

[Mr Skeptic]

Just because an event that happened is a "once in a century" event, doesn't mean that it didn't happen in the last hundred years. Just that you should expect it to happen once in one hundred years on average.

[bascule]

The exaggeration is yours, not CNN's. You want us to believe the economy is "unraveling". CNN, in that article at least, is just reporting what Greenspan said, which is that the economy is being impacted by the current financial crisis. They changed his choice of words for that headline, obviously, but not through intent to deceive, so far as I know.

 

So let me get this straight, if CNN says the economy is in a once-in-a-century crisis that's fine, but if I say something nonspecific like "unraveling" it's wrong?

 

That's some awfully strange mincing of words you're doing there

 

The worst-case scenario here is economic recession, not depression

 

How can you even say that? You're saying it's impossible that this will lead to a depression?

 

Put another way, what Greenspan said does not support your proposition that the economy is "unraveling". CNN made a mistake with the headline. That's it.

 

So the CNN Money editors, the ones who actually interviewed Greenspan and have the full context of what he's saying, made a mistake, and your interpretation of what Greenspan said, distilled through their article, is correct? Excuse me while I guffaw...

 

Of course, if you want to try and tell us how Alan Greenspan is unaware of the history of the Great Depression and its impact on this country, well hey, you go right ahead. I'm all ears.

 

Broop broop, strawman alert

[bombus]

The Crash of Western Capitalist Civilization?

 

http://www.informationclearinghouse.info/article20764.htm

[bascule]

The unraveling continues:

 

http://money.cnn.com/2008/09/15/news/companies/lehman_brothers/index.htm?postversion=2008091513

 

Lehman Brothers, one of the nation's oldest investment banks, filed for bankruptcy - the largest ever announced in the United States. And Bank of America executed a bold and swift $50 billion takeover of Merrill Lynch, while the fate of other brand-name financial institutions remained in doubt.

[Pangloss]

One need look no farther than the previous two posts to see the vast difference between what Alan Greenspan was saying and the dire extreme being peddled in this thread.

 

And iNow, none of those quotes disprove my point. They actually support it.

 

How can you even say that? You're saying it's impossible that this will lead to a depression?

 

Greenspan said nothing of the kind.

 

You should be asking yourself why he didn't predict depression, if he was so convinced that this was a century-level economic crisis.

 

 

So the CNN Money editors, the ones who actually interviewed Greenspan and have the full context of what he's saying, made a mistake, and your interpretation of what Greenspan said, distilled through their article, is correct? Excuse me while I guffaw...

 

You can't deny that they did actually remove a word from his mouth and insert a different word in its place.

 

If Greenspan was referring to the economy as opposed to the financial industry then why would he feel compelled to go on to talk about the impact of the crisis on the economy?

 

I think CNN is just equating the two words, which is understandable, if naive. Here's a version of the story that shares the same headline but look at how the first line reads:

 

The U.S. credit squeeze has brought on a "once-in-a-century" financial crisis that is likely to claim more big firms before it eases, former Federal Reserve chief Alan Greenspan said Sunday.

http://att.cnn.mlogic.mobi/cnn/lt_ne/lt_ne/detail/168352;jsessionid=8997D827272C1E52A4DBCE4AC1BBFF5D

 

He goes on to talk about the "significant" effect on the economy:

 

"I can't believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring," he said.

 

Clearly he differentiates between the two, and he says nothing about depression, makes no claim about the greatest economic crisis in a century, nothing like that. Just a significant impact. Nothing to justify the headline they gave it.

 

 

Broop broop, strawman alert

 

It's not a strawman at all, it's what you're actually saying. There's another example right there in the post above this one.

 

I simply don't see any evidence here that Alan Greenspan shares your dire, fatalist view, nor your political motivation behind it.

Edited September 15, 2008 by Pangloss

[bascule]

All right, let's try for some context here, shall we...

 

The worst-case scenario here is economic recession' date=' not depression [/quote']

 

How can you even say that? You're saying it's impossible that this will lead to a depression?

 

Greenspan said nothing of the kind.

 

You should be asking yourself why he didn't predict depression

 

More than likely because he wasn't asked for a worst case scenario. However, it seems you've already ruled out a depression as an impossibility.

 

I think CNN is just equating the two words, which is understandable, if naive.

 

Because the financial sector isn't the single most important part of the entire economy?

 

It's not a strawman at all, it's what you're actually saying.

 

Quote me, then...

 

http://money.cnn.com/2008/09/15/markets/markets_newyork2/index.htm?eref=rss_topstories

 

NEW YORK (CNNMoney.com) -- Stocks tanked Monday, amid the largest financial crisis in years after Lehman Brothers filed for the biggest bankruptcy in history, Bank of America said it would buy Merrill Lynch and AIG slumped on fears that it can't raise cash.

 

Yeah, the economy certainly doesn't seem to be unraveling... nope

[Pangloss]

Did they, or did they not, take one word out of his mouth and insert a different one?

 

Interesting article: "Economists see more pain to come, but no depression"

 

http://www.mercurynews.com/breakingnews/ci_10471920

 

Despite the headlines, most economists do not think the economy is imploding, although they agree that the spiraling cost of the subprime crisis will sharply slow the U.S. economy, probably sending it into recession.

 

That will slow economic growth for a while, possibly until the end of 2009 or later.

 

Still not unraveling..................................

[bascule]

Did they, or did they not, take one word out of his mouth and insert a different one?

 

They didn't misquote him. You've stated you feel their phrasing is naive as they're essentially equating a once-in-a-century crisis in the financial sector as being a systematic problem with the economy as a whole. Perhaps you'd care to defend that assertion. How exactly are the editors of CNN Money "naive"?

 

Interesting article: "Economists see more pain to come, but no depression"

 

I don't see them ruling it out. You've made a noncommittal assertion that a depression lies outside the sphere of possibility. I've seen no economists joining you in that position. Perhaps you'd care to defend that assertion as well.

 

Still not unraveling..................................

 

No, the Dow only suffered its biggest drop since terrorists blew up the World Trade Center after the government assumed the debts of two of the nation's biggest mortgage lenders, one of the country's biggest investment banks declared the biggest bankruptcy in U.S. history, and one of the country's biggest financial services firms sold for half its value in early 2007 after running multibillion dollar losses. And did I mention that a few months ago Bear Stearns practically evaporated overnight?

 

But no, the economy is just "struggling", it isn't "unraveling"...

 

And I'd like to note... mincing words and framing the debate by insisting that people speak in your language is one of the most insidious tactics the Republican party has used to date... and you seem to be doing just that Pangloss. The phraseology I've used is too non-specific to be incorrect, and yet you object to it for rather nebulous reasons. I think you just want to frame the debate.

 

I'm not going to play your game, sorry.

Edited September 16, 2008 by bascule
multiple post merged

[Pangloss]

They didn't misquote him.

 

They did, in fact, misquote him. That's a factual statement, and if it's wrong then you should be able to demonstrate that it's wrong by showing me a quote in which Alan Greenspan says that the economy is in a once-in-a-century crisis. On the contrary, we've looked at several quotes in which Alan Greenspan clearly says that it is the financial sector is in a once-in-a-century "crisis", and we've also looked at quotes that clearly separate the two lines of thinking.

 

So I've made my case. QED.

 

 

I don't see them ruling it out. You've made a noncommittal assertion that a depression lies outside the sphere of possibility.

 

No, nobody's ruled it out. I said that yesterday right here in this thread -- depression is a possibility. It's possible you misunderstood this quote, which on reflection I see could have been more clear:

 

How can you even say that? You're saying it's impossible that this will lead to a depression?

 

Greenspan said nothing of the kind.

 

You should be asking yourself why he didn't predict depression' date=' if he was so convinced that this was a century-level economic crisis. [/quote']

 

Greenspan didn't say it was impossible, he just didn't predict it. Greenspan didn't say what you're in here preaching that he said. He just did not.

 

You're the only one predicting ultimate doom. The only one.

 

 

No' date=' the Dow only suffered its biggest drop since terrorists blew up the World Trade Center after the government assumed the debts of two of the nation's biggest mortgage lenders, one of the country's biggest investment banks declared the biggest bankruptcy in U.S. history, and one of the country's biggest financial services firms sold for half its value in early 2007 after running multibillion dollar losses. And did I mention that a few months ago Bear Stearns practically evaporated overnight?

 

But no, the economy is just "struggling", it isn't "unraveling"...[/quote']

 

THAT's what I object to, that right there above. That kind of extreme exaggeration (the second paragraph) made for a larger purpose. You wanna believe that everyone will die if they foolishly vote Republican in November, and then cleverly hide your opinion behind an ellipses that you think only smart people will understand, fine, you've posted it. A thousand times on a thousand subjects. We get it. And I've posted mine to the contrary. I get to do that, just the same as you. What irks YOU is that nobody's marching in lockstep with you to the voting booth. Well get used to it, pal, because I am the partisan's worst nightmare -- the guy who doesn't just listen, accept, and ask their superiors what they're supposed to do next.

 

I will continue to respond to your "..." opinions. Count on it.

[bascule]

I love how you conveniently didn't respond to my points about framing the debate in the language of your choice. So I'm not going to respond to you, except to say you're taking a page right out of Karl Rove's playbook. Nice.

[iNow]

The economy is fracking jacked up beyond belief. Is "jacked up" more acceptable than "unraveling?"

 

Did you have a bad experience with rope as a child or something, P?

[Pangloss]

I love how you conveniently didn't respond to my points about framing the debate in the language of your choice. So I'm not going to respond to you, except to say you're taking a page right out of Karl Rove's playbook. Nice.

 

I did respond to each of your points, directly and completely.

 

---

line[/hr]

Oh look, it's another world-renowned expert talking about how the crisis in the financial sector is spilling over into the economy.

 

http://www.forbes.com/wallstreet/2008/09/15/forbes-banking-aig-biz-wall-cx_pm_0916forbestranscript.html

 

Have we now gotten to the point where we can be confident that the problems in the financial sector aren't going to slop any further into the real economy[/b']? And we're going to start seeing--

 

The key on the real economy is making sure, and doing it formally, openly, that the dollar will be strong. We're going to take it back to where it was a year, year and a half ago. And still, that's far above what it was in 2004, but we're going to have a strong dollar. They do that, suspend "mark to market," and the crisis will not slurp over into the real economy. But if they don't do that, and this thing continues, eventually banks are going to stop lending. What the miracle is so far is that despite a year of financial turmoil, bank lending actually is above what it was a year ago, which is the reason why the economy hasn't cratered.[/b'] But that's not going to last forever if something isn't done on the financial side. Stabilize the dollar, suspend "mark to market" and we'll get out of this.

 

Pretty serious stuff, alright. But just not cooperating with the action plan.

 

Darn those economists! Didn't they get the memo from the Democrats' Rapid Response Team?!?!

[bascule]

I did respond to each of your points, directly and completely.

 

Yes, except the ones about framing the language of the debate, which has not only been your primary concern in this thread, but your primary concern in general.

 

Was that too "partisan" or too "politically correct" for you?

[Pangloss]

I responded to that point at the end of post #64. I just didn't quote it that way. Sorry for any confusion. To be even more direct, you're absolutely right, that's exactly my concern in this thread and in general. Partisan framing. I don't like it. That's my opinion. You can put lipstick on a pi-... er, never mind.

 

That's why I've debunked every partisan thread you've created since you declared the Surge to have failed a month after it started. That was, what, over a year ago? You can call it "Karl Rove's playbook" all you want, but I apply the same critical eye to our conservative members and our resident crackpot extremists both left and right, and I've got the overflowing in-box to prove it.

 

I could be less celebratory about it when I succeed, I suppose -- you made that point in another thread the other day, and I thought it was fair. I do tend to drag things out a bit sometimes, gasbag that I am. I enjoy your participation here and I want it to continue, so I will work on that.

 

---

line[/hr]

Mod note: Discussion of the Surge in Iraq moved to here.

Edited September 16, 2008 by Pangloss

[bascule]

I appreciate that Pangloss.

 

That said, AIG failed today... the Fed is bailing them out to the tune of $85 billion:

 

http://www.reuters.com/article/wtMostRead/idUSHKG1567720080917

[iNow]

If it makes you feel any better, bascule, others have used the term "unravel" as well.

 

 

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/16/AR2008091601750.html

Too many people on Wall Street have forgotten or disregarded the basic rules of sound finance. In an endless quest for easy money, they dreamed up investment schemes that they themselves don't even understand. With their derivatives, credit default swaps, and mortgage backed securities they tried to make their own rules. But they could only avoid the basic rules of economics for so long. Now, as their schemes

unravel

in bankruptcies and collapse, it's once again the public who is left to bear the costs.

 

 

http://www.financialpost.com/story.html?id=794969

Analysts said it was a high-risk strategy that could backfire if financial markets continue to

unravel

and damage a U. S. economy already teetering on recession.

 

 

http://www.independent.co.uk/opinion/commentators/hamish-mcrae/hamish-mcrae-lehmans-fall-is-not-all-bad-news-932008.html

The markets could

unravel

further in the coming weeks and there may well be more casualties.

 

 

http://www.pbs.org/nbr/site/onair/gharib/080915_gharib/

The Treasury has drawn the line, said they're not going to help. But you know, at the end of the day, as things do

unravel

and get measurably worse, the Treasury will use the triple-A credit of the United States of America, and it's still triple-A. And it will continue to be triple-A.

 

 

 

Now, I suppose one could try to argue that the Financial sector and the Economy must be treated in silos, discussed independently and assumed to have no impact on one another, but that strikes me as an invalid approach to understanding the pressures we're under.

[ParanoiA]

Careful, none of those "unravel's" refer to the economy, but rather the financial market. Everyone agrees - as if any sane person couldn't - that the credit market is taking a horrible hit right now.

 

And no, there's no such thing as the financial market not effecting the economy, just like there's no such thing as the financial market equals the economy. The financial market is a piece of the economy and should be looked at in that way. Not sure why we keep trying to go from one extreme statement to another.

[john5746]

Now, I suppose one could try to argue that the Financial sector and the Economy must be treated in silos, discussed independently and assumed to have no impact on one another, but that strikes me as an invalid approach to understanding the pressures we're under.

 

I think it is another step - a big step in the devaluation of America in relation to the globe. It's as if a chinese investor just found out the beach front property he invested in is actually in the middle of Kansas. Hopefully, this process will be slow and not a big shock. And hopefully, we will get a President that will stop spending so much money trying to rebuild the freaking world.

[Pangloss]

Now, I suppose one could try to argue that the Financial sector and the Economy must be treated in silos, discussed independently and assumed to have no impact on one another, but that strikes me as an invalid approach to understanding the pressures we're under.

 

What ParanoiA and john5746 said, and I will just add that the above is not an argument I've ever made.

[ParanoiA]

Or maybe we'll get a president that will stop taking money from companies that are going bankrupt and look the other way. I wonder if Obama would care to give that money back?

 

The top three recipients of Fannie mae and Freddie mac were Chris Dodd, Barack Obama and John kerry. It has been said, but I have not verified it, that Obama received more in his short time in the senate than all but one politician received in two decades.

 

Certainly soundbite material. I would like to see the rest of that list of politicians soaking in Fannie Mae's and Freddie Mac's campaign money. I'm sure that's where the list of republicans starts, or else we'd be hearing about the top four recipients.

 

This whole thing is damn joke. Mccain, and Obama and his democrat congress didn't do shit in the way of oversight, and didn't do shit to stop this financial disaster. Maybe they were too busy running for president? They took their money and I guess they were happy. I'm not sure how much McCain got, but what happened to the maverick? How about the agent of change?

 

Oh yeah, they're pointing fingers at each other trying to pretend it was the other guy's fault. McCain is hiring ex-lobbyists and Obama is lathered in cash from two financially screwed institutions that both of them failed to act on.

 

These are corrupt politicians. Send them home.