Paul Bryant is reputed to have reminded his players that when the going got tough, the tough got going. Without doubt, these are not the times for the effete and pusillanimous. But these times, too, will pass.
In past decades we've seen oil price hikes, hurricanes and floods, recessions and a catastrophic attack on New York and Washington.
But what might be called the "irrational exuberance" of the housing and credit markets of the past few years stands to do as much or more damage, if unchecked, than those other disasters.
First, mortgage holders Fannie Mae and Freddie Mac had to be rescued. Then, over the weekend, "the American financial system was shaken to its core," as the Wall Street Journal put it, with the bankruptcy of Lehman Brothers Holdings and the announced fire-sale purchase of Merrill Lynch & Co. by Bank of America.
With the interconnectedness of world financial markets, and the herd mentality that tends to take over at times such as these, some feared the contagion could spread to other firms. U.S. Treasury Secretary Henry Paulson and other federal regulators worked with Wall Street officers over the weekend in what has been called a marathon effort to save Lehman Brothers from bankruptcy.
The feds avoided the temptation of another bailout, thankfully. But it will take a delicate mix of public and private first-aid to stanch the bleeding after the two big Wall Street investment firms hit rock bottom over the weekend.
"Art Hogan, chief market strategist for Jefferies selling; it's buying. It must know something about the soundness and resiliency of the American spirit.
That's the kind of confidence we'll need in the days and weeks ahead.
Comments
Paul Bryant is reputed to have reminded his players that when the going got tough, the tough got going. Without doubt, these are not the times for the effete and pusillanimous. But these times, too, will pass.
Pt 1...the US markets were NOT (banks/investment houses) connected until a Repug dominated Congress and Bubba Clinton repealed Glass Stegall. There were lots of Dems along for the ride also, but Johnny Mac voted present...big wuss war hero. The public got screwed on this one. Less than 10 years later...MELTDOWN...Pt. 2...stop the corporate welfare already...no more bailouts. Let the free mkt operate Repugs...there are winners and there are about to be a whole bunch of losers...
There is plenty of blame to go around, the government for forcing the loan industry to lower its standards to give high risk loans. Then we have the mortgage industry for handing out loans to anyone, knowing they wouldn't pay, and playing hot potato as to give it to someone else. The idiot consumer that thought they could have a house that they couldn't and many had no intention on paying for.
Don't worry, we will make it through, but the middle income will foot this bill as well.
This madness has been ongoing for decades...It is not a new phenomena...This nation is going to have very rough times ahead but we will survive if we all remain focused on the road ahead...What is needed are cool heads in the coming days, weeks and possibly years...We will survive if we, as a people, come together and the powers that be put this nation and her people ahead of greed and power...One last and final and most important task ahead would be to pray and pray hard and continuous for our God's hand to be restored on this great nation...
It really is a shame, that some that have caused this mess will never suffer and have banked millions.
Quote I just read....McCain....change you can take to the bank....is that Lehman Bros, Bear-Stearns or Merrill Lynch?
We might make it through, but not with another Republican feed the rich administration. What has been seen is unbridled greed and me first. What benefits the entire country benefits all, what benefits the wealthy, benefits the wealthy. There is no such thing as trickle-down economics....it never trickles.
Another redistribution of wealth effort fails. Forcing mortgage companies to give unsecured loans (so as not to be picking on the "disadvantaged") combined with the underwriting of these loans by investment banks has led to a severe reorganization of international finances. This shock is being felt around the world. Half of America now wants to put a party in office that will do much MORE of this type of stuff. Great plan. If a little cause this much distress, what will a lot cause?
pat, you don't really believe that, DO you? That this mortgage debacle was a dem redistribution of wealth? Of course, the Repubs would NEVER stoop to making huge profits. They are wise, intelligent stewards of our money and our government that have integrity beyond that of God Himself. Just ask Sarah "I can see Russia" Palin.
GaC, Not just a Dem redistribution of wealth program, a congressional redistribution of wealth program that had the blessing of both parties. It was a failed effort at diversification and fairness. The foolish efforts at greed were based on the belief that tax money is endless and way too many tried for a piece by subscribing to this "loans without collateral" concept.(how smart was that?) The program had to fail, it was designed to. The fact that it lasted for 5 years before collapsing is why it took so many with it. GOVERNMENT NEEDS TO GET OUT OF THE MORTGAGE BUSINESS, TOO.
Copperhead, the "I see Russia from my house" comment was from SNL. That's not real life. (That may also explain your pov on so many subjects)
Copperhead, Sarah Palin did not say she could see Russia from her house, that was on Saturday Night Live and she was an actress!!
This one is really quite simple. Risky loans to those who would not have qualified previously have proven to be disastrous for the mortgage business. America has to get back to disciplined financial practices. Home loans with no down payment, 120% financing, interest only loans all have gotten us here. How we get out is simple as well. Taxes will rise on the rich and the middle class. The poor will continue to get a free pass on taxes but may see things like EIC disappear. We will tax our way out. If congress doesn't control spending however, it will take forever. Not only is time for no increased spending, but, it's time to look at every budget cut that is reasonably possible. Does anyone truly believe national health care will help this? Does anyone truly believe that Obama, the creme of the liberal spenders, gets this? The republicans have not done any better as of late. We need to hold their feet to the fire. If we see one increased spending bill, we need to know who voted for it and help them get a job in the private sector.
Just because they are going to file bankruptcy, doesn't mean the ones behind the scenes are broke, far from it. They won't lose, their broke and mine are two different things.....Greed has no political affiliation.
Pat, both parties will continue to try to get people into homes. They want to have the stats to say, "X percent of Americans were able to buy homes during our admininstration" as it makes the economy sound good. That is why both Bush W and Clinton administrations allowed things to snowball. Why Allan Greenspan had any interest in going along has me baffled though.
I want to be a part of the Obama economy. a dinner in Beverly Hills tonight at a cost of $28,000 per plate. One meal that costs more than most of us have to live on for a year (or two). It makes me feel so good to hear his solutions to the problems of the non-elite. Let's put him in office, he can fiddle while America goes down in flames.
It is no secret and can be found in your research. Clinton and Greenspan lowered the restrictions on Wall St to make the Clinton economy look good in 1998. Remember after Greenspan left office that he bragged on Clinton and how he was the only president that knew the ropes. Bush warned Congress in 2003 that there were potential problems with the system the future and was ignored. After all, members of Congress were getting their share. Shame on them all for putting self ahead of country. Greed, the world's greatest evil.
pat, you're right on the quote, it was "PALIN: They're our next door neighbors and you can actually see Russia from land here in Alaska, from an island in Alaska.
GIBSON: What insight does that give you into what they're doing in Georgia?
PALIN: Well, I'm giving you that perspective of how small our world is and how important it is that we work with our allies to keep good relation with all of these countries, especially Russia. We will not repeat a Cold War. We must have good relationship with our allies, pressuring, also, helping us to remind Russia that it's in their benefit, also, a mutually beneficial relationship for us all to be getting along.
And look at my statement..." I can see Russia" I did not say FROM MY HOUSE. As usual, more misinformation from Republicans.
Seeing Russia is not a qualification for foreign policy OR vice president.
Gummy, you must have "jonny Mac" confused with your boy NObama, who has a RECORD of voting "present".
GACopperhead, Republicans have never encouraged mortgage companies/banks to loan money to those who couldn't afford what they borrow. That was the DIMocRAT libs in Congress, pure and simple. If trickle down economics doesn't work, why has it been so successful in growing our economy under Reagan Reagan that brought us out of stagflation of the 70s?
Our government is like someone without a job living on credit cards. Our goverment needs to get a job -- watch where it's money goes and pay it's self out of debt.
imdstuf, most Americans are able to buy homes, there's just a percentage that's not willing to make the commitment necessary. Too many are interested in the latest toys and socially acceptable habits.
GaC, the confusing point Palin was making in pointing our Russia was a next door neighbor, was that she wasn't as isolated as the loyal opposition tries to make out. There are other countries, important countries, that Alaska deals with on a daily basis. Trade and fishing rights are just two subjects Alaska has to address when dealing with a foreign countries.
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