Editorial on meltdown just propaganda

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The lead editorial in the Augusta Chronicle Oct. 1, " The truth about the meltdown," was the worst propaganda I have read in a long time. It is reminiscent of the slave owners who preached to poor whites that they were superior to blacks while they both were victimized by an oppressive and unjust system.

Columnist Thomas Frank, in his Wall Street Journal opinion piece, "The GOP Blames the Victim" (Oct. 1) stated that "capitalism sure is fragile if subprime borrowers can ruin it."

Frank also asked Bill Black, a professor of economics and law at University of Missouri-Kansas City, what he thought of the latest blame offensive. Black pointed out that "for all their failings, Fannie Mae and Freddie Mac did not originate any bad loans -- that disastrous piece of work was done by purely private, largely unregulated companies, which did it for the usual bubble-logic reason: to make a quick buck."

Most of the mistakes for which we are paying now, Black told Frank, "were four entities that under conservative economic theory should have exercised effective market discipline: the appraisers, the originators of the mortgages, the rating agencies and the investment banking firm that packaged the subprime mortgage-backed securities. Instead of (disciplining) the markets, these private actors served as the four horsemen of the financial apocalypse, aiding the accounting fraud and inflating the housing bubble." It is they, Black says, who turned "a crisis into a catastrophe."

If the financial institutions ( lending banks and underwriting investment banks) didn't salivate over profit opportunities in engaging in subprime lending, then the subprime borrowers, including "minorities," would have never gotten loans, even those who deserved them.

The tail (borrowers) didn't wag the dog (private institutions) and shouldn't be the primary scapegoat for the resulting financial disaster.

Tracy E. Williams, Jr.

Augusta

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CH
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CH 10/11/08 - 05:21 am
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So, its all the banks and

So, its all the banks and lending institutions fault, eh Tracy? Maxine Waters staunchly defended Franklin Raines, head of Freddie Mac, in 2004 when Republicans were calling for greater restrictions. She said we shouldn't try to fix a system that didn't need fixing, and, because Franklin Raines is an African-American, she claimed that questioning his "outstanding leadership" was nothing more than "political lynching." If you don't believe me, check out Youtube and listen to Waters and other Democrats rail against any kind of restrictions on lending, in 2004. Also, please note that it is those evil Republicans who are calling for tightening restrictions that might have averted the mess we're facing now. Don't believe me, check it out yourself. Then ask yourself, do you really want more of these people in congress and running the White House?

ThatOne
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ThatOne 10/11/08 - 05:25 am
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94% of homeowners are paying

94% of homeowners are paying their mortgages on time; that said it doesn't take a genius to figure 6% of bad loans aren't enough to bring down the economy...The fact is banks were placing "side bets" on mortgages in the form of CREDIT DEFAULT SWAPS (CDS)...CDS are an agreement in which a buyer (bank) makes a series of payments to a seller (ex: Intn'l Derivatives Assoc) and in exchange receives the right to a payoff if a credit instrument (loan) goes into default or on the occurrence of a specified credit event, for example bankruptcy or restructuring....This is a side bet, or if it were properly documented would be called insurance; but if if was called what it should be (insurance) then it would/could be regulated; and of course regulation is bad for business (sarcasm)...60 Minutes did a story on this $60 trillion (yes TRILLION with a T) dollar shadow market...CDS failed because when the mortgage market turned for the worse the sellers did not have the principal on hand to fullfill their end of the agreement...Here is the link to the story; once there click on the video and learn like I did... http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml

angiesdad
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angiesdad 10/11/08 - 05:55 am
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good post Thatone.the truth

good post Thatone.the truth will get you nowhere on this board.what you have is a group of sheeple who feed off one anothers post.they don't care what happened as long as they can blame liberals.yeah, like barney frank created this mess by himself.ever since teflon reagan was in office these losers refuse to accept responsibilty for anything,just like that dunce would not do.the macs were not doomed,nor were these insurance companies or banks.they just want to continue to rip us off because they can.they have money hidden they're crooks and always will be.just blame the borrowers forget who made the illegal loans, and so it goes~

JohnRandolphHardisonCain
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JohnRandolphHardisonCain 10/11/08 - 05:59 am
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Great LTE, Tracy Williams.

Great LTE, Tracy Williams. Excellent & accurate points "ThatOne". I just listened to a program on UK politics on the BBC. There is a consensus among international experts that this marks the end of the Reagan-Thatcher accord on "free" (unregulated) markets. Not only is the Reagan-Thatcher accord to blame - so too are Nobel prize winning economists (Milton Freedman) who assured us that unregulated markets always perfectly value everything at each moment making this type of failure impossible. The unregulated free market model did not account for greed, ignorance, predatory practices & financial innovation. We are only in the first stage of this long term crisis. A deep worldwide recession will follow, and it will take a VERY long time to recover. It took 15 years for stock prices to recover after a major stock market decline in 1968. This is the biggest worldwide financial crisis since 1929. There will be continuing recriminations & deep political polarization. The Great Depression saw the rise of fascism. That is something that must not be allowed to happen again. Jews did not cause the Great Depression. Minorities & equal lending practices did not cause this catastrophe.

griesella
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griesella 10/11/08 - 06:02 am
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OOO..dad. How you do carry

OOO..dad. How you do carry on. And so early on a nice Saturday morning. Take a deep breath and smile, you'll be surprised at how much better you will feel.

I4PUTT
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I4PUTT 10/11/08 - 06:17 am
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Does anyone still read what

Does anyone still read what angiesdad writes? We don't yet know what all may have been involved in this melt down. Although I do not disagree with ThatOne, I think there is more to be learned and even more that may never be disclosed. All reasons why I have no confidence in the an Obama White House.

patriciathomas
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patriciathomas 10/11/08 - 06:20 am
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Tracey, only by ignoring the

Tracey, only by ignoring the fact that the lending organizations would have NEVER lent any money without collateral to cover the loan if they hadn't been pressured by government and left wing entities to do so, can you pass off the half-information as an explanation of how this crash happened. Yes the greed was there, precipitated by an assurance that Freddie and Fannie would use government money to buy the bad mortgages. This bad paper was bundled and used as collateral to borrow money that was then invested in other enterprises, or was sold to investment entities as sound paper that would likely provide a good return. The greed was involved, once the far left wing of the government assured the greedy that there was little or no risk because of taxpayer backing. Some want to put the very people responsible for this situation into a position to perpetuate it. Obama was a lawyer who used the CRA to force the subprime loans when he was employed by ACORN.

ThatOne
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ThatOne 10/11/08 - 06:34 am
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pat and 14PUTT would you just

pat and 14PUTT would you just give up your partisan bs for just ONE day??? I took my DEM suit off today and replaced it with by bulldog t-shirt and hat...PLEASE I'm begging you to give it a rest for just one day..Stop pointing fingers all the time and give it a rest!!! You will show far more credibility and be seen as more believeable if you did not take every situation as an opportunity to bash Sen. Obama and the DEMS...Notice in my comment I did not point any fingers at any party...GEEZ, you guys are going to have a heart attack before Nov.4th, or a brain burst! GO DAWGS beat them VOLS!!!

I4PUTT
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I4PUTT 10/11/08 - 06:47 am
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I'm with you ThatOne. Anyone

I'm with you ThatOne. Anyone who pulls for my DAWGS is all right with me. GO DAWGS!!! This may not work for Pat. She's a GameCock fan. Let's pull for her chickens as well. GO COCKS!!

ThatOne
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ThatOne 10/11/08 - 07:02 am
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14PUTT: Alright man you okay

14PUTT: Alright man you okay today doggoneit!!!Poor Pat I'll pray for her :-)

ThatOne
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ThatOne 10/11/08 - 07:14 am
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angiesdad: thanks for the

angiesdad: thanks for the comp '-)

patriciathomas
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patriciathomas 10/11/08 - 07:21 am
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Pat needs all the praying she

Pat needs all the praying she can get. Thanks for pulling 4 my 'Cocks.(almost sounds perverse) Go Dawgs.

patriciathomas
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patriciathomas 10/11/08 - 07:22 am
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Back on subject, "ThatOne",

Back on subject, "ThatOne", no spin. My comment is based on history and documented fact.

johnsmith
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johnsmith 10/11/08 - 08:02 am
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If the private lenders had

If the private lenders had not had OPPORTUNITY--the ability to sell risky loans to GSE's-- and PRESSURE--federal law and open threats from the JD to prosecute them for 'redlining'--they never would have made many of the loans they made. A small number of subprime loans would be a sensible risk with potential for large profit; making risky loans your business model is the antithesis of what market forces would produce, if they were not twisted by gov't intervention. One of the talking DC heads--Obama, McCain, Reid or somebody--was attributing all of this to "Wall Street's insatiable pursuit of risk". HUH?!?! Money flees risk like democrats fleeing a Lee Greenwood concert. Money is like water--it flows into predictable places. First requirement: risk within tolerable levels. Second: within those parameters, the highest returns available. Good lord, people, this actually IS freshmen econ...were you all too busy getting loaded to read even the intro chapters? Let's see: if I create a system in which the Government backs a particular investment, in essence promising you won't lose your dollars, how's the PERCEIVED risk there? And if profits are huge, and risk is zero, where do $ go?

soldout
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soldout 10/11/08 - 08:30 am
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This is 100% caused by the

This is 100% caused by the democrat party beginning with Bill Clinton that decided they were smarter than the Bible and it's financial principles. When a person thinks killing babies is okay why would you think they are wise about anything else. Each one of us can become wise in our financies by attending a Dave Ramsey course and becoming a giver to God's work. If we vote for the un-wise we will share their curse. God will take care of His children during these hard times and He is already doing it for many if you ask around. If satan is stealing your money then give more to God's work and he will leave. All battles are won and lost in the Spiritual realm before you see the results in the natural realm.

karmakills123
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karmakills123 10/11/08 - 09:06 am
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lol..go gators !!!!!!!

lol..go gators !!!!!!!

americafirst
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americafirst 10/11/08 - 09:30 am
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The fact is that the

The fact is that the Community Reinvestment Act required the lending institutions to make these risky loans, the dems protected fannie and freddie and Wall Street typically found a way to take these mortgages and make stupid risky investment vehicles out of them purely out of greed. They made millions and the general public get screwed twice: once by the losses in the stock market and then by bailing wall street out. The gov't (both dems and repubs) didn't protect us. I fault in large part Newt Gingrich who renigged on the term limits in the Contract for America" otherwise we wouldn't have all these corrupt people in Congress.

doubt_it
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doubt_it 10/11/08 - 09:43 am
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Tracy is an idiot, pure and

Tracy is an idiot, pure and simple.

GR-10
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GR-10 10/11/08 - 10:29 am
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Ron Paul supports Chuck

Ron Paul supports Chuck Baldwin the Constitutional candidate for President. Check him out: http://www.baldwin08.com/ 3rd Party Candidates are also running for President. Learn about them, check out where they stand on issues.

mable8
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mable8 10/11/08 - 10:48 am
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If the Democrats had not

If the Democrats had not exerted their protectionist behavior towards the financial fiasco a few years ago, there would be no financial mess today. This is not the fault of President Bush (and I am no fan of his, but put the blame where it belongs), but a few fat cats--who happen to be of the Democratic party--that benefitted greatly from the sorry current events. Tracey Williams, you need to re-research your essay to the editor and then present the true facts. Believe me, the world wide web has plenty of those facts.

dashiel
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dashiel 10/11/08 - 11:17 am
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I am convinced that being an

I am convinced that being an economics expert is like being a connoisseur of fog. Maybe one of you geniuses can explain what good it does to even HAVE rating agencies? It now appears that they have no more credibility than the Bush administration. Both seem to "know" the price of everything and the value of nothing. Most Americans have been left with plenty of nothing. And for this, we get stiffed with the bill! I still believe in justice (the concept, not the department). I just hope there's a Ritz Carlton in hell and that Saxby will be the concierge.

a different drum
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a different drum 10/11/08 - 11:52 am
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The bottom line is the

The bottom line is the American Dream has become an American Nightmare. From what I have read, seen on TV, and heard on the radio -- the Chronicle Editorial was pointing the finger in the right direction.

FallingLeaves
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FallingLeaves 10/11/08 - 12:21 pm
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Tracy is not an idiot. He is

Tracy is not an idiot. He is a very intelligent man who genuinely strives to make this world a better place. He raised a fine, large family and his children are now all very accomplished, successful, and I hope happy adults. He is also a retired educator. But I don't agree with this letter. But once in a while I do agree with him, so I'll keep reading them, and I thank him for taking the time to contribute his opinion and generating more discussion of the topic.

patriciathomas
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patriciathomas 10/11/08 - 04:08 pm
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johnsmith, your 9:02 post is

johnsmith, your 9:02 post is as well stated as the rest of your posts. The koolaid spin is surely powerful if it can obscure simple and obvious fact. I hate that the dumbing down of America is so successful.

KSL
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KSL 10/11/08 - 05:34 pm
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I think the dumbing down of

I think the dumbing down of America is by Democratic design. It makes the constituency easier to manipulate.

raasheedleetawanmomood
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raasheedleetawanmomood 10/11/08 - 07:36 pm
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I think the writer is in

I think the writer is in foreclosure! Pt, you are getting a little risque about your "gamecock" (s)?????

KSL
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KSL 10/11/08 - 07:52 pm
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The gamecocks have always had

The gamecocks have always had risque things around and about. Have you seen the shirt with the quarterback's name on it?

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