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No slowing capital spending

August 16, 2013

Taxes have gone up, not just for “the wealthy” but for every American who works. The national debt is approaching $17 trillio....

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DKexpat

Aug-17-13 10:50 AM

Fannie and Freddie both "cooked the books" in the early-mid 2000s. Fannie overstated income in the billions and officers got max bonuses. One CEO earned $90M in 5 years - $40M in bonuses. The feds sued to get that back - and LOST!

Freddie UNDER-reported income because it was making so much, and pushed the money forward into future quarters to "smooth things out" so all execs would bet max bonuses.

Because of their employment contracts, officers/CEOs of both companies have their legal fees paid by...Fannie and Freddie - over $100M (so far).

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Steiner

Aug-17-13 9:03 AM

judye, do you think the left will actually put anyone in jail for the meltdown when we see the after effects of the missouri clown incident ? The left is looney over this. It is being called a hate crime. It is just like the response to mohamed cartoons, but it is from our tolerant left. You still support the left ,right judeye ?

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Steiner

Aug-17-13 8:43 AM

judeye, do you ever get past one syllable words ? Greed you say over and over. It is the libs urge to control and remake society that t led to the meltdown. The very govt you look for to solve all our ills caused the crisis. Yet you ask for more govt programs. You just gotta be mentally challenged. If the govt can be manipulated to charge zimmerman via demonstrations, you still think any one in the govt is going to jail ? Your naivete is amazing but fun to read. You want the govt to do the junk science of so called climate change after all their failures ? Are you daft ?

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judeye

Aug-17-13 8:20 AM

Exactly Dkexpat...GREED at its finest.

Now all those loans to congress folk and their kin..hmm...explains why no one in jail?

Just like Congress voted for..and then repealed...the bill that would not permit them to use inside info for personal gain. Something like what Martha Stewart went to jail for.

Go to Congress become a millionaire. Anyone else think this is wrong?

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DKexpat

Aug-16-13 4:00 PM

Google “Friends of Angelo” sometime. Angelo Mozlio was the founder/chair/CEO of Countrywide Mortgage, which was the largest residential lender (and provider of junk loans) when housing imploded.

Look at the names on the list in the “VIP Program” who received mortgages below market rates, waivers of fees, etc. You’ll see names like the Chair of the Senate Banking Committee, Chris Dodd (D-CT); the Chair of the Senate Budget Committee, Kent Conrad (D-ND); and more Dem and Repub senators and reps…and their staffs and children. Add to that list multiple CEOs of Fannie, execs at Freddie, and even a cabinet member, the Secretary of HUD, plus a number of staffers of the regulator supposed to be overseeing Fannie and Freddie.

And then read - Reckless Endangerment: How Outsized Ambition, Greed and Corruption Led to Economic Armageddon (Morgenson and Rosner)

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DarkStar

Aug-16-13 3:51 PM

Just as they ignored Fannie/Freddie giving out millions in bonuses after getting bailout funds, despite the fact the left tried to crucify other banks for doing much the same.

Although since Fannie/Freddie has Barney Frank on their payroll, or might as well have, their actions are okay

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DarkStar

Aug-16-13 2:55 PM

joew,

That's the was ironic about the left demonizing everyone connected to the mortage crisis, well except Clinton and the other democrats who pushed banks to do those loans in the first place.

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DKexpat

Aug-16-13 2:05 PM

Joew, I agree with you. Fannie/Freddie won’t buy them – and Obama can’t make them.

They don’t issue mortgages. They buy them from everyone from M&T to Lakeshore Savings to Quicken Loans – 90% of all mortgages – and package them into securities. They haven’t bought subprime in years. In fact, they’ve sued – and won billions – from banks like Bank of America, Chase, etc. for having misrepresented thousands of loans they’d sold to Fannie/Fannie.

When Obama pushed earlier this year for “principal forgiveness,” it was Fannie that pushed back (through its regulator) with empirical data showing that was a terrible idea and would actually encourage more people to default. That made Obama’s proposal dead in the water.

I think Fannie/Freddie are now both “tight ships” that will repay 100% of the bailout – but making so much money that Wall Street and those mega-banks want it. Unfortunately, they’ll win – and Americans will end up with fewer mortgage choices and higher mortgage rates.

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joew

Aug-16-13 1:49 PM

Dkexpat do you think the current push by Obama to require(oops sorry Robot)to "ask" banks to again make sub prime loans is a good idea?

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DKexpat

Aug-16-13 10:19 AM

The CBO estimates the FY2013 deficit will be $642B – 4% of GDP. There’s irony in the fact the “slowing deficit” is due in large part to bailout paybacks this by Fannie Mae and Freddie Mac – $87B this year and still counting.

Fannie, alone, has paid back $63B so far in 2013, and there’s more to come in Q3/Q4. (Fannie will have its entire bailout paid off sometime next year.)

Fannie/Freddie, under tight federal oversight, currently purchase 90% - 90% - of all mortgages written today by banks. But by a joint-bill in Congress later this year, they both will be closed by the feds in approx. 5 years.

Why? The ‘too big to fail” banks and Wall Street want all those profits. What’s in it for the rest of us? Higher – much higher – mortgage rates. In addition, Wall Street will write far fewer 30-year fixed-rate mortgages that have been the norm for so many years – instead, you’ll see shorter-term ARMs.

Good for America? Hardly. Good for Wall Street? Absolutely!

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PR24601

Aug-16-13 9:04 AM

Dcronlg, building a bunch of "mothball tanks" keeps a ton of people employed. Right on down to the hourly wage worker that sweeps the floors after the shop guys and engineers have left for the day. The cafeteria business that serves meals for 10 hours at the plant. The lawn care company that keeps the business looking good. The security guards that man the clearance gate. The local Italian eatery that hosts lunch meetings. The watering hole for EOS happy hour.

Now I'm not saying we necessarily need all these tanks. The chance of a major ground war in the 21st century are slim. But there's more to it than just pulling the plug and hey we save a ton of money. More like - pull the plug and affect an entire community.

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Steiner

Aug-16-13 8:47 AM

judeye gets it wrong as usual. Judeye keeps saying we need a jobs bill. The govt takes more money from consumers. Judeye, where are the jobs ? We have to think lke a liberal. An tax increase means more disposable income for taxpayers. An extension cord says cronig is all you need for power. Judeye, when will you ever learn anything ? cromnig and his church lady gaggle comments over and over. hey libs, cronig admits the do gooder parts of the govt are bigger than defense !hey judeye, the inner city folk are worese off than ever and she is praising obama. Proves my point activists just cannot think. complexity says cronig ? what a joke, the govt is the solution he always proclaims . Hey cronig, how is it repubs are dumb and libs are smart when history show it the other way around ? trying to cover your mistakes up ?

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DarkStar

Aug-16-13 8:46 AM

judeye,

Your comment completely overlooks the large increase in spending that occured during those same years.

Yes the deficit is down from it's peak, but it's still double what it was Bush's last year in office (Yes I realize the left wants to try and blame Bush for Spending in Obama's first year, but that doesn't mean I have to buy into that lie.)

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joew

Aug-16-13 8:37 AM

Couldn't agree more and if you figure in unfunded obligations that 17 Trillion is dwarfed by the true figure.

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judeye

Aug-16-13 8:36 AM

"Over the first four years of the Obama presidency, the deficit shrunk by a total of $300 billion dollars. " "the U.S. budget deficit for the most recent fiscal year fell to $1.089 trillion, $200 billion smaller than it was last year, and nearly $300 billion smaller than when President Obama took office."

Good Grief..so now good news still get complaints?

For many of us, the deficit going down is BAD news. It means we have not taken the opportunity to borrow at extremely low interest rates to invest in jobs..infrastructure...and new technology to address climate change.

But how those conservatives can complain that the deficit is going down..beyond me.

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Dcronlg

Aug-16-13 8:26 AM

Social Security (22%), Medicare/Medicaid (23%), interest (6%), defense (19%) and other mandatory spending (13%) accounts for 83% of all federal spending.

Discretionary spending -- all those others programs from PBS, education to infrastructure -- is 17%.

Go ahead clueless church lady gaggle OBSERVER board: start looking at the 83% and come up with a plan that will cut back on spending which won't impact the most vulnerable of our society. Please tell us how building mothballed M1 tanks is more important to our citizens than food stamps, where 85% recipients work and 3/4ths work full time jobs. Tell us why Social Security isn't means based or why the retirement age is increased to 67%. Please explain to us that 80% Medicare spending is caused by 15% of recipients, or that they receive $250K more than they were taxed for the program.

There's a complexity that you guys don't even begin to explain...

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