Financial Meltdown 101
October 13, 2008 9:43 am

Everything you ever wanted to know about the biggest economic meltdown since the Great Depression but were afraid to ask.

By Arun Gupta

....It was deregulation that led to the huge growth of the shadow banking system. In 2004 Wall Street successfully lobbied the Securities and Exchange Commission to loosen regulations on how much they could leverage against their capital reserves. This allowed the companies "to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments," according to the New York Times. The only real oversight left in place was self-policing by the investment banks themselves to determine if they were putting investors at risk.

The whole process worked as long as everyone believed housing prices would go up endlessly.....

.....U.S. over-consumption was balanced by over-production in many Asian countries. Countries like China, India, Taiwan and South Korea run large trade surpluses with the United States, which speeds their economic development. They invest excess cash in U.S. credit instruments ranging from corporate debt and MBSs to government bonds and bills. It's what economists call a virtuous cycle: we buy their goods, helping them develop, while they use the profits to buy our credit, allowing us to purchase more of their goods. But it's also unsustainable. A country cannot over-consume forever.

In the final stage of the housing bubble, fewer first-time buyers could afford traditional mortgages. Rising house prices required ever-larger down payments so subprime mortgages multiplied, as they often required little or no money down. From 2004 to 2006, nearly 20 percent of all mortgage loans were subprime loans. As the vast majority were adjustable-rate mortgages (ARMs), this created a time bomb........

.....these are political questions that depend on organizing and political power to propose, legislate, fund and enact. That's what will determine if there is a 21st-century New Deal or if Wall Street will get away with the biggest financial crime in world history.

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CNN Runs Alaska Independence Party Story Ties to Palin w / Video
October 13, 2008 7:52 pm

So when Palin accuses Barack of "not seeing the same America as you and me," maybe she is referring to an America without Alaska. In any case, isn't it time the media start giving equal time to Palin's buddy list of anti-American bombers and other radical associates? ....Huffington Post

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Powell's POST INTERVIEW, destroys the "congresswoman from Minnesota"
October 19, 2008 1:13 pm

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Powell endorsement: Pat Buchanan just went there
October 19, 2008 6:55 pm

by jhecht , kos

First Pat couldn't believe that a Republican could question the Supreme Court appointments of President Bush, or the economic agenda put forth by the Republicans. He also thought it was petty to mention the tone of the McCain campaign, and the wingnuttery of Michele Bachmann as factors in his decision. But Pat wasn't finished yet in expressing his sense of betrayal. He finally went "there".

That's right. Not satisfied with this prattle (kudos to Joan Walsh for attempting to interject sense, but than realizing Buchanan was getting his own rope), Buchanan finally went "there".

He accused Powell of only supporting Obama because he's an African-American. That's right. He said it. Powell put his skin color above his loyalty to the Republican Party, and by extension, the United States of America. Of course it never occurs to a racist, wingnut like Buchanan that there might be a connection between Obama's skin color and the tone of the McCain campaign which Powell finds objectionable. It never occurs to Buchanan that Powell has lain out a cogent and detailed case for his endorsement. No. Pat is still fighting his race war. Sadly the only casualty is Buchanan's credibility.

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White Pride, Campaign Wide
October 19, 2008 9:47 pm

The latest ad from Passionately Credulous Bigots for McCain.

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