One thing we are not hearing enough about is - what is being done to those who responsible for the current global financial meltdown?" Yes, oddly enough there is a root cause and there are likely a small group of responsible individuals, who made poor decisions that launched us all into the current global recessionary economy. The same efforts and standards should apply to these culprits as were applied to previous similar situations. Enron, Tyco, Woldcom exec's were held responsible and prosecuted because they severely, negatively impacted shareholder values, bankrupted their companies, caused massive layoffs of employees, and significantly reduce or eliminated the retirement values of many invested in these firms. Their actions were not even illegal at the time. This situation did far more damage than Enron, Tyco, and Wolrdcom and there is very little news - why are there no highly visible investigations underway today?
Below is my generic chronology of events:
1. Fannie Mae, Freddie Mac, support by Senate Finance Committee adjust the lending ratio from 12:1 to 40:1
2. More money and loans are available, with low interest rates, spurs home buying demand, outstripping supply
3. Building increases, home prices increase
4. Poor lending practices, sub-prime, predatory lending, means a much higher default rate as many can't afford the adjustable rates.
5. More bad loans are approved, then sold to other institutions
6. Default rates climb
7. Fannie and Freddie need help, sinking in bad debt
8. Gov. comes to the rescue
9. Default rates continue to climb affecting other institutions that bought the toxic loans
10 Merrill Lynch bought by Wachovia
11. Lehman files bankruptcy
12. Many institutions affected, lowering bank confidence in other banks
13. Lending stops, Financial stocks prices fall, creates panic
14. Panic spreads to other stocks - Wall Street meltdown, then global meltdown
15. Consumer Confidence tanks as house values decline, investments and retirement all decline
16. Consumers cut back severely on spending across the board
17. Oil prices fall
18. All industries suffer as demand for most items declines
19. Stock prices continue to decline
20. Layoffs to begin, unemployment to rise in 09 to what level? retirements to continue to decline, etc - coming soon in 09.
21. Auto Industry is on the verge of bankruptcy - caused by Finance Committee and Fannie Mae and Freddie Mac
Am I correct about all of that above? Probably not, but it is the best I can gather from all of the disinformation being put out in the media. I'm open for posts to help improve my chronology above
The current recession is the result of bad decisions made by a few people. Today's' situation has impacted everyone in the entire world and there are no heads rolling. Again - why are there no highly visible investigations underway today?
What is Senator Barney Frank's connection with Fannie Mae? Was there any improper relationships, conflicts of interest, etc. You'll find the answer in the link below. Senate Finance committee members, and execs at Fannie Mae and Freddie Mac, who allowed the adjustment the lending ratios from 12:1 to 40:1 should be held accountable, should be part of a larger investigation into FM and FM's situation and how it caused or contributed to the current crisis.
The culprits this time put the entire world into a recession and very little is being done to show the public that the goivernment is concerned about how this occured and will penalize those responsible.
Now many are concerned about bailing out the auto makers, but why not? We bailed out the businesses and exec's who caused all of this, or at least had a big part in the cause, and now when asdditional businesses, core businesses of the US, we say "NO" No bailout. I see it very short sighted and inconsistent to bail out those who made the bad decisions that caused all of the current problems, and let others who are suffering simply fail.
See my Blog "Auto Industry Bailout" to discuss that topic.
Make your voices heard. We are where we are, and at the least those responsible should be required to pay as other before them have. Add your comments as I'd like to hear your views, and learn more. Contact your congressmen and demand to know why very little is being done.
A good link to read about Barney Frank's relationship with Fannie and Freddie:
http://www.businessandmedia.org/printer/2008/20080924145932.aspx
Tuesday, November 11, 2008
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