As for bank runs, I am reminded of a scene in “It’s a Wonderful Life” where George Bailey has an angry mob in the lobby of the Bailey Brother’s Saving and Loan. The customers are demanding their money because Old Mr Potter has started a bank run by calling the S&L’s loan and they handed over all their cash. George Bailey is pleading with his customers and uses the line, and I am paraphrasing here “Do you know why Potter is bargaining, because we are panicking and he is not.”

Who panicked in today’s situation? It was not the people, it was members of congress telling the citizens – in a loud and panicked voice “THERE IS NO REASON TO PANIC!!” George Bailey got an infusion of cash from his honeymoon fund, what we needed were a couple more Warren Buffets to pile into the economy, unfortunately the cat and mouse game had investors on the sideline for 3-4 days.

For you entertainment, please view the attached:

http://chatteringteeth.blogspot.com/2008/07/bank-bailout-its-wonderful-life-ii.html

BTW, all lessons in life can be found in “It’s a Wonderful Life” or a Seinfeld episode

query.
nytimes.
com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES
Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers…

We are now forced to watch the architects of this crisis lecture us on the failure of markets and corporate greed.

Where are the investigations ? If there are none after the dust settles, it will be then that you know we were had.

Maybe if we blame this on Scooter Libby we can get a congressional investigation.

http://www.foxnews.com/story/0,2933,429343,00.html

You all need to decide what YOU are willing to give up if this turns into a full blown credit lockdown. Unless your family, the company you work for, and all of the entities that your company relies on such as suppliers and customers are operating on a complete cash basis, you are going to feel the effects.

This thing will ultimately be smaller, more market and less government( note I said less)not enough but better than Paulson’s original plan.

Now house republicans should strike while the Iron is hot. Spin off both Freddie and Fannie to the market. Get Uncle Sam out of the mortgage business altogether. This should be step number one after the dust settles on this bailout or massive bridge loan.

This is one of those times in our nations history where we are forced to accept half of a stupid idea with a smile.

I am not at all optimistic any real lessons will be learned. Fifty some % of Americans are opining for a candidate in Barrack Obama who not only is complicate in this mess but is getting advice and counsel from those who are truly designed and advocated for the legislation and public policy that got us here to begin with.

The origins of this mess are there for everyone to see.

Getting the House Repubs involved in the discussion was not just a smart thing to do, but a Constitutional necessity. As I said earlier, this was the focus of McCain’s intervention. I have read/seen several comments that anyone who claims McCain stopped a deal is lying through his teeth, and not just from Repubs. The Paulsen/Bush/Dem plan appeared to be DOA from the get-go as far as the House GOP was concerned. That is why Paulsen requested that McCain come to DC.

Can we really trust Paulsen, former CEO of Goldman Sachs, Bush, and Franks to fix this? Can we trust them to do more than to just give $700M to Wall Street, like fixing the core of the problem, such as repealing amendments to CRA that helped to cause this ? No and no.
Does the plan need to have oversight for Frannie and Freddie such as layed out in S.190 ? Absolutely. If Bush were to pen a few executive orders to close some of these loopholes during these discussions, this would certainly give him more cred with me. But he isn’t..

We will have a plan, and a plan that is not just CYA for Paulsen, Bush and the Dems who got us into this mess. We will have a plan that will not be an open checkbook, a plan that will be insurance against loss, rather than a transfer of loss. A summary rush, is just that, a summary rush. As one speaker on TV said, we can’t afford to fix a headache by creating a cancer.

It’s gonna take a little more than a few blog entries by Ace and Mr. Frankypants for me to call Frank Wolf to tell him I want us to give away the store. But in closing joe, I do share your concern.

cmac, yes I was watching that also. Cavuto seems rather skeptical of the bailout.

http://www.nowallstreetbailout.com/

If you don’t know how to survive better start learning where your food and shelter come from.

America and the world need to weed out the incompetent dependent fools. And I don’t mean the sick and elderly.

Hunger and necessity are the mother of invention.