Arkansas Blog

A long recession still looms because an ever growing debt still looms. Will it hit the 11 trillion mark before Bush leaves office?

No eark, it cannot hit $11 Tn unless Congress authorizes an increase in the debt ceiling.
The Emergency Economic Recovery Act provided that increase to $11.3 Tn but that one failed yesterday.

Just wait... October surprise has yet to occur..and when Bush and Cheney are in their final 90 day stretch with no election in sight.. they will rip this country a brand new rear end.

At this point if they keep it under 12 trillion and just with the three wars we have (Iraq, Pakistan and Afghanistan).. it would be a miracle.

Yeah, I know elwood. That's why it was a question.

Government, Business, Individuals going back to living within their means? It could happen.

Not.

eark, when you think of public debt keep in mind most of think of Federal debt. States and municipalities account for more. However to balance the concept state and cities also raise more tax monies than the feds.

.

Jim,
Thanks to a default on their bonds in the early 1940s state of Ark does live within their means.
Huckabee tried to place permanent indebtedness on the state but lawmakers wisely over ruled him. Recall how many times Huck said the only difference between state gov and federal gov is that the feds can print money. That should have scared the shit out of most people. Why? Because as C in C he would surpass $11 Tn so fast heads would spin.

.

For the first time in many years we will be lucky to live in Arkansas.

You see? The world did not come to an end with yesterday market crash and the highest-ever reading of the VIX index which measures market volatility, often referred to as "the fear index." But there's lots of rotten shitake yet to be served in the market cafes. Don't be surprised to see the DOW hit 8,500, possibly lower, before things begin to turn around for the longer run. Similar bad stuff with the S&P, Nasdaq, etc. The big problem, at least for now, is not the markets: It's (as so many here have already said) that people who really NEED credit, including lots of mom and pops, are having a heckuva time getting it.

A young fella I know in Clarksville has recently gone into business for himself, and his revenue over expenses is slightly exceeding his business plan projections. Even so, the prospect of a credit cut-off has him in a tizzy because it could easily starve his business out of existence. But, hey, I'll let him do the talking. Here's a few lines from an email that came in an hour ago. "I can tell you, that as a small business owner, I am heavily dependent on credit. We buy all of our inventory and supplies on credit. If cash is tight, we make payroll by using credit. We borrow all of our repair costs."

I'm grateful that all six of Arkansas's members of Congress voted for the bailout/buy-in yesterday. It took guts (a scarce commodity in the Congress) to do that with so many constituents telling them to vote against the plan. Vic Snyder said it best: "To hell with the Wall Street firms. That's not what I'm worried about. I'm worried about the people in Arkansas."

I've always felt lucky to live in Arkansas.

Read it and weep----The smoking gun. This is a NY Times Article:

--------------------------------------------------------------------------------

September 30, 1999

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
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 b! y 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. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''F! annie M ae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic tim! es. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or he! r month ly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

OH JOY! Oh joy, another copy and paste posting no one will read! Like La Rush says the Republicans are for the future and the Democrats are stuck in the past. Ha Ha Ha Ha!

"RUSH: I'm watching Senator McCain. I don't know where he is. He's doing a campaign appearance right now, and he's bashing Wall Street regulation and this sort of thing. He's doing a good thing. He's demanding an investigation. You know, where is the investigation of all of the individuals involved with Freddie Mac and Fannie Mae? I did a little bit more research, you would not believe the extent to which Freddie Mac and Fannie Mae existed to prop up liberal Democrat politicians and their favored agencies and organizations and PACs. It's just stunning. Obama is number two, Chris Dodd is number one, Hillary ranks pretty high up there as well. But they better be careful here because it is clear - you know, we started yesterday talking about all this, and the thing that's going on here with the financial markets and the housing market, this was not the result of a failure of capitalism."

No, this is from the NYTIMES if you took the time to read it. It says it all. You dems are solely responsible for this economic mess we are in. You used your offices to buy black and hispanic votes and now you have put the country in jeapordy. It is in black and white. READ IT AND WEEP.

Reading an eight year old News Paper again are we 'Eh? Sorry I'm NOT!
Republicans are SOOOoooo in the future! NOT!
Deregulation has been the mantra on both sides of the aisle since the late 1960s. AMEN!

September 30, 2000

Fannie Mae Tightens Credit On Mortgage Lending
by Ralph Merser

Fannie Mae, a mortgage repurchase company, announced today a tightening of credit standards for mortgages it acquires from lending institutions. A recent study by Fannie Mae revealed original lenders were employing deceptive tactics when explaining loan terms to potential customers. This continued practice will likely result in too many subprime loans being issued and assumed by the Association said Darrel Rand, a Fannie Mae spokesman.

Deceptive loan practices have been increasing as local banks and other institutions have sought to participate in the real estate boon. Such loans are then "cashed out" by Fannie Mae to allow local banks and mortgage companies to free up capital into other real estate investments.

If you had an ounce of sense you would understand that this says in no uncertain terms that the destruction of this countries economic system was at the hands of the democrats. Frankly, I can't afford to pay for your incompetency and criminal activity. Your liberal ideology is 'kaput' and bankrupt. I'm tired of paying for your stupid social engineering that steals from decent and honest people and rewards freeloaders. The issue is closed.

If you had an ounce of sense you would understand that this says in no uncertain terms that the destruction of this country's economic system was at the hands of the democrats. Frankly, I can't afford to pay for your incompetency and criminal activity. Your liberal ideology is 'kaput' and bankrupt. I'm tired of paying for your stupid social engineering that steals from decent and honest people and rewards freeloaders. The issue is closed.

Our trouble will continue and actually get worse because the same democratic party hypocrites who screwed up this economy will continue in their positions of power. In fact, they will have more power and will be virtually unrestrained due to the lack of oversight by the MSM and by the fact that fewer Republicans will be in office. If you think that our economics woes are bad now just give those criminals some more time. This will seem like a picnic.

So you are so morally bankrupt that you can only make a point that the article in 8 years old. Not a word about the fact that this proves beyond a shadow of doubt that the democrats were raping this country and continue to rape this country resulting in what could be our economic collapse. In case you haven't noticed, the root cause of TODAY's mess was sown back in the 70s and made worse in the 90s.

Hey! Sl, your talking points made "WORST person in the world" tonight...check out Keith Olbermann.
[CLICK]

Olberman, ha, ha, ha, ha, ha, ha. Now that is a real authority with great credibility. Have he and Chris Matthews kissed and made up? Yea, I like you 'credible' authority. That is why he got fired an the anchor man.

Strangelove has gone MAD from too much Kook-Aid....he is now posting responses to his own posts.

WHAT!?!?! No response to the link I gave you...
[Economic know-nothingism: Davis blames CRA for market woes]

"It's telling that, amid all the recent recriminations, even lenders have not fingered CRA. That's because CRA didn't bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA - or any federal regulator. Law didn't make them lend. The profit motive did. And that is not political correctness. It is correctness."

Way-to-go Sl, pulling a PALIN "know-nothingism."