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Old 19.09.2008, 11:29
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Why Politicians should keep their fingers out of the financial system

If the fine folks named below are the same ones that are trying to save the system... hmmmm.... looks like we're "doomed for good"?

Paul


Pelosi, Kerry May Share Investor Pain as AIG Stakes Evaporate


By Jonathan D. Salant
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Sept. 19 (Bloomberg) -- The market storm that brought down Lehman Brothers Holdings Inc., American International Group Inc. and other pillars of U.S. finance may have also blown holes in the portfolios of House Speaker Nancy Pelosi, Senator John Kerry and more than 50 other members of Congress.

Pelosi, in her most recent financial disclosure form, reported that her husband owned between $250,000 and $500,000 of stock in AIG, which ceded majority control to the U.S. government this week in exchange for $85 billion of loans.

Kerry, the 2004 Democratic presidential nominee, disclosed that his wife, Teresa Heinz Kerry, had more than $2 million of AIG stock at the end of 2007, when shares were worth $58.30. AIG has fallen 85 percent this week to close yesterday at $2.69. The lawmakers' aides didn't respond to calls seeking comment.

Altogether, 56 senators and representatives had stakes in AIG, Lehman, Fannie Mae, Freddie Mac, Bear Stearns Cos. or IndyMac Bancorp Inc. -- some of the biggest casualties of the market bloodbath, according to the Center for Responsive Politics. The most recent annual disclosure filings list investments as of Dec. 31, 2007, and reveal the size of holdings only within a range of values. Lawmakers may have sold shares since then.

``Lawmakers, like everyone else in America who has any kind of retirement portfolio or stock holdings, are going to be suffering,'' said Gary Kalman, a lobbyist for the Boston-based U.S. Public Interest Research Group, a consumer-advocacy organization. ``This is a serious issue. We need to have a serious response.''

Market Plunges

The Standard & Poor's 500 Index plunged 7.6 percent during the first three days of this week on news that Lehman and Merrill Lynch & Co. -- which survived two world wars and the Great Depression -- were finished as independent investment banks.

Lehman filed history's biggest bankruptcy case on Sept. 15 and Merrill sold itself to Bank of America Corp. Even after rallying yesterday, the S&P 500 is down almost 25 percent from its October 2007 peak.

Lehman shares, which traded for as much as $67.73 last November, closed yesterday at 5 cents. Merrill's shareholders are in better shape. To avoid Lehman's fate, Merrill agreed to be acquired in a stock-swap worth $26.28 per share at yesterday's closing prices. In better days, Merrill soared to as much as $98.68 in January 2007.

Bear Stearns was the first Wall Street titan to fall as home-loan defaults battered the market for mortgage-backed securities and started a chain reaction that devastated credit markets. JPMorgan Chase & Co. bought Bear Stearns in March.

Government Takeover

Earlier this month, the government took control of Fannie Mae and Freddie Mac, which together accounted for almost half of the U.S. home-loan market. Fannie Mae shares had already plummeted more than 80 percent this year, to $7.04 from $39.98, before the government's Sept. 7 takeover was announced. Shares dropped to 73 cents when trading resumed the next day. Freddie Mac fell to 88 cents, after starting the year at $34.07.

Representative Robin Hayes, a South Carolina Republican, had Congress's biggest AIG stake, according to the Washington-based Center for Responsive Politics. Hayes's AIG stock was worth between $2.8 million and $11.5 million.

John McCain, the Republican presidential nominee, avoided potential losses. Because of the Arizona senator's run for the White House, his wife, Cindy, last year liquidated a blind trust that had contained stock in AIG, Fannie Mae, Freddie Mac and Lehman. The amounts of stock she had owned weren't disclosed.

Representative Jane Harman, a California Democrat, owned between $50,000 and $100,000 of Lehman shares, according to her disclosure form. Calls to offices of Hayes and Harman weren't returned.

Pasadena, California-based IndyMac's bank was seized by U.S. regulators in July, in the third-biggest U.S. bank failure. IndyMac stock closed yesterday at 6 cents, after trading earlier this year for as much as $11.32.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.
Last Updated: September 19, 2008 00:01 EDT
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Old 19.09.2008, 14:49
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Re: Why Politicians should keep their fingers out of the financial system

actually, come to think of it, there's only one 'expert' who has been completely missing from the great debate about who caused it, and why, and how to fix the mess

Thank God George Bush hasn't tried to save us from the financial meltdown so far. Can you imagine what would happen if the poor sod thought he knew what to do about the banks ??
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Old 19.09.2008, 14:52
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Re: Why Politicians should keep their fingers out of the financial system

Quote:
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Can you imagine what would happen if the poor sod thought he knew what to do about the banks ??
He would have invaded them and replaced everyone with Blackwater mercs.

Which wouldn't have been same-o same-o really.
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Old 19.09.2008, 15:39
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Re: Why Politicians should keep their fingers out of the financial system

A US journalist just forward me something that looks like a speech to be delivered tonight in the US form the Oval Office.

Fellow citizens,
this is your president speaking, the Commander in Chief, the Value Investor,
Like you, I am appalled by the happenings on Wall Street, by the greed of this enemy - The Market - who is committing these heinous crimes against our core values, our portfolios, against the wealth of this great country.
But I want you to know that we're on it's track - we'll track all the Market terrorists down and do justice where justice is called for, wether it's in Iran, Afganistan in London or New York.
We have the support of all the free countries of the planet, and the best resources from the Pentagon, the FBI, the CIA, the SEC, the IMF, the Fed and the Treasury. We'll hammer out whatever plan is necessary to root the evil beast from our midst.
And at the end of the day, the Market will have to submit to the strength of Democracy - of our great financial institutions and the brilliant minds at their helm, to the millions of traders and investors and managers who are at the core of our succesful economic foundations - and cease and desist from it's evil intents.
We will not bend and submit our country to more rules, regulations, limitations of any kind.
America will not yiled to the Market, the Market will have to yield to US.
Thank you for listening, God bless y'all.


Oooo-kaaaay.....

Paul
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Old 24.09.2008, 22:04
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Re: Why Politicians should keep their fingers out of the financial system

I received another of those 419 scam mails in my inbox this morning

Quote:
Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Minister of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Minister of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully

Minister of Treasury Paulson
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Old 24.09.2008, 22:39
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Re: Why Politicians should keep their fingers out of the financial system

Well apparently, John McCain has stopped campaigning to "work on the economy", he's asked Obama to do the same and he wants to delay the first debate. For example....

http://www.nytimes.com/2008/09/25/us...l?ref=business

Ok, fair enough...until I read that Obama's gaining in the polls...

who me, cynical? nah.
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Old 25.09.2008, 22:17
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Re: Why Politicians should keep their fingers out of the financial system

There is an international political angle to the rescue packet, if you believe one of today's letters to the editor of NZZ. According to him, the fact that the packet is going to be accessible for foreign banks, too, is a Trojan here:

It will facilitate further control of foreign banks by the American government, like it happened 2001 after the Patriot Act that damaged the bank secret.

It also implies that abroad-domiciled sections of American banks would have to be supported in the same way by the respective government! (An interesting argument for the Swiss financial center)

And blind acceptance of the offer might prolong the US Dollar's position even though he possibly no longer deserves it, it delays a problem instead of solving it.

Any thoughts about this?
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