Chuk Todd

[4 t 4]

is on Hardball right now and he was one of the reporters that asked " what are we going to do it's the peoples over spending that got us into this in the first place" which thank god Obama set straight right away "No it's has nothing to do with the people" and yet he is still creditable and on Tweetys show. Just shoot me now.

[dkf]

1. Obama said it had nothing to do with our overspending?

Hmm. I'm not sure I agree there.

[4 t 4]

3. Your not sure you agree

it has everything to do with credit default swaps and the banks. Lets say you went in for a loan on a house 3 years ago they inflated the price of the house by maybe 20 -30 grand in the mean time the bank sold an "insurance" policy on the home aka credit default swap so if you didn't make good on the mortgage the insurer would make money because you defaulted. Well you really had no chance from the beginning because your loan wasn't worth the price of your house ie pnac bankrupts the country and you are behind before you can turn around because your already in the hole by 20 to 30 thousand thus here we are and your not sure if you agree??

[dkf]

4. Goodness, where did you hear that credit default swaps were being

bought by the same bank that loaned the $?

Are you kidding?

If that were the case, bankers would be sitting pretty and the only people with downside risk would be those who sold the credit default swaps.

You have it all wrong.

I think that would be a scam! To knowingly give bad loans and then to bet the loans will fail? Wow.

[4 t 4]

5. you must be kidding

this entire debacle is due to cds. The amount of monies involved is unimaginable.

[dkf]

8. I do acknowledge the problems with CDSes, but that shoe hasn't hardly dropped yet!

Besides, the big problem child for the CDS world is AIG, an insurance company, then Citibank, not everyone who is in trouble.

Are you perhaps confusing Credit Default Swaps (CDS) with Collateralized Debt Obligations (CDO)?

Because you could definitely make a case that CDOs are to blame for the "toxic asset" situation.

[4 t 4]

9. What the hell are you talking about-same thing-no?

Are you perhaps confusing Credit Default Swaps (CDS) with Collateralized Debt Obligations (CDO)?

[dkf]

11. No no no. Completely different but both are huge problems.

Credit Default Swaps are like insurance on a bond, but its just a contract and not regulated. So you can promise to insure $1 billion dollars worth of Lehman Brothers Bonds even if you can't possibly pay for it!!! That is how you can promise $67 trillion dollars worth of protection even if that exceeds the world's assets.

Collateralized Debt Obligations are where you package loans, but you separate them out into tranches so that the lowest tranche gets the higher yield but gets defaulted on first. The top tranche gets a lower yield but gets paid principal first. Its a totally made up security! That is why they are toxic, because its hard to figure out who really owns what and there are pieces all over the place. This is how they turned sub-prime junk into AAA-rated notes!

Of course you can do a credit default swap on a collateralized debt obligation, so if the CDO defaults, then you may have to pay insurance on it.

[4 t 4]

12. Thank You! Lets get it straight

[4 t 4]

10. Oh god you people that have NO idea

what you are talking about are so disruptive. You throw everything out of balance. And then we get nowhere.

[4 t 4]

13. You tell me who sold the CDS

If that were the case, bankers would be sitting pretty and the only people with downside risk would be those who sold the credit default swaps.

[dkf]

14. You can be on either side of the CDS either to provide protection or to get protection from default.

AIG mostly sold them though, and that is why the Government has had to pour funds into them because as bonds default, AIG has had to pay the swaps off.

I hear Citigroup has a lot of them, but I don't know as a buyer or seller of protection or on what bonds which is scary because nobody knows what is on their books.

The other problem is that you don't need to own the bond to buy the CDS protection. So for one bond that fails, you could have 10 people that bought protection on the same bond. This is where some people ARE gambling on defaults.

[4 t 4]

15. Where some people are Gambling

on defaults.?? They are completely deregulated they have never been regulated. Bonds have nothing to do with CDS you said it yourself.Why do you think we are in the shape we are in ? Because the buyers can be ten fold like you just said and when you set someone up in a home that is not even close to it's worth and you sell 100 CDS on that mortgage and the owner Must default because it isn't worth nearly the amount of the loan, What do you think will happen it was a giant set up and the traders made a fortune and the people are literally being put out on the streets. This is a matter of cds traders getting nervous and calling in their markers and everyone followed suit. CDS should have been regulated from day one it has Nothing to do with consumers overspending.

[dkf]

16. The overspending has to do more with CDOs and other types of

collateralization.

When the bank can irresponsibly loan you money and then sell your loan to some other poor schmuck, they don't really care if you can pay it back.

So all you needed to get a loan was have a heart beat. Heck some DOGS were approved for credit cards. All that easy access to money allowed people to spend more than they make and more than they can pay.

Underpinning this was real estate's previously good track record of going up every year, therefore making buyers of loans think they could always sell the asset at a good price if the loan defaulted.

This doesn't even get into the crazy loans that were being offered, interest only, pay option, no down, stated income, teaser rates, and on and on.

You really should check out CNBC's "House of Cards".

[4 t 4]

17. Your wrong again

you are again blaming the people for getting loans they had no business getting but if the banks didn't change the terms almost overnight the people would still be paying their mortgages. Once again it is because the bullshit cds they sold called in their markers and then the banks turned it on the people and it all went to hell. Why in the world would someone that could afford and was paying their mortgage for five years all the sudden stop paying. It is not the peoples fault, the people are the victims.

[dkf]

19. You don't call in your CDS. Its all in the contract as to what is the default, etc.

Mortgages didn't increase because of the swaps, they increased because that was how the mortgage worked, if people read everything closely enough they would have known that.

If a person had a 30 year fixed mortgage, they wouldn't have been surprised with rate increases. Yes they may have been surprised if they had a pay option loan or a teaser rate or an ARM. A lot of these loans started off too good to be true. Then they hit their resets. Then everything fell apart.

You still have a weird concept of how all powerful the CDS is. Not all the banks were messing with them you know.

[4 t 4]

20. Just give it up already

all the bull you tout has always been in place. There is a reason it has gotten this bad. What again is your reason because people don't read the fine print.

[dkf]

22. That isn't true.

Back in the old days you had to have 20% down to buy a house and you would have probably gotten a 30 year fixed.

If that was still the case, and we had the income standards we had back then, this would not have happened.

[Political Heretic]

21. This ignores a great many things.

First of all, many of these loans were sold to consumers in predatory and deceptive ways designed to conceal from them the full implications of what they were getting into. Now that's not just me talking, that's congressional testimony.

Second of all, George Bush himself, stood on the White House Lawn in something like 2002 and, while talking about his "ownership society" started talking about how they would begin working with Fannie and Freddie to develop subprime loans with the explicit goal of convincing people who could not otherwise afford a mortgage that they could afford these.

Third, the "find print" is difficult as hell to read and understand - yes it is a responsibility, yes some people were confused and made mistakes, but in my mind, and the mind of most liberal thinkers that tend not to blame the consumer first I might add, these mistakes are nothing compared to the massive and well-organized effort on the part of the white house and businesses to sucker people into sub prime loans at a record pace and then get rich off of them.

You blame the consumer for not being brilliant enough to understand the fine print. I choose to place primary fault where it belongs, on the institutions that were purposefully pushing ridiculously, inexcusably high-risk loans even when they, the EXPERTS, knew they were shakey better than the consumer did, and the administration that rubber stamped such endeavors. It was greed and excess that got us into this mess, not the fact that we consumers sometimes have a hard time understanding the technical fine print.

[dkf]

23. The poster said that the people who owned the CDS called in the mortgages and that is why

the mortgages reset.

My point was that the Credit Default Swaps had nothing to do with the mortgage interest resetting, that the interest rate provisions are in the mortgage loan itself.

[4 t 4]

24. Exactly!!!

[dkf]

26. All I'm saying is that I hope most people know what kind of mortgage they have.

Unless you have a fixed mortgage, you should expect the rate to change eventually.

If a person can't figure out if they have a fixed mortgage or not, then I don't have high hopes for good decision making on their part.

[AndyA]

2. Yeah, and after he provided such riveting insight during the elections,

I'm shocked that he doesn't have his own show.

He's a lightweight in a field of heavy hitters.

I don't know why NBC keeps him, but they also seem hopelessly devoted to Tool Gregory, Slobber Matthews, and Killer Scarborough as well. :shrug:

[4 t 4]

18. Yes AndyA I sure agree with you

Gregory is such a Tool and joetheinternkiller is awful what more is there to say - really ? Morning Joe should be called Morningjoekilledhisnternandgotawaywithit

[Lex]

6. He's their White House Correspondent so yeah, he'll be on a lot

saying dumbass things and making idiotic observations.

[4 t 4]

7. Killer Scarborough Hehehhehehehehhe

you said it brother. joetheinternkiller Don't be suprised if I'm soon found dead!!

[4 t 4]

25. Turn on MSNBC right now

they are talking about this exact thing