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  • Rated by 91KP on Sep 12 2008, 2:50am

    "I will tell you openly, the rule of economic law has ended in the USA. Say what you will, the open seizure of Fannie and Freddie by the US government, without cause or recourse, and the destruction of private equity is the Rubicon. We shall not go back from this point. It is kaput. " I hate the fact that this has happened, both as a libritarian and a young man who made substantial effort to pay off 100% of his substantial debt and invest much. I feel that the rule of law has been broken and I have personally been screwed. But let us be honest, it is not the first time this has happened in the United States, nor the last. The gold seizures, the savings and loan bailout, Katrina, etc - the list goes on and on. It is odd to me that government seizing 40% of your income in taxes is not seen as the same exact thing, or that land effectively seized by banning development due to "endangered species" isn't considered the equal. Or creating billions of dollars of debt to rebuild a city that is literaly underwater is not seizure either. On the other hand, those of us lucky enough to have assets have to appreciate the neccesity of social stability. If Freddie Mac and Fannie Mae were allowed to fail, it is quite likely that we would have had a delationary collapse. As money disappeared from the system, debts became unrepayable by any means and as the cycle went on there is no question that the standard of living of all americans would have decreased greatly. At the same time, the dollar would have been dropping and the foriegn ownership of US investments would have increased dramatically. Given that we live in a democratic republic that is ruled more by the democracy than the rule of law, it is very shortsighted to believe that at some point in the future a president, congress, or even dictator would not have enacted pure socialism, communism or fascism. Some things are more valuable than money, like the ability to walk to your car without a fear of being kidnapped or killed by radicals. And radicals would exist in certain situations, such as what may have been brought upon by total financial systemic faliure. So as unfortunate as this is in some ways, it could have turned out a lot worse, although it probably isn't over just yet. What we as a society and as investors should learn from this is that seizures are always going to happen when the scales get so far out of whack. A strawberry picker will never be able to pay back a $750k mortgage. So pay attention to your investments, and when you are acting out of greed instead of common sense it is quite possible that you might get burned. The people who bought Fannie Mae should have known things were out of whack, just as the people losing big money on a home should have known it was bound to happen. Had any of this happened rationally, instead of the whole thing being thought out as pretty much only a scam, it never would have happened. As a whole, homeowners were being greedy in thinking their homes would appreciate at 15% in real value for eternity and investors were greedy thinking they would receive substantial returns for loaning money to crackheads. How surprising is it then really that when the whole system is awash in illogical greed based upon unsustainable math, that the most powerful people are greedy as well?

  • Rated by timepotato on Sep 11 2008, 7:02pm

    Weeeee! can anyone say second great depression?

  • Rated by ppcfool on Sep 11 2008, 5:02pm

    these are sad times for the US, the sadder part is neither mccain nor obama will even address this issue as it really matters

  • Rated by BarrelBum on Sep 11 2008, 12:42pm

    Asorensen is correct; we have seen the Apex of capitalism

  • Rated by asorensen on Sep 11 2008, 7:29am

    I will tell you openly, the rule of economic law has ended in the USA. Say what you will, the open seizure of Fannie and Freddie by the US government, without cause or recourse, and the destruction of private equity is the Rubicon. We shall not go back from this point. It is kaput.