Failure of free-market economics

Ivan Seeking

With the failures of Freddie, Fannie, and now AIG, we have seen an earth-shaking failure of free-market economics. While the market would eventually correct itself, and though that should be allowed to happen, it had to be checked for fear of a complete US ecomomic collapse, which, according to a number of economists and members of Congress, very nearly happened this week! So instead of a free market, we have a government bail-out. Those who profited from the market go their merry way, and the taxpayer is left to absord the damage - close to 1 trillion dollars, and approximately the cost of yet another Iraq war. And we may not be done yet.

At about $6600 for every US citizen, this and the Iraq war will have cost a family of four about $27,000. So why is it that Republicans are mythically associated with prosperity [I keep forgetting]? And a special thanks to John McCain who was instrumental in creating this disaster with his long history as Mr Deregulator. He wanted to bring change to America. Well, it looks like he succeeded: Change may be the only thing left in your pockets after our adventure with McCain's deregulation and Republican control of the government.

What else could have been done with 2 trillion dollars? The Republicans and their policies have now brought the country to its knees. By all accounts, this is a national disaster.

So is this the end of an era? Have the banking, insurance, and finance markets proven too dangerous to be allowed to operate freely? And what does this say about free-market theory generally?

Also, this came out today.

Science unveils hidden drivers of stock bubbles and crashes
Medicine & Health / Psychology

Many economists believe that investors make decisions rationally, weighing up corporate data and other pricing signals to evaluate gain or risk before buying or selling stocks.

But this keystone belief in how markets function is now under mounting attack after this month's global stocks crash, the latest in a string of financial shocks over the past two decades.

Proponents of rival concepts say that primitive emotions, herd mentality and raging hormones are among the invisible motors that help inflate an asset bubble and then prick it.

"In standard economic theory, the way that prices in all markets are meant to be set depends on people being rational and having access to all available information," says David Tuckett of the Psychoanalysis Unit at University College London.

"This way of looking at things is almost completely wrong," he said. "Markets are operated by human beings."

Investigators into the theories of behavioural or emotional finance say conscious decisions are only the surface of a river with deep and powerful undercurrents.[continued]

http://www.physorg.com/news141015420.html

*OrbitalPower*

Usually, when things get privatized either the government increases in other areas, regressive intellectual property or something similar, and/or the market drives the companies into the ground and since they're "too big to fail" the government bails them out.

The amount the US spends even in good economic times on "corporate welfare" is astronomical.

I also don't understand the idea that markets are simply the way things ought to be. Markets are indeed constructed by human beings, but current market rules might be set up in such a way to stall progress in several areas.

I don't think it's natural that there needs to be huge, economic collapses in certain industries now and then. Who ever heard of other areas of a complete collapse in something being necessary to progress? This kind of stuff has happened before and you'd think people would learn that certain rules and regulations on the markets are necessary to prevent these things from occurring.

I think what's happening is just proof that capitalism needs a lot of human oversight and rules in place to keep it functioning properly. So yes, indeed, another failure of free-market economics.

*WheelsRCool*

With the failures of Freddie, Fannie, and now AIG, we have seen an earth-shaking failure of free-market economics. While the market would eventually correct itself, and though that should be allowed to happen, it had to be checked for fear of a complete US ecomomic collapse, which, according to a number of economists and members of Congress, very nearly happened this week! So instead of a free market, we have a government bail-out. Those who profited from the market go their merry way, and the taxpayer is left to absord the damage - close to 1 trillion dollars, and approximately the cost of yet another Iraq war. And we may not be done yet.

Fannie and Freddie weren't totally privatized institutions.

But remember, the financial industry is very unique in a free-market economic society, because if a big financial institution collapses, or a bank, the government has to "bailout" the customer's money in said institution, to keep the economy itself from completely reeling and going into an actual depression.

If Nike shoes collapses, no government bailouts. If Mattel collapses, no bailouts. If Coca-Cola collapses, no bailouts. If any of these collapse, will a lot of folks lose their jobs? Yes. But will the financial system collapse? Very unlikely. The worst the customers of these companies get is the fact that the company is now gone.

But if a major bank or insurance company collapses, it's different, because in addition to the institution itself collapsing, the customers themselves lose all their money. This leads to runs on the banking system, panic, etc...the Federal Reserve system exists to keep the financial system solvent in times of such crises.

I'm not quite sure if "bailout" is the correct word for these institutions though; I don't think the government is actualy bailing them out per se, more just securing the money the institutions held.

If you owned stock in AIG, I believe it's gone. Back when Bear Sterns collapsed, if you owned stock in it, it was gone. But the money of the customers is protected.

I'm not totally sure HOW this works though, nor does the media I think; there is a lot of faulty information out there:

For example: they say, "Bear Sterns was bailed out," but obviously Bear Sterns itself is history.

Then you read or hear, "Lehman Brothers will not be bailed out," yet the customers of Lehman Brothers, their money is fine. The institution itself is failing.

But that is the same thing that happened with Bear Sterns...so it's very confusing.

And a special thanks to John McCain who was instrumental in creating this disaster with his long history as Mr Deregulator. He wanted to bring change to America. Well, it looks like he succeeded: Change may be the only thing left in your pockets after our adventure with McCain's deregulation and Republican control of the government.

I have to strongly disagree with this. John McCain saw this coming from a while back, and said Fannie and Freddie needed more oversight through the Federal Housing Enterprise Regulatory Reform Act of 2005, which was shot down both by Republicans and Democrats.

Also, to call these institutions that have collapsed "de-regulated" is really kind of stretching it. They were very regulated, but by foolish, ill thought out and inneffective regulation.

If you notice, most of the hedge funds, which are virtually unregulated, seem to be doing fine (KNOCK ON WOOD, hopefully I won't have to eat my words in the coming days, weeks, or months).

What's very ironic is that some, such as Bill Gross, founder of PIMCO, have criticized hedge funds as being "unregulated banks" (http://blogs.wsj.com/economics/2007/...e-funds-a-con/). Yet we have thus far seen many of the very regulated investment banks collapse, while the "unregulated" banks seem to be doing okay for the moment.

But to just blame this crises on "deregulation" I think isn't right. For one thing, because the economy and the financial markets didn't perform very well back with heavy regulation either.

And this seems to be one problem: people either are for virtually no regulation of the financial markets, which wouldn't work, because the financial markets used to be crazy prior to any regulation, and others who argue for complete and total oversight of the financial markets, as if the government can somehow know what it's doing with this regulating when it can't handle its own finances properly, and when historically too much regulation also seems to be bad.

There is a fine middle-ground.

Remember, being for more government or being for less government are sometimes neither the answer; what we need right now is GOOD government.

The blame for this crises is on the following, I'd say: investment banks, homeowners, lenders, credit rating agencies, underwriters, investors, real-estate developers, poorly thought-out regulation, and the Federal Reserve leaving interest rates too low, which in hindsight we see was a bad thing.

To just blame one particular political party or person isn't right. Remember, bubbles occur. Under Ronald Reagan, we saw the 1987 stock market crash in which the markets lost around 23% that day; yet under Bill Clinton, we saw the stock market crash in 2000, losing over 50%. Were either of these the faults of those Presidents? Of course not.

Under President Bush, we saw the housing bubble occur; it grew and grew, then popped, unfortunately real-estate crash is a far harder blow to an economy than a stock market crash. People don't use stocks as collateral for things like they do their homes.

So is this the end of an era? Have the banking, insurance, and finance markets proven too dangerous to be allowed to operate freely? And what does this say about free-market theory generally?

Banking and insurance don't operate freely.

And what it shows is that the free-market is working: that if you lie, cheat, steal, cook the books, whatever, eventually the market gives you the boot; it kicks out the garbage.

Unfortunately, with financial institutions, they're a special exception who must have their customers' money protected.

The market is doing a very painful correction.

I don't think it's natural that there needs to be huge, economic collapses in certain industries now and then. Who ever heard of other areas of a complete collapse in something being necessary to progress? This kind of stuff has happened before and you'd think people would learn that certain rules and regulations on the markets are necessary to prevent these things from occurring.

Well collapses aren't necessary to progress, they're just a natural thing that seems to happen once in awhile.

People do understand about rules and regulations, but the problem is that the regulators themselves oftentimes don't know what they're doing.

*OrbitalPower*

Quote by WheelsRCool

There is a fine middle-ground.

Remember, being for more government or being for less government are sometimes neither the answer; what we need right now is GOOD government.

I agree here; good government is needed. Big government versus small government arguments can be a false dichotomy when you're talking about minor changes in our economic system, esp in regards to regulation where "across the board" regulation, or in this case regulatory rules to prevent bad decisions in certain sectos of the economy, may lead to more economic freedom and choices, and less failure.

That measurement of government should only be used when you're talking about huge cases of government intervention or minimalization.

I still think regulation was a problem, though, such as the legislation authored by Grammm etc., who went on to become a lobbyist and then a member of the McCain campaign team ("nation of whiners" guy).

But, extreme leftists, i.e. anarchists etc., will see any government intervention for the protection of property as big government and right-wing libertarians see somehow the reverse. Conservatives simply claim that protecting the finnancial institutions alone is "small government." The point is there are many ways to view the extent of a government in political science, including the people it is protecting and the economy it structures.

russ_watters

Lots and lots wrong here. For a start:

Quote by Ivan Seeking

Those who profited from the market go their merry way, and the taxpayer is left to absord the damage - close to 1 trillion dollars, and approximately the cost of yet another Iraq war. And we may not be done yet.

The cost of the bailouts will come nowhere close to $1 trillion. The media is playing fast and loose with the numbers. That number is an estimate of the value of the investments to be covered, not the amount of money lost. We've discussed this before.

The Republicans and their policies have now brought the country to its knees. By all accounts, this is a national disaster.

Really? When are we going to start seeing this "national disaster" decrease economic activity? Ie, the GDP? The recession predicted for earlier this year didn't happen. There still could be one in the future, but economists are not predicting one. http://www.philadelphiafed.org/resea...8/survq308.cfm

So is this the end of an era? Have the banking, insurance, and finance markets proven too dangerous to be allowed to operate freely? And what does this say about free-market theory generally?

We are certainly at the end of the era of the big independent investment banks. But you go much, much too far with your extensions. The crash is a result of a failure in the free market (meaning yes, more regulation is required), but the wild success that led up to it is also the result of the free market. You can't focus on the crash and ignore the boom that preceeded it. They obviously are two parts of the same thing. So the real question is: the downside worth the upside? And it is. Without question. Throughout the past 100 years, periods of expansion have gotten longer and recessions shorter and milder. The occasional flaw that manifests is bad at the time, but it doesn't come anywhere close to outweighing the vast prosperity of the recent past.

russ_watters

Quote by OrbitalPower

I don't think it's natural that there needs to be huge, economic collapses in certain industries now and then. Who ever heard of other areas of a complete collapse in something being necessary to progress? This kind of stuff has happened before and you'd think people would learn that certain rules and regulations on the markets are necessary to prevent these things from occurring.

It's Darwinian and it is most certainly natural. Evolution itself involves "complete collapse" (extinction).

That said, it is quite a stretch to consider the current situation a "complete collapse". This isn't 1929 and the types of things that happened then are simply not on the table today.

*WheelsRCool*

Investor's Business Daily (albeit a publication solidly supporting McCain) says a lot of blame for this ultimately goes back to the 1977 Community Reinvestment Act, enacted by the Democratic Congress and signed into law by President Carter; it also seems President Bush saw that Fannie and Freddie were at risk and tried to do something:

http://www.ibdeditorials.com/IBDArti...06632135350949

edward

Quote by WheelsRCool

Investor's Business Daily (albeit a publication solidly supporting McCain) says a lot of blame for this ultimately goes back to the 1977 Community Reinvestment Act, enacted by the Democratic Congress and signed into law by President Carter; it also seems President Bush saw that Fannie and Freddie were at risk and tried to do something:

http://www.ibdeditorials.com/IBDArti...06632135350949

Your source is grasping at straws and doing it by playing the race card.

Age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations requiring banks not only to lend to uncreditworthy borrowers, but to do so on the basis of race.

It wasn't poor black people who were flipping expensive houses with no money down in my area.

Astronuc

Quote by WheelsRCool

Investor's Business Daily (albeit a publication solidly supporting McCain) says a lot of blame for this ultimately goes back to the 1977 Community Reinvestment Act, enacted by the Democratic Congress and signed into law by President Carter;

How so? IBD appears to have misrepresented some facts.

I think the big problem was mortgage brokers awarding bad mortgages, and lenders over-extending themselves. Helping qualified lenders to obtain mortgages is not the problem - helping unqualified lenders is.

it also seems President Bush saw that Fannie and Freddie were at risk and tried to do something:

That appears to be an unsubstantiated claim. An OFHEO report in 2003 indicated problems, so hopefully Bush caught that then. Seems Bush quickly forgot that while trying to defend the War in Iraq and getting re-elected in 2004.

Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, 190th Congress, was introduced by Mr. Hagel (for himself, Mr. Sununu, and Mrs. Dole) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

The purpose of Federal Housing Enterprise Regulatory Reform Act of 2005 was to replace and amend sections of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992

http://frwebgate.access.gpo.gov/cgi-...s190is.txt.pdf

McCain appears to be a Johnny-come-lately to this effort in 2006. I'm looking for exactly when.

According to Elizabeth Dole's site:

June 15th, 2006 - Washington, D.C. - U.S. Senator Elizabeth Dole, a member of the Senate Banking Committee, today made the following statement in a Banking Committee hearing on the recent OFHEO report on Fannie Mae:

I want to thank Chairman Shelby for holding today’s hearing on the OFHEO Report of the Special Examination of Fannie Mae. This report not only confirms my deep concerns about Fannie Mae – it demonstrates that the GSE’s actions were far worse than I could have imagined.

Nearly three years ago, after it was revealed that Freddie Mac had misstated its earnings, Senators Hagel, Sununu and I introduced legislation to strengthen the regulation of the GSEs. And Fannie and Freddie responded, dispatching an army of lobbyists to Capitol Hill and spending tens of millions of dollars to oppose our bill. In 2004, their lobbying tab totaled $26 million – and just last year, more than $24 million. At times it has truly felt like David and Goliath!
. . . .

In July 2005, the Senate Banking Committee approved legislation introduced by Dole and her colleagues Senators Chuck Hagel (R-NE) and John Sununu (R-NH) that would improve oversight of Government Sponsored Enterprises (GSE). The bill, the Federal Enterprise Regulatory Reform Act (S. 190), must now be considered by the full Senate.

http://dole.senate.gov/public/index....th=6&Year=2006

Interesting the McCain is not mentioned.

The reform and improved oversight of FNMA (Fannie Mae) and FHLMC (Freddie Mac) certainly should have happened back when it was learned that they had significant accounting problems - more than 5 years ago.

Perhaps a concern over the bill was a provision to abolish OFHEO.
Sec. 301. Abolishment of OFHEO.

I'd like to know why it was defeated, and not passed with amendment. To my knowledge, it went down before the Democrats took control of the Senate in 2006, and Obama had only been Senator for 18 months, or so, so I'm not sure how he would have managed to defeat the bill.

I'd like to know how the Bill got through the Banking Committee, and then who opposed it and why.

McCain's Fannie and Freddie Connections

http://www.motherjones.com/mojoblog/...e_freddie.html

John McCain railed against Fannie Mae and Freddie Mac on the campaign trail today, saying that the CEOs that led the lenders to ruin "deserve nothing" and should have to pay back their severance packages. In an Wall Street Journal op-ed co-bylined by his vice presidential pick, Sarah Palin, McCain suggested bold reforms for Fannie and Freddie that would "terminate future lobbying, which was one of the primary contributors to this great debacle."

If that's the case, McCain should look first to his campaign staffers as the cause of that debacle. One of them was Fannie Mae's head of lobbying, and spread tens of millions of dollars around Washington in the form of lobbying contracts. A number of McCain staffers were on the receiving end of those contracts, collecting hundreds of thousands of dollars each from the lenders to rep their interests. And McCain's campaign manager served as president of a lobbying association that fought to protect Freddie Mac and Fannie Mae from the sort of regulation that McCain is now proposing.
. . . .
Aquiles Suarez, listed as an economic adviser to the McCain campaign in a July 2007 McCain press release, was formerly the director of government and industry relations for Fannie Mae. The Senate Lobbying Database says Suarez oversaw the lending giant's $47,510,000 lobbying campaign from 2003 to 2006.

And other current McCain campaign staffers were the lobbyists receiving shares of that money. According to the Senate Lobbying Database, the lobbying firm of Charlie Black, one of McCain's top aides, made at least $820,000 working for Freddie Mac from 1999 to 2004. The McCain campaign's vice-chair Wayne Berman and its congressional liaison John Green made $1.14 million working on behalf of Fannie Mae for lobbying firm Ogilvy Government Relations. Green made an additional $180,000 from Freddie Mac. Arther B. Culvahouse Jr., the VP vetter who helped John McCain select Sarah Palin, earned $80,000 from Fannie Mae in 2003 and 2004, while working for lobbying and law firm O'Melveny & Myers LLP. In addition, Politico reports that at least 20 McCain fundraisers have lobbied for Fannie Mae and Freddie Mac, pocketing at least $12.3 million over the last nine years.
. . . .

Hmmmmm.

Ivan Seeking

Apparently this is the inside joke this week: The People's Republic of Wall Street.

Astronuc

Press Release
MCCAIN STATEMENT ON CO-SPONSORSHIP OF THE FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005
May 26, 2006

“Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former Chief Executive Officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac — known as Government-sponsored entities or GSEs — and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a co-sponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S.190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”

Not quite 2005 as mentioned on many blogs.

Apparently - On Apr 12, 2007, S.190 was re-introduced in the Senate (with a new bill number) as S.1100: Federal Housing Enterprise Regulatory Reform Act of 2007.

Dodd (D) was Committee Chair in 2007.

Ivan Seeking

Holy crap! Watch the clip with Sen. Chris Dodd, D-Conn., and Rep. John Boehner, R-Ohio.
http://abcnews.go.com/thisweek

Boehner states that the ramifications of the crisis that we face, if left unchecked, are so bad that it can't be discussed. This really is unprecedented. I have NEVER seen so many powerful people so scared before. Dodd states that when congress was told, it was like the air was sucked out of the room.

And there is no certainty that the bail-out will work. It is a confidence game.

*WheelsRCool*

How so? IBD appears to have misrepresented some facts.

I think the big problem was mortgage brokers awarding bad mortgages, and lenders over-extending themselves. Helping qualified lenders to obtain mortgages is not the problem - helping unqualified lenders is.

This I think was a big part of it.

Hmmmmm.

When I was watching the news a day or so back, there was a guy mentioning exactly this, that you can find Fannie/Freddie connections on both McCain and Obama, McCain the ones listed above, and Obama, who has Franklin Raines and Jim Johnson, former Fannie Mae CEOs, as economic advisors, and also being the second largest recipient (among Senators) in donations from Fannie and Freddie: http://www.foxnews.com/story/0,2933,423701,00.html

Both candidates have dirt on each other in this it seems.

Ivan Seeking

The important thing is that this is a failure of the essential Republican economic philosophy. Less the social agenda of the extreme right, the Republicans are now ideologically bankrupt. And we have McCain, his financial advisor, and the Republicans in general to thank for this crisis. It isn't about who has a friend at Fannie, it is about a failed philosophy - the philosophy that deregulation leads to efficient and profitable financial institutions. It is yet another example where the Democrats have been right all along: You can't trust the bastards! They will hang you every time. And this time they really hurt us: This is being described as THE largest financial crisis in history. This is a national catastrophe.

In order to put this in perspective, it is even argued by some that we are now effectively socialists. George Will even cited one defintion that applies.

Astronuc

The current fiasco on Wall Street had roots in bipartisan support.

Wall Street vs. The Democrats: Don't Hold Your Breath

Today the House and Senate will begin considering the $700 billion gift to Wall Street otherwise known as the bailout package, presented to them in recent days by Treasury Secretary Henry Paulson. How will it fare on the floor of Congress? A clue to what we can expect can be found in the Congressional response to the 1999 Gramm-Leach-Biley Act, which helped pave the way for the recent disaster.

This now infamous piece of legislation repealed part of the Glass-Steagall Act, passed in 1933 in response to the banking collapse of the Great Depression. Glass-Steagall enforced a firewall between investment banks, commercial banks, and insurance companies, in order separate high-flying Wall Street risk-takers from the banks where the mass of the public keeps its money in checking and savings accounts.

Phil Gramm, then a Republican senator from Texas, and recently an economic advisor to the McCain campaign, took the lead in undoing Glass-Steagall, a move the financial services industry had been lobbying for since at least the 1980s. But Bill Clinton was also an enthusiastic supporter of banking deregulation. And it was Clinton Treasury Secretary Robert Rubin who brokered the compromise that allowed the legislation to move forward in Congress (shortly before he left the administration to join Citigroup) In November 1999, Mother Jones published a prescient piece on the dangerous implications of Gramm-Leach-Biley, under the headline “Robert Rubin Rewrites the Rules.”

How Democrats in Congress dealt with Gramm-Leach-Biley has now become a subject of debate. The final version of Gramm-Leach-Biley, won nearly universal bipartisan support and passed by a wide margin in both Houses in November 1998. The Senate’s 90 yea votes included those of VP nominee Joe Biden; and such prominent Democrats as Ted Kennedy, Christopher Dodd, Chuck Schumer, and Harry Reid.

. . . .

I have to wonder if these people even bother to read the bills.

Also, I think Rubin is advising Obama.

Astronuc

Last major investment banks change status
http://news.yahoo.com/s/ap/20080922/...ge/bank_change

WASHINGTON - It was the end of an era on Wall Street as the Federal Reserve granted permission for the last two major investment banks — Goldman Sachs and Morgan Stanley — to become bank holding companies in order to stay in business.

. . . .

Ya know, I have a sneaking suspicion that something went terribly wrong.

Astronuc

Goldman, Morgan to become holding companies
Companies get access to Fed lending in exchange for oversight

WASHINGTON (MarketWatch) -- In yet another extraordinary development for Wall Street, the Federal Reserve said late Sunday night that venerable investment banks Goldman Sachs and Morgan Stanley will become bank holding companies, subjecting themselves to stricter federal oversight.

The move will subject the companies to the same rules that pertain to traditional banks like Citigroup and J.P. Morgan Chase, and they will need to maintain specific capital reserves. The move will place the firms under stricter regulatory control and will reign in the leverage, or borrowing.

The Federal Reserve will now be their primary regulator, replacing the Securities and Exchange Commission.

The Wall Street titans will be allowed to transition into holding companies following a mandatory five-day waiting period, and will be able to take advantage of credit from the Federal Reserve Bank of New York in order to complete the transition.
. . . .

Meanwhile:

Oil futures hit daily limit for price move as cost of a barrel of crude leaps above $116 (partly related to decline of dollar).
Gold rallies 5% as dollar slides

Short-sale ban list expanded to include GE, GM
American Express also added; NYSE expands roster by another 30 stocks

http://www.sec.gov/rules/other/2008/34-58592.pdf

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WheelsRCool	Investor's Business Daily (albeit a publication solidly supporting McCain) says a lot of blame for this ultimately goes back to the 1977 Community Reinvestment Act, enacted by the Democratic Congress and signed into law by President Carter; it also seems President Bush saw that Fannie and Freddie were at risk and tried to do something: http://www.ibdeditorials.com/IBDArti...06632135350949

Ivan Seeking Recognitions: Gold Member Science Advisor Staff Emeritus	Apparently this is the inside joke this week: The People's Republic of Wall Street.