"The Media's Fault." AGAIN????

From now on call us Union Socialist America.

The only thing I blame the media for is the lack of substantial investigative reporting on how the real esate buble was growing and why it was so easy to get loans. Why didn't anyone report of the politicians that were overseeing Freddie and Fannie taking loads ofcash from them? Where was the reports on politicians threatening banks with more regulation unless they provide loans to those that couldn't pay for them? Where was the same media when these same politicians pressured these banks to count welfare and unemployment as income for loans or pressured Freddie and Fannie to buy so much of these crap loans?

Liz, From what I see, the spark that lit the fuze that started all this, was when Congress passed and President Bush signed, the bill that allowed/or ordered credit card companies to require higher minimum payments applied to the principle to force credit cards holders pay their debt off faster. All this did was double monthly payments on budgets straining to pay their minimum payment in the first place. And the credit crunch slowly snowballed from there. Bottom Line, all of the finance problems going on now is the result of governmental people deciding for me, what is good for me and mine. And the rest they say is history. Pews. Bush has done well protecting the U.S. from additional attacks from our enemies. But what we didn't need was protection from ourselves.

Liz this had better make your day. Seriously... last night I was watching Wallstreet in Crisis on CNBC. Toward the end of the special with Larry Kudlow and Michelle Caberara; Michelle made my night. When Obama Economic Know it all Gene Sperling said some things negetive about Jack Welch,Michelle hit back on the "moving target" numbers of 250,00 and 150,000 estimate gaffe of Biden's. She didn't let him off the hook. Sperling did the same song and dance answer. But she didn't let up on the hard questioning. It made my night.

I was going to go into great lengths to describe why I think that the "mainstream media"is as much to blame as wall street,or the politicians,but I won,t.I have decided that the true villain is Joe the Plumber, better known as the average American.

The media's responsibility is to report the unbiased truth (facts) in all situations, whether we want to hear it or not. It is unethical for them to mislead the American public by withholding the facts. The media has the power to generate fear of crisis or to sway voters one direction or another based upon rhetoric (not facts). Shall we blame them? Not if they're telling the truth. If they're dishonest or withholding information? A resounding "YES!".

The media didn't CAUSE the current financial mess, but it IS making things worse by sensationalizing and continuously beating the drum of (bad) news, infalting the emotion/fear component of the overall economic malaise.

No question that the media has exacerbated the financial situation we have here today. The mainstream media has only two missions. Those missions are to build ratings and to push a political agenda. Most of the media leans way left. Fox does the opposite, probably mainly to build ratings. The media builds ratings by sensationalising, exaggerating and just plain lying about every story it features. Accuracy, perspective and the truth are casualties. The mainstream media has been trumpeting the cause of the recession and the sub prime mess for at least two years. It is sensational and it hurts the party that controls the White House and that furthers their political agenda. No matter that the dimocrat party is the main culprit in the sub prime mess and that that the President in the long run can impact the "economy" only slightly.

The media only intensified the problem they did`nt start it. If you constantly tell people how terrible the economy is they start holding back on purchases and guess what happens..the economy really starts to slide.

By no means do I think think the media was at fault for starting the whole economic crisis, but they are playing a major part in causing an increased sense of panic and fear on Main Street. A perfect example is that I had heard about the 900 point DJIA gain last night, and this morning I went to CNN.com to find out what caused the surge, and there was nothing on the main page. Where as I can remember just a few weeks ago when it fell by less than half that amount and it was FRONT PAGE news. Are the American people really only interested in reading news that is negative?

as in futures markets, zero sum works.

  If you were wondering who started the mess we are now in, the following article from all places…….The New York Times…….may help clarify the matter. No wonder the Democrats are not calling for hearings before Congress.     This September 30,1999 article proves how this mortgage crisis began. . .   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 Y ork 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 by 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. ''Fannie Mae 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.'' 0ADemographic informatio n 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 times. 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 her monthly payments on time for two years, the one percent age 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.    

While most of what you say IS true, all of these situations were indeed created by the individuals and groups that were directly involved, not the media. However where I feel the media DOES have culpability is in how they sometimes tend to report on the situations. Reporting on it 24/7/365 creates panic but they have time to fill,so they continue and far too often while they may be reporting the news, they are also putting their own slant or spin on things and to often, like now, I don't feel that they are always very responsible with when or how they report on inssues, especially when it comes to certain things such as the war or the economy, they could calm people by the tone of their reports, but too often they choose not to do so.

Hi Liz, I know the media has to report what is happening, and compounded over time in this credit crisis it may appear to people that all the news is bad news. The biggest problem I have is when I hear someone in the media saying "there is no money to lend", especially being that I am in the mortgage business. We are closing loans, not like the last 2-4 years, but there is money being lended in this market. Regards, Scott

Liz - There are so many people at fault in the current crisis. First, President Carter (and other Presidents that followed) wanted to manipulate bank lending criteria to place people in homes who couldn't really afford to own homes. Getting someone a loan is just the start. As we all know, the costs of homeownership go far beyond the mortgage payment. Then the relaxed lending criteria created for the less advantaged among us were applied to all borrowers and speculators in real estate. This was all so lucrative that it spread like wildfire through the system and, as Wall Street has done before, the securities firms found a way to profit from it as well. That's when the "bundles" of mortgages were unbundled and sold into our retirement plans. The next thing you know we have legislators protecting Freddie and Fannie from scrutiny as they benefited from campaign contributions, sweetheart deals and well-paying jobs for friends and family. Where was the media when all of these stories were there for them to report on and almost none did? Who is to blame? Government, Wall Street, the media, uninformed consumers....they all bear some of the burden. Most of the burden, however, must fall to those whose job it was to protect us from the ill-advised money making ideas that capitalists will always come up with. Where was the SEC to protect us from the unregulated hedge funds that have turned our markets into trading pits that no longer reward anyone who simply wants to save for retirement? Why didn't the SEC enforce regulations against naked short selling and why did they do away with the uptick rule that had worked quite well since 1987? Where were our senators and congressmen when the alarm was being sounded about the increasing sub-prime portfolios of Freddie and Fannie? Why is it that us average citizens could see plenty wrong with housing our children were never going to be able to afford and loans that had been twisted into 40 years, interest only, and 120% of the market value but the legislators seemed to think all of this was no problem? Why does the media (including Fox News) put a full time ticker on their screen and say things like "meltdown" when the market goes down 300 points but say things like "we gained a little ground back today" when the market goes up 300 points. The answer to all of the above is because it was in thier self-interest to do so. We as citizens and viewers should require more. We should require that the people we send to Washington do more to protect us than themselves. We should require that the SEC fullfill its responsibility to protect investors rather than Wall Street profits and we should demand that the media not hype the fear to increase viewers. We should also demand that we as consumers educate ourselves enough to know when that is happening and use our votes, voices and television remotes to demand change. See - everyone carries the blame. All of us have a responsibility to change.

Liz, No doc mortgages caused this problem. However they were originally intended to be used the lack of oversite let greed and speculation drive the bus over the cliff. A lot of people made big bucks in this and I don't mean just on Wall Street. The mortgage brokers, real estate brokers, real estate developers and the speculators. But they are not at fault for taking advantage of the situation. Those who are at fault are the ones who made the ridiculous loans and those that bought the security products created from those bad resources. Those organizations are paid to know better. Someone was going to be left holding the bag, we just didn't imagine it was going to be the American taxpayer. Justice has not yet been served and if it's left up to Washington it probably never will be.

HI It began with weakening regulations and that allowed unscrupulous lenders to offer folks pie in the sky dreams. Your right Liz, owning a home is not a right it is something you have to work hard and save for. I like the idea of people having at least 20% down and a job to support the purchase of a home. If we allow anything else then we are on the path to more of what has already happened.

While, generally, I do have problems with the "maintream" media, this is something that can not be put on the media, any media. The list of who messed up, getting us where we are, is very, very long. It includes what should be some of the best and brightest minds in business and finance throughout the entire world. At the other extreme, it includes people (homeowners) that, while not terribly savvy in terms of finance, still made incredibly bad decisions. And there's a lot of people in between. But the media is no where on that list.

It's not the medias fault that the financial crisis happened it's the greedy banks and the government. The government for telling the banks they must lend more so more people can buy there first house,no matter what there income level is,they lent money to people who couldn't even afford to buy a pair shoes,and those people ended up with a mortgage of $200,000.00 to 400,00.00,and then the people who could afford the 2-400,000.00 mortgage where told we can get you a millon dollar mortgage.Like the money was coming out of a bottomless pit.I blame the people of this country, the greed of the banks and the stupidity and the greed of the government for this not the media

Dear Ms. Clayman, The blame game is just as complex as you believe. The real blame for all of this is very straight forward and easy to pinpoint, but just as difficult to fix. The unholy (think pimp-prostitute) relationship between local realtors and appraisers facilitated, fostered, and fed the housing bubble and crash. Throw in store front mortgage shops that "massaged" the paperwork to qualify the borrowers and disaster ensued. Appraisers that failed to bring in the price for the loan to get approved did not get future work. Threats, pressure and coercion were common place. It is whispered that an honest appraiser could make $40,000.00 per year, but a dishonest one could make $250,000.00 during the heady days of the bubble. You then add in exotic mortgage instruments with teaser start rates and tiered payments, escalating rates, and punitive add-ons sold across kitchen tables to shockingly unsophisticated buyers, a recipe for poison mortgage soup emerges. Liz (if I may be so bold), the blame is local; the consequences global. The upselling of these fatally flawed obligations is also part of it. At the end of the day, if the mortgages had been "real" and "proper" in the first place, we would NOT be in this mess. Michael J. Doherty, Richmond, IN

Of COURSE it's media's fault! They supported the leftist so-and-so's that blocked the Fannie Mae/Freddie Mac reforms that would have mitigated a small portion of this mess! :)

It seems obvious to me that most of the mainstream media is controlled by private interests, namely multinational Banks and Wall Street in general. I have consistently watched the evolution of this crisis, and it's clearly the result of a self fulfilling prophecy, CNBC, CNN, and the rest of the major networks have preached for the past 12 months. Remember that they've been preaching recession way before there was contraction, and every good piece of news have been tone down consistently. But this shouldn't come to us as a surprise, the mainstream media has been doing that for quite a while (go to John Lott's website and look for an article about Ann Coulter's analysis of the media polls). The lesson for me is the unparalleled importance of this election and the mantra of the mass media: sit Obama in the White House no matter what. I hope it doesn't happen, because regardless of who Obama is, the idea of a shadow government controlling this nation is just repulsive to me.

Hi, Liz -- Glad you could make it to the conference. Was the tenor what you expected? Any surprises?

Well, yes. You all studied economics, surely you knew something about cycles and waves and all that stuff (I don't presume) but who did you interview day after day but somebody who just made a killing or some wallstreet slicker or some glassy-eyed congressbeast (you know the way they look when asking "hard" questions they don't understand of econ feds who look somber and reply with non-sequiturs looking enigmatic). Where were the theorists? Where did you present overall understanding of a complicated system? And where were your efforts to sound the alarm? You are the Fourth Estate (Wikipedia: Edmund Burke, looking up at the Press Gallery of the House of Commons, said, 'Yonder sits the Fourth Estate, and they are more important than them all.') It is your JOB AS ECONOMIC ANALYSTS to understand what is going on and report it. (I don’t charge FOXBUSINESS with failure to report the political news -- I’ll get them later.) A decline was coming anyway, it was exacerbated by Congressional manipulation of market rules and regulations to further partisan (personal?) goals which has tipped the problem and now we’re going into an unprecedented political as well as economic crisis, I will say that FOX has been more truthful than other MSM, but nevertheless still pretends that everything is going to be the way it used to be. It ain’t so.

Well, yes. You all studied economics, surely you knew something about cycles and waves and all that stuff (I don't presume) but who did you interview day after day but somebody who just made a killing or some wallstreet slicker or some glassy-eyed congressbeast (you know the way they look when asking "hard" questions they don't understand of econ feds who look somber and reply with non-sequiturs looking enigmatic). Where were the theorists? Where did you present overall understanding of a complicated system? And where were your efforts to sound the alarm? You are the Fourth Estate (Wikipedia: Edmund Burke, looking up at the Press Gallery of the House of Commons, said, 'Yonder sits the Fourth Estate, and they are more important than them all.') It is your JOB AS ECONOMIC ANALYSTS to understand what is going on and report it. (I don’t charge FOXBUSINESS with failure to report the political news -- I’ll get them later.) A decline was coming anyway, it was exacerbated by Congressional manipulation of market rules and regulations to further partisan (personal?) goals which has tipped the problem and now we’re going into an unprecedented political as well as economic crisis, I will say that FOX has been more truthful than other MSM, but nevertheless still pretends that everything is going to be the way it used to be. It ain’t so.