Radical bailout plan has a jawdropping price tag

[Martrae]

Actually, Clinton is to blame for the subprime explosion. He changed the rules of the Community Reinvestment Act.

Then Andrew Cuomo (Clinton's head of HUD) really fucked things up with several rules he put in place for Fannie Mae, Freddie Mac and the FHA.

Interestingly enough, Bush tried to put Fannie Mae and Freddie Mac under the supervision of the Dept of Treasury in 2003 but was blocked by the dems who declared oversight wasn't needed.

You can also blame the Enron fallout for part of our problem. There was a bill enacted afterwards that basically stated that all corp assets have to be listed each day at their current worth. It's called the mark-to-market provision. What this does is force companies to list sub-prime mortgages on their books at the current market value...which is nothing. This means there is no potential for sale of these (because they are valued at 0) and it's locked up the market. If these were abolished or relaxed then the market would open up again and crisis would be lessened greatly.

How's all that for a scapegoat?

[Martrae]

Congress, White House reach financial bailout deal

Hold onto your ankles....we're all about to be fucked.

[Arlos]

Well, well, well. Congress actually seems to have gone out of its way to put together a real plan on this. They didn't just assumed they knew it all, they consulted real world experts. Notably, they consulted with Warren Buffett, who as I've noted before, has been decrying what the financial markets have been up to since at least 2003.

Furthermore, Warren is convinced the bailout is necessary, and that if it DOESN'T bail out the industry, the US economy will have it's worst crash in history. Now, when someone with the success and knowledge of Buffett says that, especially when you consider Berkshire-Hathaway itself is extraordinarily healthy as it wasn't involved in the derivatives trading, etc, I listen, and I listen to him more than I do Ron Paul, I'm afraid.

http://www.cnn.com/2008/POLITICS/09/28/ ... index.html

-Arlos

[Martrae]

Warren Buffett knows busines and for that I admire him for it. But understanding business and understanding how an economy works are two different animals.

If you paid attention it's not just Ron Paul saying the bailout is a hugely bad idea but the Austrian School. I'd trust their track record for predicting and understanding economics over anyone in the entire world.

[Arlos]

I suppose for my personal opinion, it's going to hinge on a couple different aspects:

1) How much oversight there is for this thing. I suppose it shouldn't have, given Bush's proclivity for power grabs, but I can still barely believe that the original plan he proposed put the entire thing in the hands of the treasury secretary, and codified that his decisions would NEVER be reviewable, not by court, congress, anyone. That he actually thought there would be buy-in to this just shows how little he gets it.

2) What taxpayer protections are built in. It's sounding like some of the things I want, an equity stake for the government, increased transparency and oversight, and limits to executive pay are already in there. We'll see what else gets put in.


Right now, I finally see signs that the middle class has realized it's becoming and endangered species, and has gotten very very pissed at the uber-rich. This wall street thing was the final straw, but I suspect the years of growth and productivity increases with actual earnings going DOWN in spite of it all is where this backlash began.

See: http://money.cnn.com/2008/09/26/news/ec ... 2008092811 for an article on this.

-Arlos

[Martrae]

The bailout bill failed to pass the House.

[ClakarEQ]

stocks tanked almost instantly, down 500, then up 150, i think they're hovering around 350 down atm.

Wichova pretty much bit the dust too :\,

[Martrae]

They'd bit it beforehand....Citigroup bought em.

[ClakarEQ]

doh, damn, quick refresh, down almost 600 now

I'm glad I don't have more than 100k banked right now LOL

EDIT
Was just thinking, my mattress is looking pretty good right now, maybe liquefying all the gold in my house too :\

[Eziekial]

Wow, I leave for the weekend and all hell is breaking loose! The markets are in a tail-spin due to the news that Congress may actually be listening to it's constituents. Ha! Wouldn't that be something

[Naethyn]

[Reynaldo]

Hopefully the dollar hangs in there until I get back from France...

$25 cheeseburgers just don't sound too appealing (with 3% transfer fee tacked on for good measure!).

[KaiineTN]

This put me in a great mood. I feel like celebrating. I was rather pessimistic, I thought it would pass.

[brinstar]

les royales avec fromage

[Diekan]

This is utter BULLSHIT. Fucking Republicans.

Voted the bill down - basically - because Palosi hurt their wee lil feelings... give me a fucking break. Anyone else see the irony here? Voting down the bill because of her speech (calling it partisian politics). Hello?!? Isn't that exactly what the fuck they are doing by voting it down??!!!??

I have ASS LOADS of money wrapped up in FRE and FNM. Just the news of a bail out alone caused a nice spike in the stock price during Friday's AH and Monday's pre-market trading - then it continued a nice ride until those rat fuck Republicans submarined the whole deal. Because someone called them a name... waaaaaaahhh!

That bail out plan was not as *evil* as some GOP and Dems wanted YOU to believe. Buying the bad paper and putting money INTO credit providing institutions (with stipulations to tighting lending practices) IS A GOOD THING.

Now we have the greatest drop in the DOW's history and our country's supposed leaders are more worried about "keeping their jobs" than doing what's right for the country's economy.

I will NEVER vote for another republican again... worthless cowardly pieces of shit. Every damn one of them.

I lost more in the market today than a lot of folks make in a year.

People are taking MASSIVE hits in their retirements, investments and everything else. And why?

We need to vote every single one of those cock suckers out of offfce. EVRERY FUCKING ONE OF THEM. ON BNOTH SDIDES.

I can understand the country refusing to bail out a company like say... Sirius XM. Our entire economy doesn't depend on sat radio - if they go under... tough. But FRE and FNM? Completely different - THE NEED TO BE BAIL OUT OR WE'RE FUCKED.

Fuck the GOP. I sware to God I will never pull the level for ANY cocksucker that has an (R) in front of his/her name again. Mother fuckers.

[Eziekial]

It will pass this week. Once members of congress get calls from their panicked wives that their 401(k) just dropped 10% the House will quickly come together and act. The bill will sail through the Senate and GW will sign it the bill into law in some grandiose "late night" session. Watch for rolled up shirt sleeves and blood-shoot eyes.

[Martrae]

You gambled on a shaky stock market and lost. I fail to see how that's anyone's fault but your own.

They did the right thing by not passing this bill today and it'll be a bad day when they finally do pass it.

[Tossica]

Fuck 401k's and "fake" market money. Use a much smaller number for the bailout money and pay off all unsecured consumer debt, student loans and get mortgages back in line with realistic home values. People will be allowed to keep their homes and the money they save every month will be almost immediately spent or reinvested and would give the economy a nice reboot. Let all the greedy fucking banks file bankruptsy. New banks that are willing to lend will pop up in their place as the money all changes hands.

[Tikker]

I've got a cardboard box that you can have diekan

[Arlos]

Now, given the current stock market, can you just imagine how bad off people would be if Bush had gotten his way and all of Social Security were currently tied up in stocks?

One of the few fortunate outcomes of this entire implosion is that that idea is now dead, dead, dead.

-Arlos

[Diekan]

You gambled on a shaky stock market and lost. I fail to see how that's anyone's fault but your own.

They did the right thing by not passing this bill today and it'll be a bad day when they finally do pass it.

The right thing? Ummm how so? You obviously do not invest much - or at all.

The Government - both sides - caused this mess by interfering with capitalism in the first place. It was during the Clinton years that the federal government started pushing banks to lend money to people who couldn't afford to pay it back in the first place.

How much have we spent in the war in Iraq? We're inching closer to a TRILLION dollars now. Not to mention all the money being wasted on ear marks and "bridges to no where." Oh, but 700 billion to save the economy is "too much."

What needs to be done?

1. Raise the insurance of the "savings accounts" from 100,000 to 1 million. (see FDIC).
2. Completely out-law naked shorting - yes it does go on. (google it if you don't know what it is).
3. Buy the bad paper from the institutions.
4. Put cash into the institutions.
5. Legislate transparency into the markets and banking industry.
6. Create TIGHT regulations on trading with actual /gasp oversite... (the SEC is practically worthless).
7. Investigate all instutions that recieve bail out money and prosecute those of wrong doing - with actual prison time as a result of legit findings of manipulation and or corruption.

Those are just a few things that can be done to start with. And, yes they are very, very general.

The can fund this bill without causing much harm to the tax payer - GET RID OF EAR MARKS for starters.

Once this is fixed the government needs to stay the fuck out of the business world unless it is providing protections (in the form of regulations and oversite) to safe guard against corruption and manipulation.

There was nothing wrong with the bill. It might have needed a coulpe of additions, but nothing that couldn't have been added after the fact. Had the bill passed the dollar would have gained strenght. The market would have not collapsed 700 freaking points.

We know WHY the GOP shot it down. My gut tells me that the Dems - the 90 that voted no - shot it down (ultimately) because I *suspect* that funding the bill would have made it all but impossible for Obama to institute his universal health care plan - if he gets elected. Which after what the GOP did is almost all but certain now.

I suspect that most people have absolutely no idea how important the "stock market" is to our economy - how important it is to economies overseas either.

Talked to a guy at the office today. He was completely against the bill - saying it was "too much money!!" The dumbass didn't even know the difference between a money market and mutual fund - but yeah... he's "savvy" enough in the ways of economics to know what's "best" for the situation. It's the uninformed jackasses like that are flooding Washington with phone calls to "kill the bill or be voted out."

Again, as I said before... if we're talking about bailing out something like Ben and Jerry's - I would strongly oppose it. But, we're not. We're talking about - practically our entire banking system - Wall Street - and ultimately our economy. Major banks are FAILING. Wachovia is no more. Wamu is no more. The list goes on.

I hope all you realize the implications of an absolute meltdown of the street. You think jobs are hard to come by now? You think bread and milk are expensive now? Just wait...

[Arlos]

I'm only going to comment on that last post with one oblique note:

Earmarks are NOT the problem. Yes, some of them are wasteful. But they amounted to only 18 billion last year, and HALF of them were for defense projects that no doubt many would cry bloody murder if they were canceled. That's what, 9 billion, TOTAL? Considering the budget runs to what, a trillion and a half? We're talking just over half a percent of the total budget there. That's nothing. I am sick of hearing earmarks mentioned as if canceling them would somehow fix every one of our budgetary woes.

We spend more on Iraq in 1 month than we do all year on ALL non-defense earmarks combined. And we spend that much in Iraq, when their government is sitting on a what, 80 billion dollar surplus? Why aren't THEY paying for things there?

-Arlos

[Diekan]

Where did I say it would *fix* the problem? I said getting rid of them would free up money... I said and I quote... "for starters."

I also mentioned the cost in terms of dollars of the war in Iraq for a reason. At the same time I completely agree that Iraq should be shelling out cash, hand over fist, to absorb the cost.

I never said getting rid of ear marks was "the" answer. But, regardless - they need to be done away with.

By the way... if the average American wasn't too stupid to do the math - we'd not have a trillion dollars in bad loans given to people who HAD to have known they couldn't afford in the first place. The tax payers are whining about the bail out - yet they're the stupid sons of bitchs who took the loans in the first place.

I'm moving to Canada.

[Martrae]

Just where do you think 700billion dollars were going to come from? All they were going to do was print more money to cover it. 700,000,000 new bills hitting the street would devalue the dollar to nothing.

Do you have any idea what that cost of milk and bread would be when the dollar is worth a penny?

You really need to do a little more research and find out what this bill really would have done to us.

[Arlos]

To be fair, tho, Mart, the plan did call for that 700 billion getting repaid over time.

Also, you do know that the plan getting voted down won't stop bailouts from happening? The debt limit for the country already got increased in anticipation of the plan passing, and just on their own authority, the treasury secretary and the fed can decide to bail out companies, and without any actions from Congress being involved

http://www.time.com/time/nation/article ... nn-partner

Wonder how successful going the alternate route in this mess would be: I mean rather than buying up the securities that aren't worth much because of lack of confidence the mortgages will be repaid, why not work with those with problematic loans to help assure that they'll get paid?

*shrug* Would seem that an effort more dedicated to helping those in the middle class with keeping their homes and deal with joblessness might well be a better approach than handouts to walls street.

-Arlos