If I’ve got this straight, basically, we’re going to give Chinese money to Wall Street investors and agree that our kids and grandkids will pay it back. I’m having trouble finding a flaw here.
Masson's Blog
If I’ve got this straight, basically, we’re going to give Chinese money to Wall Street investors and agree that our kids and grandkids will pay it back. I’m having trouble finding a flaw here.
I don’t understand the break-neck speed in which the Congress is being asked to pass this stinker of a proposal.
This crisis wasn’t created in a day, it’s not going to be solved in one either. The CBO director or even said it might make things worse.
Like I used to tell my EMT partners and Paramedic students when I worked EMS, “I know it’s an emergency, but let’s slow down a little bit, do things right the first time, so we don’t become part of the emergency”.
The freakout on the part of the president certainly has made things worse already. If you want to kill consumer confidence and further tank the stock market, acting like he has is exactly the way to go.
Does it strike anyone as odd that this is happening about five minutes before the end of the Bush administration. Coincidence?
I think Doug has summarized the logic brilliantly.
Bartender! More of that lovely Kool-Aid over here, please!
We’re being told that our economic system is near imminent collapse. People naturally assume that there has to be some exaggeration. Let’s hash it out and maybe do something by next summer. At least that’s how government usually operates.
And it’s significant ,that if we are convinced we’re in dire straits economically, it’s the conservative republicans who can’t think out of their box. Government intervention is socialism,so let our fundamentally strong supply side economic system run its course,and if people lose their 401k’s etc,so be it.It’s all our own faults for allowing ourselves to be duped.Better to suffer for the greater good( ww2 dialogue?)
I personally hope to never see another conservative no-regulation-of-anything ( except personal morality)Republican elected to any office. We surely have learned our lesson.
Doug, you have it exactly right. Now we know that the Administration is for it. We know that the people are against it. What is the Democratic Congress going to do about it?
And Lou, the lesson here isn’t about regulation. It’s about bailouts. Bad decisions were made. Will the regulations eliminate bad decision-making? I doubt it, because it would mean that all borrowers would have to put 20% down, might mean the elimination of ARM loans or balloon loans, etc., and generally would mean that most low-income borrowers would be evermore shut out of the possibility of buying a home- something that is wholly politically intolerable.
Bailouts reward bad decision-making. So, we learned that GWB is happy to reward bad decision-making. We’re about to learn if Democrats in Congress also like to reward bad decision-making.
What I see here is that Democrats in Congress are willing to enrich Wall Street, stick it to Main Street along with the Republicans, but in exchange for the ability to more greatly regulate this industry. To Democrats, a huge financial disaster in response to the original financial disaster is a-ok in trade for the ability to build the regulatory empire.
Mike Kole,
Of course the lesson here is about regulation,lack of regulation. Yes, regulations will ‘regulate decisions’ and therefore eliminate many self-serving choices that were available under feed at-the trough carte blanche.
People are against the bailout either because they can’t imagine the need is so great( accumulated lies color the present)) or they feel that it’s business as usual and it’s all for Wall street.
Maybe this is ‘teacher-think’ but I’ve always thought that the blame for bad decisions should be commensurate with the power and wealth of those who made the decisions.Or, you cannot successfully ‘game a system’ unless you thoroughly understand it,or have set it up yourself to your advantage.
The bailout should help mainstreet and if it doesnt, people will remain against. Many poor,and very poor people and minorities live on main street along with middle class,so it will be a bitter pill to swallow for conservatives ,that’s for sure,and that’s also part of their reluctance, I would guess.
New regulations would have to include government protection for those under certain economic criteria. I would like to see those who write the mortgages/allocate the funds take responsibility for default,maybe after a certain pattern of failures has been established. But I don’t know how that would work.But it’s maybe a concept for those with broad perspective of everything and everybody involved.
Blame should always start with decisions made at the top,because that’s where those are with the greater overall perspective of everything that floats.
You left out the best part of the bailout plan– the part where McCain and Palin might bail out of debates.
Look, there’s a real crisis here. But the biggest part of it is that a lot of people who thought they owned some kind of assets (but certainly couldn’t have *explained* what exactly it was that they owned) really just held pieces of paper representing assets that were so leveraged against as to make them virtually worthless. It violated a basic investing rule that you should be able to explain what those things you’ve invested in actually do.
I have stock in oil services, shipping, a bit of tech, and then a bunch of funds. I can see what it is that they make or do. I’m down 40% or so and sinking. But the ships haven’t disappeared and the factories haven’t burned down. They just aren’t moving a lot of product or services right now. Someday they will again.
If you need your money right now, you’re in a bad spot. For everyone else, if your investments are backed by tangible assets, calm down. If you need credit, this could be a big test for you if it becomes scarce. Bartering could become pretty interesting.
If your investments are in these derivatives of derivatives, then you bought crap and I’m disinclined to want to reach into my pocket to bail you out. Had it worked out for you, I don’t expect you would have shared your windfall with me.
To take it to an extreme, I have in my possession a letter from a very nice sounding individual from Nigeria who assures me that if I invest $40,000 to get her father’s money out of the country, I can have half of her $4 million windfall. Methinks it sounds like a great deal (unbelievable profits for little effort–what could go wrong?). Would it be reasonable to assume the government can bail me out if such an “investment” fails?
And where did all the terror alerts go?
Did they hate us because of our freedom to make unsound investments?
Why do I think the Repubs are trying to scare us into a rash act and the Dems are huffing and puffing for the show only to vote yea when the time comes? More of the same… ‘full of sound and fury and signifying nothing.’
I am so relieved to find out that I am not the one who is going to have to repay the Chinese. Sorry kids. You can expect a few calls from Ling Mae if you get behind on your payments.
GWB never met an organization he couldn’t bankrupt and then have someone else bail out. I can’t wait to see what he does after leaving office.
He’s just going to hang out at the ranch, right? The beloved ranch he always yearns for. I bet once he leaves the White House, he never sets foot on that ranch again.
Lou, one of my points was that the kind of regulation you are after wasn’t forthcoming in our political climate, because it would have denied access to credit to poor, low-income, and low net worth individuals. Certainly, with hindsight, this could now happen. The way it will now happen is that bad loans will be guaranteed. People who really don’t score well enough, who would have taken zero down, interest-only loans, or ARMs before, will now get government backed loans that essentially build in losses, at taxpayer expense.
I’m with you, Lou, to a point about punishment. There shouldn’t be golden parachutes. The management that was making these decisions should be facing some kind of sanctions- paying back, jail, something. I’ve also said before that the people who took loans while knowing that they couldn’t pay should also face sanctions. It’s all fraud. Scale is a factor. Nobody is innocent just because they stole while poor.
Perhaps it’s the CPA in me, but I can’t for the life of me figure out how in the world our financial community got so far askew from the fundamental principles that “living beyond your means” and “don’t buy what you can’t afford” were ignored for years. I remember talking with a realtor in California when I was out there on a business trip a few years ago, of course California is an extreme example of expensive real estate, but I remember the realtor telling me about folks buying homes with no money down and with interest only loans pegged to reset that the housing market is a disaster waiting to happen.
I like the cartharsis of lining up everybody concerned (with the current mess) holding the title of Vice President of … and above and just shooting them. Now that’s the kind of corporate incentive package I could get behind.
\:(
Mike Kole,
I don’t know what the regulations should be in the financial world,but I like to see an all-inclusive dynamic for everyone and an established process for allowing and encouraging influence and benefit.That means appropriate regulation. When it was in in my own classroom or if it’s in the mysterious (for me)high finance world ‘no regulation’ means the bullies take over, who then form ‘thug groups’ and set self-serving policy,and we outsiders can’t even judge what’s going on.Then it’s all just constant, self-serving political spin with CNN vs Fox news.We’ve had 8 years of this on all levels.
I don’t know what the structure should be except within my own expertise,but as a layman I can judge other venues by seeing who benefits and who doesnt,since that’s the same way I was judged as a teacher.I was often judged by passers-by through my always open door and so be it with our financial institutions.
This once great republic founded on the basis of a constitution that guaranteed freedom has been destroy’d. Our country has been sold out. We have been sold out. The passing of the massive bailout bill to wallstreet at the expense of the taxpayers is nothing more then treason and theft by our own government. Our elected officials have heard the outrage of the people and are passing this bill by being blackmailed and strong-armed that if they do not that this economy will fall into depression. These banks should be allow’d to fail, for thier own bad decisions and greed. We should re-build, as we always do. Writing a blank check to the treasury and the federal reserve is not the answer. This bailout will not improve the economy. It will only further line the pockets of the same people who created this mess. The very same people telling us we must pay them to fix. Our liberties are being erroded in the name of terror, the Patriot Act, and others, and now our economy is being destroy’d, nationalized and socialized, using the very same tactics. It is time for the American people to wake up and take a good look around. The time for peaceful civil dis-obedience is now. We the people run the wheels of the machine, we can bring it to its knees. To send a message of ressistance to a government that has become corrupt beyond our wildest dreams. The constitution tells us that when a government comes to what it has, that we have a duty to rise up and root out the evils and restore it. This is a crucial point in history. Will we continue to be silent good sheep or will we we say ENOUGH!!!
Beginning October 1st, the US military is placing a full active duty combat brigade on US soil. For “home scenerios, civil unrest or terrorist attacks”, so the say. Clearly, this is not telling the whole story and is illegal under the US constitution. Those who make peaceful resolutions impossible, make violent revolution inevitable. If we continue to sit idle and do nothing in the face of tyranny we are just as guilty for the evils that come as the result. Our time to make some serious choices is now. We are not democrats or republicans, liberals, or conservatives. We are Americans. We are human beings. We are not sheep and cattle at the hands of the elite who choose to control this world. We must think about our children and our grandchildren and the world we wish for them to inherit. This is bigger then any one of us.
United we stand!!!
Your choice, peace, or annihilation
http://www.youtube.com/watch?v=xsi_rsG0AUU
The above tirade mimics the lyrics of ‘La Marseillaise’. We can envision a bare-breasted Lady Liberte leading the revolutionary-guys over the barricades to fun and glory.