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$700 Billion Bailout Signed Into Law
Many readers reminded us of what no-one can have failed to hear: that the Congress passed and the President signed a $700B bailout bill in an attempt to avert the meltdown of the US economy. The bill allocates $700 billion to the Treasury Department for the purchase of so-called "toxic assets" that have been weighing down Wall Street balance sheets. This isn't particularly a tech story, though tech will be affected as will virtually all parts of the economy, and not just in the US. Among the $110B in so-called pork added to the bill to sway reluctant legislators are extensions of popular tax benefits for business R&D and alternative energy, relief for the growing pool of people subject to the alternative minimum tax, and a provision raising the FDIC's ceiling of guaranteed deposits to $250,000. Some limits were also imposed on executive compensation, though it's unclear whether they will be effective.
The greatest scam ever pulled off...and everyone thought Bush was done !
Why is it that really bad legislation always seems to pass on a Friday?
Go green: turn off your refrigerator.
Henry Paulson, the CEO of Goldman Sachs until 2006 and current U.S. Treasury Secretary succeeded in scaring the public and Congress into giving him a $700B blank check to bail out his friends. If you think that money will "trickle down" to you or small business owners, or anyone other than the people it's directly going to, you are mistaken.
...and our Congresspeople fell for it.
The DOW plummeted to 10,365 on Monday September 29th when the bailout bill failed to pass. Every proponent of the bailout screamed, "I told you so!" Then on Tuesday September 30th, even without the bailout bill the DOW rocketed up to 10,850. Then on Friday October 3rd when the bailout bill passed and was signed into law, the DOW dropped yet again to 10,325 (even lower than Monday when the bailout bill failed).
This bill will not help the credit markets, the debt markets, the equity markets or anyone reading this comment. It will help Goldman Sachs, Morgan Stanley and the rest of the former investment banks de-leverage from 60:1 leverage down to traditional 12:1 leverage on your dime while the economy goes down the tubes.
They pulled out all the steps - even threatening martial law:
http://www.youtube.com/watch?v=HaG9d_4zij8
I'm a big tall mofo.
How big of a check should I expect to get?
--
Blackshot
When the lifeboat is holed, you get to shore FIRST. Then you worry about who to blame for the hole. Or, we could have all worried three years ago, when it would have done some good. Carping right now, when the boat is sinking, is just plain stupid.
The major effect of this bill is that it is causing fiscal conservatives to blow gaskets. They can't accept the fact that the free market is what caused this mess.
It is funny to hear them complain about how people on Wall Street became "greedy." I'm not a financial expert but I think that is part of the design. Everyone on Wall Street works for their own self interest. That is how the invisible hand is supposed to work. But conservatives complaining about the essential 'feature' of the free market is sort of twisted.
I seem to remember reading the BBC and noting that countries overseas wanted this bill as much as some in the US.
Shai Schticks:"You don't make peace with friends, you make peace with enemies"
STFU, Twitter.
First, let's understand what caused this crisis. Then you'll understand why the bailout won't work.
Economist: Why Bankruptcy is better than bailout
The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities ( written EIGHT YEARS before this crisis, predicting everything down to the dollar amount)
Now, check out the $150 Billion in pork-barrel projects that were added by the Senate to the original 100-page bailout that failed in the House, turning it into a 450-page bailout:
- "Wooden arrows designed for use by children" (Sec 503)
- Wool Research (Sec. 325)
- Film and Television Productions (Sec. 502)
- Litigants in the 1989 Exxon-Valdez oil spill (Sec. 504)
- Virgin Island and Puerto Rican Rum (Section 308)
- American Samoa (Sec. 309)
- Mine Rescue Teams (Sec. 310)
- Mine Safety Equipment (Sec. 311)
- Domestic Production Activities in Puerto Rico (Sec. 312)
- Indian Tribes (Sec. 314, 315)
- Railroads (Sec. 316)
- Auto Racing Tracks (317)
- District of Columbia (Sec. 322)
This is the bill that senators are screaming about, saying "IT MUST BE PASSED OR DOOMSDAY!" Who believes them? And yet the bill easily breezed through Congress.
All of you, all at once. I have paid zero in income tax through various legitimate and less-than-legitimate methods over the last 4 years.
This bailout is disgusting to both the socialist and the capitalist, and reminds us of what America has become - a fascist state, which takes from the average citizen to give to the mighty.
Enjoy.
I had a *lot* of respect for the US...so much so that I was ready to leave my home country and move permanently. So that my family and I can have a better life.
This coupled with the ongoing fascist regime, I have decided against moving. And I am not alone...
then I won't notice a thing. I am lower middle class, barely making ends meet. I usually get a refund at tax time, but not much. I've never come anywhere NEAR the FDIC cap in my bank account, and even if my bank went under, big deal. I'd be out less than 200 bucks. But the FDIC would cover it, so no loss. The only thing that the government could do to "bail" me out of rough times would be to:
Lower my income tax
Regulate fuel prices to a reasonable level
Give me free health care
Give me free college just like the African Americans and Latinos and Single Moms and Sudanese and pretty much everyone who isn't a white male/female with no kids
Other than that, big deal. 700 billion dollars that I basically receive no real benefit from, while people who are already rich just get richer. Yay America.
Halitosis - (n.) Halle Berry's Camel Toe.
Carping right now, when the boat is sinking, is just plain stupid
You know it's an amazing coincidence. You're saying the exact same thing that Henry Paulson and his cronies say. I'm sure that it is just that - a coincidence - and that you independently came up with the identical position completely on your own.
I also suppose that if Henry Paulson said you needed to come to his house and blow him or the economy would go under you'd think, "No time to think!" and head right over to do it. If that's not the case, then why did you fall for his, "Sure, I'll give you a life preserver - throw me your wallet first!" scheme? There is time to think. Henry Paulson has said he has no plans to spend any of the $700B for FOUR WEEKS. Why the rush to pass it into within days?
I'm a big tall mofo.
There is also a provision extending IRS powers extending its immunity from a variety of laws.
Read more here: http://blog.bobbarr2008.com/2008/10/03/bailout-bill-invades-your-wallet-and-your-privacy/
There was nothing keeping it from passing. In theory, they could have just tried it again and again with different names and slight rewording until it passed.
Or pasted it onto another bill, something named, "The Protection of Children Act..you do want to protect children, don't you?"
Considering how hard this will hit taxpayers, either in pocket book or in services provided by the government going lax, or both which is likely, this should be the tipping point of a revolution.
They made their mess, and they want us to pay for it, without making significant changes to ensure that the mess doesn't happen again. So this time next year when we're having to shell out $700 billion again, who's fault is it? Its ours, for not DOING SOMETHING ABOUT IT.
Job? I don't have time to get a job! Who will sit around and bitch about being broke and unemployed then?
"We owe it all to the bedrock of our economy: the ordinary hard-working taxpayer. You resisted the siren call of credit cards, lived within your means to save for a rainy day, never took out an interest-only mortgage, credit score to make Jesus cry. Without taking every penny you saved over the $100,000 guarantee, we'd never have made it. And the best bit is, we know you'll still vote Republican! God bless you all!"
By the way, your house is still worthless.
http://rocknerd.co.uk
it's a no-holds-barred, every-man-for-himself, if you don't get caught, it's all good type of thinking that eliminates responsibility to our fellow humans.
greed, fear & ego are unprecedented evile's primary weapons. those, along with deception & coercion, helps most of us remain (unwittingly?) dependent on its' life0cidal hired goons' agenda. most of yOUR dwindling resources are being squandered on the 'wars', & continuation of the billionerrors stock markup FraUD/pyramid schemes. nobody ever mentions the real long term costs of those debacles in both life & any notion of prosperity for us, or our children, not to mention the abuse of the consciences of those of us who still have one. see you on the other side of it. the lights are coming up all over now. conspiracy theorists are being vindicated. some might choose a tin umbrella to go with their hats. the fairytail is winding down now. let your conscience be yOUR guide. you can be more helpful than you might have imagined. there are still some choices. if they do not suit you, consider the likely results of continuing to follow the corepirate nazi hypenosys story LIEn, whereas anything of relevance is replaced almost instantly with pr ?firm? scriptdead mindphuking propaganda or 'celebrity' trivia 'foam'. meanwhile; don't forget to get a little more oxygen on yOUR brain, & look up in the sky from time to time, starting early in the day. there's lots going on up there.
http://news.google.com/?ncl=1216734813&hl=en&topic=n
http://www.nytimes.com/2007/12/31/opinion/31mon1.html?em&ex=1199336400&en=c4b5414371631707&ei=5087%0A
http://news.yahoo.com/s/ap/20080918/ap_on_re_us/tent_cities;_ylt=A0wNcyS6yNJIZBoBSxKs0NUE
http://www.nytimes.com/2008/05/29/world/29amnesty.html?hp
http://www.cnn.com/2008/US/06/02/nasa.global.warming.ap/index.html
http://www.cnn.com/2008/US/weather/06/05/severe.weather.ap/index.html
http://www.cnn.com/2008/US/weather/06/02/honore.preparedness/index.html
http://www.nytimes.com/2008/06/01/opinion/01dowd.html?em&ex=1212638400&en=744b7cebc86723e5&ei=5087%0A
http://www.cnn.com/2008/POLITICS/06/05/senate.iraq/index.html
http://www.nytimes.com/2008/06/17/washington/17contractor.html?hp
http://www.nytimes.com/2008/07/03/world/middleeast/03kurdistan.html?_r=1&hp&oref=slogin
http://biz.yahoo.com/ap/080708/cheney_climate.html
http://news.yahoo.com/s/politico/20080805/pl_politico/12308;_ylt=A0wNcxTPdJhILAYAVQms0NUE
http://www.cnn.com/2008/POLITICS/09/18/voting.problems/index.html
http://news.yahoo.com/s/nm/20080903/ts_nm/environment_arctic_dc;_ylt=A0wNcwhhcb5It3EBoy2s0NUE
(talk about cowardlly race fixing/bad theater/fiction?) http://money.cnn.com/2008/09/19/news/economy/sec_short_selling/index.htm?cnn=yes
http://www.nytimes.com/2008/10/04/opinion/04sat1.html?_r=1&oref=slogin
(the teaching of hate as a way of 'life' synonymous with failed dictatorships) http://news.yahoo.com/s/ap/20081004/ap_on_re_us/newspapers_islam_dvd;_ylt=A0wNcwWdfudITHkACAus0NUE
is it time to get real yet? A LOT of energy is being squandered in attempts to keep US in the dark. in the end (give or take a few 1000 years), the creators will prevail (world without end, etc...), as it has always been. the process of gaining yOUR release from the current hostage situation may not be what you might think it is. butt of course, most of US don't know, or care what a precarious/fatal situation we're in. for example; the insidious attempts by the felonious corepirate nazi execrable to block the suns' light, interfering with a requirement (sunlight) for us to stay healthy/alive. it's likely not good for yOUR health/memories 'else they'd be bragging about it? we're intending for the whoreabully deceptive (they'll do ANYTHING for a bit more monIE/power) felons to give up/fail even further, in attempting to control the 'weather', as well as a # of other things/events.
http://www.google.com/search?hl=en&q=weather+manipulation&btnG=Search
http://video.google.c
we all have reason to fear and mistrust the conservative right for 1) deregulating 2) stealing money 3) declaring the system bankrupt and 4) taking even more money on the way out the door.
but what i don't get is how the democrats have been total patsies through this banking "crisis". everyone jumped on the bandwagon, and so quickly. don't they remember that it's president bush who was threatening that we'd better do it, or else? he pulled that same shit with Iraq, so now's the time to make the final grab for cash when he's on his way out the door.
if the democrats had any balls whatsoever, they'd call him on his bluff, propose substantial change, bitch about the greed of the republicans through December 1, then impose a fix once obama is in office. instead they're just a bunch of weak-kneed pussies with no guts to do the right thing -- let wall street crash, teach a lesson to the financial markets, which then will come running to the government BEGGING for regulations.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
We want to read about linux!
Some good details on how the 700B will be raised
Then let private firms buy it up and make that money... why the panic?
Ryan T. Sammartino
"Ancora imparo"
if you don't like what's going on with RIAA
Did you even read a summary of the bill, or are you just handing on opinions?
I'm against the bailout bill, so I must be some kind of Anti-Bush partisan hack. Fooled you! I'm a registered Republican and made the mistake of voting for Bush once.
Oh, in that case I must be some kind of member of the unwashed masses voter and just don't understand fancy economic matters. Oops - fooled you again! I'm a Vice President at a fairly large publicly traded bank and deal with investment strategies all day every day.
As for reading the bill - I actually read the entire 3 pages of the original bill. I read about half of the pork-laden 442 page version that ultimately passed. I couldn't read much more or I might be even more infuriated than I am now.
Having said all this, I doubt you read even the title of the bill if you are seriously for it.
I'm a big tall mofo.
Since they had to add 100 billion dollars to the bill to pass it, can we start calling it the 800 billion dollar bailout bill now?
Oh, take a look at the effect the bill had on the stock market. Here's the Dow's performance during trading hours on Friday. See if you can guess at what time they passed the bill. They sure are grateful, aren't they?
I came here for a good argument
Great. So, the banks that issued those faulty credits are free now, because someone else (hint: you) pay their debt. The people who took those loans for ridiculously overpriced houses on the other hand still owe that very same amount now to your government instead of banks. If that's not a bailout for banks, I don't know what is.
is the bicycle commuter tax credit. Finally those if us who don't use tons of oil will pay less towards the war fir oil. Now if only American drivers didn't behave like asshats towards cyclists....
Monstar L
Between 1 and 1.3 trillion dollars has been spent on military projects and war for the last few years, depending on how you look at old debt. The money is not clearly accounted for, against constitutional principles, and it only goes to serve large corporations.
Where is the public outcry? Where are the Republican talking heads when the budget is being discussed?
The bailout plan may be awful, but it's by no means the biggest con ever. The biggest con ever has been going on since the end of WWII, and it has cost American money and lives, and in no small number. Any of these transparently partisan personalities are just squawking for advertising dollars and votes, same as always.
Then let private firms buy it up and make that money... why the panic?
Because private firms are under pressure to make money NOW, and always turn a profit. No private enterprise would ever go for this type of long term investment with zero profits in the foreseeable future. Government, however, can wait. It really doesn't matter if it takes ten years for the money to return.
It is in the general interest of the public to resolve these type of situations as fast as possible, because in the end, it's (as usual) Joe Sixpack that's going to suffer if a larger chunk of Wall Street goes belly up.
GAAH! MY PRINTER IS ON FIRE!!! PUT IT OUT! PUT IT OUT!
There is a small chance that the bill will help to prevent a (further!) deflationary spiral within the housing market.
Sure, housing prices are a fantasy, but so is the value of gold (no really, it is), and in this case, the current fantasy is a lot better for everybody than a fantasy where houses are worth 1/10 as much (people with no equity, like me, would not be hurt directly by housing prices falling, but the economy falling apart around them would be a bit of a bummer).
Nerd rage is the funniest rage.
It would not be a bailout if private interests did it. It is a bailout because it was charged to the taxpayers... who are now victims at both ends of the stick.
This piece of shit is grossly inflationary (because the government DOES NOT HAVE THAT MONEY) and so in effect is going to have to print it, one way or another. Which means the value of the dollar will go even FURTHER down, while our gobernmental debts continues to increase. There is NOTHING economically responsible about this measure.
They could have done many other things. They could have done the Reagan thing and just let it play out its course. Despite all the screaming we have been hearing, the United States would not actually fall as a result. They could have spent that money buying up failing mortgages... that way, people would keep their homes and the financiers would STILL get their money. But no... they decided to give my money, and yours, to rich people who do not need it. Just letting the businesses fail would have been preferable to that.
I could say a lot more, but I won't bother.
I honestly believe that this will go down in history as the worst Presidential administration ever, with the worst (and stupidest) Congress to go along with it.
At the moment, it's a fact that banks are not willing to lend to each other in meaningful amounts.
Proponents of this bill and the majority of others will say that so-called "counterparty risk" is a large part of this - the risk that the bank you lend to effectively falls over unexpectedly the following day, as has happened to a small number. The theory is that a profit of 0.2% per year on the amount lent isn't sufficient to make up for counterparty risk.
Proponents of the bill will claim that this is mostly because of the subprime loans that some/many financial institutions hold. By buying up these mortgage products, you remove them from the banks, thereby reducing the perception of counterparty risk.
What should be emphasised in extremely big letters is that this is NOT A HANDOUT OF $700BN. The government buys the products, and in buying them receives the right to the interest payments of homeowners.
But doesn't a lot of homeowners go bankrupt, you say? Absolutely, which is why the government will not pay 100% of face value. A large 'haircut' will be applied on what the government offers.
Only in the scenario that 100% of homeowners go bankrupt and their homes sell for 0 each will the government lose 100%. If the government haircut is 20%, and the default rate is less than 20%, the government will actually make a profit i.e. receive more than $700bn for what it pays. If 30% defaults then the loss is 10% reduced by income from foreclosure sales.
In addition, the interest rate payments on these loans are substantially higher than on government debt that must be issued to buy them.
Everything about this deal will from now on center around exactly how large the haircut will be. It's thus up in the air whether it will be a _transfer of money_ from the government to banks, it's only guaranteed to be a _transfer of uncertainty_. Headlines saying that it's a giveaway of 700bn taxpayer money are all misleading.
Of course, there's a lot of other issues speaking against it. What's the effect on the debt markets of issuing $700bn? Will this really push down the money market rates? If banks don't get paid enough, will they have to recapitalise, and if so, will they be able to?
But on this specific point, people should be aware that the government gets uncertainty and not neccessarily a loss, and everything here-on out, from the size of government loss/profit, to bank takeup rate, to bank needs to raise capital, to possibly job losses if they can't, depends on the "paid-for" foreclosure rate versus the "actual" foreclosure rate.
so the homes that those mortgages represent while some may be overpriced the majority are worth something and therefore the notes have worth - yes a bunch of phucktards are getting off easy - but I (and many others) am losing far more in investments because of the stock market tanking and would rather the bleeding stop than sit around hoping for some miracle of change to save my retirement funds
Well, people should not be surprised. It's not the first time Bush proposes a plan and uses FUD to approve it. It's exactly the same thing he did in Irak.
In 2003 the excuse was that Irak had MDW and had helped to plan the 11S. This time the excuse was "If you don't pass it we'll have financial panic".
It's the same Fear Strategy. And just like in Irak, everybody believes it and Democrats, with Obama leading (after all, this proves what he has been saying about too-free market being evil, doesn't it?), help him to pass it. This time even Europe, who is also very very happy to hear bush admit that capitalism is evil, supports Bush.
Dazzled ? Afraid ?
Fear not they just want everything you are worth.
History on Goldsmiths
http://news.goldseek.com/GoldSeek/1219039500.php
Article pointing out where the goldsmiths have struck again.
http://www.dailykos.com/story/2008/9/30/01617/5440/126/61517 7
Prepare to lose anything without inherent value. ie gold, food, water, bullets...
I have had the chance to speak with other business owners and some executives of, let's just say, large, corporations. The general feeling is that while action was necessary there was a much better approach:
- ~500 billion USD given to the Fed
- Allow the Fed to disperse the money through the discount window with loans at 1% fixed for 18 months then reset to Prime-0.5%
- All mortgages that are currently in MBS tranches have their rates reset to Prime+1 for 24 months.
- Have the US AG seek felony charges for lenders that committed fraud.
The current bill is like trying to get fuel into a car through the tailpipe instead of filling up the gas tank.
Website Hosting
It wasn't wallstreet. You can't survive all those stupid crazy loans by Fanniemae & Freddiemac.
http://digg.com/2008_us_elections/VIDEO_Dems_fighting_like_hell_against_Fannie_Mae_regulation
you would rather see the rich get richer and the poor lose their homes, and the dollar lose half its value, as long as it doesn't affect YOUR investments??
Some samaritan you are.
You are so blind and stupid.
http://digg.com/2008_us_elections/VIDEO_Dems_fighting_like_hell_against_Fannie_Mae_regulation
Google Franklin Raines. The crook is running the Obumma campaign.
If you want to check out all of details directly it's only 724 KB to get the PDF of HR1424, the full bill.
You can find an index to most of the tax break provisions starting around page 261.
Looks like they got the Republican tax agenda in there.
Some may also like to check out the wikipedia entry for HR1424.
What I find MOST incredible about this whole bailout, is the fact that nationwide polls of the general populace indicated between 70% and 75% were AGAINST the legislation, yet the Senate passed it through with FLYING COLORS, and House of "Representatives" were swayed to voting for it in a matter of only a few days. All it really took was throwing in a few key financial incentives and bonuses to the appropriate special interests, and some empty promises by potential presidents to be.
The whole time, these "Representatives" were being flooded with demands from the American people NOT to vote for the bailout - but they turned a deaf ear to everyone, and made bold claims like "I may not be re-elected because of this, but I'm confident I did the right thing for America's future anyway." One moron said he changed his vote from NO to YES, simply because "I talked with potential president to be, Obama, and he personally assured me he would enact legislation after his election that's in alignment with what I want to see." (WHAT?!? You were VERBALLY promised some B.S. by a guy who MAY or MAY NOT become president, so that's more important to you than listening to the people who elected you and trusted you to represent their wishes?!)
When HUGE taxpayer expenditures like this are voted through and signed into law in less than a week, despite 3 out of 4 Americans being strongly against them - it's clear we no longer live in a Democracy at all! This seems like as good a reason for an overthrow of our government as what we dealt with back around 1776! Yet people will not only sit back and accept it, but probably not even vote in protest for a 3rd. party like the Libertarians. (Incidentally, Bob Barr has been speaking out against this bailout the whole time, unlike our Democratic or Republican contenders. The man gets MY vote for that reason alone. At least he's in support of the will of the PEOPLE still!)
I think we're goin
Shoes for Industry. Shoes for the Dead.
http://www.flickr.com/photos/30581266@N06/2902781625/sizes/o
And he's working for Obama. Sickening.
He's the guy that cooked the books and made $100 million off fanniemae options.
Where is the media. Nowhere.
With that one change, you could reduce taxes on income, capital, and trade, eliminate housing bubbles (which are actually speculative bubbles on land value), and cut the influence the banking and mortgage industry in half.
Seriously, if the Sixteenth Amendment brought into existence an LVT instead of the IRS, we wouldn't be bailing out these assholes today.
This situation is so absurd. The supporters act as if this thing is so urgent and there is no alternative, but then they take their time by taking off due to a Jewish holiday that not even a lot of Jews celebrate..
Then they come back and basically vote on the same bill again, but this time a few house members take the bait and it passes. Some of the amendments being totally weird and not really having anything to do with "bailing out" Wallstreet, such as subsidizing rum, wool research and wooden arrows for children?!? I'm not making this shit up!
Then we have McCain sitting in a interview riling against the pork barreling and at the same time taking credit for convincing his Republican buddies to back this "sweetened" bailout plan.
And the really ironic thing is that we have old-school (i.e. fiscally conservative) Republicans opposing the bill as well as far left dudes like Kucinich. Not to mention Paulson's conflict of interest in this whole mess.
And when you gaze long enough into the code, the code will also gaze into you.
are to blame.
Each and every one. You are not the ONLY ones to blame -- of course not -- but you share responsibility.
Accept it.
I don't know what they think this is going to accomplish. The failure of the housing market is just the tip of the ice-berg. The fundamental problem is a looming lack of labor resources brought on be the desire of the baby-boomers to retire. Once someone retires, they began taking from the economy rather than giving to it. This was always fine since there were many more paying into it than taking out of it. However, the ratio of those producing to those consuming is shrinking and continuing to shrink.
We've been counting on the development of new technologies to make people more productive so as to make up this generational deficit, but public opinion has been against the development of new industry. There has been the "information revolution" which has helped, but when it's all said and done you still need to eat and to have a roof over your head.
We can spend this 700,000,000,000 shoring up these false promises of security for our future generations, but it will do nothing to solve the underlying problem. In ten years, when we will need 7 trillion to accomplish the same deception, it will not be able to convince our older generations that they are receiving health care that does not exist.
Certainly a very busy man.
I work on programming and enhancing strategic investment platforms for both fixed income securities and equities.
So yes, you can be both a Vice President and a member of IT. I've even been a Vice President and Chief Technology Officer in the past.
I'm a big tall mofo.
Don't vote those who voted yes to this bill back into office. Vote for those who couldn't, didn't vote, or voted no.
As for Obama and McCain, neither deserve the office, both have people who caused this mess working for them. Vote third party if you have any sense left.
There were serious problems with this bill, which I wrote on my blag to try to persuade my friends and family that it was a bad idea. I wrote my congresswoman and senators to try to convince them of the same.
After the house rejected a similar measure, the Senate introduced a new bill with even more crap in it. Appropriations bills have to begin in the House of Reps, so the Senate picked an old house resolution, 1424, and gutted it. They then added 450 pages. Is that really a bill that started in the House?
My congresswoman, Jean Schmidt, voted against the first bill, and then voted for the Senate version. I wrote a somewhat venomous letter to her after she did this, telling her that I would do everything in my power to get her fired. Hopefully I won't be getting any special visits from my closing line, which others have told me sounds a little harsh:
I noticed from the roll call that you voted for this boondoggle, H.R. 1424. You have no spine, and I will use every ounce of my energy to have you removed from office. You do not represent us.
Lesser civilized, also known as third-world nations would have taken to the streets for such outright bullshit.
"Thanks for all the money you paid to us. We've used it to buy off ISO among other things" -Microsoft
Yep
I read it too.
If you're in banking, you must have noticed the fact that the increased cap of FDIC insurance from $100k to $250k will only apply until December of 2009, after which it reverts back to the limit of $100k per named account holder per financial institution.
How many people might get suckered into longer term CD's (Certificates of Deposits, not the ISO-9660 type) that might go over the boundary of the TEMPORARILY raised FDIC insurance caps and end up either inadequately covered or stuck with early-withdrawal fees?
Either way, NONE of the articles I have read make any statement about the fact that the so-called increase in the FDIC insurance from $100-thousand to $250-thousand is only going to last the length of calendar year 2009. That's a sham and a disgrace.
Kris
This is just another chapter in this administration's plan to "restore power" to the executive branch.
http://fracas2008.blogspot.com/2008/06/terrorism-executive-power-grab-and.html
Once again, they've used fear (quite effectively) to push their agenda. This $700B will go fast and won't "fix" the crux of the problem: overvalued housing. Expect to see still more legislation, more fear-mongering, and more of Paulson's buddies pocket's lined with cash....this is just getting started.
"...The smart and lazy ones I make my commanders." - Erwin Rommel
So what is their strategy to deal with it? They have created a class of company (unlimited liability) which basically has to file almost no public accounts. A similar wheeze was used in Germany some years back in the KG & Co. in which one member of a partnership was a limited company. The object is to get US and other corporations to make their corporate HQs in Ireland, and so hide their profits in this offshore bank scheme. Look it up.
By getting US corporations to relocate to Ireland they hope to avoid recession in the economy and ensure the bank guarantees will never be called in. But clearly that will reduce the tax income from corporations in the US, and worsen the crisis there.
I am only just joking when I suggest that some of the pork should have been invested in invading Ireland. Saddam may not have had WMDs, but Ireland seems to be trying to develop WMEDs (weapons of mass economic destruction). Perhaps Osama Bin Laden hasn't been caught because he's actually been in a Dublin pub, plotting the downfall of the US.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
I wrote to and called all three of my representatives (two Senators and a Representative, for those not familiar with the setup) putting my vote in the No column.
When I wrote I put in my views on how the money should be spent, since it was going to pass regardless. Yeah, none of my stuff made it in.
One again only Russ Feingold stood up against it. He was also the sole vote against the 'Patriot Bill' so he's actually got some neurons firing.
Oddly enough my Representative wrote me a lovely form letter explaining why he voted for the bill. The Senators are fine with using plain text but he feels the need to use an image file with all the headers and images that I believe are on the official stationery of the House. Yeah, I'm talking about you Paul Ryan.
Of course I shall be writing them again, expressing my displeasure over the two who did vote for the bill and my pride in the one who did not. I've gotten into the habit of copying all three when I write and noting that at the bottom of the message. It makes it easier for me to cut-and-paste as well.
We're not going to see a dime of this money. From the analysis so far we're going to actually see more problems in less lending, higher prices, and general badness in the economy. And now we've got to pay for this thing too.
The bill is full of entitlements put in place to entice specific states to vote for the bill. That's quite obvious and was stated outright during this round of revisions. So now they can 'justify their vote because it is actually good for the state' to their constituents.
Everyone seems to forget that it is our money in the first place and they think they're doing us a favor by giving some back. That's just stupid.
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Dear American:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury Paulson
(Reference: http://bettybowers.com/betty4president/?p=132)
Bush and collegues came into office promising to implement Grover Norquists ideas for contracting govenrment. The graphic phrase most often used was they would have to "strangle it in the bathtub" which was Norquist's shorthand for meaning that to reduce spending they had to basically remove govenement agencies and kill off revenue.
Fast forward we have years of the biggest govenement expansion ever. Some bandy the word "socialist" over the bailout. But actually that misses the big picture.
Suppose your goal was to move the governement more towards a corporatist outlook and to really strangle spending how could you do this.
You do it with debt. This 700 billion will be paralytic both in crippling elective goverment spending as well as it's ability to raise future debt. Oddly It does not actually go on the books as debt even but it is a liability.
And even if some day the loans and options they are buying pay off, it's accomplished the tow key goals.
1) strangling it in the bathtub. There cannot be any socialist expansion during Obama because there simply is no way to finance it either with direct revenue or borrowing.
2) a movement towards corporatism. The Government will rise and fall with the value of the companies it holds options in. What's good for the US really is what's good for AIG and JPmorgan, and the rest. Even the people admisistering the hen house in both the SEC and Treasury came from Goldmann Sachs.
The 1930's was when Corporatism was invented and the country practicing it, italy, was consider a miracle. the rest of the world was reeling in the depression. Senators and congressmen hailed the Moussilini miracle and went on fact finding missions to figure out how to import this here. Adolf Hitler was swept into power in part by nationalism that awoke in the aftermath of WWI but also because he too offered the fascist miracle for germany.
THe trains did run on time. THe auobahns emerged. It was spring time for hitler and germany too.
SO we now have an odd time in the US. We are backing our way into fascism. We have all the ingredient. Cheney and his patriot acts have created police powers that are unprecendented in our history of civil liberties. Even our allies like britain have gone to a surveliance society and now ponder 2 days detenciton with charges.
THe second fork of facism is corporatism where the state manages for the good of the corporations and vica versa. (the reason corproatism was such a miracle was precisely because of the vica versa. The people were really better off in the rising economy of italy).
So while hitler managed to once and for all kill the term "facism" at one time, it's potential for being an ecomomic engine was admired.
I note I'm not triggering Godwins law here because I'm not comparing my oponent to Hitler. Instead I'm saying that we are indeed backing into something that is facism in everything but name only, both the good and the bad.
Some drink at the fountain of knowledge. Others just gargle.
Thanks to Democrats for bankrupting Fanniemae
LOL bye bye personal responsibility. Let me guess, because the Democrats didn't force Fannie and Freddie to behave responsibly, it's all the Democrats' fault, God forbid any company should be expected to operate responsibly on its own.
Don't worry though, I'm lobbying the Democrats hard for a bill to remind you to breathe, after all it would be terrible if you suffocated on your own stupidity.
Oh and by the way...
stupid crazy loans by Fanniemae & Freddiemac
Fannie and Freddie don't make loans. The only thing they ever did was buy existing mortgages, and until the end of the Clinton years, they never bought a single sub-prime mortgage ("sub-prime" being defined as "a mortgage that didn't meet Fannie Mae's requirements")
Keep working on reciting those old talking points, someday they might be more than half right.
link to house roll call vote on the "billionaire's socialism bill of 2008"
Personally, I don't want to hear a peep out of any congress weasel who voted for it, or business goon who wanted it (or takes the cash), about "free markets" and "capitalism", because this bill is neither. Those people are big fat hypocritical liars.
Voting yes were 172 Democrats and 91 Republicans.
Voting no were 63 Democrats and 108 Republicans.
anyway, here is my state vote record
GEORGIA
Democrats - Barrow, N; Bishop, Y; Johnson, N; Lewis, Y; Marshall, Y; Scott, Y.
Republicans - Broun, N; Deal, N; Gingrey, N; Kingston, N; Linder, N; Price, N; Westmoreland, N.
across the board Nays by the Rs
It's all just part of the template for putting bad ideas into law.
Step 1: A bad idea is formed.
Someone has a bad idea for a bill. This could be a special interest group looking to get Congress to pass some horrible bill to have the government fleece the people for cash to enrich a select few. Sometimes it's the executive branch looking to grab some "emergency" powers by predicting doom and death if Congress doesn't just GIVE unchecked power to fight the terrorists allowed to flourish under their watch, the devastation wrought by a combination of natural disasters and fiddling while Rome burns, or the economic fallout of their fiscal policies.
Lucky us, we got both! Paulson's original proposal was only three pages long because what it basically said was, "Gimme some cash with no oversight, and we'll make the problem go away" -- just like the reconstruction of Iraq! But...
Step 2: Congress balks
Okay, so maybe Congress doesn't like the idea. Either Congress wakes up to the idea that "emergency" powers stick around for a long time and always reach further than Congress intended or maybe some central ideological point of principle keeps them from voting for it or, more likely, they don't see enough kickbacks for their campaign donors yet (more on that below).
So, a compromise plan is worked out. The big interest groups get to have a little say, and the leadership on both sides of the aisle crack their whips on members to vote in favor of a bill no one likes. The bill balloons up to over 100 pages as some semblance of balance is struck.
But people are still willing to stick up for their ideological principles, so we move onto step 3...
3) Sugar-coating with pork.
The one lesson the Senate has learned over 200 years of existence is that if you wrap a lump of dung in enough pork and sweeteners, you can get almost any politician to swallow it.
And so 300 pages of earmarks, tax cuts, and other pork projects are tacked onto the bill as it's welded with another "must pass" spending bill. We've seen the former tactic before when the energy bill that's been bandied about the presidential debates was passed, and we saw the latter tactic of welding horrible idea into the intelligence and war spending bills of the past few years. Nothing gets a Congressman to put aside principles quite like salty, salty pork and the fear of being called out for voting against something unrelated but necessary in the next election.
4) Bury it and hope the media forgets.
So, now you've got tax cuts for arrow & rum makers wedged into the bill and much needed subsidies to rural counties in western states that lost timber revenue that couldn't survive a normal floor vote into the bill. How do we sneak all this pork in without enraging already frothing at the mouth "plebes" who are upset at the fiscal irresponsibility of it all?
Well, we can pass it on a Friday. That worked this time. Other times, we might want to leave it to a voice vote so that no one's name can be attached to the bill and force them to take responsibility for their vote. This time, though, we *want* politician's names attached to the vote. This train wreck had to happen somehow, so we want the people who got the pork to be able to go home and thump their chest about how they fought for their constituents to get their piece of the pie -- their turn at the trough. So, we pass it on Friday and hope the weekend gives time for the outrage to move onto acceptance.
And this is what we call democracy! USA! USA! USA!
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
Well, if you are going to put over $100,000 in the bank, you really ought to take the effort to understand what your insurance is.
I think that the insurance caps should be permanent. FDIC insurance has been $100,000 for ages, and it should be adjusted for inflation.
But I think that a temporary extension is still very useful in this situation. It may stop some banks from going under in the next couple of months if there is bad news. It will also make it possible for people to stash cash in the bank safely after a large transaction like selling a major asset like a condo; it may not help with the real estate market in places like San Francisco, but it may help some parts of the economy to keep running smoothly.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Well you don't read something like that on slashdot everyday. You must be a history nerd not a computer nerd.
Hmmm... this recent bit of news seems to against that thinking:
CIBC to use $1B Cerberus cash to stop mortgage writedowns
I think you're confusing private firms, who don't have to report, with public firms that have stockholders etc.
Ryan T. Sammartino
"Ancora imparo"
Let's not be too hard on our politicians: they showed remarkable foresight by including Section 308 in this porker, cutting rum taxes. Cheap rum will come in handy in the years ahead.
Haha, you thought you lived in a democracy.
You make a very good point about the benefits of a low-valued dollar. However, as many have pointed out, if the dollar falls so will many other currencies that are tied to it, which negates much of the positive effect.
I am aware of the T-bill issue, however it presupposes that there are parties willing to buy the T-bills. I wouldn't... I am betting that our Federal government is going to run out of money before long, and that The People will let it. Faith in America does NOT necessarily mean faith in its increasingly Socialist (or Fascist, which may be more accurate but has the same fiscal effect) federal government.
I'm pretty broke, I could use a bailout!
Did I lose my money in shady borderline-illegal definitely-stupid ways? Not really...
What do you mean 'then I'll never be able to pay you back'?!
Find out who voted for the bill and vote against him...
"According to voting results, 172 Democrats voted in favor of the bill while 62 opposed it; and 91 Republicans voted for it and 108 voted against it."
Sounds like everyone has some work to do. Here are the guilty:
http://clerk.house.gov/evs/2008/roll681.xml
Right, it's a tax horizon!
I have real doubts about the bailout "working". The underlying problems with the financial system are more fundamental. We have a sizable chunk of the financial system based on the assumption that real interest rates (after inflation) will remain negative.
Currently, US dollar inflation is around 5.4%. (9% to 11% if you use classical numbers, computed the way inflation was calculated prior to the 1980s.) Normally, the Fed funds rate is just above inflation, LIBOR and the prime rate run around 2% above inflation, and mortgages run about 6% above it. For the past year, the Fed has been flooding the financial system with cheap money, at 2%, in a failing attempt to avoid a recession. LIBOR is 3.88%. So we're currently in a situation where key real interest rates are well below inflation. LIBOR, in real terms, is about -1.5%. This is very unusual historically.
The problem is that 1) negative real interest rates can't last for long without producing runaway inflation; the money has to come from somewhere, and 2) there are sectors of the financial system that are addicted to those low, low rates. Last week, LIBOR briefly hit 6.88%, businesses were screaming "credit crunch", and AT&T and GE were having difficulties rolling over their commercial paper. (GE Credit borrowed short and lent long, which is a bet on low interest rates.)
The mortgage portion of the economy is heavily dependent on those low interest rates. A mortgage really should cost a good borrower about 11.5% right now; 6% as the cost of the mortgage, and 5.4% for inflation. The "bailout" is all about keeping those interest rates artificially low. For a while longer.
Probably not that much longer. Expect a "credit crunch" in 2009 as financial reality reasserts itself.
There's nothing wrong with a credit crunch. It just means that businesses have to finance more with equity and less with debt. (Because interest on debt is deductible by business borrowers, there's a systemic bias towards financing with debt.) Consumer credit rates, other than for autos, are already at credit-crunch levels. (Stop in at your local "payday loan" outlet and ask them what their APR is.) And besides, we might see worthwhile interest rates on savings accounts.
What's "normal?" 3% real interest on savings accounts, 6% on loans, and the median house costs 2.5 years median income. That multiplier got up to over 4 in the US nationally, and over 10 in some markets. That was two years ago; now those numbers are lower, but not low enough.
When bubbles burst, they burst all the way. Tokyo residential real estate dropped over 90% when their bubble burst in 1989, and never went that high again.
We told you this would happen. You didn't listen. Now suffer the consequences.
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At last! Hallelujah! I'm European so this isn't my money that's involved, therefore a bailout is better for me and the world's economy than no bailout, and it doesn't cost me a thing anyways. Sorry you guys have to pay the cost, but look at the good side of things. Thanks to this whole thing happening at the right time it only makes you more likely to get a decent administration this time.
Seriously, I look at this chart as if it was the temperature curve of this election, and if you rely on it then this whole crisis made Obama's estimated odds of being elected skyrocket. All the Diebolds in the world couldn't save the day for John "I was a P.O.W. for 5.5 years" McCain and Sarah "I'll make you keep your foetus even if the father is your uncle" Palin.
You just got troll'd!
In related news, Zeitgeist: Addendum has been released to the public. Timing seems just perfect.
Maybe it proves something about nationwide polls instead?
I think pretty much any poll on this subject is going to get the same result as a petition to ban dihydrogen monoxide.
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
Barack John
Left and rights of passage
Black and whites of youth
Who can face the knowledge
that the truth is not the truth?
Obsolete Absolute
Ron Ralph
Cruising under your radar
Watching from the satellites
Take a page from the red book
and keep them in your sights
Red alert Red alert
As most people have said "You're just jealous you aren't a banker." Yes... I am :(
In seriousness though, I do not think this was designed to work, but it's the last in a series of promises to the lobbyists and fatcats that got the Bush team into the whitehouse.
There is no reason for any politician to fear any backlash because they will be effectively retired in 2 months and will not care at all.
I just hope for my own selfish tendencies that in a few decades I can read about all the great exploits that this administration has accomplished.
Graft is exciting.
Regardless of whether the bailout was a good idea or not, voting based on the wishes of the people isn't necessarily a good thing. First, if it were, why not just go direct democracy? Second, people are not knowledgeable about a whole hell of a lot of issues.
I like the idea of representatives voting for things because they're the right things to do, not because their ridiculously uninformed constituents think something. This isn't easy, in part because politicians have to be re-elected by these morons, and in part because they were elected by these morons.
So of course politicians aren't necessarily right about everything. But to pretend that the people have any idea about what to do is ridiculous. We've all seen the studies about how half of Americans don't know that there are 100 senators, or how a third can't name a branch of government. Do you really think these buffoons have any sort of grasp on economics?
It's possible that the people reached the "right" solution in this case (that is, whichever option has the best long-term effects on the economy). But do you think they used a process that makes any sort of sense? Especially when the wording of the question in polls has a great effect on whether they support the bailout.
People don't know much about a whole lot of issues that they have strong opinions on. Perhaps giving the people what they want is what's best for them; maybe a weak economy is great for the people if they prefer policies that create a weak economy ("Democracy is the theory that the common people know what they want, and deserve to get it good and hard." --H.L. Mencken). Of course, a benevolent dictator (which I personally would find to be massively superior to democracy, in a vacuum) could easily be followed by somebody less benevolent, and so I suppose democracy is the best way to ensure that, at least, things stay mediocre-to-ok instead of swinging between god-awful and fantastic. If there are better options out there, I really would love to know about them.
It is a big convoluted mess involving not enough oversight and too much Government meddling, reawrding of unethical behavior in Corp. America and with the public; as well as some horrible errors by the Federal Reserve.It took a team to cause all of this.
Unfortunately in this country, everyone wants to point fingers and blame at the ONE bogyman that caused ALL the problems and use that ONE excuse to further their agenda. And in the case of the parent post, someone who believes that the Government has ALL of the answers and doesn't think that there always needs to be checks and balances in all aspects of life.
The World isn't black and white - it's an infinite shades of gray and other colors. We need to stop this childish desire to think of problems in B&W and to realize that we need to take personal responsibility. It aggravates me that these dipshits borrowed more money than they could afford and then get all indignant that no one will bail them out for their greed.
Actually, total cost of bailouts over last couple months is more likely to exceed $1.8 trillion, not $700 billion:
http://news.cnet.com/8301-13578_3-10057618-38.html?tag=nl.e433
And its loaded with secret laws and crap. For instance, the IRS is allowed to pose undercover as a tax preparer.
And there's a giant loophole that allows banks to say buy $50 billion of those "toxic" debts one day and the next day sell them for a profit to the treasure for $100 billion.
Oh and the $700 billion figure is only stuff held at one time. So the gov can buy up $700 billion of the debt, sell it at a loss, buy up another $700 billion, sell it at a loss, lather, rinse, repeat, every time at a loss to tax payer (and profit to the banks). So the total cost from this single bill could be far more than $700 billion.
I do not have evidence that they are actually stupid. They could just as easily (maybe more so) simply be greedy and dishonest.
so why the love for obama?
all the politicians in Washington has just changed their profession to Soviet pig farmers. for now on the abbreviation is USSSA = United Soviet Socialist States of America...
the US Gov is pack of commie rats thats been gaming the system for so long it finally came back to bite em on the ass (at the tax payers expense of course)...
Politics is Treachery, Religion is Brainwashing
I know it's all chic and vogue and whatever to blame Bush for everything around here, but let's give credit where credit is due for the root of this whole mess. Liberal policies that attempted to move everyone (read: the renting lower and lower-middle class) into homeownership en masse resulted in huge unsustainable upswings in real estate prices. When the bubble burst about the same time that lots of ARMs got, er, twisted, tons of people got caught with their pants down.
Yes, predatory lending made the problem worse, but FNMA and FMAC were at the heart of pushing loans to those who wanted the house they "deserved" rather than what they could afford. The bailout is essentially an ass-backwards method of fully nationalizing these loans, and the efforts to keep people from declaring bankruptcy and getting stuck renting again amount to a new public welfare program.
So, while there's plenty of blame to go around, don't forget to blame the Lefties on this one as well.
One myth about the current financial crises is that it is the fault of ordinary Americans, who imprudently took out loans they could to afford. This is simply not true.
The current crises is not the fault of ordinary Americans.
It is true that many Americans took out loans they could not afford. I don't know why people did this - some, with credit cards maxed out on vacations, took out a home loans , and instead of paying off the credit card, took another vacation. Others were optimistic, egged on by the relentless propaganda that home ownership is good. Others were, perhaps , elderly and confused, or lost their jobs, or had medical bills. I don't know how many people acted in different ways, but i do know this: every single solitary mortgage had to be approved. Every single mortgage had to be approved by underwriters and bankers. Now, if someone, asks for a loan they cannot possibly pay, who bears more responsibility: the person asking, or the banker who approves it.
I further know that many ordinary Americans are suffering as a result of their actions, and of the actions of their neighbors.
Another myth about the current crisis is that rather then resulting from too little govt regulation, ti was the result of liberals messing with the free market, by forcing banks, with a law known as CRA, to make loans to poor or minority applicants. This question has been studied again and again by the Federal Reserve; suffice it to say, CRA loans were not the problem.
However, the question of who or why these loans were made is a red herring; it was not the approval of imprudent loans that has made the current crisis so severe. All the bankers who approved these loans are not actually the main culprits.
The people who bear direct responsibility for the current crises are people like Paulson; as CEO of Goldman Sachs, he and people like him are directly responsible for the current problems; that he is sending our tax dollars to his buddies to fix the problem is only icing on the cake of gall. Not only are people like pauslon responsible for our current problems, they acted from the basest of motives - greed. It was the desire on the part of people like Henry Paulson for larger paychecks that led to reckless behavior on the part of wall street; this reckless behavior generated large profits, justifying large salary's, but this same reckless behavior has gotten us to where we are today.
Another myth about the financial crisis is that it is incredibly complicate. While the technical details of loans may be complicated, the behavior and actions that led to this state are not at all complicated, and are similar to what we do every day.
As an example, this week, the wall street journal examined why AIG, one of the largest and most respected financial institutions in the world, suddenly collapsed. Turns out, they had a unit in london writing insurance; while it sounds complicated its just insurance - someone pays you some money, the premium, and you promise to pay back a lot more if they have a problem. And what did AIG do with the huge premiums they recieved ? they did not put any money aside for a reserve.
LET me repeat that: they spent all the money on salarys. So when the mortgage market went south, all of sudden people said, hey, AIG owes, in theory, a gazillion dollars of insurance, and they don't have any money set aside to pay it.
When people heard this, you had the famed loss of confidence, and AIG went bankrupt.
The numbers I've seen say constituents who *did* notify their reps were anywhere from 5-to-1 against to as high as 100-to-1 against.
So most of us *did* notify them - and they ignored us.
Every single Congress critter supporting this naked money grab should be voted out of office, Obama and McCain included.
Moderation in everything, including moderation.
CRA loans were not the problem, this has been studied again and again by the Fed Reserve
The economist link is to a right wing wack harvard prof, almost a WTF (www.thedailywtf.com)
Gov provided the cheap credit that fueled this boom and bust. Second such cycle in 8 years, of increasing amplitude, a sure sign of a control system that is very flawed.
Yes, lots of banks on Wall street were stupid, again. Read "Fooled by Randomness" and "Black Swan" to understand the statistics and sociology of investment funds.
Gov passes the laws, the businesses follow them, you can't blame it on the businesses.
A law is a program intended to control some aspect of our politico-econo-social system. However, the world out there is not a machine, and programming for open systems is not possible.
The entire idea of 'pass this law, make the world a better place' is non- and anti-rational.
The next post about how institutions can't be trusted is all true, but it applies to the gov also.
We need few, but very general laws that place the burden of honesty on the seller, the responsibility to provide all of the information needed by the buyer in order for the buyer to make a good decision, and to check that it is understood
Other than that, gov can't produce net good: for all the good it does, the negative effects are larger, e.g. wars, depressions, the FDA's 100s of 1000s of deaths every year because of slow development of new medicines and other treatments, etc.
I pinched this link off "The Economist" Website: http://www.buymyshitpile.com/
Hell, Paulson is going to save the economy by buying "distressed debt" and "toxic assets", which is financial talk for "worthless shit", so why not help him out? He has cash to piss away, and isn't quite sure right yet where to spend it.
Computer geeks are notorious for hoarding worthless shit. I just can't part myself from that IBM PCMCIA Token Ring adapter ... with an 8228 MAU ... but if Henry makes me a good offer ... I just might reconsider.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
If you feel like your representative didn't serve your interests, you know what to do.
I get really tired of people complaining that their representatives exercise the mandate of their electorate on every single vote. The whole point of having a representative congress is so that they can get the details we aren't getting.
We live in a representative democracy. We can't expect to have a functioning society with all 300 million of us participating in governance. Vote for competent people that can make good decisions in your stead. Don't run to the nearest forum of discontent every time they don't vote your way.
If you feel like overthrowing the government, please do it somewhere else. I like it here, and unlike pretty much everyone else on Slashdot, believe that this bill was a good idea, and hold to the theory that Bush and his cronies are far too stupid to be as evil as everyone gives them credit for.
Representative democracy means something other than what you take it to mean. If you get elected, you've been given a mandate by the people to do what you feel is necessary to represent them properly. You can question their decisions all you like, and you can replace them if they're not serving your interests, but perhaps you should consider once in a while that that's exactly what they're trying to do. Try talking to them once in a while if you're that concerned, face to face. They have offices in your district. Make an appointment and hash it all out. You may learn something.
Attention deficit disorder is a complicated issue, spanning several major... HEY LET'S GO RIDE BIKES!
Obama and McCain voted for this, they voted for the Telecom Bailout. Vote against both of them. I'm voting for Bob Barr!
minds, get scrambled like eggs, abused and erased. Hard Hearted Alice is who you want to see.
They're not dumb, they're just evil.
This is the difference between conservatives and liberals. Conservatives think libs are well-meaning but horribly misguided. Liberals think conservatives are evil (and this gets modded as insightful rather than flamebait!). And it's the conservatives who are "intolerant."
For the record, it was Democrats who got us in this mess, not Republicans. Democrats created these government-sponsored ATMs (Freddie and Fannie), the CRA, and your fair-and-balanced media won't report on Chris Dodd's and Barney Frank's (sorry, only Fox News is reporting this one, so had to use them) ties to Fannie Mae and Freddie Mac, how those government sponsored enterprises acted as ATMs, and how Dems forced banks to lend to those with bad credit. And how they fought John McCain's 2005 home mortgage reform bill. But now it's Republicans' fault? THIS IS A GOVERNMENT-CREATED PROBLEM that Republicans tried to regulate and Democrats wanted unregulated. But don't let the facts get in the way of a good story.
The lack of reporting on what really caused this scandal is a scandal in itself. Reading these threads shows me how the media has not done its job.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
When HUGE taxpayer expenditures like this are voted through and signed into law in less than a week, despite 3 out of 4 Americans being strongly against them - it's clear we no longer live in a Democracy at all!
You don't live in a democracy. You live in a republic. This means that rather than bending to the tyranny of the majority every time, your representatives - that you elect - make the decision that's best for their constituents even if a majority of the constituents think it's a bad idea at the time. Of course, a representative that does that too much risks losing his seat. The whole point of a republic is that the representatives can act on the bigger picture that sometimes is missed by the masses. Whether they actually accomplish that is another question.
The bailout is a necessary evil, or the pain in the long term due to damage to the wider economy will be much greater. Even if it is somewhat rewarding special interests and people who richly deserve prosecutions for fraud rather than bonuses, the longer term impact will hopefully stop the rot, and reduce the coming recession. Many business cannot function without lines of credit for day-to-day operations and growing their business. The credit crunch will cause more of them to fail, and that will cost jobs. Jobs lost, more mortgage defaults, and more credit restrictions. Getting the international money market working again is of key importance to the global economy, or we'll all pay even more than we're going to anyway. This is true whether the average american believes it or not.
Remember kids, it's all fun and games until someone commits wholesale galactic genocide.
I see an objective person has mod rights.
If you live your life the way you post on Slashdot, it's no wonder you don't have anything. How about instead of expecting the government to hand everything to you you get off your ass, study, get good grades, earn a free ride through college (or take some loans), work hard, get a good job, and then buy the shit you want?
Yeah, it does suck that certain special interests are able to use the government to make themselves richer. And we should definitely be spending our tax dollars helping out those on the bottom end of the economic scale who do work for a living with their health care costs.
But if you want more gas, or to go to college, get off your ass and work for it.
paintball
The belief that an investment "cannot possibly go down" is a self-denying prophecy, meaning that people believing in it causes it not to be true.
If people find an investment which has never gone down, then they believe the investment pays them good money with no risk whatsoever. As a result, they bid that investment up into the stratosphere. They are not concerned with the unrealistic price because the investment has no risk (in their opinion).
In other words, peoples' belief that an investment has no risk causes that investment to become overvalued and to generate massive risk where there may have been none previously.
Oddly enough, things which are said to have "NEVER gone down" often crash terribly.
Back in the 1970s there was an investment book which recommended a portfolio of 50 of the largest corporations in America. The strategy was called "the nifty fifty." These fifty large corporations were negatively correlated, meaning that when one went up, the other went down. The author of the book calculated that these 50 companies had never gone down as a group. Shortly thereafter, those companies were trading at 3x their normal value, then they all crashed at the same time.
LOL. I'm stupid! haha. You could be one of the biggest liars on the planet. Why would an idiot like you make excuses? Hmmm. Let me guess. You're god damn dummycrat.
1. First point.
"Fannie and Freddie don't make loans." http://en.wikipedia.org/wiki/Fannie_Mae. Don't make loans huh? LOL. Ok professor.
2. LOL. "Personal responsibility"? This is a real laugher. Do you think those dumb dipshit deadbeat poor black borrowers give a shit about defaulting? Yeah you're a dumbass alright.
3. How much of Barnie Franks can you deepthroat? http://www.thebulletin.us/site/index.cfm?newsid=20146707&BRD=2737&PAG=461&dept_id=576361&rfi=8
I hope so too, but the perpetrator (this bill) is known under many aliases including:"Heroes Earnings Assistance and Relief Tax Act of 2007" AKA "Defenders of Freedom Tax Relief Act of 2007" AKA "Paul Wellstone Mental Health and Addiction Equity Act of 2007". So it's difficult to find the text of the final bill and which traitors voted for it. We need a WikiCongress!
I haven't seen a single traditional news media outlet report the voting roster (maybe it would be a violation of that stupid unconstitutional McCain-Feingold bill?), but you can find The house vote here and The Senate vote here. Come election time, lets make sure they know that they still work for us and we aren't happy about being screwed over time and time again for the benefit of their wealthy friends.
Comment removed based on user account deletion
It's right at the top of the front page of the FDIC web site...not exactly hard to find.
They can't accept the fact that the free market is what caused this mess.
Wait, what? What a stunning display of ignorance of how the whole subprime lending system worked. In a "free market" the government does not intervene. Fannie Mae and Freddie Mac, government sponsored enterprises (AKA, "ATMs"), are no more "free market" than the post office. In this "free market," both FMs artificially inflated both credit and housing markets (just as government student loan programs have done to tuition) by pouring money into the system, and representing to the banks "don't worry, we are backed by Uncle Sam, what could go wrong?". In a "free market", government regulations like mark-to-market, which caused massive bank paper losses, don't exist. In a "free market," you don't have a CRA telling lenders how they have to loan their money. In a "free market" you don't have corrupt senators like Chris Dodd and Barney Frank, who are on important congressional banking oversight committees (which themselves wouldn't exist in a "free market"), leaning on lenders to make subprime loans, and fighting attempts to reign in these out-of-control Government-Sponsored Monstrosities..
Here's what Chuck Schumer said back in 2003, when Republicans wanted more oversight of said Government-Sponsored Monstrosities:
Senate Banking Committee, Oct. 16, 2003:
Sen. Charles Schumer (D., N.Y.): And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission. And I don't think there is any doubt that there are some in the administration who don't believe in Fannie and Freddie altogether, say let the private sector do it. That would be sort of an ideological position.
Source.
So Schumer himself opposed reform on the grounds that the "free market" is the wrong approach. Massive government intervention and regulation was the status quo. But now it is the "free market's" fault? WTF?
Yeah, sounds like a "free market" alright. Just like public housing is a free market.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
the FDIC increase eases my fears, I think I'll go uot Monday and get fill my gas tank, or possibaly buy another ex-wife, as far as the plan working AIG got $85B two weeks ago and already rissed away $61B http://www.nytimes.com/2008/10/04/business/04insure.html?_r=1&th&emc=th&oref=slogin
Proudly Butchering code for 20 years
"The major effect of this bill is that it is causing fiscal conservatives to blow gaskets. They can't accept the fact that the free market is what caused this mess."
No wonder you posted AC.
It's not a free market when the government tells banks they have to make X amount of dollars available for loans to the poor out of "fairness". These were people that had no money, no assets... some of them didn't even have week to week paychecks. But hey, we mandated fairness. And the subprime mess was it's child.
If there's no subprime mess, there's no mortgage crash. Period. This happend because large amounts of subprime borrowers stopped making payments. Gee, who could have seen that coming, eh?
In a real free market, subprime loans wouldn't even exist. This was one of your beloved regulatory mandates.
Life is hard, and the world is cruel
I have paid zero in income tax through various legitimate and less-than-legitimate methods over the last 4 years. .
I'll remember that while my neighbors are trying to survive an upstate New York Winter on HEAP, Food Stamps, a Medicaid HMO and SSI.
Perhaps you and Joe Biden need to read something...
""Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands." " - Judge Learned Hand
Life is hard, and the world is cruel
Yeah, but you don't get people calling and writing their representatives to ban H2O. You don't get DOS'd email servers and full voice mail boxes.
Further, a USA Today poll showed ~70% people FOR the bailout. It all depends on how you phrase the question and what agenda you're trying to push.
Buckle your ROFL belt, we're in for some LOLs.
I understand... but my message was not aimed at them (us). It was aimed at all those others. They DO share the blame, even if they were a minority.
Two of my Congresscritters (Senator and Representative) voted against. I have already informed the third that she has permanently lost my vote for any future elected office.
I don't like what they did, but I agree they had to do something.
I've learned that this kind of "SOMEBODY DO SOMETHING, IT DOESN'T MATTER WHAT, ANYTHING!" thinking is peculiar to the U.S., especially in recent decades. When something bad happens in other times and places, the attitude is "$***" happens or "It's God's will" or "It's a shame but what can we do?" One only has to look at unintended consequences of reactionary government micro/macromeddling in everything from the economy(e.g. the Quasi-state Fed being able to interest rates below natural {sane} market), our personal lives and world politics to see that there are times when the best option is to do nothing!
I know an old lady who swallowed a frog to catch the spider to catch the fly, but I don't know why she swallowed that fly... perhaps she'll die.
How can 250k FDIC limit be credible when wamu would have almost completely wiped them out. The only reason the FDIC is still in business is because the last few failures were instead fire sale sold off to the preferred few.
So basically, George Bush redefines conservatism and that makes me less conservative than Ralph Nader? I've been railing on Bush's spending and big-government "conservatism" for years.
How, exactly, is my ideology tied to George W Bush's?
Yes, it's a long article. It will require you to think and understand. That's how learning occurs.
And how is linking to the LA Times and Wikipedia and the Wall Street Journal "sticking to Fox News Bullet points"? I guess the truth hurts. Apparently you didn't take your own advice on how learning occurs and didn't read my links, and just made ad hominem attacks against me. Instead, you ignored my links and what they said and just posted some random story about how Bush is not Reagan. Yeah, thanks, I already knew that.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Corporatists, born of fascists before them, believe crippling the state's treasury is the surest way to exercise total control. Looting the treasury is exactly what the B-C admin set out to do and achieved with unprecedented success. We have seen it in action shortly after 9/11, Katrina, Iraq you name it. Unfortunately the two party system has created polarization whereby true conservatives are damned if they concede the Ruplican Party has been hijacked by corporatists.
I was off by a couple orders of magnitude.
That's more like two thousand dollars per person.
So never mind.
Well the bit about distributing the funds directly to the mortgage holders rather than buying the mortgages so the government now owns the toxic debts still makes sense.
There's just no way they're getting out of this without rewriting the pick-a-pay mortgages with market rate principal and low fixed rates. The inflated market prices and "earned" interest will just have to be written off as a loss due to poor judgement. Even then there will be folks that can't pay - the ones who should never have been loaned so much money against their income.
Home prices are going to continue go down. There's already a huge glut of homes. The smart thing to do would be to limit starts through permitting. The idiots in my area are still breaking ground in a glutted market.
Help stamp out iliturcy.
Welcome to the two partied, one party system.
Modding me -1 troll doesn't make me wrong.
Free markets are not what got us in this mess, but rather the way some players chose to participate in them.
This mess is mostly tied to debt and how these players chose to leverage their assets. You can be reasonable and not choose to over leverage your assets, but when everyone around you starts doing this, this will put you at a disadvantage in a competitive market! therefore, this will drive all reasonable players to over leverage in order to remain competitive! Which will drive everyone in the market to over leverage! and overtime, everyone will think that this is acceptable behavior until we reach a state like we are in right now.
Which makes you wonder if we should have listened to Friedman by forcing banks to have 100% reserve:
http://www.fee.org/publications/the-freeman/article.asp?aid=1500
Or outlawing interest on debt altogether and make use of other market mechanisms for financing (like the stock market and VCs).
Don't loose faith in the free market system. The system could be implemented in an infinite number of ways and just because one way does not work doesn't mean the whole system is corrupt.
When you compare this to the alternatives, there are at least periods in a free market where everyone enjoys prosperity.
The alternative makes you live in an artificial recession all your life and at the mercy of a central planning authority which can change from time to time, and most likely than not, will have incompetent people.
The WSJ opinion column is listed among the most ultra-right publications in the US.
It's about as credible and unbiased as Freedom Socialist
Additionally, it's simply parroting the unmitigated and unfounded clinton-bashing which originated, unsupported of course, in ultra-conservative astroturfing blogs.
I'm sorry, but the organizations you're bashing were legitimate. Just because they're meant to assist lower income families doesn't make them any more corrupt than the big wall street houses which also fell victim to corporate malfeasance.
How dare you attack democratic defense of the lower-middle and lower classes from abuses of wealthy people who are just as bigoted against them as white supremacists are againt the afro-american population.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
Once the government owns 700 billion in bad mortgages they face to choices:
1. Become the bank and kick families to the curb.
2. Hold on to the bad mortgages, let the families stay in their homes, and wait for the $700 billion to run out. Then ask for more.
When HUGE taxpayer expenditures like this are voted through and signed into law in less than a week, despite 3 out of 4 Americans being strongly against them - it's clear we no longer live in a Democracy at all! This seems like as good a reason for an overthrow of our government as what we dealt with back around 1776!
:)
Seriously tho, well said. Our government is out of control.
Be careful there, you might find yourself on the no fly list.
http://www.gotoguy.com/?p=368 makes a good point that "the FDIC has $53 billion to insure $3 trillion. How is this possible?"
"Fascism should more properly be called corporatism, since it is the merger of state and corporate power"-- Mussolini
OK, if we are going to quote Mussolini as a great political scientist, let's extrapolate on this a bit. Who created Fannie Mae and Freddie Mac, the true "merger of state and corporate power" in this crisis? Democrats. Who further extended this by creating the CRA? Democrats. Who expanded its mission into accusing bankers of racism ("redlining") and extorting them to make more bad loans, or else be investigated? Democrats. Who ignored warnings and blocked efforts at reform in 2003? Who killed efforts at GOP reform of the FMs in 2005? Democrats. What party was Chris Dodd, Chairman of the Senate Banking Committee who took millions in lobbying money from the financial services industry and got sweetheart loan deals a member of? Democrats. What party was the guy who was boning the assistant director of Fannie Mae while he was on the House Financial Services Committee a member of? Democrats.
Funny, I see a lot of suspects that your oh-so-insightful post left out.
But don't worry. help is on the way. Barack Obama, who also got a sweetheart loan deal, will be sure critics can't speak out against him. He will define truth, just as Orwell predicted, since the media is asleep at the switch. What party is he from?
Whoever modded parent as "insightful" are all so busy slamming Fox News that you don't even know who is responsible for all of this. But don't let the truth get in the way of a good story.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
This comment will be unpopular in this forum, but here goes: The government is out of control. Rather than specifically blame Bush or someone else, I think it's better to blame everyone in Washington right now. There are checks and balances that are supposed to prevent this sort of thing from happening, but somehow the government is working around those things right now. Plus, there is an election coming up Real Soon Now and, let's face it, you either vote Obama/Biden or you vote McCain/Palin. No third-party or independent candidate has a prayer of a chance of winning the presidency. Now look at my sig -- don't think for even one moment that I think McCain is anything special. My vote will be going to him only in the hopes that he will actually appoint Palin to some task that involves cleaning up the shit that's happening in Washington. I believe that if she gets such an appointment, she will make a tremendous difference, even if it's only a small percentage of the total waste going on right now (because a tiny percentage of trillions if still billions of dollars). About Obama -- he looks sharp, dresses sharp, has a great haircut, and speaks marvelously, but although he touts "Change" and "Hope" I really think he's more of the same bullshit we've seen from Washington. He's just really awesome at marketing himself. Kind of like the way Microsoft is really great at marketing their "more of the same" products that everyone continues to buy when better alternatives are out there. The testament to Obama's marketing prowess is how many people are enamored with him, but I know there are certain facts behind the scene that negate the marketing bullshit. With McCain -- let's just say that until he brought Palin in, I thought this election and what followed was going to suck no matter who won. Now I think there's a chance. Because this country needs more people like Palin in Washington -- people who don't know that things are supposed to be corrupt and fscked up over there, and therefore will help clean up the mess. In this upcoming election, we really need to think about who we have in office, not just in the presidency, but across the board. And I think that as many incumbents as possible should be changed for new people who haven't been to Washington yet. McCain in the presidency only because Obama is the worse choice (I know this is making me unpopular but look beyond the great looking guy and see what he really stands for) and nobody else has a chance. Bottom line, I'm voting McCain/Palin to get Palin into Washington and because Obama, although excellent at marketing himself,
McCain/Palin '08. Now THAT's hope and change!
Possible universal bank closure? http://www.gotoguy.com/?p=367
They should have just divided up the 700 billion amongst the 30,000 responsible US citizens still remaining.
Look back into the early history of this country. Look at the reasons behind the electorial college.
This country was founded on the idea that the mass public shouldn't directly control government, but rather a small group of individuals should run the country. The idea was that a small few knew better than the larger masses.
Perhaps this is a case where the elected officials genuinely believe they are helping their people, desipite going against them.
Here's another perspective: Would Congress have supported Afghanistan & Iraq, Partriot Act, etc after Sept 11th based on their own opinions? What elected official can say "No, I'm voting against the Patriot Act. I am voting against increased airport security. The current system will keep us secure."
That official would never get re-elected. People would accuse him of supporting terrorism.
That said, this 700B bailout stinks...
Yeah, the current situation where nobody can afford a house because of frozen wages and unreasonable value expectations is SOOO great... maybe for boomers.
For the rest of us, the generations who came after, this is horrific.
The market should be allowed to correct itself, not propped up for the sake of the self-indulgent boomers and the greedy execs who serve them.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
The WSJ opinion column is listed among the most ultra-right publications in the US.
It's about as credible and unbiased as Freedom Socialist [socialism.com]
Nice ad hominem attack. The "column" reprinted direct quotes by those senators and congressmen. Are you claiming they didn't actually say those things? Fine, go look in the Congressional Record. You lefties are unbelievable. A "right wing source" reports on something that the mainstream media ignores, and you call the former biased rather than the latter. Nice logic!
I'm sorry, but the organizations you're bashing were legitimate. Just because they're meant to assist lower income families doesn't make them any more corrupt than the big wall street houses which also fell victim to corporate malfeasance.
"Legitimate" if you think the role of government is to create entities which tinker with the markets, which I do not, on both ideological grounds and the fact that THEY COMPLETELY HOSED THE HOUSING MARKET. The Wall Street houses made some bad decisions on credit swaps, but that's because they didn't know what a house of cards the market would turn out to be because of the bad loans pushed by government policy. The mantra seems to be if a little old lady makes a bad investment because she didn't know all the facts, she's a victim. If Lehman does the same thing, they are corrupt greedy fat cats who get what they deserve. The point is, DEMOCRATS fought to stop any reform of this subprime lending.
How dare you attack democratic defense of the lower-middle and lower classes from abuses of wealthy people who are just as bigoted against them as white supremacists are againt the afro-american population.
How DARE I express my opinion! Right, because people with bad credit deserve to live in homes and get loans or else the lenders are racist.
So let me get this straight: We needed a giant government-created enterprise to ensure that the "wealthy" lend money to poor people with bad credit and low income. Then, when said poor people default on the mortgages, it is the wealthy's fault? Which is it? That they wouldn't loan them money or that they did (with government coercion, no less)?
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
I saw this coming, ever since the talk about a supposed economic crisis. DMCA pretended to be about protecting virtual property rights, PATRIOT pretending to be about protecting citizens from the 21st century word for 'witch'.
"Most people, I think, don't even know what a rootkit is, so why should they care about it?"
You don't live in a democracy. You live in a republic. This means that rather than bending to the tyranny of the majority every time, your representatives - that you elect - make the decision that's best for their constituents even if a majority of the constituents think it's a bad idea at the time
Incorrect.
The representatives make the decisions that
* Fits themselves. - In other words, decisions that serve the upper middle and upper class. And specifically decisions that may lead to a future money earning east somewhere.
* Allows the to get elected and reelected - Meaning, decisions that serve the lobbyists that provide the money needed for fooling uneducated americans into voting for them.
The bailout is a necessary evil
No, it isn't. The bailout is the worst kind of financial intervention. There are far better ways to do it.
The bailout is basically a 700 billion loss that will go to those responsible for losing money in the first place. Talk about moral hazard.
And no, the taxpayer won't get the money back in the future. The tax payer will get stuck with bottom of the barrel CODs that are worth essentially nothing.
And how they fought John McCain's 2005 home mortgage reform bill.
Democrats retook congress in 2006.
In the Senate, you need 60 votes to pass anything. Democrats promised to filibuster the bill from even getting a vote, and so it died in committee.
Thus ends your political science lesson.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
there is no more 'will of the people'.
why is it that the only real fundamental fix to our government is never at the top of the agenda; - legislation that bans special interests, lobbyist groups, corporate campaign contributions, etc.
- legislation that enforces term limits for senate and congressional members
what is it going to take to manifest the real will of the people? i'm thinking full-on class warfare/revolution...
You are so blind and stupid.
And you? If you have to have the Democrats pass a law to keep you alive, what does that make you?
Banks MAY not even need to hold reserves.
http://www.nowpublic.com/world/hidden-emergency-economic-stabilization-act-2008
1) Did you even bother to read your own article? http://en.wikipedia.org/wiki/Fannie_Mae#Business_mechanism
Makes loans huh? LOL. Ok professor.
2) Good thing I'm not calling for them to be bailed out, now am I? It takes two to tango.
3) Apparently it really is necessary for the government to tell corporations' executives to not do stupid shit that damages the company like lie on their financial reports to justify paying themselves millions in bonuses, or not limit the company's exposure to bad debt. You're right, it's all government's fault. Don't worry, I'm sure your oxygen bailout bill will be coming real quick in the meantime, I would suggest that you breathe, but I'm sure I'm not "expert" enough to tell YOU what to do.
Of course all of this is moot, we've already nationalized Fannie and Freddie and their debt (at an as yet unknown cost to the US), tell me, how do you intend to pin this OTHER $700 billion on Barnie Frank's dick?
Oh.. and please look up the definition of ad hominem attack.
OK.
An ad hominem argument, also known as argumentum ad hominem (Latin: "argument to the man", "argument against the man") consists of replying to an argument or factual claim by attacking or appealing to a characteristic or belief of the person making the argument or claim, rather than by addressing the substance of the argument or producing evidence against the claim. source
You attacked the WSJ instead of dealing with the quotes of Democratic members of Congress defending the FMs. Sounds like an ad hominem attack to me.
"When you have no argument, attack the plaintiff." - Cicero
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Quotes from congressmen... those are really really credible!
They comments of congressmen are pretty fucking credible to determine whether said congressmen went on record defending the lending practices of Freddie Mac and Fannie Mae. Which they did, if you would actually RTFA before slamming it.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Bush & co have taken the long con to its very extreme.
Never before have so few stolen so much from so many
Welcome to the Great Treasury Robbery of 2008
http://i37.tinypic.com/2evarex.jpg
Some fluff goes here to get past the slashdot filter. The subject line says all that needs to be said.
while the debt may be toxic - it still has VALUE and is thus potentially worth more than the money being printed to pay for it....
Actually, there is a good chance that a lot of it actually is valueless. If you think that they still have value because there is a house behind it all, then you are mistaken. When you are talking about bottom of the barrel CODs, you only money after the above layers get theirs, and with sinking house prices, even those above won't get all of theirs, leaving the bottom with nothing.
http://www.youtube.com/user/khanacademy/ if you are interested in understanding the basics.
Lesser civilized, also known as third-world nations would have taken to the streets for such outright bullshit.
.... so would more civilized nations....
The economy is a system of very great complexity. You can't do control systems without being able to write the equations, and solve them.
If someone really could do that, they wouldn't be working for the gov or trying to make a fortune on Wall Street, they would already own the world.
Listening to all the people who KNOW WHAT TO DO is amazing, serious intellectual hubris.
Not sure where you got onto the political track. No one had said anything about democrats or republicans up until your deranged post made a sophomoric attempt at politicizing the original posts content. Why do that? That just leads to nasty-grams, and anger leads to the darkside (c.f. Lord Cheney)
by the way >90% of all the bad debt accumulated after 2004. So none of your zany points actually make a lick of sense.
I do however find the apparent deep sincerity of your false logic fascinating. Or did I just miss out on a brilliant satire of the typical Fox news derangement syndrome? Bravo! Madam, I tip my hat.
Unbelievable. Fannie and Freddie are NOT private companies and they STARTED THIS MESS. And We didn't bail out Lehman. If banks want to stupid shit then they should be allowed to. We have let banks go out of business before.
Fannie & Freddie pushed us over the cliff and started the chain reaction. To say that the private sector caused this is pure propaganda.
Clinton administration laws put guns to bankers heads to force them to give bad loans to unqualified applicants.
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
Cause of the crisis
The reasons for this crisis are varied and complex.[21] The crisis can be attributed to a number of factors pervasive in both the housing and credit markets, which developed over an extended period of time. Some of these include: requirement of commercial and mortgage banks to lend to high-risk borrowers [22][23], the inability of homeowners to make their mortgage payments, poor judgment by the borrower and/or the lender, speculation and overbuilding during the boom period, risky mortgage , high personal and corporate debt levels, financial innovation that distributed and perhaps concealed default risks, central bank policies, and regulation (or lack thereof).[24]
The Subprime Mortgage Crisis occurred when lending standards were relaxed as part of a Congressional effort to make home ownership more attainable to lower income families. A dramatic increase in the availability of mortages (especially unconventional mortages with adjustable interests rates, balloon payments, or artifically lowered payments) and the extension of credit to borrowers with inadequate ability to repay their debts resulted in a feeding frenzy: brokers pushed loans on borrowers that did not meet prudent lending standards, borrowers were enticed to take equity out of their homes for improvements or other expenditures, borrowers gambled that their property values would rapidly increase allowing them to build equity and refinance the loans to avoid increased payments, lending institutions created new types of loans that required less documentation to qualify lenders (some were termed "liar's loans"), secondary markets packaged large groups of loans into "mortgage backed securities" that were then sold to investors around the globe. Each of these added to the increasing demand for more mortgages and fueled an unstainable rise in property values: the "housing bubble".
As early as 2003, former Chairman of the Federal Reserve Alan Greenspan called for greater regulation of the lending and security industry and warned of an impending financial disaster. Unfortunately, there were too many people benefitting from the seemingly unending flow of credit.
You realize, of course, that you've left a lot out?
You realize, of course, that the CRA did not force banks to make loans to individuals who couldn't afford them? What it did do was say that you could not refuse credit based on location or area (redlining) and instead had to base your loan evaluation on the INDIVIDUAL, and upon the individual's ability to pay. (Try reading the bill and not the Wiki.)
You realize, of course, that the vast majority of the subprime loans that are going belly-up were made by financial institutions like CountryWide... which are not banks, and as such, WERE NOT COVERED BY THE CRA IN THE FIRST PLACE.
You realize, of course, that in early 2005, the Office of Thrift Supervision (under GW Bush) implemented new rules that substantially weakened the CRA, and as such, its impact on credit markets?
You realize, of course, that a good portion of our current crisis is caused by the Gramm-Leach-Bliley Act, introduced by Senator Phil Gramm (R-TX), which in 1999 repealed part of the Glass-Steagall Act, opening up "competition" among banks, securities companies and insurance companies. Which in turn lead to our current set of mega-institutions that are so large and intertwined they can't be allowed to fail?
The same Phil Gramm, BTW, that was John McCain's presidential campaign co-chair and his most senior economic adviser. The same Gramm that in July explained the nation was not in a recession, stating, "We have sort of become a nation of whiners."
I could continue, but suffice to say that there's a lot of information that your oh-so-insightful post left out.
Do you work for the Republican campaign? I only ask because such blatant cherry-picking of the facts to suit your own position is a party trademark.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
Bombing the RNC is not the same as protesting it. And some ignorant dummies here modded you up. Sheeesh.
Ahh, but it's not just the price of "oil", it's the price of "gas." Look how the price of oil was dropping while in many cases the price of gas was jumping. Heck, I'm Canadian, and in while in the US both (oil and gas) prices were going down a little, ours were for some reason ratcheting up. While I'm sure there are some differences between the two countries, I also don't doubt that there are plenty of similarities in the bullshit that goes on.
There were plenty of alternatives proposed that were less intrusive, safer, and better targeted to unfreeze liquidity to buy us time to fix the real problem of reckless, unregulated trading in fraudulently valued housing derivatives.
All were all rounded rejected by Paulson and taken off the table without further debate. If you doubt this, do some research. The rush to pass this via fear-mongering is typical administration bullying at its worst.
The Paulson plan is a naked power grab. Stop trying to sugar-coat it. It's a last ditch effort to save investment bank cronies from getting crushed from the upcoming recession by buying their junk at prices way above market value.
Ooook... time for some ranting:
This has long since become much more than an attempt to save Investment bankers and corrupt mortgage banks. This crisis is now threatening banks that are quite solid, never behaved irresponsibly, were not exposed to the sub-prime mess and that are essential to the proper functioning of the USA's, Europe's, Asia's and generally the rest of the worlds economies. The banks this 'bail out' is meant to help are the ones that provide the capital for small and medium size businesses on Main Street America to function, the ones that pay people's salaries. One can only hope that it succeeds in protecting them, and the rest of us, fro what m the screw-ups of the Investment banks, the mortgage industry, the risk assessment companies and politicians (both Dems. and Reps.) who made some very poor decisions, failed to properly monitor the investment banks and the mortgage industry and didn't pull the emergency brake in time. The reason that people like you can make comments like the one above is that you yourself haven't felt the effects of is happening... YET! It will take a while for the this infection to eat it's way through the rest of the banking community, through the businesses and eventually to you yourself (think layoffs on a hitherto unknown scale) and by the time it finally does and you finally start to get it it will be to late to stop it. I think Frederic Mishkin (via NYT reporter David Leonhardt) summed this up rather nicely with his Meyer Mishkin story. Do I think it sucks that the profits of players on Wall Street always get privatized while their mistakes always get Nationalized? Yes! Do I think it sucks that these bozos get a golden... no, these days it's more like a jewel encrusted, gold engraved, platinum parachute even if they have totally screwed up? Yes! Do I want a rerun of 1929? NO! If this is the price to pay to prevent a rerun of 1929 then I'll pay it, very, very, grudgingly. One thing is for sure, I will do my best to support anybody willing to see to it that the people responsible for this mess pay for it. That being said I have no high hopes that more than a few of them will ever be punished.
And that concludes my rant...
Only to idiots, are orders laws.
-- Henning von Tresckow
"Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans."
http://www.vdare.com/sailer/080928_rove.htm
No private enterprise would ever go for this type of long term investment with zero profits in the foreseeable future.
Have you hear about Warren Buffet?
There was an article in last Sunday's Washington Post that described one house on the market after a foreclosure. The article was very instructive about what was really going on. The entire financial mess is a result of the gambling casino mentality of the derivatives market moving over into housing and mortgages. The mentality of the derivatives market was allowed to exist and continue as a result of financial market deregulation.
Many financial experts, most notably Warren Buffett, the Sage of Omaha, have for years warned that there are derivatives nobody understands and that they will cause trouble. Based on the article, it is clear that we now have mortgages nobody understands and derivatives on those mortgages that nobody understands, either. Derivatives in the form of "portfolio insurance" caused the stock market crash of 1987. Since then there have been several occasions (such as Long Term Capital Management) in which derivatives threatened to collapse the world financial system. Well, they've done it again.
The article
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/27/AR2008092702587.html
describes how the homeowner was solicited to refinance her home and took the bait. The interest rate was a teaser. Over a year into the
mortgage she discovered that it was a "negative amortization loan" where the principal increases every month. The transaction probably came nowhere near compliance with Truth in Lending laws. It is shocking that such a piece of financial garbage exists. However, Wall Street wanted mortgages to feed the highly profitable derivatives market and there was a lot of pressure to produce the mortgages, no matter how.
The article doesn't cover what happened next, but the mortgage was likely bundled into a collateralized mortgage obligation that likely had
credit default swaps written on it. Here are some relevant Wikipedia links:
http://en.wikipedia.org/wiki/Collateralized_mortgage_obligation
http://en.wikipedia.org/wiki/Credit_default_swap
http://en.wikipedia.org/wiki/Derivative_(finance)
http://en.wikipedia.org/wiki/Negative_amortization
It turns out that many of the derivatives are really side bets on prices of financial securities, and that the total outstanding value of the derivatives often exceeds by huge factors the total outstanding value of the securities. Furthermore, the derivatives are highly leveraged.
According to a recent program on NPR's This American Life there are about 4 Trillion in bonds and about 60 Trillion in derivatives betting on whether the bonds will pay off.
In the absence of strict regulation, the "free market" becomes the Fraud Market. This mess can be laid squarely at the feet of financial deregulation and Fraud Market Conservatism. Adam Smith's "unseen hand" doesn't work. The financial markets are much more in keeping with Charles MacKay's book "Extraordinary Popular Delusions and the Madness of Crowds". This has been proven over and over, and is now being proven once again.
One part of the eventual cleanup will need to be a shutdown of the derivatives casino. Some of these financial instruments are valuable to
producers and users of real commodities, but most of them need to be eliminated. Whatever remain need to be understandable and should not be
side bets. Eventually, the tails will stop wagging the dogs.
Obviously, I already "know what to do" when it comes to voting out the representatives who didn't do their jobs properly. That's a given, and thankfully - there are many web sites already giving people complete lists of who voted for and against this bailout.
I realize that 300 million of us can't realistically be expected to deal with the gritty details of proposed legislation on a day to day basis. That's not what I'm upset about!
The problem in THIS case is, we're talking about legislation spending $700 BILLION taxpayer dollars (eventually wound up over $100 billion HIGHER than that!), and yet the Senate simply rubber-stamped it on through without so much as a BIT of concern that maybe this wasn't well researched or thought out before being proposed! THEN, they went on to do something that's really not their job at ALL .... They made a concerted effort to do anything they could do to sell the bill to the House, including tweaking and adjusting it left and right to cater to whichever special interest would tempt a particular individual to switch a "no" vote to a "yes"!
How can you sit there and claim you believe "this bill was a good idea" when among other things, it gives millions of dollars to toy makers making a specific type of arrow for a kid's bow, gives perks to businesses so they can buy employees bicycles or pay for their maintenance if they ride them to work, and gives special tax breaks to makers of wool clothing items?? NONE of this addresses the core problem at all! None of this helps fix the supposed "financial meltdown and collapse" that we were supposed to see if this wasn't passed!
Over on Forbes.com, they interviewed a financial analyst and asked him how they came up with the $700 billion figure as the proper amount to rescue the economy. He admitted that it wasn't because of any study or mathematical formula they used. Rather, they just picked $700 billion because it was a nice, big number!
Anyone thinking all of THIS was "good politics" is a damn fool!
After WWI, the German (Wiemar) government decided to
honor German Imperial War bonds despite advice to the
contrary.
Soon, Germans were converting their bonds into cash
since, as obligations of the German government, they
were the equivalent of cash, less a discount for
interest and time.
Soon Germans were pushing wheel barrows full of cash
to the store to buy a loaf of bread. (see:
http://en.wikipedia.org/wiki/Hyperinflation
It seems that the government simply printed money in ....
order to redeem the war bonds. There were other causes
such as the loss of the Ruhr and gold based reparations
but, in the final analysis, is was the printing press.
Soon the US Treasury will begin buying mortgage backed
securities from the banks. To do this, they will sell
bonds, backed by the full faith and credit of the US
government.
The Federal Reserve Bank will buy these bonds, either
directly at auction or indirectly through the open
market so that the flood of bonds doesn't cause a drop in
the price of bonds and, hence, a serious increase in
interest rates.
To buy the bonds, the Fed will print money, either the ....
funny looking paper stuff or a lot of electronic credits
sent to banks through FedWire. Either way, lots of new cash
will enter into the system
I suspect, however, that it won't be long before we'll
be using those old Weimar wheel barrows ourselves to
fetch our loaves of bread.
The moral? Yeah, right. What's morality got to do with
government?
Kevin O'Kane http://www.cs.uni.edu/~okane/
Osama Bin Laden killed about 3000 Americans, and destroyed two buildings.
George W Bush killed about 3000 Americans + 100,000 Iraqis, and destroyed the American economy.
Think about that.
I just don't see the previous 900 billion spent on this mess mentioned that often. Is this to sugar coat that it's now at almost 2 trillion to protect corporate cronyism?
What I really love is how each and everyone who spoke during the voting called it crap. Swimming in sewage, bleeding out - some really graphic analogies. So why didn't they vote for something that was actually constructive!
I like the Kick the Traitors out idea. Next election cycle I hope just saying 'my opponent voted for the bailout' would be enough to get someone else elected. But I'm too cynical to believe that will actually work.
I have to wonder how a government who doesn't believe in hand-outs (no free health care etc.) can possibly approve of such a large bail-out to Wall Street of all organizations -- the place that is the most full of people who are usually against such things. All it does for me is prove that many of the people in Wall Street are just selfish hypocrites at the end of the day. By many of their own philosophies, if Wall Street crashes, it should be left to dye -- survival of the fittest and all that, right? Because that just as much applies to poor decisions as it does to being poor. I'm all for making sure the US economy doesn't collapse, even though I don't live there and I disapprove of it's military actions, but this whole thing still strikes me as repugnant.
You're the one who's stupid. Freddie and Fannie didn't need 'more regulation'. They did exactly their job, and were not mismanaged at all.
You're essentially blaming the administration of Fort Knox for costing the government money if the price of gold goes down, and claiming they needed 'better regulation'. It is hard to see exactly what sort of 'regulation' could have helped there, except for 'stop doing your government-created purpose and do the opposite'. Yeah, if you 'regulated' them into selling home loans/gold instead of buying home loans/gold, but that is certainly not the 'regulation' that Democrats were fighting against.
Their job, of course, was somewhat stupid, but it's idiotic to think 'regulation' would have stopped them from purchasing home loans, as that was the entire point of their existence, which had the amazingly obvious and unavoidable result when those loans were reduced in value of reducing their assets.
You're about to argue they bought 'bad' loans, but they didn't. The GSEs loans are actually fine. They simply don't have enough assets to cover their promises, as their assets, aka, 'houses', decreased in value, which seems rather unlikely to be their fault. Sane banks stopped making home loans at that time, but the GSEs were required by law to keep buying home loans.
If corporations are people, aren't stockholders guilty of slavery?
Not sure how the GP got to +5, but the parent's response deserves at least as much.
Where's Jim Johnson?
Hmm.....
You also forget that groups like ACORN essentially used Jessie Jackson like tactics to threaten banks to make bad loans.
And democrats blocked regulation reforms.
Do work for the Obama campaign?
Or do you just worship him?
Slashdot: you'll not find a more wretched collection of villainy and disreputable types...
>Do you work for the Republican campaign? I only ask because such blatant cherry-picking of the facts to suit your own position is a party trademark.
Hey, I found his post insightful.. It was full of real facts.
Is that impossible? I mean if OP is right, does that make you wrong? Because it seems you're right as well.
All his facts check out. I'm sure yours do too.
Between the two of you, we can plainly see it took a bipartisan effort to F up this country. INCONCEIVABLE!
Latewire
And just how did CRA force lenders to enter in to bad contracts?
You know what? I am tired of typing the same thing over and over again and people like you ignoring the plain truth about something that is easily Wikipedia'd or Google'd. Either read my post on it or read this 2001 article laying it all out about CRA's horrors. This was a Trillion Dollar Government Shakedown of Banks, whether you want to believe it or not. I suspect you are inclined to believe what you want, not what the facts tell you (isn't that what people here say about the Intelligent Design folks?). You are entitled to your own opinion, but not your own facts, brother.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Wrong. If it was a free market, banks would look at an individual's credit history, income, house location, etc..*snip*
they went with unregulated banks in the days of yore.
the almighty free market, unfettered by regulation, produced excellent results.
The real irony is the chief culprit blamed for this is pretty much the same practice of predatory lending.
subprime vs balloon..
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And shout "la la la la la I can't hear you." That's what libs do with inconvenient truths. This Plasma guy is just going to believe what he wants to believe, not the very words of congressmen as reported by a major newspaper. Of course, making ad hominem attacks is easier than going and looking up the facts for himself. "But a conservative said it, so it can't be true." Typical lib logic.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
This crap you linked originated, pulled from thin air, from fringe right-wing astroturfing blogs.
It is nothing more than the swiftboat of 2008.
Note the corrections already being posted in response.
STOP SPREADING FUD
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source watch report on the american thinker.
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Hint: see my sig.
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
It's one of those things that urks privacy advocates, but never can they point to a specific instance where this has been abused. Surely the privacy advocates can agree that for someone to be held for 42 days without charges, they must be a flight risk and under heavy investigation.
Factcheck does a good job of spreading the blame, but they do seem to underplay the effects of Fannie and Freddie.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Time to update regulations to account for the problem and start collecting.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
You realize, of course, that you've left a lot out?
Yes, it is Saturday and I (am trying to) have a life.
You realize, of course, that the CRA did not force banks to make loans to individuals who couldn't afford them? What it did do was say that you could not refuse credit based on location or area (redlining) and instead had to base your loan evaluation on the INDIVIDUAL, and upon the individual's ability to pay. (Try reading the bill and not the Wiki.)
You realize the politics involved in the enforcement of this law? The collusion between the Clinton administration and race-baiters like Acorn and Rainbow Coalition? Read The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities to see what really went on with CRA and then tell me it was a harmless, fairly-enforced policy. PLEASE, IF YOU READ NOTHING ELSE, READ THIS ARTICLE.
You realize, of course, that the vast majority of the subprime loans that are going belly-up were made by financial institutions like CountryWide... which are not banks, and as such, WERE NOT COVERED BY THE CRA IN THE FIRST PLACE.
The CRA is but one of the problems I listed. Like Freddie and Fannie's effects on credit and the housing bubble? While the GOP attempted to reign in the FM's, Dems said "if it ain't broken, don't fix it" to.
You realize, of course, that in early 2005, the Office of Thrift Supervision (under GW Bush) implemented new rules that substantially weakened the CRA, and as such, its impact on credit markets?
Good! Of course you'll give Bush credit for this? But there was still a decade of this shit going on prior to 2005.
You realize, of course, that a good portion of our current crisis [wikipedia.org] is caused by the Gramm-Leach-Bliley Act, introduced by Senator Phil Gramm (R-TX), which in 1999 repealed part of the Glass-Steagall Act, opening up "competition" among banks, securities companies and insurance companies. Which in turn lead to our current set of mega-institutions that are so large and intertwined they can't be allowed to fail?
Wrong wrong wrong! That "deregulation" actually helped mitigate the crisis by allowing prudently managed banks like Wells Fargo to diversify their portfolios and products in other areas (like mutual funds, etc) besides home loans. Had they not been able to do so, the bailout would have been a lot bigger. Wamu was stupid, but some banks took advantage of the law. And the securities companies (already massive and trading in derivatives long before 1999) failed because of the credit swaps, not because they were "competing" with banks. It was buying the already shitty mortgages that killed them. In other words, they were very often a customer, not a competitor.
The same Phil Gramm, BTW, that was John McCain's presidential campaign co-chair and his most senior economic adviser. The same Gramm that in July explained the nation was not in a recession, stating, "We have sort of become a nation of whiners."
And Gramm was exactly right. We were not in a recession, which is two consecutive quarters of economic contraction. We didn't even have one.
And we have turned into a nation of whiners. There was a time when people did not blame the government for their bad decisions and fortunes, like taking out loans they couldn't afford, then blaming big bad lenders. A time when just about every economic, social, and educational indicator was much lower than today, yet people complained less.
Now, people just want to bitch and have government be their mommy, then bitch again when government predictably screws it up. The government shouldn't be a mommy because 1) adults should be responsible for themselves and 2) Britney Spears is more qualified for the job than Uncle Sam.
Do you work for the
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Actually, hate to nitpick, but its issues like these should help to demonstrate to people that America Is not a democracy, has never been, and was intentionally designed to not be one. America is a Democratic republic. We all choose are leaders, and assume that they will be wiser, or learn more about the needs of the country, than we can or have time to. If we were a democracy, everything we did would involve a national vote, and that would be very, very scary judging by the people that I share the highway with in the mornings..
What are we going to do tonight Brain?
If the government had simply made a decision one way or the other on the bailout. Credit was frozen while the bailout was pending, because nobody knew what the value of their assets was. An answer, one way or the other, would have fixed things. Too bad the answer was "yes".
sourcewatch says this guy follows the austrian school of economics in trying to justify anarcho-capitalist (makes reaganite policies look tame) policies.
Unfortunately, the austrian school is heterodoxical, and has no statistical basis.
Instead it's based on "self-evident axioms".
One of these axioms in wikipedia "humans take conscious actions toward chosen goals", rather ignores problems like cognitive dissonance, incomplete information, etc.
I particularly like this quote from wikipedia:
" critics of the Austrian school contend that its methods consists of post-hoc analysis and do not generate testable implications, and so fails falsifiability.[2][3]"
It's on shaky ground, having more in line with the intelligent design movement than the chicago school and related statistically based economic theory on which central banks worldwide act.
I would trust their views on the great depression as much as I trust an intelligent design textbook.
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Are you for the abolition of the Federal Reserve, Fannie Mae, Freddy Mac, the Department of Education, making abortion legal, getting the church out of the state, reducing the role of the government down to its only proper role: to uphold and protect the rights of the citizenry, and that's it?
(emphasis mine)
I am for every one of those, except the bolded one. Well, at the Federal level, even that one. But that one does not fit with the others, because it's really a debate about the definition of "citizenry". One can hold to your last ideal, that the government has that one role, and still believe abortion should be illegal (at the State level).
Any idiot can see this is just viral marketing for next summers big Hollywood circle jerk sequel cash-in, Ocean'ss 535, where Goerge Clooney and his wacky gang disguise Matt Damon as Ben Bernanke and convince everyone in congress to vote to give him 700 billion dollars. Plus its just a rip off of the superior French version, Océan cinq hunred trente cinq. Sigh. Wait till you see the fucking McDonalds happy meal collectable tie in.
The world you experience is only a close approximation of reality.
Torture camps? Check.
Oligarchy with fake elections? Check.
Getting ass kicked in Afghanistan? Check.
And now the state is nationalising corporations.
It's official, folks, the USA are the new Soviet Russia. Time to recycle all those jokes.
Corporate and government systems are full of flaws and loopholes. These allow business to expose themselves to risk well beyond their capability to mitigate.
It's the same issue in every western democracy, externalities. In this case the externalities of the financial system operating on the edge of legality providing the promise of massive returns and exposing the markets to enormous risk, creating a situation where cascade collapses are possible. They expose the taxpayer to enormous risk, whilst shielded from liability for their externalities - so a few benefit and most suffer the consequences.
They can do this because political campaigns are expensive, and they require funding from many sources. Corporations are free to fund political campaigns and candidates. Candidates will not ruin their sponsors income so you have vested interests created. Because of these vested interests the politicians are working for those who fund them, not those who vote for them, so politicians are not able to change the cycle that enforces the status quo. Ergo the system of failure reinforces itself.
In the system of corporate governance that exists (and not just in the financial sector) corporations are not liable for the damage they cause to the community. To try and bring that back into balance governments introduce regulatory frameworks that applies to various business sectors. This creates regulatory apparatus that attempts to regulate behaviour which, over time, becomes ineffectual because more loopholes are created.
Because of this status quo I doubt anyone in power will be able to fix the system properly. The trap of our government and corporate structure is a critical mass of the population must understand this issue for politicians to have the support to create a permanent legislative solution.
The corporation used to be a gift from the community with a very narrow charter, now it is all pervasive with the capacity to privatise gains and socialise losses. The externalities are seen as endemic systemic issues that manifest themselves as a stock market collapse, toxic waste, job losses, human rights violations, carbon emissions and so on.
We have seen these problems for a long time in western democracies. Until the corporate lobbying cycle is made illegal we will not be able to attract the type of problem solvers to government that are able to resolve the legislative problems in corporate governance that only allows a board to make decisions that are in the interest of shareholder value.
It's these two major flaws in the democratic system that allows it to be manipulated into corporatism, as you so appropriately describe. Resolving these flaws are central to resolving most issues in modern politics.
My ism, it's full of beliefs.
Some of the ridiculous things I've heard people suggest as alternatives to the bailout (or even people's interpretations of what the bailout actually involves) definitely have me convinced that we shouldn't be letting ourselves directly control the laws. Whether or not the bailout is the best possible answer to the situation, or even one that will do more good than harm, it's probably a better idea than 90% of Americans could come up with - my overeducated (but not in econ) self included.
Warning: Apple/Nintendo fangirl. Likes her electronics cute & cuddly. May be rabid.
You realize the politics involved in the enforcement of this law? The collusion between the Clinton administration and race-baiters like Acorn and Rainbow Coalition? Read The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities to see what really went on with CRA and then tell me it was a harmless, fairly-enforced policy. PLEASE, IF YOU READ NOTHING ELSE, READ THIS ARTICLE.
City Journal
is published by the Manhattan Institute for Policy research
The Manhattan Institute (MI) is a right-wing 501(c)(3) non-profit think tank founded in 1978 by William J. Casey, who later became President Ronald Reagan's CIA director.[1]
The CRA is but one of the problems I listed. Like Freddie and Fannie's effects on credit and the housing bubble? While the GOP attempted to reign in the FM's, Dems said "if it ain't broken, don't fix it" to.
Ah, yet another quote from the WSJ's "opinion" column, which is the print equivalent of the sean hannity show.
You realize, of course, that a good portion of our current crisis [wikipedia.org] is caused by the Gramm-Leach-Bliley Act, introduced by Senator Phil Gramm (R-TX), which in 1999 repealed part of the Glass-Steagall Act, opening up "competition" among banks, securities companies and insurance companies. Which in turn lead to our current set of mega-institutions that are so large and intertwined they can't be allowed to fail?
Wrong wrong wrong! That "deregulation" actually helped mitigate the crisis by allowing prudently managed banks like Wells Fargo to diversify their portfolios and products in other areas (like mutual funds, etc) besides home loans. Had they not been able to do so, the bailout would have been a lot bigger. Wamu was stupid, but some banks took advantage of the law.
I'm sorry, but you can keep praying.. in your dreams.. that freeing corporate agents (who are otherwise completely free of liability) from regulation will result in anything but abuse and malfeasance.
I would suggest this article by Stiglitz, a nobel winning economist (disclaimer: and, author of about 50% of the texts through which I earned my economics degree).
this article is also instructive.
No, McCain is too liberal and statist on too many issues, and too pandering for me. I am a Reagan Republican.
Read my sig, read the articles I quoted from someone else who is eminently competent, then realize you drank the cool-aid of the corporate fat-cat lobby hook, line, and sinker.
We did the "reaganomics" thing.
The first time it led to depression.
The second time it led to massive recession.
The third time it led to the greatest across-the-board consolidation (and related consumer abuse) in a century, a "jobless recovery" thanks to offshoring, and eventually our fine credit crisis.
I blame democrats for not pushing hard enough against it.
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...your not even trying anymore are you?
Make SELinux enforcing again!
For $700B we could have bought million-dollar houses for the first 700,000 SlashDot members. That would be a great investment! I dream of all the great code I could write, the philanthropy I could do, if only I had equity in a nice million-dollar house out here in Western Massachusetts.
With $700B you could give everyone in the world $100 and have a hell of a party.
I don't know... when you start trying to quantify the value of the currency in this game, it all just seems like stupid numbers. Frankly, the only thing preventing us from making the world a better place (if I may presume that is our collective aim) is will, not finances. Thanks to the structure of currency we live entirely by fiat. It may not seem like it benefits the economy to do more work for less money, but only when we put the bulk of our efforts into health, education, welfare, and taking care of those in need does it lead to anything we could call prosperity.
So I say, tighten the belt and do more in the trenches to make sure our descendants aren't as fucked up as this generation of idiot naked apes, playing nonsensical games with the currency.
-- thinkyhead software and media
"The Emergency Home Finance Act of 1970 created Freddie Mac. "
from your own source on freddie mac.
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Do you work for the Republican campaign? I only ask because such blatant cherry-picking of the facts to suit your own position is a party trademark.
No, it comes from both sides of the isle. Have a look a this.
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.
That article was written in 1999, BTW.
...what two majors did you take?
paintball
Blaming Democrats/CRA/poor people is compelling on its face but it ignores several keys points:
The crisis wouldn't have happened if banks didn't have the credit to lend or were able to externalize the risk of these subprime mortgages (and other debt). Mortgaged backed securities, credit default swaps, and collateralized debt obligations did both. If your bank can reduce the risk of default to zero by spinning off your mortgages or corporate paper into these credit derivatives, what incentive do you have to rigorously screen borrowers?
If the originating bank was on the hook for these subprime loans, this crisis would have never happened.
You think things like no-doc, Alt-A, or negatively amortorized mortgage loans would have happened if the banks were playing with their own money?
The market for these credit derivatives is and was totally unregulated and highly leveraged, which is why it went bad so fast. The market for credit default swaps alone was over $60 trillion USD in 2007, while the entire global stock market has a capitalization of $50 trillion. As an aside, this is also why $700B bailout is likely useless. It amounts to a little over 1% of the CDS market. A lot more than 1% of these things are going to go bad.
It is a tea cup full of tears in an ocean.
Overall I think you make some valid points but:
A time when just about every economic, social, and educational indicator was much lower than today, yet people complained less.
Yep, it's true. And those times were basically before liberalism and social programs that conservatives rail against. Those policies that, as you have said, raised just about every economic, social, and educational indicator. I'm sure you see what I'm getting at: the liberal social programs that conservatives seem to dislike are very highly correlated with the rise of the modern successful America that they love.
I've never heard a really coherent explanation as to why we shouldn't appreciate some of the progress enabled by these liberal policies, instead of wishing to go back to when the world was more or less socially stagnant for hundreds of years.
Cheers.
Check out the response of a couple of Democrats when i started this thread.
My understanding is that due to Bank Accounting regulations (something about fair market value), private banks have to put the current market value of the mortgage or security on the books.
If nobody else wants to buy the security/mortgage then it's value is "zero" or rather "null" and that bank can not use that security as capital which means they can not borrow or lend against it.
The government on the other hand has no such accounting rules or if they do it does not affect their primary duties... banks only exist to borrow or lend money, government - despite what it seems - is not in that business and can afford to ignore the current market value for as long as needed (until it is valuable again).
The only option to circumvent this accounting regulation (which is important as otherwise the banks could write down any value for a security - ie: legitimate fraud), would be to somehow make those securities valuable again. This would mean that they would have to be guaranteed by someone who had cash or other valuable collateral to back them up... which is the other plan that was floated by the other group in congress but which did not get enough support to even get past committee apparently.
Now a completely crazy idea would be to allow the mortgages which are at risk to be re-valued to current home prices... this would mean re-writing contracts, finding out who in the world actually owned the security at the moment and then propagating this change through all the 'packaged security' products which have been traded all over the world as currency between various investors/banks/etc. Not an easy task... and the US gov now gets to do it anyways, who knows they might end up doing it - there is legislation which passed similar to this for special cases...
A fool throws a stone into a well and a thousand sages can not remove it.
Nope. Like the national debt, it will simply be rolled over into bigger loans.
The idea that credit is not inflationary is laughable... It is ONLY non inflationary if you actually allow the bubble to deflate. If you allow the debt to consume the credit... The WHOLE point of this loan is to prevent precisely that happening...
New debt IS starting up the printing presses, but without all the hassle of paper and ink. Go take a look at exactly how the CPI figures are calculated for a good laugh about the true nature of capitalism and economic growth .
Americans are going to need an extra zero or two on their salaries in the coming years... But hey, look at the bright side, everyone gets to be a milionaire.
Deleted
FWIW - You can avoid the $100K limit by designating "pay on death" beneficiaries. If you put two POD beneficiaries on your accounts, you get $200K FDIC insurance, (one for each of them, none for you). Of course you should be sure that you really want these people to get paid should you actually die, but otherwise there is little risk.
When information is power, privacy is freedom.
Bombing the RNC is not the same as protesting it. And some ignorant dummies here modded you up. Sheeesh.
No they weren't. Don't believe me? Just try to cite an article more than 2 days after the arrests that supports your claims. Good luck.
When information is power, privacy is freedom.
You are ignorant. I'm black and I'm $30,000 in debt, and thats with the max financial aid.
Because private firms are under pressure to make money NOW..
And there is your problem. Quarterly profits is a bad for any kind of long term anything. If you want stability your going to have to look further into the future. Oh and profits with increased debt is NOT profit.
Oh yes. Your insurance!
So banks start failing. Your bank fails one Friday.
What do you do, fill out a FDIC Insurance Claim form?
Do you send it in and then they send you a check?
Does anyone know how exactly this works??
It won't matter. The economy will be in total disarray, and the president will claim in this mess he is temporarily suspending presidential term limits. The economy will continue to falter, and the next big pill we have to swallow with a gun to our heads is we have to form a union with Canada and Mexico and form a new currency, the Amero. Brilliant. It's not every lifetime you see something actually attempting world domination.
p.s. some people have some really good points through all this, but realize as soon as I see sloppy spelling or grammar I am going to assume your research and ideas are equally as sloppy. You developed an expert opinion on political macroeconomic ideals but never learned to spell? Not!
Overwhemling numbers were and still are against this travesty. That's why it failed in the House the first time around. A lot of the provisions they added were put there to sway individual votes. Unfortunately by the time November rolls around people won't vote their incumbents out in any great number. They'll be too busy talking about the November TV ratings sweeps and shoving food in their mouths. People get all outraged then they either don't vote or they just vote blindly for one of the Rebpulicrat or Democrican candidates.
No, it isn't great, but I don't think a total economic collapse would be better.
Look at it this way: Are you going to pay a 10% premium for a house anytime in the next 15 years? The point is, value appreciation will stagnate until a sufficient number of people have forgotten about this disaster.
Nerd rage is the funniest rage.
America has never been a democracy. It's a representative republic. The founding fathers defined democracy as "mob rule" and the majority were very strongly opposed to a true democracy. Are you from outside the US? Or did you just fail American History 101?
I was AVP (Assistant Vice President), some of my friends were VPs.
It is just a fancy title given in the financial industry in a vain attempt to standardize positions, this in order to make easier to compare salaries and benefits across the industry.
IANAL but write like a drunk one.
With drug traffickers running the country.
Don't put riot-based politics as a shinning example of how to do things better....
IANAL but write like a drunk one.
You would not state such nonsense if you knew what a Socialist and a Marxist is.
Very few people in Europe are taxed to the levels you mention, certainly taxes are higher, but it seems that many countries in Europe are better educated, healthier and happier than people in the US,
As for your assertions regarding terrorists and dictators, you are pulling that from your ass.
IANAL but write like a drunk one.
The "neoconservative" people responsible for this mess were outright saying that the plan is to "bankrupt the government" before they got into power. The 9/11 attack took place the day Pentagon books were being audited and found missing and unable to account for a 1 trillion USD as was beingtestified in congress. Conveniently, due to 9/11, this was forgotten. Since then, the war has cost 1.2 trillion USD, brought massive losses in human lives, cost hundreds of billions of dollars in fraud, and brought trillions in extra profits to oil companies and weapons manufacturers. Bush government enabled the easy no-securities loans to practically everyone and US banks repackaged the bad loans as AAA rated (by US Moody's) for reselling them abroad. This trick was worth a few trillion dollars. Afghan opium production is now at it's highest record ever and brings in tens of billions of dollars in profits every year. The Iraq and Afghanistan wars have brought no benefit to ordinary americans whatsoever. Only the oil companies and war companies have gained massive profits.
The world is controlled by money and the money is controlled by the criminals in CIA and this latest legislation is testament and proof to that. It saves those with money. With your money. The fools whom they rob are you. The victims are the whole world. The pinnacle example of this is the anthrax letters that used your own military bioweapons against you, by your own anti-terror bioweapons expert that CIA even arranged to investigate the same crime to cover it up. Thank god they didn't use anything more efficient.
When will americans reign in the real terrorists that are the CIA? Ever since JFK, you seem to have been run by a cabal of criminals that is robbing you blind. Can you not see? Oh wait, never mind. I'll just join the robbers...
Everyone must stop paying taxes now. At least everyone who is against this bailout.
No more taxes to the fed. No more taxes to the state. No more taxes to the city.
No more taxes. Let the system crash, it's overdue for a complete overhaul.
You can't handle the truth.
Whoa, I take it back, it looks like you're way off on the gramm-leach-biley act. The thing may have actually cushioned this collapse.
Factcheck.org article ...You know, Phil Gramm and I disagreed on a lot of things, but he can't possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence. But I can't blame [the Republicans]. This wasn't something they forced me into.
Just a random quote from the article:
Bill Clinton (Sept. 24): Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn't signed that bill.
Latewire
I know most people here WILL NOT want to hear this - but you had better start understanding this for this countries sake!
Both the House and Senate has SOLD US OUT! They BOTH passed this bailout bill - which IS bad for America! (see Ref: 2) How about all the PORK they "slid" into this thing that they haven't told us about (see Ref: 1)! We can't trust McCain, nor Obama to lead this country - they both have said they will stop the pork - but yet they both voted for a bill with LOTS of pork in it! Heck we can't even trust ANY of our Representatives or Senators! They just bent us over the provebrial barrel. Where are they going to get the money to pay for this thing? China isn't going to lend us anymore money! (See ref:3). Folks this country is BANKRUPT! The sooner we wake up and realize this the sooner we can get this country back together again.
Ref: 1
-------------
Spoonful of pork may help bitter economic pill go down
http://www.cnn.com/2008/POLITICS/10/02/bailout.pork/index.html
"Deduction of state and local sales taxes: The measure allows citizens who do not pay state income taxes to deduct the amount of sales tax they pay over a year from their federal income tax for two additional years. States that benefit include Texas, Nevada, Florida, Washington and Wyoming. The measure would cost taxpayers $3.3 billion."
-- So now they don't pay ANY tax to their state! How will the state survive? Now the states will be dependant on FEDERAL money! Not the way our founding fathers set up this country!
"A refund of excise taxes to Puerto Rico and the Virgin Islands for rum: A $13.50 per gallon excise tax is placed on rum imported into the United States. The measure extends to December 31, 2009, a refund of $13.25 per gallon tax back to Puerto Rico and the Virgin Islands, which are both U.S. territories. The refund has been in place since the early '90s. The measure would cost taxpayers $192 million."
-- Great MORE big Tax cuts!
Ref: 2
------------
Revamped economic bailout passes House
http://www.cnn.com/2008/POLITICS/10/03/house.bailout/index.html
"Provisions related to film and television productions: In order to keep movie production in the U.S., production companies would be allowed to deduct the cost of producing the films from their taxes. Rep. Diane Watson, D-California, has been one of the program's biggest supporters. The measure would cost taxpayers $478 million over 10 years."
-- Hollywood is TAX FREE! More for BIG Corporations!
$700B bailout passes - President Bush poised to quickly sign historic $700 billion plan into law.
http://www.cnn.com/2008/POLITICS/10/03/house.bailout/index.html
Ref: 3
-----------
China banks told to halt lending to US banks-SCMP
http://www.reuters.com/article/marketsNews/idUSPEK16693720080925
The Truth is a Virus!!!
Hats off to the manipulators - this will be the first installment of many.. .. but no
You would expect the American dollar to dive - but no.
You would expect interest rates to rise
You would expect 'insurers' to take a punishing hit.. but no.
Imposition of some 'levy' to pay for this like a 10% tax surcharge on shonky financial institutions who wrote bad chceques.
Reverse auction of the money - no - now why not?
The only way prices can stay there - is a big devaluation.
However nothing of the sort. Weird, USA defying what they teach in economics 101, so far.
It is an excellent example and demonstration of power and who holds it. With 8 years of military and oil companies robbing the americans blind, it is now the banking cartel's turn. You are an easy target for a criminal gang called CIA running the country. I wonder how many CIA people used those fake ID's to get those easy $450k loans with no securities, hmm....
A few simple words in an arcane regulation may be a major cause of the current financial "crisis." Removing this regulation would be simpler and cheaper than the proposed bailout.
Financial Accounting Standard 157 is a regulation imposed on businesses by the quasi-private Financial Accounting Standards Board (FAS). This rule is also incorporated into the regulations of the IRS and is further enforced by the SEC and the FDIC. FAS 157 requires businesses to mark down assets to the lowest price for which similar
assets have been sold in the market.
The jargon term for this regulation is "mark-to-market." Mark-to-market forces good securities to be valued at the same price as bad securities.
http://online.wsj.com/article/SB122186515562158671.html
It's important to understand that a security may be sold at a low price for many reasons. The firm selling the security may simply need to generate cash, and be willing to take a loss for that purpose. A security may also be sold for a low price because one or more of the mortgages behind that security is in arrears or default. But once a security is sold for a low price, something startling happens . . .
All other firms are forced to pretend that their mortgage backed securities are also worth that low price, even if none of the mortgages backing their securities are in arrears or default! This leads to a chain of catastrophic consequences . . .
Company balance sheets suddenly become unbalanced. Credit rating firms downgrade the companies that suffer this fate, resulting in margin calls, higher interest rates, and falling stock prices. Firms that were having no trouble paying their bills suddenly find themselves on the verge of bankruptcy.
This has happened repeatedly over the past few months. In the absence of "mark-to-market" it's possible that no firms would have gone bankrupt, or clamored for government funding.
Treasury Secretary Paulson and Fed Chairman Bernanke have both been asked about the "mark-to-market" problem. They have responded with jargon and gibberish. We suspect that it would be highly embarrassing for government officials to admit that a federal regulation has led to so much heartache for so many people.
House Banking Chairman Barney Frank continually claims that the current problems were caused by deregulation. He, like most politicians, have powerful incentives to always exempt the government from blame. And many CEOs have powerful incentives to remain silent about such things in order to retain access to government favors. The fact is . . .
This entire problem has been caused by government money and government regulations, from the creation of the housing bubble to the bursting of that bubble, to the current plan for a bailout.
http://www.openmarket.org/2008/09/20/700-billion-for-disastrous-financial-system-bailout/#disqus_thread
Were the politicians to come clean about this they might find their careers hanging from metaphorical lamp-posts. And so they will not come clean, but will instead hide behind jargon and gibberish and blame everyone but themselves.
Worse still, they will use their own failures to grant themselves more power.
Now, here is something truly stunning . . . The current bailout plan could have unintended consequences as a result of the mark-to-market regulation. The plan is designed to purchase securities at the lowest possible price, using various tools, including reverse auctions. But
think about what this means. Under mark-to-market all holders of similar securities will then be forced to mark down their securities to that lowest possible price, potentially driving many more firms toward bankruptcy, and into the arms of the federal bailout.
http://www.o
The Truth is a Virus!!!
http://video.google.com/videoplay?docid=7065205277695921912
on googlevideo
Also, one of McCain's financial advisors is Carly Fiorina, failed CEO and Miss Golden Parachute.
I'm voting third party (Nader).
Check out the response of a couple of Democrats when i started this thread.
The funny thing about some of those idiot morons that posted in that thread is they have no frigging clue about the history of American Political parties! The Republican party WAS a THIRD party! The original two political parties in the U.S. were the Democratic and Whig parties Now that there are bone in the ear people who think ONLY the Democrat and Republican parties are the only legitimate parties they think third parties ruin it for the two major parties. I'm sorry to say but LOOK at history you knobs! Why do you think the Whig party FAILED to the Republican party? People got tired of their Bull$h!t! Well' We as Americans are sick and tired of the Democrat and Republicans - they are one in the same - power grabbing, corporate whores who don't give a $h!t about their "constiuants" at all any more. So why the hell should we vote for them!
Everyone I meet and talk to I'm telling them the TRUTH about what is going on. I even ask them to go reserach it for themselves if they don't believe me. I'm flat out telling people vote for ANY third party - just don't vote Democrat OR Republican - not just for president but for ALL offices! If that fails we should go back to what our founding fathers did to get out of a bad government!
The Truth is a Virus!!!
The outcry is right here. Unfortunately, I think that is about it (correct me if there is more)...
For the first time in my life, I am completely ashamed to be an American. I hang my head in agony at the hypocrisy which is "Capitalism" and "Democracy". We are neither a Capitalistic, or Democratic nation, people. AMERICA IS THE WORLD-WIDE LEADER OF SOCIALISM.....we just dont call it that. I know so many people exaggerate and blow things out of proportion and such, but mark my words, Im not kidding.....THIS WAS THE NAIL IN THE COFFIN FOR ME!!!! Im gone, out, done. If im going to live in a socialistic society, Im going to live in an HONEST and OPEN socialistic society. Im going to Europe, folks. And I strongly encourage anyone who wants to have the least bit of pride in the place they live to do the same. Good-bye.
Well, I didn't know, until it came into action recently. Here's an article: Regulators seize troubled IndyMac. Basically, the government comes in a seizes the bank, and makes sure people can get their money up to the insured amount. The the FDIC sells the bank, and depending on how much they get customers may get more than the insured limit.
Here's another story: IndyMac Customers Wait For Cash, Answers
"MIT betrayed all of its basic principles."
Our political system is truly broken. Many senators and representatives received calls from their constituents with the idea to vote NO on this bill. This was an expression that this was the WRONG SOLUTION. How do our politician react? They don't change the underlying solution, but put pork on top of it (exemption from excise tax for childrens' wooden arrows??? - give me a break), and push it through. Obviously, our politicians are NOT taking this seriously, it's politics as usual. Why can't they do the hard work when times call for it?
The whole lot of them should be impeached.
The political machine is running so well that just electing someone different is not a viable way of affecting change. The election cycle is too long and gives the machine time to prop up another candidate.
CTRL-ALT-DEL
The bailout plan is a bad idea on so many levels; we should let the market work through this - there is cash on the sidelines that will come in and solve the liquidity problem if government stops changing the rules of the game. Government intervention will just delay resolution of the problems. Just Say No to the Bailout Plan
Plenty of blame to go around:
Pressured to Take More Risk, Fannie Reached a Tipping Point
SEC's 2004 Rule Let Banks Pile Up New Debt
The Roots of the Crisis
And after all the fear mongering to push the bailout plan, which caused the stock market to crater, the plan probably won't work anyway; what's happening is a natural correction to the credit bubble:
Can the bailout work? Fat chance
Are we headed for an epic bear market?
The debate over the bailout is missing the big picture - we risk destroying the credibility of our currency, and when that happens, China and other countries with trade surpluses will stop taking our debt and things will really get tough:
The Chinese have been ready to treat U.S. Treasuries as a rock-hard store of value and loan us the dollars they accumulate at a very low interest rate. But what if they start to doubt the U.S. government will repay its debt?
"We are getting closer to a tipping-point," said Benn Steil, an economist. "People are asking: can we really trust the dollar as a store of value?"
I said Republican, because they are the ones who have claimed that they support small government and fiscal responsibility, but couldn't deliver either when they mostly controlled congress for a "brief" ten years and the White House for eight. I won't waste time repeating the figures for you, but the deficit went up, government spending went up, and government grew.
If fiscal responsibility is important, why aren't the same people upset about welfare, education, and medicaid questioning our military budget?
The short answer must be that it's okay to take my money to build nuclear weapons, fighter jets, and to fund CIA operations which have no oversight. But it's not okay to take your money if I want to improve education, ensure health care for all US citizens, or make sure that our elderly receive the care that they deserve.
Regarding the current crisis, it looks like it was caused by forgetting the lessons we learned in the Great Depression. Banks and investment houses and insurers were firewalled apart for a good reason, and when Congress removed those rules in 1999, it set the stage for the credit crisis taking down the entire industry. Markets are susceptible to speculative boom and bust, which is why we have to keep regulations to ease the cycles.
Hahahaha! Of course! The "thing" would have been much, much "easier" only if thanks to Gramm-Leach-Biley all the banks merged into ONE BIG BANK, no?
Because that is the only logical outcome of all this crap you know.
Hurray for "competition"! Hurray for "free markets"!
Fascists thinly disguised as "capitalists" so crack me up.
I make it a point to re-read this book every few years.
Uncanny how things like this sound like they're taken straight out of her book.
Sickening
It's just an idea.
And We didn't bail out Lehman.
No, but we did bail out AIG, which had absolutely no regulatory reason to be in this mess at all, they insured worthless shit because they were getting good money to insure it.
Clinton administration laws put guns to bankers heads to force them to give bad loans to unqualified applicants.
And fewer than 50% of the subprime loans were made by bankers during the period that Clinton's CRA regulations were in effect. Sure, Clinton and the CRA have some blame, but the fact is that in the 90's, all sorts of companies got into the mortgage business, and none of them were regulated by the CRA, they made their mortgages of their own free will. In 2004, Bush undid the CRA regulations that Clinton had added, but that didn't stop the bankers from making more subprime loans, now did it?
You can try to blame subprime madness on Clinton for telling Fannie and Freddie to start buying subprime loans in the late 90's, but riddle me this: if everyone was making subprime mortgages just to pawn them off on Freddie and Fannie, then why the hell is there so much subprime crap floating around out there that still needs $700 billion (plus) in order to be taken care of, even after we've re-nationalized Fannie and Freddie? Why hadn't all these banks and companies gotten around to turning in those mortgages for Fannie's cash by the time the federal government had to step in?
The biggest scam would have to be the theft of gold, and its replacement by a fiat currency which has since been depreciated over 90%.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Congress often (usually?) votes against the average sentiments of the general population. I wonder how this country would have turned out as a democracy (rather than a republic).
HTML error.... reposting.
Wow you're assuming I'm a republican, so let me make this clear
You say: "[FDR] engineered the end to the depression"
I say: No he didn't
You say: The social programs established during the depression didn't [...] help the private sector recover
My reply: Exactly, that was my main point. My main point with the greenspan article was that he doesn't like deficit/inflationary spending, and thinks ANY stimulus/subsidy (or tax break, if you don't call tax breaks stimuli) using borrowed or inflated money is a bad idea. This would include --ALL-- of FDRs programs, by that logic.
You can say he helped keep the country in order with the programs until the depression blew over, I really don't want to debate that (I don't know enough about that situation to say one way or the other). However, he more than likely extended and maybe even deepened the depression with inflationary spending. At one point, he dropped, in one day, the value of Gold:Dollar by one third... Try and tell me that's good for a Gold-standard currency. If that kind of damage to the economy was okay in light of keeping a nation-wide bread riot from ensuing, that's fine, just saying: it was damaging
Latewire
So just wanted to share with you all how amazingly dumb some people are... I was in a discussion the other day (minutes after the votes were counted) and i mentioned to the guy next to me that the bill had been passed. His reply was "What bill?" After explaining what bill i was talking about, he still had no idea. He had no idea that we were in this situation. He said he was more concerned with who was winning football games. So here is the best part (saddest actually), the discussion was for an economics class and we had spent the last 3 lectures talking about the current state of the economy. I'm gonna stop here before i write something angry...lol
Actually, it precipitated it. Allowing banks to get into the investment business meant that they were suddenly a lot more interested in packaging up mortgages into securities for resale to other banks and investment firms. Which became a very profitable portion of their business.
So profitable, in fact, that they continually lowered their standards on loans in order to generate sufficient "inventory" to repackage into securities. At one point in time several banks were not even verifying income, much less checking credit scores.
Add in derivatives and credit swaps and other "can't lose" insurance schemes designed to copper their bets, and the banks couldn't lose... until they did.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
"Obama isn't about change, he's about bringing back nearly all the ideas from our beloved ex-president.....Jimmy Carter."
Would that he were.
Carter was the USA's last good President.
Remember? He was the guy who was smart enough to warn you about peak oil back in the 70s and tell you some uncomfortable truths you didn't want to hear.
But no, you had to have a B-movie actor with a cowboy swagger who liked big military budgets and deregulating the finance industry and running guns for drugs into Central America. And put it all on your tab.
You are not a brain: http://books.google.com/books?id=2oV61CeDx-YC
The laws were changed to force all banks to make risky loans to unworthy high risk borrowers.
Google Obama and Acorn. They sued banks in chicago to force them to loan.
-1 Insane Rambling
No one who has money is willing to risk it. This is the definition of a credit crisis.
http://www.accountkiller.com/removal-requested
Bickering about whether or not I meant "Democracy" to mean a literal Democracy is really beside the point here. (People constantly refer to America as a "Democracy", understanding that most of us know we don't *really* all have direct input into each and every issue that's voted on. If I more accurately said "Democratic Republic" in my original message, nothing else would have changed.....
The point is, our representatives didn't even TRY to look out for the best interests of the people! If they had, they would have demanded some research into the reasoning that $700 billion was the "right" dollar amount to solve our problems. If they had, they wouldn't have changed their votes from "no" to "yes" over such trivial additional to the bill as giving Hollywood movie producers tax credits on their production expenses, or giving makers of a special type of toy arrow a tax credit!
When trillions of dollars are invested below the "risk free" rate, something seriously wrong is going on: we may be headed toward deflation.
Housing values declining are deflationary. A serious contraction in the US will lead to massive economic damage in the third world, which will cut global demand for commodities significantly.
Then why did percentage of subprime mortgages start rising sharply in the mid 90's, take a temporary dip in 2002, and continue to rise sharply until 2005, when they started to decline? If an act passed in 2005 caused the crisis, wouldn't the data reflect the rise beginning in 2005?
No, I'm sorry, all the actual hard data involving these dangerous loans show that they started in the Clinton Administration. It's true that the CRA by itself didn't do it... banks were able to comply with CRA and stay solid. However, the decreasing of regulations and encouragement of risky loans started the housing bubble that is now popped. Gramm-Leach-Bliley was so late to the party that I don't even know if it HAD an effect. At least the numbers and graphs don't show any.
Interestingly, the first time John McCain warned Congress about Fannie Mae was in 1991, just on the very leading edge of the bubble according to the graphs.
You know what, it took me this long to realize the Gramm-etc. law you have listed under 1999. That's about in the middle of the crisis, not at the end, 2005, as I misread. Sorry about that!
On the other hand, the numbers show a temporary dip around 1999 and even Bill Clinton denies that it had anything to do with causing the current crisis. Then again, this is Bill Clinton... ^.^
The act, by the way, merely allowed commercial and investment banks to consolidate. Some of the banks which did so, including Citigroup, are not only solid but have been mitigating the crisis somewhat by buying out problem banks (Citigroup recently picked up Wachovia). Wells Fargo, Bank of America, and JPMorgan and Chase are examples of other banks who merged using that act and are holding steady. (JPMorgan Chase is another rescuer, the one who picked up Washington Mutual.)
If you're interested, check out factcheck.org for more information. Neither Republicans nor Democrats escape all the blame, but Gramm-Leach-Bliley wasn't a factor.
Bending to the will of the populace and looking out for the best interest of the populace do not always go hand in hand. You based most of your argument before on the people being against the bailout rather than providing logical arguments for why it was not best for the people.
You don't get it.
The depression involved a massive contraction in the money supply from bank failures and runs.
This had a correspondingly deflationary factor.
FDR's spending did nothing more than help alleviate this problem.
Inflation, especially following sharp deflationary spirals, is not a bad thing.
The market AND government correction of this massive bank failure took time though.
The fed seeks to maintain a small quantity of inflation at all times to grease the wheels of the economy.
Specifically.. companies can raise prices, profit in the short term, and in a properly working economy people eventually receive cost of living increases to their wages.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
To clarify a bit, 70-75% of citizens were AGAINST this bill. On the other hand, 80-90% of corporations (campaign donators) were FOR it. Still suprised it passed?
Right, I got all that. However, FDR's spending did a lot more than prevent the banks from going down.. that was only at first. After he bailed out the banks, he spent sums of money dwarfing his bailouts on work and social programs. These programs not only require inflationary spending but at a rate far exceeding the normal "organic" rate of banks borrowing money from the Fed (which they do at their leisure, at the interest rate raised and lowered to encourage loans or discourage inflation).
Force-feeding the economy money doesn't help anybody. That's why monetarists like Alan Greenspan stick to the fed inflating instead of the government inflating currency. To put it another way, building a bridge to nowhere in Alaska does nothing for anyone, and in fact hurts the economy, the taxpayers, and/or anyone who has money in a bank account they didn't want made less valuable.
Like Ron Paul always says: Government spending using inflation is just another tax on people whose assets and paychecks aren't solid like those on wallstreet. Like it or not, the real value of Wal*Mart stock has nothing to do with inflation, whereas the real value of your paycheck or your bank balance are 100% inverse to inflation.
Latewire
You need to read what i'm saying instead of railing on.
Numerous banks went BUST. The help came too late for them. The problem went on for ages before they voted hoover out.
Without those banks, the money multiplier was destroyed, the currency deflated. A large number of businesses followed those banks down the tubes because of the implosion in the money supply.
Those businesses took years to regrow. The social programs were necessary, and entirely beneficial. Social programs like the boulder dam, for instance, which created an entire, bustling metropolitan area and hydroelectric power for the western states.
I disagree with fiscal infusions in the majority of cases, but this doctrine, like everything else practical, is NOT absolute.
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The cause? No. A precipitating event? Yes.
Much like there's no single reason we invaded Iraq, the current situation is a "perfect storm" of a variety of contributing factors. Subprime mortages, reduced (or no) loan standards, mortgage and security packaging, deregulation, mega-mergers and acquisitions, NO regulation of derivative and hedge fund trading, massive leveraging by investment banks in securities trading, and on, and on...
Which is also why so many people are pointing fingers at, say, CRAs. No one wants the blame, and so they're busy playing the CYA game and attempting to redirect attention elsewhere.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
I disagree with fiscal infusions in the majority of cases, but this doctrine, like everything else practical, is NOT absolute.
Well we at least agree on that. Obviously it's good for gov't to build most roads/electric power/water supply using taxpayer funds. If they're going to get used, they're going to make it worth the price of their construction. However, I don't agree with "investing in infrastructure" when you have no money to pay for it, especially in the name of stimulus. If Gov't has the money, fine, stimulate away (Greenspan even said so of the Bush tax cut in 2002 when we had a surplus... and then wanted to repeal it when we ran out of surplus).
Yes, I get what you're saying about deflation "needing" correcting (through fiscal policy, you say). I just don't agree with government intervention to that kind of extent, because it hurts other markets and the middle class. A lot of bank failure is "market correction", like saying "hey, if you make stupid loans, you have to pay for them!" Yes, they have an effect on the money supply, but, again, government should let it work itself out. There's no evidence showing fiscal stimulus having any long term benefit since it's self-negated by inhibiting real growth.
Latewire
CROATOA
Much Madness is divinest Sense --
To a discerning Eye --
Much Sense -- the starkest Madness
Could someone please explain this to me a little better...? I don't really understand what it is saying.