Unsettled Economy & The Bailout [Archive]

Frankie's Market

September 15th, 2008, 12:18 PM

Though all on Capitol Hill share blame with all involved in the subprime mortage crisis and the New World Order (http://www.hawaiithreads.com/showthread.php?t=12729), there are a few individuals in particular (some no longer serving in their political position) who shoulder a significant amount.

Some more than others? Sure! As the following op-ed points out.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/09/ED7R12R6CA.DTL

The mortgage swaps distancing the originator of the loan from the ultimate collector were only made legal as a result of the Commodity Futures Modernization Act that former Texas Republican Sen. Phil Gramm pushed through Congress just hours before the 2000 Christmas recess. Gramm, until recently co-chair of the McCain campaign, also had co-authored the Gramm-Leach-Bliley Act that became law in 1999, with President Bill Clinton's signature. That gem, which Gramm had pushed for years with massive financial industry lobbying, destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies. Those two acts effectively ended significant regulation of the financial community, and no wonder we have witnessed an even more rapid and severe meltdown in housing values than during the Great Depression.

Not surprisingly, Gramm was rewarded for his service upon retirement as head of the Senate banking committee with a top position at the Swiss-based UBS bank, which is close to drowning in the subprime mortgage nightmare he helped create. These folks have no shame, as was evidenced when the senator's wife, Wendy, was named a director of Enron, whose roiling of the energy market had only been made possible through yet another provision of the senator's Commodity Futures Modernization Act.

While neophyte Palin can claim ignorance of such matters, that will be particularly difficult for McCain, who as a senator consistently lined up with Gramm in his deregulation crusade. Clearly McCain had not learned much from his previous involvement with the savings-and-loan debacle about the risks to consumers in unregulated banking.

Yes, this is the same Phil Gramm who called Americans who voiced their concerns about the economy as "whiners." This is the same Phil Gramm who, although fired as McCain's campaign co-chair for making that statement, is still being used by McCain as an economic advisor.

Yeah, people can vote for the GOP ticket, if they find themselves energized by supporting a hockey mom they can relate to. But as Robert Scheer pointed out, don't expect her to provide any solutions to the economic crisis we are now facing. And don't hold your breath waiting for John McCain to provide any coherent answers, either.

http://voices.washingtonpost.com/the-trail/2008/09/15/mccain_fundamentals_of_economy.html

So which is it, John? Is our economy strong, or is it at risk? If you can't even make up your damn mind, how can you provide effective leadership when it comes to being this country's economic steward?

matapule

September 15th, 2008, 12:39 PM

In regards to Lehmans, isn't this happening? they are going under with no govt bailout...

Didn't Enron go under, no bailout?

That is correct, what is your point? I specifically mentioned Freddie Mac and Fannie Mae.

LikaNui

September 15th, 2008, 01:05 PM

Just now on CNN.com:

What financial pain concerns you more?

High gas prices... 48%... 68,163

Wall Street woes... 52%... 72,423

Total Votes: 140,586

Peshkwe

September 15th, 2008, 01:47 PM

AIG is rummaging around to keep from falling down too:

http://www.forbes.com/markets/2008/09/15/aig-credit-update-markets-equity-cx_cg_0915markets18.html

Frankie's Market

September 15th, 2008, 03:38 PM

Here is the bottom line, when it comes to where the Republicans have taken the American econony is the last 8 years when they have been in power:

Inauguration Day 2001/ Now
Unemployment- 4.2%/ 6.1%
Federal Budget- $281 billion surplus/ $357 billion deficit
Federal Debt- $5.7 trillion/ $9.7 trillion
Avg. price of gas- $1.46 per gallon/ $3.84 per gallon

With institutions like Lehman Brothers, Merrill Lynch, Indy Mac, Bear Stearns, Fannie Mae, and Freddie Mac falling one after the other like dominoes,..... with the Dow taking a 500 point plunge,.... for McCain to still say, today, that "the fundamentals of this economy are strong," does he realize how close he's coming to sounding like Herbert Hoover when he said, "the economy is fundamentally sound," while the country was mired in the Great Depression?

Sorry, neocons. The truth of the matter is the economy is clearly in worst shape now than before Bush and the Republicans took over. They blew it, big time. And try as he might, John McCain trying to sell himself as a candidate of change when his party has been in control for the last 8 years isn't going to work. Not when people have very real concerns about rising gas and food prices, falling property values, unemployment, and 401k's.

So I hope that McCain enjoyed whatever bounce he got out of his convention and the novelty of Sarah Palin. Sooner or later, the reality of this messed-up economy will not work in his favor.

LocalMotion

September 15th, 2008, 06:32 PM

That is correct, what is your point? I specifically mentioned Freddie Mac and Fannie Mae.

My point is (first this thread was about Lehmans) most of these companies have not been bailed out and have done the fiscally responsible thing in letting them go under.

Freddie/Fannie, is a whole different thing and the last resort for that situation was a bailout.

They're not just going around bailing out all the companies that are running their businesses badly.

I'm not writing in a condescending tone, so please don't take it that way. i'm just discussing

Amati

September 15th, 2008, 07:53 PM

Sometimes, things have to get worse - and it appears they may get much worse - before they can get better. Time to hunker down, be fiscally conservative, and get by on just the necessities.

As far as who is responsiblle,........we all are.

Your comment # one is right on.

Your comment # two, I beg to differ. I am not responsible. I work. I pay my taxes. My family is my number one concern (children's education & health, etc). I don't overspend then declare bankruptcy, I pay my bills. I vote. I don't steal or lie or have deceptive business practices.

I am not responsibible for the idotic leadership (or lack thereof) that has landed us all in this mess. Myself, and alot of other hard working people and families, have done our part. Leadership is at fault.

escondido100

September 15th, 2008, 08:00 PM

Frankie's Market

September 15th, 2008, 08:25 PM

i have no sympathy for the big wig investors who gamble like drunken sailors with other peoples money and have a history of winning big...making billions on risky deals......treat our economy like a casino and when things go south come crying for a bailout.

Crying for a bailout? I don't know what Lehman Brothers CEO Dick Fuld has been saying to the media, but if you saw him crying, that's a pool of crocodile tears he's shedding.

For all the money his company has been bleeding, it sure hasn't led to him missing any meals lately. Over the last 5 years, he's earned over $350 million and was ranked #11 on Forbes' list of the top paid executives.

http://www.forbes.com/lists/2008/12/lead_bestbosses08_Richard-S-Fuld-Jr_A9P0.html

I heard people grumbling about Dick Fuld not deserving any kind of golden parachute for this latest meltdown on Wall Street. I say, forget about that! The feds should investigate this guy to see if he was dumping any stock, a la Enron CEO Ken Lay. And if so, throw that bum in the slamma.

cyleet99

September 15th, 2008, 08:34 PM

I hate looking at my retirement accounts. Guess I will have to rely on the nonexistent Social Security!:mad:

Amati

September 15th, 2008, 08:50 PM

I just heard a descriptive quote on the radio, "They built a house of cards based on greed". Yes, that seems to about say it all, folks.

TuNnL

September 15th, 2008, 09:05 PM

I am not responsibible for the idotic leadership (or lack thereof) that has landed us all in this mess. Myself, and alot of other hard working people and families, have done our part. Leadership is at fault.Apparently you missed a key point in matapule’s dialogue:
The US got what it voted for last time.
So you see, Amati, the American people should live as responsibly as you have. But that does not forgive them (including you) the critical civic duty of electing leaders who will not lead us, as Joe Biden so eloquently (http://www.youtube.com/watch?v=v1op8vwF5UA) puts it, “off a cliff.”

I would submit that voting is the bare minimum in that process. Educating yourself on the issues, donating time and money to candidates, running for office yourself, and ultimately, standing together in armed revolt against your government when it becomes so powerful and oppressive as to contradict the very principles our country was founded on. Geez, I feel like I gave this speech already. :rolleyes:

Amati

September 15th, 2008, 09:22 PM

But that does not forgive them (including you) the critical civic duty of electing leaders who will not lead us, as Joe Biden so eloquently (http://www.youtube.com/watch?v=v1op8vwF5UA) puts it, “off a cliff.”
Not EVERONE voted for the current leaders. And, there is little defense that can be put up when suprised by liers and cheats (in politics and business). OK,OK, so none of us should be "suprised" by those actions by politicians. Sadly so.

matapule

September 15th, 2008, 11:55 PM

They're not just going around bailing out all the companies that are running their businesses badly.

I don't intend to give a comprehensive discourse on Federal bailouts since I am not that well versed. However, the Federal Reserve bailout of Bear Stearns comes to mind. There has been talk of the Federal government coming to the aid of the US auto industry. No, the government is not going around bailing out all the companies, just some. I wonder how they get on that lucky list? We, the taxpayers via the Federal government, should not be bailing out one company.

And then there is the "Economic Stimulus" rebate. I lump that under bailouts. You may wish to disagree with my terminology, but it is a governement subsidy, that the US taxpayer cannot afford. Not only is the government bailing out SOME that are running their businesses badly,......The Federal Governement is one of those SAME businesses that is being run badly!

matapule

September 16th, 2008, 12:15 AM

Your comment # two, I beg to differ. I am not responsible. I work. I pay my taxes. My family is my number one concern (children's education & health, etc). I don't overspend then declare bankruptcy, I pay my bills. I vote. I don't steal or lie or have deceptive business practices.

I am not responsibible for the idotic leadership (or lack thereof) that has landed us all in this mess. Myself, and alot of other hard working people and families, have done our part. Leadership is at fault.

When I said "we" it was in the collective sense, not the specific sense.

But, how many of us canvassed neighborhoods, contributed money, demonstrated to protest "W"s second run for office? Maybe you did, but I didn't. Therefore, I am responsible for the last 8 years (even though I didn't vote for him) and perhaps you are too.

And how many of us refused the "Economic Stimulus" rebate check? This is a tax rebate the country can't afford. Even Allen Greenspan says the government can't have tax cuts without corresponding cuts in spending and programs. Yet WE (the collective we) stand in line to accept the handout (maybe you could even call it a bailout).

Despite the fact that most people work, pay their taxes, don't overspend then declare bankruptcy, pay their bills, vote, don't steal or lie or have deceptive business practices; WE are responsibible for the idotic leadership (or lack thereof) that has landed us all in this mess. WE, and alot of other hard working people and families, have not done our part. WE allow the idiotic leadership to be elected. It appears that in most polls WE are about to let that happen again. When will WE have had enough? When will WE put a stop to this?

Yes, WE are responsible.

matapule

September 16th, 2008, 12:36 AM

i have no sympathy for the big wig investors who gamble like drunken sailors with other peoples money and have a history of winning big...making billions on risky deals......treat our economy like a casino and when things go south come crying for a bailout.........if your gonna play you may have to pay........warren buffet wil get richer...the mom and pop investor will get screwed.

And therein lies the problem. People are going to lose a lot of their retirement 401K money. It happened in the late 90's with the "Dot Com" meltdown and it is happening again.

Retirement investors need to be more savvy with where and how their retirement money is invested. The probelm is, WE (the collective we) just aren't that knowledgeable about investing. So, as opposed as I am to government intervention, it appears necessary to have governement regulation of retirement fund investments.

In my opinion, 401K funds should only be invested in a total stock index fund like the Wilshire 5000 (or something similar). This is very conservative investing, but also relatively safe. No you aren't going to strike it rich in the Wilshire 5000 in the short term. But if you are going to try to be greedy by investing in a "high risk" 401K fund, you stand the chance of losing a good portion of your retirement investment. Fiscal conservatism is the way to a comfortable retirement.

matapule

September 16th, 2008, 12:44 AM

I would submit that voting is the bare minimum in that process. Educating yourself on the issues, donating time and money to candidates, running for office yourself, and ultimately, standing together in armed revolt against your government when it becomes so powerful and oppressive as to contradict the very principles our country was founded on.

Alright Tunnl! Maybe you did learn something from us "old folks." I hope you run for office. I can't run, because AlohaKine says I'm too ugly. He thinks Sarah Palin would be a good leader because she is good looking. We deserve the leadership we vote for.

I haven't gotten this worked up about an election since Nixon ran for President.

matapule

September 16th, 2008, 12:46 AM

Not EVERONE voted for the current leaders.

So what did you do to prevent them from being elected... besides vote? I didn't do much of anything, that makes me responsible.

matapule

September 16th, 2008, 12:58 AM

Here is the bottom line, when it comes to where the Republicans have taken the American econony is the last 8 years when they have been in power:

Frankie, your points are well taken. So let's put our collective heads together here on HT and brainstorm a solution. There is a lot of wisdom represented by the members of HT. How can the governemnt fix the economy? WE are the government. What should be done?

I have read Obamas economic plan, I don't think it goes far enough. So Frankie and others who wish to participate, how do we fix this?

So I hope that McCain enjoyed whatever bounce he got out of his convention and the novelty of Sarah Palin. Sooner or later, the reality of this messed-up economy will not work in his favor.

My fear is that the economiic situation is going to work in McCains favor. Heartland America is going to look at the "familiar white man" to be a safe harbor during difficult economic times. And Palin will be shoved to the back burner.

Pay attention everyone!!!!! Don't be scammed by lies.

matapule

September 16th, 2008, 06:49 AM

My point is (first this thread was about Lehmans) most of these companies have not been bailed out and have done the fiscally responsible thing in letting them go under.

This morning's headline: Governement to bailout AIG. Also the Federal Reserve is going to pump 70 billion into financial institutions to kep them afloat. So much for letting them go under.

Peshkwe

September 16th, 2008, 07:10 AM

Forbs is saying something different, that it's not a bailout and that the feds are still undecided if they'll float a loan. The State of New York however is offering a partial loan if AIG can get others to join in...they have till Wednesday to get it all together, if they can't, the offer is pulled:

http://www.forbes.com/wallstreet/2008/09/16/aig-insurance-greenberg-biz-wall-cx_lm_0916aig.html

Peshkwe

September 16th, 2008, 07:27 AM

Looks like all the big money reserves are pumping in the cash:

http://afp.google.com/article/ALeqM5gZQgSYLbWXus0xkpVsbtq9l4UDjQ

'Cause they're all scared if AIG falls:

http://www.bloomberg.com/apps/news?pid=20601082&sid=aDUnyUrIfkik&refer=canada

Palama Kid

September 16th, 2008, 08:31 AM

And therein lies the problem. People are going to lose a lot of their retirement 401K money. It happened in the late 90's with the "Dot Com" meltdown and it is happening again.

Retirement investors need to be more savvy with where and how their retirement money is invested. The probelm is, WE (the collective we) just aren't that knowledgeable about investing. So, as opposed as I am to government intervention, it appears necessary to have governement regulation of retirement fund investments.

In my opinion, 401K funds should only be invested in a total stock index fund like the Wilshire 5000 (or something similar). This is very conservative investing, but also relatively safe. No you aren't going to strike it rich in the Wilshire 5000 in the short term. But if you are going to try to be greedy by investing in a "high risk" 401K fund, you stand the chance of losing a good portion of your retirement investment. Fiscal conservatism is the way to a comfortable retirement.

You make good points.

In the early '80s, while seriously contemplating early retirement, I made a risk assessment using 1998 as my retirement date. Luckily, and I say this very seriously, LUCKILY, I was not risk averse. Plus, being in my mid-30s, I realized I had time on my side.

Yes, I read some books to learn about risk & time. I had to get smarter. Truss me: Reading those books helped. A lot of good info - on a lot of financial subjects.

Oh, I've made good decisions, but I also made oooh bad ones.

A good one was to remain working thru 2000; a terrible one was to refrain from going more conservative after I retired, so I rode the dot.com bust down, down, down. The sale of my rental condo allowed me to stay my course and ride the market back up. Again, lucky. Whew !!!

Needless to say, I have since gone more conservative, but still keep a movable percentage in a variety of stock funds plus my company stock. After all, at the present interest rates, I will lose to the rising costs of living. My pension doesn't have a COLA.

My advice? Assess your risk aversion & adjust your investments accordingly; and very importantly, do consider your time horizon. In my experience, down markets don't stay down; up markets don't stay up. DO NOT PANIC.

Frankie's Market

September 16th, 2008, 11:43 AM

My fear is that the economiic situation is going to work in McCains favor. Heartland America is going to look at the "familiar white man" to be a safe harbor during difficult economic times. And Palin will be shoved to the back burner.

IOW, you think that people will vote based on ignorance and fear.

Thankfully, your view does not correspond with the latest polling data. Even though McCain has gotten a significant boost from his convention and has statistically tied with Obama in most of the major daily tracking polls, Obama still has a lead when people are asked who do they think will do a better job in handling the economy. (Conversely, McCain continues to lead when the same people are asked who they think will do a better job when it comes to national security.) It's looking more and more like this election will be one that is ultimately decided by people's pocketbooks.

I will say this. No way did McCain's Herbert Hooveresque statements yesterday help him to close the economy gap against Obama, and in the next set of polling data, it may even widen to McCain's detriment.

But I don't think any major shift will occur until the first presidential debate takes place next week Friday. Supposedly, this first debate is to focus on foreign policy and national security. But with all the chaos happening on Wall Street, it wouldn't be surprising if the moderator decides to emphasize the economy instead.

Leo Lakio

September 16th, 2008, 11:52 AM

Supposedly, this first debate is to focus on foreign policy and national security. But with all the chaos happening on Wall Street, it wouldn't be surprising if the moderator decides to emphasize the economy instead.Especially since the two highlighted items are closely linked.

matapule

September 16th, 2008, 02:09 PM

Especially since the two highlighted items are closely linked.

Leo I think you are spot on. Al Quaida is playing this very smart. They have our economy tied up in knots with fighting "wars" we cannot win. They have an American society that lives in constant fear and is willing to mortgage its future to make it risk free. Our economy IS our national security!

Are we a "great" society that has failed to adapt and change? Is the American society doomed? From Wikipedia: Jared Diamond (http://en.wikipedia.org/wiki/Jared_Diamond) in his recent book "Collapse: How Societies Choose to Fail or Succeed (http://en.wikipedia.org/wiki/Collapse_(book))" suggests five major reasons for the collapse of 41 studied cultures.

Environmental damage, such as deforestation (http://en.wikipedia.org/wiki/Deforestation) and soil erosion (http://en.wikipedia.org/wiki/Soil_erosion)
Climate change (http://en.wikipedia.org/wiki/Climate_change)
Dependence upon long-distance trade (http://en.wikipedia.org/wiki/International_trade) for needed resources
Increasing levels of internal and external violence, such as war or invasion
Societal responses to internal and environmental problems

Are we next?

Leo Lakio

September 16th, 2008, 02:42 PM

Leo I think you are spot on. Al Quaida is playing this very smart. They have our economy tied up in knots with fighting "wars" we cannot win. They have an American society that lives in constant fear and is willing to mortgage its future to make it risk free. Our economy IS our national security!Bankrupting the U.S. has long been one of Osama Bin Laden's publicly stated goals.

Frankie's Market

September 16th, 2008, 02:50 PM

And how many of us refused the "Economic Stimulus" rebate check? This is a tax rebate the country can't afford. Even Allen Greenspan says the government can't have tax cuts without corresponding cuts in spending and programs. Yet WE (the collective we) stand in line to accept the handout (maybe you could even call it a bailout).

Why pick on the IRS stimulus package? That cost about a $150 billion dollars in total? How many times more money has our govt. spent in Iraq and Afghanistan the six years? You tell me that.

At least the IRS stiumulus payments result in money being spent and kept here at home, helping domestic businesses. If you ask me, that is a far better way to help our economy instead of sending those same dollars abroad.

matapule

September 16th, 2008, 03:25 PM

Why pick on the IRS stimulus package? That cost about a $150 billion dollars in total? How many times more money has our govt. spent in Iraq and Afghanistan the six years? You tell me that.

If you read through the thread, my response was to the statement, "It's not my fault." To answer your question, the military incursions in several places around the world have been multiple times more expensive than the IRS package.

The Economic Stimulus package is only one example that directly affected the average US taxpayer, that we could have done without. WE are responsible. WE are at fault.

TuNnL

September 16th, 2008, 03:39 PM

Even though McCain has gotten a significant boost from his convention and has statistically tied with Obama in most of the major daily tracking polls, Obama still has a lead when people are asked who do they think will do a better job in handling the economy. (Conversely, McCain continues to lead when the same people are asked who they think will do a better job when it comes to national security.) It's looking more and more like this election will be one that is ultimately decided by people's pocketbooks.I think you’re reaching again. There’s a lot of people who are racist, pure and simple and are voting for McCain solely because he is white. All you have to do is look at the comments on “makeshift messageboards” attached to newspaper websites and on youtube. We on HT are actually the few intelligent ones. There’s a whole lot of stupid people in America. (Just look at who we re-elected in 2004!) And who can blame them? They’re a product of our failing, outdated, industrial-era public school system.

But I don't think any major shift will occur until the first presidential debate takes place next week Friday. Supposedly, this first debate is to focus on foreign policy and national security. But with all the chaos happening on Wall Street, it wouldn't be surprising if the moderator decides to emphasize the economy instead.Agreed. Simpleminded or intellectual, the majority want to hear the candidates debate the issues. Hopefully, the moderator and panelists don’t toss softballs. :p

Peshkwe

September 16th, 2008, 05:40 PM

AIG is gonna get $85 billion loan from the fed reserve:

http://www.forbes.com/topstories/2008/09/16/aig-fed-bailout-markets-equity-cx_mm_0916markets50.html

The Fed, apparently unable to convince private-sector companies to provide the cash, did the deal itself. That raises the question of whether the financial-services industry really felt that AIG's demise would have been catastrophic. The only alternative explanation would be that Wall Street won a game of chicken with the Fed, forcing it to rescue a private-sector company and setting a precedent that likely will be difficult to live down.

Time to stuff your money in the mattress.

tutusue

September 16th, 2008, 05:53 PM

[...]
Time to stuff your money in the mattress.
And hope your house isn't robbed or doesn't catch fire! :eek:

Peshkwe

September 16th, 2008, 06:08 PM

And hope your house isn't robbed or doesn't catch fire! :eek:

Mason jar or coffee can buried in the back yard then? Hmm....wonder if I can find a coal heater for this winter.

tutusue

September 16th, 2008, 06:16 PM

Mason jar or coffee can buried in the back yard then? Hmm....wonder if I can find a coal heater for this winter.
I don't have a back yard...front or side either! That's one of the many reasons I like condo living 'cept there's no place to bury anything of importance!

Frankie's Market

September 16th, 2008, 08:16 PM

I think you’re reaching again. There’s a lot of people who are racist, pure and simple and are voting for McCain solely because he is white. All you have to do is look at the comments on “makeshift messageboards” attached to newspaper websites and on youtube. We on HT are actually the few intelligent ones.

I think your last statement is a bit of a reach, but whatever. :rolleyes:

I never said that racism was not a factor. Of course, there will always be bigots who will never vote for an African-American, no matter what. Just as there are those who will never vote for a woman, no matter what.

But the diehard racists/sexists are getting smaller in number. Forty years ago, you would never have had the situation we have now, where one major party has a Black man, and the other has a woman. Believe it or not, attitudes in this country are slowly changing.

There’s a whole lot of stupid people in America. (Just look at who we re-elected in 2004!) And who can blame them? They’re a product of our failing, outdated, industrial-era public school system.

Blaming the public school system for what? For some people being racists? To me, that's behavior learned in the home.

If it's their voting habits,....then I think that's a silly observation. Voters have made bad choices in elections throughout history, not just in 2004. :rolleyes:

And something to think about. If quality/level of education would have made someone more likely to have voted Democrat in 2004, then you might want to take a gander at exit polling data from that year. The results may not match up to your preconceived notions.

According to CNN's exit poll, those voters who did not complete high school voted for Kerry, 50-49%. If they graduated from high school, they voted for Bush, 52-47%. If they were college educated, they voted for Bush, 54-46%. ;)

TuNnL

September 16th, 2008, 09:25 PM

Believe it or not, attitudes in this country are slowly changing.We'll see. ;)

Voters have made bad choices in elections throughout history, not just in 2004.Yes, but if you had read my post carefully, you would have seen the word re-elect. Click here (http://www.youtube.com/watch?v=eKgPY1adc0A), for further clarification. :rolleyes:

According to CNN's exit poll, those voters who did not complete high school voted for Kerry, 50-49%. If they graduated from high school, they voted for Bush, 52-47%. If they were college educated, they voted for Bush, 54-46%. ;)I’m not surprised you would interpret it that way. Am I the only one besides Leo Lakio who’s not a blind partisan on this board? I think you are the one with the preconceived notion. My remarks had nothing to do with the general election candidates and everything to do with leadership. I was referring to Mr. Smackdown, Wesley Clark (http://www.youtube.com/watch?v=awXaGp-KLNI), IMHO the only American general who has won a war since World War II. He should have been elected president in 2004.

timkona

September 16th, 2008, 10:10 PM

<< not a blind partisan >>

Frankie's Market

September 16th, 2008, 11:17 PM

Yes, but if you had read my post carefully, you would have seen the word re-elect.

Ulysses S. Grant was re-elected President, despite numerous embarrassing scandals that plagued his administration. Franklin Delano Roosevelt was re-elected to a fourth term, despite looking visibly ill and underweight while campaigning. While FDR was a great president through his first three terms, his brief fourth term is mostly remembered for his less-than-sharp negotiations with Joseph Stalin at the Yalta Conference.

I’m not surprised you would interpret it that way. Am I the only one besides Leo Lakio who’s not a blind partisan on this board?

Of course. You would declare yourself the very epitome of objectivity. How could it be otherwise? :rolleyes:

I think you are the one with the preconceived notion. My remarks had nothing to do with the general election candidates and everything to do with leadership. I was referring to Mr. Smackdown, Wesley Clark (http://www.youtube.com/watch?v=awXaGp-KLNI), IMHO the only American general who has won a war since World War II. He should have been elected president in 2004.

Wesley Clark. Oh, silly me. How could I have missed what should have been so obvious. Lesse, what did he accomplish in the 2004 Presidential race? Winner of a grand total of one Democratic primary. Dropped out of the running before that year's Super Tuesday. Yep, sounds like the kind of exploits that will be hailed in historical textbooks for the next couple of generations. :rolleyes:

Tiabla

September 16th, 2008, 11:27 PM

Check bankrate.com for the Safe and Sound Ratings of your bank (http://www.bankrate.com/brm/safesound/showbanks.asp?zip=96&insttype=0&which=2).

Locally, it looks like BOH and First Hawaiian are solid, while Central Pacific Bank has the worst rating...

matapule

September 17th, 2008, 08:21 AM

Forbs is saying something different, that it's not a bailout and that the feds are still undecided if they'll float a loan.

It's now official, the government IS bailing out AIG to the tune of $85B. This just opens the door to other private institutions going to the government with their hand out.

After years and years of fighting for deregulation, McCain is now saying this morning that he favors some sort of regulation for financial institutions.

McCain is also backtracking on his "economy is fundamentally strong" statement. That didn't play well. He is now saying the economy is in crisis.

salmoned

September 17th, 2008, 09:21 AM

Why pick on the IRS stimulus package? That cost about a $150 billion dollars in total? How many times more money has our govt. spent in Iraq and Afghanistan the six years? You tell me that.

At least the IRS stiumulus payments result in money being spent and kept here at home, helping domestic businesses. If you ask me, that is a far better way to help our economy instead of sending those same dollars abroad.

Oops, thousands of stimulus checks went to PI (including my wife's)...

Frankie's Market

September 17th, 2008, 10:29 AM

After years and years of fighting for deregulation, McCain is now saying this morning that he favors some sort of regulation for financial institutions.

Michael Kinsley once said that a gaffe is basically when a politician blurts out the truth. McCain did just that when he said he did not understand the economy as well as he should. All this stuff about fighting for deregulation was McCain parroting his economic gurus, Alan Greenspan and Phil Gramm. And while there is a lot of blame to be spread around over this latest Black Monday, those two gentleman each deserve a lion's share.

McCain is also backtracking on his "economy is fundamentally strong" statement. That didn't play well. He is now saying the economy is in crisis.

McCain has no clue to fix this crisis. His two aforementioned economic gurus have now been discredited and exposed for the charlatans that they are. Who does he turn to now?

As if Monday's gaffe (saying the fundamentals of the economy are still strong) wasn't bad enough, McCain compounded it yesterday by proposing to set up a 9/11 type of commission to investigate what caused the collapse. IOW, he wants to set up a group to "study" the events and to report back their findings sometime down the road. (In a couple of years, maybe?)

As I said before, McCain is absolutely clueless on how to fix this economy. And the events of the last couple of days has apparently made this fact clear to other voters. In the latest round of daily tracking polls, Obama has either taken the lead or has narrowed McCain's lead. While they are all within the margins of error and the race is still considered to be a statistical dead heat, I still think that this could be the start of a trend that will play out in Obama and the Democrat's favor.

http://www.realclearpolitics.com/epolls/2008/latestpolls/index.html

turtlegirl

September 17th, 2008, 12:57 PM

I don't have a back yard...front or side either! That's one of the many reasons I like condo living 'cept there's no place to bury anything of importance!

Fear not, HT'ers!! You are all invited to bury your valuables in my garden! :D

Leo Lakio

September 17th, 2008, 01:12 PM

Fear not, HT'ers!! You are all invited to bury your valuables in my garden! :DEven those of us who didn't get invited to your big six-month anniversary blowout lu`au? Thanks, tg! :D

Peshkwe

September 17th, 2008, 02:18 PM

Or ya can mail all your money, jewels and other goodies to me. I'll bury em in the yard and in about 2 months it'll all be considered 'cold cash'. :D

matapule

September 17th, 2008, 03:49 PM

Call me stupid (it wouldn't be the first time), but I am about ready to dump some money into a total stock market index fund like the Wilshire 5000. I am not ready to pull the trigger yet, but I am following things very closely. I should have a clearer picture within the next week or so. The stock market is presenting some interesting possibilities. If the market dips below 10,000, watch where the smart money goes. Just for reference, the market closed today at 10,609.

If the market heads a whole lot lower, look for money to be dumped into the housing market. There are a lot of good buys out there. Not necessarily in Hawaii, which I think is still way overpriced compared to the market 5 to 8 years ago. Even though the number of sales is way down in Hawaii, people are still stubbornly holding on to their asking price for the most part.

Certainly, there is a lot of doom and gloom at this time. But these are the times of opportunity for the savvy investor. For better or worse, these are exciting times. I see the glass as half full in terms of investment opportunities.

I really don't know much about anything, I just act like I do on the Internet.

Walkoff Balk

September 17th, 2008, 07:51 PM

A simple solution would be to build a time machine and travel into the future. Then, you can go online to a Wall Street Journal website. You will have guarantee winners because you know what happened in the past to make your investments.

MyopicJoe

September 18th, 2008, 11:28 AM

I'm not keen on financials. Does this amount to bail out (http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/09/18/financial/f073000D32.DTL&tsp=1)?

Peshkwe

September 18th, 2008, 11:44 AM

I think it does.

http://www.marketwatch.com/News/Story/Story.aspx?guid={BDABD1B6-8FCB-40A9-BD70-4E20692DB777}&siteid=mktw

Commercial banks, investment banks and American International Group had borrowed a total of $121.2 billion from the Federal Reserve as of Wednesday, the Fed reported Thursday.

matapule

September 18th, 2008, 12:42 PM

I just saw an interesting explanation of what happened to AIG on CNN International.

1. Lehman goes under and guess who is the largest investor in Lehman? Right AIG. So AIG is suddenly in a world of hurt.

2. AIG owns a subsidiary that is the largest lessor of commercial aircraft in the world. The subsidiary is the primary financier of aircraft to the commercial airlines.

3. Since AIG's assets are now in trouble because of Lehman, their subsidiary has to cut back (maybe even stop) on airplane orders from Boeing and Airbus

4. Commercial airlines cannot purchase new planes

5. Boeing and Airbus cannot build new planes

(do you see where this is going?)

6. Airlines have to cut flights, raise prices, and layoff personnel

7. Boeing and Airbus have to layoff personnel

8. The US and World economy goes even deeper into recession

So the answer is that the US taxpayer (through the governement) steps in and loans $85B to AIG. The US taxpayer is now the largest stockholder in AIG. The US taxpayer is now assuming the risk for the mismanagement at Lehman, AIG, and the Bush Administration. We are now on the hook for $85B.

AIG should never have become (in effect) an investment banker for Lehmans. They are an insurance company not an investment banker. Unfortunately Bush, McCain, and the Republican party is opposed to governement regulation of any industry. When there is no regulation, big business will take risks that are not prudent. Why not? The taxpayer will just bail us out when (not if) we go under.

It is like playing a football game with no referees.

Leo Lakio

September 18th, 2008, 01:03 PM

I am not that well versed.I really don't know much about anything, I just act like I do on the Internet.I think you understand better than you realize, when you say this:It is like playing a football game with no referees.

MyopicJoe

September 18th, 2008, 02:18 PM

I just saw an interesting explanation of what happened to AIG on CNN International.

Thanks for laying things out, Matapule. Always good to know how things are connected. Oh what interesting times we're living in.

Vanguard

September 19th, 2008, 03:54 PM

The party's over (http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=75638) by Pat Buchanan

timkona

September 19th, 2008, 04:07 PM

At least Buchanan is finally listening to me. I been saying for years what a bunch of dingalings are the baby boomers. He describes them as "oblivious and self-indulgent". How true.

Frankie's Market

September 19th, 2008, 07:45 PM

At least Buchanan is finally listening to me. I been saying for years what a bunch of dingalings are the baby boomers. He describes them as "oblivious and self-indulgent". How true.

How true,.... if you're a true believer of Pat Buchanan's slanted view of history. His article reads like a sorry attempt at revisionism in order to evade his generation's contributions to the economic mess we currently find ourselves in.

Buchanan's flowery words cannot hide the fact that it was during the presidency of Richard Nixon that the federal government started upon a 28 year uninterrupted string of deficit spending. A streak that wasn't broken until the presidency of Bill Clinton (a baby boomer liberal) in 1998.

It was also during the Nixon administration (of which Buchanan was a part of) that the US Treasury's gold window was closed. Of course, Nixon and his advisors never dreamed that this act would sow the seeds for a massive and crippling trade deficit, as they thought (rather arrogantly) that our manufacturing dominance would last indefinitely. They figured that the rest of the world would continually come a knockin' on our doors to buy our cars, toys, and washing machines and they would be happy to purchase them with US dollars, even though it no longer had any gold backing. Oh, how the times have changed!

Now lesse. What were the baby boomers doing in 1970-71 when all this was happening? Still going to college or just starting their professional careers. None of them were in Congress or holding any major positions in the Nixon administration. The truth that Buchanan cannot face up to is that these disastrous policies took root way before the baby boomers began operating the levers in the federal government. Nixon was a member of the so-called Greatest Generation. Buchanan and his age peers were a part of the Silent Generation. They were the ones who were leading our country during this critical time.

Buchanan's article is depressing. Not surprising since he provides no answers (either in his articles or his TV commentary) and sounds like a tired old man who has run out of ideas.

But enough with the blame game. What will we do to get ourselves out from the economic turmoil that we find ourselves in? Hopefully, some answers will be provided in next Friday's debate. And the candidate who provides the most convincing responses will, I think, becomes the next President.

MyopicJoe

September 20th, 2008, 10:45 AM

Interesting read (http://bigpicture.typepad.com/comments/2008/09/regulatory-exem.html) on the bank meltdowns.

Satow interviews the above quoted former SEC director, and he spits out the blunt truth: The current excess leverage now unwinding was the result of a purposeful SEC exemption given to five firms.

You read that right -- the events of the past year are not a mere accident, but are the results of a conscious and willful SEC decision to allow these firms to legally violate existing net capital rules that, in the past 30 years, had limited broker dealers debt-to-net capital ratio to 12-to-1.

Instead, the 2004 exemption -- given only to 5 firms -- allowed them to lever up 30 and even 40 to 1.

Who were the five that received this special exemption? You won't be surprised to learn that they were Goldman, Merrill, Lehman, Bear Stearns, and Morgan Stanley.

Now were the SEC's actions the cause of the banks failures, or were the banks doomed for some other reason? Was the SECs actions a desperate attempt to keep them afloat?

I have no clue.

Kalalau

September 21st, 2008, 05:11 AM

There is a ton of material on the net available about Senator Phil Gramm (R. Tex.)'s deregulation bill of trading back in 1999. Please check it out. It was snuck into a big funding bill late at night, it was over 260 pages long, and had been written by Wall Street lawyers, and it specifically prohibited regulatory oversight. Can you think of a legitimate reason to ban looking at the books? I can't, but maybe there is some reasonable explanation, I'd be interested to hear it.

Because of time considerations it is considered unlikely that many if any in congress ever read the bill before voting it into law. That was the legal base for the economic disaster that has unfolded. I can think of 700 billion reasons why Gramm and those Wall Street lawyers should all go to prison and do the hardest, harshest, longest sentences this country could possibly impose. And one overriding reason why it won't happen...there probably are still enough Democrats and Republicans in congress who voted for it who do not want to be held responsible, that no justice will ever be extracted in this crime. Gramm was the McCain economic advisor who said that the American people are a nation of "whiners" about the economy that he destroyed. Where would you like to see him do his time, and how long should his sentence be?

matapule

September 21st, 2008, 07:39 AM

And one overriding reason why it won't happen...there probably are still enough Democrats and Republicans in congress who voted for it who do not want to be held responsible, that no justice will ever be extracted in this crime.

Sirens, bells, alarms, and whistles go off because you, Kalalau, nailed it!

1999? Let's see that was the Clinton administration. Did Clinton veto that bill? NO! Did Clinton's economic advisors, Paul Volcker and Robert Rubin support that bill. YES! Who are among Obama's financial advisors? Volcker and Rubin!!!!!!!!!

Did Bush and McCain continue to support that Gramm bill for 8 years? YES! Who is among McCain's financial advisors? Phil Gramm!!!!!!!!!!!

Follow the money folks! We, the tax payers, are SOOOOOOOO screwed whether McCain or Obama is elected.

Kalalau

September 21st, 2008, 07:57 AM

It was strategically inserted in a huge piece of legislation that would have been very inconvenient if not impossible to veto. Why? Why was that particular strategy employed? What party controlled Congress in 1999? Who always howled incessantly about the glory of deregulating everything? It was inserted at the last minute precisely so that it would not be read. This is an incredibly, astoundingly expensive case study/lesson in why you do not deregulate things. It should have been obvious after: California energy deregulation, airlines deregulation, S&L deregulation...

And now: why did Republicans want to privatize social security? Why would you have set the system up so the books couldn't be looked at? Thank God they didn't get ahold of the social security fund!

matapule

September 21st, 2008, 09:17 AM

It was strategically inserted in a huge piece of legislation that would have been very inconvenient if not impossible to veto.

I disagree, Bill "I didn't have sex with THAT woman, Ms Lewinsky" Clinton needs to be held accountable for his part in the current economic mess. (See I'm not as much a "homer" as some people think I am.)

And now: why did Republicans want to privatize social security?
RED FLAG! RED FLAG! RED FLAG! Don't even think about falling for this ploy. The rich get richer and the poor get poorer.

TuNnL

September 21st, 2008, 04:00 PM

We, the tax payers, are SOOOOOOOO screwed whether McCain or Obama is elected.Quoted for truth.

Frankie's Market

September 22nd, 2008, 10:30 PM

U'ilani

September 22nd, 2008, 10:59 PM

We, the tax payers, are SOOOOOOOO screwed whether McCain or Obama is elected.Finally, folks are realizing that we are totally screwed no matter who gets in. But lets look at what these 2 bozos are saying about the economy: McCain ignorantly proclaims "the fundamentals of our economy are strong;" Obama panders to the voters declaring that while Americans have been "living up to their responsibilities, Washington has not." Well, he did at least get that 2nd half correct; but Americans living up to their responsibilities?? Who's been buying houses they can't afford; putting non-essential purchases on their credit cards; and in all trying to live like the Joneses?

It's about time Washington goes after these CEOs and Board of Directors who hastened, if not outright created, their firms' economic crises; and puts some fine print on the bail-out checks to keep further mind-boggling, (http://www.telegraph.co.uk/finance/3053836/Financial-crisis-Lehman-Brothers-staffs-2.5-billion-bonus-bonanza-provokes-fury.html) irresponsible behavior from occurring and holds these fat cats feet to the fire. I remember during my college years I qualified for a Pell Grant from the government. I was limited as to how I could use the money; it had to go towards tuition and books, not for a trip to Vegas or anything else. Will our taxpayer money, or more accurately, the taxpayer money of the GenXers and beyond being given to these firms have any kind of limitations? I doubt it. We are screwed.

matapule

September 23rd, 2008, 05:50 AM

If you, in fact, have "a clearer picture" of what is going to be happening, then you have a lot more confidence than many financial gurus, like Jim Cramer (CNBC) and Ali Velshi (CNN).

Yes, FM, I made that quote a week ago. I said in a week. Yes, I now have a clearer picture. The bailout proposed by Paulson has made the market extremely volatile. Frankly, Frankie, I would be feeling better if the market had continued to fall. But this business of down 400 one day and up 400 the next is a market that is very dangerous for any investor. I will not be putting money into the market at this time.

I have some CD's coming due in a month. I have no idea what I will do with them at this time.

matapule

September 23rd, 2008, 06:14 AM

It's about time Washington goes after these CEOs and Board of Directors who hastened, if not outright created, their firms' economic crises;

The bailout proposed by Bush/Paulson is NOT in the best interests of the American taxpayer. I am totally opposed to it. The guilty, both Republicans and Democrats, go unpunished. What we need is a complete overhaul of our financial systems, a fundamental change in Administration policy and philosophy, and some "tough love" for the Ameriican consumer. What this translates to is huge increases in taxes. No more fighting wars wiith a credit card. From now on it has got to be pay as you go.

Here is a start. The proposed cost of the bailout is $700B. So pull out of Iraq immediately. That will save $200B to $400B annually.

And what the hell are we doing giving "free" money to private firms because they made bad decisions? Rewards for bad behavior? And where does this end? Now the US auto industry is talking about government financing for new tooling to be competitive. Why did they not make product adjustments as the market changed? I say let the US auto industry go under.

How much more are we willing to take?

Hang on kaumea (friends), we are about to embark on the ride of our life.

matapule

September 23rd, 2008, 09:08 AM

From the Asociated Press

"Federal Reserve Chairman Ben Bernanke bluntly warned reluctant lawmakers Tuesday they risk a recession with higher unemployment and increased home foreclosures if they fail to pass the Bush administration's $700 billion plan to bail out the financial industry. "

Maybe a recession would be good for this country right at the moment to bring it back to its senses. Why should taxpayers be responsible for bad loans made to poor risks? Maybe we need more foreclosures.

"Bernanke sketched a scenario in which neither businesses nor consumers could borrow money"

What's wrong with that? It is called.....living within your means.

"Despite expressions of unhappiness in both parties, the prospects for legislation seemed strong, with lawmakers eager to adjourn this week or next for the elections."

And do they propose we are going to pay for this? It will be repaid by much higher taxes which will lead to higher unemployment and more home foreclosures......ergo, a recession.

"Differences remained, though, including a demand from many Democrats and some Republicans to strip executives at failing financial firms of lucrative "golden parachutes" on their way out the door."

That's right! The guys who headed these companies should not be rewarded with any kind of lucrative severence package.

I'm damn mad, and I'm not going to take it anymore!

http://www.clipartof.com/images/thumbnail/1930.gif

matapule

September 23rd, 2008, 12:00 PM

Bush Treasuery Secretary, Paulson, says, "Approve bailout or risk recession." Thanks but no thanks, I am willing to risk recession.

The Bush Administration is like the little boy who cried wolf. First it was the weapons of mass destruction in Iraq to justify an invasion. Then it was the federal for Katrina victims that was squandered, now it is a mandatory taxpayer bailout for some very rich fat cats.

I always wanted to believe Bush in the past. I have been burned too many times by this man and his administration. The taxpayer will get burned if the Paulson proposal is approved. I smell a rat in the proposal:

- no legislative or judicial review or oversight or controls (It will all be in the hands of the Bush Administration)
- no sanctions against company officers
- no taxpayer equity in the companies who receive benefits
- no proposal for how this will be repaid
- no limitations on corporate salaries and bonuses
- no regulation to prevent this from happening again

Just say "NO" to the Paulson proposal.

sinjin

September 23rd, 2008, 12:27 PM

Just say "NO" to the Paulson proposal.This won't be put to a vote.

matapule

September 23rd, 2008, 12:32 PM

This won't be put to a vote.

Of course it won't! Do you think it would pass if it were? Noooooooooooo!

Kalalau

September 23rd, 2008, 04:10 PM

The FBI is sniffing around for fraud at some of the biggest players. A good enough team of accountants might be able to recover some of the money. President Clinton did not take regulators off the job, or fill the SEC with political hacks, his execution of the job was credible. It is difficult to look at Mr. Bush's administration as anything other than a criminal enterprise. Enter the RICO anti racketeering statute. Seize as much as possible from everybody who could be considered a conspirator, that might not settle the markets but it would help the balance sheet some.

turtlegirl

September 23rd, 2008, 04:13 PM

Hmmm.

$700,000,000,000 is available to be given away, right?

Well, America has about 305,186,613 people living here, based on the census results I just looked up. So if we divide that $7mil equally amongst every American man, woman, and child, we would all be due a check from the fed for $2293.68.

But wait, we don't need to pay minors anything, so that figure could reasonably be estimated at $5-6000 per adult.

Sweet!! I want mine!!

After all, those crummy investors already got their 'free money' onehundredfold.

matapule

September 23rd, 2008, 06:07 PM

So if we divide that $7mil equally amongst every American man, woman, and child, we would all be due a check from the fed for $2293.68.

The figures are about $2000 for every individual, or $6,500 per household, or I've seen about as high as $50,000 per taxpayer!!

Whatever way you slice it, the Bush Administration wants $700B to spend as they see fit with no oversight or review. How are we ever going to pay this back?

Call your Senators and Representative and tell them to vote no!

Frankie's Market

September 23rd, 2008, 07:00 PM

I've been reading some misleading information here re: what the proposed $700 billion bailout is about and its ramifications. Whether someone supports it or opposes it, everyone understandably has a different position. (Supporting the White House's plan, supporting the bailout but with adequate oversight & restriction, or totally opposed to it). But folks should make those decisions after educating themselves with accurate information. In other words, do your own research, and don't rely on other people's rhetoric or knee-jerk reactions.

Today's edition of MSNBC's Hardball featured excellent points from Jim Cramer and especially, Steven Pearlstein, the much respected Washington Post financial columnist.

http://www.msnbc.msn.com/id/21134540/vp/26858762#26858762

Note that Pearlstein and Cramer are not making excuses for the misdeeds of Wall Street. They are genuinely concerned about how the meltdown on Wall Street will likely lead to consequences on Main Street. But just how bad and far-reaching the consequences, nobody knows. That's what makes this economic crisis so scary. We're in uncharted waters here.

And don't think that only incompetent CEOs, careless investors, and overextended mortgage holders will suffer should the economy totally breakdown. Even the most dilligent and hard-working people could be hard hit by 401(k)s that go sour, closure of midsized regional banks that become cash strapped due to tightened bank-to-bank lending, and of course, increased unemployment that naturally result from a recession.

matapule

September 24th, 2008, 06:49 AM

And don't think that only incompetent CEOs, careless investors, and overextended mortgage holders will suffer should the economy totally breakdown. Even the most dilligent and hard-working people could be hard hit by 401(k)s that go sour, closure of midsized regional banks that become cash strapped due to tightened bank-to-bank lending, and of course, increased unemployment that naturally result from a recession.

Thank you for the link Frankie. Very interesting for what is said and what is not said in the Cramer/Pearlstein video. I don't disagree with what Cramer/Pearlstein said. I don't disagree either with what you have said above, but you are just parroting the Bush/Paulson scare propaganda.

Both Cramer and Pearlstein said that something has to be done. I don't think anyone is disputing that.....as far as it goes. Let's analyze what Cramer said first. He said that some mortgages are only worth 40% to 50% of their value in his opinion. He gave San Bernardino/Riverside counties in California as an example. Yet Bush/Paulson want to give the mortgage banks 100% of the value. What's the matter with that picture? Let's analyze what Pearlstein said. He said that the $700B bailout could result in a $200B loss or $200B gain to the taxpayer, nobody knows for sure. But that presumes that the US taxpayer is a shareholder in the $700B investment. That condition is not included in the Bush/Paulson plan. They also went on to say that the $700B bailout is not a guarantee that we can forestall economic disaster. We may be throwing good money after bad. So Cramer/Pearlstein are not talking about the Bush/Paulson proposal, but a variation of that proposal.

How do we pay for this $700B? Who pays? Do we just put it on our national credit card? I charge things on a credit card but I also know that I need to pay that card down to zero at the end of each month. Why would I support a credit policy by the government that I know intrinisically is bad money management? There is no such thing as "free" money.

If you watch the next in sequence video, Barney Frank talks about the bailout. He is only going to support a plan that has bi-partisan support. Right now the Republicans are the biggest opposition to the Bush/Paulson plan. Although the Democrats probably have enough votes to pass any plan they want, Frank wants bi-partisan support so that the Republicans cannot use the bailout as a partisan political argument at some time in the future. I support Frank's efforts.

I support getting the troops out of Iraq immediately. You know we can save somewhere between $200B and $400B a year by pulling our troops out. For those Americans who want to keep the troops there, let them pay $2000 per month each (or whatever it costs) to keep them there. That way it can be a completely voluntary war effort. Wouldn't it be nice if the local school district got all the money it needed to get the best teachers, the best equipment, and the best facilites, but the military had to have a bake sale every time they wanted to buy a new bomber (that doesn't work)?

I also support massive taxes on the wealthiest Americans, those who gross over $250,000 per year to pay for a significant portion of this bailout. They are the ones who profited the most, they are the ones who should pay the most.

And where are those wealthiest Americans in this crisis? Why don't they step up and do their patriotic duty and buy some of this stock that is worth 50 cents on the dollar that the taxpayer is being asked to buy? At least Warren Buffet, to his credit, stepped up yesterday and put $5B of his own money into Goldman Sachs. Where are the others? I have an aquaintance who sold his software company 5 years ago for $1B. He has so much money he can't spend it fast enough. Is he going to purchase some of this stock that is only worth 50% of its trading value? No, he said that's just throwing money away. Hmmmm, that's not a very confident attitude in an economy that made him a very wealthy man.

I believe something has to be done, but not the unmodified Bush/Paulson proposal. Let me quote a few lines from columnist Robert L. Borosage, who sums up my feelings about the bailout and what should be included better than I can articulate.

Most Americans would just as soon the Masters of the Universe were allowed to sink in their own folly. They had the party; let them clean up the mess. But, looking at sinking housing values and shaken retirement accounts, most Americans know something has to get done.
Banks and investment houses carry weapons of financial mass destruction. If nothing is done, the chances for a deep and long depression are very great.

Leaders from unions, consumer and citizen groups have weighed in, demanding strict conditions on any bailout. On Monday, Sen. Chris Dodd put forth a draft bill that called for an independent board to run the bailout, required that taxpayers get partial ownership in any firm bailed out, and mandated steps to forestall foreclosures and work out mortgages, helping to keep people in their homes. House Speaker Nancy Pelosi demands a kickstart for the real economy - extension of unemployment benefits, aid to states and localities, investment in green jobs and basic infrastructure. (But at only $50 billion, a relative pittance for the real economy compared to the sums demanded to rescue Wall Street). Rep. Barney Frank insists on limits on the compensation of executives of any firm that gets bailed out. Together, these conditions begin to make some sense out of a bad fix.
Initially, Bush and Paulson, backed by the slavish Republican leadership in Congress, resisted, calling for the bill to remain "simple and clear." Republican leaders denounced help for homeowners and Main Street as "political" and "partisan" as opposed to bailing out the Master's of the Universe which somehow is an emergency above politics.
But Paulson is a deal maker. As someone who made half a billion on Wall Street, however, he's been unbending on limits on pay for his friends, on providing taxpayers with an equity stake in the firms that are helped, and on measures to force work outs of mortgages and a freeze on foreclosures. And he'll resist any detailed measures to regulate Wall Street to insure this doesn't happen again. For all the talk of bipartisan accord, this will be a face off. Democrats will have to stare him down.
With the financial markets reeling, who will blink first? Will the Democratic leadership insist on common sense? Will Paulson be able to panic Congress into folding? Will the financial firm lobbyists now swarming the Capitol like a plague of locusts be able to rent the votes they need?
But this staggering bailout - as perilous and costly as it will be -is only a stop gap. Broader lessons need to be drawn; larger and more permanent reforms are needed. One thing should be clear: the conservative era is over. The theology of market fundamentalism has proven to be a false idol once more. As Joseph Stiglitz has argued, the collapse of Wall Street is to the market fundamentalists what the fall of the Berlin Wall was to communism. It's over. The right has proved once more that it cannot be trusted to run the government it scorns. A trillion dollar debacle in Iraq. A trillion dollar bust on Wall Street. Hundreds of billions pocketed by Big Pharma and Big Oil. It is time for a reckoning.

Peshkwe

September 24th, 2008, 08:03 AM

Something needs doing about the speculators as well. Why on earth do they allow futures speculation? Unless these people are mind readers all they're doing is jacking up the costs of things.

The bailout is going to bailing out those guys as well as the holders of legitimate stocks and accounts.

http://www.forbes.com/energy/2008/09/23/energy-oil-washington-biz-cx_wp_0923energy.html

"If speculators were forced to liquidate their positions, oil would easily be $65 to $75 per barrel by the time the liquidation was complete," said Michael Masters, the founder of Atlanta-based hedge fund Masters Capital Management. Tuesday, oil was trading at $108.74 in midday trading in New York.

In 2006, the U.S. Senate's Subcommittee for Permanent Investigations had already reported "there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices." The trouble is that so much of the trading happens in so-called "dark markets," unregulated over-the-counter electronic exchanges where trading companies buy and sell energy derivatives, that this role is hard to document.

http://en.wikipedia.org/wiki/Energy_derivative

So this winter here in cold country....

How many elders are going to be found frozen to death in their beds 'cause they can't afford the heating bills?

How many house fires and monoxide deaths are there going to be from folks trying to heat their houses with faulty space heaters?

It's gonna be a looooong winter...lucky you live Hawaii eh?

Frankie's Market

September 24th, 2008, 01:16 PM

Thank you for the link Frankie. Very interesting for what is said and what is not said in the Cramer/Pearlstein video. I don't disagree with what Cramer/Pearlstein said. I don't disagree either with what you have said above, but you are just parroting the Bush/Paulson scare propaganda.

I'm "parroting Bush/Paulson scare propaganda." Ah, the ad hominem attack. I can see where this particular line of discussion is leading, and it likely won't be a productive and meaningful one.

I'll end it here by noting,.... it's remarkable how just a week ago in this very thread, you said, "I don't intend to give a comprehensive discourse on Federal bailouts since I am not that well versed." But now, you apparently are well versed enough to better understand the full implication of what's at stake in this economic crisis over someone like Steven Pearlstein.

Remarkable.

matapule

September 24th, 2008, 02:31 PM

it's remarkable how just a week ago in this very thread, you said, "I don't intend to give a comprehensive discourse on Federal bailouts since I am not that well versed." But now, you apparently are well versed enough to better understand the full implication of what's at stake in this economic crisis

Ah, but you yourself, Frankie, said yesterday, "But folks should make those decisions after educating themselves with accurate information. In other words, do your own research, and don't rely on other people's rhetoric or knee-jerk reactions." And that is what I have done over the last week, just as you suggested yesterday. Do I understand the full implication of what's at stake? Not by a long shot. I don't know that anyone fully understands. But I understand better today than I did a week ago. I guess I'm damned if I do, damned if I don't.

over someone like Steven Pearlstein.

I clearly stated, "I don't disagree with what Cramer/Pearlstein said......Both Cramer and Pearlstein said that something has to be done. I don't think anyone is disputing that.......So Cramer/Pearlstein are not talking about the Bush/Paulson proposal, but a variation of that proposal." If in fact Pearlstein is suggesting that we adopt the Bush/Paulson proposal as is(I don't think he is), then I totally disagree with him just like Senator Obama is opposed to Bush's proposal. So, please don't spin my words. I'll take criticism for what I say, but I won't take criticism for what I didn't say.

So, if you don't like my musings, what do you suggest should be done? It is fine to criticize, but let's see what your alternative is. I asked you that a week ago, and you have yet to offer anything.

Frankie's Market

September 24th, 2008, 03:50 PM

Ah, but you yourself, Frankie, said yesterday, "But folks should make those decisions after educating themselves with accurate information. In other words, do your own research, and don't rely on other people's rhetoric or knee-jerk reactions."

Yes, that is what I said. So how does any of that come of as "parroting Bush/Paulson scare propaganda?"

As I said, it's hard to engage in productive discussions when you tar someone who happens to disagree with you as spreading propaganda.

Interesting that in your quoting of my previous post, you failed to also quote what I said one sentence earlier.

Whether someone supports it or opposes it, everyone understandably has a different position. (Supporting the White House's plan, supporting the bailout but with adequate oversight & restriction, or totally opposed to it).

Yeah, that clearly is an example of Bush/Paulson propaganda. :rolleyes:

I clearly stated, "I don't disagree with what Cramer/Pearlstein said......Both Cramer and Pearlstein said that something has to be done. I don't think anyone is disputing that.......So Cramer/Pearlstein are not talking about the Bush/Paulson proposal, but a variation of that proposal." If in fact Pearlstein is suggesting that we adopt the Bush/Paulson proposal as is(I don't think he is), then I totally disagree with him just like Senator Obama is opposed to Bush's proposal. So, please don't spin my words. I'll take criticism for what I say, but I won't take criticism for what I didn't say.

But at the same time, you have no problems painting people who holds views contrary to your own as being propaganda mouthpieces. :rolleyes:

I never once said that Paulsen should be given a $700 billion blank check to do with as he sees fit. As a matter of fact, I haven't even stated a position on whether or not the bailout should be approved, or in exactly what form it should take. A fact that has seemingly slipped right past you.

So I take great exception at your claims that I am spreading Bush propaganda. You're obviously entitled to stating your own opinions. But there's no need to label those who offer dissenting thoughts as spreading propaganda. Unless you would like this discussion to degenerate into personal attacks. If so, then go right ahead and knock yourself out. I'll have no part in it.

Peshkwe

September 24th, 2008, 04:12 PM

Wait a minute...Paulson is saying that any over site, executives losing their golden parachutes, time limits, caps...anything other than what he has laid out will be a deal breaker for the bailout.

So what's he saying then....the wall street financiers, the so called 'captains of finance', the parachute boy CEO's will say thanks but no thanks? We'll go down with our ships if we don't get cart blanche...oh by the way, y'all are coming with us!!! (cue maniacal laughter from a bad slasher flick). That they'll purposely throw the US under the bus?

What the hell?

Or....is it a massive power grab using panic as the manipulating grease with that little constitution busting section 8 in there ("Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." )

http://www.nytimes.com/2008/09/24/business/economy/24fannie.html?_r=1&hp&oref=slogin

Senator Dodd called the Treasury proposal “stunning and unprecedented in its scope and lack of detail.”

Asserting that the plan would allow Mr. Paulson to act with “absolute impunity,” Senator Dodd said, “After reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well.”

That's what I've been hearing over and over on the news...so I looked up what it might be doing to put the constitution at risk. So 'section 8' of the bailout would exempt the Secretary of the Treasury from any kind of legal or congressional action or controls.

and here is the problem with the constitution:

http://www.law.cornell.edu/constitution/constitution.articlei.html#section1

Section 9. The migration or importation of such persons as any of the states now existing shall think proper to admit, shall not be prohibited by the Congress prior to the year one thousand eight hundred and eight, but a tax or duty may be imposed on such importation, not exceeding ten dollars for each person.

The privilege of the writ of habeas corpus shall not be suspended, unless when in cases of rebellion or invasion the public safety may require it.

No bill of attainder or ex post facto Law shall be passed.

sooooo.....

like tell me......

are the CEO's gonna invade or rebel?

Edit....these bits might be a problem too:

Section 7. All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.

Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

Kinda says congress not treasurer.

matapule

September 24th, 2008, 04:27 PM

Wait a minute...Paulson is saying that any over site, executives losing their golden parachutes, time limits, caps...anything other than what he has laid out will be a deal breaker for the bailout.

Just over the Internet, Paulson is backing down on those "non-negotiable" requirements. There is bi-partisan opposition to the Bush/Paulson proposal. I think he and Bush now realize that their power grab isn't going to work.

Peshkwe

September 24th, 2008, 04:33 PM

Or they realized....oh...hey...this might actually be treasonous yanno?

matapule

September 24th, 2008, 05:09 PM

As a matter of fact, I haven't even stated a position on whether or not the bailout should be approved, or in exactly what form it should take. A fact that has seemingly slipped right past you.

So, if you don't like my musings, what do you suggest should be done? It is fine to criticize, but let's see what your alternative is. I asked you that a week ago, and you have yet to offer anything.

http://www.clipartof.com/images/thumbnail/1892.gif

Sooooooo.....would you like to share with us what you think should be done?

So I take great exception at your claims that I am spreading Bush propaganda.

Then if I have offended you, fakamolemole (forgive me). I apologize.

Frankie's Market

September 24th, 2008, 07:39 PM

http://www.clipartof.com/images/thumbnail/1892.gif

Sooooooo.....would you like to share with us what you think should be done?

With truthfulness and humility, I admit. I really don't know. My grasp of macro-economics is so limited that I wouldn't know how to solve it.

All that I do know is that something needs to be done by govt. When a giant economic bubble bursts, free market systems don't always act in a rational way and intervention is needed in order to prevent panic, whether it be mass sell-offs in the stock market, sudden runs on banks, etc. I'm all in favor of having oversight over this unprecedented bailout and with caveats that satisfy Congress. But to do nothing,... we're just repeating the same mistake of the Great Depression of 1929 and the Japanese Bubble Burst of 1990, economic crises that each lasted for a decade and resulted in consequences that affected virtually all segments of the population. It's one thing to deal with mild recessions that occur over a couple of years as a normal part of the economic cycle. That's a reality that folks have to live with and politicians can't do anything about it. But we're not dealing with a normal downturn in business here. This is much more serious.

You can say that I'm crying wolf, if you want. But consider this: the FDIC reported that 117 banks are now in trouble, which is up from 90 the quarter before. This, in combination with banks being afraid to make loans to other banks, is a potential recipe for massive failures. All banks are leveraged, to varying degrees. They don't just sit on everybody's money. If a major bank fails, it could start a domino effect, taking down other banks.

Peshkwe

September 24th, 2008, 08:02 PM

But it won't stop or change anything really 'cause even with the bailout maybe saving wallstreet, the dollar will be worth almost nothing.

It's the hedge bets and funds that'll get us next...commodities will go up and consumer spending will be withheld in order to deal with the price of food, gas and oil....winter's coming:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqtfxP6rro_8&refer=home

OPEC President Chakib Khelil said oil prices may rise as investors hedge against a depreciating U.S. dollar.

The dollar may get ``crushed'' as the cost of bailing out banks causes U.S. borrowing to balloon, John Taylor, chairman of International Foreign Exchange Concepts Inc., the world's biggest currency hedge-fund firm, said earlier this week.

We're back to the same ol same ol...no one has any money to spend for fear of not being able to survive the winter with all your toes attached.

Peshkwe

September 25th, 2008, 07:57 AM

Ok so what would happen if the bailout doesn't happen? Recession? Depression?

Some folks don't think it'll be that bad to let things take their natural course without intervention:

http://www.chicagotribune.com/news/columnists/chi-oped0925chapmansep25,0,6253846.column
Bernanke warns of a recession. But economic downturns are not to be avoided at all costs. And one good thing about recessions is that they end, usually in a matter of months. An intervention of this nature, by contrast, would have malignant consequences for decades to come.

For me I think I'd rather have it done and over quick even if it is painful for awhile rather than have it be a slow, long drawn out affair. That scares me more.

Peshkwe

September 25th, 2008, 08:06 AM

They came up with a plan (they're on the news now) all it has to do is pass the house and senate and get signed.

They haven't released any details yet though, but did say there was gonna be oversight and home owners aid of some sort.

turtlegirl

September 25th, 2008, 09:26 AM

Sooooooo.....would you like to share with us what you think should be done?

I think that all of us need to start squrreling away canned food and rice, and drinking water, and maybe a jerry can of gasoline or two. Get a bicycle. Candles, batteries, duct tape, etc...just like you would prepare for a hurricane (or just like we'd prepare for if Matson stops coming) Now. Anything you can forsee needing for the rest of the year, get it now, before the economy goes to hell in a handbasket. Especially you outer islanders. Been thinking about refurbishing your catchment system, or getting a backup generator, or solar panels, or a chicken coop? Do it now, while you can still afford it and the supplies are available.

Frankie's Market

September 26th, 2008, 04:47 AM

I really hate to say "I told you so," because this is bad news,....

Washington Mutual Inc. just collapsed, marking the all-time biggest bank failure.

http://voanews.com/english/2008-09-26-voa7.cfm

As U.S. lawmakers grappled over a $700 billion dollar bank bailout plan, one of the nation's largest banks - Washington Mutual Incorporated - collapsed under the weight of its enormous bad bets on the U.S. mortgage market. From Washington, VOA's Purnell Murdock reports on what is seen as the largest bank failure in U.S. history.

With financial markets reeling over the recent crisis on Wall Street, the collapse of Seattle-based Washington Mutual could not have come at a worse time.

Federal regulators moved quickly, seizing the troubled mortgage lender late Thursday and selling the thrift's banking assets to U.S. investment bank J.P. Morgan for nearly $2 billion.

The Federal Deposit Insurance Company (FDIC), insures Americans' bank deposits of up to $100,000. But it says because of the deal it will not have to use its assets to cover Washington Mutual's deposits.

The FDIC had already spent billions of dollars in its takeover of IndyMac, which collapsed in July. Some analysts say a Washington Mutual failure could have used up half the money in the government insurance fund.

If anyone is still under the illusion that the economic crisis is only of concern to Wall Street fat cats, they had better wake up and smell the coffee. A failure in the banking system affects everyone, not just tycoons. It's easy for the finger waggers around here to say "no bailout. Everyone should just tighten their belts, yadda yadda yadda." But if more banks fail, the FDIC won't be able to keep finding buyers. And if that happens, then guess what? Public money has to be used to pay out for all the FDIC insured funds anyway. So there's no getting around the inevitable, which is that the govt. will end up using taxpayer dollars in coping with this crisis. To think otherwise is to be in denial.

matapule

September 26th, 2008, 06:14 AM

I really hate to say "I told you so," because this is bad news,....

No, you love saying "I told you so." Let's be honest.

It's easy for the finger waggers around here to say "no bailout. And if that happens, then guess what? Public money has to be used to pay out for all the FDIC insured funds anyway. So there's no getting around the inevitable, which is that the govt. will end up using taxpayer dollars in coping with this crisis. To think otherwise is to be in denial.

That IS exactly what a significant and growing number of professional economists is suggesting SHOULD happen. Cramer is not an economist, he is a Wall Street guy and entertainer.

BTW no FDIC funds have been used at WaMu. And WaMu would have required $350B of the $700B just to fix just that one bank.

You have stated that you don't know what should happen, which is fine.

With truthfulness and humility, I admit. I really don't know. My grasp of macro-economics is so limited that I wouldn't know how to solve it.

But how can you argue for or against any proposal if your grasp of economics is limited?

Vanguard

September 26th, 2008, 07:36 AM

FDIC May Need $150 Billion Bailout as More Banks Fail (http://www.bloomberg.com/apps/news?pid=20601087&sid=amZxIbcjZISU&refer=home)

GregLee

September 26th, 2008, 10:45 AM

$700,000,000,000 is available to be given away, right?

Not exactly. It's not available, and nothing is to be given away. The money will be borrowed, and the full amount would only be spent if the bail-out plan failed. The $700B is pledged to back the value of certain securities, but the idea is to give the markets confidence in the securities' worth. For that to work, the money has to be available for their purchase, but they don't necessarily have to be purchased.

And the money will not be given away; it will be used to buy securities which have some worth and which, having purchased, the government will then own. Later they can be resold. Whether the government will lose or profit by the transactions is uncertain. It's possible that it will profit -- that is, it may make back more than the portion of the $700B that was spent.

matapule

September 26th, 2008, 12:56 PM

Not exactly. It's not available, and nothing is to be given away.

It will be "given away" in terms of purchasing securities in what are now "junk stocks" in the companies that are the brink of failure.

The money will be borrowed,

From whom? Our government is in debt, it has no money to lend.

and the full amount would only be spent if the bail-out plan failed.

If the government stepped in to save WaMu, it is estimated that would have taken $350B of the $700B. Actually some economists are estimating it is going to take closer to $1 Trillion to save all these companies.

The $700B is pledged to back the value of certain securities, but the idea is to give the markets confidence in the securities' worth. For that to work, the money has to be available for their purchase, but they don't necessarily have to be purchased.

The current plan is they will be purchased if the market doesn't step in to purchase them. There is no guarantee the free market is going to do that, so you might as well presume the $700B is spent.

But let's presume for a moment that the free market does purchase these securities. Why not purchase them if you know that if your stocks go down, the government is there to bring their value back up. It is like guaranteeing a profit for a stock investor - someone who is taking a risk, but without the risk. And the taxpayer is being asked to back this plan that will assure that stock investors don't lose money in these stocks. I don't like that picture. The taxpayer is being asked to protect stock investors and stock brokers.

And the money will not be given away; it will be used to buy securities which have some worth and which, having purchased, the government will then own.

That is still being negotiated. Bush/Paulson's proposal did not include that provision.

Later they can be resold. Whether the government will lose or profit by the transactions is uncertain. It's possible that it will profit -- that is, it may make back more than the portion of the $700B that was spent.

That is true, the taxpayer (I wish you would stop saying government, it is the taxpayer) is now being forced to play the Stock Market game whether they want to or not. The government is taking our tax dollars and "investing" them in the stock market in stocks that are currently high risk. And who is going to pay the carrying cost of that $700B.....the taxpayer.

GregLee

September 26th, 2008, 01:16 PM

"The money will be borrowed, ..."

From whom? Our government is in debt, it has no money to lend.

Our government will issue notes and guarantee to tax us to make good on the interest and, eventually the principal. The lenders will be whoever buys the notes. If you as an individual want to lend someone money, you have to first acquire the money, but governments don't need to do that, since they are in charge of the currency. I think most everyone knows that, so maybe in asking the question, you are playing dumb to make some point. But what's the point?

Frankie's Market

September 26th, 2008, 01:51 PM

No, you love saying "I told you so." Let's be honest.

I see a pattern here. First, you accuse me of spouting propaganda. And now, you say I relish being the bearer of bad news. Instead of responding to the substance of what I have to say, you resort to personal attacks. What a shame.

That IS exactly what a significant and growing number of professional economists is suggesting SHOULD happen. Cramer is not an economist, he is a Wall Street guy and entertainer.

Yet another personal attack, with no arguments of substance against any of what Cramer is saying.

BTW no FDIC funds have been used at WaMu.

Uhhhhhh yeah. Swell job of you repeating the very same thing in the article that I quoted. :rolleyes:

The Federal Deposit Insurance Company (FDIC), insures Americans' bank deposits of up to $100,000. But it says because of the deal it will not have to use its assets to cover Washington Mutual's deposits.

But how can you argue for or against any proposal if your grasp of economics is limited?

I said that my grasp of macroeconomics is limited, in the sense that if someone suddenly put me in charge of a nation's economy that is spiraling into a deep recession and I was given X number of dollars with the objective of trying to avert trouble, I wouldn't have the knowledge, expertise, and experience to know exactly where to direct that money and how much of it needs to be spent.

But while my knowledge may be limited, I'm not totally ignorant on the matter, either. I know enough that some form of govt. intervention is needed to restore public confidence in the financial system. Otherwise, we're on the precipe of a impending disaster.

Ironic that while I'm having to respond to denials that a govt. bailout is needed, yet another major bank (Wachovia) is reeling, right on the toes of WaMu's collapse.

http://money.cnn.com/news/newsfeeds/articles/djf500/200809261420DOWJONESDJONLINE000690_FORTUNE5.htm

turtlegirl

September 26th, 2008, 02:14 PM

Good job, guys!!

While you all were bickering online, I was prepping by moving my money (small amount that it is, but at least its something) and buying rice and beans, etc..

Actually, I feel awful for anyone who has large sums of money to be concerned about from the middle class. They could end up in a baaad way if they don't plan now.

Anyone remember the rice shortage of this year?

Unless you plan on eating your cash once it becomes devalued, I strongly suggest investing in your own personal needs., especially food.

Aww, forget it...just don't come by my house looking for a bowl of red beans and rice should this all go to (r@p.

Any one remember the great depression?? "Oh no, it can't happen to us, we're America!" ... cut to investors jumping out of their windows on Wall Street.

Not to play Chicken Little, but if things do go bad, it will be without enough warning, and I'll be prepared, while everyone else is waiting at the stores trying desperately to purchase whatever's leftover.

And finally, rest assured, people :rolleyes:. The Bush administration sees the end of their rule coming up just around the corner, and I believe they'll do whatever they can to line their pockets (and their 'friends' pockets), at the expense of every American citizen, because this is their last gasp, and nobody holds them accountable, anyway. They even try to ensure their unaccountability by telling us that they support plans and projects with no oversight and accountability!!

matapule

September 26th, 2008, 02:38 PM

Ironic that while I'm having to respond to denials that a govt. bailout is needed, yet another major bank (Wachovia) is reeling, right on the toes of WaMu's collapse.

And where does it all end? Who else is going to fail and need a bailout. Is $700B enough? How about $1T or $2T? Where does the bailout end?

Maybe we are staring in the face of another Stock Market crash and no amount of money can fix it.

matapule

September 26th, 2008, 02:53 PM

Our government will issue notes and guarantee to tax us to make good on the interest and, eventually the principal.

My point is that everyone needs to understand that this bailout is going to cost them money through increased taxes. This isn't free money. The taxpayer will pay with a possiblity that there may be a profit in the future. But I have no confidence that the government will give it back to the taxpayer if there is a profit. They will just find something else to spend it on.

And how will those taxes be collected? Do we go with the Republicans who traditionally have tried to move the tax burden from the wealthiest to the middle class or the Democrats who want to increase taxes on the wealthiest Americans.

The lenders will be whoever buys the notes.

How do we guarantee that there will be anyone to buy these notes? We have notes issued by a government that is seriously in debt, guaranteeing what is now junk stock. I'm not interested in buying.

If you as an individual want to lend someone money, you have to first acquire the money, but governments don't need to do that, since they are in charge of the currency.

Yes, that is right, they just print more money, which leads to inflation.

Can you give me your take an my assertion that guaranteeing these junk stocks only assures that investors who took a risk will not lose money and assure that stock brokers will continue to make money by propping up a sagging stock market.

matapule

September 26th, 2008, 02:59 PM

While you all were bickering online,

I can appreciate your frustration, TG. But the "bickering" is an important dialog that Americans should be participating. These are tough, dangerous times. I don't consider it bickering so much as "vetting" out the real issues. This is going to take patience and understanding. But I know where you're coming from.

turtlegirl

September 26th, 2008, 03:08 PM

Sigh.

For anyone interested, here is an abbreviated timeline of our great American history. (http://www.amatecon.com/gd/gdtimeline.html)

The good stuff starts in 1926, when the Revenue Act of 1926 was passed, which cut the taxes of the wealthy by two thirds. Follow it thru the Great Depression, and the years afterward.

wow, that was only 82 years ago

GregLee

September 26th, 2008, 04:35 PM

How do we guarantee that there will be anyone to buy these notes? We have notes issued by a government that is seriously in debt, guaranteeing what is now junk stock. I'm not interested in buying.

I believe treasure notes are sold at auction. The price will go as low as required to provide an incentive to buy, given the nominal interest rate. It's conceivable that investors might come to doubt the government's ability to pay its obligations, but we're nowhere near that point. US government obligations attract large amounts of investment capital from around the world, because they are safe, comparatively speaking.

Yes, that is right, they just print more money, which leads to inflation.

That's the effect.

Can you give me your take an my assertion that guaranteeing these junk stocks only assures that investors who took a risk will not lose money and assure that stock brokers will continue to make money by propping up a sagging stock market.
Those are two of the effects, though they are not the only effects.

matapule

September 29th, 2008, 09:16 AM

I think the proposed, compromise bailout plan isn't going to work. It is throwing good money after bad. Columnist David Sirota lists the top 5 reasons against the $700B bailout:

1. Bailout's inherent fiscal insanity could make problem worse.
2. Experts on both the Left and the Right say that this bailout could make problem worse.
3. There are clearly better and safer alternatives.
4. Any incumbent voting for this puts themselves at risk of being thrown out of office.
5. Corruption and sleaze are swirling around these bailouts - and Americans know it.

You can read the article in detail here (http://www.huffingtonpost.com/david-sirota/top-5-reasons-to-vote-aga_b_130068.html).

Ron Whitfield

September 29th, 2008, 10:04 AM

Nancy Pelosi helped defeat the congress' massive bailout.

I think this is a good thing and hope that a real plan can be put together to help everybody.

matapule

September 29th, 2008, 10:47 AM

I think this government proposal is not in the best interests of the American taxpayer. This whole mess still smells to high heaven. We are not ready to put this baby to rest. Let the stock market go to hell in a hand basket and yes I will be losing some of my retirement savings. But I feel I will lose even more if the plan passes in this form. We need an entirely new approach to solving the problem. I am glad Congress is having to work overtime. They helped create this mess they can work overtime to fix it.

Why are there no professional economists involved in the proposals for a solution? Why is it that there are just political hacks and Wall Street professionals who are making the proposal? I am glad this plan failed! I am damned mad and I'm not going to take it anymore!

This is what I posted on the "Unsettled Economy" thread an hour ago:

I think the proposed, compromise bailout plan isn't going to work. It is throwing good money after bad. Columnist David Sirota lists the top 5 reasons against the $700B bailout:

1. Bailout's inherent fiscal insanity could make problem worse.
2. Experts on both the Left and the Right say that this bailout could make problem worse.
3. There are clearly better and safer alternatives.
4. Any incumbent voting for this puts themselves at risk of being thrown out of office.
5. Corruption and sleaze are swirling around these bailouts - and Americans know it.

You can read the article in detail here (http://www.huffingtonpost.com/david-sirota/top-5-reasons-to-vote-aga_b_130068.html).

kani-lehua

September 29th, 2008, 10:52 AM

tutusue

September 29th, 2008, 11:07 AM

[...]
however, i'm wondering how this is going to affect our attempts in acquiring a mortgage loan for the house we are making an offer on? we prequalified for "x" amount at the end of last month which could mean that we do not qualify for that amount today? our offer is being presented to the seller today...we'll see what happens.[...]
Kani...hopefully your offer is contingent upon obtaining financing or that you have another contingency to fall back on should you be unable to get financing.

Random

September 29th, 2008, 11:07 AM

most definitely ron and matapule.

however, i'm wondering how this is going to affect our attempts in acquiring a mortgage loan for the house we are making an offer on? we prequalified for "x" amount at the end of last month which could mean that we do not qualify for that amount today? our offer is being presented to the seller today...we'll see what happens.
Just don't hold your breath.

I wonder if what Nancy said in her speech was deliberate, or could those angry Republicans set aside their party loyalty and do what's right for our economy.

I ask again, shall we let the market sort itself out, and if so, when we will see the light at the end of the tunnel, before and after the Second Depression? How long do we hold out?

How does the global markets sees our American dollar? Weak and unchanged, ergo lacking confidence? Getting worse, also lacking confidence? Or a chance to become strong again?

I hear small businesses are affected by this because they cannot get banks and financial institutions to approve/renew a line of credit or loan.

kani-lehua

September 29th, 2008, 11:14 AM

Kani...hopefully your offer is contingent upon obtaining financing or that you have another contingency to fall back on should you be unable to get financing.

thank you. yes it is.

matapule

September 29th, 2008, 11:17 AM

however, i'm wondering how this is going to affect our attempts in acquiring a mortgage loan for the house we are making an offer on? we prequalified for "x" amount at the end of last month which could mean that we do not qualify for that amount today? our offer is being presented to the seller today...we'll see what happens.

You ask a good question and I don't have an answer. I understand that if a bailout package is not passed, credit will dry up across the board. In other words people are going to have to pay cash for pretty much everything - TVs, cars, houses, etc. How this will affect you when you are prequalified is hard to tell and I don't think anybody can give you a firm answer right now.

I have two suggestions for you to explore if your deal falls through for lack of financing.

1. ask the seller to take back the paper on the sale (the seller provides the financing)

or 2. Ask the seller for a lease option to purchase, with all lease payments applied to the purcahse price when you are able to secure financing at some time in the future.

in the meantime, houses are sitting on the market longer and longer and sellers are unable to move them because the lenders are becoming more stringent with extending credit. prices are dropping and realtors/sellers are trying all kinds of methods/combinations to find a buyer.

And that is why this may not be a good time for you to buy that house. You may be able to pick it up for a lot less at sometime in the future.

I feel for you. I hope that things turn out well for you. I hope you keep us posted, in general terms, how this plays out for you. We can all learn through your experience. Now is the time, more than ever, that we come together as ohana. These are challenging times, but certainly not a time to panic. If nothing else, maybe we can give you some moral support.

monomanomonuia (good luck)