Unsettled Economy & The Bailout

[Kalalau]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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...58762#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]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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...923energy.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]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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.

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.

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]

Re: Unsettled Economy

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/bu...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/constitut....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]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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

[matapule]

Re: Unsettled Economy

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.

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]

Re: Unsettled Economy

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]

Re: Unsettled Economy

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?p...o_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.