You’ve stated the problem. Have any solutions?

Good morning Christy!

Yep, have always thought it was fascinating irony when the rich sneer at government “entitlements”. They are the ones who think they are owed ….. I guess just for having been, you know, so darn successful. *g*

the text of the bill has been released. the house rules committee reported out a rule late last night to govern debate. the rule has already been passed and i expect the “debate” will begin soon. i put the details for house schedule in a diary.

I wish I did. One of the things the bailout is designed to do, as I understand it, is to shore up companies who hold iffy mortgages to allow the folks holding those mortgages to refinance to stay in their homes rather than lose them. But it remains to be seen whether that will actually happen — or whether this will be take the money and run on the corporate end of things.

The thing that pisses me off most is that investments have always — ALWAYS — been a risk that the investor takes on themselves when they put money into the market. A lot of these companies took enormous risks with their funds in very unsecure and risky notes, and they expect the rest of us to clean up the mess of their own making. Which it looks like we will do to save the folks who initially got those loans in the first place rather than take the full economic hit from this and all the foreclosures that go with it. But I fear that will lead to more risk on Wall Street and expected handouts, rather than learning from the errors of so many ways.

It’s so tough to not be greedy at someone else’s expense, isn’t it? *g*

Why does Congress think throwing money at greedy nincompoops will save the economy?

The most basic, fundamental question. I want to hear 1 senator or rep answer this. A big part of me says call them on this. I know less about economis than John McCain, I think. But te word we kep hearing is “meltdown”. Will the whole economy really meltdown before other proposals can be put forth and ahve a chance to garner support? Even if so, will it really take so long to come back?

I think Ian’s got something coming up on some of the finer points of the deal. I’ve been trying to wade through the latest draft since yesterday and, frankly, I’m not certain I understand half of it. Ugh. Way too much legalese in the bill which is, I think, as much tactical as anything in terms of making it a tough one to wade through…but I could be wrong.

i spell for crap. sorry.

re the bill. what i read of it last night looks very bad. i’m hoping that hugh will be weighing in with his analysis.

also, very important link from prostratedragon last night on conference call between treasury and 800 of their closest friends in the financial services industry. i’ll have more on that in a bit if no one else covers it.

Good morning Christy,
As I said in the previous post, this bailout is like trying to cut off an iceberg at the waterline.
I think we need to fix the economy, fix it here, fix it now!

Thanks Christy.

digg

that’s why i think the conference call is so important. explaining how the constraints on golden parachutes don’t mean what people think they mean, etc.

Isn’t this like trying to put out a house fire by hosing down the embers? It may keep some of the fire from spreading, but the house is still on fire.

btw, I loved this pix — piggy banks lined up at the trough. *g*

I can see no place in the bill Wall St Bailut Bill where homeowners get help. The HOPE act, passed earlier, is punative, and ineffective.

Cram Down in Bankruptcy, currenty not alloed for primary residences, whould be better.

I’ve been waiting for this buyout…

Citigroup has agreed to buy Wachovia’s banking operations in a government-brokered deal, a move that that would concentrate power within the nation’s banking industry in the hands of a few giant lenders, The New York Times’s Eric Dash and Andrew Ross Sorkin reported Monday morning.

As part of the deal, Citigroup will absorb up to $42 billion of losses on Wachovia’s $312 billion pool of loans — but the Federal Deposit Insurance Corporation will absorb losses beyond that. In return, the banking giant has given the FDIC $12 billion in preferred stock and warrants as compensation.

http://dealbook.blogs.nytimes……-wachovia/

My concern is how little the Democrats got at the negotiating table. If the GOP really took the crisis seriously, they would be pressuring Bush to pull out of Iraq and Afghanistan. That’s the lowest hanging fruit in terms of saving the taxpayers’s some dollars. As others have pointed out, cutting DoD’s budget is another good place to start.

British government just bailed out FORTIS. Citi just bought Wachovia. They’ll be bringing Wachovia’s bad debt to the Treasury auctions.

I’m very concerned wingnuts in the House are going to bail on Bush and leave the Dems holding the bag.

There isn’t any place in the bill that I know of that directly gives homeowners help. It’s supposed to be some sort of indirect beneficiary amorphous thing, as I understand it. For which I’m not exactly holding my breath until I actually see it bear fruit…

Thanks for the link. Sounds as though Citi is now definitely in the “too big too fail” club.

You know what bothers me about this entire mess?

The mortgages in or approaching foreclosure.

In a conference call earlier this spring, George Soros said that another 5 million foreclosures were expected inside the next 2 years. We’ve already had at least that many. I hear nothing at all about helping fend off these foreclosures, which will surely happen if the economy continues in a clump and fuel costs continue their inexorable rise.

If the faltering price of underlying assets and inherent risk that ultimately comprised CDOs (collateralized debt objects) and CDSs (credit default swaps) is driven by the market being flooded with properties, why not put a halt on the foreclosures and demand every mortgagor renegotiate rates with any mortgagee that made an attempt to pay something on their mortgage?

It would slow down the collapse of property values, offer stability to mortgagors and mortgagees alike in terms of their corporate and personal finances, and it would potentially boost the return on any equity we took in this through our taxpayer-funded bailout…

It’s as if all those smart guys suddenly forgot how supply-and-demand worked — you know, that first and fundamental relationship any of us business majors learned in Econ 101. They can manipulate the supply of housing and risk by removing the reasons why the supply escalated, yes?

“the economy continues in a clump” — agh. That’s “slump”, with an “s”.

Although this mess does feel like a big clump of dung.

Here’s more on that from the FDIC directly, via Calculated Risk, who are also reporting that personal income at least is in a recession.

I would love to see some very specific stats about the mortgage holdings that have apparently precipitated this crisis. My guess is that the credit lines of developers may be a big factor — not simply those individuals who have gotten in “over their heads”.

Also, building for second homes seems to be somewhat out of control in this country. When you look at places like Myrtle Beach or Vegas, I cannot imagine that the already built supply doesn’t exceed the demand.

Semi-off topic rant: why isn’t anyone in the congress (let alone the MSM and all but a few bloggers) calling the bailout what it is? A blatant attempt by the administration to bankrupt the government before turning over power to their successors?

After Cheney’s energy task force (remember them?) and similar maneuvers picked the low hanging fruit, they turned to the military industrial complex to strip the rest of the tree. Now, as they are about to leave, they want to chop the tree up for firewood ’cause there’s no fruit left.

And everyone shakes there heads, says what a shame it is, and hands them an axe.

–MarkusQ

P.S. $100,000,000,000.00 “at the presidents discretion”? Are they insane?

P.P.S. Don’t answer that.

frank is bringing the bailout bill to the house floor now.

because the leadership of both parties are in the tank on this one. it’s main street against wall street.

Frank Gee I wish the devil wasn’t making me do this!

Want to be certain that everyone saw that we now have Oxdown Gazette up and running for your own diaries. Ari explains a bit here. Take a peek!

Yes, we finally chased down those last few ghosts in the code. Thank goodness. Hope everyone enjoys this!

me too. looks like the kind you can open easily by just screwing off their snouts.

Where are Grover Norquist and his bathtub?

(sorry for the visual)

“Foreclosure relief,” is included in most of the press reports I have read about the corporate welfare bailout. How that translates, what it means concretely is unknown to me.

The fact that this bill will not allow Bankruptcy judges to reset the interest rate on a mortgage aka cramdown is of great concern to me. That sounds very inflationary.

There isn’t any place in the bill that I know of that directly gives homeowners help.

I’m very angry that the D’s caved (but the, that’s what they do, isn’t it?) on a provision for allowing bankruptcy judges to cram down mortgage rates for single-dwelling citizens.

While D’s can be counted on to cave at the first hint rumor of opposition, I truly don’t understand Repub opposition to this.

Is there any rational (or even Republican-rational) reason to be against this, while continuing to support such ability for BR judges on 2d, 3d, or any multiple of additional dwellings?

What could the opposition consist of, other than a mere “fuck them, they’re poor” vindictiveness?

Thanks for putting “Other Half” in quotes. Because they’re really the other one tenth of one percent. That’s the problem.

Exactly my thoughts. We know there are nmany more foreclosures predicted for the next two years. Now with the economy tanking, there will probably be even more than initially expected.

It’s as if all those smart guys suddenly forgot how supply-and-demand worked

I think it’s all those smart guys don’t care…It’s more about saving Wall Street…nothing about Main Street…just enough recovery for us to keep us consuming…

I wish Main Street was being helped with this massive bailout. As it is now, I only see this as Phase One of the Crisis with more to come in 6 months.

Krugman said last night that while the bailout is far from ideal, it’s unfortunately necessary — and can be revisited once Bush and his people are gone in another four months. However, he sez this morning that this might not be enough to stop a massive, economy-trashing bank run by frightened rich investors (who have been spooked by the Bush-Paulson fear-fanning).

the Ds didn’t cave on this – they are playing the leadership role is pushing this bill through. listen to frank now on the house floor.

frank is now saying how honerable and wonderful paulson and bernanke are.

Very cool…thank you FDL!

It pushes the envelop far, but it is increasingly clear free market capitalism cannot regulate rapidly evolving technological societies. We cannot respond to global warming because a response affects too many jobs. We are more interested in jobs (who can blame us when a job puts food on the table). We are also invested in hierarchy, a long standing social arrangement that comforts us. We think wealth measures intelligence and we want smart men to lead. For the self made, which includes most of the movers and shakers, wealth is a vain attempt to eradicate the early humiliations of poverty. They hate humanity which is why their decisions do not benefit those beneath them. They prefer to rip them off. As you may know if you clicked on my name and went to my site, I am a utopian, a believer in a classless, moneyless society. I see us as literally insane. I propose a theory stating where the insanity comes from and what we can do to heal ourselves.

So what to do? First, before we address other issues, we need to organize using the internet. I have no idea how to do this other than to suggest we need an “Our space”. The Oxdown community steps in this direction, but posts and comments (called diaries in Oxdown) don’t do it. The end result needs to be nationwide demonstrations (if demonstrating is what we choose to do) rather than demonstrating in a specific city. We need some way to agree on collective action. The not so recent writer’s strike is a case in point. How empowering it would have been if everyone decided not to go to the movies until the thing was settled. There’s things we can do that are legal that demonstrate how many of us feel a certain way. George Bush supposedly has a thirty percent approval rating (a terrible indictment of democracy that he has so many on his side) but what of the seventy percent? How can we make our voices heard?

As for the bailout, it is a huge ripoff. If it’s pension funds they’re worrying about, I’d rather bail out the pension funds directly rather than investment banks. The bailout is a perfect case in point. I suspect, though I have no way of knowing, that a majority of Americans don’t support it, but we get it anyway. That’s not democracy. I’m not sure what it is, but it must be corrected.

revisited how? krugman will understand the economics in ways i can not imagine – but i don’t think he’s been watching our congress in action.

that comment was in response to Christy’s announcement of the Oxdown Gazette.

do I have to? *g*

My guess is that anyone holding mortgages and mortgage backed securities is very much against it. That includes mutual funds, pension funds, deep pocketed institutions. I think the perception is that bankruptcy cramdown introduces even more downward pressure on the value of mortgage backed securities.

I disagree strongly with that position, but I think that’s where the pressure was coming from.

Another trickle down meme. JHFC.

Thanks very much for those links.

I posted this in the previous post. Fits here too:

James Galbraith on the bailout:

The present slump is national, and it can’t be cured that way. But it could be resolved in three years, rather than 10, by a new Home Owners Loan Corp., which would rewrite mortgages, manage rental conversions and decide when vacant, degraded properties should be demolished. Set it up like a draft board in each community, under federal guidelines, and get to work.

http://www.washingtonpost.com/…..03033.html

William Isaac on the bailout:

Also weighing in on the bailout last week was William M. Isaac, former chairman of the Federal Deposit Insurance Corp., who pronounced Congress’ rush to spend $700 billion on questionable assets “disheartening.”

Isaac proposes revisiting a 1980s-vintage FDIC program that buoyed problem savings and loan associations by issuing them promissory notes they could use to shore up their capital base, allowing them to start lending to worthy borrowers again.

He also says the banks should get relief from an onerous accounting requirement known as the “mark-to-market” rule, which forces them to declare values on mortgage security holdings that reflect only their short-term worth, which in a troubled market may be far below their real value. The markdowns, he argues, have contributed heavily to major banks’ huge reported losses, sapping investor confidence.

Thanks for the reminder about the new Oxdown Gazette community blogs here at FDL.

For those of you familiar with using WordPress, you’ll be right at home.

For those of you who’ve never tried it, or tried blogging, it’s a perfect opportunity, go for it!

And now off to re-post my comment above as a blog post…

selise,

I have been trying to get a copy of the letter sent to congress by 170 academic economists. DO you know where I might have luck? I ended up emailing Dr. Ohanian at UCLA for help but I may not hear from him until later today.

the democrats don’t want to own the bailout, they want this president to come up with the solution, they will take credit if it works, they will lay blame at his door if it fails

we need to stop them from that strategy, they need to kick this baby down the hall, give up at the most 100 billion, tell the president if he wahts to bring the troops home to fund more he is welcome to do that

tell the president if he can find the 10 billion dollars lost in accounting in Iaq contractors he can use that money alos

tell the president if he wants to reclaim all the middle class assets he gave to these bankers, his oil pals, his industrial pals he can use that money too

tell the president he has to get the money from the places he himself misapropriated it

[not gonna happen but some of the democrats have a clue, for instance senator sanders

Damn, now even the tigers are fighting amongst themselves. Gotta go.

Be good to yourselves, and all other living things.

Namaste

Krugman is saying, I think, that, because of the downward spiral, the world wide credit markets will likely freeze up again very soon. 700 billion is a drop in the bucket compared to the damage that derivatives have done to the world economy.

I think it’s going to be a wonderful addition. We started thinking about doing something like that ages ago, because we had so many great comments that really ought to have been flushed out into longer posts or more fully addressed somehow. But it was just Jane and I and we could only do so much. And as we’ve grown a bit, the need for it has also grown, but then it was figuring out the tech logistics which, frankly, is not my gift. *g* (Right now, the backstage crew will be laughing hysterically. I’m an utter techno-moron in many ways.)

So I’m glad we’ve finally gotten the idea to a point where it is workable for everyone. And I do hope folks use it to an active advantage as much as possible!

selise and I agreed previouly:

…the whole language on this bailout has NOT been made public long enough…

Would recommend flooding Pelosi’s office with calls for more time for the public to view it.

DC office: 202-225-4965

However, he sez this morning that this might not be enough to stop a massive, economy-trashing bank run by frightened rich investors (who have been spooked by the Bush-Paulson fear-fanning).

Not to worry. So long as the uber-rich remain the uber-rich, they will continue their long-standing practice of putting that money in areas which end up benefiting ALL Americans.

Piss-down Trickle-down Economics will save the day once again, and continue to insure that the fundamentally strong economy works even for us little pain-in-the-ass middle-classers.

McBrain assures it.

Why is it that when someone says trickle down I have visions of my grandson relieving himself and the diaper not containing it all.

I blame Reagan. *g*

I cannot imagine that the already built supply doesn’t exceed the demand.

Bingo !!!

guest Stirling Newberry addresses this in his 2 posts below

another bubble ?!?! – yeah, I know I was shocked as well

Newberry I

Newberry II

Mornin’ All :D

Nouriel Roubini:
http://www.rgemonitor.com/blog/roubini/
“Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented – many on the RGE Monitor Finance blog forum – alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.”

Thanks mucho for the digg.

i saw it earlier. will google in a bit if no one else posts a link.

anyone watching CSpan ? is Adam Putnam shilling for “the plan” – he’s so busy rambling, I can’t tell

only if you are a masochist like me *g*

I think Dennis Kucinich and Rep Brad Sherman have been working on something. They all themselves the Skeptics Caucus.

http://thehill.com/leading-the…..09-28.html

http://rawstory.com/news/2008/….._0928.html

stupid dangerous actions by the dems. from chris floyd:

The crisis of Wall Street’s financial meltdown has demonstrated, once again, that although the Bush Faction thugs are criminals, killers, torturers, and thieves, without even the slightest competence in governing, they remain brilliant political tacticians. They may be willfully ignorant and brutally stupid in almost every other area, but when it comes to advancing their own narrow interests — at the expense of the political opposition — their low cunning cannot be denied.

Just look how they have made the Democratic leadership the face of the Administration’s bailout plan — which is perhaps the most virulently unpopular government action in the last 100 years. This unconscionable giveaway to the greedy rich was cooked up in the poison kitchen of the Oval Office, long before the late summer collapses that triggered the public crisis — yet at every turn, before every camera, who do we see fighting hard for the plan? Why, Nancy Pelosi and Barney Frank, front and center, day after day, talking it up, defending the President and his wise counselor, the rapacious Wall Street profiteer Henry Paulson. When the bailout goes through, and ordinary Americans see that their own lives and livelihoods are still collapsing all around them, who are they going to blame? Why, the Democrats, of course.

CNBC was reporting earlier that he was along with Eric Kantor (Wingnut-VA) and Roy Blunt.

I’d really, really like to know what Paulson told Schumer and Dodd 2 weeks ago that made them think the sky was falling, they must act now, and they needed to take the lead on screwing us, yet again.

Because you’re right – the dems are taking the lead on this, and I just don’t get it. I understand that they had to take a lead on stopping the “give me 800B and I’ll do whatever the hell I want with it and you and your judges and anyone else you think might be a check on me can go Cheney yourselves” because that idea was so bad it was beyond bad.

What I don’t understand is why the didn’t take that opposition all the way to saying, no, we don’t bail out businesses that made bad business decisions. They wanted the market to work, we’re gonna let the damned market work.

They could have forced the Prez to find some Republican allies to carry his water. They could have taken the lead on doing something else – something that might work to prop up mortgages, keep people in their homes, help to restore liquidity, etc. I’m not an economist, I won’t formulate a plan, but there are some out there, and they are being ignored.

The part I hate the most is that they have put me into the position of having to support Bill “the Crazy Christian who wants to repeal the law of gravity” Sali. Part of that bailout should go to pay for the therapy I’m gonna need.

Here’s more on the Skeptics Caucus:

http://www.dailykos.com/story/2008/9/28/203136/683

He just said Washington Mutual is the biggest bank in the US. My husband says no, one of, maybe.
Kid’s wet behind the ears.

I’m in favor of passing the bailout bill as a stop gap measure that gets us to Jan. 20, 2009.

The only thing that’s going to pull this economy out of the toilet is the creation of new industry in America. The most obvious concept to enter this void is environmental technology. If the U.S. government gets behind saving the planet it will spark an economic boom similar to the digital revolution of the 1990s (the one Bill Clinton gets credit for because it happened on his watch).

New industry, coupled with new regulation, added to NEW PEOPLE guarding the hen house will revive the economy.

Opposing this bailout bill is silly and unproductive. Does it suck? yes. Is it necessary for short term salvation? yes.

They could have taken the lead on doing something else – something that might work to prop up mortgages, keep people in their homes, help to restore liquidity, etc. I’m not an economist, I won’t formulate a plan, but there are some out there, and they are being ignored.

the only hypothesis i can come up with that makes sense of the dems actions (not just on this, but through out the last few years) is that they are not an opposition party, that the same people who fund the Rs fund the Ds (thank you bill clinton) and that is who they represent.

I think this post from Ian is a good line-in-the-sand for liberals:

Bailout 101: Patch the Hull Or Taxpayers Will Be Paying Forever

By: Ian Welsh Saturday September 27, 2008 5:50 pm

Go Brad. He’s my guy. He made several very good one-minute speeches last week as well.

I think a lot of the House Republicans are opposing not so much because they really do oppose the bill, but because they’ve calculated that the Lou Dobbs faux populist ploy gets them voter support. At least that’s what I’ve been reading between the lines from Roy Blunt’s smarmy prnouncements on occasion. He just oozes “I don’t really believe this, but I think saying it makes me more popular.”

The whole thing, from start to finish, has just reeked of kabuki on so many sides. And I’d love to know what the backroom information has been as well, to have a better idea of what they think may be happening versus what we’ve been told publicly.

Is it necessary for short term salvation? yes.

evidence please?

you are talking about more than $2000 for every person (including every child) in the country. i want more than assertions and i want real accountability and transparency (as well as regulation). does this bill have any of that?

I’m with both of you. No one is talking about us (Democrats and Indepenedents) that agree that this bill sucks. Unfortunately, I have to admit I am with the right wingnuts of House Repubs. because the Dems are chicken sh!t!

I’m with you, Lina! Also, we have a whole lot of infrastructure with even more deferred maintenance. Jobs, jobs, jobs!

i don’t think we can know why people in congress do what they do. all we can do is observe what they do.

Per the “backroom information” — heard anecdotally that the insiders who want this bill were opining that the “ATMs might just stop working” if it is not quickly passed.

With only a slight homage to my screen name *g*, guess the Dems were then frightened by the thought of pitchforks in the streets.

I know Wall Street deserves a lot of the blame for this. But, there were a lot of others involved in this mess that are walking away with a pocket full of money. Just to name few, they are: realtors, loan officers on commission, appraisers [ha], abstractors, real estate attorneys, and on and on.

Hensarling up – he currently chairs Republican Study Committee (conservatives) – their group is still clinging to the idea of an alternative plan

That’s true. One of the largest real estate firms in FL does yacht outings with leaders in both parties and contributes to both.

My guess is that anyone holding mortgages and mortgage backed securities is very much against it.

I disagree strongly with that position, but I think that’s where the pressure was coming from.

I also disagree strongly, and fail to see any sense in that position. Seems to me that any entity holding mortgage-backed securities would prefer seeing a reduced rate of return on actual mortgages as opposed to having the mortgages thrown onto the toxic trash-pile.

But what do I know?

(I still think it’s vindictiveness)

I’m someone whose bank just failed.

Go back and read some American history circa 1929-32. It did not benefit anyone for Herbert Hoover to contemplate his navel for three years before FDR came in and started spending federal money to get the economy moving again. That three years of suffering did not help in the long run. My gradparents lost their house, their jobs, and all their money during that period.

I don’t have evidence, but I’ve got history.

Christy – that is why I was surprised to see Putnam shilling for it -

he, Kingston, McHenry and all the other usual facists were counting on running against it

my perverse schadenfreude takes a small pleasure in seeing him forced to give up his one functioning talking point :D

Unfortunately, I have to admit I am with the right wingnuts of House Repubs. because the Dems are chicken sh!t!

yeah. how twisted is that?

i just hope the right wingnuts don’t succeed in getting a worse bill passed. how many in congress are actually trying to take constructive action? maybe a handful? sanders, kucinich, ….

I don’t know jack about this stuff. What happens if someone owns stock in a situation like the Wachovia thing today?

My parents came from NYC and they recalled the Wall St. people jumping out the windows of their buildings back then. They were rich; then they lost everything and they couldn’t take it.

i’m not advocating nothing. i’m advocating not throwing money at wall street in ways that won’t help.

real accountability and transparency (as well as regulation).

I will second that. ANd NO DIRECT power to Paulson language. Everything needs to transparent and reviewed before “spent”.

You’re stock price in the toilet, and your new overlord is Citigroup.

As I said, the current bill only has to last until Jan. 20. Then new regulators take over.

S.O.L. for regular shareholders. They lost 90% this morning at the opening bell.

exactly. whatever else people want to see in this bill – the absence of accountability marks this bill for what it is.

Also massive amounts of Dollar Menu commercials.

They cry alot, depending on the price they bought the stock for.

If so, then set a spending cap between now and then. The 350 is too high and the language over the second installment is loose.

But it’s better than a failure?

Eric Kantor (Wingnut-VA)

You’re too kind to Rep. (C)antor.

Either that or too disrespectful to actual Wingnuts…

The gentleman from Virginia has all of the talents and brain-power of a cheap mannequin.

If it’s the same as with the WaMu mess from last week, they have to suck it up and take whatever price they get. It’s part of the risk when you buy the stock in the first place. At least, for the little investors anyway.

But with a company like AIG — which owns an enormous share of the municipal loans/bonds in this country, for starters — the result of something like that going under on towns across this country would have been a far, far greater ripple effect. (I remember them from any number of financing bits and pieces when I was a municipal attorney here — and seeing what they were doing in terms of financing things like infrastructure bonds or loans to municipalities for new street lights and such all over the state of WV. And they do that everywhere — they are the biggest municipal lender, as I recall, at least in the 1990s anyway.)

There is a LOT going on in any individual decision on this that we won’t know for a long time to come, I’m afraid. Because it’s going to have to be unpacked piece by piece.

your comment reminded me that there is yet another entity out there that also deservessome credit for this mess -

United States Chamber of Commerce - they have functioned as the Cheerleaders – never met a deregulation move they didn’t like – and now I see these cowards endorsing the bailout as is –

something tells me there’s a whole lot of site scrubbing going on in Mayberry

As I said, the current bill only has to last until Jan. 20.

i didn’t see that when i looked at the bill. could you point out to me where it says that?

But if it was already down 80% from last year then it really doesn’t matter that much?

You might be encouraged by the language from Galbraith and Isaac I post @46. This can be done quite differently and without all our tax dollars and preventing a “crash”…not just a band-aid which will spend all our $$$ and push a crash down the road.

Yep. I didn’t own any stock, but I do bank there. They claim this will be a seamless transition. I’ll keep folks posted.

You know, we’re all on edge about this bill — but there truly is no reason for anyone getting snippy at anyone else just because they hold a different opinion, eh? Deep breath, everyone, and realize that there is a LOT in play at the moment — more than any one person can fully appreciate in terms of every single facet and every single application for every single person’s set of facts.

It’s enough to just get an extra cuppa coffee in me this morning…

Dow is down 330+

it is a failure.

Part of what is lost in this has been known for many years…they want you to stay in your overpriced house paying the bill for the “demand” of people with no money “flipping” 3 houses at a time.

How many people are now slaves to “high” wage jobs…until they lose that job or if not will still be paying in massive amounts of their cash flow into house (gas to get there as well since you had to move out of the city). Lets not talk about other costs and health.

Wave one will be the many many construction people that start/continue to lose their jobs.

Only way it makes sense is if wages go up and house prices are inflated down – looks like we have a different route though:
- house prices go down (but you are still stuck with your sticker price, also higher rate if you dump it and buy a new one).
- wages flat or down/layoffs
- and we are still going to get inflation

All this and keep in mind the bailout is a way to tell other people that have money (likely in other countries) that they can’t buy with their savings in the fire-sale. Rather the US gov/taxbase will be doing the buying with inflated/borrowed money (thus denying assets and devaluing savings).

Oh well, guess I never should have saved a dime like all the smart people.

And in a perfect bit or irony, I know a couple of Wachovia employees who bought company stock a couple of years ago using their home equity lines. They were “strongly encouraged to” by their bosses.

Reminds me of what happened at Enron.

OT to Raven: our meltdown in the SEC East was a painful thing to experience this weekend. Let’s see how the Dawgs and Gators can regroup. I’ll bet nobody offers them a bailout plan.

Currency markets were down yesterday in advance of the bill introduction as well. So a down market was pretty much anticipated today, I think…

if McCain wins, it will go on for four years.

hehehehehehehehehe

http://www.youtube.com/watch?v=WrqTSZoegYo

that is just sad

Guess they don’t like the part about no golden parachutes! “What kinda relief is this supposed to be to us! The nerve, limiting our greed!”

I don’t know that I’ve ever seen a worse half than the dogs had. Is it better to get waxed or lose on a missed xtra point? All I know is that the value of my GA-Fla tickets took a nosedive!

I wonder what this mess is going to do local governments and public schools. These entities are funded, in large measure, by real estate taxes. That source of funding is going to take a hit as a result of this.

Not to mention now that some oligarch has stolen about 1 – 40 trillion dollars there is going to be no money to put the construction folks to work (for example making leveys to stop out hot planet from hitting us, or the rotting bridges to fall, or the massive traffic jams to ease)

We pay these boys and girls in congress a good buck w/ nice benes.
Therefore if it’s the woorst crisis since man began having crisis’ why should congress recess. Is this a huge part of the problem that our hired servants take a month of paid leave to come home and convince us what a stupendous job they have done for us. If it’s this bad they better come up w/ a comprehensive package to separate the way glass-stengel used to. Savings and loans, banks and insurance companies stand alone . What about opening the books and regulating the hedge funds? There’s no time to campaign at a time like this!

I watched Charlie Wilson’s war last night–a movie about how a bunch of rag-tag rebels, with a little financial help, brought down one of the world’s greatest military powers.

I had a horrible feeling watching the movie that people who dislike the United States as much as we hated the Soviet Union can use a small lever to bring about America’s downfall as well. The lever doesn’t have to be military–at this point in time our economy is so vulnerable its on the brink of falling now.

I don’t necessarily believe that our Congressional representatives are trying to sell us out–I just think that the whole problem is now so complicated that they don’t have any idea what to do. And the fear of not acting is keeping them from delaying the Paulson proposal and holding hearings with experts who might offer other useful solutions.

My husband worked at “the Enron” before Enron(thus, Enron should have NEVER happened)…This company paid out most of the retirement plan in stock and had all kinds of stipulations for selling and reinvesting sold stock into more stable retirement savings plans. We were not able to sell. One day, the retirement account looked great, the next, only worth pennies (literally, the stocks were worth 2 cents each). Lost a great deal of retirement and have yet to be able to make it up.

I think both are equally painful. I wouldn’t give up on that game being meaningful just yet.

I’ve read the bill. In brief, it is the Paulson plan. He can buy what he wants from whom he wants, he sets up the mechanism for buying, i.e. he determines the price, he can hire whom he wants and what companies because he writes the conflict of interest rules, and he can do what he wants with what he buys. Paulson or his successor effectively have the full $700 billion. It would take a veto override to block the second $350 billion. There is a veritable blizzard of oversight groups and requirements for reports but no enforcement mechanism to say no you can’t do that on anything. There is no reform or re-regulation of markets.

I could say more but this is the short, dirty story.

This has already been happening for almost 2 years. The state of AZ was solvent; now we’re in the red again, and that’s due to the drop in the RE market. To make matters worse, I’ve always said our main product in this state is development to accommodate all those inmigrating. Not so much working anymore. Things have been slowing down now for a while.

Yes, afaik, it’s also close to end of the quarter for a lot of publicly traded companies. Too early imho to say this is a referendum on the bailout.

oh fuk

Industry-wide (Hedge Funds and Institutions like Goldman Sachs) Short Selling of stocks drives share prices down. Short Sellers have ruled the market for several years already. When the coffers of some companies get replenished by the bailout, they will be short-sold all over again and we will be in the same position again.

Nationwide foreclosures, CDO’s, CDA’s, and short-selling of the market work together to bankrupt the system.

Then we need to hit the phones and faxes like crazy. It needs to be a NO to the Paulson power and pushing the need for regulatory, transparent oversight. Additionally, the whole 700 billion should not require a veto override. The language should be in a timetable review form.

In 1980 the top 1% received 8% of all income. Today the top 1% receives 20% of the income. This is the inevitable result of a quarter century of trickle down economics. This explains, in part, why so many people are scrounging around Wal-Mart and carrying big balances on their credit cards.

I was talking about selling them! I get them every year but have no interest in big cocktail patries, the morons here are bad enough.

Goldman Sachs will benefit hugely.

I don’t necessarily believe that our Congressional representatives are trying to sell us out–I just think that the whole problem is now so complicated that they don’t have any idea what to do. And the fear of not acting is keeping them from delaying the Paulson proposal and holding hearings with experts who might offer other useful solutions.

Pardon but this is complete BS. The Congress has known about this for upwards of a year. They hould have known about for at least 5 years. They have and have had access to experts both inside and outside government during all this time. They, in fact, did have hearings but refused to invite anyone with an alternative. The Bush Administration worked on Paulson’s 2 page plan for 6 months and then dumped it on the Congress cold with 2 weeks left before adjournment for the election. SO if the Administration could wait that long, why couldn’t the Congress take a little time to get it right? And did I mention it? This is their effing job to know and if they don’t know, to find out.

This is what they did on the MCA and FISA. How long before we realize that it is not a bug but a feature?

Well, thanks a lot, Raven!

thanks hugh. was looking forward to your take on it.

btw – the house is now “debating” the bill. the house rule on the bill was passed earlier this morning – debate is limited to 3 hours.

This bill does nothing for the economy as a whole.

We need to slash usury rates immediately and fix interest on consumer debt to 10% across the board.

Mortgages have to come in a few standard versions.. fixed rate and different terms. Terms to purchase real estate are a min of 10% cash.

No bundling and packaging mortgages or using them as leverage for other financial products. If mortgage lenders are happy with the 10% interest they can mow lawns.

Outlaw all derivative instruments and other leveraged “paper” and risk management instruments.

Reset all mortgages to fixed rate 30 year 8% or so.

Hault all foreclosures for 24 months and set up a corporation to assist homeowners of non spec homes to remain in them.

Break up banks into small state only size. No banks can have braches and operations aside from the state where they are incoporated.

US banks forbidden from offshore operations.

Close all tax shelters and tax havens

Make shell corporations illegal

Raise the minumum wage to $15/hr.

Limit executive pay to 50x that of the the lowest paid worker… across the board.

The market has shown it cannot clean it’s own house. The unseen hand of the market is an illusion.

That experiment is a failure.

We need a different economic model. Capitalism is not serving the people (workers), It is serving CAPITAL. Why bother to fix capitalism. It will make the rich richer and the poor poorer – that’s the point of wealth creation – it’s for the wealthy.

Can we please have the congress tele numbers so readers can call and weigh in.

@ 53 is Pelosi’s number:

DC office: 202-225-4965

I called

House Representative Barney Frank:

202-225-5931

Fax: 202-225-0182

Shays saying he will vote for the bailout. His last act as a Congressman?

I called Pelosi. They’re just recording messages.

Is anyone physically protesting in DC?

I don’t want to talk about it. So there. *g*

Keep calling. You will eventually get a live body.

Would it be possible to file a class action lawsuit against these gov’t. critters for failure to do due diligence?

Someone needs to remind Burgess that it is his beloved Pres. Bush from his home state who is, above all, responsible for “pushing” this through at the last minute. His politicizing of the issue has been disgusting during a crucial time.

He needs to zip it.

Michael Moore has a good letter up today: bloodless coup.

I can’t use the linky function, get the 404 each time. But michaelmooredotcom does it, find his letter.

I wonder if the residents of D.C. might have a true case of Taxation without Representation?

Boston Tea Party Time?

I’m really tired of the amateur economists on this site undermining needed action to protect my retirement fund and access to credit that I and other ordinary Americans and small businesses (like FDL) need to meet expenses. It’s as if I’ve been hit by a drunk driver (Wall St. and lack of oversight by the executive branch) and I’m lying injured by the side of the road. Many on this site are so preoccupied with penalizing the drunk driver that my injuries and the threat to my health are being ignored or not understood. If there is not prompt and effective intervention in the current financial situation, available credit will effectively disappear (no credit card loans allowed), 100% payment on outstanding balances will be required every month, car and home loans will not be available, jobs will be lost, payment on money market fund withdrawals could be delayed, and companies may not be able to borrow to meet payroll in a timely fashion – just to name a few likely events. It’s time to prevent my hemorrhaging by the side of the road. There will be time to pass stronger drunk driving laws and put the bastards in jail. I’m grateful that people like Chris Dodd and Barney Frank are ready to step up to the plate and take on the Bush administration’s one-sided plan and many in their own party to do the right thing at the right time.

Here’s the letter from 170 of the nation’s academic economists. We the People need to sign on too.

http://faculty.chicagogsb.edu/…..rotest.htm

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

To RedHen It’s not about penalizing it’s about removing the drunk from behind the wheel. If we tend to the injured needs they are creating worse realities ahead. Get the drunks from behind the wheel.

Ohh, signed by all those economists with “foreign names.” If we are elected, we’ll be bringing those jobs to Americans!!

Sarah Palin