Kill the bailout: The foreign bank angle
I’ll be on Neil Cavuto’s show at around 4:10-15pm-ish Eastern to talk about the foreign bank angle of the Mother of All Bailouts.
If you ain’t mad, you ain’t payin’ attention.
***
I hear that GOP Rep. Mike Pence, a fiscal conservative loner, will also be on the show. Tune in!
Posted in: Subprime crisis
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Maybe they could make this easier and the Bureau of Printing and Engraving could just stack large bales of new money on the street in front of their offices. Then who ever needed it could just stop by and load up a few hundred billion.
It would sure save a lot of time for everyone involved.
Sounds more like a coups than a rescue.
I have Fox on now and will be watching. Get them Michelle!
L
How do you pass a law that says an entire branch of the federal government is exempt from the law?
I tried to get mad over this and then I realized, they are doing it for us.
/sarc – duh
There. MUCH better!
Sooooooo….
If I don’t pay my taxes, is that considered a “correction?”
This reminds of something…. Germany after World War I, compare and contrast.
the inability to question the handling of this by the secretary and the power handed over to spend our money by this person as he sees fit, sounds more like totalitarianism than a democratic republic….hmmmmmmmmmmm???
How about a law requiring the bastards to wear togas and sandals?
Here’s some frightening perspective on the bailout.
Man I’ll miss it; working late. Can you link the video to the post please?
I called Senator Dole’s office and told them if she wants to win re-election in a landslide to come out forcefully against this. They said they would tell her.
This is a coup de tat and time for the military to step in and suspend congress.
Anybody ready for another “Boston Tea Party”?
I just watched Michelle on Cavuto–Great job! Somebody needs to talk about this sellout to foreign governments of our financial/national security interests. Neil did a great job also in allowing Michelle to spell it all out.
I really question the timing of all this economic doom and gloom. Will it all go away overnight just as soon as BO is elected? Just like the surplus (NOT!) that Clinton left which disappeared without a trace five minutes after Dubya took over office. I’m strongly suspecting that it is just part of the election strategy by the Demoncats.
It’s all “light, smoke, and mirrors.”
You forgot to strike the “sarc” tag!
The inmates are trying to run the asylum.
mister p, my sentiments exactly. i do believe that the actions of pelosi and reid requires us to act on the the 2nd amendment’s ability to ‘right’ the government and turn it back over to the people. not just this bailout baloney but also with regards to the non-drilling bill she is trying to leverage against passing the bailout bill. in the end, the only ones shafted are the taxpayers paying for the bailout and the poor who cannot afford the gas prices.
I would suspect it would be in the best interest of Congress to drag the situation out.
Guess I’ll stop by Borders Books on the way home from work and pick up a foreign language primer. Should it be Chinese? The Swiss don’t have their own language……..
At least I don’t have to worry about facing Mecca and owning a prayer rug. The Islam-o-fascists won’t bother with us after the economic collapse of the U.S.
Good job, Michelle, although I noticed Cavuto cutting you off quite a bit when you started to get into the meat of the problem. (He did he same thing to Pence.)
No need, China has more people who can speak English than we do. Learn to read Help Wanted in Spanish.
Just go to Hong Kong they speak English there!
Great job on Cavuto, Michelle!
I’m sure you’re drowning in your tears that Paulson won’t be sending you an invite for Christmas, aren’t ya?
I really wish I could have seen it
Congress would be happier if we just stuck with our panem et circenses.
Anyone what to barter for my moose burgers?
No cash necessary.
We’ve got 80 lbs of salmon in the freezer to.
On September 22nd, 2008 at 3:54 pm,
It’s called the Exceptions and Regulations Clause of the US Constitution, Article III, §2, Clause II:
In all cases affecting ambassadors, other public ministers and consuls, and those in which a state shall be party, the Supreme Court shall have original jurisdiction. In all the other cases before mentioned, the Supreme Court shall have appellate jurisdiction, both as to law and fact, with such exceptions, and under such regulations as the Congress shall make.
[Emphasis added]
This is the way, incidentally, that Congress tried to keep the Court from intervening in the analysis of whether terrorists at Guantanamo Bay had Constitutional rights.
You may not agree with it, and Constitutional scholars still argue about whether that’s what the Founders really intended, but there it is.
Indignation about the proposed legislation would be better invested into debates about its effects instead of its legality.
A lot of the attitude that the government should just kick back and watch the chaos unfold seems more emotive than contemplative. Consider the following article linked on the Drudge Report: Almost Armageddon: Markets Were 500 Trades From a Meltdown. Excerpts:
“Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level – a 22 percent decline! – while the clang of the opening bell was still echoing around the cavernous exchange floor.”
“The Fed’s dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt.”
See also Bailout Prevents Great Depression 2.0. Excerpts:
“What would be the dollar cost of not bailing out Wall Street? Try a number north of $30 trillion. (The awful math is detailed below.) That’s why Hank Paulson and Ben Bernanke were so scared last week. And, yes, I think “scared” isn’t too strong a word. You don’t think they convened an emergency nighttime meeting of congressional leaders and then walked out with something close to a blank check for a trillion bucks because they thought we were headed for an outright recession, even a fairly nasty one?
Nope, I think they believed, and got Congress to believe, that the economy was on the verge of something far worse than the worst downturn in a generation. And that is why they went with the so-called nuclear option: the biggest financial bailout in history. In the words of JPMorgan Chase economist James Glassman, “Thankfully, we and our friends around the world who are watching the economic lights come on will never know where events would have led, if the clock had not stopped [last] Thursday afternoon…. Last week’s events made the 1987 stock market crash look like child’s play.”
I’m not prepared to make any conclusions right now about whether the Federal Reserve and the Federal government should’ve intervened, or what form that intervention (if any) should’ve taken. Maybe government intervention will have adverse consequences — it wouldn’t be the first time. But it also seems that yearning for the days of laissez-faire Capitalism could lead to disaster.
I’m not an economist, a banker, an accountant or a tax lawyer. There seem to be many questions unanswered, and that calls for calm analysis in the days ahead instead of a rush to judgment.
But I’m seeing in many of the comments here a philosophy of “Let them eat cake / Let’s fiddle while Rome burns” that seems short on analysis and long on bile.
I think when the figure out how to manage the Seante restaraunt so it at least breaks even, they can move on to more challenging things like bailing out the financial industry.
Repealing all of their “social engineering” legislation that created the subprime mess would be a good start.
Who voted for Paulson, again?
Oh, right… none of us.
Glad to see someone that nobody voted for spending $0.7T of our money. That’s nice of him.
And don’t forget: this isn’t over. I’m sure he’ll find a way to make it an even Trillion before he leaves.
That is, IF he leaves. Since nobody voted him in, are we sure he’s leaving?
We’re so far through the looking glass at this point that nothing would surprise me. If he suddenly donned a Che’ T-Shirt, stuck a cigar in his mouth, pulled out a Tommy Gun and said “I ain’t goin’” it wouldn’t surprise me one bit.
I tell ya, a plot of land in the alaskan wilderness and a gun is looking better all the time. Imagine how long you could live off of 1 moose.
I have now called both of my congressmen and told them that they should not support the bailout.
So Paulson is sending us into debt to China and other foreign banks.
That’s really nice… for China.
No wonder he wants “immunity” from prosecution. I hope he bones up on his Chinese. He may be needing it when we run him out of the country.
In light of this, the price of oil went up a whopping 30 percent, before “falling” to 120 dollars a barrow. At the very least and patriot would see drilling oil as an opportunity to get funds and cheaper oil. However the dregs we have in congress are not patriots. They have conspired, quite openly, to act in the worst interest of this country for some bogus world view.
Paid off land in alsaka is looking better and better the more I read…
Yeah let’s let AIG go bankrupt, and then watch the rest fall like dominoes and the entire economy collapse. Brilliant! Can’t wait until it costs a week’s wages to buy a hamburger, if you’re one of the few lucky enough to still have a job, and your employer actually pays you. Mortgage? HAH! That will be the least of your problems. But hey, as long as they don’t touch your tax dollars, right?
Here’s a gun – might as well shoot yourself in the foot while you’re at it.
Your choice. Go down now without a fight just to prove some point, or let these bast@rds do what they have to do and maybe we’ll wake up next week and still have an economy to b*tch about. Not really much different from holding your nose and voting McCain in order to keep Obama out. Not very different at all.
I know you don’t like Ron Paul Michelle, but he’s absolutely against this bailout, and has been right on the coming meltdown for years. He’s also been on Cavuto’s show many times – latest interview here.
nyc123me: better AIG than the USA.
OT/ Time to bomb Pakistan.
I keep hearing the question “should the federal government have intervened?”
It is really a misnomer. The federal government was involved in creating this “problem” from the very start. The federal government, both GOP and Democrats, have been milking the system for the benefit of their friends for decades. I suppose it might matter to some that the Dems have walked away with the lion’s share of the pillage and plunder. But, to those of us holding the now empty sack that used to hold $1 trillion it matters little.
We have got to realize that the federal government CAUSED the problem to begin with. Therefore, asking if they should “intervene” is really asking “should they continue to manipulate the markets for the benefit of their friends?”
It doesn’t matter what the maximum marginal tax rates are as long as the government can bestow billions and billions on favored people and organizations and take that same sum from the taxpaying citizens of the nation. Talk about entitlements all you want but we just witnessed the single largest transfer of wealth in this nation’s history.
The problem is the federal government. It has become an unregulated and unregulatable beast and it now owns us. If we can’t change this then the Republic is already dead. It just hasn’t reached room temperature yet.
By the way, as far as I was aware, the US is not alone in this action, a number of other major economies are doing the same thing in order to support the world economy, are they not? If it were just the US alone I might be a little less willing to accept what has to be done..
This is a lot of BS on so many levels. I will take the ’simple’ solution that seems to elude the ‘experts’.
I do not think throwing good money after bad will work. IF there is a problem with consumer and business loans being ’stopped’ by the current banking entities, then these entities need to fail.
If we need to ‘inject’ cash into banks, it would make far more sense to place that cash into RESPONSIBLE hands, and NOT the same hands that were just involved in this. There are many small banks that are not involved in this and would love an opportunity to grow.
Looking at the event today of Paulson’s Goldman Sachs suddenly becoming a ‘federally insured’ entity, undoubtedly shows where a substantial portion of the 700 billion will be going.
SonofDY – I think if one goes, the other will follow.
Perhaps. I am not convinced that it will not happen anyway. Well it will be done no matter how I feel about it. BTW they will have to raise taxes to pay for this.
Ok, I’ll broadcast my stupidity because I want to understand this. Other than whatever congress decided to allow back in 1999, are we in this mess because a whole bunch of people built/bought/refinanced houses and couldn’t pay for them?
As I understand it, the accepted therapy for cocaine addiction is now to give the addicts as much coke as they can snort at taxpayer expense.
Therefore, giving $700 billion taxpayer money to the very same irresponsible people who just blew $700 billion of their stockholder’s money is consistent with that new treatment.
What’s the matter with you people? Didn’t you hear Joe Biden say that paying taxes is patriotic?
Robbi101, he forgot to tell Rangel.
True, it may well happen anyway, but at least the Fed aren’t just sitting by and letting it happen like they did in the first Great Depression. And yes, taxes will probably go up, although most likely for those who can afford it more. Hey, once upon a time (pre-Reagan) the upper tax rate was 90%! US citizens have become a little too complacent and take too much for granted.. reality is what it is, whether it is liked or not.
I’ve thought about that for a long time. What if conservatives banded together in a tax revolt? Of course, that’s difficult for those on paychecks, because it is automatically deducted. But surely there is a way.
Regulus, the guy who wrote that article ( James Pethokoukis), while he’s a money & politics blogger at US News & World Report… and commentator on several news shows… his background is as a Soviet Politics/US History major and journalist graduate… plus he won Jeopardy.
I’m not saying he’s a financial dolt.. but I think this problem requires somewhat more expertise than he is likely to have.
There are some pretty big assumptions in his article. I don’t know whether they’re reasonable or not, but I’d want a few more opinions from financial experts before I sanctified his assessment of all this.
Also… I think in addition to the risks of “leaving things alone” if this bailout does happen, it’s not just that it is done… but -how- it is done. Do you really want the US to be on the hook to China for another trillion dollars?
GladzKravtz it’s not just that, although that is certainly a part of it. In a word, it’s greed. I don’t think there’s any one group that can wear the blame for this though. The mortgage market craziness was just an enabler.
Sure there is a way. File a new W4 and claim 99 deductions. Just tell them you are taking advantage of a new “liar loan” to purchase several new houses. Tell them the government said it is “okay.”
99 deductions means you withhold no federal income tax from your next paycheck.
Just for the rich? Please, that wouldn’t come even close to covering this bill plus the existing defict. This country needs to cut spending and pass a debt reduction tax that does nothing but pay off debt. If we don’t pay off the debt, nothing else will work.
Yes! Yes! Somebody else gets it!
Stop spending. STOP SPENDING!!!!
WAREAGLE82, At this point we have to cut spending and raise tax. We have no choice but to pay down the debt.
-Pay down the debt.
-Cut spending.
Oldie but a goodie:
BALANCED BUDGET AMENDMENT!!!!!
We’re screwed anyway SonofDY.. there’s a $53trillion (yes Trillion) bomb waiting for us about 10 years down the line in the form of Social Security and Medicare promises the US has made.. and that’s not even figuring in the massive increase when these lunatics start their amnesty! So why not do the bailout, at least it might give us all a few years more to enjoy life before the end of the US empire.
So, Mr. Alan Greenspan, why don’t you come over to my house and explain how you got us into this mess. I promise to use self-restraint, but I gotta warn ya, my dog thinks you’re a freaking idiot.
Oops! Maybe we don’t agree.
We have to cut taxes and cut spending even more! I am not talking about cutting spending by 5 billion. I am talking about cutting spending by 1 or 2 TRILLION. It isn’t the government’s money. They have no right to bankrupt the citizens of this nation.
And we must pass a balanced budget amendment.
nyc123me Thanks for your response. In my stubborn opinionated way, I keep wanting to pin this on some one group and the only one I see is that enabler group you mention. Humans were born with brains and should know when they are living beyond their means. Sometimes I love to watch the show Bridezillas. This one girl was griping because the PayDay Loan people wouldn’t loan her $1000 for her reception when she had no pay stubs, rent receipts or bank statements. They said they could only give her $400 (why even that??). Anyway, she scoffed at the $400 saying, she could spend that on a dinner or a pair of shoes! I guess you see where I am on all this now….
Not to worry! We will just borrow it from China and OPEC. The have lots of cash. We can borrow our way out of debt!
And by the time inflation hits 5000% a week it won’t really matter how much we owe anybody.
Look who’s buying up the scraps. Japanese banks. They have a huge savings rate in Japan, and according to a Mitsubishi spokesman having been piling up money for months in anticipation of a buying opportunity. See, it’s possible to be a banker and know how to make a profit…
Oh yeah, Jamie Gorelick never worked for Mitsubishi that I now of.
Yes, but I think Jamie Gorelick never helped the Japanese build a wall either.
Oops! Maybe we don’t agree.
Oh I agree, Cut spending literaly to the bone. Earmarks?, gone. Medicaid/care? Cut all benefits except life saving ones. Prosecute all fraud to the extreme. Review all welfare cases. Cut drug addiction from SS as a “disability” Deport all illegal aliens in prison NOW. No state or federal aid without confirming citizenship. 2-5% tax on EVERYONE till the existing loans are paid off. Not one cent of that tax can be used for anything but paying down the debt. Only allow imports from companies proven to treat and pay thier workers well. Drill here, drill everywhere. Get off of forgien oil. It would suck for a few years, but the nation would be far better off in the long run.
Yeah, I erased part of my post that might have gotten me sued. Every time I think of that idiot I think of innocent civilians dying, and now we have her getting rich in a housing bubble debacle.
Germany 1930. Good news, you will be able to pay off your house with a days wages. Bad news, a loaf of bread will cast 100,000 dollars.
Gold.
wareagle, You are going to get me going like I was this morning… aaaarrrghhh.
serenity now…… (sienfield)
Mao Tse-Tung
Mao was a genocidal wacko, but he was a smart genocidal wacko. Just like Hitler. Stalin? not so much.
I guess this is the beginning of a long, long week.
You can buy plots of land in alaska of 5-6 thousand. HHHMMMM
I was in Russia in 1998 when they defaulted on a portion of their debt. It was a very interesting time.
We were paid in dollars so for us the problem was getting to the dollars we had and finding stuff to buy. No foreign banks would accept ATM transactions from Russian banks. Merchants didn’t want to sell their goods because the currency was worthless. Thankfully the problems only lasted a few months but I seriously had to think about an escape plan.
Our Russian friends were not so fortunate. The exchange rate went from 6 Rubles to the $ to 18 Rubles to the $ in a few days.
Moose stew anyone?
Two thirds of the budget is entitlements. I never expected to see my $260,000 Social Security money anyway, although I think most people do.
The damage that this one person has caused this nation is unbelievable. Plus, she has gotten rich off of it! I wonder how she sleeps at night knowing she is personally responsible for preventing the FBI from uncovering the 9/11 plot?
I am going running before my blood presure gets so high I blow something important.
I don’t think “my” Social Security is up to $260K just yet. But, I don’t ever expect to see a penny of it. I will work until I die or become disabled. The government has stolen 15% from me for every year I have worked. And then they gave it away to someone else.
Then they had the audacity to tell me I am not saving enough.
There’s a something coming, collapse, revolution, war… not sure what it is but it’s comin’.
If it were the Clinton administration then we would send a couple of cruise misiles to destroy a factory in Sudan instead. That would teach ‘em.
I missed it! Call Allah to get on the stick and post the video!!
If that is what you are seeing, your reading skills needs to be improved.
The amount of the bailout is shocking. Despite that I haven’t seen anyone objecting to an action that would prevent a full scale depression.
What I am seeing, and what at least my point here was, that a fix is one thing, but the abdication of accountability and separation of powers coupled with bailing out other nations for their greed is quite another thing.
As for the Exceptions and Regulations Clause, there is no way in hell that it can or was ever intended to abrogate the protections of the Constitution. What this legislation does is to remove all checks and balances inherent in our Constitution regarding what should be a purely domestic issue arising out of the Commerce Clause.
In addition, any action with respect to a foreign power is already addressed in the Constitution with respect to the treaty provisions, and any treaty of the US must be in accord with the Constitution. In the event of a conflict between the provisions of a treaty and the Constitution, the provisions of the Constitution prevail. To hold otherwise would allow the Senate to invalidate the provisions of the very document that allows it to exist.
The situation we are in today is largely the result of a lack of accountability. Fannie and Freddie were neother fish nor fowl, and as such were allowed to skirt the protections and checks to which the government and private companies are held.
People are angry, and rightly so. Our government and its bastard financial institutions have betrayed the people’s trust. And you make condescending comments when people question a solution that is developed by the very people that caused the mess in the first place while absolving the administrator of the grand scheme of any check, balance, review or accountability? Give me a break.
Let Wall St. burn.
Our elected officals failed us. The CEOs and corporate boards of many financial institutions failed us. What do you expect from human nature with few legal/moral constraints?
The only security is in the Lord…
I just read post # 2! The language enrages me. One trillion dollars with no accountability!? These people we send to represent us will be the downfall of the U.S. Especially the lib demorats and the people selected to head these agencies.
How in the hell do “we the people” get these bums out of there? “Don’t blame us” Pelosi and her cage of like minded squirrels never think of the consequences when making their grand pronouncements. As long as it feels good that is all the justification required.
Rangle, up to his eyeballs with tax problems, Barnie Frank heading up a committee that he probably can’t even spell correctly, managed to block Bush every step of the way when it came to passing new regulation for Freddie and Fanny. Now look at the results and look at the chicken s$$$s diving for cover and pointing fingers in anyway direction, except at themselves.
This is a sickening mess and these lawmakers are doing their best to wreck our country!
Government is not the solution. GOVERNMENT is the problem.
There, I vented. It did no good. I am angrier than when I started.
Amen, thats right!! especially after Iran gets a few NUKES
which will be any day now…
#14 The 101st Airborne should have been in there a long time ago.
True and False. I’m also a Swiss Citizen. In Switzerland we have 3 official languages and 4 national languages.
The 3 official languages are:
German, French and Italian.
The 4 national languages are:
1) Swiss-German aka Schweizerdeutsch (a German Alemannic dialect),
2) French,
3) Ticinese Lombard (an Italian dialect),
4) Romanche.
For example when I speak Swiss-German, most German citizens would not understand what I’m saying. Only those living south of Karlsruhe-Stuttgart-Ulm can speak an Alemannic dialect.
Swiss-German is only an oral language. You cannot write in Swiss-German, you have to use standard German (Hochdeutsch) just like in Germany or Austria.
So we do have our own language, it is just not official.
isn’t it like 3 in the morning in Switzerland? do you use Euros for currency?
Everyone on the finance food chain is guilty, from the politicians who pushed these schemes, to the bankers who campaign-financed Congress into tilting the bankruptcy laws in their favor so they could gouge working people suffering from flat income on exhorbitant interest rates to those who arranged, approved and sanctioned “liar loans” to lenders who issued them and sold them to Wall Street funds to be chopped up into “collateralized debt obligations” to hucksters who peddled these derivatives to unsuspecting investors to rating agencies (Moody’s, etc.) who anointed these shaky securities with AAA ratings, to government regulators (the Fed, the SEC, the Comptroller of the Currency, etc.) who refused to police this con game. While some of you are quick to blame irresponsible borrowers and reckless property flippers, we don’t have enough fingers to point at all those responsible for this disaster.
You guys are too harsh. Anybody knows that if you have a problem, doing more of the same thing is the only way to solve it.
Giving money to congress is like giving a gun to a monkey.
Well if they shoot themselves with it, that’s not such a bad thing is it?
CNN article: CNN poll: GOP takes brunt of blame for economy; Obama gains. Shows how stupid America is.
“Majority of respondents viewed Obama as better on economic issues”
ffs.. idiots.
Thanks for asking
It’s 1:48 am in Switzerland right now.
I live in Maryland not far from Bethesda. I came to Europe for my cousin’s wedding. It’s cold like winter here ~7°C (45 F)
No Switzerland does not use Euros for currency (Switzerland is not a member of EU). The currency in Switzerland is Swiss Franc and
1€ = Fr 1.60
$1 = Fr 1.07
All stores in Switzerland also accept Euros. When getting money from Swiss ATMs, you have to select either Franc or Euro, since tiny Switzerland is surrounded by 4 countries in €urozone (Italy, Germany, Austria and France).
Okay time to go to sleep now !
Again, I can no longer support these fiscally conservative Republican’s. I’m preparing for the re-training camps. Been quite a ride. Nice knowing y’all.
I’ll translate: “We are keeping the Jews’ gold.”