Laugh line of the day
From Bush’s address to the nation tonight, urging taxpayers to fork over a trillion dollars to Treasury Secretary Hank Paulson to distribute to whichever failing banks he chooses, at home or abroad, in order to rescue them from their bottomless pit of toxic debt:
“I’m a strong believer in free enterprise.”
***
Full text:
ADDRESS BY THE PRESIDENT TO THE NATION
State Floor
9:01 P.M. EDTTHE PRESIDENT: Good evening. This is an extraordinary period for America’s economy. Over the past few weeks, many Americans have felt anxiety about their finances and their future. I understand their worry and their frustration. We’ve seen triple-digit swings in the stock market. Major financial institutions have teetered on the edge of collapse, and some have failed. As uncertainty has grown, many banks have restricted lending. Credit markets have frozen. And families and businesses have found it harder to borrow money.
We’re in the midst of a serious financial crisis, and the federal government is responding with decisive action. We’ve boosted confidence in money market mutual funds, and acted to prevent major investors from intentionally driving down stocks for their own personal gain.
Most importantly, my administration is working with Congress to address the root cause behind much of the instability in our markets. Financial assets related to home mortgages have lost value during the housing decline. And the banks holding these assets have restricted credit. As a result, our entire economy is in danger. So I’ve proposed that the federal government reduce the risk posed by these troubled assets, and supply urgently-needed money so banks and other financial institutions can avoid collapse and resume lending.
This rescue effort is not aimed at preserving any individual company or industry — it is aimed at preserving America’s overall economy. It will help American consumers and businesses get credit to meet their daily needs and create jobs. And it will help send a signal to markets around the world that America’s financial system is back on track.
I know many Americans have questions tonight: How did we reach this point in our economy? How will the solution I’ve proposed work? And what does this mean for your financial future? These are good questions, and they deserve clear answers.
First, how did our economy reach this point?
Well, most economists agree that the problems we are witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad, because our country is an attractive and secure place to do business. This large influx of money to U.S. banks and financial institutions — along with low interest rates — made it easier for Americans to get credit. These developments allowed more families to borrow money for cars and homes and college tuition — some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.
Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit — combined with the faulty assumption that home values would continue to rise — led to excesses and bad decisions. Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.
Optimism about housing values also led to a boom in home construction. Eventually the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell. And this created a problem: Borrowers with adjustable rate mortgages who had been planning to sell or refinance their homes at a higher price were stuck with homes worth less than expected — along with mortgage payments they could not afford. As a result, many mortgage holders began to default.
These widespread defaults had effects far beyond the housing market. See, in today’s mortgage industry, home loans are often packaged together, and converted into financial products called “mortgage-backed securities.” These securities were sold to investors around the world. Many investors assumed these securities were trustworthy, and asked few questions about their actual value. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac. Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.
The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses. Before long, these securities became so unreliable that they were not being bought or sold. Investment banks such as Bear Stearns and Lehman Brothers found themselves saddled with large amounts of assets they could not sell. They ran out of the money needed to meet their immediate obligations. And they faced imminent collapse. Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt.
With the situation becoming more precarious by the day, I faced a choice: To step in with dramatic government action, or to stand back and allow the irresponsible actions of some to undermine the financial security of all.
I’m a strong believer in free enterprise. So my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly. There’s been a widespread loss of confidence. And major sectors of America’s financial system are at risk of shutting down.
The government’s top economic experts warn that without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold:
More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.
Fellow citizens: We must not let this happen. I appreciate the work of leaders from both parties in both houses of Congress to address this problem — and to make improvements to the proposal my administration sent to them. There is a spirit of cooperation between Democrats and Republicans, and between Congress and this administration. In that spirit, I’ve invited Senators McCain and Obama to join congressional leaders of both parties at the White House tomorrow to help speed our discussions toward a bipartisan bill.
I know that an economic rescue package will present a tough vote for many members of Congress. It is difficult to pass a bill that commits so much of the taxpayers’ hard-earned money. I also understand the frustration of responsible Americans who pay their mortgages on time, file their tax returns every April 15th, and are reluctant to pay the cost of excesses on Wall Street. But given the situation we are facing, not passing a bill now would cost these Americans much more later.
Many Americans are asking: How would a rescue plan work?
After much discussion, there is now widespread agreement on the principles such a plan would include. It would remove the risk posed by the troubled assets — including mortgage-backed securities — now clogging the financial system. This would free banks to resume the flow of credit to American families and businesses. Any rescue plan should also be designed to ensure that taxpayers are protected. It should welcome the participation of financial institutions large and small. It should make certain that failed executives do not receive a windfall from your tax dollars. It should establish a bipartisan board to oversee the plan’s implementation. And it should be enacted as soon as possible.
In close consultation with Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke, and SEC Chairman Chris Cox, I announced a plan on Friday. First, the plan is big enough to solve a serious problem. Under our proposal, the federal government would put up to $700 billion taxpayer dollars on the line to purchase troubled assets that are clogging the financial system. In the short term, this will free up banks to resume the flow of credit to American families and businesses. And this will help our economy grow.
Second, as markets have lost confidence in mortgage-backed securities, their prices have dropped sharply. Yet the value of many of these assets will likely be higher than their current price, because the vast majority of Americans will ultimately pay off their mortgages. The government is the one institution with the patience and resources to buy these assets at their current low prices and hold them until markets return to normal. And when that happens, money will flow back to the Treasury as these assets are sold. And we expect that much, if not all, of the tax dollars we invest will be paid back.
A final question is: What does this mean for your economic future?
The primary steps — purpose of the steps I have outlined tonight is to safeguard the financial security of American workers and families and small businesses. The federal government also continues to enforce laws and regulations protecting your money. The Treasury Department recently offered government insurance for money market mutual funds. And through the FDIC, every savings account, checking account, and certificate of deposit is insured by the federal government for up to $100,000. The FDIC has been in existence for 75 years, and no one has ever lost a penny on an insured deposit — and this will not change.
Once this crisis is resolved, there will be time to update our financial regulatory structures. Our 21st century global economy remains regulated largely by outdated 20th century laws. Recently, we’ve seen how one company can grow so large that its failure jeopardizes the entire financial system.
Earlier this year, Secretary Paulson proposed a blueprint that would modernize our financial regulations. For example, the Federal Reserve would be authorized to take a closer look at the operations of companies across the financial spectrum and ensure that their practices do not threaten overall financial stability. There are other good ideas, and members of Congress should consider them. As they do, they must ensure that efforts to regulate Wall Street do not end up hampering our economy’s ability to grow.
In the long run, Americans have good reason to be confident in our economic strength. Despite corrections in the marketplace and instances of abuse, democratic capitalism is the best system ever devised. It has unleashed the talents and the productivity, and entrepreneurial spirit of our citizens. It has made this country the best place in the world to invest and do business. And it gives our economy the flexibility and resilience to absorb shocks, adjust, and bounce back.
Our economy is facing a moment of great challenge. But we’ve overcome tough challenges before — and we will overcome this one. I know that Americans sometimes get discouraged by the tone in Washington, and the seemingly endless partisan struggles. Yet history has shown that in times of real trial, elected officials rise to the occasion. And together, we will show the world once again what kind of country America is — a nation that tackles problems head on, where leaders come together to meet great tests, and where people of every background can work hard, develop their talents, and realize their dreams.
Thank you for listening. May God bless you.
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Trackbacks
- Bush Pleads With “The One” To Save The World | BigMouthFrog
- Jules Crittenden » Dire Circumstances
- The Other McCain: Bush's speech
- My thoughts on “The Bail Out”, McCain, Bush’s Speech, and other things…. – Political Byline
- $700 Bailout: See no evil. Hear no evil. Speak no evil. « Republican Party of Jefferson County, TN
- Laugh line of the day — The 2008 Elections
- Stop The Bailout: The American Elites’ Bum Rush of The American People–No Sale! « Pronk Palisades
- Bush on Economic Crisis as Heard by a Computer
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AND…
build the damn fence
deport whatever illegals are left
and make it illegal to write them a mortgage or loan of any kind.
How about making only the guilty pay?
Public records tell us who defaulted on their mortgages.
Fine them as much as it takes to fix this so-called crisis.
One problem: this solution actually makes sense.
Hear, hear!
For those who claim doing nothing is not a plan – it is indeed a plan. It’s a plan to let the market do what markets do. It’s a plan to let the market decide the real value and to extend credit to those who really are creditworthy and to retract credit from those who are not. It’s a plan to let the collective wisdom of “THE PEOPLE” supersede the politicians. It’s a plan that will be far less damaging in the long run.
Either way, we are going to pay the piper. We will pay if they use our tax dollars for this bailout. We will pay if they do nothing and our economy crashes. It’s pathetic the only thing this country can do is throw money at things. Money, money, money…I have a friend who is in the FBI and investigates white collar crime. He said he saw this coming two years ago. He also agreed, we will learn nothing from it. We are funny that way.
corona, people default because they don’t have any money. Fining them doesn’t make any sense.
Whaddaywant them to do to come up with the cash to pay their fines? Sell their house, the house that’s worth half the mortgage they took out? The proceeds of such a sale will go to the bank that gave them a mortgage.
get a grip.
My husband sent this to me. I haven’t completely finished reading it. However, so far it has painted a thorough picture of what we are facing and how we got here. I think it’s a good explanation. So, I’m passing it along.
Thank you NJ-Aviator. My point is though that doing nothing with respect to the $700B is in fact the right thing to do. All of the items in your plan are good and should be implemented however, they don’t all have to be implemented “today” or “everything” will collapse. Though, sooner is better than later.
Not to mention that the U.S. survived the Great Depression. I think this time it will be death by a thousand cuts from the bloated, insane greed and selfishness of our country’s “leaders” in business and government. They really fear for their own well-being, not that of you and I.
30 – good reading. I didn’t read all of it either, but the first two paraghraphs sum it up pretty well and also explain why things will just remain the same. We spend all of our time talking about how to
fixband aid the problem and few people understand what the problem really is. Some see it as just the cause and effect of capitalism while we throw money at this. I personally do not believe anything will change. We are just delaying the inevitable crash.***Faux News Alert***
Dunedin: Obama using shock therapy in debate training the past two days
to keep him from Um’ing and Er’ing his way through yet more embarrassing performances to a National audience.
Faux News has learned the cookie method failed (look how wimpy he is)
and early results for shock therapy are showing minimal results at best.
(but he’s enjoying it)
Film at 11:00
Misscheryl,
I just finished reading it. It’s worth reading all the way through.
Rus… I don’t disagree. In fact, it would take a lot of time for some of the those things to come about. Less for others.
your very welcome.
The President is so funny I forgot to laugh.
Now we wait for Warren Buffet and George Soros and their partners to Short the Dollar.
The easiest way for Fedzilla to pay all this nonsense is to just print more money. We could Globalize the solution by tying the Dollar to the Peso and Euro. Welcome to the Third Worlding of America.
Whether or not you buy it doesn’t really matter. That’s how the market operates.
I see a lot of people on this board doing something we normally condemn the Lefties for: you are thundering on in very emphatic and emotional terms about an issue that few of you seem to actually understand.
Take a few minutes and read Jim’s posts (not paraphrase, read). His summation is the best I’ve read so far.
All of which is made possible by capitalism. Capitalism depends on the ability of people and institutions to lend money to other people and institutions. That free flow of money is being severely disrupted by this mess and like it or not Bush was right when he said it can, and will, ripple through the entire economy.
And if you think the idea of this bailout is a bad idea here’s a real nightmare for you to mull over: we do nothing and the consequences are even half as bad as we’re being warned. Obama rides it into the White House. Then we’re in a serious recession just in time for the most liberal President in history (backed by a solidly democratic congress)to fix it with his own version of The New Deal. After you see that you’ll be wishing the solution only cost $700 billion.
Something to think about…
Isn’t it interesting how Democrats will whine and cry foul and scream “LIAR” over spending $85 billion to keep order in a critical war we are fighting inthe most critical part of the world today…
But they’re very willing to fork over $700 billion plus because Bernake and Paulson say they needs it, but not exactly what they’ll do with it or whether getting it will fix the problem they say we have.
Hmmm… could it be they feel this issue hurts republicans so it’s wise on their part to stoke the fire?
You’ll note fiscal conservatives in congress are going Ape-$#__ over this. That should tell you something.
Not saying their isn’t a problem… just pointing out how liberals are responding to this versus war or terror spending.
there isn’t…
argh…
Good heavens, the denial here is appalling.
I’m sitting here laughing is disgust at those of you who think that our government should just drop everything, and apply Dave Ramseys’ Financial Peace principals to our current situation. As if the sainted Dave Ramsey is some kind of economic Messiah.
For the love of God people, get a grip. Are you really that shallow, ignorant, shortsighted, and disconnected from reality?
We’re talking about the whole of the American economy here, you idiots, not a damned household budget!
There are some very smart voices on this thread, people who have a firm understanding of economics and the dire nature of this crisis. And the president is right, it IS dire.
I sincerely hope that the appallingly ignorant “let ‘em fail”! howlers here, will let up on their idiocy long enough to actually READ THESE POSTS.
And that includes our HOSTESS, who is DEAD WRONG ON THIS.
For crying out loud, people… this is not a simple matter of an undesirable tax increase to fund Dem social programs or something of that sort. We’re talking the total collapse of the American economy here. Do you even understand what that means?
This bailout HAS to happen folks, and YES it has to happen within the next day or two. We are out of time and denial in this situation is nothing short of suicidal.
I wonder if many here who are complaining about having to pay more taxes, actually understand what a total collapse of our economy is going to look like?
There are many here who demonstrate an absolutely STUNNING ignorance about the American economy, the realities we are presented with, and the grave economic situation that we are now facing.
Having to pay more taxes to bail these corporations is a bitter pill to swallow for all of us, especially those of us who are already low income and struggling.
But America is strong, and so are her people. If there has ever been a situation that calls for the American people to set aside their petty differences in order to act quickly and decisively, this is it.
And the time is NOW. If we wait even one more week quibbling about details, our economy is going to collapse like a house of cards. If you are still sitting here in denial, for the love of GOD shake yourself out of it.
If we don’t act decisively, by this time next week there won’t be anything left to recover. Are you people incapable of understanding that, or simply unwilling to?
There are a lot of people here who are either ignorant, in denial, or both. You’ve lived out your entire lives during a period of peace and economic prosperity. I implore you to do some research today about the Great Depression and how deeply Americans suffered during that time.
This is a time for reality-based thought, people…. not idealistic fantasies.
Great background information. Thanks 30.
James, it’s what exactly we do rather than whether or not we do anything.
Buying out the MBS instruments isn’t the only way to deal with it.
On September 25th, 2008 at 9:15 am, James Felix said:
THANK YOU!
I’m happy to see that at least some people here haven’t completely abandoned their critical thinking skills.
What really upsets is these yahoos who got themselves into this mess by being greedy and playing the regulations like a criminal plays with the law could careless what the tax payer is going to have to do to fix this. They are sitting around patting each other on the back now saying “Wow Joe, that was a close one.” More regulation isn’t the answer, they’ll just get around those and 30 years down the road, we will be in the same mess. There is no Corporate accountabily nor do they feel any responsibility to their customers (lack of customer service is a symptom of this) it’s all about money, money, money. Get as much money as you can, screw the customer – produce garbage and get paid – who cares if your product works or not. Nothing matters but how much money you have. I’m just so furious about this.
LMC,
Glad you found it helpful.
All the CAPITAL and bold letters in that diatribe a few posts above don’t mean a thing – as somebody said “It’s like putting lipstick on a pig.”
James Felix there are indeed real assets with real value there; this is true. But will a Federal bail out change the prolific spending and debt habits that caused all this without draconian Federal Regulations and controls? Under Capitalism sometimes even the biggest fail to be replaced. US Leather Company is no longer one of the great names of the Dow Industrial Average.
Federal bailouts of Chrysler and New York City did not fundamentally change the way those two institutions managed their money. Chrysler still has their expensive UAW contracts and New York City still has their expensive social programs and feel good spending habits.
My big worry is the devaluation of the dollar-inflation- that will wipe out the savings and equity of millions of Americans who HAVE spent and saved wisely, Americans who earn far less than Auto Workers, Financial House functionaries and money speculators.
Scary times indeed.
Irish Rose,
I concur with you that many on this site are not seeing the enormity of this problem.
I believe this is an issue where dogma must give way to reality. As a conservative my gut-level reaction is to let this run its course without government intervention. As a pragmatist I know that that approach will be a disaster.
I think the debate should be over how to best address the problem while retaining as much conservative principles as possible. Newt has some good ideas as do others. I have contacted my 2 useless senator’s offices and useless representative’s office (I am from Massachusetts after all.) I let them know that I want a help-out solution, not bail-out solution and I do not want to see any earmarks or social reform strings attached. Maybe if we all do the same we can help shape this inevitable legislation.
I think we would all like to do that, but I also believe that’s not realistic. If people think those in third world countries have it bad, we’d be looking at the pretty much the same conditions here if we do nothing. We must take action on this. I’m not sure giving 700 trillion to someone without oversight is the right thing to do though.
“billion” eerrrr
Misscheryl,
I am not sure if you are agreeing with me or not. I think we both see this as a problem that, unfortunately, needs to be addressed; and that we both want this done with no strings attached, strict oversight and as many conservative principles as possible. Is my understanding of your position correct?
Yes, I am in agreement with you.
On September 25th, 2008 at 9:31 am, Misscheryl said:
Me too.
I honestly don’t think that theres’ an American citizen that isn’t.
But our collective anger does very little to change the situation on the ground.
It stinks, but it has to be done.
I am becoming a strong believer in military coups.
If anyone hasn’t read ALL of 30s link…do so. There is so much information in it and I’m still trying to absorb it (my head hurts) but, just wow!
China banks told to halt lending to US banks-SCMP
BEIJING, Sept 25 (Reuters) – Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.
“The decree appears to be Beijing’s first attempt to erect defences against the deepening U.S. financial meltdown after the mainland’s major lenders reported billions of U.S. dollars in exposure to the credit crisis,” the SCMP said.
A spokesman for the CBRC had no immediate comment. (Reporting by Alan Wheatley and Langi Chiang; editing by Ken Wills)
What happens next is of course unemployment rates over 10 percent, more defaulted loans and bancruptcies and more bailouts. Next will be the cities and states. Illinois is about to default on its pension plan which is underfunded by 44 billion dollars.
States and schools depend on property tax. The defaulted mortgages on property where no body is payng the property tax either. So the feds will have to cover that property tax (hear anybody talk about that). This is not a solution, but only a further unwinding of the economy.
And those of us who don’t vote for Obama are racists.
Look, I am ok if you want to disagree about the solution. But I minored in economics, had licenses and worked for a Wall Street firm for nearly 10 years. Those guys know the system is going down. They are in this to grab as much cash as they can, like a contest winner in a wind chamber.
Lots of people knew darned well this was going to happen 5+ years ago. But insinuating that we are now too dumb to understand why they need our money? *That’s* the most condesceding liberal line I’ve seen on these boards so far today.
As Grandma used to say, this is throwing good money after bad, and this exact type of action took what should have been a 12 month correction in the early part of the 1900’s, and turned it into a 10 year tragedy in the 1920’s and 30’s.
JP Morgan made a killing in 1907, then stepped back and let it all die in ‘29. Warren Buffet is now positioning himself to do the same. Wake up already!
These financial geniuses presenting Plan B (for bailout!) are the same lot that got us in this mess, and I certainly doubt that a lot of elected lawyers are suddenly equipped to make flawless financial decisions.
Because, like the poster above, I am ready for a reset.
It’s already burning. Let it burn quickly so we can rebuild with honor. And maybe some *real* conservatism.
“People default because they don’t have any money.”
HARDY HAR HAR
Have you been paying attention? Did you totally miss the posts on this blog of the member of Congress (guess the party) who has gamed the system again and again?
The vast majority of defaulters have jobs or receive some kind of government payment. Garnish the wages – take the fine from the handout.
Case closed.
30 pcs.. regarding that article.
Yes, it was very informative.
But consider this.
In addition to a good walk-through of the history, the article essentially highlights the fact that the issue is Valuation of the MBSs, CDOs and other securities.
The gov’t, after buying these up, will tear into them and assign a value based on what they find. (Whether they reorganize some of these and eat the underlying bad debt remains to be seen).
Then, once valued or “Transparent”.. they will auction them.
On the surface it sounds like a plan.
However. The status of the underlying debt will be changing month to month. If the banks and HIBs as he calls them couldn’t value them before, how are they going to value them after they re-buy them? And what’s to stop them from re-slicing the pie again and creating the mess AGAIN?
Also, why is it that the treasury has to buy these securities before assigning a value to them? Is there no way to freeze them and analyze them while they’re on the books of these firms? Is it the cash that the firms need? And if being forced/allowed to sell these for huge losses, then buy them back through auction is good, I’d like to here why. Maybe there’s a really good reason for all for all of this, but it’s not clear what it is. And I do get that who ever re-buys these securities might make money going forward. Given the transparency at the time of sale.
And… Does anyone have any idea what it going to cost the gov’t to actually operate this re-valuation machine? And does anyone thing the inefficiencies of that gov’t operated business will not be spectacularly wastefull? I’m not saying it isn’t needed, but it won’t be free. Go back and look at how much the Resoltion Trust Corp cost. Again. not saying it’s not needed and not cheap compared to a meltdown. Just that it’s not free.
Irish Rose:
Chill out. Few don’t want a fix. Many just don’t agree with THIS fix or at least the details of it and the implications it will have down the road.
1. If the bailout is done (eg. we print up $700 billion USD that do not exist and hand that over to dysfunctional, if not criminal corporations…) and it doesn’t work, then what??? We will have subsidized inefficient organizations and very possibly criminal ones as well (based upon the scope and scale of investigations taking place as I write…).
2. The provisions in the language of said bailout ‘bill’ are at least curious for the language which purposefully excludes oversight and transparency. ANY bill done to save these corps should include STRONG provisions for oversight and full disclosure of the details and include a boat load of strong regulation.
3. Further, it is inherently a conflict of interest for Paulson (up to 2006, the CEO of Goldman Sachs) to be lobbying for any bailout package for his buddies in the industry (and directly, his former employer in fact).
4. I’m open to lending some sort of assistance – not to help these organizations survive, but only to ensure the ripple effects are controlled throughout the wider US economy. Let the organizations and their crooked leaders take the dive – as humble working Americans have been required to do so often in the past.
5. Many in the most conservative circles actually agree with many progressives (eg. ‘liberals’) that the particular terms of the proposed bailout are bad. <- That, should tell you something. And, to boot, most US Reps. and Senators are receiving high call ratios AGAINST said proposal.
As a low income single mom, I can honestly say that it makes me angry as hell to have to pay for all of this. I’m already struggling, and I can’t afford another tax increase. It’s going to mean clamping down even harder on an already impossible budget.
But I HAVE to do it.
I’m going to do my part, and I’m not going to whine about it.
I’m going to pay my share and do what I have to do, because my children deserve to have a future. ALL of our children deserve to have a future.
I’m not a person who is prone to violent rhetoric, and I rarely make statements like this, but this makes me about as mad as I’ve ever been… the selfish pigs who are responsible for bringing this country to the brink of complete economic collapse should all be rounded up, put up against a wall, and shot.
Irish Rose.. some of those selfish pigs are your neighbors… maybe distant neighbors, politician who changed the lending rules and investment bankers that built up this MBS market.
So yeah… we sure do agree on that. But don’t fork over your hard earned cash so easily. Hold your position soldier.
Irish Rose:
.
OK… how much time to you propose that we take then, to come up with a more palatable “fix?”
Irish Rose, your children already owe $35,000 to the US government. The future you’re saving for them is one of slavery.
Letting the market crash might give them a chance to pay cash for a house, instead of going into a 30 year debt where the bank typically makes 200% + of the mortgage amount in interest.
Send these bastards into receivership, and let the market (not the government) decide what the properties are worth.
I do not purport to have all of the answers, because I don’t. I merely provided the link for those who are trying to understand what we are facing and how best to move forward. That said, it seems to me that there is no full-proof plan.
I believe the oversight committee will be responsible for addressing the re-valuation aspect.
Hopefully, we are.
Nothing ever is.
Where was the “And God bless America”?
Doom, Doom, Doom…
Mrs. Malkin, you’re an idiot. In case you didn’t catch her drift
GO FOR IT!
IR – For you to tell many of us to get a grip and just trust Bush, Paulson, and Congress is totally outrageous. I don’t think I’ve read any comments here though that indicate some commenters think the national financial situation is just dandy – the remedy is what is at issue. Short term band-aid (maybe), only delaying the inevitable, long term fix – those are what is at stake. It appears you are telling us we are idiots because we don’t just jump up and say “yes government please flush away more of my tax dollars”. I for one will happily pit my economic/financial credentials (both educational and “experiential”) against yours.
Further I love how you are always smarter than our hostess.
And for what it’s worth – household finances work the same way government finances do with one exception – the government can print paper (thereby devaluing all of the previously printed paper). There is income, there are expenditures. Any discrepancy between these two numbers is either savings or borrowing.
Not to mention the largest growth of governmental agencies and regulation in the history of our country.
“I’m a strong believer in
free enterprisesecure borderssmaller governmentfederalismnothing.”On September 25th, 2008 at 10:18 am, fourstringfuror said:
Liberal arguments like that that present nothing except personal attacks serve only to reinforce my belief that we’re better off taking our lumps now rather than later.
Like she said . . .
Just so we’re clear, those aren’t my words; those are the words of our esteemed IrishRose.
Better.
For those that strictly oppose this I would love to hear your alternatives.
No I don’t understand what that means. I’ve had the privilege of traveling and doing business all over the world – even third world countries with hyper inflation. Please explain it to me.
That is not what I said. There is indeed real value here. That value is concentrated in the foundation upon which the derivatives were based – mortgage loans on real property.
The problem is that the market in the mortgage and real estate market has seized up. And when that happens, there can be NO value. If the asset does not trade, no value can be established. And if the value cannot be assessed, lenders will not risk making a loan that may or may not be worth the trouble.
If there is no ability to get loans on real estate, people cannot sell their existing homes, and others cannot buy new homes. Like or not, America has been conditioned to view real estate as something they do not have to purchase on a cash basis.
Mortgage loans have been historically viewed as the safest of all investments. Banks keep them as part of their investment and capital accounts. Insurers hold them as part of their investments and reserves. Retirement plans hold them in large quantities.
That is because they have always been esaily valued and the market for trading in those assets has been very liquid. With no liquidity in the mortgage sector, those assets cannot be liquidated to meet the ongoing obligations of banks, retirement plans and insurers. These institutions maintain very low cash reserves. They make no money on cash, whereby investing that money in safe assets allows them to use the investment income to offset their expenses and their ongoing liabilities, helping to keep the cost of operations down.
No bank, retirement plan or insurer would ever be able to meet an immediate redemption of their assets to meet total liabilities. But that is exactly what is looming here.
There are so many aspects to this that stink. Once the govt. assumes ownership of these assets, does anybody believe they will actually forclose once the payments stop? Hell no. The loans will be renegotiaed, subsidized or partially forgiven all at taxpayer expense. Even if not written into this bill, the Dems will sneak it in in the future after the elections. Straight from the mouth of Barney Frank:
This bailout will end up being yet another transfer of wealth to the irresponsible. If some method could be included to prevent this, I could get on board but the Dems can’t be trusted. Couldn’t some provision be written in so the govt buys the assets (at reduced price) when the house is in foreclosure, instead of before? On one hand this would prevent any Democrat games but seems is overly lenient to the lenders.
Having said that, I would rather just let the market take it’s course and suffer now than see this turn into yet another entitlement. That would solve nothing and just delay the day of reckoning which will come, one way or another.
my suggestion is to have our public servants walk a mile in our shoes. get rid of the government retirement plan and make them live on social security, it will ge fixed. get rid of their health plan and make them personally buy health insurance, it will get fixed. get rid of nancy pelosi and others lear jets and make all government officials fly coach, and the airline mess will get fixed. make our government cut $1 of present day government spending for every $1 of new spending on bailouts, and they would soon come to the conclusion they can’t have every damn thing they want and reach into that always full piggy bank called the taxpayer to get more. you want 700 billion to rescue wall street, cut 700 billion from WHO spending, UN spending, AIDs in Africa spending, rebuilding Iraq spending, saving europe again spending, mid-east peace initiative spending, department of redundancy department spending. i’m sure most of the state department could disappear and no one would notice, as it has long been nothing more than a job for rich northeasterners imbecilic children to keep them out of the parents houses. how many kennedy’s can one organization absorb?
all i want from my elected officials is that they live in my world, not the dream world they have created for themselves where no perk is too extravagant, no spending is too much, no cause is too stupid to fund, and no accountability is ever demanded.
Let’s not make IR the issue. We don’t have to turn into bottom feeders like the left if we don’t agree with someone. I am in agreement that something must be done, I’m not crazy about throwing 700 billion at someone and say “have at it.” But, I’m also not crazy about a huge govenmental oversight agency. I dunno. I’m certainly not smart enought to figure this one out. My trust is not in this government or any other..so…God’s will to all those who believe.
I won’t call MM names because I love her, but her distain for the Wall Street and Congressional swindlers has clouded her judgement. Shutting down the bailout would be the proverbial “cutting off our own nose to spite our face”. We take the best action we can now with the information we have. Then we look into properly analyzing causes followed by carefully crafted controls for the future. If this is done honestly, the responsible private and government criminals will be exposed in due course and prosecuted or at least run out of office. Blame and accountability must be assigned across the board or, as other posters here have said: It will happen again.
I agree that the Presidents (Carter, Bush1&2 and Clinton) were clueless on this.
Did anyone else feel like they were watching a Saturday Night Live skit with Alfred E Neuman at the helm?
YeaH, i’M SUPPOSED TO BELIEVE A GUY WHO SAID HE WOULD PROTECT THE BORDERS..(bald faced lie) And who lets Ramos and Compean rot in jail to further his own mercenary goals…No thanks Jorge , you’ve cried wolf too many times…does anybody believe this guy gives a crap about average citizens?
NO AMNESTY FOR WALL STREET OR ILLEGALS !
Irish Rose: I didn’t intend to sound harsh btw.
Anyway, I don’t believe it would take months to come up with a plan to address this. Days… or a couple of weeks at most.
30 pcs:
Those questions/issues weren’t directed at, or critical of you. I am simply tossing them out there. And I don’t have answers either.. let alone sure fire ones.
On the re-valuation, I think the over-sight committee is the entity Congress is proposing to watch the actions of the treasury as they buy up, reprice and resell. What I’m talking about is how firms will handle MBSs after they buy them back.
Frankly, I think the MBS market should go away. not overnight, but over time. We did fine without it before 1995.. we can live without it again. Provided mortgage lending goes back to what it was in the 1980’s. Ability based.. not an Entitlement.
And having it go away would eliminate the Goldman’s etc from creating a new and shiny way to screw us up with MBS that circumvents what rules Congress attempts to create.
Yup.. nothing ever is free 30 pcs… unless we live in a world ruled by Obama… and you’re one of his Community Organizers. Then everything is free.
On September 25th, 2008 at 10:51 am, NJ-Aviator said:
You’re probably right, we could hammer out a better plan if we had enough time to do so.
But unfortunately the situation demands that we act on this very quickly and put a bare-bones plan into place. Things are beginning to deteriorate very rapidly, and time has run out.
We’re going to have to take whatever bipartisan bailout plan the crisis team is able to work out between now and Friday afternoon, and go with it.
It’s not going to be perfect, far from it. But it will avert a horrific economic catastrophe, and that has to be our focus right now.
There will be time to work out the more minute details of the implimentation later.
I see. I misunderstood. That’s a good question one that cannot be answered until we come to an agreement about what must be done.
I take your point, but even then it isn’t free. Somebody is paying the piper.
That’s better.
What angers me the most, is that I was priced out of being able to buy a home by the people that are now whining about losing the homes they could not afford in the first place, and NOW I am going to be expeted to pay for those homes too?
No. I have had it with all this Socialist, “Pay for me, not for thee” crap that has been injected into this government and country.
I have absolutely been fed up with having to pay for everyone else to the point that I can no longer pay for myself and my family.
I am like IrishRose. I CANNOT afford any more increases. I am on a fixed income from a disability pension from the Fire Department, and to have to pay higher taxes due to the greed and incompetenc and apparent illiteracy of others is just too much to ask.
These people deserve everything they are getting.
Stop asking me to pay for you.
That is NOT how this country was founded, that is NOT what this country is about, and that is NOT going to be what I am going to do.
I saw a bumper sticker the other day on a car with California plates. It said “Work harder millions of people on welfare are depending on you.”
Jim M: I’m sorry for glibly commenting on your post 9. You have considered many aspects and thought this through which is further than many have gone. What I was trying to say is the paper trail is so long and winding that it’s difficult to know what’s behind it – hence a house of cards.
As to your premise:
, I disagree. Everywhere in the “free” world I’ve been (and some not so free) indicates to me that where there is money to be made, people will be willing invest. It might not be handled through a “central credit market” / corner bank, but it still gets done. I’m not suggesting it’s nearly as efficient or desirable – just business does not cease, transactions do not stop.
Like the proverbial chicken farmer we have allowed the fox to run the hen house. There have been many that seemed confused about what should be done about this.
First, kill the fox. Get rid of the congress that allowed and ignored this mess to happen. DO NOT RETURN A SINGLE congressman to congress. Vote for the person running against the incumbent. Let’s create a “Junior” congress! New blood, with new ideas. Send the “fat cats” home and break up all the deal makers.
Second, build a better chicken coop, in other words let if FAIL and foreclose on all those who can’t pay their mortgage payments. Most of these are the “toxic” type anyway. These people can move to apartments, which will be a boom for apartment owners. New
appraisals can be done and the property resold to qualified buyers.
Third, go back to the rule that requires borrowers to have a sufficient income and budget to afford the home. Jimmy Carter can build the homes for the poor and low income people. It’ll make him feel better too!
And I must add, this is the same thinking that Obama is preaching today. Once again and more of it. Take the top 5% money earners and give to those who do not have. Why is it so hard to understand that this guy is toxic! We are living the repercussions of this today…right now! I hope he shows up all by his lonesome to debate tomorrow night. If he does, he is truely the complete idiot that people suggest he is.
oooohhh, wait, I need to correct something. Obama doesn’t want to lend the money. This time he’s just going to give it away. I guess that will avoid this problem in the future.
You are exactly right. Should The Tarnished Bovine get elected, you can be assured that there will be so much more of these bailouts to where no one will have ANY personal responsibility at all.
But what is contemplated here, is taking money from all taxpayers – and giving it to companies staffed with individuals whose net worth/annual incomes is higher, and often, much higher than the mean. In more cases than not, it is the “poor” subsidizing the “rich”.
While the money is flowing IN to those organizations, they’re quite happy to PRIVATIZE the benefits, when the cash flow is negative, they’re quick to insist that we SOCIALIZE the losses.
I say, organizations such as this need no longer be actors in the economy…
They should just ‘go away’. Isn’t that the way capitalism is supposed to work?
Or, stated another way, why wouldn’t anyone deserve to have a 6 or 7 figure salary doing a job that, apparently, *some* Americans are willing to do (uh-hum, cough, sigh…), running an investment bank into the ground? Anyone could do that. I would love to have that job… but, probably would not do it – out of sheer conscientiousness.
Bush’s friends: http://washingtondc.fbi.gov/dojpressrel/pressrel08/wfo092408.htm
This is truly amazing…
We are watching the federal government as Superman trying to rescue the runaway locomotive (the market). At least, that is how they see it.
In actuality, there are no heroics here. We are seeing the worst of what a government can do when they believe they can get away with it. The Congress and the President really sense their worth when the can spend other people’s money (OPM).
The majority of stopgap and emergency actions by the feds cause a larger problem down the road. For each emergency, the American taxpayers are crunched for years on end.
Spending under FDR delayed the recovery of the Depression. The one-time illegal alien amnesty did nothing to end illegal immigration (in fact, encouraged the activity to greater numbers). Want to discuss Social Security, Medicare, and such?
What we need are true reforms and the backbone to enforce the rule of law. We should pursue those that tried to cut corners and destroyed those businesses. If we are going to have regulators, then the regulators must do their jobs. We must also start reducing the monies that are poured into political campaigns whose members of Congress write obscure laws benefitting those who donated.
Simply put, jail and fine the crooks (recover the ill-gotten gains). Jail the regulators for malfeasance of office. Eliminate the tax-exemption status of all political donations. Investigate all NGOs and community activist groups that misuse their federal grants and charters.
Responsibility. You have to be fiscally and morally responsible as do I. Why shouldn’t everyone be so, especially the government that represents us?
IrishRose… I have a quick fix for this Financial FUBAR!
Up until 1933 the Gold Standard worked just fine in this Country. I say RETURN TO IT!
Tell Bernanke and the rest of the Corporate Brain Dead its OVER! NO MORE GETTING RICH OFF THE BLOOD & SWEAT OF THE AMERICAN TAXPAYERS!
The Fed = The WORLD BANK…I’m personally tired of FINANCING THE WORLD, PERIOD!
No more selling off my childrens FUTURE!
No more selling off AMERICA!
And don’t forget to thank Zigler: http://www.vdare.com/mann/what_do.htm
I’m sitting here this afternoon feeling sick to my stomach.
I’m a single mom, a domestic violence survivor and all slone where I live, without any family members or friends to help me out financially. Everything that I’ve been able to accomplish over the last three years I’ve done on my own, without a family to fall back on and without a job for much of that time (I’ve lost two good paying jobs now to the downturn in the automotive industry).
I’ve been living paycheck to paycheck wondering how I’m going to keep the utilities on, and food on the table. Regrettably I had to utilize the food stamp program for a while, but I got out of it as soon as I was able to. It was a matter of personal pride for me.
The last six months have finally (finally) turned my situation around. I have a great job and it’s going very well, and I have health benefits for the first time in five years. I scrimped and saved enough to refinance my home the old fashioned way, and I’ve lowered my monthly mortgage payment considerably.
I have a fairly decent tax return coming back, and I’ve been planning to put it all into savings to support my family through any crisis that might arise over the next 12 months, with the sole exception of the $ needed to purchase a train ticket so that I can go visit the sibling that I’ve not seen in five years.
There are some parts of this bailout that are more important than others and should be supported. But there are other parts that SHOULD be weeded out and probably would be, were we not so pressed for time.
It grinds on me to think that I’m going to have to turn over most if not all of the small tax return that I’m depending on to provide for my family, to support the maggots that got us into this mess.
Nonsense. Price those babies at $1 and see how fast they fly out the door.
They have value, they just don’t have the value that the people that own them want them to have.
I am sorry their retirement plans are in trouble, but that doesn’t give them the right to jeopardize mine.
Irish Rose, two things:
1. I am not usually a gold bug, but precious metals are traditionally used to preserve wealth during inflationary cycles.
2. Be very skeptical of advice you receive on the internet.
Didn’t all of you people vote for him two times – stop complaining and start apologizing to the American people for what you have brought us.
Moron. You haven’t a clue, do you?
You’re a perfect example of why many people in this country are unfit to vote because you don’t know how to THINK.
What some here don’t see is that we can’t win either way in this situation.
If we do nothing we are not certain of the consequences. We cannot be. I don’t doubt that there will be consequences but nobody can say with any certainty if those consequences will be a 3 quarter recession or a 1929 style depression lasting a decade.
We do know that the bailout, as discussed so far, will further shove the United States toward socialism. And it won’t fix what caused the problem and it won’t stop it from happening again.
So America loses either way. We suffer a recession or depression, or we become a socialist nation.
The problem with picking our poison is that we are still dead regardless of which poison kills us.
The same crooks will be running Congress and Wall Street after we bail them out.
We not be able to win, but I would rather have a choice about what get to lose.
This isn’t going to work. Look at the credit markets! They’re still not moving.
The banks are going to take all
ourthis money and sit on it.That’s what I’d do, because the problem isn’t as complicated as the financial geniuses would have you believe.
We, as a country, do not have any money. We have spent more than we made. We are consuming more than we make. We are giving out more than we are receiving.
OT – but a wonderful suggestion was made today at lunch. McCain doesn’t go to the debate tomorrow night – Sarah shows up. She says – I’m here representing Senator McCain who is attending to something very important for our nation.
She’d clobber Obama and the experience question would all of the sudden be silent.
But the problem is we either bail out and lose or don’t bail out and lose. But, the “bail out and lose” is more certain than the other option. I guess that was my point in a nutshell.
I’d rather have Sarah in the economic discussions. I suspect she actually balances her own checkbook.
I think I’d rather have Cindy McCain in the discussion. She runs an actual company and understand some of this stuff first-hand.
I wish my wife was a beautiful rich woman who owned a beer company.
WarEagle – so does my husband! LOL
If wishes were horses, beggars would ride.
Heh. And I only wanted a pony.
Hey, if you are going to wish why not wish big?
And she fired the chef to show her kids it’s OK to eat Mac and Cheese. If only Dodd, Frank, Pelosi, Raines, Gorelick and John Dillinger were eating Mac and Cheese…
Believe it or not Huck actually has something intelligent to say. Governors live with budgets.
Can Gorelick and Frank share the same cell? We can put up Chinese walls so they won’t even see each other.
No she didn’t. She reassigned her as a “constituent relations assistant” in the governor’s office and later to the state museum until finally being reassigned to the Legislative Lounge to cook there, so she never came off the payroll, as far as I can tell.
And I don’t think, with the childhood obesity problems in the US, we should be extolling the good wholesome values of Mac and Cheese too much.
Ok, my point was doing without as an act of personal responsibility and not getting a sense of entitlement. As far as the kids were concerned, the chef was axed.
And the mac and cheese in my little tale played the part of fiscal moderation versus excess, not nutritional advice. (We can leave $100 ham out – this wasn’t an Obama attack).