Wasn’t the bailout supposed to calm the financial markets?
Doesn’t seem to be working out that way:
Markets in Asia tumble amid fears of growing financial turmoil
London plunges as banks pump billions into market
US STOCKS-Futures tumble as credit woes fan global rout
You know what they’re going to tell you, don’t you:
***
See, I told you so: They want more, more, more…
Despite widespread unease over the use of taxpayer money to salve Wall Street’s wounds, it also seems virtually certain that lawmakers will in coming months confront anew demands for even greater government activism. Critics say the new federal legislation just won’t do enough to resolve the banks’ chief problem: a crippling shortage of capital.
Already, prominent economists across the political spectrum are floating proposals that envision mammoth government spending beyond the $700 billion bailout. Among them: shuttering insolvent banks and providing taxpayer cash to those that can be saved; a temporary unlimited government guarantee of all bank deposits; or even direct financial aid to individual homeowners to ward off foreclosure.
“This act alone is not really going to resolve anything. Eventually, the government is going to have to do more,” says George Magnus, senior economic adviser to UBS in London.
Meanwhile: The $85 billion bailed-out AIG parties hearty.
I repeat:
Paulson’s monumental misjudgment is no surprise to those who have paid attention to him over the last year. This is the man who proclaimed the subprime crisis “largely contained” in April 2007; “near the bottom” in May 2007; and “largely contained” again in August 2007. This is the man who pledged that he had “no interest in bailing out lenders or property speculators” in October 2007 and couldn’t “think of any situation where the backdrop of the global economy was as healthy as it is today.”
This is the man who patted himself on the back for refusing to “put taxpayer money on the line” to rescue Lehman Brothers on Sept. 15 – and then turned around the next day and engineered the $85 billion taxpayer-funded bailout of AIG. This is the man who vowed he had “no plans to insert money” into Fannie Mae and Freddie Mac –and then turned around and committed $200 billion in capital and credit lines to those corrupt, bloated, crumbling institutions.
This is the man who declared “the worst is likely to be behind us” in May 2008 – and then got down on his knees in front of Nancy Pelosi to pass a Mother of All Bailouts plan whose dollar figure was plucked from thin air. (“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com. “We just wanted to choose a really large number.”)
This is a man, in other words, whose crap sandwich should be taken with a huge grain of salt.
Too late now, feckless Congress.
Taste the Crap Sandwich.
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Pelosi and the socialist democraps will ask for more money, probably before noon. They can’t help themselves.
Giveme Giveme Giveme It mine mine mine. The financial markets are acting like a three year old who knows the cookie jar isn’t empty yet.
That is because the bailout is not big enough! Bush lied, stock market died. /sarc
those crackpot economists in congress will tell us the next bail out will work.
I listened to a financial podcast yesterday that was very depressing. It said that after a brief potential upswing in the Dow (3 to 6 months)after this bailout, the markets would fall back towards 7500 or so. Boomers will start to slow their spending as their about to hit retirement and even the emerging markets will start to slow down. Housing prices were predicted to fall more as well. Government won’t be able to print enough money in this scenario without risk creating junk status for our debt.
And that’s BEFORE any new spending under an Obama administration! Get ready to just hand your paycheck over to Uncle Sam.
Umm…
SURPRISE!
$850B.
Heckuva job there, Bush/Congress.
We were watching Pelosi and Comapany speak after the bailout bill passed (while waiting for a AFN to replay the Palin/Biden debate) and on the side they had the Stock ticker. We were laughing at how the more each of them said the more it fell, especially Barney Frank. As soon as he started speaking it tumbled nearly 100 points. We were not surpirsed when we woke up Saturday morning (friday night back stateside) to see that the Dow Jones closed at -157 points. Of course we all new that the bailout would not help, especially when you have Barney Frank talking about how the bill had the provision from a July 2008 bill that would allow the government to renegotiate the mortgages of those who faced foreclosure to a government backed loan with a lower interest rate and lower principle balance. But they claim they are not fleecing the taxpayer.
Oil down to $89.85/barrel per AP on Yahoo News at the pump we’re down to $3.27 and this is bad, how?
I think I can hang with this trend as far as it’ll go, wouldn’t mind $30/barrel and $1.25 at the pump either.
Food and other prices would follow as well methinks
Yep “change” is what you’ll have left after Obama.
Government intervention is only going to prolong any slowdown in the economy. You’d think all these eggheads working up in D.C. would know this. I think they have other motives, like the redistribution of wealth.
Damn, it’s early on the left coast. My dog is still sleeping!!! Good morning everybody!!
/s/
José
I dont know if any of you saw the SNL skit about Bush/Congress over the bailout, but it was actually really good and fairly factual. They have a link to it over at newsbusters.org
Blieve it or not they make fun of the Dem’s trying to blame it all on Bush and even have Barney Frank admiting that it was all the Democrats fault. It goes on to show the people who will be helped out by the bailout bill (this includes a couple of Loser’s with no jobs that got a subprime mortgage and claimed they did not understand that they would have to pay monthly). I was shocked that it was really good and fair.
Here is the link to the SNL video clip at newsbusters.org
Ok everybody, all together now….
“We told you so!”
I’m on a home association board. We were setting our budget for the next 12 months last night and could not make an intelligent guess what our cost would be. Thank God I work out of my home now. I can’t imagine running my old business with unknown fuel, health and inflationary variables. I know these are relatively small small problems, but it shows how this meltdown will permeate every level of our culture.
Any guess how long before the first piece of ‘toxic debt’ is bought by the bail-out ?
hire the staff
testify before congress
build the building
testify before congress
design the software
testify before congress
negotiate with the bankers
testify before congress
pay ransom to ACORN
testify before congress
etc.,etc.,etc.,
The American Left has achieved their objective of a Socialist America and they did it using our own institutions. Trust me, the thieves will be back in 3 months looking for another trillion $.
The seeds of this bitter harvest were deftly planted by the Carter and Clinton administrations and Conservatives have yet to devise a cohesive strategy for showing America just how they did it and why they must be held accountable. Can you imagine a unified Obama-led government and what destruction they will wreck?
Remember, it took the policies of Carter and Clinton 15-20 years to fully reveal themselves – this cycle will be much shorter. The Democrats will continue these back door Treasury thefts until the economy is ruined. This is what happens when lawless and godless people are given free reign. Say goodbye to the middle class, American Civilization, and prosperity.
The more I think about this “bailout”, the more upset I get.
I’ve come to this conclusion… It is nothing more than a BULK TAX! Instead of the Govt. picking at our flesh like vultures, this money grab was more like a Great White attack!
Anyway you look at it though, it is Taxation WITHOUT representation!
I believe The Boston Tea Party comes to mind.
Does anybody here think 60 minutes will do an exposé on ACORN?
josetheguerilla @ 7:36 AM:
I think their motive is to prove that they are helping, when they are actually as useful as teats on a bull. These clowns didn’t see it coming, now they can fix it in less than a week?
Sometimes, it is better to do nothing. If you start monkeying with a complex system you don’t understand, you are likely to make the problem worse.
Thanks Ms. Fannie Mae, aka Barney Frank, and Mr. Freddie Mac, aka, Christopher Dodd. This is a fine mess you’ve helped get us into.
I’d be remiss if I didn’t mention Chuck Schumer. Sir, please take a bow.
As the old saying goes “Might Oaks from Little Acorns grow…”. Looks like this is true in the financial world too. Barack Obama didn’t fall too far from the ACORN tree. This austere group along with their Community Organizer deserve a great hand of applause also.
We’re screwed.
iamsaved said: This austere group along with their Community Organizer deserve a great hand
ofapplause also.across the face.There. fixed it for ya.
“Wasn’t the bailout supposed to calm the financial markets?” Sure was, but it was too late. Big drops in all major markets – in Russia’s case, 12%. Wouldn’t be surprised to see the DOW drop below 10,000 today. I question how much will even end up being used for the intended bailout:
California, Illinois, Massachusetts so far lining up with their hands out for billions.. their reasoning, in the words of Massachusetts State Treasurer Timothy Cahill, “That’s all we would ask them to do: treat us like the investment banks.”
Newsflash: Investment banks no longer exist, and although Cahill might like to think the state’s coffers are his personal playpen, they are not.
The $100billion in earmarks should never have been tacked on, and it seems clear a significant amount of the money is going to end up going to the politicians to top up their state books and probably take a nice little bonus for themselves.. explains how the bill got past the house second time around doesn’t it..
What this market drop shows is an utter lack of confidence in the Fed to act fairly and responsibly – but no big surprise there, they punish responsibility and reward irresponsibility.
Yes, I was for the initial bill, to be used immediately and as intended at the time (to reassign these toxic debts), but I was against this second bill with the ridiculous earmarks.
From each according to his abilities–to each according to their needs.
Name the author
I believe ‘Great White’ will be viewed as a racist term, much like ‘Black Hole’. In future, please use the term ‘Great Black attack’.
/sarc
Karl Marx. eep.
Anyone notice how as soon as that boondoggle of a bill passed, the media started talking about how it would take WEEKS for us to see anything positive about the “bailout”! Too bad they never mentioned that to the taxpayers BEFORE it was passed!
I see the Dow futures is DOWN this morning!
And yet they keep claiming that we cant drill for oil as it wont immediately solve the energy crisis…
Here’s your chance to send a clear message on Nov 4th
http://onassignment.blogs.foxbusiness.com/2008/10/03/roll-call-how-did-your-representative-vote/
Absolutely. Before all is said and done, I believe that the “bailout” will do more harm than good to the markets by undermining confidence in the system.
Can’t Paulson just sit on the $800B for a while and see what happens? Since he is now in charge of all the nation’s finances, I think slow and steady would be a better idea than just carelessly throwing this money around. It’s authorized, it’s there, so if he needs to do something, he can do it, but don’t rush into it.
And don’t forget “Hope”!!!
As in “I HOPE you have spare CHANGE for your personal needs.”
CAPT McCain, you are requested to take the conn. Your watch will be 4 on and carry on until properly relived. We are in a typhoon and the current watchteam is steering us to the dangerous semicircle.
Recruit Obama is not worthy of being a sideboy for you. In fact, he’s probably in a fan room somewhere getting buzzed. Or he’s in the head, with his face in the trough, puking his guts out.
Steer us clear of the storm sir. Take the helm.
VR
Warrant
BOHICA!
VR
Warrant
Would that be “Audacity of Hope”?
L’audace, l’audace, toujours l’audace!
Maybe the Audacity of Arrogance?
My market grafting charts show the DOW should be at 9000 to reach a strong foundation before the meltdown. I’ve been doing this for 40 years and have a good track record. Now however I find my variables of input have little historical basis. I don’t know where we’re going and I afraid no one else does.
- Cancel the bailout
– revert all floating mortgages down to their initially agreed rate (and if still people can’t afford it, they never should have signed in the first place, so let them fail)
– for those who took fixed rate mortgages (the responsible ones), drop them to the floating rate at the time they signed and fix the rate there
– give every mortgage a 15% cut in principle
– for all taxpayers who didn’t take up a mortgage because they were responsible enough to know they could not risk a rate increase, eliminate income tax completely for a couple of years (only for those without mortgages).
The banks would be better off, there wouldn’t be $100billion going to earmarks that shouldn’t be, and it would give taxpayers a relatively fair deal.
Illegals should get nothing out of this.
All Juan would have to say is “Owing China the amount of $$ we do is dangerous. I will work to erase this onerous debt.”
But he won’t. He’s determined to lose.
I hope Sarah Palin has had enough of his defeatist ways and starts using her own talking points. He’s wasting a lot of her valuable time with his sham campaign. Alaska has a $300 million SURPLUS. This is a woman who knows how to handle money.
I put up a Palin yard sign yesterday (folded the “McSame” part over the back and clipped it down).
Did anyone see Neil Boortz on Huckleberry’s show last night? I’ve heard a couple comments(Glenn Beck?) that the flat tax proposal isn’t really what we’d be paying on everyday items, but that it would balloon like everything else. Boortz estimates that $13 trillion in U.S. business is overseas because of our punitive tax laws. It was thought-provoking to say the least.
Saw Chris Wallace and his gang (including Britt Hume) on the Sunday show and I think the panel has finally gone off the deep end. They were furious that there was any grandstanding over passage of the failout (”TheyHAD to do something”) and even moreso that people complained of the “sweeteners.”
Sick.
CNN news flash: Federal Reserve doubles to $300B the amount it will loan to financial institutions in need of short-term capital. More soon.
What a surprise. I guess their word isn’t worth the paper it’s written on.
TOO LATE.
Of course the stocks took a plunge. Instead of takeing measures that would have functioned at essentially the immediate term, Paulson, the treachorous traitor, forced congress, the bunch of wimpy whiney little turds that they are, to pass legislation that has no hope of working ever and will not even have accomplished anything until the election is over, hence giving the Democrats the election.
I called Rep. Herseth Sandlins office to voice my opinion on the “Bailout”… The guy hung up on me!!!
So, I called the local office to voice my opinion… I asked how a bill could go from 3 pages to over 400?
She said alot of that was “Sweeteners”… I said “Wooden Arrows? Rum? those are sweeteners?”
She laughed & said YES…
Disgust is to good of a word for these people!
The Dow was up 300+ before the vote count on Friday, but tanked after the bill passed. Go figure.
Is there any move to challenge the bailout in court? Oh, never mind, the courts are packed with left wing judges, aren’t they, so this would do no good. And while we’re on the subject, who do you think will be President Obama’s Secretary of the Treasury? Dodd? Franks? Could this go on all day, all night? It could you know, and it just might! Welcome to Amerika.
The flat tax is the only solution to this manufactured crisis.
http://www.fairtax.org/site/PageServer?pagename=about_main
Please join us.
I wonder, now that we’ve put this $700+ billion band-aid on the problem, when will Congress get around to fixing the systematic problems (created by themselves no less) that caused this? There are multiple solutions out there for this, but I wonder if this issue is even on the radar screen anymore, especially with elections coming so soon.
The first link is to Dave Ramsey’s plan. As the second link’s author attests:
“The solution to the problem, of course, has nothing to do with what Congress has been trying to do. Here is a first approximation of what should be done: 1. repeal the CRA and Sarbanes-Oxley (including “mark-to-market” valuation rules), 2. dismantle the GSE’s, 3. exempt the securities (or underlying mortgages) that have been targeted in the “bailout” from all income and capital gains taxes (this will attract private equity investors to buy the assets, thereby establishing market valuations), and 4. investigate all government officials (elected and otherwise), non-profits, and private sector players involved in creating the mortgage crisis, and impeach, censure, and prosecute as the evidence indicates.”
How about Obama’s Economic advisor Raines (you know the former CEO of Fannie Mae).
Welcome to a shell of what America was.
A global recession is inevitable, and overdue. But the more government spends to “fix” it, the longer and deeper it will be due to panic and increased inflation. If congress lets the corporations fail, they will be absorbed by the solvent ones, and this will be quicker and shallower.
But the idiots can’t help themselves; the have to look like they are doing something, even if it’s wrong.
“When in danger, fear or doubt, run in circles scream and shout.”
Here’s my take…..
IF we, the commoners, knew this, why in heavens name did Congress not?
Are they stupid or did they deliberately do this?
One choice only.
THEY SHOULD BE HUNG!!!!!!
In fairness, the European market reaction is concerned with the performance of European banks. There is no plan at all in place or in the works to shore up these institutions. This has little to do with events in the US. US markets, in turn, are reacting to the pullback overseas.
This problem is far more widespread, and far more complex than a partisan soundbite like “crap sandwich” would suggest. Beware of simplistic sloganeering in place of actual analysis.
As the saying goes – elections have consequences…time to pay the piper.
Pleassssssssssseeeeeeeeeeee……..
Regarding the beware comment…
when you can print out 800 billion Plus simply because you say it’s worth 800 billion Plus.. why stop there and print out another 800 billion?
It’s only the economy..
The biggest advantage of the “fair tax” is it makes the SHEEPLE acutely aware of government spending on a daily basis. This problem meltdown has accrued because the population has been brain dead.
http://www.fairtax.org/site/PageServer?pagename=about_main
Please join us.
Get ready: I see the flash and smoke of the HEAT rounds firing in your direction already.
You’re probably going to be called things like: liberal, troll, lefty, Obama-supporter, socialist, communist, idiot, lgm (no disrespect to LGM- he has it pretty rough here)…
Good post!!!!!!!!
On the Fox TV special about the mortgage/banking crisis this weekend, it was mentioned that Fannie Mae and Freddie Mac have over FOUR TRILLION DOLLARS worth of sub-prime loans on their books. If so, how exactly will $700 BILLION help? That’s not even a quarter of the garbage loans FM and FM financed. People like Chuck Schumer, Chris Dodd and Barney Frank should be put in prison for this bullcrap.
Couild someone please explain the meaning of “mark to market”?
Thank you.
I can hold my head high since I did everything I possibly could (other than an armed seige…which ain’t lookin’ so bad right now) to stop the crap sammy.
I follow the economics school that is convinced that Presidents Hoover and Roosevelt “do something” prolonged the Great Depression. The markets, industry and banking could not set coherent policies with the government changing and meddling in everything.
pretty much sums up what is happening.
—
America First
America Alone
America Come Home
MARs: Middle American Radical
Mark-to-market is an accounting method of assigning a value to an asset based on the current market price, because the asset value say a year from now will not be known until that time. If it is marked to market, for accounting purposes it is assigned the value that it would currently fetch in the open market. Since the housing market has dropped so much, it turns all these mortgages that banks hold into debts whose security (the house) doesn’t even cover the amount of the mortgage, which has to be reflected in their books because that is the current market value.. which makes their bottom line look very very bad, even though it may not be in future when those differences are realized.. if that makes sense.
Yep.
In medicine, we follow the rule (paraphrased) that says, “For Chrissake, don’t make things worse.”
Also, we try to remember that sometimes the best course to follow is, “Don’t just do something…stand there!”
Family Man, Don’t have enough time to really study the Fair Tax plan word for word this a.m., but I signed up. The chart of who supports and who doesn’t needs updated. It still lists Denny Hastert and Stephanie Tubbs-Jones.
Notice how many dems voted against it. That’s got to tell you something! Duncan Hunter and Mike Pence are for it. That’s good enough for me.
You know what makes Bush look smart in all of this? …Pelosi.
nyc123me
Market to market accounting only makes sense if you have a totally transparent system, which we don’t. That is precisely why we are now having this problem.
Ah, I see.
Thank you,.
So, it’s another bureacratic, administrative, lawyerly (got a son in law school) way of BS-ing a simple term like “current value” into some arcane argot (Ooh – I get goose bumps when I use words like that!).
Not in the least surprised….
But, again, thank you.
Where is our Dear Leader? Oh, let me guess. The Littlest Marxist sock puppet is getting his daily marching orders from the Soros politburo. I so look forward to the next Democrat program. Please Dear Leader may I have some more? Oh, I would like to report on my neighbors. I really think they are contras.
Nods Family Man.. granite just asked for a definition, that’s all
Lol Granite, yup, pretty much.
well well, looks like bailout bill chickens coming home to roost!
stock up on ammo…
wait, Barack Obama, our new bi-racial messiah, will just waive his clean and articulate hands, and fix this!!!
just hold your breath…
I am telling you, this bail out will hit 2 TRILLION. And Obama plans to spend 800 BILLION more, with a debt of over 10 TRILLION already, well you can do the math. It would have been cheaper to pay 100,000 off of every mortgage in the country than to do it this way. Bankruptcy MIGHT be avoided if we cut spending. If Obama gets in, Bankruptcy is inevitable. The debt must be paid down. At this point I think tax increases on everyone are inevitable no matter who gets in. I propose a 5% debt tax (no exemptions and no exceptions) that will not be allowed to be used for anything but reducing the prinicple of the debt and will be eliminated when the debt is paid off and a balanced budget amendment with and exemption for congressionaly decleared war.
The idiots running our government don’t really believe in a true free market system. The archaic an manipulative tax laws create the need for business to cover their transparency. The tax laws force business to work with shady politicians. The result is the mess we have now.
Or to send thier business overseas.
This maybe off the track, but I think it’s important enough to share with those skeptics and hesitant to acknowledge that the Dems are the root and caused of this financial morass. This article was publish by the NY Times, of all papers!
I’ve always considered myself a sound, work through the system kind of guy. Is anyone else getting to the point where the unthinkable be come the only reality. The Boston Massacre was manufactured by a few men in a pub in order to galvanize the general population against the British. Do we need ordinary hard working citizen, marching in the streets being shot down by our national guard to wake people up? We may be reaching that point.
GOD it’s unthinkable.
Nope.
It’s more likely that ACORN will be transformed into a Gov’t agency in an Obama administration.
Seriosly. Either the Org or the people who run will be brought into gov’t if the Radical wins the election.
What’s sad is that I can’t really tell which candidate better fits here. In terms of policy, McCain and Obama are strikingly similar.
There can be only one answer: Wall Street was hungrier than we thought; therefore they need the full crap dinner (with a couple of sides of pork) instead of merely the sandwich.
Guess you don’t know about the provision in the crap sandwich which allows them to pay down the debt and then turn around and increase it by buying more toxic waste. Your idea would merely fund congress’ insatiable desire to spend.
Oh I do, thats why it must include a balanced budget amendment with an exception only for decleared wars.
$700 Billion?
Ain’t nuthin’ special about that number.
Expect that the bailout will exceed $1.5 Trillion before they’re done. if they’re ever done.
Then expect working couples making $125K each and up to pay about $1,500 more in various taxes -each month-.
Oh yeah. For those of us making between $50K and $125K? You can bet your last dollar that taxes will also be going up. And more than you might think. Clinton claimed he wasn’t going to raise taxes. But he implemented the biggest tax hike on the Americam Middle Class in generations.
But fear not… It’s patriotic ya know.
(Insert Picture of Smirky here)
Buy stock in Vasaliine and KY —- They undoubtabley will be selling a whole lot of their product….
DJ at 9818 (7:47am PT) and fluctuating quite a bit.
Wasn’t crap sandwich 2.0 supposed to stop and/or reverse this?
Hmmmm… Maybe the proponents of Bailout 2008 were just plain wrong…
Our Constitution
iswas the most perfect instrument that could be made by man.Yet the Founders could see this day coming,too.
To paraphrase Ben Franklin. when the voters find out they can vote themselves money, it’s all over.
I don’t see why the possibility of martial law here is so far-fetched to some.
I see it as a real possibility. Remember, the Boomers had everything and the younger generation have grown to expect and need handouts and instant gratification.
When that starts to go away. there could be trouble in the streets.
Just look at New Orleans after Katrina.
Fasten your seat belts. It could be a bumpy ride.
The deflationary pressures on world markets must be enormous. My strong, mostly educated guess, is that the re-inflationary efforts (e.g. the Armageddon Avoidance Act of 2008) will not work. Moreover, I’m surprised that no one appears to be commenting on how the continuing decline in oil prices is very good news. Not only will it take an enormous burden off the American consumer, but it will put a real crimp in Putin’s
military build upwar machine. There will come a point, should the price drop continue (and I grant no one knows how far the decline will go), in which the adventuresome Mr. Putin and his creepy friends will find their current plans no longer, shall we say, sustainable and will have to severely curtail them.Please note, I’m not suggesting we all get up and dance, but the news out there is not all bleak.
they’ll engineer a crisis (sound familiar??) to raise the price of oil.
I have no doubt they will try, but I cannot see that strategy being effective in the long run, should world deflationary pressures be as strong as I believe them to be. Please note I am not predicting peace in our times. I am only pointing out, as economists must, that on the one hand we have this and on the other hand we have that — insert at this point the Harry Truman line about wanting a one-armed economist.