This isn’t just a Wall Street bailout!
Should Congress try and reach a compromise on a new bailout plan or should the government let the market handle the financial crisis on its own? (Back to story)
If doing nothing is so bad, why does Paulson to take about a month to set up a program, after the bailout passes. I have to wonder if cries of “wolf” are being used to pass an unpalatable bailout of the Wall Street fatcats. They gambled (with other’s money) and acted unethically; let them pay the penalty for losing (I don’t blame them for trying to shift the loss to others but I don’t want to pay for their next yacht or overpriced New York condo party).
We have to acknowledge that this Credit Crisis is beginning to extend its tentacles to every nook and cranny of our financial system.
Today, at an article at CNN “Credit woes: More than home loans” we see the beginning of this spread of the “BLOB” that threatens to Eat the entire Western Financial World.
This article is at http://money.cnn.com/2008/10/03/news/economy/credit_cards/index.htm?postversion=2008100307
The problem from a Physics Point of View can be looked at as if the Total Entropy (or “DISORDER”) in the entire System has reached an inflection point.
This “disorder” has been created by the outstanding Mountain of Debt.
Under Normal Circumstances, additional credit-money tends to create “order” at the cost of deferred “disorder”.
If money lent throughout the system, in its many manifestations, is paid back on time, and total debt does not become unmanageable, the total “disorder” (or ‘Entropy’) never becomes overwhelming and dangerous to the continuance of the issue of Credit.
But now, the Total Debt has begun to exceed the ability of any ADDITIONAL credit-money to add more “order” to the system.
In other words, no matter what is done, the system MUST FIRST cleanse itself of the built-up past excesses, before it can productively USE the additional Debt shoveled into it.
This is why the Rescue Packages are unlikely to succeed.
We are simply too close to the turning point, if not already past it.
The Credit Bubble will implode, regardless of what we do to the system itself.
We are told that “doing something, doing anything, is better than doing nothing”.
But there are many wise people whose contributions to our knowledge we are ignoring today in our rush to “do something” and “to fix it now”.
One of these is Murray N. Rothbard, who in 1969 wrote the following prescient words.
“Mises, then, pinpoints the blame for the [recurring boom-and-bust phases of the business] cycle on inflationary bank credit expansion propelled by the intervention of government and its central bank.”
“What does Mises say should be done, say by government, once the depression arrives? What is the governmental role in the cure of depression?”
“In the first place, government must cease inflating as soon as possible. It is true that this will, inevitably, bring the inflationary boom abruptly to an end, and commence the inevitable recession or depression.”
“But the longer the government waits for this, the worse the necessary readjustments will have to be. The sooner the depression-readjustment is gotten over with, the better. This means, also, that the government must never try to prop up unsound business situations; it must never bail out or lend money to business firms in trouble.”
“Doing this will simply prolong the agony and convert a sharp and quick depression phase into a lingering and chronic disease.”
“The government must never try to prop up wage rates or prices of producers’ goods; doing so will prolong and delay indefinitely the completion of the depression-adjustment process; it will cause indefinite and prolonged depression and mass unemployment in the vital capital goods industries.”
“The government must not try to inflate again, in order to get out of the depression. For even if this reinflation succeeds, it will only sow greater trouble later on.”
“The government must do nothing to encourage consumption, and it must not increase its own expenditures, for this will further increase the social consumption/investment ratio. In fact, cutting the government budget will improve the ratio.”
“What the economy needs is not more consumption spending but more saving, in order to validate some of the excessive investments of the [preceding] boom.”
“Thus, what the government should do, according to the Misesian analysis of the depression, is absolutely nothing. It should, from the point of view of economic health and ending the depression as quickly as possible, maintain a strict hands-off, ‘laissez-faire’ policy.”
“Anything it does will delay and obstruct the adjustment process of the market; the less it does, the more rapidly will the market adjustment process do its work, and sound economic recovery ensue.”
The above was taken from http://mises.org/story/3127
What is with these idiot senators? They should be held liable for their damaging remarks. First Chuch Schumer creates panick with IndyMac Bank – no repercussions. Then that STUPID MORON Reid from Nevada opens his mouth and creates panic today about some insurer near bankruptcy.
But here is the catch and quote:
Senator Reid is not personally aware of any particular company being on the verge of bankruptcy. He has no special knowledge about [a bankruptcy] nor has he talked to any insurance company officials,” said Jim Manley, spokesman for Sen. Reid.
Reid should be held personally liable for any all loss related to that retarded uneducated slanderous remark!
America can we please quick voting these incapable idiots into office???
It is a bailout and we do need to save the components of the system that keeps cash flowing to business and individuals. Put Wall Street into Bankruptcy and Chapter 7 DISCHARGE the obligations along with the C level officers, their golden parachutes, the boards, and the MBA’s who were planning on making millions by raping our capital systems. With the discharge the obligation goes away and the structural pieces can keep going
Dear Economic Idiot,
It is you and people like you, scared and irrational, that vote yes for things like this and it is exactly what the Bush administration is banking on. If you scare people enough they will eventually agree to anything, it happened with the ‘WMD” and is still going on, it has happened many times in this administration and it’s happening again, stop being foolish and realize what they are doing.
Feds want a piece of the pie; the original bailout was going to do what?
Double the Feds 700 Billion (They take 700 billion from us and invest it, make a return, and don’t give it back) I want a “Loan” like this that never has to be paid back. It was explained best by someone on CNN who said “It’s like pointing a Gun at your neighbors head and taking all his money, then gambling it in Reno – If you win they get their money back, if you don’t they don’t.”
It bails out the Government and Wall Street (That means big businesses who made poor decisions that have already cost the American people money and in some cases their homes) not to mention half these businesses that are US companies outsource half their jobs to India or China.
This new “Raise” in the FDIC insured amount is another fat cat, Wall Street, government piece of crap. It raises the FDIC insured amount to $250,000 – Please tell me what “Average American” has $250,000 in the bank because I sure don’t and I am “Middle Class”
Stop voting for stupid people like Bush, stop making hasty decisions based on fear, stop listening to every piece of government crap crammed down your throat, and stop being an idiot.
Thanks!
It’s so hard to listen to the president telling us what’s going on. I don’t believe anything that comes out of his mouth.
I am so proud of the people who fought back, slapped congress and the president on the hand and said NO! to the bailout. It was good to see we still have some influence over our congress.
But it’s time to fix things. We’ve proved that we’re not going to take it any more so let’s not cut off our nose to spite our face.
I’m on a fixed income and I don’t know if I’ll be able to survive a depression.
Still, I have to wonder if this is all lies and scare tactics to get us to go along.
I’d rather see 700 billion towards schools. I mean you could give 10 billion per state for all those schools in lower income brackets that are using 20 year old textbooks, have leaking ceilings, and water leaking from the ceilings. how about we help the people of America. However this bill will pass because the rich help the rich. That’s why I’m planning on voting for all new blood in congress after this passes. Let’s remind congress that they are there to represent us not wall street.
I know we need to do something, but why isn’t there some type of penality for these companies that require this assistance? This isn’t the fault of the average american, its the fault of the government and wall street and the banks. Yet they will get a handout and walk away clean.
700 billion dollars, will that fix the problem or are we just throwing good money after bad? Why this take a while to figure out, they are rushing this and it will again be a disaster. I didn’t see them rush after Katrina, and we had to beg for help. It took me over a year to get help.
They wish to save our retirement accounts … awww geeeeee … where have they in the last 8 years when we have been continaully losing money in our 401k accounts? Now lets talk about the new FDIC insurance that they are going to raise from 100k to 250k, who is that helping again?????????? Not the average american, we don’t have that type of money in our bank accounts. Like that is really going to instill confidence from us.
They need to be penalized for thier actions, that is what most of us are upset about. The government has squandered our trust and now expect us just to agree with them …. sorry not going to happen.
A couple of dozen postings ago Michael from Tennesse outlined a plan proposed by financial counselor and radio talk show host Dave Ramsey. No pork, no sweeteners, no extraneous or unrelated add-ons – just common sense.
I vote for that plan.
That plan offers sane guidance to avoid Government take over of another part of our lives. It addresses the key areas without lining anyone’s pockets or removing the little bit of lining I have in mine. I don’t vote to help two groups any more than is necessary to keep us out of a deep recession or depression: The Wall Street crowd whose greed and risky behavior created the problem, and the average citizen who was foolhardy enough to believe that could buy everything with credit, live way beyond their means, and believe that their debt would never catch up to them.
Additionally, I would like to see a provision in any bail out bill that states the federal government will cut spending by 5% for the next 12 months. Even if a symbolic gesture, the 435 members of the house and senate should cut their salaries, travel and staff expenses by 5% for 12 months. At least this shows they are making an effort to control spending.
I would add to Dave Ramsey’s plan to make it mandatory that every American be required, like we do for a driver’s license, to take a financial planning course, like Ramsey’s Financial Peace. I don’t work for him but admire his straight talk and his challenge that we each take charge of our personal finances.
These comments are truly disappointing. Many of you are more concerned with punishing Wall Street than you are with saving Main Street. A failure by lawmakers to act will lead to more economic pain for all of us as bank lending grinds to a screeching halt.
We’re all angry because of what’s going on right now. But if you really want to do something to make a positive difference, then why don’t you stop shopping at places like WalMart that import cheap Chinese crap (I’m sorry, I mean the products that your spoiled children insist on having!) which contributes to the massive deficit we’re still running – Likewise, same thing when you buy a Toyota or Honda (yes, I understand that they ‘build’ them here – but ultimately, the profits flow back to the home economy). One key reality that people don’t want to face is that foreign ownership (fueled by our growing deficit) of key American assets played a strong role in bringing us to this point.
Of course, those of you that insist on exercising your ‘consumer freedom’, and buying imports but can’t get a loan to send your son or daughter to college – why don’t you call Toyota’s HQ in Japan, and see if they’ll lend you the money. I’m sure you’ll find that they’re not as loyal to you, as you’ve been to them.
The bottom line is that you’re looking for villians in all of the wrong places – start by looking in the mirror.
Here’s another idea for you award-winning parents out there. The next time your over-priveleged kids (ladies – that includes your husbands) ‘demand’ a new Japanese-manufactured video game or other electronic gadget, try saying NO!
In the meantime, the government has to pass this plan, and help stabilize the financial markets. Don’t be foolish, just because you’re angry.
Paul…were you born a JERK or did you acquire this handicap along the way ?? You make me VOMIT !!! what is it that you don’t understand about NO…NO…NO…to this give away to people who caused this problem…were you never taught that a person must take resposibility for their own actions ??? which would include their investing…if you are a greedy person you will follow the advise of a greedy person…or if you did not understand the investment then punish your broker, banker, fund manager etc. and not the majority of the people who do not and I repeat.. DO NOT.. want this give away or anything of its nature to pass…Young man its time you take your head out of the place where the sun doesn’t shine…you are lacking the intellegence to understand what FOR THE PEOPLE AND BY THE PEOPLE STANDS FOR !!! AND WE THE PEOPLE DID NOT WANT THIS TO PASS IN THE SENATE…WOW…AGAINST THE WISHES OF WE THE PEOPLE…SON DO YOU REMENBER BEING TAUGHT ABOUT ANYTHING THAT HAPPENED IN BOSTON TO LEAD TO WHAT WAS ONCE A GREAT COUNTRY ??? PAUL, DO YOU BELONG TO THE COMMUNIST PARTY ??? YOU CERTAINLY WRITE AND TALK LIKE ONE…YOU MAKE ME VOMIT !!!!
Any sort of bailout for failed businesses is unacceptable. Any fallout from a business failure creates hardship, but that can be a good thing! Hardship is an opportunity to rise up again and move on, stronger than before. It brings people together. A government bailout snuffs out this opportunity. It uses money we do not have, saddling us with more debt and probably more taxation. I know. I know. More debt due to a bailout is hardship too, but it offers little benefit. The difference is, that letting business recover on its own, rebuilds an economically vibrant and responsible America, but a bailout is merely a bandage, leaving no incentive to abandon irresponsible behaviors and business practices. Bailout or no bailout, there will be hardship, so lets choose the hardship that strengthens us, instead of the one that weakens us. Let’s not enable the behaviors and business practices that got us into this mess!
What about the FDIC chairman who says a large portion of the bailout money will be going overseas. That doesn’t sound like its helping out the American people. Why doesn’t the government divide that money ($700 billion) up to every single taxpayer, by some estimates it would be over $200,000.00 given to each taxpayer. Wouldn’t that save the market, build up our economy, pay off loans, give more money to bank to loan out again. It’s our money, give it back to us! Why should the taxpayers have to pay for people who gambled with their mortgages by getting variable interest loans. I know several people who have fixed mortgages and are having no problems. Many people relied on 401K’s that were using the market and stocks, another way of gambling.(High risk) You call it investing I call it gambling with your lives. What ever happened to saving your money in a bank and not gambling it.
Mainstream Media is too invested in the bailout to report on it!! If we are going to help the scholars say we need to infuse the big healthy banks with money and a reason to buy up the crap. And it will take alot more than 700 billion. Throwing money into a failing bank is just that so wave goodbye to your dollars.
Let’s see who owns CNN? Hmmm do they have a stake in seeing the bailout pass?
Did anyone watch any nbc owned stations on Wednesday when GE rumours were flying? The reporter was trying to talk people into saying they needed the bailout. The CEO of Mattel just kept saying “no we’re ok.”
I didn’t expect Washington to become a pawn shop for the banks. “Here, what will you give me for this stuff? Just hold it and if I can I’ll come back and get it, or after awhile you can try to sell it.”
I like Ralph Nader myself.
SOCIALISM ………….$ 700 BILLION
DISRESPECT …………. 150 BILLION
THIEF (SUBTOTAL) ….. $ 850 BILLION
and counting …
THE VAST MAJORITY OF AMERICANS ARE AGAINST THE BAILOUTS.
It is the ULTIMATE of DISREPECT that the Senate ADDED another $150 BILLION to the $700,000 Billion BAILOUT.
I can only shake my head with disqust. Yet, they wonder why we do not trust them.
They ROB the BANK while they CLAIM they are putting out the FIRE.
SAD 
The Democrats complains incessantly about Bush’s lies concerning the IRAQ War.
Democrats, you have “carried the water” for Bush. It is not good enough to say, “Something is better than Nothing” or “things could have been worse”.
Remember this saying:
“FOOL ME ONCE, SHAME ON YOU. FOOL ME TWICE SHAME ON ME”.
Democrats your COMPLAINTS will Fall on DEAF EARS. As, our PLEAS have Fell on Yours.
NO BAILOUT TO HOMEOWNERS AND WALLSTREET !!!
They do not deserve Charity. Their lavish lifestyle is their own doing.
This is a CAPITALISM NOT SOCIALISM !!!
To Debbie in Tampa, FL.
You say “So divide 200 million adults 18+ into $85 billion that equals $425,000.00.”
I think there is an error here.
I get only $425.
The other way is $425 times 200,000,000 = 85,000,000,000.
Please see if I am wrong.
Something seems to be missing from the discussion about the bank crisis. Years ago we had strong fundamental industries supporting the U.S. economy (steel, auto & general industrial manufacturing, food processing, etc.). When these went offshore everyone looked around for something tangible to replace them with. So they built a bunch of Indian Gambling parlors and ran out of ideas. Welcome to the business of lending money to people that don’t have real assets as collateral. The banks, the brokerage houses, the real estate industry, the building industry and even the appraisers made money. But worst of all the public spent money that they leveraged out of their homes based on ridiculously inflated home prices. Americans need to wake up to the fact that it was THEY who spent the largest portion of this money. They spent it on everything under the sun from groceries to braces for their kids to medical care over the last ten years. It’s easy for some homeowner to throw their hands up and say that they’ve been duped into believing that they had equity which disappeared into thin air but it doesn’t take an Einstein to know that if your house was worth $300,000 when you bought it and all of a sudden your realtor tells you that it’s worth $600,000 that maybe you need to think twice before you borrow a ton of money against the new appraised price. This borrowing disease that affected so many Americans was the new economy and everyone who can sign their name knew the risks inherant in borrowing against collateral that has volatile valuation. To make things worse, the U.S. (for better or worse) decided to go to war in Iraq and Afghanistan and borrow the cost of the war from the Chinese and the Japanese. Oooops! Surprise, surprise that we’re in the mess that we’re in now. I can assure you that bailing out the banks will only encourage people to borrow more money that they can’t pay back until we’re in the tank again. It’s time for a reality check for the U.S. public. People need to stop living beyond their means and the government needs to start thinking about how to rebuild the failing economy. Taiwan did it. Japan did it. Germany did it. China did it. This is just something that for lack of a better term is called “hard work”. I hope our new President grabs the bull by the horns and starts investing the taxpayers money into building a new and more stable economic base in America. Yes, this will take years and until then people will have to find a better alternative than spending money they don’t have. I don’t support a $700 billion bailout of the banks so we can get back on the hampster mill again.
Okay here’s the deal on the bailout. No deal without reform. We the american taxpayer refuse, absolutely refuse any deal for bailout without reform of Freddie Mac and Fannie Mae. I am not kidding. I am sending this on to CNNmoney, fox news forum, congressmen and senators. This is the “New Deal”- honesty and accountability. No bailout without reform. This institution gets no bailout from me the taxpayer until I see the changes in writing revising the limits on mortagages, credit worthiness, etc. NO BAILOUT WITHOUT REFORM. The buck stops here.
Not true. This will NOT help our weak economy. This will not help anyone that has, is loosing or will loose a home.
This does not help our dollar’s purchasing power.
This will help reinforce bad habits of conglomerates.
CNN could only find a frat boy in a jacket to demonize people who disagree with him on economic issues? Give me a break, the only thing that I am afraid of happening is how W. might somehow turn this into catalyst for a war somehow. This bailout will not make any one life in the general public easier and I think we are all sick and tired of W. trying to light a fire under our rumps for us to act in his favor. These Washington scare tactics are getting very transparent as of late and I really hope America collectively and finally stands up to these people in office and tell them enough is enough. $700 Billion passed is $700 Billion robbed from the American Public. Add that to your already outstanding $30000 per citizen national debt and I won’t need so much as a pinky down your throat to make you sick.
Too little too late. The CDS market has already picked those that will fail. The congress will be back in the spring asking for another 700 billion. The credit bubble will deflate over time and there is no way to make it happen any faster. This train is already over the cliff. No Bailout!
I would prefer that any economic stimulus be redirected away from an already over subsidized and stimulated housing and mortgage economy.
Nuke plants yes – house flippers – NO!
The other Ron Brown
How about taking the opportunity to revamp our monetary system instead of supporting a broken one. Banks and the Fed have the freedom to create money out of thin air. We know it as debt. We need to be freed. We need real change but unfortunately a bailout is going to happen. So, why not make it meaningful for us; If that is possible. Put regulations on the Fed, force banks to cut existing mortgages and credit cards in half. Limit the amount of fiat money can be created. Don’t worry, they will still make billions. Does anyone remember Ron Paul?
It seems like a big “fear and consume” tatic from the bush administration but it’s not. THERES NO CONSUME available. The bailout must happen to keep the country alive. The country is built on consumption and debt. The bailout will continue the lifestyle most americans love. Yeah there is a problem with that. Bailout the banks and never forget. The problem that should be fixed to protect the economy is the people. People need to waste less and build more. “Im not an environmentalist”
Oh My God! Does no one here get it? This isn’t about Wall Street losing their shirts. This is about us the average Joe losing our shirts. The FDIC does not have enough money in the budget to bail out every bank, and those banks are falling just like dominos. Go google “FDIC Paulson in trouble” and read the articles. Educate yourselves. You are all so naive hanging onto your fine sounding “principles” and that is all you will have left if nothing is done to put money back into the FDIC right now!
There are two views towards this financial crisis, free market conditionality and or government interference. Ideally, we advocate free market w/minimum goverment intervention, until now that is. However, the magnitude of the problem has increase to the point if there is no action taken, credit markets are vulnerable to collapse. It is significantly more important because this is our first economic slowdown under a globalization market. Under free market, you can say those are the punishments of the “invisible hand” theory, under a profit/loss scenario of supply/demand. However, it can ultimately change the way America goes about business. On the positive aspect, we will finally learn to create savings accounts. However, it create another depression and credit compression with high interest rates. Not to mention, we will have to re gain foreign investment confidence. On the other side, I’m also concerned about the bailout. Such an amount is more than what the IMF has subsidize since 1949 to all countries who have undergone a crisis. Aditionally, it will raise doubts to other nations over our govt spending, ultimately creating speculation that can affect our investing climate. Secondly, it can widespread to other public sectors that are have now been offset due to this Wall Street bailout. What about our public education system, which still has room for growth and improvement, social security, and more importantly our health care system. I think we have to go back to the whiteboard and rethink this through to ensure it is for the best interest of the American people.
BAG THE BAILOUT — THE POPULATION OF THE U.S. IS UNDER 400,000 … JUST GIVE EVERYBODY ONE MILLION DOLLARS— SEE WHAT THAT DOES TO THE ECONOMY THE NEXT DAY! BETTER THAN 600 BUCKS AND WOULD STILL SAVE THREE HUNDRED BILLION DOLLARS — GET THE PERSPECTIVE OF SIZE HERE???
I’m really discouraged that some people who were so adamantly against the bailout on Monday are doing an about-face and saying that something must be done today because of the market drop. Doesn’t anyone realize that the stock market is a ridiculous self-fulfilling prophecy that is almost totally removed from reality? If the government hadn’t presented the bailout plan as though the sky will fall and our economy will collapse if it doesn’t pass ASAP, Monday would have been just another day on Wall Street, not the insane drop we saw. But, remember that it regained more than half of the points that were lost on Tuesday! The market is volatile but you cannot pay too much attention day to day or you’ll go nuts. Stay strong, keep the pressure on your representatives, and NO BAILOUT!!!
Stocks drop THEN miraculously rise a day later???? THEN today drop before a Senate vote…looks an AWFUL like DIRTY WALL STREET tactics to manipulate votes and escalate fear. What else logically explains the illogical? Now the market decides the legislation??? Is the a government by the people for the people OR government by the people for the market?
Call your Representative. KILL THE BILL!
Does this guy even know economics? Maybe he should put down the coffee, shave, and go back to school.
The problem with these bailouts is that it won’t solve the underlying problem – the crushing debt American consumers are in. We are a service economy which relies on people to buy goods and services and most of us are tapped out from over consumption brought on by artificially low interest rates and lax lending standards. The reason credit is tight is due to lending agencies assessing risk and noticing that many consumers are over leveraged!
Add to this these bailouts are deficit spending being added to the national debt. This will lead to higher interest rates, inflation, etc, etc.
The proposed $700 billion purchase of bad mortgage backed securities is clearly a Wall Street bailout. This is reinforced by the fact that NO comprehensive alternative has been presented for debate or comparison by congress. At least not to the public’s knowledge.
While congress continues to “put lipstick” on this pig it is still a pig. Congress should do nothing until other reasonable alternatives are seriously considered. Alternatives like the one from DAve Ramsy, which was presented by Michael from Cookeville Tennessee in an earlier comment.
Mr. La Monica:
Your last paragraph read: “People don’t want to reward bad behavior. But we don’t want to cut off our nose to spite our face here,” Dye said. “This will hurt Main Street very quickly.”
If Main Street begins to hurt, then let the government get involved, end all of this supply-side, trickle-down, voodoo-economics, and try something that actually works. We’re do for some bottom-up economic reality. The government should try directing the money to the people who really need it and get it’s collective hands out of our pocketbooks.
Yes! It is just a Wall Street bailout. Let the market work this out. Keep the government out of this problem.
Nobody, at the top, is willing to understand, but the government (Ben Benanke and Henry Paulson) have been throwing Hundreds of Billions of Dollars at this for the past 14 months, and look where we are. If the businesses in question haven’t been fixed, and if others were allowed to fail, then there certainly should be no bailout now.
Henry Paulson and Ben Bernanke are part of the problem and should have no part in the solution.
Is this a capitalist society or not? If so, then no socialist bailouts of “BIG BUSINESS.”
This doesn’t affect all of us. Some of us were smart and pulled most of our money out of the market 14 months ago. Some of us don’t have exotic mortgages. Most of us don’t own a significant amount of stock in financial companies. Some of us pay our bills, and haven’t requested this bailout.
I believe 81 percent of the American public believes this bailout is BAD. Do you people think we’re all stupid. We would only be stupid if we put up with this bailout.
To all representatives and senators. Rest assured, you will be voted out of office if you vote for this bill. We will not support a corrupt bill, that costs us trillions of dollars to bailout companies that never cared about us in the first place.
This is not a bailout. It is simply a last minute attempt to wring a little more wealth out of the hands of the middle class and transfer it to the rich, before the oncoming and inevitable crash takes full effect. The real money is already gone, pulled out by the insiders over the last few years. It is not the result of ‘mistakes’. It is the result of many decades of deliberate effort by the proponents of reagonomics, i.e, rich people, to ’starve the beast’, meaning push the government so far into debt it cannot have any practical effect on the activities of the ‘free market’. The fact that they were able to do this while transferring staggering amounts of the wealth of the middle class to themselves, and time it so the baby boomers will be forced to liquidate even more of their ‘retirement savings’ at depression level prices over the next few years is while disgusting, truly a masterpiece of economic manipulation. It’s over folks, the rich guys win again. They did it before with the ‘Savings and Loan’ crisis. That worked so well they did almost exactly the same thing in Japan a few years later, and now they have come back for the ‘big score’. The federal officials are totally in the pockets of these people so we can hardly expect a true fix out of them. See you on the soup kitchen line.
I live in a VERY small Kansas town. I suppose I am fairly simple minded. I know nothing about big business or Wall Street. But, I’ve developed my own opinions about the bail-out plan based on what I do know.
My mother ran a small Cafe in our town. (The only Cafe.) Well, she was having difficulty and decided to close the doors due to high overhead and not enough revenue. I decided to take over the business. For a year, I tried my best to make the business work by modifying the menu to limit inventory costs, gently raising some prices and cutting back expenses where I could. But, in such a small community, you can only generate a limited customer base. So, my plan wasn’t working as well as I thought. Our town has an “Economic Development Foundation” that is there to back small businesses and aid in the growth of our community. I went to them and explained that I was having trouble and asked for their help. I was told no for reasons I still don’t really understand. After that, the Cafe closed and the community was upset that there was no place to eat in our town. Eventually, the Cafe was bought by someone else and has been running for several years now. A year ago, another restaurant opened in our town, as well. (How this town can support two restaurants, I don’t know. But it’s working.)
I know it’s not the same as a $700 Billion dollar bail-out, but it’s my simple logic: I did not receive the financial backing I needed. I closed the doors. The people of our community lost a business but things have a way of working out. I believe the same thing will happen with our ecomomy. If this bill does pass, one of two things will happen…either the businesses will continue what they have been doing or they will tighten the reins so much that credit will seem to “freeze” anyway. Either way, the American people are going to feel the pinch. If I would have received financial backing by the Foundation for my Cafe, I would have had to raise my prices even more and make more cutbacks because what I was initially doing wasn’t working. Even though it would have saved the Cafe, the community wouldn’t have supported it as much.
I don’t want anyone to have to suffer financial hardships, either. But, sometimes things have to appear to get worse before they can get better.
This bailout is not needed still. The economy will get worse not better with this bailout. The dollar can not keep being depreciated forever. The more fake money we put in the system the sooner it become worthless. That is the problem we should be looking into not the banks that made stupid choices. The countries that use the dollar as their reserve currency will change this if we keep this up.
The companies that are about to fail or did should and are the problem. You are saying if we save them it fixes everything. That is just plain wrong. The people are the ones that need to be brought back up. They are the ones who are struggling and the ones that need the money to pay the bills on the rest of these debts these companies still have. We don’t need the banks. They can be replaced by sound businesses. We need the people to be thriving to be able to pay for anything.
On Tus. the SEC said that it is not necessary for the investment banks to mark-to-market securities at “firesale” prices.
This is exactly what is needed, not the bailout plan. Instead of the U.S. taxpayer holding these securities for the long run, the SEC is letting the investment banks hold them and not price them on their books at current horriblly low prices. This gives those banks plenty of time – many years – to make profits to help offset any long run losses.
THUS, NOOOOOO NEED FOR THE BAILOUT.
RELAX PAUL!
Umm No Period. Can we move along now?
We need a slate of independants and write in candidates. America is tired of hearing about Wall Street’s problems. Congress isn’t listening, they’ve even shut down their email server, so now you can’t even write to them. We don’t want a new proposal, we don’t want a sweetener. We don’t want to beef it up or weaken it. We want it dropped. We want to see Bush and his cronies in jail for war crimes in addition to the economic meltdown.
We certainly do not believe anything they say.
Let the chips fall where they may. We have too much credit already. The banks that can not lend will fail, and new more solvent ones will fill in the gap. Americans are fed up with trickle down theories. We have more confidence in gleaning something valuable from this beached whale then trying to save it.
The problem stems from years of financial degregulation from Bush, Reagan, and even Clinton, and the resulting wave of corporate and personal greed as everyone piled into the market and bought more real estate than they could afford.
We had the great bull market, and now a huge correction is unfolding. No bailout can fix the real estate problem and the $180 trillion derivative mess – it’s way too big.
It’s foolish to think that the people and system that created the problem can fix it. Let the market take its course!
The only plan I’d support is to give the money to the people, rather than corporations – and to strenthen the safety net to prepare for the challenging times ahead. Let the governmental and corportate hogs at the trough pay for their own lunch!
The bailout seems a fairly bad idea: to use 700 billions we do not have in order for one person (with minimal oversight) to buy for the government assets which are very hard to value. On previous occasions, when given power, this administration has misused it; how can we trust them now? And anyway, I believe that for the markets, long term stability in monetary policies is more important then a sporadic blank check, which does add more instability.
There are risks associated with both passing or not of the bailout. The risks for not passing have been extensively presented in press, however a bigger risk looms for borrowing another 700 billion dollars: a crisis of confidence in US government paying its debt.
NO BAILOUT!
I was born and raised in Compton, California. I graduated with an undergraduate degree in accounting and a minor in macro economics. I am a Certified Public Accountant and a Graduate of the Harvard Business School.
After a failed attempt to become an Internet millionaire, I lost EVERYTHING after the DOT.com bust and 9/11. NO ONE BAILED ME OUT! Now I live credit free and hand to mouth with each passing payroll period.
So, I am not affected by the current financial turmoil. If congress passes this bailout bill my children will not only pay the price for me “swinging for the fences” in the game of capitalism but they (and their children) will also have to pay the price for others who participated willingly in the greatest wealth creation game on earth.
THIS IS NOT FAIR!!!
I will spend the rest of my life seeking to remove from office ANYONE that asks my children to pay the gambling debts of others. Congress is so quick to come to the rescue of property owners because we really only have a ONE PARTY legislature to represent us – The Party of Property Owners!
Stop the lies! Main Street does not represent the “average” American. The average American pays the property owners on Main Street for their monthly rent, food, gas, utilities, auto lease, insurance and healthcare.
Furthermore, small businesses on Main Street employ friends and family first and fire them last. I don’t have any friends or family on Main Street. Restructuring is the painful promise of capitalism’s ability to correct inefficient capital allocation and free capital for wealth creation.
Get Real. Don’t go for this Deal.
Fix the problem but not with taxpayer money or guarentees. If our congressional leaders would look outside of the box (the beltway) Im sure they could come up with a good fix.
If the Executives and members of the Board of Directors of a bank with the “toxic mortgages” have fiduciary responsibility, can’t their assets be seized and used to support the bank before taxpayer money is used?
The proposed bailout plan prohibits “golden parachutes” in future executive contracts, but allows current contracts, and the executives who made the bad investments, to get their huge payouts at our expense. Why not make all those contracts null and void and seize the assets of the executives and board members with fiduciary responsibility?
NO BAILOUT!
When you have personal finacial probems the first thing an advisor would say is stop borrowing money. So to the govt I say stop borrowing money.
The bailout is designed to get the banks and Wallies top dollar for their junk. If this paper is such a good deal, a money maker for the taxpayer, private sector money would be all over it….public pensions, private trusts, college trusts, private equity….hundreds of billions of available money. Unfortunately, prudent investors are only willing to pay 1/4 of face value, or less. Private capital would never pay what Hank, Benny and Geo are trying to put the government (taxpayer) on the hook for, because they (private investors) know they would lose money. The “good deal for the taxpayers” story is just a sell job. Our elected officials do need to pass it, just be honest and sell it to the american citizens for what it really is.
Don’t you just love the commentary by “the media” – the 777 point drop was the LARGEST IN HISTORY – point drop, yes, but only the 17TH largest percentage drop. 17th – not as scary is it. And as Paul says in his column…”stocks rebounded a bit Tuesday” – rebounded a bit? A 400 point gain??? That’s a bit? Crazy.
You’re being told now that this bailout is good for mainstreet. No it’s not. Credit is available to be who can afford it. Those who can’t – SHOULDN’T GET IT. For hundreds of years we were fine with 20% down payments on mortgages and sensible loan terms and interest rate variations based on risk. The higher the risk, the higher the rate. But over the past decade it was decided that everyone – regardless of risk or ability to repay should have a mortgage and loans with nothing down and low rates. Why?
Oh and the best part of this bailout bill – it allows foreign debt to be purchased. That’s right – we’ll be buying up all the “troubled assets” from China and Germany and Australia (no wonder all these countries where complaining when the House voted down the bill). Paulsen even went so far as to say he would recommend that BILL BE VETOED if the language was changed to not allow foreign debt.
So get ready average American taxpayer – if this bill passes you’ll be on the hook for OVER $700Billion (it’s a revolving line of credit) to bailout foreign countries….. Sad.
Why stop at 700 billion? Why not make it 13 trillion and bailout every American from all of their debts? If 700 billion is good then 13 trillion is better!
I am concerned about the proposed 700B bailout plan and feel that it should not be passed. I feel that as a taxpayer, I am in no way obligated to bail out these troubled firms that fail due to their own mistakes. These troubled firms clearly did not make well informed decisions and they’re now suffering the ramifications.
I feel that these firms must be held accountable for their own actions and they must find a way to bail themselves out, with their own money. If passed, the bailout bill would just further enable these firms to not be held accountable for their actions. I trust that Congress will make the right decision when the time comes because everyone in life must be held accountable for their own actions. For this attribute alone helps us all successfully grow, change and prosper.
After all, if my company gets into financial trouble, will the government help us out?
ARE THEY BLACKMAILING US ?
“Many of the folks writing their congressmen last week to say they were against the plan may have looked at their 401(k)s this morning and are rethinking their position,”
The propaganda on this is unbelievable. Yesterday AIG, the recipient of an $85 billion “bail out” announced it would be paying cash retention bonuses to 150 executives. Why wasn’t this a CNN headline?
Until this ceases, I will vote against any politician who supports this or any other version of a bail-out bill.
The Demoncrats in congress are at the root of this mess and I have seen no proposed actions, investigations, etc. to determine how and who is responsible. Until that happens I am not in favor of any open ended bailout. No pain, no gain.
A currency change seems the best sullution for all.
a lot of drug dealers and other dishonest would be holding useless money
The dollar woyld hold its value
I do not support any bailout or rescue as proposed
Wow, the crisis has me trying to figure out ways to let Congress know we do not want this bail out of Wall Street bankers. The moving your account from Chase, Citi Group, Wells Fargo, Bank of America,Sun Trust and MetLife to local banks is working as they think it is a slight of confidence. Silly Congressmen it is our signal not to go ahead with the bail out. Keep up the good work and let’s bankrupt the major banks by moving our money to local banks. After all the local banks loan money to local businesses.
Did you know that 90 percent of all the bad loans the major banks have are with foreigners. And if the bail out happens it is not Americans that will be bailed out but super rich Arabs. Think about it some super rich Arab is black mailing Congress so they can use our tax dollars to pay them off.
This is a crisis of whether Americans are their own masters or we are just economic slaves to Arabs.
Please tell your Congressman you are moving your money out of the major banks to local banks as protest and do it before they give our country away to the very terrorist who attacked us on 9/11.
Dear Mr. LaMonica,
Thanks for giving us the opportunity to read real people’s comments on these situations. I stopped reading your articles long, long ago (because you either don’t get it or just like to play devil’s advocate). Rather I go right to the comments section of your articles. It is encouraging to see intelligent, insightful comments from my fellow Americans. Maybe there is hope for our country yet.
By the way, I am 100% against the bail-out.
Sincerely,
BAILOUT: READ LATEST STRONG-ARM TACTICS TO URGE PASSING THE BILL
CNN AM / Ali Velshi Posting Comment # 256
Good morning Ali and CNN Team:
(Ali I bet YOU or ANYONE ELSE won’t have the brass ball’s or fortitude to discuss this on Live TV)
1. Can you answer how the added bill for increasig the FDIC cap to $250,00.00 will “help the average 6 pak Joe”?
We are Government DoD Employess and we are lucky to have a whole $500.00 in any one of our accounts.
Again…WE THE PEOPLE…the average working”joe” does NOT HAVE this kinda of money “just floating” around in any Bank account. HERE AGAIN THIS IS ONLY PROTECTING THE WEALTHY!
2. Can you answer; how by adding “A MENTAL HEALTH BILL” TO THIS bailout plan – What..for God’s Sake does “mental health” have to due with THIS FINANCIAL BREAKDOWN?
And…During AC/Cooper360 last night, he had a commentary from someone- as BREAKING NEWS – reporting that the House had “THRONW IN THESE TWO ADDED BILLS TO (quote) “SWEETEN THE DEAL AS TO URGE THE BAILOUT PLAN TO BE PASSED”
For the life of me I could not recall the speaker’s name because I literally “busted out laughing”. THIS IS BECOMING A JOKE!
WE THE PEOPLE…WAKE UP..IT IS STILL NOT WORKING IN OUR FAVOR!
By the statement made by “SWEETENING THE DEAL” This remains as ILLEGAL POLITICAL STRONG-ARMING TACTICTS.
This is POLITICAL EXTORTION:
(webster’s dictioary definition as follows)
EXTORTION: Illegal use of one’s official position or powers to obtain property, funds or patronage.
Therefore – For those House members that have added this strategy have now BECAME EXTORTIONIST….Which is ILLEGAL!
WE THE PEOPLE…don’t fall for it!
CONTINUE TO “CRASH THE EMAIL SYSTEMS” as WE COTINUE TO BE HEARD…
Posted By Deborah – Amelia Island, FL: October 1, 2008 8:23 am
Those pompous politicians who look for opportunities to get their faces in the news were asleep at the wheel and our country is suffering for it. I say vote out everyone who is up for reelection this November no matter how they vote on the bailout bill because they were all wrong not to have done something much, much sooner.
Let this situation be a lesson to the new candidates with political ambitions – you better come prepared and know what you are doing. We don’t need more uber rich who have long ago lost touch with the middle class situation.
No Bailout!!!
I wasn’t bailed out, and I wasn’t even gambling! What kind of message is this sending to American citizens? There is no way I am paying to bailout companies that gamble, and I’m NOT paying for any golden parachutes. Let them file bankruptcy like everyone else.
This is easy decision. NO BAILOUT!! Give power back to the people where it should be; Not the rich whining brats.
No Bailout!! No Bailout!!
We are in unchartered waters when it comes to our economy. So in order to fixed the problems we have to do something that has never been done. Instead of a 700Billion dollor bailout to the individuals that created the problem, why not make a taxable payment to each voting American over the Age of 18. This will infuse each individual without about 400 thousand dollars per individual and the taxes back will be about 190 thousand. Inflation will go up but the average american can catch up and the banks and companies will get their monies back through a natural progresson of supply and demand. On the negative there will be a quick boost in inflation but the law of supply and demand will gradually put things back in the natural order.
Why didn’t anyone in Congress seem concerned about how much money they were losing when the market dropped 777 points?
Don’t let Wall Street burn!!!! Let the companies that did ill advised risk managment, or none at all, and committed grave mistakes burn and let them do it without my tax dollars! This is where the American system starts and kicks the weak to the curb, but it hasn’t been doing that. We’ve been spoon feeding the weak ones and it has GOT TO STOP or the whole becomes jepordized. Some bodies either stack up now, or a lot more bodies later one to the point it is unrecoverable!
Rico laws claw back to the assets accumulated by gangsters at the expense of the public. How about these leaders who set policy to ignore good credit standards to hide problems? Come on, Federal Government, use this law to fund some of the bailout!
They couldn’t fool us, so now they’re trying to bribe us with a tax cut instead of going back to the drawing board. What’s next, if we don’t take a bribe they start threatening to hurt our families? Oh wait, they already have.
Why does it have to be this solution? Why does the Congressional leadership have blinders on? Because other solutions would take control out of the hands of the banking system and this one gives more power to them. If it feels like organized crime tactics, that’s because it is, very well-organized crime. The five families? The financial system, the media, the Democratic Party leadership, the Republican Party Leadership and the Fed.
Let me get this straight. The financial crisis was caused by banks lending out too much money so the answer is to invest 700 billion taxpayer dollars on assets they no longer want so that they will be able to lend out money again to people who can’t afford it. Does that sum it up in one long run-on sentence?
Also, if the credit markets are so clogged up, why then do I still get 5 different pieces of junk mail a day with pre-approvals with credit lines I wouldn’t be able to afford?
What a MESS! These gurus were paid millions to mess up the economy and now the Fed wants to bail them out for their gamble. What a joke. This mess is affecting far flung corners of the globe with world wide loss. Fix the system so people can’t sell what they haven’t got. (This is pure theft from mums and dads and pensioners accounts)Limit lending for share market speculation. Hang those gurus that have caused these problems, or at least throw them into jail. Sorry. This mess has to be fixed properly, once and for all.
I strongly urge you to Contact Congress by sending an email directly from our web site immediately. Don’t let them ignore us.
You can also use this form to lookup your Congressional Representatives contact information as well as view their voting record.
This bailout is nothing but bad news. There is no real crisis, the market sell of is a result of fear mongering by President Bush
The bill allows for foreign banks to dump all of their bad assets into American banks, who can in turn sell the debt to the treasury.
THE AMERICAN PEOPLE SHOULD NOT BE PUT ON THE HOOK FOR WALL STREET, AND ESPECIALLY NOT FOR COMMUNIST NATIONS LIKE CHINA!
IMPORTANT: YOUR ACTION IS NEEDED. SEND THIS TO EVERYONE YOU KNOW.
Congress will meet again tomorrow to vote on a revised version of the bill.
ITS STILL THE SAME BILL.
It allows foreign banks from Nation Like China and England to transfer an unlimited amount of bad debt to be transferred to our tax bill.
THE GOVERNMENT SCARES THE HELL OUT OF US THREATENING MAIN STREET WITH THE NEXT GREAT DEPRESSION. But this bill will help COMMUNISTS in SHANGHAI . Not patriotic Americans.
Please contact your congress men. Call them, fax them, email and tell them no way before its too late. Election day is soon, let them know there will be consequences for voting for this criminal bill.
Visit blog.alexanderhiggins.com to learn how to help
THE FACTS:
FACT: UNDER THE PROPOSED BILL FOREIGN BANKS CAN DUMP UNLIMITED AMOUNTS OF BAD DEBTS INTO THEIR BRANCHES AND SUBSIDIARIES IN AMERICA. THEY CAN THEN SELL THOSE BAD DEBTS TO THE US TREASURY AND PUT THE AMERICAN TAX PAYER ON THE HOOK FOR THEIR BAD DEBT;
FACT: LESS THAN A THIRD OF CONGRESS BELIEVES THE BAILOUT BILL WILL WORK. OVER 50% OF CONGREES THINKS THAT THE BILL WILL ONLY MAKE THE PROBLEMS WORSE.
FACT: HUNDREDS OF THE NATIONS LEADING ECONOMIST THINK THIS BILL ABSOLUTELY STINKS
FACT: HOUSE PRICES ROSE OVER 100% SINCE 2000. HOUSE PRICES ARE ONLY DOWN 15% SINCE THE MARKET HAS TURNED. MOST ECONOMISTS PREDICT ONLY ANOTHER 10% DOWNWING BEFORE THE PRICES BOTTOM. THE WORSE OUTLOOKS CALL FOR 35% BEFORE WE DROP. THAT MEANS, WORSE CASE SCENARIO HOUSE PRICES WILL STILL BE UP OVER 50% SINCE 2000.
FACT: WHILE HOUSE PRICES ARE DOWN ONLY 15%, FINANCIAL STOCKS ARE DOWN 60-70%. THIS ISN’T A REAL CRISIS. THE FINANCIAL MARKET HAS BEEN ABUSED BY GOVERNMENT CORRUPTION AND FEAR MONGERING HOLDING. BUSH IS HOLDING THE ECONOMY RANSOM.
FACT: EVEN AFTER CONGRESS KILLED THE BAILOUT BILL, THE STOCK MARKETS SOARED TODAY. TODAY’S GAINS WHERE THE HIGHEST GAINS IN YEARS.
FACT: THE NATIONS LEADING ECONOMISTS SAY THIS BILL WONT WORK AND WILL ONLEY MAKE THE CRISIS WORSE.
FACT: IRELAND PASSED A BAILOUT BILL WHICH INSURED BAD DEBTS ANT ITS STOCK MARKET TOOK OFF. NO NEED TO MAKE THEIR TAXPAYERS PURCHASE BILLIONS IN BAD ASSETS
FACT: PRIVATE DEBT IS $35 TRILLION. HOUSING DEBT IS 10 TRILLION. 700 BILLION DOLLARS WONT EVENT PUT A DENT IN THAT DEBT.
FACT: 30% OF AMERCIANS OWN THEIR HOMES OUTRIGHT. ANOTHER 30% PURCHASED THEIR HOME BEFORE 2000 AND AREN’T AFFECTED BY PREDATORY MORTAGES. OF THE REMAINING MORTGAGES ONLY 15% ARE HIGH RISK REPRESENTING 300 BILLION IN BAD MORTGAGES.
FACT: THE BAILOUT BILL IS NOT JUST FOR THE PURCHASE OF SECURITIES RELATED TO BAD SECURITIES. THE BILL WILL ALLOW THE FED TO BUT ANY BAD SECURITIES THEY WANT.
FACT: UNDER THE BILL, THE FED WILL BE OVERSEEN ONLY BY A CRITIQUE BOARD, WHICH WILL HAVE REAL POWER OVER THE FED. EACH MEMBER OF THE CRITIQUE BOARD WILL BE PAID A MILLION DOLLARS A DAY.
FACT: THE FED DOESN’T HAVE THE RESOURCES TO OVERSEE THE BILL. A PART TIME TEMPORARY EMPLOYEE WILL BE PAID LEVEL 4 EXECUTIVE PAY.
FACT: THE BILL CREATES AT LEAST TWO NEW HUGE PERMANENT BRANCHES OF THE FEDERAL GOVERNMENT, WHOSE COSTS WILL PAID FOR DIRECTLY FROM THE POCKETS OF TAXPAYERS
FACT: THE ADMINISTRATIVE COST OF OVER SEEING THE BILLS FUNDS ARE IN NO WAY CAPPED IN THIS BILL.
FACT: THE BILL HAS NO CAPS ON EXECUTIVE PAY.
FACT: THERE ARE NO PROTECTIONS FOR THE TAXPAYER IN THE BILL. THE CRITQUE BOARD CAN RECOMMEND THAT THE TREASURY DEVISE A PLAN TO RECOUP TAXPAYER MONIES. KEYWORDS RECOMMEND A PLAN
PLEASE VISIT BLOG.ALEXANDERHIGGINS.COM TO LEARN HOW YOU CAN HELP!!
The govenment should offer to buy mortgage backed securities at $.65 to the dollar and then reset them at $.75 to the dollar to bail out the home owner and put a floor under the market and protect the taxpayer from big losses. This would enable financials to value their assets and hopefully start loaning money again.
We the people understand the “complexities” perfectly. The Federal Reserve has been issuing cheap credit for decades, without a vote in Congress. So when given the chance to voice our opinion, we say, “NO!”. Banks were pressured by the gov’t to make risky loans with this cheap credit. The mortgages were bundled and sold as AAA rated assets. Then borrowers began to default. This bailout is an attempt to fix the value of these assets (no one else wants to buy worthless paper). The taxpayers will NOT get a return on the investment, because it requires home prices to perpetually increase.
We are in a recession brought about by the tanking of the dollar as a direct result of the FED fixing interest rates. There is no way to stop it now. Abolish the Federal Reserve and let the market correct itself over the next 18 months. Your children’s children will be grateful.
THE PEOPLE HAVE SPOKEN. Any congressman or senator who votes for a wallstreet bailout must face the wrath of the electorate. I urge all citizens to keep very close track of who votes for this bailout and take immediate action to vote them out of office. No excuses; they’ve been forewarned that we mean business. We’ve had enough of people who think they know better than we do what’s good for us. It’s time to take back this government, clean it up, and kick out all of these bad apples. Better a regular citizen in office than a corrupt politician (any day). VOTERS ORGANIZE and backup your threats!
Market should handle the financial crisis as it is a free market economy. This is a normal economic cycle. The main aim of the bail out is to ease the credit crunch. May be the government should come up with a plan to make funds available to the individuals and business through federal loan program (similar to FAFSA program). Another option is to take over a failing bank and use that infrastructure to support the federal loan programs.
Paul, relax. If you have read the People’s History of the United States you will know the government is on your side, historically speaking. In fact, after the super bull market from the early eighties to 2000, much more people than ever are on your side and should know the government is on there side, too.
LISTEN, there are many sides to this story, as in the past stories, but know this. The majority of the people will always be perceived as populist; that is, not everyone has loads of money, or money to save. There really is no single voice of the populist party, and no, the defecting House republicans are not the voice of populists.
Now, I don’t mean to type in a certain tone, but your typed antics are ridick. The emotion is taken at face value.
We all know, (populists may not know-assumed from American entitlement) that the government has always acted in the best interests of business, specifically big biz. small biz doesn’t exactly count, at least in these days with global economy. Now wake up…whatever your hidden bias might be relative to how much you invested in risky investments, don’t fall into the upper mid income class that takes the side of elite/government. They have always used the portion of middle class that wants what they don;t have relative to their postion, to use against the rest of the middle class that is forced to side with the lower classes.
really, bailout or no bailout (adjusted or not), a portion of the middle class, and all of the lower class will suffer. given all the sentiment for government intervention, and the actual actions that gov. has shown, we know what the real motives are.
people, continue to call your government in protest! the real answers to social security and the rest will only come to a numbed culture that experiences extremely painful monetary consequences.
And if you question me at this mark, please don’t, because historically, the same thing has happened in the past.
NO ONE IN THIS BLOG, (which happens to be most) should believe in government action. I have my doubts that the head blogger here has unbiased sentiment on this issue…at the least, he is speaking as someone in a decently invested spokesperson.
Now, listen
After the 700 Billion then what? Canada we are told is in good shape. Perhaps you can borrow some money from us.
The plan is faulty.
Stop using credit to pay credit. Cash is king. In the end the USA will be bankrupt and China will foreclose on America.
Paul you need to get a clue and quit beating the drum that Wall Street and this administration is preaching. The markets can go down and it will go down with or without this bailout. It is the stock market and there are not guaranteed returns. So far this year we have had 17 Banks, 286 Mortgage Lenders, 29 Home Builders and 82 Hedge Funds go under. Has your 401(k) gone to zero yet? Has the depression started yet? Has the market gone to zero yet? No the free market has already assumed these losses and has moved on. There is a huge amount of deleveraging going on in the market place and no bailout is going to stop it. The markets need to correct themselves because the were over inflated with borrowed money as was everything else.
The banks will not lend to each other because they do not know who is next to fail because there is no transparency in the markets. These greedy wall street companies created SIV’s, Conduit’s and QSEP’s to funnel junk assets off there balance sheet so they can borrow more money and start the process all over again. Making money pushing paper and rewarded way beyond what they deserved. Well the party has ended and they are left holding the bag of crap because the housing market has turned for the worse. They made the loans and bad decisions they must face the consequences. It is so sad the Congress, Paulson and GWB are trying to sell this dooms day crisis to save people who made $627,000 per employee last year. Pity, pity when they lose their jobs welcome to the real world.
People call your Senators and tell these morons to vote NO.
Does no one see the conflict of interest with Paulson running the program and being the ex CEO of Goldman. See if he will go with the plan if you ban Goldman and Morgan Stanley from using it and if he says no then you know what his underlying agenda really is. That is securing a position for himself after the next presidents fires his ass.
Judging from the board there seems to be an overall assessment that people are willing to take the hit in the wallet and economically before they allow a bailout to go through.
Call, fax and email them now it worked with the house vote.
What Part of NO !!! NO !!! NO !!! Bailout Don’t You Understand ?? Its a persons own decision where to invest their money and if its in the stock market or anything related to the stock market its their choice…NO GUARANTEES come with “” INVESTING “”. If your 401K is down complain to you investment person ( The Greedy Pigs That Handle Your Money ) who allow your money to be invested in the market…PEOPLE OF AMERICA !!! Get your money out of anything related to the stock market.. ” NOW ” and I mean NOW !!!! The worst is yet to come…Their are no guarantees in life…my business is 85% off … no one bailing me out..so stop crying and get your money out !!! NO…NO…NO…Bailout or give a ways…not oneeeeeee ” DIME “…and as for the politicians and those two candidates for president why am I not hearing… NO…NO…NO…we all should be hearing them give a speech saying this is a country ” For The People…By The People “… and its time that We The People take control of the U.S.A. and get those Greedy Pigs who caused this happening out…make them return all they swindled and stole to the people…
Instead, I’m in favor of giving $85,000,000,000 to America in a We Deserve It Dividend. To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.. So divide 200 million adults 18+ into $85 billion that equals $425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend. Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in thei r pocket. A husband and wife has $595,000.00. What would you do with $297,500.00 to $595,000.00 in your family? Pay off your mortgage – housing crisis solved. Repay college loans – what a great boost to new grads Put away money for college – it’ll be there Save in a bank – create money to loan to entrepreneurs. Buy a new car – create jobs Invest in the market – capital drives growth Pay for your parent’s medical insurance – health care improves Enable Deadbeat Dads to come clean – or else Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces. If we’re going to re-distribute wealth let’s really do it…instead of trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President. If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+! As for AIG – liquidate it. Sell off its parts. Let American General go back to being American General.Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here’s my rationale. We ! deserve it and AIG doesn’t. Sure it’s a crazy idea that can “never work.” But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam. Kindest personal regards, Birk T. J . Birkenmeier, A Creative Guy & Citizen of the Republic
CNN, quit trying to sell us the bailout! Are you journalists or advertisers? Honestly I can’t tell anymore.
Why don’t you try acting like journalists and start asking the hard questions of Wall Street executives and of our so-called leaders in Washington. Will Time Warner let you do that? Or is the leash too tight?
I work in a European investment bank in Tokyo. I find it odd that the most ardent supporters of the bailout are foreigners, whom hope to benefit on the backs of the American taxpayers. Wake up call in Washington please. We don’t need to bailout Europe or Asia. Come up with a package to help those Americans who have problems paying their mortgages. That’s an investment in our future.
I don’t trust the bald headed fart that heads up the treasury. He is a Wall St. insider and I think he cares more for his banker cronies than the tax payer. I think he is the proverbial fox in the hen house.
There needs to be two solutions. The first one needs to happen now to get the economy back on track. That is to stabilize the banking sector so that credit can be restored. That is mandatory or the whole system is going to shut down. The second one is to vote out the incumbents and check whether Paulson has been shorting the market while he’s been in office. The people better start getting rid of these old congressional greasers before they ruin the country for good! I don’t care if you like your congressman, the incumbents need to go until congress gets the message that you better go into office for the people, not yourself or your going to be voted out. Next, explain why $700 B is the number. That came from nowhere except Paulson thinking this is how big of a checking balance he would like to have to pay whoever he wants. Explain how much money Franks, Obama, and Dodd received from Fannie and Freddie. Explain why the democrats thought that Fannie and Freddie were just fine in 2004. Explain why they are putting slush funds for congress and for votes in the bail-out plan and not telling the public.
Why do Ali Veshi and Paul Lamonica look down on the regular American as if Americans are idiots? Americans don’t want it. How much money your big business family is your problem.
Let me echo what has been said several times here.
We can’t afford it. It wont work. I don’t care how bad its going to get if we don’t do it, we still can’t afford it, and it still wont work.
Is anyone else really sick of the media telling Americans that we don’t “get it”? We don’t understand that Wall St. affects Main St…blah blah blah. And that legislators should essentially ignore the will of the people because we don’t understand! Give me a break!! We’re not idiots–we know times will be tough, maybe really really tough. But destroying the dollar completely is definitely NOT the answer. The government must stop acting so irresponsibly. It is better to accept the consequences of the Fed printing and spending now rather than later when it will be even worse.
Writers below have today made many great observations and comments.
As a result, I have more faith in the ‘little guy’ than ever before.
The contributions below, and the vote of the House on Monday, have given me hope. Hope that the ‘grassroots’ can really have an effect on how the grass ‘above us’ behaves.
Sad to say I — rather belatedly — have started to lose faith in our ‘leaders’. The Western world deserves better.
Because we have better amongst to choose from — even amongst the people who are contributing below. And amongst those many who let their voices be heard by their representatives over the last several days and weeks.
Just as one small observation and example, I have to agree with those who say “let the chips fall where they may”.
If a poorly-run institution gets taken over by one that is better managed, like Bank of America, then is that not the way it is supposed to happen?
Why even consider letting those inept managers (who need to go back to management school) continue running such important institutions in our societies?
Simple — we shouldn’t.
Those wall street types & condescending analysts are obviously so much smarter than us “suckers” so we should just go along with their plan.
The vast majority of us think rewarding criminals for stealing is a bad idea. But these CNN geniuses point out that if we don’t hand over the money some of us will be hurt.
No thanks, I’ll take my chances with this recession. I believe that paying off criminals just leads to more criminals.
That’s odd…
I’d swear I had posted something when I returned here from lunch a little while ago…
Open debate and free speach; gotta love ‘em 
This Bill, HR3997, must not pass. WAKE UP people! They are not going to use this money to help homeowners in foreclosure – they are going to correct the issues associated with the deritives and the short sales. It’s all BS. I’ll give them $5 bucks to use the frickin DELETE key and end the mess once and for all. Call your House Respresentatives, people. Tell them you will vote against them if they vote for it. Bush is trying to change all of the Nay-sayers votes right now so HE doesn’t look even stupider when he leaves office. I have called my House Representative several times and people are there answering the phone, taking my message. YOUR CALL COUNTS! It only takes a minute. Use Google to find the phone numbers. Wall Street’s fate doesn’t depend on the passage of HR3997 , but, YOURS and MINE and OUR CHILDREN’s FUTURES depend on it!
All these great ideas about how to make America a better place, pay off mortgages, feed, house and educate people. sounds like paradise to me but.. I am not king George or King henry – the wall street fat cats don’t want your house paid off, they don’t want to solve your financial problems and make the country a better place, they want you to struggle and pay them every penny you make so they can have a swiss chalet and a beach front summer house in Aruba and if the bailout or other monies were to solve the problems of the average America where is the profit in that for the big money guys?
Here’s my solution to the “Bailouts”.
NO BAILOUT!
Let’s get this straight.
We the people are not being helped by this so-called bailout.
Here’s my plan! I’m against the $85,000,000,000.00 bailout of AIG.
Instead, I’m in favor of giving $85,000,000,000 to the American
Citizens in a “We Deserve It Dividend”.
To make the math simple, let’s assume there are 200,000,000 bona
fide Legal Citizens of the age of 18 and older in the United States.
Our population is about 330,000,000 +/- counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and over.
So divide 200 million adults (18+) into $85 billon dollars and that come
to $425,000.00.
My plan is to give $425,000 to every Legal Citizen 18 and over as a
“We Deserve It Dividend”. Of course, it would NOT be tax-free.(you
need to pay your illegal taxes 
. So let’s assume a tax rate of 30%.
Every individual 18+ has to pay $127,500.00 in taxes (this would replace
the interest because this isn’t a loan). That sends $25,500,000,000 right
back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in
their pocket. A husband and wife have $595,000.00.
What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage – housing crisis solved.
Start a business – reduces unemployment
Repay college loans – what a great boost to new grads
Put away money for college – it’ll be there
Save in a bank – creates money to loan to entrepreneurs.
Buy a new car – create jobs
Invest in the market – capital drives growth
Pay for your medical insurance – health care improves
Enable Deadbeat Dads to come clean – or else
The Government (taxpayers) would save another $700,000,000,000 they’re
giving Fannie May and Freddie Mac, etc, because everyone would be able
to pay off their mortgages
So, what do think of my plan?
Also; isn’t it the policy of the U.S. Government not to deal with terrorists?
Isn’t all of this D.C. and Wall Street blithering fear-talk a form of terrorism?
HA!
dear fellow readers. Usualy i very much agree with all that’s said here and I always disagree with our friend Pollyanna Paul. But for once, I disagree with all of you. The bail-out is not there to please wall street (which will have a terrible time anyway), but for the good of the American people. When the banking system collapses, we will all have a terrible problem. The Great Depression was no fun for ordinary Americans.
whoa.
I just came around to see where this thread has got to since lunch and man; does Mr. la Monica still have a job?
We simply face the choice between a deflationary depression (no bail out) or an inflationary depression with some delay (bail-out). In the first scenario, the saver’s money will be lost in failed banks and lost deposits (unless he/she takes safety in gvmt bonds). In the second scenario, the saver’s funds will be rescued, but rendered pretty much worthless in the ensuing inflation crisis which will be horrible given the size of the problem, unless he/she takes safety in gold… Another point: 700 billion is far from enough. It’s just pocket change to get us to the next half year. Eventually it’ll take trillions to save the banking system.
The “bailout” won’t work, and is completely unaffordable anyway. Bush is happy to propose it because he loves spending money (as long as it is borrowed). He is like a drunken sailor with a no-limit Visa card…
We don’t have this money in the treasury, so we will have to borrow it – America can’t afford another trillion dollars in debt!
If we have to do this bailout, we should all just write out a check for $10,000 per American household, regardless of means or ability to pay. That is the only way I will support it – only if it is 100% funded with real money.
My kid doesn’t need to be paying for this BS 30 years from now.
IF this taxpayer bailout of Wall Street was absolutely critical to keep the economy functioning, The REPUBLICAN Secretary of the Treasury would be able to persuade the REPUBLICAN Senators and Representatives to vote Yes. Unanimously. The fact that Paulson can’t even get a third the House Republicans to vote ‘yes’ makes it clear that this taxpayer giveaway to Wall Street bailout NOT necessary to prevent a depression.
Call your congressmember NOW. Keep the bailout DEAD.
NO WELFARE FOR WALL STREET!!!
We’ve been told, over and over again, that the U.S. cannot afford universal health care, or a high-speed train system, or free university education.
But Bush, Obama, Frank and Dodd think we can afford for billions in welfare for rich Wall Streeters.
NO! Let them fail! If bankruptcy is good enough for struggling homeowners, it’s good enough for Goldman Sachs.
NO WELFARE FOR WALL STREET!!!
Call your congressmember NOW. Keep the bailout DEAD.
Here’s a thought. More than $10 Billion dollars are generated annually in lottery sales.
How about a REAL ‘Hope for Homeowners’ national housing lottery…
NOT a lottery gives 1 winner $200 million.
A lottery that would give nearly 340 Americans home ownership each week and give financial institution their money as these mortgages are paid.
NOT a lottery to line the pockets of it’s executives and oversight committees.
A lottery for Americans, owned by Americans, for the good of Americans.
If even only 5 billion annually were generated, we could take 60% of that each week ( $96,153,846.15 ), divide by median home cost (hypothec $275,000), to payout to more than 340 existing or new mortgages.. Meaning winners can only use the money for housing. This gives Americans an opportunity to opt in and gives 340 Americans each week $$$ towards their home or a new home.
The remaining 40% ($2 Billion annually) would be used for operating costs and to invest in government bonds that would pay dividends to ALL past winners (for the life of the program) and create extra money that would be used to provide additional winners (more than 340 weekly) as time goes on. At the end of the program, all excess would be distributed to past winners. The money CANNOT be used for anything else.. Only homes for tax paying Americans!!! Oh, and the best part is you don’t pay taxes on the $275,000+ towards your mortgage or home… unless you sell, you’d have to pay capital gains taxes if the home is not your primary residence for 5 years. I think only fair that way to keep investments legit and winners in a home.
Now, obviously I haven’t worked out all the details.. Smarter people than I can help with that. But, it doesn’t take much thought to know this could really change America for the better. And kept out of greedy minds and hands could, not only change America for the better, but the world too. Some may say this type of thinking is absurd. Hey, I’m THINKING! YOU SHOULD THINK TOO! You may come up with something really cool.
More? No limit to how often you can win. The more you win, the more homes you can buy and more dividends you could receive. What ever the median home cost is TODAY is what it pays to every winner.. Not more, not less.. This can be adjusted annually to keep up with a growing economy.
Think of how the economy would be stimulated by people spending their earned and taxed money on goods and services rather than to their stretched mortgages.
Of course this won’t prevent some in the future from trying to reach to far and a mortgage without lenders doing their job. This is to help get Americans motivated about fixing the housing crisis and helping fellow Americans and themselves purchase and own real estate.
This wont fix housing this year or next.. But imagine the result in 5 year, 10 years, or more..
You could win you children’s home before they even have buy it, leave it in bonds and cash in when they are ready to buy.. Nice wedding gift!
The possibilities are as endless as is our ability to think outside the box and outside of what we are being told is the only solution.
“THINK FOR A BETTER CHANGE, A BETTER TOMORROW, REAL HOPE FOR REAL HOMEOWNERS”
I said it before and I’ll say it again No, No, No, Bailout! Let them burn! It is a necessary part of any free market system that the weak and foolish parish especially if it is by their own hand. Besides, in any form, a bailout is not in the best interest of the US Taxpayer, promotes continued reckless lending practices, and there is no guarantee it will work. In addition, it has not been proven that it is even necessary. Just look at the markets today. The very idea is simply outrageous.
Bob from Santa Fe writes:
“It’s wisdom like this that is going to inflate my borrowing costs (even people with good credit will pay more for their loans) and keep my dad in his job after he should have retired due to the decline in his 401k.”
The savings rate in this country has sporadically gone negative for periods of various length on multiple occasions in the past few years. Last year, the national savings rate went negative and has (as far as I know) stayed there. People are, on the aggregate, spending more money than they take in each year. Normally, economic difficulty required making choices between that flat screen TV and putting food on the table. With cheap and easy credit, people have been able to do both. This has inflated housing prices (easy mortages), college and university prices (easy student loans), and even commodities (speculators can borrow money to make bets in the markets).
Current interest rates are historically low. This has been enabled by the Asian savings glut, as they have been investing here. This cannot continue…as I said earlier, this country cannot borrow its way to prosperity. Yes, borrowing money will become more expensive. But responsible people with a good credit history will still be able to get loans. It will limit the use of credit for non-essential things and encourage people to adjust and save where they can.
As for your father’s situation: I truly feel for him. I’ve lost a lot of money because of the stock market’s yo-yoing, myself. However, this is the unfortunate reality of a nation that has turned to market-based 401(k)/403(b) plans as our primary means of retirement support as opposed to relying on pensions and social security. But that is a symptom of bigger problems in our society.
In any case, cheap credit is not the answer. It’s going to be a painful adjustment for the U.S., but it’s a necessary one. I don’t wish economic hardship on anyone, but to use another commenter’s analogy, the medicine that cures us sometimes tastes bitter.
I agree with Jim L, the condescending in the media towards “the ignorant masses” is unbelievable. If you are so high and mighty Mr CNN broadcast journalism major please pay the bailout yourself. I want no part of it!
I gladly submit to you a real and workable plan from Dave Ramsey.
Years of bad decisions and stupid mistakes have created an economic nightmare in this country,
but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support
any congressperson who votes to implement such a policy. Instead, I submit the following threestep
Common Sense Plan.
I. INSURANCE
a. Insure the subprime bonds/mortgages with an underlying FHA-type insurance.
Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
b. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a
6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while working with the borrower—again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming
executives from being paid when they don’t do their jobs.
c. This backstop will cost less than $50 billion—a small fraction of the current proposal.
II. MARK TO MARKET
a. Remove mark to market accounting rules for two years on only subprime Tier III
bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
b. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
a. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
b. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down.
This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to stand up, speak out, and fix this mess.
A bailout plan will not work, do you think it is smart to continue to “keep credit flowing”, as Paulson said, when individuals and corporations are spending way more than they can afford. The ratio of debt to income for individuals and corporations is out of control. The debt that the government holds is out of control!!!
The values of houses have increased too much and too fast and need to come back down to realistic, affordable prices. The average income and the average home prices do not match up in most areas of the country. The bailout plan is going to keep the prices high and inflation will continue rising but incomes will not. Individuals and businesses will continue to go deeper and deeper in debt.
Without a bailout the businesses and banks that are healthy can make it through some rough years. Those that are using credit for daily operations should not be doing that anyway and should consider closing the doors. Those that can survive will survive without this bailout and those that live on credit will have to change their ways….finally.
The $700B bailout is money that should be used to educate our children, provide health care, and build infrastructure. I can live without a loan for a house or car for a few years but I can’t live without an education for my children.
As a taxpaying citizen and a VOTING citizen I will be watching closely who votes to pass any more bailouts, trust me they will not get my vote and I will shout it from the rooftops!!
I will keep up the pressure on my representatives to LET THE BAILOUT BILL DIE!!
No Bailout!
Write and call your Congressman,Send the message loud and clear,If they voted for it,Complain to them,LOUDLY. If people still have their 401’s in high risk,well live by the sword die by the sword.Wall street is like a whinning kid having a temper tantrum.If they dont get their way they’ll make us pay.The LINE in the Sand has been drawn.I’m SICK and TIRED of being Bullied,Scared,and Threatened into BAILOUTS. All the other bailouts haven’t helped one bit.This is just another one,In what would become a long line of even more to come,when this one doesn’t work. SIV’s,CDO’s,CEO’s,derivitives,All tools WALL STREET,The Banks,to Cover All the FRAUD.FRAUD is CRIME.Punish the GUILTY and make them pay for the bailout.Its just a massive correction that is DUE.Strong Companies and Banks will suck up weak ones,The THINNING of the HERD.Let the pieces fall where they may.The economy is an illusion, molded by BUSH,fake unemployment numbers,fake inflation numbers,fake stock market numbers.Let the market run its course like its supposed to.The government can’t “fix” the market,only delay the correction.The big banks didnt need help with the profits,But,they want help with the losses.If we didn’t ship all our jobs oversea’s people could money to pay their bills,instead you want to bail the banks out, so they can us MORE CREDIT, to live.Which by the way got us to the position we are in NOW.Bring the jobs back here,and raise the min.wage to 20 dollars and downsize the government by 50%,and stop government waste and maybe we can turn it around,NO BAILOUT FOR THE .
Dear Paul, At first I supported the bailout, but now I believe it is premature because its just throwing good money after bad until their is a global decision on how to unwind the Credit default swaps mess.
However, the populace uprising against a bailout appears to be based on the same human failings that got us into this mess and is only one more step down the path of rediscovering what this nation learned from the Great Depression. I believe the depresion taught the rich, religeous, middle-class and poor humility and that individuals MUST work together to provide for their common welfare. Human civilization can only prosper if individuals keep their principles at the personal level, and compromise with others for the good of all.
This attitude seemed to survive pretty much through the 1960s, but the “Vietnam War” destroyed this sense of nation and those on both political sides of the War have been arrogantly attacking each other ever since until few can even recognize the reversal of principle and compromise at the individual level. Arrogant, self-righeous people within the media, politics and religion have been quick to exploit the money and power of polarization. While individuals have compromised their own sense of personal responsibility by blaming everyone else for their real or perceived problems. It appear like there is a very high probabilty of a gobal depression although not as severe as the Great Depression which I believe was the seventh to befall the USA since its inception and not the last this nation will ever see.
Today’s 490 point DOW rally and the handsome dollar currency appreciation put a white hot spotlight that Wall Street is lying to Main Street regarding financial catastrophe if Wall Street isn’t bailed out.
I agree with the comment from Posted By Scott, New York NY: September 30, 2008 3:23 pm. The “news” we receive today does not match the real “news” the average person experiences. I find myself jumping right into the comment section of these articles.
I actually felt pretty good when I saw that my 401k lost a couple grand on Monday. It reminded me that for once the American people were heard and that we won’t just be bullied. I have gained a great deal of respect for all those individuals that took the time to write to congress and pressure them to think about their decision and how it might affect their re-electability. This whole administration has been based on fear. Bush believes congress will sign any bill if they scare the hell out of everyone. This time we called their bluff!
Mike from Redwood City, CA posted this idea on September 30, 2008 12:43 pm.
“The current bailout plan is just that: a bailout of the current failed Wall Street financial system. We need to reboot, start over, with a new system. Let me suggest:
Take a smaller amount of money, maybe $70 billion instead of $700 billion, and use it to set up a new mortgage bank to target the mortgage market. We could call it the Federal Mortgage Bank (instead of the Federal Reserve Bank). It would be FDIC-insured, it could accept deposits, make mortgage loans, sell bonds, and go public and sell shares. Once it’s profitable, it could pay dividends. It could buy MBS at steep discounts, ‘pennies on the dollar’, as the veteran bankers say, and then clean them up. This good bank with solid lending practices should quickly drive out the bad banks with their toxic loans and securities.
Regulations need to be stiffly enforced, up there with ‘hang an investment banker from a lamp post on Wall Street and leave him there as a lesson to the rest’, to make sure they know we are serious.
I don’t know enough about all of the problems in derivatives, swaps, etc. to offer a recommendation, but it still seems that the current system is too far gone to bailout. If we’re going to use taxpayer money, we should start over from the beginning, which is much cheaper. It’s still our money.”
I think this is idea that should be considered. I am going to pass this on to my representatives in my state of Iowa and I hope others, if they like it, will do the same. Thanks Mike!!
This started out as a bailout for WallStreet. Now the media is trying to say that the economic crises is taking a toll on Main Street. I don’t know. I don’t live on Main or Wall Street. But I can tell you on Benny Lane we could care less. We don’t have 401k’s to protect. We live from paycheck to paycheck working hard to buy gas to get to jobs we can’t stand. And the reality is we could less about Wall Street or Main Street. In the words of the Bloodhound Gang. “We don’t need no water let the .. burn”. Bring our jobs back to America. Give us enough money to put into stocks and bonds and maybe we would care then.
The AP just reported in NY Mayor Bloomberg and legislators have scrapped a bill for 9/11 responders health care because of this bailout crisis.
9/11 first responders are still dying and still sick and still have no health care, this bill would have paid for their health care.
SO WHICH IS MORE IMPORTANT YOUR MORTGAGE AND 401K STOCK MARKET????? OR 9/11 FIRST RESPONDER HEROES DYING?
its gross that the NY legislators are using the economic crisis to put aside and not even discuss the first responder health care bill.
ANY DISCUSSION ABOUT THIS ECONOMIC CRISIS NEEDS TO INCLUDE 9/11 FIRST RESPONDERS HEALTHCARE.
Include health care for the 9/11 first responders and I would support any bailout they come up with.
the Feal Good Foundation has been working to get health care for the 9/11 responders for years and this is the big corporate banks killing more heroes and first responders again.
First responders dying and not having adequate healthcare rests souly on your shoulders.
I do not know how NY legislators can sleep at night but everyone will know that they scrapped this bill and are letting them die.
What we need to do is convene a gathering of the brightest financially successful people in the country. Include Paulson and Barneke but no wall street people. Have several good old brainstorming sessions and mix and match ideas to willow down the best possible solutions. The first component needs to be a short term moritorium on foreclosures.
Just the process alone will restore world wide confidence. The finished solution will start from this greater level of confidence than exists now.
How can unfreezing credit lines help the homeowners who are in foreclosure or bankruptcy save there homes, we can’t get a loan anyway, they need to help us Americans, we can open the American economy quicker than a bank bailout, put money into helping the poor americans stuck with lousy loans and rising property taxes on homes that have lost there value.
I’m tired of Paul LaMonica and other journalists talking down to us, like we’re opposed to the bailout because we’re just not smart or educated enough about how Wall Street works to understand what THEY do, which is how, jeez, if we don’t get this bailout, we’re going to be in a bad recession and jobs will be lost.
Well, as far as most Americans are concerned, we’re already in a recession, and jobs are already being lost by the thousands each month. NO evidence has been provided that this bailout will actually fix what’s wrong with this economy, and many of us see the bailout as making things worse. With a $400 BILLION Federal budget deficit already this year, plus hundreds of BILLION$ spent on other bailouts, adding $700 BILLION to the debt that our government needs to dump into the market this year alone will cause the collapse of the US Dollar, and the consequences of that are enormous — increased costs for everything we import, including 70% of our oil. Thus we end up with very high inflation, and quite likely hyperinflation.
Paul and other journalists have never publicized the fact that 150 economists, including 3 Nobel Prize winners, have come out against the bailout.
The people who have been posting out here on the CNN/Money website are clearly people who care enough about what’s going on on Wall Street to come out here and read the financial news — we’re not talking about folks who get all their news from People or Sports Illustrated websites. Overall, the posts here have been extremely articulate and very well reasoned, and if those of us who follow the financial news (I’ll bet daily, for just about everyone who has posted here) are against the bailout, maybe it’s because we’re educated in the ways of the financial system and can see the longer-term consequences of throwing $700 BILLION of taxpayer money at Wall Street banks who have shown they are incompetent at handling money.
Bottom line to all journalists: Knock it off with the condescending attitudes that those of us who are against the bailout aren’t as savvy as you are!
The bail out saves Paul’s job. No wall street, no job for Paul. Typical self interest for a useless bailout.
Why no bail out, because people/busniess/investors who did not mortage themself in debt and have liquidity, this is going to be a great buying oppurtunity. That is the way free market works. If the idiots who claimed housing would increase forever at 10% annually were right, I would have been screwed. They gambled and gambled wrong, now is a great oppurtunity. Buffet has lots of cash to invest now because he resisted the stupidity of the past 10 years (and did not keep this a secret) and he will make a killing like anyone else who will invest his cash wisely now. A fool in his money is soon parted except in the United States, there is always a goverment bailout (hopefully not).
$700B / 300M CITIZENS = $2333.33 FOR EVERY MAN, WOMAN, AND CHILD IN AMERICA.
That’s what I would call a real stimulus package.
That’s:
9,333.32 for a family of 4.
11,666.66 for a family of 5.
16,333.31 for the Palin Family.
How much did you say you lost yesterday?
Dear Paul,
Have you noticed that next to nobody is buying your arguments? And it is not that we are angry – its more disbelief and astonishment that anyone could be buying the line we are getting from the Wall Street and DC Bandits.
For many of use who have experienced being laid off, the fear you seem to be promoting is just boring. It is better to deal with reality sooner rather than later instead of throwing good money after bad.
Perhaps you should be questioning your own credibility at this point?
You know, I’d rather read you guys than the propaganda dressed as “news” on CNN/money these days. (Sister publication Fortune is doing better when it comes to providing balanced coverage.)
How about we cut out the middle man and start our own website? I’ve already started skipping “the buzz” and going straight to these comments pages.
Bush’s golden parachute – the bailout is means for Bush and friends to be in the good graces of wall street when they leave office. We should continue to say no to bailouts of private firms – Freddie and Fannie were enough.
Let Wall Street go down like countless of Americans have, in reality we all need this “financial cleansing”. So many were living beyond their means and spending money they didn’t have. All the while, the banks just kept feeding this addiction so we should all just hold on for the ride now.
For me, as with most people I have talked with, the biggest problem with the bailout is not the concept of doing so, but the huge amounts that the corporate level personnel will reap for their poor judgment–I would love to get $500,000 plus perks for making a mistake! People who pilot these financial dealings should have to pay the piper like everyone else. I believe that if the American people could see corporate America brought down the way the working man has been brought down, and will continue to remain on the lower rungs of the ladder for a number of years, they would come to understand the need for our business/financial system to continue to operate and recover. We need a bail out, but not to the benefit of the high and mighty who could spare a house or two, at the expense of the working man, of which many are either already in the streets, or close to it.
No. Simple answer, why try to complicate matters? No means No. Bush is irrelevant, ignore his prattling. Lawmakers worth any salt will be meeting with constituants up until the election. Once the new administration is in place we can sweep up the mess on Wall Street.
Once again Paul your telling the country to “hate it but accept it” – who pays you for this constant drum beat for the oligarchs?
The people have spoken and frankly a new plan won’t change the fact that a new bailout isnt wanted or desired and will be met with the same rejection.
Tell the cabal pulling your strings that we don’t want to play their game anymore.
Teresa, If you’ve lost 400k so far in this mess, why would you want to double that? If they bail these banks out, all they do is delay the inevitable and reaffirm the faulty mechanics of the market which got us her in the first place. They hope it will be long enough to get out before the real catastrophe comes and they are held accountable. Hank is a smart man, but he’s not smarter than all the highly-creative college-bred thieves on Wall st. They will find a way to subvert even the most righteous Treasury policies.
No one is saying action should not be taken. I am saying that THIS ACTION SHOULD NOT BE TAKEN. If we, the taxpayers should be bailing anyone out it is people like you who have taken a real loss at the expense of mismanaged and mis-regulated securities. I’m also saying that the sky is not falling and the mantra, “a good plan today is better than a perfect plan tomorrow” does not hold true here since this is a horrible plan today. If we get a good plan tomorrow that protects you and me, and holds those accountable who are responsible for our well-being – I’m all for it. What is a good plan you ask? Sucking up the logistics of managing direct mortgage assets, which does not fall under the authority of the US Treasury. If relief to people with faulty mortgages does not re-stabilize the markets in 6 months, then we should talk about taking more drastic measures. But after all other options have been exhausted. Simply put, they have done nothing to stifle this catastrophe (and in many ways caused it). By dragging our feet on this and injecting small fixes to correct the course we can effectively regulate the market back to working again. A large course correction will ultimately send us in a direction spiraling out of control.
As far as consumer credit goes, if banks aren’t going to offer it – someone else will. 2 weeks of completely stalled markets and anyone who took macro can tell you that the demand will be met with adequate supply. If the general competitiveness of the market is brought in to question (such as with a huge bailout), then the basic rules of economics break down and it is anybody’s guess how the cards will fall when the real market collapse comes.
Me, I’ll take the predictable market. I’ll suck up what’s been coming to us and take it standing up. I lost alot yesterday two but I’m not budging because I will not trade even one ounce of my civil liberties for any amount of upside on a market security.
If you want to cower in the corner and cry about how you let some sleazeball in New York blow your retirement plan, move. If you can’t take the heat; you shouldn’t be GAMBLING in the market in the first place.
Till then I’m not going to encourage my senators and reps to give away the house to the guys that caused this problem.
SAVE THE AMERICAN TAXPAYER.
No bail out. This is another failed agenda of a failed administration. It would make more sense to pay the mortages of the less-than-25% of homes in foreclosure. Then the bundled mortages would be worth money and then the assets would be worth what the banks thought they were worth in the beginning or close to it and then the financial crisis would be solved…from the bottom up. Not from the top down. Remember the aid the government already gave companies has not helped but has been great for Wall Street.
For example the current CEO of Freddie Mac has a salary of $900,000 and this is a person leading a failed organization. Do you really think this program is for Main Street in any way?
Remember Paulson was the CEO of Goldman Sachs Group only a few short months ago. That was the only firm bailed out by Buffet and he got to watch as a former rival went into bankruptcy. I am sure he got some satisfaction from that moment.
And the market rebound is proof that we can whether the storm. The sky is NOT falling.
Sir, I have lost most of my IRA and stock values, but still cheer the the bailout rejection. Why? Several reasons. Fist – why is it necessary for Mr. Paulson to be given a check for $700G and say “Here, do what thou wilt.”. Ridiculous. Better to put the fox in charge of the hen house, at least they will die a quick merciful death. Giving Paulson absolute power will absolutely corrupt – they are already planning on it! And why all of a sudden this bum’s rush to pass the bill – no consideration of alternatives, such as a Fed loan package (and allowing the taxpayer to have a definitive future recoup rather than just a possible one, which is what the current bailout specifies – I read it!) rather than an outright money giveaway, and what is the need for kowtowing to the companies at risk, acting as if they have a choice to accept loans or fail? Give me a break. This is WAY too big and expensive to do off the cuff, the way the Iraq war was started (which used many of the same tactics, by the way). I definitely think that by publishing this column you have put your own credibility in question, sounds to me like they have you in their pocket too. Oh well another one bites the dust…
Layoffs and company’s going under is a part of this country. I worked for a retailer a few years ago. They got in trouble and nobody was there to help them and they had to lay off a bunch of us. Also, 401k? I had to stop adding to that a long time ago when my health insurance tripled in price and gas went through the roof. There is a bigger mess out there than just some banks being stupid. I mean if the government has 700 billion laying around to give away I mean I know some people that could use some of that.
The loses in taking place in the market NEED to take place in order to correct the hollow structure upon which they stand. Remember those pyramid scams or “harvest” plans where you kick in $100 and bring in two/three friends and the do the same and you move to the top and “harvest” $5,000 on a $100 buy in and as long as new “planters” and “sewers” move through you all move up? Well those are garbage and fail because they’re artificial and worthless. The huge earnings you’ve enjoyed in your 401k are inflated and semi-artificial based on profits and growth of weak, insecure and down right artificial mortgages and securities . You take the hit ON PAPER in your 401k and slowly, securely build it back up. Don’t like the volatility? then put your money in fixed interest or bonds and stop being greedy.
If you took the 1 trillion dollars or so that this is reallying going to cost us and divided it up and gave every American over 18 and equal share that would be about 442 thousand for each of us want to bail out the American people why do you try that if you are so worried about us.
The middle to lower incomes are damned if we do and damned if we don’t. If we bail them out – our taxes will increase, less income coming home to pay our current bills and if we don’t we all risk the chance of losing our jobs, loss of income and in turn will put our homes in foreclosure. Personally, the CEO’s of those banks that are needing this bail out, should all be FIRED with NO benefit of any payout whatsoever!!
PROBLEM FIXED!
TODAYS JUMP IN SHARES GIVES THEM BANKERS 500 BILLION!
I AM SURE THEY CAN FIND THE REST 250 IF THEY LOOK IN THEIR COIN JARS!
On one hand I think it’s good this got delayed but something has to happen. I think a delay will help fine tune what ultimately needs to be done.
I think it’s funny how short sightedness got us into this mess in the first place and once again, short sightedness is keeping us in this mess. And I’m talking about all the people who said let Wall Street burn.
Sorry, but trust the American public who are rarely up to date on current events, know where the US is on the map or know how to balance their check books? Now they decide to voice their opinions?? Where were they in the last 10 years when this has been building up? Oh yeah, they were building so-called equity and buying all the things they didn’t need just so they can keep up with the Jones’. Now they’re crying foul when it’s been taken away from them. And like a spoiled child, they blame others for their misfortunes. And I wonder why we’re having this problem.
Good bye instant gratification.
I want Paulson and those other clowns to come clean with what’s going on. Give us some detail — don’t just say “give me $700 B and don’t ask any questions — TRUST ME!!!” I want to know some details and I think others do too. There is too much vagueness for us to trust you. Think about it. When a surgeon makes a bad cut and you need it fixed — do you go back to that same surgeon for him to fix it? Absolutely not! So, kick out the congress and let’s get some people who haven’t already betrayed us. Also, you might begin by telling us the truth!
I view the bad mortgages (and bad borrowers) as an abscess in our economy. Now, no one knows where the abscess is. So, people just chomp at different parts of the body, thus severely damaging the whole body. Not only that, the abscess spreads its infections throughout the whole body, making it vulnerable to collapse and death.
So, if we can find out where the abscess is, and quickly remove it (called bailout or rescue), we are all better off. The cost of a surgery is far less than the life of our economy.
You are as full of it as Bush and the rest of the liars in Washington. Not buying it. Let the Banks that bet wrong fail, they have already failed. No to the Bailout. Thank goodness most posters see through your propaganda.
I think they should leave well enough alone. If it means being taxed more than we already are no way! No way for our future generations as well. If they control who these banks are loaning to we would not be in this mess. The government can clean it up all the want but a bailout is a bandaid if banks go back to the same ole lending practices
What most of American public believes is that this bill is a bailout of Wall Street. I hate to break it to everyone, but as Wall Street goes, as does Main St. We need to put all partisan feelings aside and come together as a united country, while avoiding a castastrophe in our economy. I don’t know about you, but I don’t relish the thought of telling the stories of the Great Depression as my grandparents told me.
Wake up America. The war on Terror, WMD, etc etc – I agree we were all fooled. With all leaders of Congress backing this bill – Republican and Democrat alike, they are privy to more than we. And, the markets don’t lie. $1 Trillion in losses in one day?!?! If that isn’t proof, I’m not sure what will wake up those fools who are crying foul and don’t want government intervention. Well, maybe standing in line for food may…
Paul, this is NOT about what the stock market indexes do on a daily basis.
Will you please start reading and taking to heart some of the better “bearish” analysts like John Mauldin and Peter Schrif and others? Then you won’t be continually putting your HOPES into each article, but may be able to report on our bursting bubbles with a sense of perspective beyond one day.
Thanks to the Fed for decades we have been postponing every little bit of financial pain possible with the adicting medicene – DEBT.
In stead of saving, we have consumed about 2 ot perhaps 3 decades of goods and services on borrowed money and now it appears it is finally time to pay it back – it won’t be fun, not one little bit.
PAUL, DON’T APPEAL TO MY 401K PLAN.
Let me explain you something, you don’t seem to understand.
Crash is inevitable. The longer we delay it, the more of my contributions will go to inflated assets, the more money I loose.
Get serious. Do you really want the government to INFLATE us out of this mess ?
Sorry, but I choose the value of the dollar and my savings account. Never really liked the idea of 401Ks anyway.
NO BAILOUT !
Yes, a Bailout is reguired to pay off some bad gambling debts, but more needs to be done to protect the average American than writing a $700 Billion or more “Blank Check”.
Maybe this is a good lesson to get people to pay attention as to what is actually going on this country.
I am sure that Washington received more emails in the last few days than anytime in History. The average person who never wanted to get involved, is now getting involved and the elected officials are listening to what people are telling them.
Let’s follow some general principles. If we put aside “Greed” and work the system according to how this country was founded, we would be much better off. What happened to general accounting principles? Where were the “Check and Balances”?
Let’s follow the 10%-10%-80% Rule. A lot of us of folks live well beyond our means. Maybe it really is time for us to reflect on how and why we do things?
This rule would apply to all, both the public and private sector. Give 10% to your local church or charity, keep 10% for yourself and all of your other expenses would be covered by the other 80%.
It takes work to do this, but it can be done.
Our elected officials are put in place to serve and protect the people that voted them in office. I believe that some elected officials that never payed attention before, are now paying attention.
Warren Buffett seems to know what he is doing, maybe we all need to hire him!
May God continue to Bless this Country! The Land of the Free and the Home of the Brave!
Thanks for listening!
people are right. the market will correct itself. the world economy will correct itself, not the american economy. american economy cannot absorb the impact so quickly so many investors (and american money) will flow outwards. the world will be saved. not america. not for a long time. so thanks.
TO Dave
Re short selling
Heard on CNBC today that the plan is to extend the ban on short selling. They also noted that because of the ban Mondays’ fall was worse than if the short sellers were around. ANother example of things being done that are supposed to help yet bite us you know where.
The need for this massive give-away-bailout is a farce. We’re being rushed into a decision that has the potential to affect our economy for a decade… and not in a good way. Wall Street is horribly out of touch with what they’ve done to the average American and how average Americans view them. This $700 billion dollar hand-over won’t be solving any of our problems, just allowing the banks to get their own house in order before they deny you and I a loan.
Letting the investment banks fail will not affect us. Why?
1) The corporations in question make nothing, but rather push money around and essentially invent imaginary wealth.
2) Goldman Sachs doesn’t loan you and I money… Your local bank, which doesn’t dabble in investment scams, is insured and won’t be affected.
3) These banks and other financial players are the ones who have suckered us into predatory mortgages, privatized student loans, and tripled your credit card limit while tripling the interest rate. They cheat us and then ask us for a hand… outrageous!
4) Just like the housing bubble, there is a stock and energy bubble about to burst. It will burst regardless of whether we protect Wall Street.
5) The Street is just now waking up to the economic realities that the people have been subjected to for years. They don’t like it and want a gimme, hence the current situation.
6) Regulatory lapses can be traced back to deregulation championed by Wall Street and its surrogates.
7) Finally, outside of the NYC metro area, the Stock Market and the economy are unrelated. We’ve been taking it on the chin for years while the market constantly went up.
The government needs to find a way to assist the average person in preserving their homes, finding work, and dealing with energy costs before letting the companies responsible for our ills raid the Treasury.
Considering that roughly half the Americans are stupid enough to still believe that McCain and Lady Distraction could lead this country, I’m not surprised with yesterday’s outcome. We have long lost our ability to see the obvious.
I say, let the bill go through but then do the witch hunting next. Put all the execs, regulators, brokers and the like in JAIL and let them rotten in there.
Some sense of justice would cheer me up!
No bailout. All financial markets and investments carry the risk vs reward sword. Investors know that. Free markets should remain just that…free. A bailout will allow for the first step toward the US becoming a socialist government. Bad choices…tough consequences…No bailout.
To Teresea:
While it is a shame you lost value in your home while you seemed to do the right thing. You anger is misdirected. People are tired of paying for others mistakes, as you have attested to. Why are no CEOs who benefited from these toxic loans being called to task and made to pay restitiution? When that happens maybe some taxpayers would be willing to help.
When I was with Wachovia, I saw the Golden West deal and asked “what is the company thinking?” If a simple person like me can see no value in the deal, then the company deserved to close up shop when it went bad. And that was only one of the MANY problems I saw.
I think we can recover with out big government intervention this is a free market. Let the people who made bad bets pay. This bail out is about government helping big friends on Wall St. Then their is Bush with his “we must act now or it’s the end” yeah right just like Iraq and his “weapons of mass destruction ” like I am going to listen to that Idiot!! Please we need less government. Let the economist and Wall st. figure this out that is what they went to school for and have spent years doing, not a group of lying politicians who are using this for personal or party traction.
NO BAILOUT!! Let these Wall Street jerks pay the price for the mess that they created! Sure a lot of people will lose their jobs, and that is unfortunate. However, that $700 billion can go a long way towards helping them out with unemployment assistance, etc. If we give that money to Wall Street they’ll just take it and go right back to what they were doing without any reform. Those fat cat jerks will probably end up with multimillion dollar bonuses at the end of the year too.
I popped into my local (regional) bank this morning to ensure my HELOC is not effected by the overnight rise in the LIBOR. No problems: to cover my HELOC they borrow from the Fed. In fact, their borrowing ability is so sound they are still looking for HELOC customers.
Similarly, the small company I work for in Phoenix has banks knocking on its door, competing to lend us money to cover our growing payroll.
Please, someone, tell me where the problem is, really!
As for stocks – I love it. Buy low sell high. I have been longing for a buy low opportunity and now its here.
Again, someone tell me where the problem really lies …. oooh, maybe the answer is in the word LIES.
IF THE PEOPLE THAT THINK BUYING BAD BONDS IS A GOOD IDEA THEN I HAVE SOME CONFEDERATE MONEY I WOULD LIKE TO SELL THEM.
Sept. 29 (Bloomberg) — “The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.
The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide.”
In short, the taxpayer bailout already happened, without the approval of Congress, and, surprise, surprise, it didn’t work.
No more bailout aka ‘rescue package’. It will not work.
NO BAILOUT! The reason this is failing is people are realizing that this bailout is not a plan for the future, but a plan for future failure as well. We are not treating the problem, but rather throwing another bad solution at it. In some cases the government is the cause of this, in others, companies took too high of risks. Let the high risk takers lose their shorts, and keep government out of business! Keep the morons like Barney Frank and Harry Reid out of the problwem they created!
Corporate America will normalize ONLY when government gets out of the way, and doesn’t offer any more free handouts (ie bailouts).
The Nanny State has to STOP. We live in a Free Country and in a Free Market. As such there are winners and losers in that system. There are consequences for actions.
A Bail Out only further reduces people’s personal responsibility. Since when are America’s (and apparently ALL American’s) born with the right to own a house on a 40 yr mortgage, and 3 flat panel TV’s on 36 months same as cash, and on and on.
WE (consumers) caused this. WE over spent our budgets and incomes. The hard truth is that WE caused this and let others profit from it. Now they have taken the money and run. Congress and The President want the Bail Out so that this does not happen on their watch. It’s going to happen at some point, people.
We are NOT guaranteed to have a better live than our parents and NOT guaranteed to make more than our parents.
Government involvement from raising the minimum wage to special interest bail outs to our ridiculous tax code have caused this.
This should be a wake up call for Americans to get back into the game. We have been too lazy to long and no one said life was easy. I don’t believe that my children should have to pay for the mistakes made in the recent past. And that’s how long it will take to pay off this mess.
Let’s take the hit now and rebuild this mighty economy.
i vote for No Bailout fully understanding potential negative consequences including a decrease in the standard of living for most citizens, and increased social unrest and crime.
The pooling and resale of mortgages sounds like a skimming operation that adds zero real value to GDP. Should be illegal along with many other Wall Street schemes/gimics/financial instruments/markets. There are valuable roles fulfilled by Wall Street also, but today they are less than the negatives that drain real GDP.
We were told these new instruments (SIV, CDO, etc.) were developed by the ‘best risk modelers’, but we have painfully learned they did not have a real estate market decline scenario. Absolutely unbelievable!! I believe these executives and governmental leaders fully knew the danger to our economy, but were mostly interested in lining their wallets with cash. Imagine the indivual punishments for this mismanagement in other parts of the world. Golden parachutes would be the least of concerns for these executives.
The administration and congressional leaders of finance and banking committees were supposed to regulate and ensure this type of financial disaster was avoided. They failed despite many warnings of a dangerous real estate bubble going back to Greenspan. I do not trust Congress or the administration can find a solution, and I do not trust anyone involved with financial services industry(including Mr. La Monica) to have an unbiased opinion.
What if the right answer is let the market meltdown? Certainly the standard of living will decline, but much of the recent standard was based on debt anyway. As for social unrest and crime – throughout history civilizations rise and fall. So the financial fate of US may be determined by citizens picking up the pieces and starting to rebuild. The US has demonstrated our best collective efforts recovering from this type of challenge in previous hardships.
The markets, both stock and housing, inflated for years. A real correction is needed. Too many people bought too much house and put down not enough money on that house. Who really needs 5000 square feet? In many cases they are complicit in this mess. Those who were victims of predatory lending practices should be helped. But not those who just showed poor judgement.
401K’s and the “ownership” society are not the answer. Only good social programs will insulate us from market downturns like this. In addition, corporations *must* be prevented from looting worker pension plans and health plans, a promise is a promise. If a company promises to pay retirement and health care then those programs must become the first creditor.
Response to Teresa, Leesburg, VA: I’m sorry you lost money on your home, but this bailout package isn’t going to fix that for you, and it is highly unlikely to fix it for anybody else who is that far “upside down” on their mortgage. So if the bailout isn’t a fix for the REAL problem facing Americans, why support it? The bailout has always been a taxpayer gift to Wall Street banks that made some very bad investing decisions. Taxpayers, like you and your children and grandchildren will end up picking up the tab for the bailout.
Hmmm. Why is everyone blaming Wall Street? Is Wall Street really the only party responsible for this mess? I guess all those people who bought houses that they could never afford or took out lines of credit they couldn’t realistically afford and the realtors who pushed the big houses and the mortgage brokers who okayed everything and the builders who just kept churning out McMansions and the home improvement stores that jumped right into the frenzy…and all the rest of us — all of those people and more — had nothing to do with this… right? Everyone played the game, but Wall Street was the unfortunate one still standing when the music stopped.
Why we all here in US have to work and our gov celebrating other country holiday in such emergency situation we all face right now? But fortunately our stock is reacting positively if our rulers take two days vacation, should we give them more days off to solve crisis?
The banks have gone on a credit “strike” and refuse to give loans to businesses, homeowners and students. Are we supposed to turn over the public treasury to them with a gun to our head, with not even a moratorium on foreclosures? No! Instead, tell them that they resume loaning money or else the government will nationalize them. Crisis solved.
Sorry Teresa from VA.; if this mess had not occurred in the first place your mortgage would have only been 200k in the first place.
The averice that brought us here in the first place came from both sides of the fence. Lenders and consumers.
I say no bailout, and I work in finical services. The issue here is that banks under pressure from the goverment(Clinton) adjust lending practices so that evryone could buy a house, even if they coulden’t afford one. Much of the issue also has to do with greed, we need to make wallstreet terrified of repeating this situation in the future, explain to me why a “starter” house in the USA costs $250,000, a 700% increse from 1975, even after you adjust for inflation. It is totally insane, we are addicted to credit and sooner or later this has to end. You cannot simply delay it for a few years with a cash injection, eventually the market will do what it needs to do which is retract. However if we leave the same poeple and companies in power you will just see them come up with the next irresponsiable money vehicle in the next few years, taking risks is part of American business, being careless with you invesments is not.
La Monica,
What is it that you don’t understand? NO BAILOUT!!
Now the talking heads are coming up with “this is not a Wall Street bail out, Wachovia is in Portland” line. We’re just not that naïve Paul.
A bailout rewards reckless behavior regardless of who the bailout is for. The taxpayers have spoken. Count your losses, lick your wounds, and get back on the horse.
From the article:
“Sure, stocks rebounded a bit Tuesday. But make no mistake. If Congress doesn’t come up with some new plan to address this credit crisis, we could be faced with more gut-churning market drops”
Is this a threat from Wall Street to the rest of the country (the House, taxpayers, citizens…)?
So if we don’t throw money to the problem, they will start selling shares from 401ks and investment portfolios they manage (they are, after all, the big players in the stock exchange).
Sorry, no money will solve the problem. Only regulation of underrating and risk levels at the banks assets.
More money given to the banks will only achieve more inflation, dollar devaluation, higher oil prices and more financial pain in the medium/long term. Main street is ok sacrificing Wall street in order to recover sooner than later (and with higher inflation).
Hey Paul,
Have you had a chance to read the article “The 55 Trillion Dollar Question”. There was a link to it on the same page as your article today. So, when they fix the CDS (credit default swaps) free-for-all, maybe i’ll consider some altered and extremely regulated form of the Bail Out. Oh yeah, have you noticed where the DOW is today???
Scare tactics. That’s all it is.
So, if the rest of you out there have had enough of the “financial experts” and the media telling us that the Main Street folk are too stupid to understand the impact of a failed Bail Out Plan, check out Michael Moore’s website and his letter titled “Congratulations, Corporate Crime Fighters! Coup Averted for Three Days!” http://www.michaelmoore.com/words/message/index.php?id=236
John from Poughkeepsie, right on! Now the government is more than trying to just fool you though. They are trying to take your lunch money!
No way should they sign the bailout bill. The banks and investors were okay in 2004 when the SEC lifted the leverage ratio from 12 to 1 to unlimited. They were doing business with ratios of 35-45 to 1. I have stocks in my 457k and on my own. Did I get a bailout when I lost money during the last quarter? No, it is what it is a RISK, let them declare bankruptcy. I have already tightened my belt, and budget in anticipation of this coming winter. Until this plan addresses how the GOV. will help ordinary citizens, in SPECIFIC terms this will not, and should not pass.
How about some of the head honchos in all the banks, and Paulson reach into their accounts and but back some of those HUGH bonus that they received over the past 6 years.
How about we spend some of the money we are printing and take care of the homeless living under bridges in California and Florida.
Finally the market is up 400+ points at 2:29pmEST. Where is the calamity that was predicted if the bill was not passed? Leave the market alone.
Lets discuss my 401k for a minute, lets discuss all of our 401k’s. Lets say I own 1000 shares of Mircosoft, and yesterday the share price dropped $20 a share. Unless I am going to sell it, who cares. I still own 1000 shares of Microsoft and it will go back up. The stock market lost $0 yesterday. It was devalued by over a trillion dollars, but it did not lose a cent. The only time this abstract value comes into play is if you are going to sell.
Funny how these terms keep getting thrown around to try to scare the common folks, whom I call the “sheeple”, into doing whatever the rich and powerful want. I assure you of one thing, YOUR BEST INTERESTS ARE NOT ON THEIR MINDS. It is the greed, and willingness to shaft the sheeple that got us into this mess. Now let the fat cats go down.
Now on the consumer side of the house. If it sounds to good to be true it problably is. If you make $35000 a year and some banker tells you you can get a $400,000 house…guess what sucker…you may get it, but you wont keep it. I refuse to pitch in to help you keep it either.
How is it that W comes running out of his office after more than a year of forclosures, layoffs, and reposessions and starts screaming “the sky if falling”. Well, it already fell. Now you want the very people it fell on to pitch in and keep the rich and powerful from feeling the pain…
No Way….No Bailout.
The back story said the people that did not agree to the bail-out would feel different now their 401k took a hit. I think the people that don’t have a 401k are very happy that the little money we have is not spent on the people that have the money to put into a 401k plan.
Why doesn’t the Goverment give the people the money to pay on their mortgages, instead of giving it to the banks, since we are going to pay for it anyway.
I do not believe in bailing out company’s for their bad decisions. They should pay the concequenses for their actions.
Who is going to help the people that will be affected financialy, with the burden of paying for the bail out. I don’t think the Government going to help us.
Give each and every American $2300.00 that will perk up the economy. (Including the children seeing they’re paying for it.)
I personally have lost over 200K in this mess that the government has gotten us all into. By deregulating the baking industry, people were allowed to purchase homes that they cannot afford. I bought my house for 400k – which I can afford – and now its worth 200 thanks to all of the foreclosures in my neighborhood. And now, I have lost half of what I have of what in the stock market. So please explain to me how this bail out is a bad idea since I am already paying a very high price for someone else’s mistakes.
All of these people want to spin it as a good thing the bail out was put down. That the only people that will be hurt by this are the people that have made bad financial decisions. Well, I disagree. My husband and I are very conservative financially and we have lost our shirt. I have family that own their own business and are hurting because no one wants to spend money. Its not just the people that bough homes they couldn’t afford that are being hurt by this mess. we are all going to pay the price one way or another.
The regional banks, small banks, and credit unions that didn’t buy into all this funny-money, the CDOs, derivatives, debt swaps, are doing just fine and continue to lend money. Let Bernanke fix the problem by providing (for starters) about $100 billion of Fed money to those financial institutions instead of the ones on Wall Street that have shown they are incompetent at handling money. We would have liquidity and unfrozen debt markets pretty quickly without a $700 BILLION gift to unscrupulous Wall Street bankers.
How can the government bailout Wall Street or Main Street or Detroit’s auto industry when they’re broke? The government is running the highest deficits in history, they have no money. There is no money for a bailout. Where will money come from?
My taxes haven’t gone up, yours haven’t gone up… If they pass this bailout everyone’s taxes will have to go up or the value of the dollar will have to go down. Once the dollar loses value we’ll be headed for a much larger crisis than this.
No sir, I am not for the bail-out. The banks will be fine after the weak ones are weeded out. This is the normal business cycle at work. A Recession is good because it clears the weak from the market and reminds investors that equity investing needs a sense of caution or dare I say, fear from time to time.
GW Bush and his “friends” would like you to believe that it is the end of the world, but it is not! Is he perhaps one of the most hated men in the world right now looking for a straw to grasp at? Any straw?
American people!!!
Fool me once (Patriot Act), shame on me.
Fool me twice (Weapons of Mass Destruction), shame on you.
Try and fool us again, here comes a fist at your nose!!
America needs a Rescue Plan. We need to remember why we are fortunate to live in this country. Our congressional representatives need to remember why they should feel honored to represent us, the American people. This crisis had highlighted a much bigger issue.
It is time to stop the negative talking about our friends and neighbors, roll up our sleeves, and solve our countries problems, including the financial problems. I vote the presidential candidate who has the nerve to get us out of this mess, to stand the ground on this fundamental change. The same goes for my local and state representatives. It’s time to be less partisian and more American.
Mr. Bush and his cronies would have us all believe that if this Bill did not get passed yesterday, that the markets would crash. Sure it went down 700 points, because the babies that control the Markets cried. Today, it is already recovered 200 points. We are not stupid and we know that the cronies of this government manipulate the markets to their advantage.
Middle America if the market can be manipulated in such a way that it bounces back after the failure to pass a bill that they claim they need, what does that really mean?
I say to our elected officials, stop toying with us and do your freakin jobs. Sit down and come up with a proper solution that address and fixes the problem. Not, simply a bandaid to slow the bleeding. Do something that will stop or slow the foreclosures, stabilize the housing market and restore confidence in the American People. “DO NOT BAIL OUT NEGLIGENT BUSINESSES” Let the Fail. The Free Market will correct itself if you rescue the People of the United States, NOT Corporate America!
Quote from CNN Money: “Art Hogan, chief market analyst at Jefferies & Co., said that there is growing hope among traders that enough House members will reconsider their vote to pass it later this week, and that early gains Tuesday are likely a reaction to the perception that the market overreacted to Monday’s vote..
“We were taking the rescue plan for granted, and when it didn’t pass, there had to be a reaction,” said Hogan. ”
Any official that supports this type of bill should be ousted this November. We the People of the United States of America need to let Mr. Bush hear that Loud and Clear!
Every article I’ve read that says “I told you so” concerning the market’s dive Monday after the failed bailout is only showing proof that this is bad for the short term. What is happening now, I admit, is very bad for those who are retiring this year or maybe even in the next couple of years. However, in the long run, the financial markets will limit the amount of credit available, both good & bad, and eventually let the bad credit will be absorbed. Maybe after this crisis banks will learn how to responsibly loan money. People are, by nature, very greedy and will take whatever is given to them. Let’s hope that banks will learn to responsibly loan money to people who don’t know how much they can afford. Too much credit is not a good thing and a year or two in a crunch will benefit our economy.
“I will never vote for any of the congressmen that vote for any bailout of wall street. I don’t care about my $401K. I don’t care about my house. I don’t care about much, but I don’t believe in government intervention to bail out banks. . .”
Unbelievable.
It’s wisdom like this that is going to inflate my borrowing costs (even people with good credit will pay more for their loans) and keep my dad in his job after he should have retired due to the decline in his 401k.
Apparently, I should have planned ahead like many bailout opponents and put my money under a mattress.
No BAILOUT! No more wallstreet gambling using taxpayer money! Let WS CEOs explain to their customers here and overseas what was wrong in these AAA rated investments!
It is time for all the syndicate writers of these major news organizations to stand up and get real with the public. There is enough information out there, the world wide web, to make comparisons with market history. You don’t even have to be too smart. In our current situation there has only been a handful of bank failures compared to the thousands that went under in the savings and loan crisis. The stock market will recover just fine if banks that took bad risk have to pay the consequences. The banks that were prudent and following the rules can reap the benefits of playing good and the one that didn’t should be torn apart and made an example of. Like I say the market will recover. It’s time for the press to stop all these scare tackets. This $700,000,000.00 will by no means gaurantee a lesser ression. All it boils down to is unsound policy by our policy makers who have steadily refused to be honest with the American people. Only until recently Bernanke and Paulson said the economy were doing fine and in fact still growing, now they say it’s crashing. Isn’t it obvious to all news organizitions and those who write for them that we are being deceived. I have serious concerns when the same people who have been less than honest in the past are now expecting us to believe they are being honest now. The best prediction of future behavior is past behavior. I personally do not feel it is right to reward banks for bad behavior. Let the fall, the market WILL recove and stop all the scare tackets.
Dear Washington:
As a tax payer I am asking you NOT to support the bailout proposal or any bailout proposal that does not focus on the foreclosure crisis. We as tax payers are not here to bailout bad businesses that conducted risky lending. Let risk taking financial institutions fail, merge or be bought by strong financial institutions – as has already began happening. The Government should not intervene and should leave over leveraged financial institutions to default on their derivatives obligations and, if necessary, file for bankruptcy. From my understanding this bailout supports fixing mortgage backed securities which some are imaginary derivatives and that many financial institutions wrote claims over the same mortgages, which most have gone bad. These claims have zero bearing on the mortgage or housing crises which is crushing American tax payers and American VOTERS. Any politician that supports the bailout proposal that doesn’t focus on the foreclosure crisis will lose my votes forever.
Thank you
See there is nothing to the crisis. The stocket market has come back by 500 billion dollars. They can easy raise the next 200 billion to bail themselves out (if it was really a crisis).
This proves nothing is wrong and there is no credit crisis. Wall Street bankers were just looking for 700 billion dollars from each American tax payer to pad their Christmans bonuses.
Now Congress can relax and take that jewish Holiday and not come back to work until after the Nov. 4th elections.
Hurray for Congress they voted down the Wall Street hand out to super rich Wall Street bankers. Now they just need to tax them 700 billion a year and get the budget back on track. if the satock market can gain 500 billion in one day they will never miss 700 billion taxed over a years times.
The only people who will feel a “credit crunch” are people and business who sgould not be getting credit anyway. If you are trying to get a $40k loan for a $40k car on a $40k salary … you shouldn’t get it! But if you are resonable and trying to get a $40k loan for a $50k car on an $80k salaray then you will get a loan – today! Enogh of the WMD type doom and gloom prophecy, we’re all sick of the lies from you all.
I’m willing to take on some REAL HURT to let the economy right size ITSELF. Think MOST of the working class feels the same. The people here who have done the right thing only to see our investments in the stock market and our realestate go to hell because of greed and corruption. Let the greedy bankers and freaking corrupt politicians BE DAMNED.
WE DON’T NEED A BAILOUT. What we need is less social programs, more regulation, CEO compensation tied to performance (not the good ole boy corruption that exists), and the rich to pay theier fair share – a flat tax – where ALL the loop holes are closed – jets, yachts, rolexs, credit cards thru the companies and NO MORE OFFSHORE ACCOUNTS. Ask Warren Buffet if the wealthy pay thier fair share?
The bail-out should NOT be for Wall Street or any of the Mortgage companies. If they want a bail-out that will WORK, they need to bail out the homeowner, not the mortgage company. If the homeowner is allowed to alter their mortgage such that it is affordable, it follows that instead of losing their home (and $$) they will instead continue to make payments on the mortgage. This will, in effect, bail-out both the homeowner AND the financial industry. Bailing out only the financial industry is not only wrong but is a continuance of the fleecing of the American People. THAT is why we so outraged at the bail-out.
Paul, this is a particularly vacuous piece of yours. You have bought the pitch in its entirety. What a scam. Sure, this ‘bailout’ will offer some short term psychological relief to the credit markets, but we will go down via 1,000 paper cuts as opposed to the more violent beheading that we experienced yesterday. This governmental move will only temporize the fall out of massive deleveraging we are about to experience over the next few years. And yes, the banks are seizing up the inter bank lending to add pressure to get this bill passed; they are acting like good capitalists by seizing the opportunity the dimwitted (or complicit) Feds have given them. Look at the self-serving folks lining up to back the bailout: Warren Buffett (at least he admits he is going to profit off of this ‘plan’ with his $5 billion infusion into GS), Bill Good, Boone Pickens, and every other opportunist smells the fear in D.C. Good for them. But bad for you. Anyway, I remember two months ago you were saying things weren’t really that bad in the U.S. economy and the market was poised for a rebound! Forgive me for not giving your current argument too much credibility.
Here, here, David from Albany:
I do not buy that the market drop yesterday indicated how much a bailout is needed. It was investors disappointed when they weren’t given a handout which they were expecting.
I do not buy that the package has to be done ASAP. The world markets did not indicate this. Note that oil prices actually went down, which is probably more helpful to more people than this bailout will ever be. ALSO, THE DOLLAR STRENGTHENED!
I do not buy that this package will work.
I don’t buy that this money will trickle down to ‘average Americans.’
I do not buy that this bailout will be good for me.
THIS IS ALL A HOAX PERPETRATED BY THE CORP-GOVT-MEDIA CONGLOMERATE TO STEAL OUR WALLETS!
My biggest problem is what the government would end up buying. People here are selling us a line of BS that real assets would end up being owned by the government.
“The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives.” Ari J. Officer and Lawrence H. Officer Time.com
In other words we’re simply buying thin air, because that’s what the banks ended up investing their money in.
I also keep hearing that we can’t determine what the true cost will be, that it will somehow be less than the $700 billion they want from us.
I can’t tell you either, but I can assure you it will not be less. It will be more. At least $1 trillion by the time interest and inflation are factored in.
No to bailout! Things won’t change. Mortgage rates for everyone need to be set at a 5% interest rate. This would help people stay in their homes, make people buy homes and people not struggling, will put extra money from lowering their interest rate back into the economy. They need to change the credit card laws. The credit card companies should not be allowed to charge any higher than 11% interest rates. These banks are thieves, so why should we help them when they won’t help us!
There’s a 3rd choice – change the plan. The current plan may not work and doesn’t address the far larger credit default swap problem behind this. The mark-to-market rule needs to be changed, and the Irish have set an example by guaranteeing their banks. I like Michael Lewitt’s (Hegemony Capital) plan as a starting point – add a plan to address mortgage issues at the bottom – change ARMs to fixed and renegotiate at a level families and honest mortgage holders can live with.
The government should announce that it will effectively stand behind the U.S. financial system against failure through some sort of guarantee or insurance program. The government has already done this with respect to money market assets. The govt of Ireland has just done this.
Mark-to-market accounting for financial institutions should be suspended for an indefinite period. Since nobody knows what these assets are worth, we should not drive the system into insolvency trying to place a value on assets that nobody is willing to purchase at the current time.
The Federal Reserve should reduce the overnight interest rate by 75 basis points immediately. This will allow financial institutions to begin to earn more on their assets, which will begin the process of rebuilding their balance sheets.
The Securities and Exchange Commission should announce the formation of a study group that will report back no later than December 31, 2008 on a comprehensive regime for regulating the credit default swap market.
“If this was about us then they would be using that money to create jobs for people to earn money to pay their bills and keep the economy going. Instead they want to push all this money directly in to the banking system in hopes that they’ll loan us more money.”
BRAVO!!
I’m sorry, but this whole thing could be neatly solved by the banks themselves if they would just swallow their pride and greed and restructure bad mortgages into something that can be paid back. Would they make as much money? No. Would the loans be fixed? Mostly. We don’t need a bailout. The banks need to step up and fix the mortgage mess THEY made. It’s completely doable without Fed intervention.
Let their butts fail. It’s cyclical. The talk that everything will fail is a farce. The smaller banks will step up and “unfreeze” the market. The market is unfrozen for people who can actually AFFORD to take a loan out.
There is already a “bailout” system in place. It’s called bankruptcy. Let these firms file and sort out their financials under those terms. If not then the government should be willing to “bailout” every tax paying citizen from all their debts. What’s fair for the goose………
Hey, the Government (Bernanke and Paulson) are part of the problem too and they should own up to it!
These two fed the hype with all the reductions of the short-term and prime lending rates, which lead to unbridaled, well just plain greed, in the market. Messing with the interest rates with no checks and balances to make sure that something like this wouldn’t happen was just plain stupid. Too loose credit kept the market going up and up and people got greedy, splitting mortgages across ’securities’ that were, in fact, not secure at all but extremely risky. Caveat Emptor, let the buyer beware, but no one was aware at all. I, personally, would check to make sure that Paulson and Bernanke do not have large exposures in their personal portfolios based on these mortgage based securities. I would also make it illegal to give a mortgage to someone without proof of ability to pay. I am a Republican by choice and temperment but for this I would like more oversight on the market so we don’t have a repeat. Fiscal Conservative.
Let the banks go bankrupt, like any private citizen would. Yes, some “big banks” will die. I’d say increase FDIC protection to 1 million (vs 100k now) to protect those who tried saving money instead of spending what they didn’t have. What Lamonica isn’t saying is that America’s small banks are raking in the cash now as people flee the big, bloated idiots. If the big one’s all died, it’s not like we’d have no banking system – it would just go back to being smaller, local banks. No more money for “leveraged buyouts” and other non-productive funny games with money that seem to impoverish the workers while enriching a few wall street fools. Somehow, we’ll survive.
yes it is,OK they lost 1.2 trillion why now do they need 700 billion I’m glad they didn’t have it to lose already holly crap wake up!!! wall street is like gambling everyone knows it’s not guaranteed money
you win some you lose some it’ll be OK clam down this could turn over night or it could take awhile 401k money is being taken out as people lose their jobs so lets do something about jobs not wall street!!your all nothing but a bunch of collage idiots step away from the tree and see the forest your bright people just one sided
NO BAILOUT!!!!
Let the market fix itself. Some companies will go under and some will prevail. That is how the economy should work, survival of the fittest. If during that I loose my 401K and my house that is the way it goes. I would rather loose everything than have my tax dollars used to help the financial markets because they got greedy. What happens if I get greedy and take on to much debt? I have to file for bankruptcy. I can guarantee the government will not come to my rescue. Let them work out the problems the same way every American is expected to. STAY OUT GOVERNTMET!!!!
What I want to see is intelligent leadership, compromise, collaboration, and a sense of urgency among congressmen of all points of view. Something good would be the result.
I am totally disgusted by partisan divisiveness and petty bickering, and few positive contributions of substance from both sides of the aisle.
what astounds me about all this is that we are supposed to follow hank paulsen to the promised land
hank told us that the economy was strong and the subprime contained
hank told us that housing would bottom in spring 2007
hank told us that he had a bazooka and would not have to use it
hank has been wrong for 18 months but expects us to give him 700 billion to play with
oh yes he wants it by monday morning with no questions asked cause he is king hank
NO BAILOUT! Those with good credit who actually live up to their obligations can ALWAYS get credit in ANY market. Whenever some talking head pontificates about the credit market being “frozen” or “seizing up” just translate that to mean: “Consumers and business with lousy credit can’t seem to borrow any more money – wah! wah! wah!”.
What’s the problem? Consumers and businesses who repeatedly stiffed or strung out payments to creditors because they could always get credit from someplace else are finally at the end of their rope. Time to reap the whirlwind you bozos!
Those of us who handled our financial affairs conservatively and saved money are laughing at you and the failure of this bailout, just as you once laughed at us for being “prudent”, “cheap”, and not being stupid enough to equate debt with the appearance of wealth.
No Bailout!!! People are able to borrow money. The main people going to be affected are people who should not borrow money.
The thing that is so confusing to me is that we, as a country, have spent about ten (10) years trying to prevent recessions. That isn’t how the market works – credit, stock, bond, whatever. Sometimes it’s up and sometimes it’s down … it’s a cycle.
Why have we refused to recognized the fact that the market, as a whole, has been artificially supported for years? It has to come down so that it can go back up.
Yes, it will be hard. People will lose their businesses and jobs and retirement accounts will lose value. But, the market rebounds after the “true value” is found. We have to let that happen.
I started hurting financially three (3) years ago. Economists and financial advisors have been warning about the US dependence on credit for years. Maybe this is the time to say, “we have to let things reset.”
This is a different world from the 1920s… we may have a hard recession, we may have a depression, but we have to let the market reset. And we have to have a National Economic Plan that is realistic and takes into account that BAD financial tactics (based on the strategy “Get all the money we can, as quickly as we can.”) has put us in this position.
It’s gonna hurt. I hurt. My mom is hurting. We have to suck it up and tough it out until a real plan can be formulated and implemented.
The market is not rallying Tuesday because buyers expect the bailout will come later – your website is wrong. It is rallying because the selloff on Monday was overdone. The American Public is smart enough to see that it’s a bad idea for government to buy up toxic debt. It’s toxic, stay away from it, let it die and clear it off the books, don’t buy it.
No bailout for free enterprise businesses! Let them go bankrupt. The markets have already bounced back. And my 401(k) was a joke long before this happened. Don’t pay for bad debt with more debt. Nobody will buy those lousy loan products. Wall Street isn’t even trying because they’re waiting for a handout. Don’t let Wall Street privatize profits and socialize losses at taxpayer expense. We’re already at a $450B deficit for this year alone. Do you really want to make it a TRILLION? That would be so much worse, especially in the long run! In the short term, letting the markets adjust naturally, while painful for a short time, will lower inflation and gas prices for Main Street. And we won’t kill the value of the dollar by printing money day and night. When bubbles burst, you can’t blow them back up with artificial money–unless you want a bigger burst down the road.
We should let the market work it out. Yes, WaMu and Wachovia failed. But Citi and others are still strong enough to absorb them, and will be that much stronger as a result.
And if you take the position that this will freeze up markets and kill the economy, then focus the government intervention there. Don’t buy up the mistakes of the current banks (who should have known better). Create a mechanism for other businesses / industries to secure loans through the stronger banks, or through a new system.
We cannot take away accountability for actions. To do so undermines the free market, and creates an incentive for future “bad” behavior.
Actually, it seems that the bailout will pass, against all our wishes. The EU blames US for their troubles. The EU is looking to the US to do something. Well, s***w that! IF the banks around the world only took steps to follow the US, they should not be doing to bad. I think the problem is that we are still in better shape than our overseas counterparts. Hey, anyone notice in the SE there is a gas shortage? Anyone see the lines for people standing in line for gas, what’s congress doing about that? What has Bush have to say about that?
NO BAILOUT !
The author claims it’s the biggest stock market drop in history. Actually, it is not even in the top 10 as a percentage of the market. Goldman had 17 billion for bonuses as of December 2007. If I want to bailout a company, I’ll don’t, buy their stock or buy some of their assets.
The only bailout that should be offered is a reduction of taxes.
No Bail Out. If anyone doesn’t get what this means I’m guessing they are a member of congress. They act like we don’t know what will happen. I say they don’t know what will happen.
Bail out will prolong this and cause 10+ years of depression.
No Bail Out, market will correct and so will spending in congress and we’ll have 1 to 3 years of recession.
This is a hostage situation where if you don’t bail them out for screwing things up they will crash the market. It may be hard but you never give in to hostage demands.
The congress is playing this like some game of he called me a name so I’m not going to vote for it.
We need to take responsible actions from what a few did. Start taxing the wealth 1% at 90% just like we did after the great depression. They are going to close their wallets and tuck their ill gotten gains away. Open up those wallets thru aggressive taxes on these thieves. Remove them from the hen house and let’s pull together.
It may be hard but I’m sure we’ll be stronger for it. Yes I’m sure I’ll lose my job, so how I will survive.
Just one question: Where exactly does all this money come from?
Yeah, that’s what I thought.
We’re in a depression no matter what. Do we want to compound it by printing endless amounts of money and crashing the dollar?
Do we want to slowly peel the bandaid off and rip off one hair at a time off our arm? OR, do we want to rip it off all at once and make it less painful?
Smart people recognize that we got ourselves in this mess, and throwing billions of dollars more into a problem that was caused by excess money supply WILL NOT HELP! Get a clue people!
Doing nothing = painful but short depression, cleansing effect, rebound within 1-2 years
Bailout after bailout with money that DOES NOT EXIST = debasing the dollar = turning America into a third world country, collapse of the dollar.
GET A CLUE PEOPLE!!!
I see your points Pual. There are afew things we all need to remeber.
First, no matter what happens, this is going to hurt. It’s going to be ugly and painful, it’s just a matter of time. The bailout provides relief short term, not long term.
Second, these are very complex financial vehicles. Even the experts concede that they don’t understand them fully. How can Congress possibly understand what they are buying.
Third, this is bad debt. If it were not bad debt, the money would vbe flowing and things would not be frozen. How can we expect to recover all, or even most, of the investment knowing it is bad debt and subject to default?
Fourth, long term, the markets will recover and the economy will see brighter days. Just as it did after the great depression, just as it did after all other recessions, just as it did after September 11, 2001.
We need to think long term and how this will affect the country long term.
The claim that the credit markets have “frozen up” is a scam. The big banks have simply stopped lending to create this artificial “crisis” to prod their buddies in the White House to get them this bailout. They’re quite effectively gaming the system.
Think the mortgage crisis is something? Wait till the consumer debt (ie credit card) crisis. We as a country need to learn to live within our means and any bail out will only delay the inevitable. So let’s suffer the pain now–it will only be worse later. Oh by the way, this do nothing congress needs to be cleaned out–VOTE OUT ALL INCUMBENTS!!!
I do not believe Congress should have to vote to “bailout” the situation. It appears as a takeover of the financial institutuions.
The real question is why isn’t there a bailout for folks who have really taken it in the shorts in the real estate market – homeowners. The reported 20% decline in home prices means that homeowners have lost aourn $3 trillion dollars in the last two years with more to come. Only a very small percentage of that loss is ever going to seep its way into the financial markets through defaults on mortgages. Most of it will come out of homeowner equity. The only saving grace is that a large part of it will be offset by the gains made on paper during the housing bubble.
The losses for wall street are a normal outcome of the market working as designed. Loan originators manufactured mortgages that they sold to bond dealers who bundled them into AAA quality bonds and sold to those who wanted, or were required to have, very low risk investments. Neither the bond dealer nor the loan initiator had any stake in whether the loans would get paid off and the folks buying the bonds had no way to assess that either. As a result, the bond dealers were able to transform high risk loans into AAA securities.
Did the rating services have any reason to think real estate loans would be less secure than they had been in the past. Well, yes. All you had to do was look at the fact that homes values were increasing at rates never before experienced to make you wonder whether other historical information was no longer valid.
But how often have you heard the investment community tell you that eventually the market will always go back up. That people have never lost money in the long run. Its only when they write the fine print that you read that historical returns are not a promise of future returns.
We shouldn’t bail out Wall Street because we are going to need that money to bail ourselves out of this mess.
The people are angry! Most of the readers of CNN are professionals. A lot of us are engineers, computer programmers, mathematicians and scientists. One thing we all have in common is being witness to either being displaced or watching our co-workers displaced by H1-B and L-1 guest workers and seeing our jobs moved off shore. Now, when this “free trade”, “global economy” nonsense was foisted off on us, we were told that only the low paying jobs would go, that we would retain the high paying jobs and technical expertise to create new, good paying jobs for this country. It has worked out exactly the opposite! Now, with our economy in meltdown we lack the means to even dig our way out of the soup Microsoft and corporate America landed us in. What we want is a complete end to the H1-B, L-1 and any other guest worker visas. Similarly, we want taxes and duties and tariff’s enacted that will punish companies that outsource jobs. We want an end to all tax breaks these companies and the investors that support them enjoy – and I mean *all* tax breaks. Those are things that Congress can do and they are what we EXPECT Congress to do. Write this into any bailout package and shove it down the throats of Wall Street and corporate America. We simply will not stand for any sort of bailout, any sort of taxpayer funded reward, for a company or investor that does not put this country and it’s workers first. Let’s be clear about one thing, if COngress passes any sort of bailout using taxpayer money without this, there WIL BE hell to pay!
Of course the markets are “frozen” right now. They are sitting on stuff that is worth 20 cents on the dollar, and they are waiting for the government to come in and buy it up at 80 cents on the dollar.
So of course they are “illiquid” as they anticipate government intervention. If we just get the government to butt out, the markets will take care of themselves.
I will never vote for any of the congressmen that vote for any bailout of wall street. I don’t care about my $401K. I don’t care about my house. I don’t care about much, but I don’t believe in government intervention to bail out banks. Let them file for bankruptcy like individuals are forced to do when they can’t afford their debt load. Let the market dicate which firms survive and which don’t.
I do not buy that the market drop yesterday indicated how much a bailout is needed. It was investors disappointed when they weren’t given a handout which they were expecting.
I do not buy that the package has to be done ASAP. The world markets did not indicate this. Note that oil prices actually went down, which is probably more helpful to more people than this bailout will ever be.
I do not buy that this package will work. Do we expect that banks, now with cash in place instead of toxic paper, will start loaning for people to buy overpriced, plummeting housing or cars they cannot afford? (Do we want banks to loan money to people for things they cannot afford?) How is the govt going to sell this toxic paper for a profit “when housing prices rebound” when housing prices are still overpriced?
I don’t buy that this money will trickle down to ‘average Americans.’ The more we spend, the more we tend to send overseas.
I do not buy that this bailout will be good for me.
I WILL buy that a 20% plus drop in the stock markets and/or home markets is a crisis requiring action IF and ONLY IF a 20% gain is treated as a bounteous windfall to be gleefully handed over to the government to be held in reserve against future downfalls. I know people who made a killing on houses. The IRS exempted all their gains. And the capital gains tax? Hello?
I recognize whatever the action there will be winners and losers, but one approach is fair and objective. The bailout is unfounded and unproven, and UNFAIR.
PS lets not get too carried away with all this. The big crises are yet to come. Bigger finance issues (credit swaps), and energy to name a couple. Save your energy, congress. And save my money.
…Do **YOU** want to pay for this mess??
The stock market has a way of healing itself, and big banks that didn’t get involved in this mess will always buy up the banks that were less wise.
Everybody who has been around more than 10 years knows that these things are cyclical.
…Think back a while with me if you will- if you’d pulled out your money on Black Monday, you’d have lost a boatload. However, if you’d had it in an ETF that follows the Dow Jones, and just left it the heck alone- you’d still be sitting pretty right now. (I remember seeing something on the news about a guy that jumped out of a building on Black Monday- what an *idiot*! …Apparently, he didn’t understand the value of patience.)
The lesson here is that banks need to be responsible about who they lend to, and also about purchasing questionable securities in times of great economic boom.
Because, as we all know- for every boom, there is always a bust.
…So- here’s to the bust!! Get used to it. …Americans aren’t all suddenly going to resort to a life of crime because their 401(k) went down, or jobs get tight. What Americans will do is be resourceful, start recycling things, and help turn the economy around again on its own merit.
We don’t need to pay for other people’s irresponsibility, and our government should be focusing on socializing healthcare, not socializing banking and financial markets.
I mean, think of all the times the stock market fell: Black Monday, 9/11, the .com bust… Is the government just going to swoop in now with the Great American Credit Card whenever the ticker goes south?
OR- if we must use tax dollars, then we all want equity in what we are paying for (maybe the government could use any returns to help save social security?).
Because, aside from the lesson of boom/bust- everybody also knows that there is no such thing as a free lunch.
Sometimes we have to take medicine that is good for us, but tastes like ****. Sorry that some of us will suffer for these indiscretions (I certainly am one of them!). But giving corporations our tax dollars so that they can keep their dignity is ridiculous. What about the people who are just hanging on? What is Congress doing for them? Passing Bush’s Bankruptcy bill, something that penalizes us, the People, and helps them, the faceless corporations.
Paul, with all due respect, panic does not help in this situation.
A potential outlay of 700 BILLION DOLLARS DEMANDS that we move prudently.
I think the rejection of the bill was proper in this light.
We have a chance to reconsider.
Please see http://chronicle.com/news/article/5230/economists-and-the-bailout-for-once-a-petition-has-an-impact
Also please see http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092504531.html
and also
http://www.lacitybeat.com/cms/story/detail/dr_joseph_stiglitz/7545/
I respectfully disagree with you — I happen to believe that a BAD PLAN is FAR WORSE than NO PLAN AT ALL.
Furthermore, the FED ALREADY has at its disposal other ways to keep banking institutions from FAILING.
So this is something else.
I don’t know if “it is a power grab”.
But it is overstating what tools are needed in the arsenal.
The FEDERAL RESERVE is not without weapons, even now.
In fact, I would argue that the FED already has far too much power — and with such power, it also has the power to do harm. Just a few months ago, the FED’s powers were once again, expanded, in light of the perceived “Credit Crunch”. What lunacy!
The FED has done grievous harm to all of us in the west, along with other Central Banks, recently and in the past. Don’t expect that this will stop, even with the FED’s “best intentions”. After all, Central Planning and a Command Economy never worked anywhere else, at ANY TIME — why should it start working now?
Who was the greatest serial bubble-blower in history?
Who looked the other way when warned that there was a housing bubble and that mischief was afoot in the mortgage industry?
Who himself wondered ALOUD to others in his presence, whether the FED was not doing some unknown long-term “harm” by keeping interest rates at obscenely low levels for so long?
And we are still saying and thinking that the FED and the FEDs will “fix” things with the same “tools” that brought us to this juncture?
Please.
When system DEBT (credit) reaches an UNSUSTAINABLE LEVEL, guess what?
It contracts — no matter what you do to prevent it. There is no other possible outcome — today, or tomorrow, it will happen.
Also if these “toxic” mortgages are such a great investment for the taxpayer why can’t the “professionals” on Wall Steet cannot make money on them?
NO BAILOUT!
How come no one is calling for all the execs at the failed institution to give back all the money the “earned” while overseeing this disaster.? Start with former CEO of Goldman Sachs, Mr Paulson. Talk about a conflict of intrest.
BTW On the NYC news last night they went to a dealership and guess what people were stil getting loans. Yes these people had good credit and that is the point. People got loans they should not have gotten.
This country has gotten so used to living on debt that it thinks that is the only way.
Scare tactics are not going to work.
A bailout is definately needed, but certainly not on Wall Street! It seems to me that the so called “backup” in the financial markets are due in large part to the bad mortgages. Why not take some of that 700 billion and give it directly to the homeowners in trouble. Have their mortgages restructured so that they can afford them. The banks will get paid for the loans they made, the “backup” will be cleared and Congress can say they actually helped Main Street Americans instead of Wall Street Americans. Now I am not saying that the homeowners who “knew” they could not afford their mortgages should be rewarded, but those who were certainly “duped” into thinking they were getting a good deal and ended up with an ARM, if they can afford their homes with a fixed interest rate, than that is who needs to be helped the most. Of course, I got myself out of a bad ARM back in January of this year into a fixed rate. No one helped me except me and that is how most of Middle Class Americans will see any bailout of homeowners in foreclosure. the thought will be “hey, what about me? I have struggled and paid my mortgage on time every month just to protect my good credit. What do I get from our Federal Government?” Seems to me its a no win situation. On the other hand the failed bailout did lower oil prices…lol !!!
Approve the bailout! To do nothing is to devastate this already weakened economy, just so our anger at Wall Street can be satisfied!
The right kind of bail out would be ok. We’re already sinking $630 billion at a time into the market.
But. No need for America to bail out the global market. We are one country, can’t pay for the whole world. Let the taxpayers of the other countries bail out their own banks.
And, Wall Street keeps saying without them, no jobs on Main st. Well, if no jobs on Main st- no one to take out the loans or to pay them back. No one to pay for the bail out.
Wall street had better appreciate the American taxpayer.
Also, I heard someone say that it is the fault of the American taxpayers who got bad loans.
Well, I ask those folks, where would the whole world be if not for the American tax payer all of these years. Who made the world rich buying the worlds products?
I can say that because I dont have a house or mortgage.
However, if there has to be a bail out, then do it right. Don’t rush through the writing of the bill. Slow down, write a bill that we can all be proud of…
NO!! NO!!! NO!!! NO bailout. I know the media and our elected rep’s would like us to believe we are to stupid to understand how much we need to pay so that the risk takers don’t fail but this country has been through bad times before and we always emerge better for teh experiance so again. NO!!!NO!!!NO!!!
If it is true that the sky is falling then let it fall. I am personally tired of being afraid and threatened by the fears of the government and the strong arm of Wall Street. If we honestly have an economy that is so fragile and dependent, then it is time we face the music, deal with the consequences and be more intelligent next time. Wall Street says if they don’t get what they want the market will tumble. The Secretary of the Treasury makes speeches looking absolutely terrified. Let’s just deal with it and get it over with. If we all loose everything let’s do it all at once… better than loosing sleep watching neighbors and friends one by one being picked off.
Mr. La Monica said:
“I understand why people are angry. I’m angry. I am not happy that the government is in this position because of reckless behavior by banking executives, investors and, yes, even consumers.”
So make the banking executives, investors and,consumers(consumers of the LOANS, that is…) pay for this!
Perhaps if they learn that their actions have consequences they will be more prudent in the future.
Suck it up and grow up.
I’m not your sugar-daddy.
If this was about us then they would be using that money to create jobs for people to earn money to pay their bills and keep the economy going. Instead they want to push all this money directly in to the banking system in hopes that they’ll loan us more money.
No bailout. This mess is the fault of the U.S. government. This is not a bailout for Wall Street, Main Street, or any other “street.” This is a bailout for our government who has attempted to manipulate the credit markets for decades. Their incompetence is finally coming home to roost and it is high time we adjust to a new reality and deal with what will be an extraordinary and catastrophic fallout. Unfortunately, the incompetence will only continue given the two presidential candidates currently in the race. But, I am willing to lose everything — the house, the retirement accounts, everything — if it means the government will feel the consequences of its actions. Pelosi, Bush, Reed, Boehner… the whole lot of them needs to go. (And let’s get rid of McCain and Obama while we’re at it.)
NO BAILOUT! What our leaders don’t seem to understand is that the
GOVERNMENT is NOT CAPABLE of doing anything to “fix” the market. Markets are driven by inexorable issues of supply and demand – intervention only delays or moves the problems elsewhere. If a recession has to happen because a bubble, then it is unavoidable. Inserting an inefficient government into the center of the crisis will only make things worse.
as complicated a matter as this is, there should be more time spent explaining to the public what has been the cause and why they feel 700 billion on the backs of the taxpayers is what the doctor ordered. it remains to be seen how these toxic investment vehicles will magically change to good investments with just the passage of time. the mortgages have been divided up and sold off to any # of pension funds, insurance giants, foreign governments and held in house. that is why loan modifications have been so difficult and while foreclosures will continue,,,,,there is no entity to make a decision. we also have a severe confidence crisis since even in the best of times with staunch regulation, the big boys ALWAYS leverage their funds. and the fundamental bedrock core of the issue is that housing will have to hit rock bottom (say, 2010) before anything resembling an improving economy can take place. in the meantime, as credit tightens (credit cards, home equity lines of credit, car loans and mortages for the peons and commercial paper and credit default swaps among other things for the bigshots) we will see worsening conditions. instead of a bailout, they should have given each adult american 200k, taken the tax bite and let each adult american spread the 140k or so around, keeping consumer confidence high.
if the current bill or something like it passes, god help us because it will be the first of many bailouts. why not wait until after the election when those responsible will have some time to figure things out instead of leaving such important issues to be swept along by those going out in 35 days……….
I’m glad to see that some of the people arounf here aren’t crazy. This idea of bailing out is, well, silly. Congress has already “bailed” out several banking entities and look where we are. The huge “losses” in the stock market? Unless you sold your stocks, you still have the same number of shares as you did before the drop. Unless you are planning on selling in the near future, you will get your 1.2 trillion back. Any money that is being put in now is actually getting you more than it was last week. The only people this drop hurts are the ones who are planning on selling before a recovery. And the market was up 250+ points already today. Sky is falling indeed. As for the credit freeze – I tend to agree that giving the banks money would only encourage more bad loans (or more hoarding on their part, take your pick). People have been overextending themselves for a long time. Well it’s time to pay the piper. All these companies who won’t be able to make financial obligations because they can’t get loans? How about not spending money you don’t have. That seems to be the lesson for everyone from this: individuals, businesses, GOVERNMENT. Since when is operating in the red a good thing? One last thing – the people saying give us the $700B – you DO realize that the government is hugely in debt, so they would have to get the money FROM YOU to give TO YOU. It’s like taking a cash advance from a credit card. You didn’t magically get free money.
Shame on the columnist for using a 3 hour period of time in the stock-market as a valid basis for judging that not passing the bailout is bad for mainstreet. The day-to-day activity of the stock market is driven by traders who THRIVE on volatility.
Put yourself in the trader’s shoes. Yesterday after the bailout failed, it’s a very good bet that the market will go down. So what do you do, you sell (or short-sell). That drives the market lower. As a trader, you look for historical patterns and the best comparison was the drop a few days after 9/11. So you wait until the market drops about that much, before buying back in again. I knew the market was going to drop big-time yesterday and I have no solid opinion about the actual health of the economy.
Using your logic, maybe you want to revise your judgement now that the Dow has gone up 350 points (so far).
I love all these comments. It really shows that people are paying attention and not just taking what all the so-called “experts” tell them.
Mr. La Monica said:
“I understand why people are angry. I’m angry. I am not happy that the government is in this position because of reckless behavior by banking executives, investors and, yes, even consumers.”
So make the (consumers of the LOANS, that is…) pay for this!
Perhaps if they learn that their actions have consequences they will be more prudent in the future.
Suck it up and grow up.
I’m not your sugar-daddy.
Why not let the American public be more directly involved in the bailout with help from the government? Let the Federal government work with state and local governments, who can deal with their local constituents. The American public would be much more inclined to believe in the bailout if we could participate. If the bailout was placed in the public’s hands so we could participate I think it would be an immediate success. The public will not trust the government with this kind of enormous plan. These are my ideas:
1. Use the funds to directly pay lenders of the citizen’s mortgages, and equity loans.
2. Require proof of what lenders will be paid with the funding to ensure people will not be using the funds for other purposes.
3. The local governments would be the central source for each community to collect the information from the citizens and verify their lenders, and the amount of money required to help them with their situations.
4. The American people will not have a problem being taxed when they see the results of the investment in such a personal way.
5. The problem is there is no trust in Wall St. Allow the American citizen to participate in this rescue effort.
I understand that this would be very complicated; however, it will develop a trust in the government of the people of the United States of America. It will place our government officials on a level field with us. When we work together eye to eye and hand in hand, we can develop a relationship once again.
If the people would have the opportunity to see their debt paid down directly, the government would see cooperation like it never has before.
Benefits:
1. The burden of debt would be lifted.
2. Lenders would be paid which would give them immediate cash to use for stimulating the economy.
3. Interest rates would be controlled so that lenders would not be able to take advantage of the borrower.
Just another thought, maybe this rescue plan should include forcing credit card companies to reduce their interest rates which is making America sink in debt.
Thank you, Bill
Since I have not heard about new Chief Officers or new Board of Director apointments at all afected ‘Charities’ on Wall Street; please don’t ask for my donation. Nothing that is broken is being worked on.
No bailout.
We all need to learn how to live within our means. We need responsibility! The banks should never have made loans to those with poor credit. And those who bought a house too big, that they couldn’t afford, that is a decision they will have to live by. We should not have to subsidize people’s bad decisions.
Perhaps more regulations to prevent a recurrance. And punish those who broke any laws to the fullest extent possible.
Let the free market reign. At some point, new banks will form and they will lend money at lower rates. This is called competition, the cornerstone of a free market.
I would only approve of a bailout if one of the stipulations in the agreement would state that the U. S. Government can prosecute all of the investment bankers that perpetrated this fraud on the U. S. public.
The bailout is dead and should remain dead. The bailout legislation was rushed without any consideration for possible alternatives.
I can’t help but notice that they are ignoring an existing Federal process that could resolve the entire situation, which only adds to my personal suspicion that this is a Wall Street executive raid on the US Tresury.
The Federal Emergency Management Agency (FEMA) is well equipped, at least, relatively, for handling physical disasters.
Why not use those FEMA processes for economic disasters?
FEMA, upon a Presidential disaster declaration, can offer up to $200,000 in loans to individuals and $2,000,000 in loans to businesses, through the Small Business Administration (SBA). These loans are certainly not enough to bail out Wall Street, but they can keep the small businesses and individuals which are the backbone of this economy afloat during the current credit crisis, without a massive socialization plan of the American capital markets. Plus, it gives Wall Street room to payout their debts without rewarding the executives responsible for this debacle.
The SBA disaster loan fact sheet can be found at the following URL:
http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_da_disastr_loan_factsht.pdf
I don’t see any reason why a complete credit market failure can’t count as a disaster.
There are other alternatives. The way this bill is being pushed reminds me of the sales pitch of a fraudulent telemarketer or a shady used car salesman.
The proposed bail out only helps the banks. The whole problem with the economy is the declining home prices and rising foreclosures. Tell me how the bailout helps with either of the 2 factors driving this crisis and i’ll be for it. Until then I hope the government keeps my money.
The problem facing the financial system is being driven by falling residential real estate prices. This is being driven by foreclosures and the inability of home owners to negotiate with loan service companies, banks, or mortgage pool trustees.
The Government must step in and force mortgage lenders and their representatives to recognize that there are many borrowers whose houses are now worth significantly less than the face value of the mortgage. The Government must cause lenders to deal honestly and in good faith with home owners, before turning to foreclosure. This must include significant modifications to the principal amount of existing mortgages.
If lenders were required to wait 90 days before filing foreclosure notification, and during that time negotiate fairly and honestly with home owners to re set their mortgages to reflect current market conditions, then it would begin to put a floor on real estate values.
Mortgages are secured loans. If the value of the collateral securing the loan falls, the value of the loan falls. The current system prevents this aspect of the market from working properly. Government needs to correct this.
Instead of bailout greedy Wall street, let’s spend the money on tax payers. Why housing inventory is so high? Because the price is 50% higher than normal based on historical standard. Face this, middle class income can not afford middle class house. If congress offers 1% (or 0%) 15 years mortgage, I’m sure the sideliner first time home buyer will clear up the 10 months housing inventory fairly quickly. That would be the right direction to spend $700B.
NO! NO! NO! If the Federal government wants to do something they can change regulations, accounting procedures, tax codes and tax incentives. I don’t care how much my 401K drops in value!
Lets see the prosecution of those responsible for Fannie may and Freddie mack!!!! Government got us in this mess! Force changes that will end the policies that got us here! Those policies forced lenders to ignore prudent lending practices to promote a social program of housing for all!
We need a correction. Things have been out of wack way too long. Anyone with common sense could see houses in California were way to high. The reason Washington wants this bail out is so the correction does not happen right before the election. Well they all need to go. We need all new leadership. Change should start in congress.
Tim, Fresno Ca said:
The whole “credit is drying up” and “no one can get a loan” is a lie. Banks are still lending, they are just returning to sane lending levels. I’m sorry a farm laborer can no longer get an $800,000 liar loan to help prop up your home price, but sanity has to return. There are as many loans being made, and home sales happening as there was in 2000. We’re just back to the ‘good credit score’ and 20% down days.
Exactly! I obtained a mortgage pre-approval three weeks ago. Why? Because I have 20% down, a solid job (over 10 years with my current employer), no debt (not even a car payment), and an excellent credit history. Yesterday my sister obtained a car loan…the same day as the largest market drop (by points) in history.
People who have strong credit histories, good jobs, money down, and reasponsible debt levels have no problem getting loans. If people/businesses are being declined perhaps they need to look at themselves as the reason.
These exotic loans, the swaps, the risky investments were all created because there was too much competition in the market place and every corporation was having a difficulty finding ROI. The local community banks didn’t have to enter into these practices because they brought value to their service. Doesn’t it seem logical to say the Wall Street and the huge banking conglomerates need to shrink, merge, and loose some of their competition to return to profit? They certainly don’t bring value to Main Street, so they must shrink to find their ROI. Any bailout that goes to prevent the winding down will only delay the inevitable. Big banks and I banks (which don’t exist anymore) are always going to be concerned about their ROI.
STOP CALLING IT A BAILOUT!!!!! Its an emergency plan to restore confidence to the credit markets. Do any of you realize what will happen to a majority of the companies (EMPLOYERS!!!) in this country if we can’t get the credit crunch fixed?? Ever heard of PAYROLLS??? I don’t want my paycheck held up because my employer’s line of credit got shut down. This credit crunch is strangling our economy, WAKE UP PEOPLE!!!! Don’t you understand that Wall Street is ALL OF US?!!!!! Its our 401K money, our IRA’s, our Pensions!!!!! Get over your anger and get behind a solution.
For anyone out there who thinks this is JUST a Wall Street bail out, call in and check your 401k balance TODAY.
No bailout for Wall Street EVER. This plan will not fix the problem. Americans way too far in debt, and moving that debt onto the government (i.e. taxpayer) does not make that debt go away, it merely shuffles it from those who are responsible for creating this situation onto the backs of everyone.
The debt will unwind regardless. The idea that the Government would make money on these trash securities is laughable. I don’t care if Wall Street collapses completely. I will not be enslaved by our Government to pay the evil, greedy people on Wall Street.
If the Government does proceed with a bailout, it will fail and the American people will be very angry.
If banks want to sell the US Government the actual mortgage that’s fine. But this selling of gambling debts (securities) is ridiculous. Would a casino buy back your losses? I think not.
For a ‘bailout’ plan to work there has to be a massive overhaul of the financial system, the purchases would have to be of the actual mortgage, not some speculation of the mortgage and said mortgage would have to go under review to determine if it was given under fraudulent terms (predatory lending, artificial appraisals, excessive debt:income ratios, etc) and be adjusted accordingly.
Yes, I agree, we probably ought not just do nothing, but bailing out gamblers from bad decisions is absolutely NOT the answer.
If we are worried about jobs tanking, then invest in companies (for stock of course.) We have a wonderful opportunity right now with alternative energy. The US could lead the world on this and bring back manufacturing. There was a day when the US was PROUD to make things.
Fannie & Freddy could buy up the actual mortgages and readjust them to make them fair again.
The lending community should go under massive review and regulation to stop this predatory lending practices and IMHO bring a complete halt to these payday/checkintocash practices.
Or the govt should stay the heck out of the free market and let it do what it will.
But to just give them money is stupid.
We will bailout any bank whose top officers go to prison for Financial Terrorism
People and banks loan money and add liquidity to the system without Wall Street a million times each day.
This bailout is to help the very people who caused this disaster. Let them die.
Let’s wait until after the November 4th elections to address this issue. That way politics should be somewhat curtailed and the newly elected president will be able to have more weight in the decision. A few more weeks will not be that critical and more plans can emerge for consideration. Better than rushing into this blindly.
No it IS just a Wall Street bailout. I own 2 cars, rent a apartment, pay my bills and taxes, pay my credit card, and still have money left over for savings. I worked very hard to make sure I had the means to do this. The whole market could tank and my job would be safe, and I could still pay the bills on time. One of us (me or my wife) could lose our job and still could make ends meet. Im sorry but I have no desire to buy into your fat cat koolaid. I know who this money is going for, and it is NOT main street. If you wanted to help people out give the PUBLIC the money, not the people who lost billions as it is.
NO bailout. Let the chips fall where they will. The irresponsible of this nation have bid housing up to the point that it’s unaffordable for anyone making the median wage to afford a median-priced home. Housing needs to fall further. Institutions that took risks and loss need to a) raise capital and take the losses or b) go bankrupt.
We need to go back to the days of working hard to save a 20% down payment for a reasonably-sized and reasonably-priced home. Let’s get back to standard 15- and 30-year mortgages.
I am sorry that people will have to suffer. But that is the penalty for making poor choices. It is not my responsibility to bail them out. The U.S. cannot continue borrowing its way to “prosperity.”
Let’s have no bailout. Let’s teach the fat cats a lesson by losing our jobs, 401ks, everything we owe. I am sure they will certainly learn a lesson sitting on their mansions with millions in the bank while we wait in line for free food.
This is a false choice. No bailout. Start simple….$1,000,000 FDIC insurance to make capital flow back to banks. Have Fed promise that any bank to bank loan that is defaulted on will have all funds replaced at that bank by close of business same day. This will take away bank to bank fear. Next there will be plenty of money for any credit-worthy people or businesses BUT we will learn few will want more or be able to borrow more.
So, the next step will have to be big tax cut for those making less than $100K paid for by those making more than $150K, a small price to pay after 8 years of tax cuts. This cut should be sent in monthly checks so that it gets used evenly on paying down debts or paying higher mortgages bills. This should keep the problem from growing and then we can tolerate the defaults of derivative-infested giant institutions and work through them.
Keep the $700B in reserve for a year or two and see if it can be avoided or would be better spent as “buy down” of interest rates to get people into fixed rate, painful but sustainable mortgage payments.
The bailout is a bad idea that will not solve the larger issues…do simple things first and remember the advice of Hitchhiker’s Guide to the Galaxy – Do Not Panic! We will get through this!
No new vote until at least Thursday. Great news! We all need to step away from the chicken little crew and think.
The credit system is “frozen”? Of course it is, If I wanted to sell my toxic assets as a finacial organization. I would want to project the worst possible outlook for not bailing me out.
However, “IF” I couldn’t get out of jail free (card) I would have to start making good business decisions and start building a portfolio of solid futures. Credit markets will be forced to start investing in:
Good businesses
Local businesses
Qualified home buyers
“Banks won’t even loan to banks” Well that’s not entirely true. Yes, Wamu could not borrow money but they are carrying so much debt in sub-prime loans that they have no value of assets to back a loan. BofA can get money, loan money etc. This is because even at the height of the “Money Grab” lending BofA did not do sub-prime loans.
Now, unicorns and elves don’t live in my neighborhood, so I’m not saying these are not tough times, but Americans will continue to go to work everyday and because Americans are the power behind our economy credit markets will be forced to get back to doing business, or close their doors.
How many dinnertime phone calls have you received from the local body shop? the local market? the corner tire store? “Real business”? Now how many have you received from someone who dangles money in front of you and assures you that you can make money appear from thin air?
It will take time to purge the system of this bad paper. As is evident by the world markets, it wasn’t just us. Governments all over the world are rushing in and throwing money at a problem that was created by to much money and not enough work. California home production is down 96%, mainly because the build frenzy was not supported by home ownership. It was fueled by flip inflation. Housing prices are falling, well duh… Housing value should increase 10-15% over a 10 year period. There is no basis for housing to increase 20,30 or 40% in months due to flip inflation.
In the end the economy will be rebuilt as it always is on the backs of American workers. A 700 billion dollar give away will not free credit markets, it is just another way American tax payers will loose money to a criminal business model that needed to be euthenized when the sub-prime market was in it’s infancy.
I think the fact that oil prices dropped shows no bailout is good for
America, and small businesses. Does America need to rely on
businesses that need credit in order to function? How horrible would
it be if real estate prices went down to 1985 levels? Bad for current
property owners(my and their loss) good for new buyers.(My gain as I upgrade to a better house)
If no bailout means commodity prices across the board will fall, then
that is good for everybody and small businesses.
I just got a loan for my business for $45,000 yesterday with an hour phone call, and my credit score is probably barely 700. Business owners and people with bad credit scores can’t get loans? Oh well. Banks that made bad decisions don’t survive? Too bad so sad. These are the reasons why
America is not standing behind the bailout because the logic does not
make sense, and we all say let them fail. If the market loses 50% of
its value, the rich(and people who don’t diversify) will lose the most, and things will become more affordable.
No jobs because no credit? Then those jobs shouldn’t exist. Simple
problems simple answers.
Myself on the other hand, I think a bailout would help me, because
that would devalue the dollar(not that the FED creating money out of
thin air doesn’t do that anyway) which would drive up prices, and
income (I am a merchant) and it would devalue my debt(which
unfortunately is where my portfolio currently stands) but that didn’t
stop me from faxing 452 congress people and representatives, with a
letter stating NO BAILOUT along with details explaining why.
So here you have someone who would benefit from the bailout stating
let the failures fail.
This looks like a “white collar” Sack of Rome, how much money has vanished since the goverment started giving it to Wall Street?
MAIN STREET…MAIN STREET…MAIN STREET
Main Street is the new catch phrase. And it is laughable.
Since when did WALL STREET EVER CARE ABOUT MAIN STREET.
WAKE UP, FOLKS !!! Know a CON when you see one.
Con-artists success depends on you believing it is in your best interest.
Who is George Bush “Base”? Why is Paulson worth $700 Million? Why was the CEO of Lehman Brothers paid $20 million for 18 days from a failed company? Why are CEO’s paid $100 million?
WAKE UP! THEY DO NOT CARE ABOUT YOUR FAMILY.
McCain’s wife calls herself an only child rather than share the wealth of their father with her sister. Obama’s brother lives in a shantytown.
Look after yourself, your MONEY, and your future generation. Stop passing the buck. WWII generation was great because of their sacrifice. This is our time.
SAY NO TO THE BAILOUT!
If the economy was a ship it would be listing very bady. This is not in doubt. Yet the Bush administration wasted the last week vainly trying to pass off a cement block as a life preserver. This does not inspire confidence. The way forward can only begin with Henry Paulson’s immediate resignation and replacement with someone credible. Applying more orange paint to the cement block will not improve its legislative buoyancy regardless of what happens to my 401K.
I am still against the bailout. I realize that there may be more pain without a bailout, I am not ignorant. But I do believe it is time for Americans (including individuals, companies and goverment) to start living within their means – I believe this is one of the core problems that created this mess. A big contraction of credit may be the only way to accomplish this. So yes there will be significant pain, but it may be the only way to get us to a more sustainable and responsible way of life. Paying the price for years of excess needs to happen. Lets do it now and get it over with. Delaying this with a abilout so we can continue with business as usual is not the answer.
Yes it is! “However, in the wake of the Lehman bankruptcy, things just got worse and more dominos fell” could just as easily be written “After the govt bailed out Bear Stearns, things just got worse and more dominos fell”. Fixing a symtoms of the problem without fixing the root is no fix at all. The only reasons things fell as bad as they did yesterday was fat cats were sending us a message – “Bail us out or else!” We shouldn’t let them bully us into a bad deal.
Also I’m sick of being told I don’t get how this affects me and I’m just being stupid and shortsighted for refusing to bail out the banks. You think I haven’t had friends laid off? You think my company hasn’t downsized some? I know this will affect me. But I’m willing to go through some hard times to really fix this mess, not cover it up with a bandaid and hope the internal bleeding stops.
Here is the truth. With, or without the bail out, Main Street will hurt. It’s funny, people actually feel bad for Washington Mutual. I worked there for 5 years and left the organization three years ago when I saw what was coming. Two years ago, WaMu sold their entire fixed portfolio to Wells Fargo, and they want sympathy? They made a business decision. They did not want fixed rate mortgages in their portfolio. And, while the mortgage industry was booming, all I remember was low performance from WaMu due to high expenses of doing business. I am sure that the other companies that found their demise were in the same boat. SO, the market tanked yesterday. Isn’t that common to bear markets? Maybe all the fat cat investors who wanted the bailout didn’t think about their friends and family on Main Street. The market will come back. Yesterday’s sell off is already recovering. Actually, even though the market is overall low, haven’t we seen violent swings one day after another; so on a weekly basis, net losses are not so bad? My advisor reminds me that I have time to retire. I also know much of my new money is going into safer investments, and I put a plan a long time ago to rebalance, therefore, when my gains hit a certain level, I would move money into a secure fixed account (don’t want to get to greedy)! The truth is, I would be much more comfortable with a bailout that Paulson or Bernanke didn’t have control over. I do not trust their motives. Paulson especially. I also believe that this is why the bill didn’t pass. Bernanke made clear that he would be willing to pay above market value for these assets. My big problem is that these assets will not be worth much in five or ten years, and then what? Did we already forget the lessons from the tech bubble of 00-01? Although the market somewhat recovered, I don’t see any compelling evidence that after 7 years tech stocks are still seeing any great returns. MBS, CDS, and everything else saw huge returns in the last few years; do we expect things to go back to that kind of growth? Wouldn’t that put these assets back into another bubble? And, who would want to buy these securities back from the government? Analysts know what kind of crap they sold; it will still be crap 5 years from now. Why wasn’t a RTC reconsidered? Given 90% solvency is pretty tough in this market, should we prop corporations up that are less than 70% solvent? In grade school, this is a D (not quite failing). I don’t trust anyone that tells me that I only have one option. Besides, we could not let Bears fail due to the swap market. How did this proposal end the swap problems? Americans are being held for ransom with fear. Well, I am not afraid. I have already lost my job, and I am finding it quite difficult to find anything, in most cases, I am overqualified for a position I would love to have right now. I am proud to say, my House Rep voted down the bailout. I will vote for him again. And, to all you with the idea of giving the public the money to work their way up the economy, does Zimbabwe come into your plans? You cannot have too much money chasing the same things. That is how inflation goes out of control.
I agree let Wall street burn, I have already lost all my money in my stocks (I owened WaMu stocks) so I really dont give a D*** anymore. So let all of you d**b A**’s get what you want even you dont know whats right for you. But dont come running back mad when you loose your jobs because the company you work for just went bankrupt. Then maybe you all will realize what an Id** you were.
No Bailout! Let the free markets work. The last thing we need is MORE money going to the wall street fat cats.
First I must say that Wall Street is failing not because they were all crooks, frauds etc. It is because people stopped paying their bills.
While some people legitimately fall on hard times and can’t pay the bills its seems that many Americans were too greedy, naive or just plain stupid and wanted the American dream for close to free and chose to walk away when things got too tough.
Were some people duped by fradulent lenders. Absolutley, but most of these bad players were not the Wall Street I-banks and Big banks. The media needs to be more truthful about this.
That being said I do think there are better ways to fix this issue than $700B of our money. You need to start with restoring value to the underlying mortgages. If the gov’t wants to help they should mandate freezing all interest rates on mortgages or tell banks to rstructure them to allow for current interest to be paid at the levels when the mortgages were first entered into. Sure some of these loans would be underwater but its a hell of alot better to be getting some interest on a loan than seeing an empty asset sit and deteriorate and not get any payments. This would stop many foreclosures and maybe stabilize housing prices and the value of the underlying mortgage securities so they could be used as collateral again to free up liquidity for the credit markets.
Is this fair to all of us who knew how to budget and live within our means – no its not. But its sure better than seeing our hard earned 401ks continue to decline and our economy go into a deeper recession.
No bailout!
The stocks tumbling affected who?
How many average working people got devastated by the drop?
I’ve got my 401K in there but luckily I’ve got another 20-30 years before I need it. My house is paid off and I dont have any car payments. I dont need any credit.
I believe that any buisness that is dependant on a credit source is not much of a buisness and should go bankrupt. If they produced anything worth while, anything we the people might need a smaller buisness will come up and fill the void.
I say it’s finally time for all of the greedy big buisnesses to get whats coming to them.
I feel sorry for the people that have overextended themselves but they made bad choices and will have to learn the hardway.
I will tell you that if all the news channels were not owned by big buisness. The decription of what could possible happen to the economy would not be nearly as terrible sounding as they make it out to be.
Every report I hear sounds like rich folks trying to protect rich folks not the working man.
I hear reports that there going to have to lay people off if this bailout doesnt go through. Heck they killed 600,000 job already this year and were still surviving that.
Polyanna, er I mean Paul.
I don’t think the ‘unwashed masses’ saying no to this bailout should be viewed as a demand to do nothing. There are many, many different ways to for us to spend 700 billion dollars that won’t be a direct bailout to (and only to) wall street.
Hell Paul, lets take the 700 billion and drop it into the FDIC. Then lets force the banks to mark to market. Those that can make it do, and those that can’t…well the FDIC is now well capitalized to step in and take them over. And guess what…there are no longer any hidden level 3 assets, and lending continues because now banks know who’s viable and who is garbage.
The whole “credit is drying up” and “no one can get a loan” is a lie. Banks are still lending, they are just returning to sane lending levels. I’m sorry a farm laborer can no longer get an $800,000 liar loan to help prop up your home price, but sanity has to return. There are as many loans being made, and home sales happening as there was in 2000. We’re just back to the ‘good credit score’ and 20% down days.
You need to just let that AIG stock in your portfolio go to credit heaven Paul. The market is a gamble, not a guarantee on a return.
Capitalism works with creative destruction. No bailout will be painful, but necessary. The bailout (and the Bush administration in general) has been a threat to the capitalist system in this country. Where did the notion that recessions and the business cycle should be avoided at all costs come from? Why is moral hazard an esoteric thought that main street should not care about? And why does no one ever count inflation (devalued money) as a cost of the bailout?
The government wants to spend $700B to outsmart the market because it thinks the market is pricing loans and securities too cheaply. First, I wasn’t aware the government had $700B to invest- I thought we were already broke. Second, is playing the role of hedge fund an appropriate role for government? Third, do we really believe that Paulson et al. can outsmart the market and make money on this? Fourth, why do we think giving this money to banks that have made bad decisions is the best use of money that doesn’t exist?
About the credit crisis, if there is a shortage of money, why are the top rates at banks 3-4%, below the rate of inflation? It seems that they could easily raise money by raising the interest rates to above the rate of inflation and still make money on loans. It seems to me that there is a shortage of money at subsidized, below-inflation interest rates, not money in general.
To summarize, the bailout stinks and I hope it is not rammed through later this week.
The best way out of this is to reinstate the Glass-Steagall Act. Aggressively reregulate, instead of bailing out the fools who created the problem.
Every financial institution has been playing unwisely – basically they are gambling casinos – and this consequence WAS predicted over 10 years ago.
Let these gamblers declare bankruptcy, like us citizens.
The mess we are in now is largely due to government intervention in and manipulation of the market. When the government claims that they can solve an economic problem through intervention exactly what are they basing this confidence on? From my perspective government actions rarely accomplish the stated objective and more often than not lead to unexpected, negative consequences. Yet they have the arrogance to raise the stakes to $700B. It’s mind boggling and equally mind boggling that anyone would trust their judgement to do this.
NO Bailout. Send wallstreet to no-credit rehab, if they have hangover as JB said… Only one solution will work: make sure main-street Americans earn more and can pay off their mortgages and credit card debt asap.
Part of the reason the vote failed was the disengenuiness of the Republican caucus who had promised votes to house leadership.
The reason for the last minute defection was an opportunity to manipulate the market on a scale here to fore unknown.
By voting “no” at the last minute facilitated the panic selling on Wall Street that sent stocks tumbling some almost 800 points.
Those with liquidity could snarf the cheap stocks at bargin prices and make a killing as stocks returned to near prior vote prices — all curtousy of the Republican leadership.
There will be some kind of bill eventually.
That is only a matter of time.
But the NEED to RUSH is overstated.
Please consider this for a moment.
700 billion divided by $200,000 is equal to 3,500,000.
That is to say, 3 and a half MILLION people under water with their mortgages could be GIVEN $200,000 EACH for the SAME money that is being proposed to be DIRECTLY handed over to financial institutions to save them from their OWN bad decision-making.
I am not suggesting that such money should necessarily be directly handed over to 3.5 million people.
But IT is a measure of the SIZE and potential EFFICACY of the proposed ‘BAILOUT’ — if DONE PROPERLY.
Equivalently, if you were to give $100,000 to 7 million homeowners in trouble with their mortgages, it would also amount to the SAME 700 Billion dollars.
Even if you only SUBSIDIZED (as a loan) this kind of money, you could still “rescue” this many people and presumably, the economy with it.
If your true INTENT is to actually ACCOMPLISH the same thing — that is, to make the financial institutions “WHOLE” on their BAD INVESTMENTS, this is one way of doing it. It is better than giving the money directly to those whose decisions need to be corrected. We don’t give Johnny a Popsicle when he does wrong — we send him to the corner.
What I am saying in so many words, is that the BILL we saw VOTED DOWN is not necessarily the BEST BILL that could have been brought forward. HASTE makes WASTE, and the people’s representatives, in the best American tradition, understood this in their heart of hearts.
There are a lot of great economists who are not being consulted. 200 of them recently came out against the version of the bill that went down to defeat. This is not Good Management — this is VERY POOR OVERSIGHT and a VERY POOR way of bringing the best expertise to bear on a grievously serious issue.
Now we have a lucky chance for a sober second review of this ill-considered RUSH TO JUDGMENT by Paulson and Bernanke.
Bernanke for one, is supposedly an expert on the Great Depression. That colors his take on what to do. What was proposed was VERY POORLY thought out.
The American people are wiser than this small cabal of supposedly very smart people.
Please see http://blogs.usatoday.com/oped/2008/09/a-chance-to-imp.html
Dr. Joseph E. Stiglitz, Nobel laureate in economics in 2001, is far better informed about this matter, imho, than the people who cobbled this FIRST piece of legislation together.
One of the legislators made a very astute and telling observation after midnight on Saturday night. That person said that Secretary Paulson had learned “a great deal” about the legislative process in the past several days.
We all also soon thereafter learned even more, as the wisdom of Americans shone through when the House in a great show of bipartisam wisdom turned down the first, very bad, version of the B.P. — the Bailout Package.
I enjoy your commentary. However, over the last week and a half, I haven’t agreed with much you have had to say. I still don’t. If a bailout plan is needed, it needs to be much better than what Paulson has been forcing down our throats. $700 billion is not going to save the world. The world wide markets crashed yesterday, and I don’t believe that $700 billion injected into the US banks can turn that around. The main thing it is going to do is devalue the dollar, and give us less power on the world market.
Also, all the crap that the Democrats put in discussed me. They are saying “We don’t like giving that much money to your people, unless you give more money to our people.” It is so corrupt, and is driving out the middle class. So the rich bankers get theirs, the low income home owners get theirs and the middle class gets a dollar so week we can wipe our ass with it. Look at the huge jump up the dollar is taking today, after the failed bailout. As a result, look at the lowering price of oil. This is the best thing that could happen for the middle class, and all those worried about the inflation of our imports and gas prices.
We the people, being condescendingly portrayed by the mainstream media and Washington as ill-informed mobacrats, are well aware of the severe consequences of the failure of our financial system. We know we are undoubtedly in for economic hardships in the near future. This being said, the looming threat of these hardships does not alter the sentiment of the public and our desire for Justice and Capitalism to prevail in our great Nation. The United States is built on free markets and free ideas. With these freedoms comes risk. We accept these risks because the benefits of our freedoms will always outweigh any hardship that arises. Listen to the PEOPLE. We are not ill-informed. We know the implications. VOTE NO and give the people a voice.
The current bailout plan is just that: a bailout of the current failed Wall Street financial system. We need to reboot, start over, with a new system. Let me suggest:
Take a smaller amount of money, maybe $70 billion instead of $700 billion, and use it to set up a new mortgage bank to target the mortgage market. We could call it the Federal Mortgage Bank (instead of the Federal Reserve Bank). It would be FDIC-insured, it could accept deposits, make mortgage loans, sell bonds, and go public and sell shares. Once it’s profitable, it could pay dividends. It could buy MBS at steep discounts, ‘pennies on the dollar’, as the veteran bankers say, and then clean them up. This good bank with solid lending practices should quickly drive out the bad banks with their toxic loans and securities.
Regulations need to be stiffly enforced, up there with ‘hang an investment banker from a lamp post on Wall Street and leave him there as a lesson to the rest’, to make sure they know we are serious.
I don’t know enough about all of the problems in derivatives, swaps, etc. to offer a recommendation, but it still seems that the current system is too far gone to bailout. If we’re going to use taxpayer money, we should start over from the beginning, which is much cheaper. It’s still our money.
Paul,
Understand that my belief is that all bailouts are bad. Look at the stock market today. Look at the dollar strengthening. Look at prices for oil and commodities coming down. What should that tell our leaders in Washington? DO NOTHING…stay out of the markets and quit trying to re-inflate bubbles.
But they wont do it, they feel they have to meddle in the markets. We need this correction to clear out the malinvestment in the system and regain proper, stable growth. If you continue to bail these failing firms out, the market will continue to send the wrong signals. Interest rates act like beacons in a market. If you artificially inflate them or deflate them, people get real confused. Tell me, do you know where to put your money right now? Probably not. We can’t decipher this market because the Fed, Paulson and Bush are acting irrationally. They need to calm down and get out of it.
Say’s Law: Recession does not occur because of failure in demand or lack of money. The more goods (for which there is demand) that are produced, the more those goods (supply) can constitute a demand for other goods In Say’s view, creation of more money simply results in inflation; more money demanding the same quantity of goods does not represent an increase in real demand.
I’m not angry at Wall Street, just viewing this Paulson proposal for what it is: a power grab.
If they really want to help us, they should work on regulations to prevent this problem in the first place. They should not take our hard earned money and give it to the people responsible for this mess.
A bailout is needed to restore confidence and liquidity but not this bailout! I strongly prefer a Warren Buffett type investment in Goldman Sachs as a model. Let’s make some money off these deals for the taxpayers. Also, we need only to look to the Fortis bailout in Europe for another example. Please tell me our representatives in Washington are not so stupid as to approve the Paulson plan!
No bailout. Those of us who opposed the bailout from the start realized that the market would tank. We understand. The market will recover in time, when companies start making good decisions again.
congress should work on something else besides the bailout. The people have spoken, we don’t need political or media tyranny like your’s or CNN’s.
The people have spoken
Think about if the amazing bottom-up benefits if the government gave one hundred or two hundred thousand dollars to each citizen. The economy would bolster in so many ways – capital purchases, investments, money put away for children’s education. Non-profits would benefit because many citizens do not need the money and would give it to their favorite non-profit.
With basic calculations and some guidelines for spending, we could stay under the $700B and fix the economy quickly. Instead, we are intentionally diminishing the value of the financial system so private investors can buy it all up – this is the “new” greed. Let’s put the money back in Main Street rather than Wall Street – it will eventually wind up there by choice rather than by necessity.
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Dear R.S. Quinn:
I’m glad you got that bigoted response off your chest, but since when does the greed and
outright fraud perpetrated by Wall Street get a free pass?
We live in a world economy, and many of the products and services we buy come from
American companies, even if the products are made abroad. On the other hand, many products from foreign businesses are made right here in the USA.
So, let me see if I understand this. It’s OK for greedy American businesses to ship all of the jobs to foreign countries, then import the products to sell at inflated prices, but it isn’t OK to buy products, made in America, by American workers and sold at a fair price, because the company headquarters is in a foreign land.
Your complete lack of understanding is incredible. You tell us not to shop at Wal-Mart, a quintessential American company, and at the same time tell us not to buy Toyotas and Hondas.
You want us to socialize the Wall Street losses, but don’t want us to share in the
profits.
This bailout is one of the biggest boondoggles in the history of boondoggles, and it won’t even accomplish what little it proposes to accomplish.