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Comments
Worse
Whoops!
I read the BBJ wrong. I thought it said 208-205.
NM.
Why are we amalgamating mega-banks ...
into giga-banks? Shouldn't we do the exact opposite, break the big banks up into small enough pieces so that none of them are "too big to fail"? The recent shotgun mergers strike me as concentrating risk rather than dispersing it.
Too much debt...
If you broke up the banks into smaller pieces, you'd have to spread the debt that the parent bank had, and each of the new mini-banks wouldn't have the capital to manage the debt (so someone would need to infuse some capital into these new mini-banks). Either, the government would have to do it and that's not very capitalist or another institution (who as a result would more than likely own a controlling interest in the company) and the organizations that would be financed well-enough to support the new banks through the remainder of mortgage default write downs would be a bank.
IANAF - I am not an financier.
Tierney is a great
Tierney is a great representative and makes alot of sense. We are being bullied to bail out the big guys, but forget about the little guys. If were going to fix this problem we need to fix it from the top to the bottom.
Disappointed in Lynch
Pahkcah02 called her Congressman's office to complain:
Lynch explains his no vote
Here.
Thats how the powerful keep
Thats how the powerful keep their power and money, they exploit chaos to their own advantage. They are the ones who got us into this mess, then they told us that everything was ok, then they told us we have to act right now or else were all going to die/starve/something else bad.
Bush and company did the same thing after 9/11 and eight years later were still sending money into the black hole that is Iraq. I was on the "lets get em" bandwagon at that time, Im not jumping on this new bandwagon now. There is nothing wrong with rejecting the bill and retooling it, and dont let anyone tell you otherwise. Members of congress just want to get this done right now so they can run off and campaign, and the business community wants to get that money before they lose any more themselves.
This is how Bush gets things done, he lets them slide until there is a national crisis then manages to have anyone who opposes his form of truth be villified.
Killing the bailout was the right thing to do
Good points, ShadyMilkMan.
The phrase "they made their bed, and now it's time to lie in it" fits perfectly.
I think killing the bailout will be beneficial for several reasons.
One, Wall Street will now have to dump out and excise the bad apples who see Gordon Gecko as their hero. When they lost royally on one set of bets (housing) they ran up other bets (commodities, the dollar) to cover their losses - never, ever a good way to make wealth the honest way. We may see the fallout include perp walks and handcuffs to sate the "Give us Barabbas!" folks.
Two, it pointed out the fecklessness of both political parties. Both wanted to be white knights, but many of their soldiers had a lot of checkered pasts and skeletons in their closets. Plenty of bickering, like eight year olds over the last piece of birthday cake, is what doomed this bailout.
Three, the remaining public who did, does, and still do the right thing - pay their bills, keep their accounts balanced and diversified - will remain in good shape as long as they don't panic. To be blunt: they must ignore the hype and fearmongering, and not fall into the herd mentality of running the banks.
Four, it's easy to place blame on people, but it's hard to cull through all that information and determine that it's not as bad as it might seem. We love instant gratification, the satisfaction of blaming people before all the facts come in, and then get frustrated when it's not resolved quickly, or not at all. The clearer the picture becomes, the more we understand what's going on.
Five, this is an absolutely teachable moment - do not buy what you cannot afford, and do not let people tell you otherwise.
Capuano explains his yes vote
Copy of his e-mail.
My reply to Capuano
Yeah, but all the bill really does is clear the balance sheet of the Fed and dump that all on the Treasury (read: Taxpayers) so they can resume accumulating junk securities from investment and retail banking companies.
It's just another rape of the taxpayer, and your vote, Capuano, almost got us there. I hope you will wake up and stop voting to destroy our finances even further. If the credit market dries up, that's because it was not sustainable enough to exist in the first place, and WE should not be paying to let it exist so that some rich business executives can profit. That is capital socialism, that is bad policy, and that is bad governance.
If you want to keep supporting a dead-on-arrival infrastructure that has contributed to these market "corrections" and bubble "burstings" then you should be kicked out of office at the next possible chance.
A record!
Two things is for sure, today will go down in the history books as largest one-day point drop as well as the day that the use of the terms "to protect the interests of hard-working Americans" and "on behalf of working-class families" broke all previous records.
I like Capuano but agree with Lynch
Mike Capuano is my congressman and I respect him highly, but in this case I'm more with Lynch. Congress is supposed to be a deliberative body. It should not be stampeded into panic action by a lame-duck executive branch and a few Wall Street bankers who want to profit by creating an atmosphere of fear.
Credit Crunch
People who are against the bailout strictly because they see it as a "Get Out of Jail Free" card for Wall Street are completely missing the point. Wall Street got greedy and put the lives of millions of ordinary Americans at risk. While executives who ran these shady operations certainly shouldn't be rewarded by taxpayers, not acting to stabilize Wall Street would have further catastrophic implications than an ex-CEO having to move out his mans in Westport.
If banks fail and credit seizes, a lot of us are going to lose our jobs. Whether it's borrowing during "slow" season and paying it back during "busy" season to make year-round payroll or leasing equipment, just about every single employer in this country depends on easy credit to make their business run. If our employers can't get the credit they need to make their business work, they're going to to be forced to shut their doors. Assuming this has a trickle down effect, it's going to be awfully tough to find a new job.
People who are against the bailout may not have been on Wall Street, but chances are that they benefited from easy credit doled out during the past decade. If you own a house with an interest only mortgage, bought a mortgage with less than 20% down, lease a car, have a student loan, or have a credit card balance higher than zero, you are a direct beneficiary of easy credit times on the Street. Regardless of the fact that you may have used this credit responsibly, the chances of you getting that new car loan, mortgage, or low-interest credit card will become a pipe dream if Congress doesn't step up and act.
If the bailout bill fails again, it has the potential to cause more financial ruin than the Great Depression. We need to stop the blame game and let our Representatives know that gambling with our bank accounts, employment stability, and retirement funds is not ok. The 778 point market drop is only a preview of things to come if our leaders fail to act.
While people who need alot
While people who need alot of money for college may suffer, may be hard to get 100,000 worth of loans for BU, I dont think the pool for small college loans will completely dry up. I did it the old fashioned way, worked through school and went to a school that wasnt 40,000 a year. I waited a while before buying a new car and was planning on waiting to buy a house. It might actually make more sense to put in 20 percent, you avoid PMI and it proves you can afford it. For years people have been telling people who are cautious that they shouldnt be so cautious and to spend money, go on vacation, go to the expensive schools, pay for it later! I know some people that already got their credit limits slashed, but mine has stayed the same, and Im still getting new credit card offers in the mail from Amex and other companies offering low interest cards.
I want this thing to be fixed, but I dont want a quick fix ban aid and I dont want to do something because were afraid of doing nothing.
Boa Credit Cards
Have you heard of anyone losing their credit cards due to their credit rating? I saw on reddit yesterday that BoA might do that if you're under 750, but hasn't really been confirmed.
Really? They just bumped up
Really? They just bumped up my credit limit and dropped my interest rate.
Phew
For a second, I thought you meant something to do with credit cards wrapped in feathers, and I'd hate to open that envelope.
No, not those
It's the ones that wind their way around your neck and squeeze you have to worry about.
Oh thats GTE Visa, the ones
Oh thats GTE Visa, the ones who offer the "college" themed cards. Yeah one late payment and they are charging you like 29 percent interest. Talk about wrapping around your neck and squeezing!
GTE?
Didn't they merge with Verizon years ago?
I think its a different
I think its a different company but I cant find it online. I just remember it being the company on the Visa cards that some of my friends had from their colleges. It definitly wasnt a phone company. I had one of the cards at one point and they were always doing something fishy like charging me for monthly subscriptions to weird stuff (of course those companies being owned by them too) and then getting mad at me when I called and asked about the charges.
Compelling argument for the bailout?
I have yet to see any compelling argument that supports the bailout. They talk crisis, and some talk payrolls, but nobody from the Treasury or Frank/Dodd is actually articulating what this solves and why that solution is worth $700B of our money.
On top of that dearth of information, what we _do_ know is bad. Paulson will get significant authority and the ability to give money to a breadth of companies, while not having very much oversight, and nationalize a bunch of institutions? Not a positive step in the direction that will prevent these problems in the future.
Absent a compelling argument, I still say no to the bailout. And I think our elected house officials mostly got it wrong.
I also have not seen a
I also have not seen a *detailed* future history of the coming depression. However, I've heard enough from folks I trust to form a basic idea:
Credit is the lifeblood of our economic system. It's currently not flowing, due to fear that the other guy may not be able to repay a loan. If banks don't lend, they don't make any money and they go out of business. If companies can't borrow, they can't expand or buy other companies' stuff, so they go out of business. Bank failure, unemployment, destruction of capital ... depression.
The bailout plan basically amounts to the government taking a lot of IOUs of unknown quality. Thus removed from the balance sheets, no more fear the borrower can pay. Loans happen, and the economy grows.
The short, best way to sell this plan (as Ben Stein did in print Sunday, and On Point today) is to say, "The greedy bastards who made this happen stink. Bailing them out stinks. But if we don't, everyone will suffer."
Or even more briefly: moral hazard is better than actual hazard.
This is why I'm suspicious
"The greedy bastards who made this happen stink. Bailing them out stinks. But if we don't, everyone will suffer."
This is why I'm suspicious of any plan in which the word "guillotine" isn't prominently involved.
The bailout is not simply a
The bailout is not simply a moral hazard as opposed to an actual hazard. That is a false dichotomy.
And I certainly won't listen to anything Ben Stein says. And he also presents a false dichotomy since the bailout does not take away all suffering, or some such nonsense.
I simply do not want my tax dollars buying hundreds of billions of dollars of worthless securities at prices significantly above their market value. It is a fucking handout to private industry which made willful fraudulent financial transactions and profited handsomely.
Meanwhile, the Fed 'injects' 600 billion dollars today. Obscene.
More conversation about the
More conversation about the economic crisis and other plans that have been construed to solve it.
Two for one
Wow, two fallacies (straw man and ad hominem) in one post! Although I admit, I built the straw man.
Look, what it boils down is do you think there is a genuine crisis, and will it affect everyone? If you answer "yes" and "yes" (this is my view), then there are ways to structure the plan (e.g. reverse auction) to prevent the things you decry (e.g. paying too much).
If you answer "yes/no" or "no/no", which are reasonable positions, then the bailout is indeed pure robbery and should be opposed.