Say what you will here.
US Senate Passes US$700 Billion Bailout Plan
Previous post: Choi Jin-sil Suicide
Follow Us!
Korea News via Yahoo- Korea bans Orioles' scouts after teen inks deal
- S. Korea Lawmakers Make First Gaeseong Trip Since Kim Death
- Korea-US trade pact re-emerges as political issue
- Korea-U.S. trade pact re-emerges as political issue
- North Korea’s super-size hotel is set to open — 23 years behind schedule
- Bank of Korea Holds Rate for Eighth Month as Growth Slows
- South Korea Holds Rates for Eighth Straight Month
- Saudi 'pledges secure energy supply' to S. Korea
- The Korea Times gets taken for an intergalactic ride
- South Korea’s No. 2 Public Pension Fund to Boost Equities
Buy My Seoul Guidebook!
Books and DVDs on Korea
{ 80 comments… read them below or add one }
first.
so when should I send money home, and can I ask my boss to pay me in Euros? jeez this sucks.
It’s what Congress has to say that is still the issue.
I had thought the main flaw with Paulson’s plan was obvious: that the taxpayer is buying whatever Paulson wants to buy, unburdening the banks of troublesome assets, and getting nothing in return (other than the possibility that those same toxic assets might increase in value some day). The solution was obvious: make sure the taxpayer gets an equity share of every bank it helps out, so that when the bank’s share value recovers the taxpayer is rewarded as an equal partner.
Politics is messy. Congress defeated the bill 228-205 on Monday. 12 votes need to be swung. I foolishly assumed that getting those 12 votes would simply mean inserting an equity share provision, and giving the taxpayer some chance to recoup their investment. Instead, the new bill is a straight-up attempt to buy votes with $150 billion in tax cuts, plus some fishy new accounting rules to help the banks on paper without helping them in reality.
Bottom line: The price of one vote to approve spending of $700 billion taxpayer dollars? Another $12.5 billion taxpayer dollars.
most Americans in Korea do not pay taxes to the US government anyway
Peace out American dollar; don’t forget your lube on the way out.
Seriously though, the bailout is garbage. If congress passes this revised piece of garbage (which is just as bad as the first: no oversight, and now it increases fdic insurance, and a rider…I’m not shitting you…to decrease taxes on wooden arrowheads) I’m done with America.
Where the hell is all this money going to come from? How will it address the fact that most of these crappy mortgage assets are still out there?
It doesn’t, other than to buy them up when they present themselves.
Oh, and there’s a provision to bail out foreign banks.
Fuck Paulson, Fuck Bernanke.
Peace out American dollar; don’t forget your lube on the way out.
Seriously though, the bailout is garbage. If congress passes this revised piece of garbage (which is just as bad as the first: no oversight, and now it increases fdic insurance, and a rider…I’m not shitting you…to decrease taxes on wooden arrowheads) I’m done with America.
Where the hell is all this money going to come from? How will it address the fact that most of these crappy mortgage assets are still out there?
It doesn’t, other than to buy them up when they present themselves.
Oh, and there’s a provision to bail out foreign banks.
Fuck Paulson, Fuck Bernanke.
Peace out American dollar; don’t forget your lube on the way out.
Seriously though, the bailout is garbage. If congress passes this revised piece of garbage (which is just as bad as the first: no oversight, and now it increases fdic insurance, and a rider…I’m not shitting you…to decrease taxes on wooden arrowheads) I’m done with America.
Where the hell is all this money going to come from? How will it address the fact that most of these crappy mortgage assets are still out there?
It doesn’t, other than to buy them up when they present themselves.
Oh, and there’s a provision to bail out foreign banks.
Fuck Paulson, Fuck Bernanke.
What might work better than taking on bad debts, would be insuring a safety net for those estimated 20 million workers that will lose their jobs, when 2000 banks go bankrupt and then in turn all those companies go bankrupt when the banks call in their loans.
If there was anyone with any leadership skills they would get right on this instead of covering their own asses.
A great breakdown of the issue is here.
http://ca.youtube.com/watch?v=SMFt7tRq-Ps
Welcome to the United States Socialist Republic – Comrades!
3. Linkd, I thought there was some provision for the taxpayer to get non-voting warrants in the banks they bailed out. That way, even if the loans go bad, but the bank recovers, the taxpayer can still recoup the money. Did they take that out?
There was also a rovision providing $250 billion immediately and then the rest subject to the President’s approval.
http://www.asiaing.com/emergency-economic-stabilization-act-of-2008.html
I take your point though that they had to add in an extra $150 billion of tax cuts to get the thing passed. Amazing.
#3. Linkd, I thought there was some provision in the bill for the taxpayer to get non-voting warrants in the banks they helped. That way, even if the loans go bad, but the bank recovers, the taxpayer can still get the money back. Did they take that out?
as a liberal this plan sucks to high heaven but SOMETHING had to be done to show people that the government is willing to do something to instill confidence in the markets.
Tonite even with the Senate passing this, the credit markets are still pretty much frozen, people dont need to keep an eye on the dow but the tnote and tbill yields and the credit spreads are still high
lets hope the obama admin will be able to change it once in office
btw, the cost of passing the senate version? $100 billion OUCH
Well, my American friends, here is the end game of Bushism. A gigantic “I TOLD YOU SO!” to all of you. Here you have had the largest theft in human history. Not one American will keep his house, feed his kids of fill up his gas tank because of this. The banks have held the people hostage by refusing to release credit for a couple of weeks. Thus, your “conservative” president has worked with the to extort the largest piece of corporate welfare in human history.
Do it all again and vote for McCain. With the insanity I see down there, it wouldn’t surprise me.
Are any history students of the fall of the Roman Empire experiencing a sense of deja vu here?
Well, I wonder if running huge trade and budget deficits and having a huge mercenary army has anything in common with Rome? How about the greed of the Elite undermining a society. How about brainwashing a large segment of the populous?
Of course Rome fell, but when I think of Rome, I think of the development of laws and technology, as well as the preservation of learning and peace. I’d rather have the Romans than the Vandals around any day.
Kimchipig: Your level of intelligence is quite suitable to your moniker. Its all Bush’s fault right? Human greed? Bush. Economic cyclical downturn? Bush. Bush, Bush, Bush, Bush, Bush, Bush, Bush.
Oh yes, then McCain = Bush. Bush. Bush. Bush. Bush.
So if Bush is Satan, Obama really must be the Messiah?
Cut the s–t you psudeo-intellectual fakir. There are issues and problems that are far greater than your anti-Bush fetish.
That having been said, we can move to more adult topics of discussion.
As for Rome, Rome wasn’t built in a day, and certainly was not destroyed in one either. Nathan is correct: No matter what the pathologies of the Roman system, it is much preferable to the dark regression that consumed Europe. In many respects, as countless aspects of our modern existence pay homage to Roman roots, we are still only playing catchup to the Romans.
Our founding fathers of America warned that in our democracy, the people would get what they want, and deserve what they get. The categorically communist nature of the bailout and the extortion of taxpayer dollars are surely to have profound effects but there’s always some way to make money in the system. My hope is that the House of Representatives blocks the bill from passage. We should get a better idea of where they stand when they vote to bring the bill to the floor before they debate/vote on it proper.
“… the new bill is a straight-up attempt to buy votes with $150 billion in tax cuts, plus some fishy new accounting rules to help the banks on paper without helping them in reality.”
Sometimes you have to cut cards with the devil. If $150B in tax cuts is what it’s going to take to get 12+ House Republicans to vote for it, then that’s what needs to be done.
I know there are a lot of Main streeter’s here pissed at the prospect of bailing out a lot of Wall Streeter’s who got rich from way too much speculation with their money. Of course it was wrong, unethical and they need to be punished. For their crimes, their industry should be reregulated and be changed forever and they shouldn’t be allowed to make millions for making casino-like bets with your money. Money should be invested to build real value to the economy, not to make hedging bets on what goes up or what goes down.
However, the American people need to get over their feelings of moral outrage to get this deal passed in the House. The costs of doing nothing are way too great. In 1929, Wall Street also needed a bailout, but the government couldn’t get over its morality and its believe that government shouldn’t get involved in financial crisis. At that time too most of Main Street thought it was Wall Street’s problem and not their own. Boy were they wrong.
The financial system has been wrecked by excessive speculating. Main Street will feel the pain, but by the time it does, it may be too late. The best analogy I can think of is cancer. By the time you feel that lump in your body and your appetite noticeably declines, an MRI will show the cancer has spread from the lung to the spine and liver and it will be too late.
@Wangkon
Or, if you prefer a more obscure reference in 삼국지, 脣亡齒寒… I think that’s how you spell it. That phrase has been on my mind ever since the bailout has been proposed.
“I’d rather have the Romans than the Vandals around any day.”
I’m glad Rome fell. If Rome didn’t fall, Europe would be more like China.
Oh, and those Vandals, Visigoths, Ostrogoths, etc. carried on Roman laws and traditions and made Europe a much more diverse and interesting place. The fact that Rome’s admirers, rather than Rome itself, carried the torch of Western Tradition made the West that more innovative and vital.
Linkd,
As long as those accounting rules are temporary, I don’t consider them too fishy. The markets are a wreck right now, they are warped. Even debts with toxic subprime mortgages in them still have SOME value. However, they are essentially zero on a balance sheet because no one in the market will buy them. BUT… they are not worth zero.
Given that markets are warped right now, to ascribe a more forward projecting value to those assets is the right thing to do until the markets stabilize.
http://docs.justia.com/cases/federal/district-courts/pennsylvania/paedce/2:2008cv04083/281573/13/
Some other Democrats have pressed Senator Obama about his actual place of birth (members of Obama’s family claim multiple places in Hawaii and Kenya). He might not have been born an American Citizen!
His stepfather’s adoption of him may have made him an Indonesian Citizen–and a Muslim. If so (and he did travel on an Indonesian passport after he was 18), he may not be eligible under the Constitution, regardless of where he was born!
And the Obama Campaign just keeps blowing smoke and spinning, instead of obeying the court and releasing the relevant documents.
Surely this could be easily resolved? Surely the DNC would rather this be resolved sooner than later? If Obama is the honorable man he claims to be, surely he would want this resolved today!
“Cut the s–t you psudeo-intellectual fakir. There are issues and problems that are far greater than your anti-Bush fetish.”
Well, it is much easier to blame someone else that to take the responsibility for your own actions.
I take it back; Bush has been a huge success.
I know there are a lot of Main streeter’s here pissed at the prospect of bailing out a lot of Wall Streeter’s who got rich from way too much speculation with their money. Of course it was wrong, unethical and they need to be punished. For their crimes, their industry should be reregulated and be changed forever and they shouldn’t be allowed to make millions for making casino-like bets with your money. Money should be invested to build real value to the economy, not to make hedging bets on what goes up or what goes down.
The alternative, of course, is to rescue Main Street itself rather than Wall Street. Trickle-up, not trickle-down. The root cause of the toxic assets are the mortgage payments not being made by the paycheck-to-paycheck families who are getting whip-lashed by increasing adjustable-rates and squeezed by higher prices of food and gas. Instead, we’re about to hand $700 billion to the very same high risk speculators so that they can pull a one last big heist and stash their multi-million dollar gold parachutes in Swiss accounts before everything comes crashing down. This being trickle-out, of course.
Furthermore, the ones who are responsible are not being punished by more future regulation or the end of high stakes investment banking. They already got their millions and they’ll retire comfortably while the rest of America is royally fucked.
#21, it does not matter where Obama was born, since his mother was a U.S. citizen when he was born. That makes him a “natural born” United States citizen even if he were born outside the United States.
Regardless of his own family’s alleged confusion over where he was born, his state-issued birth certificate, which has been released, says he was born in Honolulu.
McCain, by the way, was born in Panama.
“I’m glad Rome fell. If Rome didn’t fall, Europe would be more like China.”
That’s a rather odd comment, and one that is not really possible to prove the truth of. I’m pretty sure, though, that if Rome hadn’t fallen, Boethius would have written a few more good books.
As for the barbarians preserving some of the Roman customs and learning, that’s true. But it’s equally true that they could never have originated all that themselves. To that extent, it’s incorrect to say that “Rome’s admirers, **rather than** Rome itself, carried the torch of Western Tradition.” Rome itself did carry the torch of the Western Tradition for a very long time prior to its demise.
I’d still take the Romans over the Vandals, and if I were forced to go back in time and live among either group, it wouldn’t be the latter, all their dynamism notwithstanding.
# 23,
A lot of inaccuracies there.
The $700B plan won’t just be handed over to the same people who may have gotten us in this mess. It will be used to buy debt at a much reduced price that will be enough to help the banks out, but will reduce the chances that we, the people, are over paying. We will not be buying these assets at market price, but as much below market price as possible. In 5 to 7 years, when markets stabilize and have some growth, the U.S. tax payers may even make out with some profit.
Oversight will of course be key. This isn’t an opportunity for Paulson to bailout his Wall Street friends. It is my understanding that an oversight committee will be formed that will be bipartisan and will have financial appointees that will be picked by both parties. It will be these people who will be responsible for making sure we get these debts at the right price.
Giving $700B to Main Street would be rather tough as well. Let’s face it, no one is coming out smelling like roses here. Sure, many in Wall Street packaged and repackaged these toxic sub prime debts to a point where it’s now weighing down the entire financial system, however, it’s a lot of people in Main Street who took on more debt then they could afford for a house they didn’t really deserve. All those loans with exotic structures such as negative amortization, 40 year term, first and second 100% financed, etc. People with modest means who decided to extend themselves in such a manner, are you saying they don’t share any of the blame either? So we give $700B to people who have those kinds of financial judgment skills? Are you crazy? If they get bailed out, than what about the rest of us hard working chaps who move heaven and earth to make our mortgage payments? Worse still, what kind of message does that give to working familes? Skip your mortgage payments and don’t worry, Uncle Sam will take care of it?
I know it’s hard for a lot of people to accept we need to do this, especially from people in Main Street who don’t really understand fully what’s going on and are understandabily bitter at how bad things have gotten.
However, there is one person in the financial industry that still has a measure of credibility with Main Street and that’s Warren Buffet. If you don’t trust the suits of Wall Street or the leaders in Washington, than perhaps people may still trust the “Wizard of Omaha.”
In an interview with Charle Rose:
Calling it an “economic Pearl Harbor, Warren Buffett, the world’s richest man, told Charlie Rose of PBS Wednesday evening that the full Congress must act quickly to restore confidence in America’s financial system, otherwise, the “cardiac arrest” caused by mortgages gone bad and a liquidity crisis that’s putting a tourniquet on credit lending for big banks and individuals and families, is real and needs to be stanched, before it boils over into a real modern-day Depression, with the only tool that can do the job: the financial clout and staying power of the US Government.
This whole thing reminds me of The Onion headline back when the Enron thing happened: “Americans Would Be Outraged at Enron Scandal If Only They Understood It”
Yeah, I know what you mean when you say that Main Street is just as responsible for creating the mess. There are many ordinary people who watched a bit too much Robert Kiyosaki “Rich Dad Poor Dad” seminars and went out and bought 3 or 4 homes as investments. But there are plenty of prudent ordinary folks who didn’t get carried away with get-rich-quick-and-easy scheme and they are just as equally in peril.
Now, given that both Main Street and Wall Street have both had a hand in creating the mess, the question sill remains, do we bail out Wall Street or Main Street? The provision for oversight in the bill are largely lip-service. Don’t tell me that a bunch of sleep-deprived legislators came up with a reassuring system of oversight in a matter of days. The bill itself contains lots of trojan horse legalese, such as giving extensive new powers to the IRS to track individual personal credit card transaction(!). Giving absolute power to Henry Paulson over the fate of the $700 billion slush fund is like basically giving Wall Street keys to the Treasury. After a couple of months, like a junkie addicted to crack, they’re gonna want another $700 billion. What is the incentive for Wall Street to get its act together as long as they could count on the Fed for a bailout while holding the rest of the economy hostage by threatening mutually-assured economic destruction? Like I said, its just another chance for the high rollers to milk the system for millions before they cash out and the investment banking industry as we know it comes to a close.
The real headline for what’s going on right now should be “Americans Would Be Pissed Off at the House Republicans If Only They Understood How Much of a Mess We Are In”
wow. amazing.
It is Bush and Bush’s man who said the bail out is necessary.
Strangely, Obama says the bail out is necessary.
Even stranger, no one is crediting Bush for doing the right thing.
Even stranger than that, WBuffet’s word is like God’s word, and Bush’s action gets no credit. I think it is Bush who went on National tv to promote it first.
Canadians have as much influence and right to input on the US economy as Mexicans do.
bum obviously never read SamGookJi.
there is no such phrase in it.
he’s confusing different Chinese folklore-history with totally different time frames.
Net Kim, Kiyosaki from the basics of his books says
Don’t buy a HOUSE! A House is debt.
Gimme a break.
However, there is one person in the financial industry that still has a measure of credibility with Main Street and that’s Warren Buffet. If you don’t trust the suits of Wall Street or the leaders in Washington, than perhaps people may still trust the “Wizard of Omaha.”
I’m sorry but Warren Buffet has completely lost his credibility during the past week due to the conflict of interest posed by his massive recent investments in Goldman Sachs and GE. He’s not interested in the fate of the nation. He’s worried about protecting his investments.
It will be used to buy debt at a much reduced price that will be enough to help the banks out, but will reduce the chances that we, the people, are over paying. We will not be buying these assets at market price, but as much below market price as possible. In 5 to 7 years, when markets stabilize and have some growth, the U.S. tax payers may even make out with some profit.
Absolutely no one knows how to price these instruments, these derivatives. No one. Certainly no one in the government, and most certainly not Congress. That’s why Bush agreed to give absolute control to Hank Paulson, a former Wall Street big-shot. The reasoning must have been, well he’s the Wall Street guy, let them figure it out. The opportunities for more fraud and corruption are rife with the bill as it stands.
Both Ron Paul and Ralph Nader are AGAINST the bailout. I’d rather put my trust in the opinion of people who stand OUTSIDE the system and don’t stand to gain or lose regardless of outcome.
So… you are trusting a mechanic to treat your gall badder infection?
Or…
You are trusting a doctor to fix your transmission?
Also…
Warren Buffet warned against derivatives back in 2003 and said they were financial “instuments of mass distruction” and “ticking time bombs.”
http://www.gurufocus.com/forum/read.php?1,35434
http://news.bbc.co.uk/2/hi/business/2817995.stm
Also…
Warren Buffet warned against derivatives back in 2003 and said they were financial “instuments of mass distruction” and “ticking time bombs.”
You are trusting a doctor to fix your transmission?
A urologist might know how to fix a stick.
Look Wangkon, I know what Buffet said in 2003. I was the one who mentioned it on this blog a few weeks ago.
Also, you work in the banking/finance industry from what I know. Surely you must realize that your personal opinion on the matter is not the most objective one.
Can the bailout succeed? by Paul Craig Roberts
http://www.counterpunch.org/roberts10022008.html
Yep… I’m in the financial industry, but no, what happens in Wall Street doesn’t directly impact me. However, given that I’m in the industry, maybe I have a better view of just how the shit’s going to hit the fan. Did you ever think about it that way?
Basically, what affects the leveraged buy-out business the most (my specific industry) is LIBOR, or the London Interbank Offered Rate, which is the rate that banks lend to each other. A high LIBOR means that I’m up shit’s creek and LIBOR is through the roof right now. However, that doesn’t mean I’m not in the same boat as a car dealer, a manufacturer’s rep, a worker at John Deere or Caterpillar or anyone else who’s livelihood depends on the free flow of capital to get high-ticketed items financed and bought. Let’s face it, if it’s over a few grand for consumers or several tens of thousands of dollars for a businesses, bank financing is going to be involved. You take that away and I don’t care who you are, pink slips will follow…
@ wjk
That’s what 왕해 tells 원술 in order to convince him to help 여포 out when 조조 and 유비 invaded 서주. This was right after he was trapped in 하비 because he was too retarded to attack 조조’s camp when they were still unsettled. Korean version would be something like 입술이 없으면 이가 시린다. 왕해 was saying that 원술 should help out despite his misgivings about 여포, because their interests were interlinked (since 조조’s next obvious target would be 원술). I thought it was an appropriate reference to this situation because though Main Street legitimately has a lot of grudge against Wall Street in this crisis, not helping Wall st. out because of that spite would only hurt Main st.
Looks like somebody read the cartoon version of 삼국지.
Oh, and sorry for going off topic.
Off topic request: Can anyone point me to a Korean cable channel that will be broadcasting the VP debate? I need to see the train wreck in full glory without resorting to channelsurfing.net.
And I mean other than foreign cable channels (CNN International, BBC World, AFN, etc.). I is currently has access to none of thems.
Look Wangkon, I know what Buffet said in 2003. I was the one who mentioned it on this blog a few weeks ago.
Don’t ask for a hat tip.
Wangkon, I see your point about the problems of Wall Street becoming the problems of Main Street.
But won’t a bailout now just encourage Wall Street (and whatever street is responsible for making bad loans etc.) to play fast and furious next time? What is there in the bailout package that discourages reckless behavior?
Can they limit the size of golden parachutes for firms that decide to take advantage of this package? Maybe give the boards and CEOs of those companies an incentive to try to find their own way out of this mess, but still provide a safety net for those who have no other choice.
I don’t want Uncle Sam’s money (which is my money) to be someone else’s just for the taking. This is starting to seem too much like a giveaway, when some of it may be completely unnecessary once the really bad players are stabilized.
A HT for a comment????…. U-81, that’s beyond lame…
bumfromkorea @43,
Hate doing this, but I’m afraid that was not the first occasion in which 순망치한 was used.
Source: Naver 지식In
(For the record, Naver 지식In should be used with extreme caution — it is NOT Wikipedia. But this account comports with my memory.)
(Oh, and I trust you already know 전국시대 ends with the unification by 한, which disintegrates in 삼국지.)
순망치한
《춘추좌씨전(春秋左氏傳)》희공 5년조에 나오는 말이다. 춘추시대 말엽(B.C. 655), 진(晉)나라 헌공은 괵나라를 공격할 야심을 품고 통과국인 우나라 우공에게 그곳을 지나도록 허락해줄 것을 요청했다. 우나라의 현인 궁지기(宮之寄)는 헌공의 속셈을 알고 우왕에게 간언했다. “괵나라와 우나라는 한몸이나 다름없는 사이오라 괵나라가 망하면 우나라도 망할 것이옵니다. 옛 속담에도 수레의 짐받이 판자와 수레는 서로 의지하고(輔車相依), 입술이 없어지면 이가 시리다(脣亡齒寒)고 했습니다. 이는 바로 괵나라와 우나라의 관계를 말한 것입니다. 결코 길을 빌려주어서는 안될 것입니다.” 그러나 뇌물에 눈이 어두워진 우왕은 “진과 우리는 동종(同宗) 의 나라인데 어찌 우리를 해칠 리가 있겠소?”라며 듣지 않았다. 궁지기는 후환이 두려워 “우리나라는 올해를 넘기지 못할 것이다.”라는 말을 남기고 가족과 함께 우나라를 떠났다. 진나라는 궁지기의 예견대로 12월에 괵나라를 정벌하고 돌아오는 길에 우나라도 정복하고 우왕을 사로잡았다.
Korean men have hard erections.
user-81 @48,
That’s a completely legitimately concern. Hopefully this New York Times article could speak to it? Link
@ 48 & 52,
That’s absolutely a legit concern.
However, provisions to fleece the fat cats, protect the vulnerable middle class, and rein in destructive speculation doesn’t necessarily have to be a part of this bill. It can be part of seperate legislation.
Seriously, if we think about it, I’m sure we can have a bailout package that makes 3/4′s of the House happy, but we wouldn’t have it ready for a vote until Christmas…
This is a spreading cancer… You got to start chemo while it’s a localized lump before it works it’s way to other parts of the body and your chances of curing it diminishes. I’d argue that back in the begining of summer, $250B would of done it… but since nothing was done back then, it’s just going to take more to get this resolved. In another two weeks the chances that $700B will help the economy will diminish and you may need a trillion or more!
pretty useless boasting to you superficials, but I read the real Bible King James, NIV, NASB end to end, the real ROTK, but I suppose you guys read the pictures Bibles and the cartoon ROTK’s.
children,
Matthew 18:4, in that case.
@theKorean
)
Oh, yeah, I know that wasn’t the first time the phrase was used… in fact, it’s most likely that Luo GuanZhong just made the conversation up (like many other things in 삼국지), and even if it was real, 왕해 would have been using a famous phrase from history to convince 원술. I was just saying that’s where I heard the phrase from and the phrase is actually in 삼국지, contrary to wjk’s claim. (lol… a lot of those phrases I got from 삼국지, actually, as opposed to the original sources
But, once again, sorry for the OT talks
I can’t stand Paulson/Bernanke, and all the other FREAKS trying to steal from the American tax payer. I don’t trust/believe a thing they say, let the cards fall I don’t give a shit, it’s better than giving 700 hundred Billion away to people who will/can only artificially fix things. The market will only straighten out when/if shit REALLY does hit the fan.
Just how the hell did they come up with that figure anyway, has anybody said, explained why? It’s as though they wiped their asses and saw that figure on the toilet paper afterwards.
“WangKon936″
The big banks/bankers who actually get the money(IF) who’s to say they don’t simply sit on it? At this point, they don’t care about “the car dealer, a manufacturer’s rep, a worker at John Deere/Caterpillar as much as their own position.
The venerable Martin Wolf:
“Where the hell is all this money going to come from?”
From the investors domestic and foreign. The US government will issue more IOU’s. But this time, they will have to offer a stiff intrest rate like 5% or so, to entice the investors. Any other short falls, they’ll just print up the balance. Oh, and keep in mind, it’s not really $700 billion. You have to add in the $592 billion the Fed and the Treasury already pumped into the economy prior to this bailout package. So the total so far is $1.29 trillion.
Second, there’s the interest expense on all the IOUs that will have to be issued. Let’s take the total so far, the $1.29 trillion. Apply a conservative 5% interest rate the US government is going to have to pay to borrow the money. That’s another $64 billion per year in interest expense costs. Compounded over 5 years, that’s over $350 billion. 10 years, $807 billion.
So where is all this money going to come from? Raising taxes is not an option, especially with the economy the way it is. The only option for the US, a massive currency devaluation. By inflating it away. By eventually raising asset prices fictitiously through inflation, through more smoke and mirrors, via an eventual massive dollar devaluation. The US government won’t do it. They don’t have to. The markets will do it on their own. The US dollar is toast.
Hey WangKon, that is 3 or 4 medical analogies in 2 days. Thinking of a career change? I am sure WJK will give you a reference and help you be what your parents really hoped you’d be.
They raised the FDIC insurance cap from $100,000 to $250,000. That should be enough to prevent a Great Depression style run on the banks, right? How many of you have more than a $250,000 in the bank?
Regardless of the bailout, trust is priceless and the SEC and Federal Reserve do not have enough to buy that back once it is gone and IMHO, it is gone.
It will still take time for the average person to feel this loss but that is still forthcoming. Now I am only worried about the foolish attempt to prop up the value of the Won by the Korean Government.
Let’s go back a few years…
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
http://tinyurl.com/3fpk37
Speaking of Clinton…
Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001. Instead of looking at “outdated criteria,” such as the mortgage applicant’s credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named “Caylee.”
Threatening lawsuits, Clinton’s Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn’t a joke — it’s a fact.
When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices. In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration’s affirmative action lending policies as one of the “hidden success stories” of the Clinton administration, saying that “black and Latino homeownership has surged to the highest level ever recorded.”
Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn’t get out of their loans by selling their houses. A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it’s gone off.
http://patriotpost.us/opinion/entry.asp?entry_id=47987
“Nomad”, that is only part of the recipe. The recipe is more like fruit cake than dough nut batter. There is also the deregulation party and massive lack of oversight on the part of the securities and exchange commission that fueled this extended orgy of ponzi-mania. Investment companies and others promoted this debacle as well and politicians found it to be a source of money for their politics as well.
Waiting at the end of all this recrimination lies the real question: who do you trust and why?
Very good points Nomad.
The average Fannie and Freddie loan profile was pretty toxic and goes WAY over what would be common sense…
Check out the two tables here:
http://www.aei.org/publications/pubID.28704/pub_detail.asp
FICO score of below 620 at 62%!!! Neg amortization loans at 72%!!! No wonder they both failed!
Very good points Nomad.
The average Fannie and Freddie loan profile was pretty toxic and goes WAY over what would be common sense…
Check out the two tables here.
FICO score of below 620 consisting of 62% of their portfolio!!! Neg amortization loans at 72%!!! No wonder they both failed!
Paul Krugman is a former MIT and Stanford economist (and current NYT columist) that I respect a lot. He was the only economist to have come close to predicting the East Asian Economic Crisis.
Today in his blog he says that we have “gone over the edge.”
The probability that the U.S. is now entering a recession (starting in the 4th quarter) is extremely high.
~ Oh, happy Friday everyone.
Paul Krugman is a former MIT and Stanford economist (and current NYT columist) that I respect a lot. He was the only economist to have come close to predicting the East Asian Economic Crisis.
Today in his blog he says that we have “gone over the edge.”
The probability that the U.S. is now entering a recession (starting in the 4th quarter) is extremely high.
~ Oh, happy Friday everyone.
Roboseyo….
The Won will stablize, go back to 1,000 to a dollar middle of 2009 or third quarter 2009. Sorry.
Translation of #63
Blame it on the Democrats and the minorities.
He even links an article written by Ann Coulter, no less.
I think you meant #65, sunshine – unless you’re talking to yourself.
Let me guess; you blame Bush, right? Granted, the man is an idiot but all this was put into motion way before he stumbled into the oval office.
And come on, you like Ann. She’s white, blonde…need I say more?
#73, I don’t blame Bush but the Ann Coulter piece trying to pin it all on Democrats because they supported home ownership for minorities and the poor is absurd. That doesn’t explain the push for adjustable-rate mortgages, the people making money flipping houses, the mixing up of bad mortgages in with the good so that investors wouldn’t know the risk they were buying.
And come on, you like Ann. She’s white, blonde…need I say more?
Ann Coulter looks like a man. I don’t think even Netizen “Jungle Fever” Kim would hit that.
@user81:
That stringy mane of bleached hair can’t feminize Coulter’s sheman face. You might be interested in this website I stumbled across a few weeks ago. The website owner appears to be a British man. I don’t agree with his ideas about race and beauty but share his views on the masculinized women of the fashion industry. Plenty of NSFW images in the section titled “Attractive Women.”
Plenty of NSFW images in the section titled “Attractive Women.”
Sonagi is the coolest straight chick ever!
Heterosexual women like looking at other women’s bodies but for a different reason than heterosexual men do. We ask ourselves, “Would I want to look like her?” while men ask themselves, “Would I want to have sex with her?”
Heterosexual women like looking at other women’s bodies but for a different reason than heterosexual men do.
I meant that you were a cool chick for supplying the men with NSFW images of hot women.
Let me guess; you blame Bush, right?
In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.
The rest can be read here in this Jan 2004 article:
http://www.usatoday.com/money/perfi/housing/2004-01-20-fha_x.htm
The truth of the matter is both the Bush and Clinton Administrations had a hand in the matter. They both jumped on the affirmation action lending bandwagon. Whether Republican or Democrat, everyone made mistakes.
I don’t blame Bush personally for the sub-prime mortgage crisis. I don’t blame the Clinton Administration for wanting to increase home-ownership among minorities. In fact, I think that’s a highly admirable goal. Homeownership instills a sense of responsibility.
But somehow the highly deregulated, wild wild west nature of the financial system corrupted these good intentions to the point where the poorest among us were criminally being charged exorbitant usury for wanting a stake in the American dream. Yes, maybe the minority buyers should have been more educated about what they were doing and maybe some of them didn’t even speak English. However, the lenders and everything all the way up to the Wall Street I-bankers knew exactly what they were doing, therefore the blame falls squarely on them.
Without the American dream, without the promise of upward mobility for all, the American experiment fails.
And no I don’t find Ann Coulter to be attractive.
You must log in to post a comment.
{ 1 trackback }