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#40167 - 09/26/08 06:39 PM Political Claptrap
alicex4 Offline
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What is with Pelosi, she won't bring Partisan legislation to the President to sign for this bailout? Now the Dems need the Republican house minority to be on the bill? Since when does the majority party of both houses need minority approval to pass an allegedly great bill, that is desperately needed, in this supposed dire bailout? The bailout sucks! The Dems are too cowardly to take the heat alone. According to Lindsey Graham 20% of the $ is not going to debt relief it is going to ACORN! Follow the money. Why is Chris (I got a no interest loan from Countrywide mortgage) even on this committee? Republicans Pence, Blunt, et. al. should schedule a press conference and discuss why this legislation sucks.

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#40169 - 09/26/08 07:57 PM Re: Political Claptrap [Re: alicex4]
mworking Offline
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Registered: 05/26/04
Posts: 764
 Originally Posted By: alicex4
What is with Pelosi, she won't bring Partisan legislation to the President to sign for this bailout? Now the Dems need the Republican house minority to be on the bill? Since when does the majority party of both houses need minority approval to pass an allegedly great bill, that is desperately needed, in this supposed dire bailout? The bailout sucks! The Dems are too cowardly to take the heat alone. According to Lindsey Graham 20% of the $ is not going to debt relief it is going to ACORN! Follow the money. Why is Chris (I got a no interest loan from Countrywide mortgage) even on this committee? Republicans Pence, Blunt, et. al. should schedule a press conference and discuss why this legislation sucks.


I was unaware that the "Dems" asked specifically for this bill more than anyone else
I am aware that the president and his officials and advisers are begging for this bill.
The bill is not a great bill. It doesn’t guarantee any outcome and no one can.
The bill is not a great bill. It does put a vast amount of taxpayer money at risk.
There has been wise bipartisan support and action to slow things up, limit CEO and other officer salaries, and to dole out the funds a portion at a time if at all.

I have heard the “Dems” don’t remember who specifically say they will not pass this bill on their own because it may well not be any good and they don’t want to take the blame for passing it alone. This is honesty and if there isn’t enough support for it shouldn’t be passed

So again:

 Quote:
Now the Dems need the Republican house minority to be on the bill?


Absolutely!

 Quote:
an allegedly great bill, that is desperately needed


Great word allegedly. The guys saying the economy was strong yesterday now say there is an economic emergency. They are dishonest, or incompetent or both and shouldn’t be trusted either way.

 Quote:
The bailout sucks!


Yes it does!

 Quote:
Republicans … should schedule a press conference and discuss why this legislation sucks


Republicans and Democrats have both said something like this.


Edited by mworking (09/26/08 08:28 PM)

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#40170 - 09/26/08 08:16 PM Re: Political Claptrap [Re: mworking]
Mike Rawdon Offline

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Taxpayer money "at risk", my ass. It's gone for good. Chance of it coming back = 0.

What I don't understand - if default on mortgages is the source of this mess, than the banks involved now own hundreds of thousands of houses. I mean, it's not like the payments aren't made so the bank ends up with bupkiss; they get the freakin' house! Those are ASSETS. Is all that value being accounted for? Who gets to keep the houses after the USofA pays these banks indebtedness? I think we should hold a raffle...give the properties away to the folks paying for the bailout.

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#40174 - 09/27/08 01:07 AM Re: Political Claptrap [Re: Mike Rawdon]
Dillbag Offline
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Registered: 05/02/06
Posts: 1130
Loc: "The Town"
Ummm... yeah... that's exactly how it all works! You've got a great solution...

WTF?
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#40181 - 09/27/08 02:53 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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Registered: 05/23/01
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 Originally Posted By: alicex4
What is with Pelosi, she won't bring Partisan legislation to the President to sign for this bailout? Now the Dems need the Republican house minority to be on the bill?


Yes, it needs bipartisan support. Some kind of bailout is necessary to keep the economy from total collapse, and it looks like the markets won't wait much past the weekend. But to most people, it looks like taking money from the public to give it to big Wall Street institutions--which it is, but people don't realize that they may suffer through years of recession if we don't do it. So public opinion is running against it,even though most of them will end up far worse off if we do nothing.

In such a situation, if Democrats to the unpopular but necessary thing, it would be easy for Republicans to take the other side and let the Democrats take all the political heat. No Democratic politician would sensibly allow that, especially going into an election. If it's really necessary to do this bailout, then both parties have to be willing to do the necessary but unpopular thing, or it won't pass. Yes, Democrats are unwilling to take the heat alone, because no one party should have to do so.

And you have the debt relief/ACORN part wrong. The bill doesn't put 20% of the bailout funds to anyone (and 20% of $700 billion to any organization would be a patently ridiculous number on its face). It says that 20% of any profits from the sale of any government-purchased asset will go to the Housing Trust Fund. There may be no overall profits to be had; most people think that we'll be fortunate if we break even. So the overall profits from the assets sold at greater than cost will likely be relatively small, and 20% of that number is smaller still.

Second, the Housing Trust Fund are funds that cities and states create to support affordable housing. I've tried to do a little research and while some conservative web sites have cited the funds as a "boondoggle" for Acorn and La Raza, I haven't found any independent data to support the allegation. Moreover, even if some of the money--if there is any profit to be had--goes to some of these organizations, there's no indication as to how much it would be. I'd bet they're not the only organizations working on affordable housing, and I've found no numbers indicating how much Acorn would receive.

If research bears out the allegation, then fine. But the "20% of the bailout" figure is flat out incorrect. I think the wildness of the accusation calls for a little investigation before assuming its truth.

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#40182 - 09/27/08 03:05 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
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Registered: 05/26/04
Posts: 764
 Originally Posted By: Daniel
...
If research bears out the allegation, then fine. But the "20% of the bailout" figure is flat out incorrect. I think the wildness of the accusation calls for a little investigation before assuming its truth.


True but if you listen and believe Fox, then you'll end up believing all kinds of things that aren't true.

Again:
The bill is not a great bill.
It doesn’t guarantee any outcome and no one can.
It does put a vast amount of taxpayer money at risk.

True but if you listen and believe Fox, then you'll end up believing all kinds of things that aren't true.

Again:
The bill is not a great bill.
It doesn’t guarantee any outcome and no one can.
It does put a vast amount of taxpayer money at risk.

Added:
No one knows what will happen if this bill is passed.
No one knows what will happen if this bill is not passed.

The sad thing is that neither Obama or McCain can say that and expect to be elected. They are expected to snap their fingers and miraculously fix years debt accrual and mismanagement of or economy.



Edited by mworking (09/27/08 05:54 PM)

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#40183 - 09/27/08 06:15 PM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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Thanks for the clarification of the percentage of funds to be to "affordable housing" although why ACORN should receive any funds is a mystery to me. Aren't they still being investigated for voter fraud in Ohio?
So I guess all the hoopla about this Congress being a leadership Congress is crap. No open debate, no document review, closed door back room meetings, public lies... Just 9 days ago Reid said "no one knows what to do" but now he knows exactly what to do only he can't make anything public. Why do you believe anything this bunch says? It is the foxes guarding the chicken coop.

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#40185 - 09/27/08 07:02 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
Thanks for the clarification of the percentage of funds to be to "affordable housing" although why ACORN should receive any funds is a mystery to me. Aren't they still being investigated for voter fraud in Ohio?


Can't speak to the Ohio situation. I believe they do good work elsewhere. I'm not going to say all corporations are bad based on Enron. And again, the connection between ACORN and the Housing Trust Fund is not clear to me. Perhaps they are one among many organizations that are involved with affordable housing. I doubt any of the funds go directly to the organizations, but I could be wrong.

 Originally Posted By: alicex4
So I guess all the hoopla about this Congress being a leadership Congress is crap. No open debate, no document review, closed door back room meetings, public lies... Just 9 days ago Reid said "no one knows what to do" but now he knows exactly what to do only he can't make anything public. Why do you believe anything this bunch says? It is the foxes guarding the chicken coop.


There's simply no time for extended hearings. As I wrote above, the markets are on the verge of collapse. Joe Nocera writes in today's NY Times: "If the country had more time, I would argue that we put ideas like that [one put forward by Andrew Feldstein of Blue Mountain Capital Management] into the sunlight and see if they flower. But we don't have any more time. Nine days ago, the financial markets were staring into the abyss; the only thing that pulled them back was the news that the Treasury and the Federal Reserve had come up with a bailout plan. And the only thing that kept them from falling back is the expectation that the plan will be approved quickly."

"Leadership" is a two way street. We can't expect our elected representatives to exhibit "leadership" by voting against their constituents' wishes because then they'll just be voted out of office. The system is designed so that we, the voters, are ultimately the ones accountable, and we can't expect our representatives to make hard decisions unless we're willing to make hard decisions. And today, too many of us seem to expect our representatives to work miracles and threaten to vote them out when they can't meet our unrealistic expectations. That kind of politics is unsustainable.

And I don't think it's foxes guarding the hen house at all. Lots of these people in Congress could be making a lot more money elsewhere. Most of them have no personal stake in the terms of the bailout. I think most of them are doing the best they can in a difficult situation. I don't think Reid says he knows exactly what to do. And anyone who has been involved in negotiations knows that making intermediate stages public can blow up a deal.

I just don't see the picture of those serving in Congress rubbing their hands together and talking with each other about "how can we screw the taxpayers today?" Some of them have honest differences of opinion, and some are sometimes too blinded by ideology. It's easy to assume the worst, but I see little to back it up.

And if we're concerned about the influence of big money on politics, then the solution (as I've said before) is to support candidates and organizations that push for public campaign financing of elections. I've talked to numerous people in Congress and have heard a lot of support for it; perhaps with more discussion and more public support, it will eventually happen.

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#40189 - 09/27/08 10:15 PM Re: Political Claptrap [Re: Daniel]
oenophore Offline
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There's simply no time for extended hearings. As I wrote above, the markets are on the verge of collapse.

There are quite a few with excellent credentials saying so and just as many it seems saying quite the opposite. So semi-ignorant laymen like me consult their unreliable gut as it were. What else can we do?
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#40190 - 09/27/08 11:20 PM Re: Political Claptrap [Re: oenophore]
Daniel Online   content
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Posts: 1515
 Originally Posted By: oenophore
There are quite a few with excellent credentials saying so and just as many it seems saying quite the opposite.


I've heard a few saying the opposite, but not nearly as many. I admit I don't have inside information, but I don't think the columnists I read have an ideological agenda.

And we all saw what the markets did until people thought Congress had a plan in place.

And if the Democrats think it's urgent to act...well, let's just say they're not exactly the party of "let's bail out Wall Street on a whim!"

It's possible that most of us are wrong. (Heck, there are still true libertarians out there saying we should just let the market deal with it.) But I don't think that's a risk most of us want to take.

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#40192 - 09/28/08 01:12 AM Re: Political Claptrap [Re: Daniel]
Smike Offline
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 Quote:
"There's simply no time for extended hearings. As I wrote above, the markets are on the verge of collapse"


Agree with that statement.

 Quote:
"Leadership" is a two way street. We can't expect our elected representatives to exhibit "leadership" by voting against their constituents' wishes because then they'll just be voted out of office."


What is needed right now is someone to "lead" and not wait for Americans to wake up to what could happen with out action. Henry Paulson is sticking his balls out there and stating it point blank. Hes the best chance we have. Nancy Pelosi on the other hand needs to step down (as I've stated before) She is the one that could in her position rise above all this and make an historical move and unite parties to save this country. Even if she loses her seat, if she were to stand up and make the right choice she could at least die later in life knowing she did someone great for her country. (Few if any politicians see the big picture anymore)

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#40193 - 09/28/08 02:01 AM Re: Political Claptrap [Re: Smike]
Mike Rawdon Offline

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Registered: 11/29/99
Posts: 4276
Loc: Poughkeepsie
 Originally Posted By: Smike
... she could at least die later in life knowing she did someone great for her country.


So could Monica L.

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#40194 - 09/28/08 04:35 AM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: Smike
Henry Paulson is sticking his balls out there and stating it point blank. Hes the best chance we have. Nancy Pelosi on the other hand needs to step down (as I've stated before) She is the one that could in her position rise above all this and make an historical move and unite parties to save this country.


I think Pelosi is doing what she can. It's not about putting her seat at risk; it's about getting enough votes. Paulson has the luxury of being an appointed official and being able to make proposals and decisions that are not dependent on others. Pelosi has neither of those. According to her statements and statements by House Finance Committee Chairman Barny Frank, if House Republicans don't join in then there will not be enough Democratic votes to pass the legislation. She can't force Democratic members to vote the way she wants (witness the recent vote on offshore oil drilling, where she had to cave), and some of them won't take the responsibility for unpopular legislation unless at least some members of the opposition do the same. She doesn't have all-powerful control over her members, and if it comes down to saving their own skins, House members will do what's in their own interests before doing what their party leader wants them to do. So some Republican members may have to join in to get Democratic votes regardless of what Pelosi does. And since she can't make the Republicans do it, that's why they're back at the bargaining table.

It's not easy corralling over 200 individuals over something that's probably somewhat to very unpopular in most of their districts. It's like herding cats, and I'm amazed sometimes that anything gets passed.

Not that I'm an expert in this field, but I have to say I don't understand how the Republican proposal for a Wall Street financed insurance fund restores liquidity to the credit markets, which is the immediate problem. Nor do I see how they can object to the cost of the bailout and then propose more capital gains tax cuts which will also be unpaid for (and very little of which would to to Main Street). One can read this exchange between Frank and Congressman Mike Pence and reach one's own conclusions. But to me, the Republican proposal sounds like it's trapped in the ideology that the solution to every problem is a tax cut.

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#40196 - 09/28/08 02:18 PM Re: Political Claptrap [Re: Daniel]
Smike Offline
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Pelosi has been a reactionary leader. (Hard to the use word 'leader' after reactionary.) Its not that she needs to force 200 people to see her way, its that in this time in history that great leaders are born and rise to inspire hope and movement and make hard choices for the future. (She has done nether)

I guess my disappointment lies in looking back at other historical moments in history and some of the people that helped lead this country through those moments, and seeing the same old political crap and bickering now.

We need a leader that makes us all proud to be an American again.

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#40197 - 09/28/08 07:36 PM Re: Political Claptrap [Re: Smike]
mworking Offline
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Registered: 05/26/04
Posts: 764
1/2 the US already has one no? He’s the president.

Went to buy furniture today, passed Carrabas part of an Italian chain for the second time and confirmed it really is closed.

We'd been looking at Oscar Huber's flagship store near AC. The staff had been informed last week that OH had filed chapter 11. Our salesman was in tears. The manager was still in shock - you could tell. A real crash will affect everyone.

Still, I'm not completely convinced the sky is falling - um yet. But, if it is I'll wager the bailout does not work for more than 12 months tops.

Seems to me the US has been living far beyond its means in many many ways for quite a while. I don't think there's a silver bullet that’s going to fix that - unless the rest of the world wants to bail us out it's going to be tough at some point.

I think not good news any way you look at this.

Guess I think we do need to make some hard choices – but a bailout might not be one of them.


Edited by mworking (09/28/08 07:54 PM)

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#40198 - 09/28/08 08:01 PM Re: Political Claptrap [Re: mworking]
mworking Offline
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Registered: 05/26/04
Posts: 764
Hey - let privatise Social Secuity! It's easy and it won't require any regulation or anything.

Bailout from, the peole who brought us a STONG ECONOMY by way of less regulation yesterday

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#40199 - 09/28/08 09:30 PM Re: Political Claptrap [Re: mworking]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: mworking
I'll wager the bailout does not work for more than 12 months tops.


What do you mean by "work"?

I don't think anyone pretends that we're not in for tough economic times. But just because the economy slows down and it's tougher to get a job won't mean that the bailout didn't "work." The choice is between bad and worse. Some people think it's between having a bad economy and essentially no economy.

If the credit markets seize up, then we'll know that the bailout didn't work. We'll never know how much worse things would be without the bailout, but people who know something about the issue seem very, very scared about the consequences of government inaction and just letting "the market" sort it out.

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#40200 - 09/28/08 09:50 PM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: Smike
Pelosi has been a reactionary leader. (Hard to the use word 'leader' after reactionary.) Its not that she needs to force 200 people to see her way, its that in this time in history that great leaders are born and rise to inspire hope and movement and make hard choices for the future. (She has done nether)


I can't think of a period in history where the Speaker of the House led the nation out of a crisis. I can barely think of an instance where the Speaker focused the public on any particular important issue. Maybe a few times a few Senators have risen to the occasion. But the place most people look to for leadership is the president, not the legislature. And our system just seems ill-designed to fill a leadership gap when the president is unwilling or incapable of rallying the public.

I'd bet a substantial portion of the public can't even name the Speaker of the House, much less have any understanding of the current risk to the national economy. Nor is there any time to educate people on the crisis even if they were interested (which, I'd guess, many are not).

The priority was to get a deal done. It appears to be done (again). Given that the Speaker's position does not appear to be one that lends itself to national "leadership" capacity and the urgency of just getting a solution, it seems to me that she's done what was needed in a difficult time, as have many of her colleagues of both parties. I think it's hard to do or expect much more than that, especially when power is so divided not only between the executive and legislative branches but within the legislature.

Sure, I would have liked more lofty rhetoric and an appeal to our sense of the common good. (And though there were some partisan attacks, there was also a lot of talk about bipartisanship.) But given the difficulty of the situation, I'm impressed that a deal has gotten done and done quickly (assuming it doesn't fall apart again).

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#40204 - 09/29/08 02:16 AM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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Do the SS IOU's in the treasury come before these Wall Street IOU's? Which politician will explain this to America? Now way can each politician give tax cuts and elaborate govt. programs with the debt as it is now. "Momma may have and Poppa may have, but God bless the child that's got his own." You better have your own back, govt. is waaay over extended at this point.

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#40205 - 09/29/08 04:06 AM Re: Political Claptrap [Re: alicex4]
alicex4 Offline
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Read the bill while watching the Eagles Lose, no oversight until 60 days after the first transaction? What oversight is this? Looks like Paulson is decision king still. Very disappointing. MMMMMmmmmm.

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#40206 - 09/29/08 10:19 AM Re: Political Claptrap [Re: alicex4]
oenophore Offline
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 Originally Posted By: alicex4
Do the SS IOU's in the treasury come before these Wall Street IOU's? Which politician will explain this to America? Now way can each politician give tax cuts and elaborate govt. programs with the debt as it is now. "Momma may have and Poppa may have, but God bless the child that's got his own." You better have your own back, govt. is waaay over extended at this point.
This is hefty rationale for a sizable federal tax increase.
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#40207 - 09/29/08 12:55 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
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Registered: 05/26/04
Posts: 764
 Originally Posted By: Daniel
 Originally Posted By: mworking
I'll wager the bailout does not work for more than 12 months tops.


What do you mean by "work"?...The choice is between bad and worse. Some people think it's between having a bad economy and essentially no economy...If the credit markets seize up, then we'll know that the bailout didn't work. We'll never know how much worse things would be without the bailout, but people who know something about the issue seem very, very scared about the consequences of government inaction and just letting "the market" sort it out.


I agree Daniel,

But it bothers me that this is exactly like the decision to go into Iraq. My gut said no then, but I was willing to let “those in the know” meaning GW as well as others make the call – despite the fact that I didn’t trust his/their judgment, or honesty, and the fact that disagreed with him on most everything else.

My gut says no now too – but I'd like to think they know more than me, and are at least going on an educated guess – which is all I think they are going now.

Added:
 Originally Posted By: Daniel
But given the difficulty of the situation, I'm impressed that a deal has gotten done and done quickly (assuming it doesn't fall apart again).


I am more scared than impressed. As I understand it the bill is still essentially the GW Paulson bill. I am not surprised that GW has once again successfully used scare tactics to gain almost absolute control over something. In time this may well look like GW’s exit present to the big business world to many of us. Supporters I am sure will claim he saved our economy.


Edited by mworking (09/29/08 01:28 PM)

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#40211 - 09/29/08 02:46 PM Re: Political Claptrap [Re: mworking]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: mworking
it bothers me that this is exactly like the decision to go into Iraq....

I am more scared than impressed. As I understand it the bill is still essentially the GW Paulson bill. I am not surprised that GW has once again successfully used scare tactics to gain almost absolute control over something.


I don't think so. The Paulson plan was three pages long had no oversight. The proposed bill is over 100 pages. The Paulson plan gave taxpayers no equity stake in participating banks. The proposed bill does.

The plan does give the Treasury Secretary a lot of discretion over pricing the securities and acquiring equity stakes. Since no one knows what these things are worth, I'm not sure there's a good way around that problem.

But even with that discretion, there is a fair amount of oversight. According to Floyd Norris in today's NY Times, "This bill requires frequent reports to Congressional committees, including a Congressional oversight panel; audits by the comptroller general; and appointment of an inspector general for the program." So there is a lot of power given to the Treasurer, but with a degree of transparency and oversight.

Congress can't simply set prices here and expect the thing to have a chance of working. So the outcome seems like a reasonable compromise to me. It's understandable to be skeptical of an administration that has been so wrong in the past. But we do have a Congress which has been burned in the past and is not exactly politically inclined to bail out the Wall Street barons. There are countervailing forces at work here to provide some control over the process.

Oh, and alicex4? Looks like the Housing Trust Fund provision which would have provided affordable housing funds to community service groups was dropped from the final bill. (It's interesting that ACORN has become such bugaboo for conservatives. Seems to me that alleged improper actions by a few affiliates are being used to tar the entire organization--kind of like saying because Senator Ted Stevens was indicted, everyone in the Senate is corrupt. But as far as this bill is concerned, the issue is moot.)

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#40223 - 09/29/08 05:24 PM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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I read the bill last night Daniel, while watching the Eagles blow it. Oversight my ass, it is still the Paulson Me me me bill. Oversight doesn't even begin until 60 days after the first transaction occurs. A panel will report to Congress on a regular monthly basis, which puts the first oversight one business quarter after the first transaction. That is no oversight. Given that these politicians got us into this mess, and nothing in this bailout removes the bad paper debt, how does this plan do anything positive for the market? I have written Congress and called demanding a no vote on this. Hopefully there will be leadership in House Republicans.

Also, what's the option if/when THIS bailout fails? How big is the next one, because that's where it's going to go. Wake up America.


Edited by alicex4 (09/29/08 05:26 PM)

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#40226 - 09/29/08 05:43 PM Re: Political Claptrap [Re: alicex4]
Smike Offline
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"Wake up America"

Should be wake up world. Which it did today. (in a very bad way) The accelerated speed at which the world markets are falling is unprecedented and out right scary. The world markets need to know there is some kind of bottom to this. This is no longer a US thing.

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#40227 - 09/29/08 05:46 PM Re: Political Claptrap [Re: Smike]
strat Offline
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I emailed Hillary, Chuck, and Maurice and said STOP THE BS. ACT NOW. Hopefully they listen.

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#40228 - 09/29/08 05:52 PM Re: Political Claptrap [Re: Smike]
alicex4 Offline
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It ceased being a US thing when Fannie Mae and Freddie Mac bundled these crap loans into securities that were sold abroad.

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#40230 - 09/29/08 06:01 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: alicex4
Oversight my ass, it is still the Paulson Me me me bill. Oversight doesn't even begin until 60 days after the first transaction occurs. A panel will report to Congress on a regular monthly basis, which puts the first oversight one business quarter after the first transaction. That is no oversight.


I think it is. Those making these transactions do so knowing that they will see the light of day and be subjected to public scrutiny. That puts at least some pressure on the Treasury officials when they make the deals. And frankly I don't see much in the way of alternatives; it's just not feasible to have Congress signing off on every transaction, especially as the markets fluctuate. Unless you're willing to suggest an alternative?

 Originally Posted By: alicex4
Given that these politicians got us into this mess, and nothing in this bailout removes the bad paper debt, how does this plan do anything positive for the market?


It does remove bad debt; more importantly, it buys up the uncertainties. It buys up the mortgage-backed securities, which are likely undervalued because no one can really figure out how good they are (which is why we're going to pay somewhere between market value and hold-to-maturity value on them). When the financial companies get rid of these securities which are dragging down their balance sheets, they'll be able to lend more readily because they'll have more capital.

 Originally Posted By: alicex4
I have written Congress and called demanding a no vote on this. Hopefully there will be leadership in House Republicans.


Hope you've got an alternative in place that can pass in the next few days, then. Because things can get really bad, really fast, for a really long time. What's your suggestion?

 Originally Posted By: alicex4
Also, what's the option if/when THIS bailout fails? How big is the next one, because that's where it's going to go. Wake up America.


Yup, it may not work. But better wake up to the fact that if we don't do something, we're almost certainly in for some terrible times ahead. Our choices are between bad and worse, so saying "this might be bad" is not a good way of making the decision. One has to consider the possible alternatives and pick the best of the bunch, even if the best still isn't very good.

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#40233 - 09/29/08 06:23 PM Re: Political Claptrap [Re: Daniel]
Smike Offline
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Oh shit. Bailout plan was just rejected by the House of Reps. All bets are off, god speed America.


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#40235 - 09/29/08 06:33 PM Re: Political Claptrap [Re: Smike]
alicex4 Offline
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CSPAN is fun to watch today. Look out for some midnight Amendment that might yet pass this giant turd of a bill.

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#40236 - 09/29/08 06:49 PM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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 Originally Posted By: Smike
Oh shit. Bailout plan was just rejected by the House of Reps. All bets are off, god speed America.


Quotes like this one are examples of how ideology has blinded people to facts. According to the NY Times piece on the no vote, "Early in the House debate, Jeb Hensarling, Republican of Texas, said he intended to vote against the package, which he said would put the nation on 'the slippery slope to socialism.' He said that he was afraid that it ultimately would not work, leaving the taxpayers responsible for 'the mother of all debt.'"

First of all, it's not anywhere close to a slippery slope to socialism; it's the way just about every major financial problem has been solved. The government buys the bad debts (sometimes acquiring an equity stake), holds them until the economy recovers, and sells them (along with the equity stake). The government is buying these things to restore confidence in the credit markets, not because we want to socialize businesses. The assertion that this process is "socialism" is flatly wrong on the facts and not borne out by history.

Second, he's right that it may not work. But that's no reason for voting "no" if voting "no" will likely leave us even worse off. Saying "I don't like it" doesn't mean there's a better alternative. Voting no because the proposal might not work is simply irresponsible, because most people say that doing nothing definitely won't work.

The NY Times piece says there's a revote planned. I wonder what the naysayers would have to get to change their minds. You'd think that the past seven years would have taught people that when facts conflict with ideology, you should adjust the ideology instead of throwing out the facts. But some people's adherence to "principle" in the face of what most people think is an overwhelming reality may wind up dragging all of us down, perhaps with the rest of the world in tow.
__________

Here's another quote: "Representative Darrell Issa, a Republican, said he was 'resolute' in his opposition to the measure because it would betray party principles and amount to 'a coffin on top of Ronald Reagan’s coffin.'"

Yeah, stick to party principles when the economy is on the brink. Better to preserve principles than avert disaster. Brilliant. (And never mind that Reagan had no problem running up tons and tons of debt, so Issa is wrong on the facts to boot.)


Edited by Daniel (09/29/08 06:54 PM)
Edit Reason: added last quote

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#40237 - 09/29/08 06:50 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
Look out for some midnight Amendment that might yet pass this giant turd of a bill.


And the suggested alternative is...what, exactly?

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#40238 - 09/29/08 06:56 PM Re: Political Claptrap [Re: Daniel]
Smike Offline
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 Originally Posted By: Daniel
 Originally Posted By: Smike
Oh shit. Bailout plan was just rejected by the House of Reps. All bets are off, god speed America.


Quotes like this one are examples of how ideology has blinded people to facts.


Certainly don't take my word on it, just watch the world markets (and our own). They facts speak for themselves. They show these are historic times.

Bailout sucks
World financial uncertainly sucks even more.

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#40241 - 09/29/08 07:05 PM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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Let gravity take effect. The markets will slough off their bad debt. It is not the government's job to be a market regulator. As an advocate of "affordable housing" the government has, for it's part, enabled this debacle to occur. Time for tough love. You can't deny market reality, as much as you might want to regulate the decline. No one even mentions the obvious inflationary bent this legislation is empowering. You can't wish a crappy situation better. You can only face the inevitable music with intelligence and grace. Both of these qualities are sorely lacking in govt.

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#40243 - 09/29/08 07:12 PM Re: Political Claptrap [Re: Daniel]
Smike Offline
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 Originally Posted By: Daniel


First of all, it's not anywhere close to a slippery slope to socialism; " is flatly wrong on the facts and not borne out by history.


Never said anything remotely close to that, I'm taking about a economic crisis, not socialism

 Originally Posted By: Daniel

…because most people say that doing nothing definitely won't work.


Don’t worry if we do nothing, it will be clear.

I hope I’m dead wrong on all accounts and vomit from all the crow I would eat.

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#40245 - 09/29/08 07:28 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
Let gravity take effect. The markets will slough off their bad debt. It is not the government's job to be a market regulator.


No one is trying to "regulate the market." The plan is just to keep the credit markets from seizing up. The market would then take its course from there.

 Originally Posted By: alicex4
As an advocate of "affordable housing" the government has, for it's part, enabled this debacle to occur.


That may be true. But it has nothing to do as to whether this plan will or will not help the situation.

 Originally Posted By: alicex4
No one even mentions the obvious inflationary bent this legislation is empowering.


Sure people are. That may be why the US stock markets opened down today in spite of the prospect of an agreement. But the prospective inflationary effects still don't answer the question as to whether we're better or worse off without the bailout.

 Originally Posted By: alicex4
You can't wish a crappy situation better. You can only face the inevitable music with intelligence and grace. Both of these qualities are sorely lacking in govt.


We've seen the consequences of government inaction before. It was called the Great Depression. By contrast, we muddled through the S&L crisis moderately well. Most people think if government hadn't acted then, the outcome would have been far worse.

Yes, "the market" would eventually sort things out on its own. The question is how much carnage would be produced in the process and how long it would take for the economy to pick up again. We have a free market administration advocating intervention. We have Democrats who are distinctly disinclined towards bailing out Wall Street mostly supporting bailing out Wall Street. I think that these folks are so willing to vote against their supposed "principles" shows that they believe action is necessary to keep all of us from suffering longer and more deeply than we otherwise would. It's the ideologues (on both sides) that seem to want to reprise the hands-off scenario of the late 1920s.

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#40246 - 09/29/08 07:32 PM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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 Originally Posted By: Smike
 Originally Posted By: Daniel


First of all, it's not anywhere close to a slippery slope to socialism; " is flatly wrong on the facts and not borne out by history.


Never said anything remotely close to that, I'm taking about a economic crisis, not socialism


Smike, my "this quote" line was not intended to refer to you, but to the subsequent statement by Representative Ted Hensnarling. Sorry that wasn't clear.

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#40252 - 09/29/08 09:17 PM Re: Political Claptrap [Re: Daniel]
Smike Offline
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Holly crap, what the hell did Pelosi say just before the House vote? Apparently is was very partisan and political in nature and it motivated some votes to turn against the bill.

Daniel you are crazy if you make any more excuse's for this person. If the above is true, that is unbelievable. So far all I can get my hands on is the video of her speech after the failed vote were she turned face on what was said was earlier.

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#40253 - 09/29/08 09:41 PM Re: Political Claptrap [Re: Smike]
pedestrian Offline
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I'm not sure the government was inactive during the Great Depression. If I remember correctly, the Fed apparently provided some liquidity as far as it could but its hands were tied by gold standard laws that mandated limits on the credit it could issue based on its gold reserves.

Some historical studies showed that (a) in the aftermath, every major world currency abandoned the gold standard and was floated; (b) the speed with which each country did so was a reliable predictor of its subsequent economic recovery. There I go, quoting wikipedia again...

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#40254 - 09/29/08 10:03 PM Re: Political Claptrap [Re: pedestrian]
oenophore Offline
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If I may be allowed some flippant levity:

Whee – this is as exciting and suspenseful as the presidential election itself!
_________________________

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#40255 - 09/29/08 11:20 PM Re: Political Claptrap [Re: oenophore]
alicex4 Offline
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"Somebody has to do something, and it's just incredibly pathetic that it has to be us."
Jerry Garcia.

Prime maniacal risibility, it just doesn't get any better than this if you are a Lit major.

On the plus side, makes a market tank of 200-300 look easy by comparison.


Edited by alicex4 (09/29/08 11:21 PM)

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#40257 - 09/30/08 01:22 AM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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 Originally Posted By: Smike
Holly crap, what the hell did Pelosi say just before the House vote? Apparently is was very partisan and political in nature and it motivated some votes to turn against the bill.

Daniel you are crazy if you make any more excuse's for this person. If the above is true, that is unbelievable.


I'm not excusing Pelosi for what she said (though I confess I haven't heard/read it yet). But I think it's ridiculous for our elected representatives who would otherwise have voted "yes" to put the economic future of the nation at stake because of what one of their colleagues said on the floor. Many of them probably have said worse things just to get elected in the first place. Are they really that thin-skinned?

If they care about the country, they could have denounced Pelosi's remarks and voted yes. Anyone who changed his/her vote because of her remarks doesn't belong in Congress.
___________

OK, I found a transcript of Pelosi's floor speech. She criticizes Bush for his economic policies and some, but not all, Republicans for going along with him. It's a pretty small portion of her remarks. She also talks about the bipartisan cooperation that produced the compromise.

Again, maybe she shouldn't have been critical at all. But anyone whose vote changed as a result of that speech shouldn't be taken seriously in any political context ever again. You folks can read the speech for yourselves and ask if you would have been so craven as to change your vote as a result. It's pretty mild compared to the attack ads flying around these days.

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#40258 - 09/30/08 01:42 AM Re: Political Claptrap [Re: alicex4]
Smike Offline
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 Originally Posted By: alicex4
Let gravity take effect. The markets will slough off their bad debt. It is not the government's job to be a market regulator. As an advocate of "affordable housing" the government has, for it's part, enabled this debacle to occur. Time for tough love. You can't deny market reality, as much as you might want to regulate the decline. No one even mentions the obvious inflationary bent this legislation is empowering. You can't wish a crappy situation better. You can only face the inevitable music with intelligence and grace. Both of these qualities are sorely lacking in govt.


It pains me to hear this as those comments are echoed by so many 'main st' people right now. The system is f-ed-up. Right now the credit markets are frozen, doesn't matter who or how, but there they are.

Try to get a student loan right now.
Try to get an auto loan without a credit score of 700
Try to get a mortgage with less then 20% down (regardless of score)
Try to get a boat loan at any cost or rate
Try to get a line of credit
Try to get home equity loan

The flow of money through credit is seriously pulled back right now.

http://www.reuters.com/article/etfNews/idUSN2551111920080925

This will not stop until the banking industry sees a bottom. While the people at capital hill were screwing around today the market lost a trillion in value. Hows your 401k doing?

I had a friend today move 50 million in customer funds across different banks to even out deposits to stay within the FDIC 100K threshold for deposit insurance. Now his move is a bit fueled by panic but this is what small to mid size companies are going through in their mind set.


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#40259 - 09/30/08 02:05 AM Re: Political Claptrap [Re: Daniel]
Smike Offline
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 Originally Posted By: Daniel
 Originally Posted By: Smike
Holly crap, what the hell did Pelosi say just before the House vote? Apparently is was very partisan and political in nature and it motivated some votes to turn against the bill.

Daniel you are crazy if you make any more excuse's for this person. If the above is true, that is unbelievable.


I'm not excusing Pelosi for what she said (though I confess I haven't heard/read it yet). But I think it's ridiculous for our elected representatives who would otherwise have voted "yes" to put the economic future of the nation at stake because of what one of their colleagues said on the floor. Many of them probably have said worse things just to get elected in the first place. Are they really that thin-skinned?

If they care about the country, they could have denounced Pelosi's remarks and voted yes. Anyone who changed his/her vote because of her remarks doesn't belong in Congress.
___________

OK, I found a transcript of Pelosi's floor speech. She criticizes Bush for his economic policies and some, but not all, Republicans for going along with him. It's a pretty small portion of her remarks. She also talks about the bipartisan cooperation that produced the compromise.

Again, maybe she shouldn't have been critical at all. But anyone whose vote changed as a result of that speech shouldn't be taken seriously in any political context ever again. You folks can read the speech for yourselves and ask if you would have been so craven as to change your vote as a result. It's pretty mild compared to the attack ads flying around these days.


There is a video on that link. Link She rips into everyone and the plan itself for almost 5 minutes, before the video cuts off. That *bleep* knew how razor thin this bill was going to the House, why on earth with such an important vote going up, did she do that?

Doesn't matter, its 3 more days at the minimum before this will get voted on again. Maybe we can lose another trillion in that time. My god she only could get, what 60% of the democrats to vote for it?

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#40262 - 09/30/08 04:01 AM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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 Originally Posted By: Smike
She rips into everyone and the plan itself for almost 5 minutes, before the video cuts off. That *bleep* knew how razor thin this bill was going to the House, why on earth with such an important vote going up, did she do that?

Doesn't matter, its 3 more days at the minimum before this will get voted on again. Maybe we can lose another trillion in that time. My god she only could get, what 60% of the democrats to vote for it?


Five minutes? Certainly not regarding the opposing party. The Bush references are in one paragraph among many and mentions Republican support for Bush once, and then limits it to "not all" of them. Yes, maybe she shouldn't have said it at all. But for anyone to change a vote about it--ridiculous. After all, isn't their slogan "Country First" these days? Any grownup who was offended would have denounced what she said and voted yes anyway. What a bunch of children--if that's really what happened.

As to why she said what she said, I don't know. Maybe it's what she really feels. Maybe some of her caucus thought they needed her to provide political cover. Still doesn't excuse others changing their votes because of it--if that's really what happened.

Once again, she doesn't have omnipotent control over her members. I read an unsubstantiated account that House Democrats delivered the number of votes she said she would, which would imply that Boehner said he had enough to pass the legislation. Regardless, if Boehner couldn't keep his members in line because of Pelosi's speech, I think that's where the lack of control is. (His party delivered 1/3 of their caucus on a bill that their leadership supported--and voted for.)

Though the lack of control is really in the White House. Bush has cried wolf too many times to have any credibility left with either party. And a presidential power vacuum is hard to fill by anyone on Capitol Hill. No one wants to be associated with him, so he can't threaten anyone these days.

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#40263 - 09/30/08 04:21 AM Re: Political Claptrap [Re: Daniel]
Smike Offline
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You must be sleeping with her...

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#40265 - 09/30/08 10:14 AM Re: Political Claptrap [Re: Smike]
oenophore Offline
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Maybe we can lose another trillion in that time.

What does that mean? Who are "we"? Has any capital been destroyed? Isn't it strange that a financial panic that destroys nothing material can lead to distress, while a war that destroys much can lead to prosperity?
_________________________

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#40267 - 09/30/08 12:21 PM Re: Political Claptrap [Re: oenophore]
Smike Offline
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 Originally Posted By: oenophore
Maybe we can lose another trillion in that time.

What does that mean? Who are "we"? Has any capital been destroyed? Isn't it strange that a financial panic that destroys nothing material can lead to distress, while a war that destroys much can lead to prosperity?


We as in all the business that suffered losses on Monday. 1.2 trillion in ‘value” was removed which is 1.2 trillion in access to capital. Since most of the economic and banking systems heavily rely on equity value, that puts a huge crimp on everything they do. Now of course (and hopefully) they will rebound some lost ground today.

But what the most troubling side affect of all this is the freezing up of short term borrowing. This will have a far greater affect to main st then a loss of 777pt on the dow.

http://www.bloomberg.com/apps/news?pid=20601087&sid=alszNo3N0CHo&refer=home

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#40268 - 09/30/08 01:28 PM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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 Originally Posted By: Smike
You must be sleeping with her...


Come on, I know you can rustle up a reply on the merits.

Did her comments really justify anyone changing his or her vote on something so important? (Is it possible that Republican leadership didn't have the votes to begin with and were glad to find a way to blame the Democrats?)

Anyway, she's not my type.

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#40270 - 09/30/08 01:49 PM Re: Political Claptrap [Re: Daniel]
Smike Offline
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 Originally Posted By: Daniel
 Originally Posted By: Smike
You must be sleeping with her...


Come on, I know you can rustle up a reply on the merits.

Did her comments really justify anyone changing his or her vote on something so important? (Is it possible that Republican leadership didn't have the votes to begin with and were glad to find a way to blame the Democrats?)

Anyway, she's not my type.


I’m only going to reply because I hate her soo much.

View the video. My comment was “She rips into everyone and the plan itself for almost 5 minutes” you interpreted as me saying she is ripping into the Republicans for 5 min. Basically if you view the video of her speech it appears overwhelmingly against the bailout plan. If so why? Didn’t she just spend the last 3 days getting both parties to agree on it????? She completely contradicts her actions with the speech, and then she is part of a conference that was held after the failed vote and she turns back 180 and states over and over again the need to get this past and the need for bipartisan support. I don’t get it? What on earth is she doing, other then looking ill rational?


 Quote:
“But for anyone to change a vote about it—ridiculous “


I agree and I don’t think that her speech was a tipping point. While the republicans are not unified for reasons you state, I don’t see them going back and fourth pissing on everything one moment, then calling for unity the next.


Edited by Smike (09/30/08 01:52 PM)

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#40275 - 09/30/08 02:58 PM Re: Political Claptrap [Re: Smike]
mworking Offline
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I have to wait till later to try to view her speach, but it sounds as though she is doing her job even thoght it requires her to do something she doesn't belive in.

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#40281 - 09/30/08 03:53 PM Re: Political Claptrap [Re: Smike]
oenophore Offline
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But what the most troubling side affect of all this is the freezing up of short term borrowing.

By that do you mean the everyday short-term borrowing that lubricates commerce?
_________________________

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#40285 - 09/30/08 05:02 PM Re: Political Claptrap [Re: Smike]
mworking Offline
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OK I watched Nancy Pelosi’s speech.

She doesn’t rip into the current proposal at all!
She does criticize how we got to its necessity, and she criticizes the original bill, how it handled and its initial introduction.

She was dead on in every aspect and I applaud her truthfulness.
I don’t know much about her, but if this.

You make it sound as though her job is to always convince everyone to do the same thing. I understand that that is what you want her to do, but it’s not what I want her to do. This is a case where many people feel the cure may be worse than the disease. She just letting politicians vote on their own conscience.

You all know I’m pretty liberal. I’m not convinced the cure is not worse than the disease, and when I go home to my Republican Blue Collar town, the people I know are all saying NO WAY, and they are more vocal about this - writing letters and calling politicians than I have seen in quite a while.


My feeling on this relate to an earlier post and Daniels response:

 Originally Posted By: mworking
I'll wager the bailout does not work for more than 12 months tops.

 Originally Posted By: Daniel
What do you mean by "work"?



I mean that even if we pass this bill I am not at all convinced that within a year we won’t be looking at the same exact problem only ¾ of a trillion dollars poorer.


Edited by mworking (09/30/08 05:27 PM)

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#40286 - 09/30/08 05:25 PM Re: Political Claptrap [Re: mworking]
alicex4 Offline
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"I have to wait till later to try to view her speach, but it sounds as though she is doing her job even thoght it requires her to do something she doesn't belive in."


The majority party is responsible for assembling a majority vote, and Speaker Nancy Pelosi failed in that fundamental task.

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#40287 - 09/30/08 05:28 PM Re: Political Claptrap [Re: alicex4]
mworking Offline
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Thought they got one and the majority said NO!


Edited by mworking (09/30/08 05:46 PM)

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#40290 - 09/30/08 06:11 PM Re: Political Claptrap [Re: mworking]
alicex4 Offline
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So if you can't corral enough votes in your own party, how do you suppose a lame duck president is going to influence anyone?

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#40291 - 09/30/08 06:51 PM Re: Political Claptrap [Re: alicex4]
mworking Offline
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 Originally Posted By: alicex4
So if you can't corral enough votes in your own party, how do you suppose a lame duck president is going to influence anyone?


As I see it corralling people is not democracy. Certainly not democracy at its best! Convincing them would be much preferable.

Those who feel the bill must be passed quickly must sell it to those who don't. Someone needs to convince Pelosi if they want her to sell their wares. Right now she is obviously just being fair. I give her credit for that alone that is far far far...far far far more than our current administration has done on almost everything - starting with science and temporarily ending with this.

Mind you I'm not for or against this bill at this time. I am simply wary. Unfortunately having GW and close advisors tell me, only make me doubt more - lots more. Finally, when the economy tanks, I am as likely to find myself unemployed and in need of income as most others.

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#40292 - 09/30/08 06:58 PM Re: Political Claptrap [Re: mworking]
Smike Offline
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 Quote:
"OK I watched Nancy Pelosi’s speech.

She doesn’t rip into the current proposal at all!"


You watched the wrong one.

Here it is:
http://www.youtube.com/watch?v=VMLo7i38D58

SHE TEARS INTO THIS BILL for over 7 minutes. The whole speech is a political rant. At 12:30 she mentions for the first time bipartisan support. After 14 minutes starts to sink back to blaming the republicans again but then in the last very last minute she talks in a bipartisan manor and what all this means to Americans directly.

she is a wreak

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#40293 - 09/30/08 07:23 PM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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I still don't think what she said was so terrible. She laments what was left out of the bill that she wanted in, but she in no way says anyone should not vote against the bill because of it.

And if there's agreement that no one should have switched votes because of it, then I really don't see the point of blaming her for what she said since it should not have affected the outcome.

In any case, it seems to me that John McCain needs to re-suspend his campaign until this is dealt with. After all, if it was urgent enough for him to suspend his campaign before the debate until there was a deal, I don't see why it's not urgent enough right now since there's still not a deal. Assuming, of course, he was serious about it the first time around...

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#40294 - 09/30/08 07:30 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
So if you can't corral enough votes in your own party, how do you suppose a lame duck president is going to influence anyone?


She did get "enough" votes in her own party: she delivered the votes that she said she would. Today's NY Times says it's the House Republican leadership that didn't have the votes they thought they did.

This was a tough vote for many members. And the bill wouldn't have been brought to the floor unless the party leaders thought they had the votes. I doubt they didn't discuss their respective totals beforehand. Even opponents thought they were going to lose until the vote actually happened. Somebody can't count, and it's not Pelosi.

And again, the notion that all Democrats would vote for the bill and give House Republicans the luxury of voting against it is just not credible. No House leader could keep the entire caucus in line if they thought the other side of the aisle would get off with no political risk.

Also in today's NY Times was that Bush didn't even make a trip to Capitol Hill. Yes, he's the lamest of lame ducks. But to not even try? On something he claims is so urgent and essential?

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#40295 - 09/30/08 08:20 PM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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Read the WSJ take on the event, "The Beltway Crash
Congress lives up to its 10% approval rating"
http://online.wsj.com/article/SB122273257698488295.html
Her highly partisan speech on the floor -- blaming "right-wing ideology of anything goes, no supervision, no discipline, no regulation" for the financial distress -- is no excuse for Republicans to vote no. But it is indicative of the way she has governed for the past two years -- like Tom DeLay without the charm. The cynics are saying Ms. Pelosi deliberately tanked the bill by giving 95 Democrats a pass, knowing failure would hurt John McCain, and given her track record we can see why people would believe it.

Plus, many who voted no are up for re-election I think. I know I called and emailed all of my representatives to express my displeasure with the bill and demanding a no vote. Unfortunately, my reps voted yes. Lots of people are playing the political angle in this, politicians I mean.



Edited by alicex4 (09/30/08 08:26 PM)

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#40297 - 09/30/08 09:16 PM Re: Political Claptrap [Re: alicex4]
mworking Offline
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 Originally Posted By: alicex4
Read the WSJ take on the event, ...Her highly partisan speech on the floor...


What do you expect from JSJ. They are not exactly fair in my (limited) experience and I don't read it much because of that.

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#40299 - 09/30/08 10:31 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
many who voted no are up for re-election I think.


That is true. Of the 38 races with incumbents in races categorized as "toss-up" or "lean" by the Swing State Project, 8 voted yes and 30 voted no (and that would be 3 yes and 17 no among Republicans, and 5 yes and 13 no among Democrats). For the rest, it was 197-198.

 Originally Posted By: alicex4
The cynics are saying Ms. Pelosi deliberately tanked the bill by giving 95 Democrats a pass, knowing failure would hurt John McCain, and given her track record we can see why people would believe it.


The cynics can say that if they want, but simple politics is a simpler explanation. There was no way that the entire Democratic caucus would vote yes and allow the entire Republican side to vote no and avoid any political heat for an unpopular measure, so it was impossible to have a party-line vote on this one. Had the parties' positions reversed, I am confident the same rules would have applied.

 Originally Posted By: alicex4
it is indicative of the way she has governed for the past two years -- like Tom DeLay without the charm.


Now that, I think, is political claptrap. I don't approve or agree with everything Pelosi has done. But remember it was prior Speaker Hastert who had his "majority of the majority" rule: he wouldn't bring a bill to the floor unless a majority of Republicans supported it, regardless of whether it had majority support in the House. Pelosi, I believe, has brought bills to the floor for votes despite opposition from a majority of her caucus. I'm not saying she's not partisan, but I do think it's an improvement from prior management in terms of partisanship (though that may not be an especially high bar).

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#40300 - 10/01/08 12:11 AM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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Dude, you are a gentleman to note, not an especially high bar. Too bad there are no gentlemen and scholars among our elected officials. Why is the Senate going to vote on this bill on Wednesday? Isn't that a waste of time and money?

What is your reaction to the market upswing today?

If Fannie and Freddie were not political machine enterprises that coerced loans for unqualified people, and packaged these loans into international hedge funds, this would not be an issue. I still say let the chips fall and the dust settle. I feel for small business owners in this that are having credit problems, but you can't believe that any bill by Congress would change the banking culture overnight. Those people are screwed by being in the wrong place at the wrong time. it is unfortunate, but a fact of life that not all outcomes are fair and balanced. Where is all of this is relief for the small businessman?? The circuit court in California today upheld a law that all businesses in SF must provide healthcare for employees. Non profits too. While possibly admirable (depending on you bent) this is a killer for small businesses in this climate.

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#40301 - 10/01/08 01:39 AM Re: Political Claptrap [Re: alicex4]
Smike Offline
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Ok so let me try to see if I understand this correctly

1. Senate will append the $700 billion dollar plan with revisions to an existing bill that failed a vote in the House. (a bill that dealt with renewable energy tax incentives) not the original $700 billion dollar bill that the house drew up that failed.
2. They will vote and if the bill passes in the Senate then it needs to go back to the House for a revote
3. If it passes the re-vote in the house then it’s a done deal.

Stock markets tanked on Monday due to the expectation of the original bill being talked about all weekend long would at least pass the House. Markets today regained a lot of the lost ground on Monday on the, again, ‘expectation’ that some form of the $700 billion dollar package will get passed. So the markets are now setting themselves up again for ‘possible’ disappointment Thursday with the Senate vote.

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#40302 - 10/01/08 01:59 AM Re: Political Claptrap [Re: Smike]
alicex4 Offline
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Perhaps the markets are aligning themselves,as they need to in the future with up/down fluctuations, to let the free market decide the prices for the assets? Aside from bolstering the FDIC limit, and prosecuting those involved w/ Fannie/Freddie, non-action is my best hope.

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#40306 - 10/01/08 10:00 AM Re: Political Claptrap [Re: alicex4]
oenophore Offline
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 Originally Posted By: alicex4
Perhaps the markets are aligning themselves,as they need to in the future with up/down fluctuations, to let the free market decide the prices for the assets? Aside from bolstering the FDIC limit, and prosecuting those involved w/ Fannie/Freddie, non-action is my best hope.
Mine too. Funny that it's only the political center that's in favor of this $.7T plan.
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#40317 - 10/01/08 02:06 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
What is your reaction to the market upswing today?


I think it's more important to look at LIBOR, since it shows what's going on with the credit markets. I heard on the news yesterdays that it's at it's highest rate in seven years.

 Originally Posted By: alicex4
The circuit court in California today upheld a law that all businesses in SF must provide healthcare for employees. Non profits too. While possibly admirable (depending on you bent) this is a killer for small businesses in this climate.


That's why many businesses, large and small, favor publicly financed universal health insurance. But I think that's for another thread....

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#40319 - 10/01/08 02:27 PM Re: Political Claptrap [Re: Daniel]
Smike Offline
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 Quote:
I think it's more important to look at LIBOR, since it shows what's going on with the credit markets. I heard on the news yesterdays that it's at it's highest rate in seven years.


Agreed! Plus its gotten dramatically worse in the past 30 days. If the American people were litterite on this and it was in front of them everyday, no one would be stopping the $700 billion dollar plan.

http://money.cnn.com/2008/10/01/markets/bondcenter/credit_markets/index.htm?postversion=2008100108

“One indicator of how willing banks were to lend to other banks, called the "TED spread," showed high prices of loans between banks. The TED spread measures the difference between three-month Libor and the 3-month Treasury borrowing rates and is a key indicator of risk. The higher the spread, the bigger the aversion to risk.

On Wednesday, the spread retreated to 3.24%, after surging as high as 3.53% Tuesday, its highest level in more than 25 years, according to Bloomberg.com. On Sept. 5, the TED spread was only 1.04%.”

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#40320 - 10/01/08 03:00 PM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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 Originally Posted By: Smike
If the American people were litterite on this and it was in front of them everyday, no one would be stopping the $700 billion dollar plan.


I think there would be a lot less opposition, at least. There are reasonable arguments that the rescue plan won't work. But I don't think most of the public understand the consequences of doing nothing. I don't think most people understand how it affects everyday businesses, jobs, the ability of individuals to get and pay for mortgages (can't pay the mortgage if you lose your job), how if the economy tanks it's going to make us wish we only had the problems we see today.

The question is whether the result of doing nothing is better or worse than the result of doing something that might or might not work less the cost of doing that something. I don't think most people are considering how bad the result of doing nothing would be because it just hasn't happened yet and so has no immediate visceral impact.

Also, the cost won't be $700 billion. The only way it costs that much is if the underlying assets are worth nothing, and that's not the case. Even if everyone defaulted on the underlying mortgages--which won't come close to happening--there's still the value of the house itself. I think there are a lot of misperceptions about what the basics of the plan really entail.

I think Tom Friedman's column in today's NY Times is a good read.

"What you can’t see is how bank A will no longer lend to good company B or mortgage company C. Because no one is sure the other guy’s assets and collateral are worth anything, which is why the government needs to come in and put a floor under them. Otherwise, the system will be choked of credit, like a body being choked of oxygen and turning blue.

"Well, you say, 'I don’t own any stocks — let those greedy monsters on Wall Street suffer.' You may not own any stocks, but your pension fund owned some Lehman Brothers commercial paper and your regional bank held subprime mortgage bonds, which is why you were able refinance your house two years ago. And your local airport was insured by A.I.G., and your local municipality sold municipal bonds on Wall Street to finance your street’s new sewer system, and your local car company depended on the credit markets to finance your auto loan — and now that the credit market has dried up, Wachovia bank went bust and your neighbor lost her secretarial job there.

"We’re all connected. As others have pointed out, you can’t save Main Street and punish Wall Street anymore than you can be in a rowboat with someone you hate and think that the leak in the bottom of the boat at his end is not going to sink you, too."


Edited by Daniel (10/01/08 08:16 PM)
Edit Reason: misidentification of NY Times columnist

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#40321 - 10/01/08 03:41 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
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 Originally Posted By: Daniel
"We’re all connected. As others have pointed out, you can’t save Main Street and punish Wall Street anymore than you can be in a rowboat with someone you hate and think that the leak in the bottom of the boat at his end is not going to sink you, too."


Good analogy. The problem with the bailout as I understand it is that is fits your analogy perfectly. It will do some bailing, and almost nothing to fix the leak!

Of course I understand that the business community is saying this is an emergency, give us the damn bucket now, and fix the leak after.

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#40334 - 10/01/08 08:13 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
The circuit court in California today upheld a law that all businesses in SF must provide healthcare for employees. Non profits too. While possibly admirable (depending on you bent) this is a killer for small businesses in this climate.


Just a correction here. Today's NY Times says the law does not apply to businesses with 20 or fewer employees.

Other federal courts have decided that similar laws violate federal laws regarding employee benefit plans, so the Supreme Court will probably wind up resolving the split.

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#40336 - 10/01/08 08:17 PM Re: Political Claptrap [Re: mworking]
Daniel Online   content
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 Originally Posted By: mworking
The problem with the bailout as I understand it is that is fits your analogy perfectly. It will do some bailing, and almost nothing to fix the leak!


Lots of other people with a great deal of knowledge say differently. Tom Friedman, for one. Is there reason not to believe him and others? From what I've read, it may indeed help fix the leak, though there are no guarantees.

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#40338 - 10/01/08 08:34 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
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Buying up high risk debt is only bailing. I haven't heard of anything in the legislation to prevent the same thing from happening again - though one might argue common sense will prevent the same risk misrepresentation that led to this mess from being accepted in the near future.

Remember there is a whole industry (or at least what’s left of it) that will need to sell loans right away in order to "survive". They are not going to change their ways including misrepresentation of risk on their own.



Edited by mworking (10/01/08 08:34 PM)

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#40342 - 10/01/08 08:57 PM Re: Political Claptrap [Re: mworking]
Smike Offline
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 Quote:
Buying up high risk debt is only bailing.


Yup, it sure is, and its just enough to keep the ship afloat to bring into dry dock and make real lasting repairs.

Hard to fix a ship that is sitting on the bottom of the ocean.

 Quote:
They are not going to change their ways including misrepresentation of risk on their own.


They might not in the short term, but it will be hard as hell (to say the least) to lead anyone to scoop up these future risky investments in any form close to what has happened in the last 8 years. That's the beauty of the self correction aspect of the market. They just need to change the regulations to ensure that when this is all forgotten the future is not doomed to repeat the mistakes of the past.


Edited by Smike (10/01/08 09:02 PM)

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#40343 - 10/01/08 09:02 PM Re: Political Claptrap [Re: mworking]
pedestrian Offline
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 Quote:
Remember there is a whole industry (or at least what’s left of it) that will need to sell loans right away in order to "survive".


Indeed. That's one thing that has me a little unsettled about this bailout plan. The problem is that loans represent a revenue stream for banks, the payments on the loans will pay the bank's bills for years to come. After the government buys these loans, the banks have nothing but the cash proceeds. Cash is not a revenue stream.

"But wait", you say, "there's nothing forcing these banks to sell the loans. They can cherrypick and sell the worst ones to the government." Ahh, well, maybe there is something forcing them to sell: Sarbanes-Oxley and its mark-to-market provisions. Sarbanes-Oxley forces corporations to report their assets on their balance sheet at the current market price, not at the par value. If those assets aren't valued rationally, they could be forced to sell just to avoid a paper bankruptcy, that is, their balance sheet says they're bankrupt but they still have cash flows to pay their bills. They could be forced to report these assets at market value even if they're planning to hold them to maturity.

I'm not sure what the ultimate answer is. SOX increases transparency for investors, and that's a good thing. But is it causing avoidable bankruptcies and preventing organizations from riding out the storm?

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#40344 - 10/01/08 09:02 PM Re: Political Claptrap [Re: mworking]
Daniel Online   content
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 Originally Posted By: mworking
Buying up high risk debt is only bailing.


I don't think so. Many of these lending institutions also have these risky debts, so they're afraid that they won't have the capital to give out if too many of those debts go bad, so they won't lend in the face of such uncertainty. Or, they are owed money by those who have those risky debts (counterparty risk) and fear that they won't get their money back and so will have that much less capital to give out. Remember that most institutions are leveraged, so they already have much more money out in loans than they actually have in hand, and the are counting on most of those loans being repaid so that they can lend again.

Resolving those uncertainties won't force those institutions to resume lending at reasonable rates, but it could help. And if most experts think it's worth trying to avoid a severe economic collapse, then I think it's worth trying. I see no reason to think that it's just bailing rather than a serious attempt to save the credit markets--which are already drying up, forcing municipalities to delay projects, which means more people out of work, which less stuff being bought from other people, which means less income for them, and the spiral that ensues.

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#40347 - 10/01/08 10:37 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
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What I am saying is not that that buying risky debt won’t free up lenders to lend money now.

But to me that is still bailing.

What I am asking is what the bill does to prevent new loans from being evaluated and/or misrepresented as having lesser risk than they really carry, and sold as such with the result that we go through this again - and again – and again. This is the leak I refer to.

Lots of people made lots of money providing loans that should not have been made. More people made lots of money packaging and selling those loans, temporarily buyers will be wary, but all the motives to try to sell loans this way are still present with no more regulation than there was. No?

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#40351 - 10/02/08 01:11 AM Re: Political Claptrap [Re: mworking]
Daniel Online   content
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 Originally Posted By: mworking
What I am asking is what the bill does to prevent new loans from being evaluated and/or misrepresented as having lesser risk than they really carry, and sold as such with the result that we go through this again - and again – and again. This is the leak I refer to.


Yes, that's a problem. And it can and should be dealt with. But it's not necessary to deal with it right now. Proper regulatory structures can be put in place (like preventing lending institutions from exceeding certain leverage positions/requiring more capital, as is now done for banks for them to qualify for FDIC protection).

But not everything has to be done in this bill. Worthy ideas for preventing this from recurring should pass on their own accord. I don't think we can wait for those ideas to percolate up, nor is it necessary to do so in order to address the current crisis. I think in this environment, the problem of mis-evaluated risky loans is pretty nonexistent. The next Congress is more than capable of dealing with it in January.

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#40352 - 10/02/08 01:23 AM Re: Political Claptrap [Re: Daniel]
Smike Offline
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Thank god it passed step 1 in the Senate.... Its an ugly pill to swallow, but extremely necessary.

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#40354 - 10/02/08 04:14 AM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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The Senate dressed it up with some more ornaments: extensions of renewable energy tax breaks, and extensions of AMT tax relief and business tax breaks.

I may like some of those provisions (alternative energy incentives) and dislike others (more unpaid-for tax cuts), but I wish these folks would drop the other stuff and deal with a laser-like intensity on the damn problem, which is the state of the credit markets. If they think the other stuff is so great, pass them after the election.

But if this is what it takes to get the bill passed, then this is what it takes. Still, it's amazing to me to see how many people out there think anything corporate is evil, and how many other people think there's no problem for which the cure is not an unpaid-for tax cut. Seems to me that the ideologues on both sides are in control. (It's also amazing to me that some of those who complain about the cost of the bill seem to approve of adding more costs to the bill. And some of those who complain about the weak dollar support adding to the debt, which weakens the dollar.)

Interesting how this issue is cutting across traditional political views. I suspect Smike and I have different political leanings, yet we both support a rescue plan, while mworking and alicex4 also have very different political views yet agree in their opposition to it.

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#40355 - 10/02/08 10:32 AM Re: Political Claptrap [Re: Daniel]
oenophore Offline
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Interesting how this issue is cutting across traditional political views. I suspect Smike and I have different political leanings, yet we both support a rescue plan, while mworking and alicex4 also have very different political views yet agree in their opposition to it.

Look at the websites of Michael Moore and Rush Limbaugh and see that they both oppose the plan while, of course, offering different etiologies for the problem.
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#40357 - 10/02/08 01:26 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
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 Originally Posted By: Daniel
The Senate dressed it up with some more ornaments...I wish these folks would drop the other stuff and deal with a laser-like intensity on the damn problem


Agreed

 Originally Posted By: Daniel
Interesting how this issue is cutting across traditional political views... I suspect Smike and I have different political leanings, yet we both support a rescue plan, while mworking and alicex4 also have very different political views yet agree in their opposition to it.


Yes your point is interesting but I am pretty much middle of the road here.

I certainly understand the case for having the government buy up high risk debt. I do

I do have doubts about whether a government run bail-out will work, doing more than delay the inevitable.

I don't like who may have control over the money, how fast it may be spent even though I understand that that is part of the requirement in the buy-out plan.

I do not believe that even if it really is necessary and really does work, that tax payers will get their moneys worth.

I am sure that there will be a select business community that will make a fortune from it.

Even with all this I am still wondering if a bailout isn't the best thing we can do quickly.


Edited by mworking (10/02/08 01:45 PM)

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#40358 - 10/02/08 01:51 PM Re: Political Claptrap [Re: mworking]
Dillbag Offline
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Always interesting how these bills morph into larger things... (quote from Marketplace, Wednesday PM show)

 Originally Posted By: Kai Ryssdal - Marketplace.org
Page 297: changes to the child tax credit.

Page 298: tax relief for film and television productions.

Page 300: and I just can't figure out what this has to do with the credit squeeze, but certain wooden arrow shafts not more than 5-16ths of an inch in diameter are no longer subject to excise tax.


And here's the full text of the bill... "Rescue Package"
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#40359 - 10/02/08 02:07 PM Re: Political Claptrap [Re: Dillbag]
alicex4 Offline
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This bill is a disgrace. It is not needed and will not help IMO. Look at all the sweetener crap that is added to try to get votes. If the bailout really was necessary this bill should just contain those items and address the bailout issue. Way to give Paulson unlimited power of the redistribution of wealth and debt. Paulson is unelected and basically answers to nobody. I can't remove him from office. Yet he is the sole decider of how these monies are spent. This scandal makes Enron look like small potatoes. The media coverage is a disgrace too, but there are no journalists left with integrity. Please, contact your elected officals and demand a no vote.

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#40360 - 10/02/08 02:10 PM Re: Political Claptrap [Re: mworking]
MurphysLaw Offline
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Pelosi may be an idiot, but for the Repub's who voted against the plan, to blame it on HER, is just asinine.

Well, I *would* have voted for it, but she said some poo-poo kaka dirty things, and made me very mad, so then I was forced to vote against it.


Here's a fantastic article by an economist who I really find to be knowledgeable and informed, and who says what he thinks, not just going along with the herd.

http://online.wsj.com/article/SB122282734447293049.html

Some of the key points:
thusfar, this is a financial crisis, not an economic one.
(see the GDP #'s he quotes)
Not that it won't possibly become one if some sort of intervention doesn't take place, but the "bailout" (which is a TERRIBLE way to 'market' this plan, no wonder folks don't want to vote for it) is NOT the only solution, nor even the best.

The main problem with mark to market is, financial institutions are required to use that when calculatiing their capital vs. the statutory requirements.
When assets that they originally were saying were worth $1 have to be written down, historically in the worst case, full foreclosure scenario, they are still worth 40 cents on the dollar (since the houses aren't all burning to the ground w/ no insurance, and then having the land itself fall off into the ocean - there's still some intrinsic value there, regardless).
Problem is, in markets like this, with the widespread fear, panic, and just general lack of knowledge of what these assets are worth, nobody will pay 40 cents, they'll only pay say 20 cents, or less, or won't even bid on them at all.
Now these companies all of a sudden have to say these assets are worth 20 cents, or less, and there goes all of their capital base.
FDIC steps in, and game over.

IF they were allowed to park these assets off to the side (which is basically what the "bailout" plan will let them do), until things get back closer to normal, then they wouldn't be effectively forced to sell them (or themselves) at fire-sale prices, and could hold them until they could get a more realistic and fair market value for them.
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#40361 - 10/02/08 02:31 PM Re: Political Claptrap [Re: MurphysLaw]
Smike Offline
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 Originally Posted By: MurphysLaw


IF they were allowed to park these assets off to the side (which is basically what the "bailout" plan will let them do), until things get back closer to normal, then they wouldn't be effectively forced to sell them (or themselves) at fire-sale prices, and could hold them until they could get a more realistic and fair market value for them.


You certainly know more on that then I do (well at least they pay you too anyway \:\/ ) but I think that would have been a viable option to prevent the accelerated collapse of the system and downward spiral back 2 years ago. The writing was on the wall as they say. At current state, allowing banks to ‘park’ assets from further declines I feel would not be effective now. (and allowing them to mark them back up to some past value as they ‘park’ them would be a mess to say the least)

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#40362 - 10/02/08 02:45 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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 Originally Posted By: alicex4
This bill is a disgrace. It is not needed and will not help IMO.


Why do those who believe it will not help believe that? There are plenty of people who say it will help, or that it would be foolish not to try, including Warren Buffett last night. Sure, there are some knowledgeable people who say it won't work, but there are many more who do. What is the basis for disregarding the vast majority of knowledgeable opinion on this issue?

 Originally Posted By: alicex4
Look at all the sweetener crap that is added to try to get votes. If the bailout really was necessary this bill should just contain those items and address the bailout issue.


I'd like to get rid of the unnecessary stuff too. That's not how politics works. Some individuals may see crises as ways to get other things that they want. Until we live in a benevolent dictatorship, we have the system we have. I don't think that's a reason for tanking the economy.

And if the House had passed its version, we wouldn't have seen a lot of this extraneous stuff.

 Originally Posted By: alicex4
Way to give Paulson unlimited power of the redistribution of wealth and debt. Paulson is unelected and basically answers to nobody. I can't remove him from office. Yet he is the sole decider of how these monies are spent.


Assuming the package is worth trying, what alternative method of buying distressed securities is out there? Someone has to decide. Congress can't approve every transaction. For those who think the program is useless to begin with, then this objection understandable. But if the bill is formed with the assumption that it might help, how else could security purchases be structured?

 Originally Posted By: alicex4
The media coverage is a disgrace too, but there are no journalists left with integrity.


Is there any evidence that they've sacrificed their "integrity" rather than reporting facts or, if they're columnists, what they really believe? Or do you just disagree with them, in which case there's no real integrity issue?

Why do people believe what they believe on this issue? Are press reports wrong because they "lack integrity"? How do we know they lack integrity? Are Warren Buffett and many other experts simply mistaken? How do we know this? What is the support for the claim that this thing definitely won't help or is not worth trying? There may be some differences of opinion, but why go against the substantial weight of those who know something about this problem?

I know there are alternatives that have been proposed, but time is short and I don't see anything else that could be passed quickly. European leaders were aghast at the failure in the House. This Congress after the election or the next Congress in January can improve on the plan. It's this or nothing. Buffett said that things will be bad regardless, but it could be the difference between 7% unemployment and 9%, which is 3 million more people out of work.

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#40364 - 10/02/08 02:51 PM Re: Political Claptrap [Re: Smike]
Daniel Online   content
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The mark-to-market "problem" has mystified me. If books are open, and these bad securities have a lower market value than hold-to-maturity value, wouldn't anyone who was trying to evaluate the worth of the company know it? So if people know the differences between those values and can plan accordingly, what's the problem?

The point of accounting rules is to maintain transparency. If people know that the securities may be eventually worth substantially more than they are right now, then transparency has been achieved and evaluators can make their own judgments.

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#40368 - 10/02/08 03:46 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
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 Originally Posted By: Daniel
Buffett said that things will be bad regardless, but it could be the difference between 7% unemployment and 9%, which is 3 million more people out of work.


Well, that's the big question. Just as an example, would a difference of %2 unemployment be worth $700,000,000,000? We could simply hand out an awful lot of unemployment for that kind of money!

I would guess that a difference of %2 unemployment with no other benefits would be categorized by most people as not having worked, and I am pretty sure that those in congress who vote yes on this bill are expecting more.

Added: Doesn't that work to 233K per unemployed person!


Edited by mworking (10/02/08 04:37 PM)
Edit Reason: added

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#40375 - 10/02/08 07:07 PM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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Registered: 07/05/00
Posts: 3400
"Why do those who believe it will not help believe that?"
Because we damn sure didn't get into this financial mess quickly, there is no quick bailout coming, no matter how Washington frames it. As for Warren B. his rescue of GE has not stopped GE from tanking.

"Until we live in a benevolent dictatorship, we have the system we have."
Which is just what this bill will lead us toward. Govt. has no business getting involved in the free market. That's what got us here, govt advocating and then legislating "affordable housing". Read the Constitution, govt needs to promote general welfare not provide it or ensure it, or even insure it.

"Assuming the package is worth trying, what alternative method of buying distressed securities is out there?"
There's the rub, there is no alternative method. You can't erase 10 years of crap debt. You can't throw good money after bad debt. If it sounds too good to be true, the bailout plan, it probably is too good to be true.

"I know there are alternatives that have been proposed, but time is short and I don't see anything else that could be passed quickly. European leaders were aghast at the failure in the House."


Europe almost passed their own bailout bill but Belgium and Germany vetoed it. They are waiting for the US to buy the bad debt, freeing them from the burden. Now that they think there is another US bill they are waiting again.

This crisis didn't materialize overnight, it took years to get here. Why do you think anything can mitigate the effects of this problem in a short period of time? You, my friend, are buying a pig in a poke.

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#40376 - 10/02/08 07:36 PM Re: Political Claptrap [Re: mworking]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: mworking
[quote=Daniel]Added: Doesn't that work to 233K per unemployed person!


No, for several reasons.

First, and this is a point many people miss, the rescue plan won't cost $700 billion. That number assumes that the underlying assets are worthless. They are obviously not. If the economic situation improves when the government sells them, some of that money will be recouped, possibly all. So I'd say preventing 3,000,000 unnecessarily unemployed people at what might be little cost in the end is definitely worth it.

Moreover, the cost of 3,000,000 unemployed people is substantial. Those are people who may be losing their houses, which would bring down everyone else's property values. Those are people who won't be able to buy things, affecting everyone else's businesses. Those are people who may make the recession deeper and longer than it would otherwise be. And that affects all of us.

And there's the cost of the adverse effects on people who still have jobs but ones that don't pay as much because the credit crisis inhibited economic growth.

Really, if it were that simple, would so many people who know so much more about the situation than we do be supporting the plan?

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#40377 - 10/02/08 07:49 PM Re: Political Claptrap [Re: alicex4]
pedestrian Offline
Pooh-Bah

Registered: 08/05/02
Posts: 2244
Loc: a heavily fortified bunker!
 Originally Posted By: alicex4
This bill is a disgrace. It is not needed and will not help IMO. Look at all the sweetener crap that is added to try to get votes. If the bailout really was necessary this bill should just contain those items and address the bailout issue. Way to give Paulson unlimited power of the redistribution of wealth and debt. Paulson is unelected and basically answers to nobody. I can't remove him from office. Yet he is the sole decider of how these monies are spent. This scandal makes Enron look like small potatoes. The media coverage is a disgrace too, but there are no journalists left with integrity. Please, contact your elected officals and demand a no vote.


a typical libercontrarian response (not that there's anything wrong with that... sorta)

If you think that this is not necessary, I submit that you are simply uninformed. This thing is already spreading to other sectors of the economy - for example the university of vermont just had 90% of assets frozen (thanks, wachovia) in the main trust fund that they use to manage their cash flows. that's a big deal when money market funds are frozen.

the issue here is that everyone is hoarding and there is, still, a massive amount of bad assets spread throughout the system. lisa can't even renew her homeowner's insurance right now because the risk premium is so huge - insurers are refusing to write policy at any price. FDIC insurance only covers a minor part of the problem.

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#40378 - 10/02/08 08:03 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: alicex4
"Why do those who believe it will not help believe that?"
Because we damn sure didn't get into this financial mess quickly, there is no quick bailout coming, no matter how Washington frames it. As for Warren B. his rescue of GE has not stopped GE from tanking.


But that doesn't mean that intervention won't work. Intervention worked in Sweden in the 1990s. Japan didn't intervene and had a zombie economy that is still suffering the effects today.

Again, no one says this will be a "quick bailout." They're saying it's what's needed to avoid a complete disaster. With so many knowledgeable people saying that, what, again, is the reason not to give them some credence? Do we know more than they do?

 Originally Posted By: alicex4
"Until we live in a benevolent dictatorship, we have the system we have."
Which is just what this bill will lead us toward. Govt. has no business getting involved in the free market.


That wasn't the point. The objection was to the extraneous provisions that had been added in the Senate. Saying "government shouldn't get involved in the free market" doesn't answer why those extraneous provisions should be enough to tank a plan that many regard as essential.

And this whole idea that government shouldn't get involved in the free market is claptrap. Government is always involved because it sets the rules. For instance, you don't need government to deal with fraud. Eventually, those committing fraud will get smoked out, and "the market" will punish the organizations that let it happen. But those who committed the fraud may be on some sandy beach on some island while innocent investors have their life savings wiped out, and there's nothing "the market" can do for them. So we have government intervention in the form of mandatory disclosure rules to prevent that situation from happening in the first place. Most people agree that's a good idea, as are many other government rules which "intervene" in the "free" market. This whole idea that government should stay out is ideology; it doesn't exist in practice.

Nor does that ideology tell us what the best options are for dealing with the present problem. The decision should be made on the best attempt to make a cold-hearted calculation as to the probable effects of the plan versus the probable effects of doing nothing. If it comes out that doing nothing is the better options, so be it. But claims that the government should never get involved in the free market don't tell us what the outcomes of those calculations are. Why not do the calculations first, and then reach a conclusion--or listen to those who are doing their best to do those calculations?

 Originally Posted By: alicex4
"Assuming the package is worth trying, what alternative method of buying distressed securities is out there?"
There's the rub, there is no alternative method. You can't erase 10 years of crap debt. You can't throw good money after bad debt. If it sounds too good to be true, the bailout plan, it probably is too good to be true.


Plenty of people have made lots of money buying "bad" debt when that debt is undervalued. There's a whole financial sector that deals with, and makes money on, distressed securities. The problem today is that the bad debt (the mortgaged-backed securities) probably isn't as bad as people think (or at least are willing to pay right now), yet it's still clogging up the financial system. It's not like government will be paying face value for the assets; it will pay something between market value and hold-to-maturity value.

There's no debate that it will take time for the questionable loans to unwind. The question is whether having the government take them essentially out of the system will help the credit lines from seizing up. Again, many experts think it will. What is your basis for believing differently?

 Originally Posted By: alicex4
This crisis didn't materialize overnight, it took years to get here. Why do you think anything can mitigate the effects of this problem in a short period of time? You, my friend, are buying a pig in a poke.


Again, many people who know a lot about how the system works think this rescue plan is worth trying; indeed, some of them think it would be insane not to do so. Why do you think it definitely won't work? What is the basis for your judgment on these matters?

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#40386 - 10/03/08 01:55 AM Re: Political Claptrap [Re: Daniel]
alicex4 Offline
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There is a difference in undervalued debt and bad debt.

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#40397 - 10/03/08 06:30 PM Re: Political Claptrap [Re: Smike]
MurphysLaw Offline
gumby

Registered: 03/12/02
Posts: 2308
Loc: Hudson Valley, NY
We're good to go.

Here's the key part of what got passed today, if you ask me:
(from Bloomberg.com)

The Senate bill also reiterates the U.S. Securities and Exchange Commission's authority to suspend an accounting rule that bankers and other corporate executives say exacerbates their troubles.

The so-called fair-value standard requires companies to review assets and report losses if their values decline. Lawmakers, the American Bankers Association and companies including American International Group Inc. have urged the SEC to suspend or ease the rule, saying it forces firms to report deeper losses than needed on assets such as subprime mortgages.


Maybe the morons in Washington aren't so dumb after all?
I don't know if the first bill included this part, but it is an absolute grand slam that it got passed in the second one.
This alone will dramatically alleviate the current problems, by not forcing all the financial institutions to have to sell these assets at ridiculous fire-sale prices anymore.

Alas, it came too late for:
Bear, Lehman, Merrill, AIG, WaMu, and Wachovia.
_________________________
"Flailing?" "Flail on!"

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#40400 - 10/03/08 06:56 PM Re: Political Claptrap [Re: MurphysLaw]
mworking Offline
old hand

Registered: 05/26/04
Posts: 764
I have heard over and over and over again that the problem in the market was lack of trust. What you wrote simply sound like they will be calling assets of low value or high risk, higher value and/or lower risk. Knowing the above instills me with a continued lack of confidence and reminds me of why have been so skeptical! Misrepresented risk and value is what got us into this mess, isn't it?

-----------------------------------------------------

From: http://finance.comcast.net/www/news.html?x=http://76.96.38.13/data/news/2008/10/03/1077246.xml

“Today's bailout doesn't even attack one of the biggest problems for our economy: The housing sector. Government officials from Treasury Secretary Henry Paulson on down have said the economy won't recover until housing does.”

I don’t know the credibility of this writer, but it’s a Paulson quote and this is exactly what I expect.

Further the housing market can not even begin to recover until those who can not afford their homes give them up and someone else begins to make payment on them. The empty home need to be filled too. Even then I don’t expect to see a housing boom like we just went through for a long time – perhaps not in my life time for . That boom was partly fueled by many loans that should never have been made. I’ve been watching for a few years as people I know making less than me bought homes costing more than twice as much as mine cost me. Of course the bank said my home was worth nearly what they were spending, but that didn’t make it any easier for them to make payments!

So I do not expect that housing / construction market will soon recover to nearly the level it had been recently.

Now what was that bailout supposed to do?


Edited by mworking (10/03/08 07:51 PM)

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#40402 - 10/03/08 08:54 PM Re: Political Claptrap [Re: mworking]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: mworking
“Today's bailout doesn't even attack one of the biggest problems for our economy: The housing sector. Government officials from Treasury Secretary Henry Paulson on down have said the economy won't recover until housing does.”
....

Now what was that bailout supposed to do?


That's true: the economy probably won't recover until the housing market bottoms out. But that wasn't the purpose of the rescue plan. The point of the plan was to prevent credit from drying up that would pretty much freeze the gears of the economy completely. It's the difference between going through tough times as home prices drop and level off, and people not being able to get loans to start, expand, or just run their businesses.

No one (who knows what's going on) ever claimed the rescue plan was going to solve our economic problems. The claim was that it would help prevent a total disaster. As noted above, municipalities were already delaying or canceling projects because they lacked access to reasonable credit. (I read in the NY Times yesterday that the benchmark LIBOR lending rate was at an all-time high.) That means less work, fewer jobs, and less money for those workers to buy things from other people, etc. The point of the rescue plan was to take questionable assets off the books so that lenders wouldn't be as unreasonably afraid to lend, thereby allowing the economy to operate in a more normal fashion. Unreasonably easy credit is obviously a danger because it leads to bubbles. But unreasonably expensive credit is also a danger because it shuts down otherwise profitable ventures.

The housing bubble will have to resolve itself on its own (with perhaps an effort to keep people who really could stay in their homes to be able to do so).

So that's my admittedly armchair understanding, for what it's worth.

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#40403 - 10/03/08 09:00 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
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Registered: 05/23/01
Posts: 1515
 Originally Posted By: alicex4
There is a difference in undervalued debt and bad debt.


And the vast consensus is that the mortgage-backed securities are undervalued. The numbers I've heard are that their market value is about 30 cents on the dollar, and the hold-to-maturity value is likely to be 60 to 70 cents on the dollar. But no one wants to take the risk right now, which is why the market price is low. There are lots of good loans mixed in with the bad ones, but they've gotten so complicated that it takes a large institution like the government to have the resources to bear the risk--and possibly break even on the deal (since they'll have to pay more than market value, otherwise the fiscal stability of the institutions that hold them now wouldn't be so shaky).

By the way, I don't blame the Europeans for not jumping in first. If it's not clear that the biggest player is going to take part, then it wouldn't make sense for the smaller players to make what would probably be a useless gesture. Their participation can matter only if the US comes into play big time. Now we'll have to see what happens.

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#40411 - 10/04/08 01:57 PM Re: Political Claptrap [Re: Daniel]
mworking Offline
old hand

Registered: 05/26/04
Posts: 764
 Originally Posted By: Daniel
I don't blame the Europeans for not jumping in first...Their participation can matter only if the US comes into play big time. Now we'll have to see what happens.


Good point.

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#40428 - 10/06/08 01:07 AM Re: Political Claptrap [Re: mworking]
alicex4 Offline
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Registered: 07/05/00
Posts: 3400
Watch this whole plan sink like the proverbial STONE, and not in a good way! \:\)

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#40429 - 10/06/08 01:12 AM Re: Political Claptrap [Re: mworking]
alicex4 Offline
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NYTIMES has a front page story this weekend where they actually say "Democrats blocked reform". I almost choked on my hot chocolate Sunday AM. When the liberal rag the times dimes out the Democrats, it must be the last days.

PS If one more out of touch politician mentions main street in an ad, I may need to arm myself.

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#40434 - 10/06/08 02:05 PM Re: Political Claptrap [Re: alicex4]
Smike Offline
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Registered: 05/01/01
Posts: 3143
Loc: in your backyard
So what are the chances of the NYSE hitting any of the circuit breakers today?

http://www.nyse.com/press/circuit_breakers.html

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#40439 - 10/06/08 02:39 PM Re: Political Claptrap [Re: alicex4]
alicex4 Offline
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Registered: 07/05/00
Posts: 3400
The Dow has already tanked 300 points. How low can she go....

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#40440 - 10/06/08 02:41 PM Re: Political Claptrap [Re: Smike]
alicex4 Offline
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Posts: 3400
Jim Cramer, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”

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#40442 - 10/06/08 02:46 PM Re: Political Claptrap [Re: alicex4]
Smike Offline
Carpal Tunnel

Registered: 05/01/01
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Loc: in your backyard
 Originally Posted By: alicex4
Jim Cramer, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”



That is the main driver in the world economy right now – ‘Fear’

One of the great quotes of all time seems unnervingly relevant today. “The only thing we have to fear, is fear itself.”

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#40444 - 10/06/08 05:07 PM Re: Political Claptrap [Re: alicex4]
Mike Rawdon Offline

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Registered: 11/29/99
Posts: 4276
Loc: Poughkeepsie
 Originally Posted By: alicex4
Jim Cramer, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”



Yup, and to our gasoline-deprived friends in the Southeast: if you're worried about the gasoline shortage, go out and top off your tank today. Don't wait, do it now!

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#40446 - 10/06/08 05:23 PM Re: Political Claptrap [Re: Mike Rawdon]
alicex4 Offline
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Not only the Souteast, apparently the Colonial pipeline that runs from NC to Linden NJ was shut down because a contractor damaged it.

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#40448 - 10/06/08 05:39 PM Re: Political Claptrap [Re: alicex4]
Daniel Online   content
veteran

Registered: 05/23/01
Posts: 1515
 Originally Posted By: alicex4
Jim Cramer, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”


The time to buy is when everyone else is selling. I think if you've got a long time horizon (five years or more), it would not be smart to sell now. Yes, there's some chance things will tank further. There's also some chance that we're seeing herd behavior, that the housing market will bottom out and stabilize within the next year, and things will gradually get back to normal. Do people really think the Dow is going to be below 9,800 in 2013?

If you're risk-averse or have short-term needs, that's a different situation. And if you've got money invested that you can't afford to lose, then a heavy allocation in stocks wasn't a good idea to begin with.

Determine your tolerance for risk, and go from there. Investment 101, folks.

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#40454 - 10/06/08 07:33 PM Re: Political Claptrap [Re: Daniel]
MurphysLaw Offline
gumby

Registered: 03/12/02
Posts: 2308
Loc: Hudson Valley, NY
“The four most dangerous words in investing are 'This time it's different.'”
-Sir John Templeton

“The way to make money is to buy when blood is running in the streets.”
-John D. Rockefeller

“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell.”
- Sir John Templeton

"Our favorite holding period is forever."
-Warren Buffett

I'll take these quotes over whatever Mr. Mad Money is spouting off about these days, since he has obviously finally gone completely off his meds.

I used to think Suze Orman was the Antichrist. Now I think she and Cramer do the job in shifts.
_________________________
"Flailing?" "Flail on!"

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#40460 - 10/07/08 02:19 AM Re: Political Claptrap [Re: MurphysLaw]
alicex4 Offline
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Registered: 07/05/00
Posts: 3400
House is paid off. Booyah, they can't take away what you own, as long as you pay your taxes. See Washington township NJ for reference....

We'll see. I remember when people didn't retire, they worked until they died, maybe this philosophy will reignite in society. Pay cash, buy what you can afford--not what you dream, want. Lowered expectations rule!

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#40462 - 10/07/08 11:02 AM Re: Political Claptrap [Re: MurphysLaw]
oenophore Offline
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Registered: 09/24/01
Posts: 5977
Loc: 212 land
“The way to make money is to buy when blood is running in the streets.”
-John D. Rockefeller


That has been attributed to Nathan Rothschild in 1815. ("I invest only when I hear the sound of cannon fire and see blood running in the streets. I sell when I hear the sound of the violins.")

Booyah, they can't take away what you own, as long as you pay your taxes.

Might those taxes rise as other tax revenues shrink in a declining economy?
_________________________

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#40465 - 10/07/08 02:07 PM Re: Political Claptrap [Re: oenophore]
alicex4 Offline
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Registered: 07/05/00
Posts: 3400
"Might those taxes rise as other tax revenues shrink in a declining economy? "

Possibly, but it is a lot easier to cobble together $3000-$4000 than $112,000. Just make sure you pay your taxes. Washington Township NJ down in SJ will take your property if you are behind in your taxes.

WASHINGTON TWP. — Members of township council are expected to vote next week on an accelerated tax sale meant to balance the municipal budget -- but they won't do so happily.
The tax sale, if approved, would take place on Dec. 23, officials said.

"Nice Christmas present," Councilwoman Anita LaPierre lamented at a workshop meeting Wednesday.

"We'll be Snidely Whiplash," Councilman Albert Frattali said of the sale, which would require landowners to pay all 2008 property taxes by year-end, where they previously could have waited until June.

People who remain behind on payments would face tax liens and the possibility of foreclosure after six months, said Nick Petroni, the township auditor.

But council members, who had long resisted Mayor Paul Moriarty's proposal for an accelerated sale, indicated they saw no alternative after state officials blocked a previous bid to balance the 2008 budget.

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#40466 - 10/07/08 02:10 PM Re: Political Claptrap [Re: oenophore]
Smike Offline
Carpal Tunnel

Registered: 05/01/01
Posts: 3143
Loc: in your backyard
Interesting foreshadow

http://query.nytimes.com/gst/fullpage.ht...&pagewanted=all

(Take note of the publish date)

Two key points:

 Quote:
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.


 Quote:
'From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'


This is why I cringe every time I hear the democrats scream that lack of regulation was part of the cause. Not that I don’t agree with that, but its like they are hoping that most average Americans have forgotten the past of even just 10 years ago. I remember quite well the Clintons initiatives in making home mortgages available to everyone (even if they should not have one for financial reasons) Certainly the republicans have done no better in seeing all this unfold and just standing by.


Edited by Smike (10/07/08 02:28 PM)

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#42493 - 12/30/08 10:46 AM Re: Political Claptrap [Re: Daniel]
oenophore Offline
Carpal Tunnel

Registered: 09/24/01
Posts: 5977
Loc: 212 land
Bush didn't even make a trip to Capitol Hill. Yes, he's the lamest of lame ducks.


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#42771 - 01/24/09 12:58 PM Re: Political Claptrap [Re: Daniel]
oenophore Offline
Carpal Tunnel

Registered: 09/24/01
Posts: 5977
Loc: 212 land
 Originally Posted By: Daniel
 Originally Posted By: mworking
The problem with the bailout as I understand it is that is fits your analogy perfectly. It will do some bailing, and almost nothing to fix the leak!


Lots of other people with a great deal of knowledge say differently. Tom Friedman, for one. Is there reason not to believe him and others? From what I've read, it may indeed help fix the leak, though there are no guarantees.

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#42772 - 01/24/09 05:44 PM Re: Political Claptrap [Re: oenophore]
Daniel Online   content
veteran

Registered: 05/23/01
Posts: 1515
Here's another scathing Tom Friedman assessment by Matt Taibbi. Makes many of the same points at greater length, and fun to read.

As far as the bailout goes, Joe Nocera at the NY Times says today that Paulson had it right the first time with the original TARP plan: buying the bad (or unknown) assets so that banks would have confidence in their balance sheets, freeing them to lend again and encouraging private money to return to the banks.

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