patrick.net

I take it back. It's not 75c it's 45c. Cheaper than bubble gum. I would still rather have bubblegum.

Dear *ME*:

Thank you for expressing your concerns with the problems in the financial sector and proposals to address them.

A lot of Ohioans, including me, are angry at the thought of bailing out people who made a lot of money making bad business decisions that created problems in neighborhoods across Ohio.
I agree that we need to avoid rewarding excessive risk taking. These institutions made unwise decisions, and taxpayers should not be expected to simply cover their losses.

Treasury Secretary Paulson this weekend sent a proposal to Congress that would give him almost unfettered authority to spend $700 billion purchasing troubled assets from financial institutions. On Tuesday, my colleagues on the Banking Committee and I held a hearing at which Secretary Paulson, Federal Reserve Chairman Bernanke, and others testified.

They made a strong case for the need to act quickly to prevent further damage to our economy. The turmoil in the credit markets has the potential to do great damage to a lot of innocent bystanders. I am afraid that if we do not act, the economic instability could affect thousands of American jobs and the savings of countless middle class families.

But Secretary Paulson’s proposal is not the right answer. No Secretary should be given a $700 billion blank check. Taxpayers must be given an opportunity to recover their money, and assurances their tax dollars will not fund lavish pay and golden parachutes. We need strong rules to guard against abuse, and to ensure all types of institutions and regions are helped.

In the days ahead, we need to focus on containing the damage to middle class families and local businesses as much as possible. In the months ahead, we need to take a hard look at how financial markets are regulated so we never find ourselves in this situation again.

Thank you again for contacting me. I will certainly keep your views in mind as the Senate debates ways to help restore strength to our economy.
Sincerely,
Sherrod Brown

Look at this shit! I just got this from one of my reps in response to a letter I wrote last night.

I am Ok with the Bailout as long as these two conditions are met :

1) All the profits made by selling homes in the past 8 years are taxed at 50%. Put those numbers are tax liabilities which can be paid in next 10 years.

2) for 2000 - 2008 , Yearly salary above 40K (Average salary) per year at all institutions recieving bailout will be taxed at 50% and put as tax liability which can be paid in next 10 years.

This is an attempt to cancel out profits made from US tax payer with losses to US tax payer.

Bottom line : We need to partly get the money back from people who made all the big bucks during the boom and then use that to finance this bailout. I am not ready for the double whammy.

Stuck,

I'm with you on the protest idea. I've never marched on anything in my life, but this just can't be passed without an uproar from the public. I think one of the reasons they want it passed so quickly is to keep people from organizing.

There should be a bailout tax for next 10 years on the tax form.
People who made big bucks during boom time have to pay that.

Longtime Lurker....occasional contributor 2 years ago or so.....

anyway....

The way I see things is as follows:

there was a systemic problem w/regard to risk mgmt and tossing the req's for mortgages out the window....at fault were wall street wizards, hedge funds, insurance companies...etc. etc....all the way down to banks, mortgage "companies", mortgage originators, officers, and eventually the borrowers

so on the one hand...anyone that didn't play along is punished...true....on the other hand...throw the baby and the bath water inseparable w/re: bailout right? At least that's what the CW is w/Paulson chirping....

This is how I see it:

Yes we SHOULD bail out the irresponsible for the sake of the country like the S&L crisis etc.

Yes it's unfair

BUT and a big butt:

AS ROUBINI SAYS: the credit losses are 1-2 TRILLION DOLLARS! this thing is out the barn and running now for >2 years--homes in detroit have been declining since summer '05! including the upper class burbs!!!!!!!!

So what does this mean? It means IT DOESNT F**CKING MATTER what the gov't does (unless they become Mugabe-esque and try hyperinflation)! I just read the I think it's GALBRAITH book about the Depression and guess what happened in 1928 and 1929: they tried to manipulate the market...and guess what happened: they failed and we all remember it as "tightening credit" which "worsened the depression"

BULLS***T....now is the same they can throw a few hundred billion and try their auction facilities and claim injecting liquidity but guess what...there is zillions in capital vaporized forever in these roach and mold infested foreclosures! Have you actually seen what these homes in foreclosure look like! SCARY!!!!!

However, none of this is investment advice. I'm not nearly crazy enough to even think of what to do in markets like these.

I feel for the BOOMERS and big borrrowers that are in bad shape a little, but the GREED and HYSTERIA of the last 10 years gives me what's it called a little SCHADENFRUED or something!

I only wish I had a crystal ball and could have been like CASEY SERIN in CALIFORNIA with no RECOURSE and ATM'd myself to a life offshore somewhere!!!!!

even the bailout as it stands would tighten credit and regulation "to prevent it from happening again" which means there's less $ for lending...

so it doesnt matter as far as I can tell!

If i'm wrong please tell me why....

GOD BLESS US ALL!

well said revengeofaone.

This bailout plan is just a proxy to buy assets at "Peak Prices"
Who is going to determine what the actual price of an asset is ?
Can you believe in the appraisals ??
I think Govt will buy all the assets at the peak prices.
700B is no way going to be sufficient to cover the already lost value?
The total Bubble (fake wealth ) was around 12trillion according to case schiller index.
Even if we assume that 80% hold on to thier assets and service the debt.
20% of 12T is 2.4 Trillion Loss !!

Does anyone remember/ know what happened to Argentina stock market when their currency crashed?

Oh boy - not good!

http://tinyurl.com/4b6dw7

Got Gold?

FDIC takes WaMu on Thursday? What happened to Bank Failure Friday?

Grandpa McCain is showing his true colors by evading debate and issues like a headless chicken. I would have voted for McCain when was in his 40s, or 50s, but Senile McCain? He is losing it both mentally and physically, 30 years too late.

Which brings to the subject of what to cut for the country's multiple entitlement programs. I am all for cutting down medicare, it is just completely absurd to see a country that only caters to the dying batch leaving the infants and children uncovered. Every dollar of Medicaid cut has to be matched by the Medicare cut.

If someone can fund his own retirement and medical expenses when he is old, that means he has done something right. If he cannot, he fucked his life and we shall not be responsible. This country needs to learn about how to let people fail, let people go bankrupt, and let people die.

In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to J.P. Morgan Chase & Co.

The closing represents the demise of what once was the largest U.S. thrift but came to symbolize many of the worst excesses of the mortgage boom. Federal regulators said WaMu has suffered an exodus of $16.7 billion in deposits since Sept. 15, leaving the Seattle thrift "with insufficient liquidity to meet its obligations." As a result, WaMu was in "an unsafe and unsound condition to transact business," according to the Office of Thrift Supervision.

While the exact structure of the transaction wasn't immediately known, J.P. Morgan is expected to acquire Washington Mutual's deposits and branches, as well as other operations. The deal isn't expected to result in any hit to the Federal Deposit Insurance Corp.'s bank-insurance fund, according to a person familiar with the arrangement. Some analysts have worried that a WaMu failure could cost more than $20 billion.

Federal regulators have been heavily involved in orchestrating the transaction, which comes as WaMu grapples with its bad mortgage loans. Regulators were hoping to fend off a collapse of WaMu, which, with more than $300 billion in assets, would mark by far the largest banking failure in U.S. history.

http://www.fdic.gov/bank/individual/failed/wamu.html

This is the biggest one yet!

Grandpa McCain is showing his true colors by evading debate and issues like a headless chicken.

So you're going to cast your vote for a no talent fucking ass clown whose sole accomplishment is taking over the office vacated by some asshole who wanted to fuck someone other than 7 of 9? Why not just tell the fucking truth? You don't want to vote for someone older than you, enjoy your fucking boomerism you fucking piece of shit, embrace it, don't hide from it.

evading the debate? Watch McCain turn your little bitch out like the mumbling fuck he is. Watch NObama without his teleprompter. Yeah fuckwad, and I quote, "aaa bbb you see, come on, you're all fired up aaa bbb aaaa"

I am suprised to see a group of GOP members killing this Bailout. I have not had anything good to say about a Republican in a long time. There guys are my heros of the day.

THANKS GOP House Members. I will not for get your good fight. If you kill this for good, I will always remember your good service to our nation.

HELP US OBI G.O.P, You are our only hope!

The headlines read "JPMorgan to buy WaMu Assets" -- nothing about WaMu seizure. Very distracting.

Surfer-X -- Why wonder any longer about what kind of moron would vote for McCain? There is one -- in living color.

surfer-x

I think if you focus you boomer-hating energy on yourself, you would have risen to a situation not so subject to "boomer politics". I am not even a boomer, but I have had boomer friends who helped me personally tremendously.

I frankly do not judge people by their age, I judge them on how beneficial they can be to me.

To be frank, deal or no deal doesn't matter.

Deal = collapse later
No deal = collapse faster

The only difference is how much wall street can walk away with.

1) I am grateful for the republicans blocking the attempted theft from the treasury.

2) I will be taking to the streets, but not to march, but to dance with joy at the demise of WaMu.

Calling EBGuy, the in-house Fed B/S specialist for a Thursday powwow.

We specifically reserve Friday for bank failure parties.

Calling EBGuy, the in-house Fed B/S spec1alist for a Thursday powwow.

We specifically reserve Friday for bank failure parties.

Sorry, EBGuy is wretching.... blahhhhhhh.... He predicted a JPM takeover of WaMu, just not quite the way the FDIC arranged the dance card.
And the latest H.4.1, nothing we didn't already know, but it still looks ugly when you put it all in one place...

Ron Paul banzai!

I am all for cutting down medicare, it is just completely absurd to see a country that only caters to the dying batch leaving the infants and children uncovered. Every dollar of Medicaid cut has to be matched by the Medicare cut.

Scrap medicare. Scrap medicaid. Tie voting power to effective tax rate!

I am NOT against universal healthcare. The only way for that to happen is to get rid of healthcare for special interest groups like the elderly.

Seems like Paulson knelt on his knees begging for the plan to be approved. I hope someone has captured that moment on camera.

http://www.nytimes.com/2008/09/26/business/26bailout.html

This is scary. If that egoistic bastard is in this desperate situation then this is even worse than what most people on this blog have imagined.

All the more reason to not support the bailout. If the economy is going to be utterly ruined, then the less tax payer money we waste on bankers, the better.

He wasn't asking Pelosi to marry him?

It took you 2 years Peter, but you finally made me smile

StuckInBA,

that was my reaction too. I don't buy the Paulson is evil viewpoint. I actually kindof like Bernake too.

I'm pretty sure they know whats going to happen either way. If nothing else, they are going through the motions so that they go down in history as having "tried".

Can anyone else feel the sea change going on? The public is starting to turn.

We are finally talking about the right things as a society.

Capitulation breeds fear first, then optimism with a new sense of direction.

How many of you believed Paulson when he said in the hearings "Guess what? Taxpayers are already on the hook".

His argument, which does scare the hell of me if it is true, is that without this bill, credit freezes up. As someone with no debt and no mortgage, it is tempting to think "F*ck 'em! Let the banks die". But that could very well mean my employer cannot make the next payroll because their lines of credit have been revoked. No more paychecks, no more health benefits, no more 401k...talk about cutting off your nose to spite your face.

Jesus, this sucks. This board has been predicting similar outcomes for years now, and getting the label of the "tin-foil-hat-crowd". How dare we say that real estate does not always increase in value? How dare we throw around words like "inflation", "recession" and "depression" when the party was in full swing? That it is coming to fruition is both gratifying and horrifying. We are truly stuck between a rock and a hard place if Paulson is telling the truth.

What's the trust level out there about a former Goldman Sachs chief executive getting an open line of credit from the taxpayers to keep the sky from falling on Wall Street? Do we believe him?

That sounds great TOB. It brings a little light to the gloom we're in.

Trust is a particularly sensitive issue for Americans now. After the Bush administration's most recent "sky is falling and we must invade Iraq/Afghanistan and suspend the Constitution" stunt, it is understandable that many Americans will not trust this latest "crisis" as fact. How many trillions are we willing to gamble again?

That it is Paulson pulling the alarm this time is not much better, given his background. I will let go and go with trust for now. I think he's not nearly as evil as the Bush/Cheney crowd.

Fuzzy :

This will change the American society. After a long and arduous road, we might emerge as a better nation. We might.

We are well past the denial phase. We are rushing through the anger phase and are now at the border of bargaining phase.

Till now, many people had a hope that this is a temporary downturn. People like us were still being treated as lunatics. Now it is dawning upon folks what exactly is the severity of the situation and what grave danger we are facing.

Now when the president, the treasury secretary, the Fed chief and the congressmen are acting like paranoids - people know that we were not the chicken littles.

This will force them to hear the hard, logical point of view. Back to basics, baby, back to basics. The road to prosperity is via hard work and financial prudence. Ponzi scheme eventually fail. They are destined to fail.

It will take a long time before we repeat the financial euphoria. Think how long it took after depression to have a bubble of some kind. The process of rebuilding is going to be slow, very slow. But it will happen. And in a sane way.

When rest of the country was celebrating their million dollar equity - I was very pessimistic. Now that people think of being in an apocalypse - I am oddly optimistic. This slap in the face - or maybe kick in the balls - was needed to get out of hangover.

It's time to FaceReality of The Other Side. Get used to it. It's going to be a while.

Thanks StuckInBA. I've been so used to doom-and-gloom for these past few years and particularly these past two weeks, I think I need a kick in my proverbial balls to get through the hangover.

Imagine a US economy not based on spiraling debt and ponzi schemes? Imagine a nation of savers instead of a nation of debt-enslaved, mind-numbed drones? It's actually quite inspiring.

Lowly :

I do not trust Paulson. I have a hard time trusting anyone in power or anyone who wants to be in power.

More than the dollar amount - the way this plan was pushed - it just stinks. The timing of it - just before the congress recess is very fishy. Why didn't he present this plan 3 weeks ago instead of claiming that the banking system is sound ?

The language - very arrogant. If you don't pay top dollar for the sh1t, banks may not participate. If you limit their executive pay, banks may not participate. If you demand anything in return like equity, banks won't participate. So the banks are doing us a favor by accepting our money ?

I don't think the whole economy will simply freeze if we do not give this blank check to Paulson. People who think that they can control the course of economy are as stupid/arrogant as the scientists in Jurassic Park. They thought they can create the beast and control it and profit from it. But it's eating them instead - and unfortunately many innocent bystanders.

Economy evolves. It functioned fine 2000 years ago - all over the world. It functioned after the great depression. And it will function now. It will be a very different economy where people may have to pay cash instead. And they might need to even save - gee what a concept !

If there is no car loan available, prices of cars will come down to a level where people can afford it with cash. The process won't happen overnight and won't be pretty - and it won't be as simple as that. Yes. But we will adapt. Human race is amazing in adapting itself.

Don't let fear rule you.

Lowly :

I was responding to your previous question about trusting Paulson. Our messages got posted almost at the same time.

Yeah, StuckInBA, I think we're on the same wave length. I don't fully trust Paulson. It's the usual lesser of two evils bargain that we routinely confront.

Anyone know why something like Sweden's 1992 bank buy-out - not bailout! - wasn't considered? (Yeah, I know...)

They had a fairly similar though necessarily smaller mess going on, and the Swedish taxpayers managed to come out of it without taking nearly as much of a bath as we're being asked to (and they stand a good chance of recovering even more of their money). On the other hand, the bank shareholders got bitchslapped.

http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html

"Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well."