2008 Oct 3, 3:56am
32,369 views 193 comments
The House of Representatives approved a $700 billion bailout package for U.S. banksters.
The fundamental problems with the bill remain intact.
Argentina, feel free to cry.
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see what the elites are getting away with? More money and even more power. See, what the working class Americans hate or not hate doesn't make any difference, and I doubt if they care either way. They are busy watching American Idol.
Only the people who aspire to become American Elite but failed will understand what a raw deal they ended up with, and get pissed.
400,000 fucking deadbeats will get to stay in their houses.
You can do it without paying any intermediary or broker and it is easy. Go to www.treasurydirect.gov and set up an account. When you set up the account you them a checking account number. Say you want to put about $50,000.00 into a 6 month treasury bill. You make sure you have 50K in your account before you request to buy. The Treasury will debit an amount a little less than 50K (assuming non-zero rates by the time you do it) from your checking about 3 days after the Monday auction. 6 months after you make your purchase the Treasury will deposit $50K back into your checking. Read the online help first. It is very accessible. There is nothing difficult about buying your own treasury securities. I have moved about 40% of my portfolio into laddered short term treasury bills. I am not saying it is a good investment. I am just saying you don't have to pay anybody to buy them on your behalf. Disclaimer: All of the above is not investment advice. Please seek the counsel of a competent financial advisor and be careful.
TOB - Regarding the numbers, they seriously need to ban L1. It has no limits and now has some sort of a loophole (water cooler talk, no details) which lets the L1s become permanent residents in a record amount of time. So basically you do not need a technical/scientific background, there is no labor cert, there is no cap, the wifey can legally work, and now this loophole. Even H1Bs are screwed by them.
I am all in favor of H1B *but* with strict education, employment and skill-set verification plus no middlemen (read Indian Bodyshoppers). However, existence of L1 is beyond me.
Yes mike_orange. L1 is the NINJA Subprime of the legal immigration world.
cortexity: Those L1 NINJAs will need an immediate bailout to ensure their continued dream of American citizenship! They were victims of predatory citizenship practices... and who can blame them for wanting to remain in their beautiful new home?
There will be no middle class pretty soon IMO.
No matter how you slice it we compete with the world. We can bring the cheap labor here to make our businesses more competitive, or the business will go to the countries where the cheap labor resides.
It is not so much a question of who will do the work as it is where they will do it.
If we bring the labor here, at least their earnings will be spent here.
mike_orange - I do not think I'd go this far in the tech workers. Remember, if it were not for these idiots making 120k and buying 1M houses, bay area real estate would be similar to Stockton.
in the tech workers = in *dissing* the tech workers.
"Can we have a middle class party instead of rich mans party (republican) and poor manâ€™s party ( Democratic) ??"
No. Both parties are for the rich, and mostly controlled by the rich. And any party that is not so would not last. There is no poor man's party.
The politicians bullshit the public to get votes, and then they do what their campaign contributors want. Politicians live by votes, and without campaign contributions they do not win elections.
mike_orange: I agree with Zephyr too - we need to have the citizens wake up and consider careers in technology. It is a chicken and egg situation - why would anyone spend 40k a year college only to compete with a 70k/year H1/L1 who got his degree from god knows what college in India for 2k.
At the same time, I hardly come across US citizens for the technology openings we have at my company. To me it looks like they've completely given up on IT/Technology and moved on to other careers like Sales/Marketing, etc. which is a pretty unfortunate indication.
India is screwed anyway. Their markets hit a 2 year low today and continue to tank lower. The services based economy cannot survive when most of the jobs are created by bodyshops. They had the time and money to innovate, but they chose to do low-risk, high reward cheap outsourcing work and now will go down with us.
What you get and have been getting for all of this globalization is greatly reduced prices for the goods you buy. Unfortunately this more competitive business climate not only reduces the prices that you pay, it also reduces wages.
For most of history this has been a net benefit, and in the long run it will continue to be. This is because when we buy goods for less than we can produce them ourselves we get both the goods and have labor available to produce other additional goods to buy with the money saved by the lower prices. A net gain for the economy.
However, during the last 20 years we have been hit with a sudden flood of cheap labor as the communist countries entered the global economy. This flood of cheap labor has reduced wages faster than normal, causing some net loss to the purchasing power of our wages.
If it helps, a lot of chindians have moved to middle management and make their living with visio and powerpoint. Come layoffs, I hardly think such kind will be able to survive - not because of their visa or nationality, but because of the shallow skills they've got. They can fake their resumes but whoever is hiring in these times will not buy it at the face value for sure.
As for outsourcing to foreign countries, it would be completely futile (and counterproductive) to ban the practice. If US firms are not allowed to produce in the cheaper locations, then the US companies will lose business to foreign companies who do produce in those places. The jobs will go there whether our companies benefit from it or not.
The problem we have is half-assed globalization.
First of all, we are living in an era that you will have to compete with the worldwide labor pool of talents no matter you like it or not.
Then, we have capital that is already moving across the globe with a few strokes of keyboard in search of the best opportunities. We have corporations that roams around the world free and moves around its HQ based on whichever provides the best tax advantage (Haliburton is becoming a Middle Eastern company! The only part that is not quite at freedom to move around to look for the best opportunity? Us the people.
America has been able to pay its labor the highest price in the world because it has the strongest consumers, so being located near the biggest consumer pool is a huge geographical advantage. Well this geographical advantage is about to go away. If the consumption power of the US is cut in half, your pay will have to go with it.
So, in such a situation, either you ask nobody to move around (including capital and corporations, ask them to pledge their exclusive allegiance to a country), or everybody gets to move around. Or else somebody will be left behind, really behind.
TOB - Most of it is because of the hiring binges that the companies have. Come to think of it, I pass Sun's Menlo Park office on my way to work every day. Seeing the full parking lot, I always wonder - why the hell they need so many people!?! Similary, Oracle, Cisco, HP, Intel...I always wonder..why do they need so many people? Is it to satisfy the ego of the hiring managers ..the more the reports, the better they feel, the bigger their budget? Something somewhere is just not right.
It is a difficult issue. As long as the living standards of people in other parts of the world are so far below ours, they will be willing to work for much cheaper real wages. Like water finding its level this is unstoppable.
Zephyr - Just like the South Park episode, the goobacks.
As OO pointed out, capital moves easily. Where the capital goes the income and wealth follows. We are chasing our capital away with our tax policy. Did you know that almost all of the hedge funds operating in the US are actually domiciled outside the US? They do this to avoid paying US income tax on their profits. About 70% of all hedge funds are based in the Cayman Islands, where there is no income tax on such companies. The Cayman Islands is a tax heaven - there are more banks in Cayman than there are people! All motivated by dodging US income taxes.
Yet these companies are allowed to benefit from our consumers and economy without payng tax to the US. Guess what - the rest of us pay the bill in higher taxes or deficits.
And now the bailout is going to buy the losses on MBS and other investments that these hedge funds hold with your tax dollars!
Even if they don't buy them directly from the hedge funds, the government buying will drive up the prices and benefit these tax dodging entities.
Companies based outside the US get to sell into our markets without paying as much tax as companies based here must pay. They play games with calculating "profit" for their US operations - keeping the profits offshore where the US cannot tax them because they are not US companies.
Even US companies play profit accounting games, and "profit" is often not what it appears to be. The solution is to tax the companies based on their net revenues.
We were all ripped-off big time by the bailout giveaway. And it will not really do the most needed thing, which is to restore confidence in the banks.
What should be done (and we will eventually have to do anyway) is guarantee all deposits in US banks. Protect the depositors - not the investors or banks themselves. If all deposits are protected, banks will have no trouble getting money to lend, and will increase their lending again.
Yes but it is hard to do on a large and broad basis.
To a large extent the losses are already spread. Pension funds and other pools of the peoples money were big buyers of those securities.
But it was not fake money. If it was fake the loss of it would be inconsequential. Real people put real money into these pools of money, and the managers bought the toxic stuff because it had a slightly higher yield. The added risk was far greater than they realized.
Where did the money go? It went to people who sold stuff to the borrowers. It went to the sellers of homes who sold at the market top. It was a giant wealth transfer.
Buy low, sell high. But for everyone who does this there is someone on the other side of the transaction, selling or buying at the worst time. Someone gains and someone loses.
Unfortunately, so many of the losing parties borrowed the money that they lost, and could not repay it - thus spreading their losses to others who did not realize that they were at such risk. This leads to panic and fear of lending. Therein lies the problem.
Yes. Whatever the borrowers spent it on, thats where it went.
Foolish investors, careless lenders and irresponsible and stupid borrowers all caused this mess. And now the government will attempt to solve the problem by bailing them out at our expense.
Most of the chindians buying now have not seen the pink slip tsunami of 2000/2001. They landed here in the Greenspan era of hot IPOs, hiring binges and endless credit. Now they'd realize the ass-whooping of capitalism.
physicians don't make $300K up, you are talking about a guy with years of practice and not a lot of Medicare deadbeats with that kind of income.
Physicians are not the problems of our medical system, insurance is. Where did the money go in the medical system? Just look at the CEO pay of all the insurance companies, not the physicians, because they have a rather high cost of operation - office, admin, and yeah, malpractice insurance.
Speaking of Pink Slips, eBay is starting the trend.
Even though the layoffs will be "global" - which in post H1B/L1 era means job cuts in the US. If the company is hiring "globally", it means they're hiring in India.
October 3rd, 2008 at 1:31 pm
Looks like the Dow fell ~400 points after the Bailout Bill was signed.
Monday will be interesting.
Looks like I was right! I can't wait to here the spin about why the bailout was needed. The excuse about saving 401ks from stock crash just won't fly anymore. Maybe more voters will see the bailout for what it was - a bailout for well connected wall street donors.
# The Original Bankster Says:
they seriously need to stop all foreign work visas.
Dumbest short-sighted idea I have heard so far from you (and that is saying something :-) ). What you suggest is the fastest way to:
1. offshore jobs - if you cannot bring workers to the job, send the job to the workers
2. ensure that the majority new projects are started offshore and no part of it (workers, management, overhead, cubicle-space, facilities) even touches US shores at all.
You need to have a policy that intelligently connects a company's US market revenues to its US workforce's strength. For instance, something that says that if your company sold [X] million dollars of product within US borders, then [X/12] million dollars needs to be re-invested here on a use-it-or-lose-it basis into a general fund that does something about employee training or improvement.
Now, that may not be a perfect plan, but it sure beats this "send the furriners home" nonsense.
India is screwed anyway. [...] The services based economy cannot survive when most of the jobs are created by bodyshops.
I think you may be making a mistaken assumption that what _you_ see of Indian companies here is all there is about their economy. I reviewed a case-study on emerging economies (BRIC) a few years ago - and while the analysis was not particularly original or insightful, it made the case that these countries have manufacturing depth and indigenous R&D in a very wide range of industries. Since then, I noticed several recent developments have supported this case. Russia and India in particular also have very broad educational infrastructure - both at elementary level as well as higher education. The internal environment in China and India is so intensely competitive that any survivors that come out of those markets (including job market) are guaranteed to give anyone anywhere in the world a serious run for their money.
So, while it may make you feel a little better to dismiss these places using some kind of ethnic stereotyping, it would probably be a good idea to shake yourself up and think about what you are going to do - beyond writing to your congressman to complain about outsourcing. I agree that the US needs to do a better job of dis-incentivizing businesses "leaders" to pillage the country - but it is up to individual Americans to step up their game too if you want any kind of sustainable solution.
@coretexity, the last paragraph of my previous post was not directed at you personally.
The Original Bankster Says:
yep and the ACM + IEEE donâ€™t help either, they work against american engineers as well.
ACM = Association for Computing Machinery
IEEE = Institute of Electrical and Electronics Engineers
Both of these are international organizations that promote advancement of technology. They are not political organizations or workers unions. Why would you expect them to further the case for American engineers (or Iranian, for that matter)?
I am not disagreeing with your premise that US tech workers need better representation in their own government - just saying that looking to ACM or IEEE to do this is not the way.
Buy low, sell high. But for everyone who does this there is someone on the other side of the transaction, selling or buying at the worst time.
Which reminds me, this is a housing blog. Is _anyone_ dumb enough to buy a house in the Bay area these days? I see for-sale signs with fantasy prices still pop up on lawns and go after a few weeks), but can't imaging what kind of mouth-breathing 'tard is wanting to buy now unless it is a deeply discounted REO.
The Original Bankster Says:
SP, Ill take that as a yes.
If that helps, you're welcome.
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