President Bush’s proposed solution, which he wants Congress to authorize immediately, tells taxpayers to write a check for $700 billion and trust the government and Wall Street to do the right thing ”” with inadequate regulation and virtually no oversight.
We agree with Senator Barack Obama that the administration’s plan lacks regulatory muscle, and we agree with Senator John McCain when he said: “When we’re talking about a trillion dollars of taxpayer money, ”˜trust me’ just isn’t good enough.”
Nearly everyone agrees that the there will have to be another very big bailout. The financial system, gorged on its own excesses, cannot stabilize without intervention. The $700 billion would be used to buy up the bad assets that are presumably clogging the system.
To protect the American taxpayer, Congress must ensure that the bailout comes with clear ground rules and vigilant oversight. In an appalling, though familiar fashion, the ground rules proposed by the Bush administration are wholly unacceptable ”” as are its tactics.
From “ITulip” who notes that “We got this from a friend, origin unknown. But we like.
http://www.itulip.com/forums/showthread.php?p=49705#post49705
To: TRUSTED PERSON
Subject: REQUEST FOR URGENT BUSINESS RELATIONSHIP
DEAR AMERICAN:
I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.
I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.
I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.
THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.
PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.
YOURS FAITHFULLY MINISTER OF TREASURY PAULSON
Not too dang far from the truth, Clueless.
The hypocrisy of the NYT knows no limits. The precipitating domino of the current crisis was the collapse of the subprime mortgage system. Until the mid-90s, subprime was a tiny sliver of the overall mortgage market. Then, under pressure from community organizations (such as Barack Obama’s) and their umbrella coordinators, such as ACORN, the Community Reinvestment Act was passed. While passed with the good intention of encouraging banks to increase their lending in low income neighborhoods, it had the predictable effect of requiring lenders to reduce lending standards in order to meet CRA “targets”. The larger pool of subprime loans eventually began succumbing to its own lower standards. The high volume of those defaults began to impact property values, which then began to cause defaults in higher quality loans.
By contrast, John McCain has been pushing for reform of the mortgage industry for at least seven years. But reform is hard to achieve in the face of the massive financial industry “contributions” to politicians. To get the real story follow the money. But the NYT will never do that story because it leads to all their favorites. E.g. recall that committee chair, Sen. Dodd, received one of those “friends of Angelo” [Mozilo, former CEO of Countrywide] loans at 1% below market. But Dodd maintains he did nothing wrong. Check out the public contribution records. The ask why the media is not reporting that story.
But, #3, it hasn’t just been the target loans to low income neighborhoods. Professional financial speculators (financial advisors, bankers, and other con men who play their game for the quick buck) and amateurs specualted in real estate in good neighborhoods, too. Everyone bought expecting huge short-term profits – and the artificially supported market made the lie look true. Now middle class people who were caught up in the dream of the bubble are hanging out there with the big bankers waiting for someone to solve the problem painlessly.
The whole decade has been premised on easy credit to anyone who asked for money, whether the borrower was in any position to pay back the loan or not. This was because the loans themselves became a sort of currency. It really is a case of Monopoly money chasing Monopoly money. The current fear is that the buyout will entail the creation of more Monopoly money to pay for itself. What, then, is anything really worth and is really worth anything?
Quite right #4. As standards were lowered for subprime, lower standards began to ripple through all levels.
Also to clarify an earlier point, CRA was enacted earlier, but it was its application in the 90s under pressure that helped push the huge expansion of subprime
#4, And don’t forget that for every single bad loan made, persons ‘processing’ the loan made bucks, and the higher-ups then sliced and diced them into ‘new derivatives’ — and made MORE bucks in a totally unregulated ‘derivatives’ market! Those fat cats who came up with this Ponzi scheme and profited HUGELY from it the past 10 years or so now want the US taxpayer to come up with cash so that they (the fat cats) can be hired back as ‘consultants’ to the govt. to value the fast-sinking ‘assets’ they want the govt. to buy so that the Wall St. firms can go on spinning merrily!!! And did you notice the timing, right before an election the GOP is losing?!?
These SO*s should be going to JAIL, and every ‘investor’ who tried to flip a house (not his or her personal residence) should be forced to take their lumps: they gambled and LOST. And the Wall St. fat cats (average salary: $300,000) should take theirs, too.