1. You two gentlemen have been wrong about the Housing crisis, missed the leverage problem, and understated the derivative issue. Recall the overuse of the word “Contained.” Indeed, you two have been wrong about nearly everything financially related since this crisis began years ago.
Question: Why should we trust your judgment on the largest bailout in American history?
2. How are you pricing the purchase of these damaged assets? Is the taxpayer paying 22 cents on the dollar? 5.5 cents? If there is no market price for this junk paper, how are you going to determine a purchase price?
I remember a presidential candidate that was as loosey goosey as these proposals. Is Paulson a related to Pat Paulson? Pat was more in touch with the the US public, IMO.
[blockquote]1. You two gentlemen have been wrong about the Housing crisis, missed the leverage problem, and understated the derivative issue. Recall the overuse of the word “Contained.” Indeed, you two have been wrong about nearly everything financially related since this crisis began years ago.
Question: Why should we trust your judgment on the largest bailout in American history?
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14. If we make this inordinate grant of unlimited cash, how can we rein in the budget in the future? How can we as a Congress say no to expensive budget items such as Nationalized Health Care, or Infrastructure repair programs or fill in the blank on the grounds they are “too expensive?”
Bonus comedy question: Are you now, or have you ever been, a Socialist? Do you know, or associate, with other Socialists?[/blockquote]
Those three questions are the best of the best. One wonders where the trust is supposed to come from to solve this problem when everyone’s trust funds are floundering.
I like question #1 the best. If these guys can’t regulate Freddie and Fannie, why should we let them have a go at something far more complicated and subject to political extortion?
I am so concerned with the whole deal I would much prefer a recession to the unknown depths of financial hell that seem sure farther into the future.
Don
PS The best article that I ahve seen so far that most acurately lays out the problem is from [url=http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0]Bloomberg[/url]
Ask them what’s wrong with using the Swedes’ approach?
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em
Very sloppy. E.g. # 6 “700 Bil cost”. No, $700 bil is the size of the fund. If the plan works, the fund actually makes a profit, as markets stabilize and the fund sells off the distressed assets. This is already being done by private funds. Massive Federal intervention should speed up the process.
Don, many people have been warning about the need to reform Fannie Freddie. E.g. see John McCain’s May 25, 2006 testimony, mentioned in my prior post, that F/F were “cooking the books” to support high bonuses, and furthwer warning of F/F’s potential danger to the entire economy.
#! Oh I think these gentlemen understand the problem very well. After all, when Paulson was at Goldman Sachs, although his firm sold CDOs and toxic waste, leveraged up the wazoo to everybody else, his personal monies (several hundred million a year salary) was invested in Treasuries.
Seems smart enough to me.
DonGander, I completely agree with this: “I would much prefer a recession to the unknown depths of financial hell that seem sure farther into the future.”
For years now, we’ve had easy credit — credit which consumers could not actually live up to, but used anyway.
It’s time to pay the piper now . . . and I hear a whole bunch of rich people who own stock in these loan and financial and mortgate and insurance companies not wanting to pay that piper. Wanting to go through all sorts of maneuverings and machinations to make that piper go away.
The result will be yet further regulating [and the regulating was a huge snarl that helped get us into this mess in the first place, along with the penalties inflicted on mortgage companies and lending institutions for not lending to people whom legislators had determined ought to be lended to, no matter what] . . . in an effort to stave off paying the piper [i]for now[/i], but which will get us in even deeper and into a worse snarl.
What a travesty.
I should note that both parties are willing to support this massive bailout of corporations that ought to go belly-up, for their terrible decisions, rather then supported by taxpayers. In a free-market, the “correction” would be swift and terrible. For the bad decisions that these companies made . . . they would go out of business, and new companies, who had learned from the old’s failures, would spring up to fill the vacuum.
Further, the market would learn again that there is no government bailout for terrible business decisions — when a big corporation screws up, then they will be allowed to fail and disappear. That kind of “learning” extends all the way down through the market . . .
But no . . . there won’t be that “learning” now. Big corporations everywhere will “learn” that if they can point out just how much of the economy they have power over, the government will rush in to shore up their stupid decision-making over the past two decades.
Disgraceful.
I find myself remembering the bankruptcy reform laws. How much moralizing was directed at the “irresponsible” idiot with the unpayable credit card debt. It’s always amazing to me how the moralizing is so top down. But now the shoe is on the other foot. The Parable of the Unforgiving Servant comes to mind.
I like what Sarah has to say in her post. I think that the “average” American doesn’t understand the potential downside to [i]not doing[/i] the bailout. They are angry about it, but scared to death not to let the “experts” run the show. There’s a world of difference between having your investments go flat or down some, and not having a job at all.
RE: “I find myself remembering the bankruptcy reform laws. How much moralizing was directed at the “irresponsible†idiot with the unpayable credit card debt.”
Yes — I agreed with that then, and I wish the same thing were done now with the big boys.
I think another question that should be asked is…do we need a Federal Reserve Bank at all since they have utterly failed in their mission. Perhaps now would be a good time to abandon fiat currency and return to real money back by say…I don’t know…silver. Perhaps we should decouple our economies from the current globalism so that inflation/recession cycles remain localized to regions or at most, individual nations. Perhaps we should view this as a golden opportunity to reclaim U.S. Sovereignty and stop printing Bretton Woods post 1971 toilette paper.
Sarah,
Thanks. Re: the Bankruptcy Reform laws. Funny how we were able to get that bit of top down regulation done. The trouble always seems to come with the other direction.