The voters will sort out the blame on all this in November. Anger at Washington will feed a hunger for change, and it’s likely to fall harder on the GOP as the party that holds the White House. But for the next president and the next Congress, whatever its makeup, Monday’s performance should be looked at as an example of what it was, a performance designed to undermine the public’s confidence in its elected leadership.
Yes, perhaps voters will want a change. They may start by not electing Obama, whose two advisers, Franklin Raines and James Johnson, got preferential home loans [industry favors] apparently because of their executive positions heading Fannie Mae, which we had to bail out. Raines and Johnson are friends of Angelo Mozilo, former chief executive ofthe now bankrupt Countrywide Financial Corp. – one of the lead companies that wrote all those sub-prime mortgages. That’s right, Obama’s advisors were funneled millions of dollars for personal home loans while Mozilo made exceptions from Countrywide policy to provide the two Fannie Mae CEO’s “sweetheart deals.
Or maybe the voters will want a change from Democrat Senator Chris Dodd. The senator is also a friend of Mozilo and also got Countrywide Mortgage sweetheart mortgage on a second home (in East Haddam, CT), as well as getting another sweetheart home equity loan that second home.
Perhaps they will finally sweep out of office Rep. Barney Frank. You all know of course that he is Chairman of the House Financial Services Committee, the committee that oversaw Fanny Mae. Well wonder of wonders, he “was once romantically involved with a Fannie Mae executive.” He also received more than $40,000 in campaign donations since 1999.
http://www.businessandmedia.org/printer/2008/20080924145932.aspx
I agree with the author, voters will sort out the blame this November, and anger at Washington will feed a hunger for change. I just hope that voters remember to change from the likes of Franklin Raines, James Johnson, Chris Dodd, and Barney Franks! For real change, vote for Palin, or better yet, Bob Barr.
Ugh! Sorry for all the typos. I did a “sleep study” last night and I am very tired.
[blockquote]Monday’s performance should be looked at as an example of what it was, a performance designed to undermine the public’s confidence in its elected leadership. [/blockquote]
And I was called “cynical” when I said something similar. The rule of thumb is when you’ve become so cynical about Washington that you can taste copperin your mouth, you’re about halfway to how cynical Washington is.
http://www.itulip.com/forums/showthread.php?t=5600
According to Senator Sherman, the main recipients of the bail out will be China, England and other foreign banks. They have apparently demanded that they be allowed to trade in their Treasuries on Monday, and have them converted on Tuesday.
I plan to call my senator to vote NO again.
I also plan to vote against every yes voting incumbant this November
As an independent without an affiliation with either the Republican or Democrat parties, I am more than puzzled by the silence on both the media’s part and McCain/Palin regarding McCain’s strengths and Obama’s vulnerabilities regarding the current financial crisis.
McCain publically and with specificity pointed out the vulnerabilities in federally sanctioned lending practices when he outspokenly co-sponsored a bill in Congress that addressed this vulnerability issue.
The bill was opposed by a Democrat controlled Congress and went nowhere. If I were McCain and Palin, I would be making this fact so well known that elementary school students would be aware of it.
Two key political appointees, both Democrats, Franklin Raines and James Johnson, who are now Obama’s key financial advisors, oversaw (as in were ‘complicit in management of’) events that led up to the current crisis.
And yet, McCain and Palin are also silent on this matter.
My analysis of McCain’s non-utilization of these issues in a strong and strident and forthright manner is that McCain is strongly driven, as a Navy captain and the son and grandson of two four-star admirals, by a military ettiquette that is key to responsible military leadership but which makes him vulnerable to unprincipled political opponents.
http://www.safehaven.com/article-11424.htm
The above is a text version of the interview with Senator SHerman. He makes the following points:
Rep. Brad Sherman:
Larry you have to read the bill. It’s very clear. The Bank of Shanghai can transfer all of its toxic assets to the Bank of Shanghai of Los Angeles which can then sell them the next day to the Treasury. I had a provision to say if it wasn’t owned by an American entity even a subsidiary, but at least an entity in the US, the Treasury can’t buy it. It was rejected.
The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday. Paulson has made it clear he will recommend a veto of any bill that contained a clear provision that said if Americans did not own the asset on September 20th that it can’t be sold to the Treasury.
Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure that can happen.
Resolution Draft
Inquiring minds are verifying the above in the Bailout Bill Resolution Draft. Here is the language under discussion.
3 SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
4 AND CENTRAL BANKS.
5 The Secretary shall coordinate, as appropriate, with
6 foreign financial authorities and central banks to work to
7 ward the establishment of similar programs by such au
8 thorities and central banks. To the extent that such for
9 eign financial authorities or banks hold troubled assets as
10 a result of extending financing to financial institutions
11 that have failed or defaulted on such financing, such trou
12 bled assets qualify for purchase under section 101.
7 SEC. 101. PURCHASES OF TROUBLED ASSETS.
8 (a) OFFICES; AUTHORITY. —
9 (1) AUTHORITY. — The Secretary is authorized
10 to establish a troubled asset relief program (or
11 “TARP”) to purchase, and to make and fund com
12 mitments to purchase, troubled assets from any fi
13 nancial institution, on such terms and conditions as
14 are determined by the Secretary, and in accordance
15 with this Act and the policies and procedures devel
16 oped and published by the Secretary.
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
4 AND CENTRAL BANKS.
5 The Secretary shall coordinate, as appropriate, with
6 foreign financial authorities and central banks to work to
7 ward the establishment of similar programs by such au
8 thorities and central banks. To the extent that such for
9 eign financial authorities or banks hold troubled assets as
10 a result of extending financing to financial institutions
11 that have failed or defaulted on such financing, such trou
12 bled assets qualify for purchase under section 101.
Seriously folks. Let’s not bail out China. We have enough troubles of our own, especially given the fact that there unlawful linking of their yuan with our dollar resulted in the transfer of our industry to their shores.
There are a number of strange signals being sent. On the one hand, we are told that it is only a small sliver of mortgages that are underwater, which begs the question of why the banks need $700 billion and why the private sector won’t touch these instruments with a poker. On the other, we are told that failure to pass this bill will end the world as we know it, again, begging the question of the fundamental soundness of our money and banking system.
What is going on here? It appears that the banks have leverage on top of leverage, a financial game of musical chairs. There is a HUGE upside down pyramid resting on the home values of Americans. And if home values aren’t worth what the National Association of Realtors says they’re worth, then the banks aren’t just broke, they’re negative equity for as high as you can count. Same for all the entities that issued those strange financial instruments that purport to insure against defaults: the premiums were calculated on bogus values.
Which leads to my next point: if the values aren’t there, then no amount of “liquidity” can raise them. The losses WILL occur. If the government steps in to underwrite them, it only has three options or a combination thereof: taxes (which hinder capital accumulation, productivity and consumer spending), public debt (which sucks capital from the private sector), or monetary inflation (which lowers living standards and motivates yet another, and bigger, boom-bust cycle).
In sum, anything the government does will be bad and will do nothing to stop the inevitable. An economic contraction is coming, and it may be one for the history books.
#5, I share your puzzlement in why McCain isn’t shouting Obama’s connections to this mess (including his work in ACORN and its work in precipitating these bad loans, as well as his advisors and money from FNMA and FDMA). This would seem the ideal time for it. Maybe he is waiting to see what happens. But if a bailout passes, and the crisis passes, McCain will have missed a royal opportunity.
Anybody who stops and thinks – or better yet, does some research, knows that this situation came about over several decades, that congressional leaders have been benefited by finance companies, and that a lot of the toxic assets are held by foreign interests.
However, an astonishing percentage of people who will vote will not think or do research — they will simply say, “Bush was in charge when this mess hit; so it has to be the fault of the Republicans.”
Not only are we planning to pay for England and China’s bad loans (in addition to our own) placing our children and grandchildren in servitude, we are also going to bring back debt bondage.
The extra brilliant idea to help Wall Street (in addition to just handing them our money)? Remember how they made a mistake by letting home debtors walk away from their mortgages? They are about to fix that:
From :
http://www.itulip.com/forums/showthread.php?t=5593
It’s the new government “rescue” plan or “mortgage replacement loans”, which IMHO is a disguise for a plan to make serfdom legal and supported by government enforcement in the US.
When I heard initially about it I dismissed it quickly as just another autocratic enormity and a closeted wet dream of some sick financial Golums.
Well I may have been wrong … Tonight on Charlie Rose the great “rescue” idea was put forward by Martin Feldstein , who is not only an AIG board member (where he did a great job ), but also a member of G30 (aka the “Gang of Thirty pieces of silver” or the “geniuses” who started to promote the derivatives lunacy in the late 90’s)
Let me first peel the onion for you and tomorrow we may get a link to the Charlie Rose interview and judge for yourselves.
Problem:
About 10 million homeowners have negative equity in their homes (the mortgage they payed is way higher than the current market value of their houses). About half of those have more than 20% .
That freezes the banks that conned them into signing those mortgages and were responsible for for the whole housing bubble (OK not only banks, …add more from your own list)
Blah blah blah … financial crisis …. blah blah blah …hurting financial institutions ….blah blah blah… house prices are in a downward spiral… many homeowners have actually incentives to foreclose their mortgages (Duh!!!) .. that furthers lowers the rice of houses … bank credit… blah blah blah …. those people who foreclose their mortgages put more pressure on people which still have a positive equity.
And the root cause of this problem is that mortgages are a no recourse loan.( ie if you stop payments the bank can’t do anything else than take the house back, only the house and nothing else)
Reaction:
We must do something to “save” the homeowner! In addition to the Wall Street bailout, so we can a “alleviate” the burden of negative equity.
Of course that doesn’t mean the homeowners should be forgiven a proportion of the mortgage … nah .. because that would produce a sharp decline in home prices and the Wall Street would loose more money.
We have to do something to stop people from choosing foreclosure instead of continuing to pay exorbitant mortgages.
The government has to build a firewall to stop the downward spiral of house prices.
Solution:
We have to bailout J6P from being ripped off completely by offering him an “incentive” to continue the obscene payments on a home worth nothing. A part of his mortgage would be replaced by a low interest government loan (loan provided by J6P from his tax money) that will lower the mortgage payments.
But we have to be “responsible” with J6P’s tax money when we use them to bailout … well…Mr J6P . The government “partial replacement loan” would not be a non recourse loan like a normal mortgage, like his existing mortgage.
Those “mortgage replacement loans” will be full recourse loans, which will not go to the individual but to the mortgage holders…
And of course, since this is actually a “swap and not a loan” probably the “rescue” of the homeowners would be roughly somewhere around (an additional) $700 bil (from J6P’s tax money, of course)
If home prices will continue to go down and J6P cannot pay his mortgage he will loose his home, he will loose all the money he did pay for that home, but he will still have to pay to the government about 20% of his initial obscene mortgage, i.e. the full-recourse “mortgage replacement loan”
So J6P would loose everything and will become a debt slave and pushed by the government into debt bondage because the government cannot waste taxpayer’s (J6P’s) money.
I was yelling at my TV : “You moron, if you want to stop house prices form failing let them reach to the bottom of the bubble faster . It is idiotic to artificially prop prices after a bubble burst, and it’s immoral to do that with taxpayer’s money!!!!”
Someone is going to have to provide proof that this is not a corporate welfare plan. These institutions that are alledgedly failing have no one to blame other than themselves. We the taxpayers pay the President of our country a generous salarey, $400,000.00 yearly. But many of the executives from these failing companies were and probably still are being paid as much as $17,000.00 PER HOUR. Based on a 52 week year that works out to be 35.3 Million a year. I’m sorry, but I can not have that much Christian charity. I have lost my job due to a down turn in business. When my wife and I were married 4 1/2 years ago, she had a load of credit card debt. We knew we could not pay for it. She is 68 and has no income other than Social Security. I’m 60. On advice of a competent bankruptcy attorney, she filed a chapter 7 bank ruptcy. We had almost $70.00 equity in the house. The trustee sold it, and now wants to keep all proceeds. If we had been allowed to stay in a Chapter 13, we would have been paying this debt under court supervision. The Chaper 7 Trustee filed a motion to conver the case to Ch7, which the court granted. In North Carolina, the bankruptcy court has twisted the applicable law, and we lost a house that the mortgage was in MY name. For those who want to read a joke, look up the North Carolina Constitution and read about homesteads and exemptions for women. Then tell me about corporate salaries. I hate to say it, but if had known that the US Court system had eroded into such a you scratch my back and I scratch yours institution, I would have never returned to the US. It makes me sorry that I gave most of and the best years of my life to the US serving in the military. I resigned a commission to get out of the ridiculous scenarios being developed 18 years ago.
There is no way I will trust our “honorables” to bail out Wall Street. There is too much chance of political payback coming to congress, and I do not trust them.
I know I sound cynical and I am. I ask all of you to pray for me for an increase in faith. That is wht keeps me going right now.
drummie,
It is a corporate welfare plan. But, look at it this way: Say you only have one grocery store to buy your groceries. ( also, you can’t grow them, borrow them, etc …)
This grocery store mismanages it’s books. IF they don’t get help ( a little “welfare booty” ) they will shut their doors. Your will have nowhere to buy food. You and your family will starve to death. And it will be the end.
Use this analogy and substitute “banks” for grocery store.
bl
Bob,
That is an absurd model that bears no relation to reality.