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The economy - oops - Page 3

post #101 of 2754
9/20/08 at 10:56pm
Quote:
Originally Posted by The Closer View Post


And unfortunately, at the end of the day it is Mrs. Cupp's fault for not reading the small print. I know that the "democratic view" is that really nobody is responsible for the mistakes they make (perhaps her city councilman should have accompanied her to her loan closing to review things?) but again, there is nothing wrong with telling Mrs. Cupp that its her fault she signed off on something she didnt fully understand.

And when you say "blessed by people who were supposed to watch out for her best interests in Washington" I can only assume you are referring to folks like Obama, correct? Seeing as how he was a big supporter of lax lending standards.

.
And here is the heart of the problem. Did you read all the small print on your mortgage? How about the "Terms and Conditions" that come with every single piece of software you buy or download?

Combine the lack of education of most Americans with the complex process of buying a home and you get...the current situation!

I really despise this "Every man for himself" society we've created in the US: where you must expect/assume that everyone is out to get you and will lie to you to attain their aims. And it is your responsibility to double-check everything everyone represents to you.

And remember that in this mortgage situation we are not talking about "Duke Fleed's Fly by Night Mortgage Co" . We are talking about Washington Mutual, IndyMac etc.

Ask yourself if this is the society you want to live in. Not the society to DO live in, the one you want?
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post #102 of 2754
9/20/08 at 11:27pm
Quote:
Originally Posted by Cylon Baby View Post

Combine the lack of education of most Americans with the complex process of buying a home and you get...the current situation!
Studies have consistently shown that Americans ranks among the least (if not THE least) financially educated nations in the western world. Now, in a situation like this, there are unquestionably numerous factors invovled, but this lack of financial understanding only serves to make a bad problem worse.

In my town, there are no shortage* of families that make about 70k a year living in $200,000 houses. Obviously, part of that can be blamed on the fact that housing prices were inflated beyond any rational sense, but at a certain point isn't it incumbent on the buyer to say "You know, I shouldn't do this. Long term, it isn't a financially responsible decision." Yeah, home loans were being handed out like candy at Halloween and everyone wanted to get a piece of that pie. But the buyers didn't stop and ask themselves "You know, this adjustable rate mortgage looks great now, but is it going to stay that way?"

And I don't want to sound like one of these "BLAME THE CONSUMER!" people. I realize the preasure on people in, as you pointed out, an incredibly materialistic society. I also understand the desire to give one's family a nice home and good standard of living. And I understand that it was things like that that made it all the easier for the economy to take the turns that it did. Most people are well meaning and were simply grabbing the opportunity that was presented to them, but they never once considered that they make be making a deal with the Devil.

And, to be honest, my sympathy starts to deteriorate when I look at the financial decisions of some of these people. For example, I have a family member that lives in a $500,000 home. She doesn't work, and her husband works in Real Estate. He does ok for himself, but they live in a resort town, so his business is VERY seasonal, meaning that there are long stretches with no money coming in. So, what do they do? Take out any and every loan they can find, with no means to pay them back, of course!

The thing that blows my mind is that they COULD still live a very comfortable lifestyle with the money he brings in. They aren't content to live that life, though. They've got a house they can't afford, vehicles they can't afford, and on top of that they owe several thousand dollars in back taxes. Sure, they had these offers dangled in front of them, but they abused the system and now the reality is that they'll probably be losing the house in the next 9 months.

So, in a situation like that, am I REALLY supposed to lay all the blame on the financial end? Believe me, I know that there are plenty of well-intentioned people being fucked over because of all this, but there are also a ton of people that knew damn well, or at least had an idea, that they were milking the system without care of the long term implications.

*Well, there wasn't. That's changing now.
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post #103 of 2754
9/21/08 at 9:14am
Quote:
Originally Posted by Matt Goldberg View Post
Even if Obama wins the election, I don't see how he'll be able to afford reforms like universal health care or full college tuition.
TAX CUTS FOR THE RICH, obviously.
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post #104 of 2754
9/21/08 at 12:08pm
Quote:
Originally Posted by Matt Goldberg View Post
Because things aren't dismal enough, allow me to chime in with something else this financial catastrophe ruins: social reform. Even if Obama wins the election, I don't see how he'll be able to afford reforms like universal health care or full college tuition. Is he going to have to spend his whole time in office cleaning up the mess that the Bush administration made all over the rug?
Unfortunately, he--and the next few administrations--will be doing just that. Prior to this, everyone knew the next few presidents were going to have to clean up the mess Bush has made of the Middle East, the Bill of Rights, our standing in the international community, the already historically massive federal debt and weak dollar, the raping of the Army and so on and so forth. Then, just before the election, the credit crisis finally came to a head and compounded and multiplied the problems that the policies the Republican Party in general and the Bush Administration in particular have enacted over the last fifteen years. Prior to that, it was reasonable to think that Obama could fund his reforms if we simply stopped underwriting the energy industry's cost of doing business, got the insanely wealthy to pay their fair share in taxes for the first time in a few decades, started to downscale the War in Iraq, stopped throwing money at foolish DoD programs that are just financial black holes and nothing more (Star Wars and the like) and got back to "pay as you go" federal spending. Now, that's all out the window. The next few administrations are going to be able to do nothing but clean up the mess the current administration has made of things. This is just plain depressing.

The thing that's more depressing is everyone is buying this "Do Nothing Congress" bullshit. What most people don't know--because the mainstream media won't tell them--is that the entire strategy of the Republican Party leadership since 2006 has been to make the GOP's slim minority in congress an albatross around the majority party's neck in order to--in Delay's own words--make them look like a "do nothing congress" by 2008. If the public buys that and elects McCain and/or reverses the trend of 2006, I'm going to be of the opinion that this electorate gets everything it deserves.
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post #105 of 2754
9/21/08 at 1:35pm
Great article today in the FT about Greenspan's hand in this. Kinda goes over some of the stuff a few of us have said so far in this thread:

http://www.ft.com/cms/s/0/32b85c72-8...0779fd18c.html
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post #106 of 2754
9/21/08 at 5:26pm
Early reactions to Paulson's bailout plan, not so hot.
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post #107 of 2754
9/21/08 at 5:45pm
Kudos to Obama for speaking out for some Quid Pro Quo:

Quote:
Obama has stepped up and stated what he needs a bailout plan to include in order to support it, and the Paulson plan simply can't meet his requirements. Obama has just announced his opposition to the basic principles of the Paulson Plan.

No Blank Check: Paulson doesn't get money without oversight or legal responsibility.

Must Be Regulatory Changes: The practices that caused the crisis have to be ended at the same time.

Taxpayers Need More than Consideration: If a huge bailout is to occur, it has to be done in the way that costs taxpayers the least possible.

No Bailout For Foreign Banks From US Money: Instead, all countries should work together to help everyone.

Ordinary People Get Help Too: It can't just be a bailout for Hank's friends, it has to help ordinary Americans too.

As Obama said:

The bottom line is that we must change the economic policies that led us down this dangerous path in the first place. For the last eight years, we’ve had an “on your own-anything goes” philosophy in Washington and on Wall Street that lavished tax cuts on the wealthy and big corporations; that viewed even common-sense regulation and oversight as unwise and unnecessary; and that shredded consumer protections and loosened the rules of the road. Ordinary Americans are now paying the price. The events of this week have rendered a final verdict on that failed philosophy, and it is a philosophy I will end as President of the United States,” said Senator Barack Obama.
Source with links.
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post #108 of 2754
9/21/08 at 5:49pm
Health insurance for American citizens? FUCK THAT.

Bailing out poor decisions and possible illegal behaviour by huge financial institutions? $700 BILLION BABY.

And please remember to spit on that homeless vet you pass near the highway for being such a losing underachiever. He and everyone on food stamps are the cause of all this.
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post #109 of 2754
9/21/08 at 7:02pm
I like this piece from Robert Reich. I hope at least Obama is listening. I can't imagine McCain or Bush moving forward with anything like this:

Quote:
What Wall Street Should Do To Get Its Blank Check
By Robert Reich - September 21, 2008, 1:48PM

The frame has been set, the dye cast. Treasury Secretary Hank Paulson, presumably representing the Bush administration but indirectly representing Wall Street, and Fed Chief Ben Bernanke, want a blank check from Congress for $700 billion or possibly a trillion dollars or more to take bad debt off Wall Street's balance sheets. Never before in the history of American capitalism has so much been asked of so many for (at least in the first instance) so few.

Put yourself in the shoes of a member of Congress, including our two presidential candidates. The Treasury Secretary and Fed Chair have told you this is necessary to save the economy. If you don't agree, you risk a meltdown of the entire global financial system. Your own constituents' savings could go down with it. An election is six weeks away. Besides, in the last two days of trading, since rumors spread that the Treasury and the Fed were planning something of this sort, stock prices revived.

Now - quick -- what do you do? You have no choice but to say yes.

But you might also set some conditions on Wall Street.

The public doesn't like a blank check. They think this whole bailout idea is nuts. They see fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity. Wall Street's request for a blank check comes at the same time most of the public is worried about their jobs and declining wages, and having enough money to pay for gas and food and health insurance, meet their car payments and mortgage payments, and save for their retirement and childrens' college education. And so the public is asking: Why should Wall Street get bailed out by me when I'm getting screwed?

So if you are a member of Congress, you just might be in a position to demand from Wall Street certain conditions in return for the blank check.

My five nominees:

1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.

2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year's other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?

3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street's outsized political power - especially when that power is being exercised to get favorable terms from taxpayers?

4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.

5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?

Wall Streeters may not like these conditions. Well, you should tell them that the public doesn't like the idea of bailing out Wall Street. So if Wall Street doesn't accept these conditions, it doesn't get the blank check.
Source.
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post #110 of 2754
9/21/08 at 7:38pm
Quote:
Originally Posted by yt View Post
Kudos to Obama for speaking out for some Quid Pro Quo:



Source with links.
I agree with almost everything. The entire last paragraph is more partisan bullshit that really deserves no attention.

Quote:
Ordinary People Get Help Too: It can't just be a bailout for Hank's friends, it has to help ordinary Americans too.
What people keep failing to realize is that they are, at the end of the day, bailing out ordinary Americans. The ramifications of the meltdown that was seemingly about to occur would have been felt from the top all the way down to below the bottom to an extent that almost all of us have never seen before.
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post #111 of 2754
9/21/08 at 7:49pm
Larisa Alexandrovna has an interesting piece in the Huffington Post, calling this move a continuation of Prescott Bush's Business Plot:

Quote:
If you must break the law, do it to seize power: in all other cases observe it. ~ Julius Caesar

In 2000, the long fought for and long admired democracy of the United States of America began a slow and steady decline toward fascism - a Bush family tradition - with the installment of a president - a man the citizens overwhelmingly rejected (although the funny math told a still believed myth) - by a few corrupt judges on the US Supreme Court. That coup is now nearly complete and checkmate is all but unavoidable.

Let me first point you to the Bush administration's so-called Wall Street bailout bill, here, so that you can see for yourself that this treachery is being conducted in the light of day. Fascism is finally and formally out of the right-wing closet even if the F word is not yet openly being used (although it should be, and often).

Now, if you do not yet understand that the Wall Street crisis is a man-made disaster done through intentional deregulation and corruption, I have a bridge in Alaska to sell to you (or Sara Palin does anyway). This manufactured crisis is now to be remedied, if the fiscal fascists get their way, with the total transfer of Congressional powers (the few that still remain) to the Executive Branch and the total transfer of public funds into corporate (via government as intermediary) hands.

Adam Davidson of NPR blogs about the so-called bailout bill as follows:

I would guess that this has to be one of the biggest peacetime transfers of power from Congress to the Administration in history. (Anyone know?). Certainly one of the most concise.

The Treasury Secretary can buy broadly defined assets, on any terms he wants, he can hire anyone he wants to do it and can appoint private sector companies as financial deputies of the US government. And he can write whatever regulation he thinks are needed.

Most importantly, Davidson points to this passage in the bill:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

The Bush family, in the form of Prescott Bush, has tried a more aggressive coup before in order to install fascism in this country. This treasonous plot was called "the Business Plot," because the high-level plotters - including Prescott Bush - were Wall Street men who openly supported fascism.

It seems this time around, the Bush family is trying the more subtle approach to open bloodshed: first create a crisis, then under the guise of addressing that crisis, overthrow democracy. Yes, it does sound terribly conspiracy-theory-esque when explained just this way. But what else does one call a criminal conspiracy to destroy Congressional powers permanently, alter Judicial powers permanently, and steal public funds?

As I see it now, we have but two options and I have long alluded to hoping against hope that one of these options would not be the only one left to a peaceful people. The first and frankly most preferable option is for Congress to immediately begin impeachment proceedings against the members of this latest Business Plot.

No time needs to be wasted on hearings as we already now have in writing, formally as presented to Congress, the intentions of this administration to nullify Congressional powers permanently, to alter Judicial powers permanently, and to openly steal public funds using as blackmail the total collapse of the US economy if these powers are not handed over. You do see how this is blackmail, do you not? You do see how this is a manufactured crisis precisely designed to be used as blackmail, do you not?

The other option, the one I have long prayed we would never need to even consider, is a total revolution. But, If Congress won't act in its own self-defense, in the defense of democracy, in defense of us - the people who have elected them to protect us from this very danger - then what is left for us to do? I don't want to see it come down to this, but I fear that it will. Put your party politics aside right now. We are in a crisis so dangerous that should these people succeed in their coup, your party affiliation will no longer matter, your American flag will be a nice collectible item of something that once was, and your version of God will be worshiped in secrecy because your freedoms will be owned by the few.

You are no longer Republicans, Democrats, or any shade of voter. You do not live in a swing state or a solid colored state. You are simply this: an American. That is the only side that matters. So call your members of Congress and demand, no, declare that unless they do their duty to the Constitution and to us, we will move to the streets - not because we want to, but because our founding fathers demanded this duty of each and every citizen in the face of such a domestic enemy. Demand - as is your right - that this bill be voted against and demand - as is your right - that the people plotting this treachery be held to account. We are either a nation of laws or we are no longer a democracy. Pick a side, because there won't be another time, another moment, another chance to be a patriot.
More here.
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post #112 of 2754
9/21/08 at 7:51pm
Quote:
Originally Posted by The Closer View Post
I agree with almost everything. The entire last paragraph is more partisan bullshit that really deserves no attention.
Uh, it may be partisan, but to deny the importance of Reaganomics (or to put it more accurately, modern conservative orthodoxy) as a major contributing factor to the structural deterioration underneath this crisis, is really putting the blinders on.

Quote:
What people keep failing to realize is that they are, at the end of the day, bailing out ordinary Americans. The ramifications of the meltdown that was seemingly about to occur would have been felt from the top all the way down to below the bottom to an extent that almost all of us have never seen before.
I don't think anyone is failing to recognize this.
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post #113 of 2754
9/21/08 at 8:05pm
Quote:
Originally Posted by Pop Zeus View Post

I don't think anyone is failing to recognize this.
You wouldnt guess it considering over the past few days all weve been hearing about from mainly one end of the political spectrum is "Wall St vs Main St."

I understand and agree with the importance of oversight, checks & balances, etc...but in this case Wall St and Main St are pretty much the same.
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post #114 of 2754
9/21/08 at 8:24pm




More "good country people" here.
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post #115 of 2754
9/21/08 at 9:05pm
I'm torn with CEO pay.

On one hand, these guys especially should not be paid as much as they are for basically fucking up their companies. If I was a shareholder or a board member for one of these companies, I'd make sure they'd get as little as possible.

At the same time, these are public companies and I have to disagree with anyone who thinks that the government should step in and tell these companies how much money they should pay their executives.
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post #116 of 2754
9/21/08 at 9:22pm
Quote:
Originally Posted by Muharulz View Post
I'm torn with CEO pay.

On one hand, these guys especially should not be paid as much as they are for basically fucking up their companies. If I was a shareholder or a board member for one of these companies, I'd make sure they'd get as little as possible.

At the same time, these are public companies and I have to disagree with anyone who thinks that the government should step in and tell these companies how much money they should pay their executives.
Indeed. Take Fuld for example. He was one of Wall St's most tenured CEOs and (up until last quarter) led the company in such a way that they never reported a loss over a fiscal quarter. He ran a business that employed tens of thousands of people. He earned his pay. It just so happens that his entire business (similar to Bear Sterns) revolved around dealing in types of investments that for decades performed as they were supposed to.

I know its fashionable to blame CEOs and bitch about how much money they make, but a lot of them actually earn it.
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post #117 of 2754
9/21/08 at 9:29pm
Why did CEO pay increase 6X from the 1980s to 2003?

Why did the disparity between CEO pay and average worker pay increase from 35X in the 1980s to 262X in 2005?

Do you see any connection between market capitalization, downsizing and the current financial collapse? Just asking.
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post #118 of 2754
9/21/08 at 9:33pm
Quote:
Originally Posted by Muharulz View Post
I'm torn with CEO pay.

On one hand, these guys especially should not be paid as much as they are for basically fucking up their companies. If I was a shareholder or a board member for one of these companies, I'd make sure they'd get as little as possible.

At the same time, these are public companies and I have to disagree with anyone who thinks that the government should step in and tell these companies how much money they should pay their executives.
Most people are pissed off because this whole decade has been littered with historically significant financial scandals (Enron-the current banking implosion) and the people behind them, even the ones who go to jail, get multiple millions of dollars in severance packages while the employees have their benefits go up in smoke and the taxpayers are left holding the bag. It's the lack of responsiblity, not the pay that pisses people off.

With the current situation, I think the government has every right to tell the company not to give out the golden parachutes, given that they own a majority interest in the companies.
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post #119 of 2754
9/21/08 at 9:36pm
Quote:
Originally Posted by Muharulz View Post
I'm torn with CEO pay.

On one hand, these guys especially should not be paid as much as they are for basically fucking up their companies. If I was a shareholder or a board member for one of these companies, I'd make sure they'd get as little as possible.

At the same time, these are public companies and I have to disagree with anyone who thinks that the government should step in and tell these companies how much money they should pay their executives.
Well, given the fact that its taxpayers who are bailing out these companies, shouldn't they have a say (in the form of oversight and regulations) in how their money is spent? Also, not knowing how overvalued your assets are probably means you are not good at being a CEO.
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post #120 of 2754
9/21/08 at 9:42pm
Quote:
Originally Posted by yt View Post
Why did CEO pay increase 6X from the 1980s to 2003?

Why did the disparity between CEO pay and average worker pay increase from 35X in the 1980s to 262X in 2005?

Do you see any connection between market capitalization, downsizing and the current financial collapse? Just asking.
Dont get me wrong, I think the pay for a lot of CEO's over the past few years has been appalling. The one example that always comes to my mind is Stanley O'Neal.

But for every Stanley O'Neill, there's a Jamie Dimon.

I think that stockholders should be allowed to have more of a say when it comes to cash compensation to CEOs. If you make the majority of their compensation in stock and/or options (and do away with parachute deals unless you have been there for a certain amount of time) maybe that would seem fair?
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post #121 of 2754
9/21/08 at 10:17pm
Quote:
Originally Posted by Pop Zeus View Post
Well, given the fact that its taxpayers who are bailing out these companies, shouldn't they have a say (in the form of oversight and regulations) in how their money is spent? Also, not knowing how overvalued your assets are probably means you are not good at being a CEO.
I think it's tough to say. It makes me cringe knowing that the government is going to control these companies. The government would almost certainly have a say in who makes how much money when if they bail out a company.

But we are talking about past pay. Yeah, I hear all of you about responsibility to their company, which is why I said that if I owned stock in that company and my CEO lead the company to tanksville, I'd give him jack shit.

And this leads me to vt's point. While I can't point to specific cases of 6x pay from the 80s to now, I would say that if my company (which many did during the 90s boom) made a ton of bank... I would love to pay my CEO millions of dollars. Where we all agree is when that kind of money should not be paid off. I agree with all of you that these golden parachutes are out of control. CEO's of companies that tanked under their leadership should not have a graceful exit, they should not be given severance packages for failed terms in office.

As for the difference between CEO's and workers, I may disagree with you all. Personally I think that if a company succeeds under the watch of one person (take Steve Jobs for example) they should benefit far more significantly than the average iPod builder. That's the way it always works and should continue to work. The more important people, the ones who make serious business dealings everyday, should be the ones making the most money and they are the ones who should benefit the most when their companies succeed. As I have stated above, however, I feel that they should take the brunt of criticism and attacks and get little to no pay for their work in failed regimes.

I've made it pretty damn clear that I absolutely disagree with these recent bailouts by our government. These companies used shady and sometimes illegal measures to earn profits and now we are paying for their greed. I don't think the American people should bail these companies out regardless of what it would lead for our economy in the short-term.
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post #122 of 2754
9/21/08 at 10:31pm
Ultimately, when we're talking about trillions of dollars, a couple of hundred million diverted to CEO pay might not seem like a lot, but it is an important distinction in how the CEO differentiates between his personal success and wealth and the success and wealth of the company.

The biggest problem that I have with Paulson's bailout package (besides the lack of long term structural regulations) is the lack of oversight in who controls the selling (and resulting profits) of the mortgage packages that the taxpayers are buying at an above market value. If we do not, as taxpayers, see any upside to that, then it will be a continuation of this anything-goes, unregulated free market capitalism, which is actually a completely retarded form of socialism.
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post #123 of 2754
9/22/08 at 1:42am
Aaaand it all comes full circle...
Quote:
The New York Times reports this evening that "foreign banks, which were initially excluded from the [Wall Street bailout] plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks."

The Times further reports that two of the biggest foreign banks in need of such relief are Barclays and UBS. In fact, my understanding is that UBS is more on the line here than any other foreign bank.

Let's add this up.

John McCain's top economics advisor, who is widely believed to be his choice for Treasury Secretary, should he win in November, is former Sen. Phil Gramm. (Indeed, just last night his spokesman refused to say Gramm wouldn't be McCain's choice for Treasury Secretary.)

Gramm is both vice chairman of UBS's US division and a lobbyist for UBS.

If UBS successfully lobbied over the weekend to get in on the bailout, what was Gramm's role in the lobbying?
Source.
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post #124 of 2754
9/22/08 at 3:21am
Quote:
Originally Posted by Cylon Baby View Post
And here is the heart of the problem. Did you read all the small print on your mortgage?
All the info you really need should be on the HUD-1 and TILA forms.

Now, probably 90% of Americans don't know what the fuck I just said, so that's a bit of an issue.
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post #125 of 2754
9/22/08 at 3:50am
Hell hath frozen over. Newt f**ing Gingrich is breaking ranks and crying foul.

Quote:
Before D.C. Gets Our Money, It Owes Us Some Answers [Newt Gingrich]

Watching Washington rush to throw taxpayer money at Wall Street has been sobering and a little frightening.

We are being told Treasury Secretary Henry Paulson has a plan which will shift $700 billion in obligations from private companies to the taxpayer.

We are being warned that this $700 billion bailout is the only answer to a crisis.

We are being reassured that we can trust Secretary Paulson "because he knows what he is doing".

Congress had better ask a lot of questions before it shifts this much burden to the taxpayer and shifts this much power to a Washington bureaucracy.

Imagine that the political balance of power in Washington were different.

If this were a Democratic administration the Republicans in the House and Senate would be demanding answers and would be organizing for a “no” vote.
Rant continues here.
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post #126 of 2754
9/22/08 at 3:57am
Quote:
Originally Posted by yt View Post
Hell hath frozen over. Newt f**ing Gingrich is breaking ranks and crying foul.
I could be mis-remembering, but Newt seems to have found that whole "maverick/straight-talk" schtick that McCain dropped a few years back. I shudder every time he seems to make sense, which is starting to happen more often than I'm comfortable with.
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post #127 of 2754
9/22/08 at 9:59am
Quote:

Reuters
AIG's ex-CEO refuses $22 million severance payout: report
Monday September 22, 6:23 am ET


(Reuters) - American International Group Inc's (NYSE:AIG - News) former Chief Executive Robert Willumstad has rejected a $22 million severance payment, the Wall Street Journal reported, citing a person familiar with the decision.
Willumstad e-mailed his successor, Edward Liddy, of his decision to forego the severance since he was not able to execute the restructuring plan he had developed, the paper said.

The newspaper also reported major shareholders concerned about the government takeover were planning to meet on Monday to discuss alternatives to the federal bailout, citing a person familiar with the matter.

AIG and Robert Willumstad could not be immediately reached for comment.
http://biz.yahoo.com/rb/080922/finan...illumstad.html
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post #128 of 2754
9/22/08 at 10:25am
A nice little PR/resume building stunt. Kudos to Robert Willumstad for that move.
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post #129 of 2754
9/22/08 at 10:31am
Saw this on CNN.com.
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post #130 of 2754
9/22/08 at 12:02pm
From Bloomberg: http://www.bloomberg.com/apps/news?p...d=aSKSoiNbnQY0

Quote:

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.

Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.

Greenspan's Warning

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Mounds of Materials

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.

Yes, I do realize that the author of the article is one of McCain's economic advisors....but facts are facts and parts of this are interesting.
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post #131 of 2754
9/22/08 at 12:21pm
From the NY Times: http://www.nytimes.com/2008/09/22/us...7nuznBsIw26YZg

Quote:
Loan Titans Paid McCain Adviser Nearly $2 Million
By DAVID D. KIRKPATRICK and CHARLES DUHIGG
Published: September 21, 2008

Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say....

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month. Mr. Davis “didn’t really do anything,” Mr. McCarson, a Democrat, said.
Yes, I do realize that the authors of this aren't tied to the McCain campaign, but facts are facts and this is interesting.
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post #132 of 2754
9/22/08 at 12:22pm
Jesus fucking Christ.
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post #133 of 2754
9/22/08 at 1:02pm
Been busy this weekend, haven't had a chance to read everything over but I thought I'd throw this article up (if it hadn't already been posted)

http://www.nypost.com/seven/09212008...don_130110.htm



Quote:
Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor.

According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.
Quote:
Banks, which usually keep an average of $2 billion in excess reserves earmarked for withdrawals, pumped that up to an astounding $90 billion by Wednesday, Lou Crandall, chief economist at Wrighton ICAP, told The Journal.

And for good reason. By the close of business on Wednesday, $144.5 billion - a record - had been withdrawn. How much money was taken out of money market funds the prior week? Roughly $7.1 billion, according to AMG Data Services.
For the record, the market is down right now and it is entirely because of the Democrats trying to politicize this bail out.

Asked about the fundamentals of the U.S. economy, Paulson said, "I won't bet against the American people ... We will work through this." It's all about investor confidence.
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post #134 of 2754
9/22/08 at 1:05pm
At this point, the McCain campaign could say that earth revolves around the sun and I'd want it fact checked. Also, we just spent a bunch of posts describing how this problem is systemic, and now the McCain campaign wants us to believe that the entire crisis could've been avoided by the Democrats not voting for 1 bill.
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post #135 of 2754
9/22/08 at 1:12pm
Quote:
Originally Posted by Pop Zeus View Post
At this point, the McCain campaign could say that earth revolves around the sun and I'd want it fact checked. Also, we just spent a bunch of posts describing how this problem is systemic, and now the McCain campaign wants us to believe that the entire crisis could've been avoided by the Democrats not voting for 1 bill.
It might have fundamentally shifted the housing market. Then again it might not have, either way... if it was enacted we wouldn't have had to bail out Freddie Mac and Fannie Mae, which now accounts for 200+ billion of taxpayer money.

Let's just divide that up by all the members who voted no and ask for them to flip the bill. That sounds like something a liberal would say.
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post #136 of 2754
9/22/08 at 1:25pm
Interestingly enough, it seems Obama and McCain are on the same side of this issue. Both smell a fish with the bailout.
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post #137 of 2754
9/22/08 at 1:30pm
Quote:
Originally Posted by dynamotv View Post
Interestingly enough, it seems Obama and McCain are on the same side of this issue. Both smell a fish with the bailout.
McCain's just politicizing the bailout!
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post #138 of 2754
9/22/08 at 1:39pm
Quote:
Originally Posted by Pop Zeus View Post
McCain's just politicizing the bailout!
Let's wait 5 minutes. He might still be for the bailout. That crazy decisive McCain. You know where he stands for at least a day.
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post #139 of 2754
9/22/08 at 2:12pm
Two genius missives from members of Congress that I read on Crooks and Liars. Both of these are must-reads for bitter tragic-comic hilarity.

Quote:
Paulsen and congressional Republicans, or the few that will actually vote for this (most will be unwilling to take responsibility for the consequences of their policies), have said that there can't be any "add ons," or addition provisions. Fuck that. I don't really want to trigger a world wide depression (that's not hyperbole, that's a distinct possibility), but I'm not voting for a blank check for $700 billion for those mother fuckers.

Nancy said she wanted to include the second "stimulus" package that the Bush Administration and congressional Republicans have blocked. I don't want to trade a $700 billion dollar giveaway to the most unsympathetic human beings on the planet for a few fucking bridges. I want reforms of the industry, and I want it to be as punitive as possible.

Henry Waxman has suggested corporate government reforms, including CEO compensation, as the price for this. Some members have publicly suggested allowing modification of mortgages in bankruptcy, and the House Judiciary Committee staff is also very interested in that. That's a real possibility.

We may strip out all the gives to industry in the predatory mortgage lending bill that the House passed last November, which hasn't budged in the Senate, and include that in the bill. There are other ideas on the table but they are going to be tough to work out before next week.

I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.

I'm open to other ideas, and I am looking for volunteers who want to hold the sons of bitches so I can beat the crap out of them.
And here's how another one sees the next few days going:

Quote:
Here's the industry's play: progressives will approach Nancy with ideas for reform, and she'll agree to push for their proposals, and she'll really mean it. Then industry lobbyists will go to Dennis Moore, Melissa Bean and a few other Democrats, and tell them how dire the consequences of the proposals would be, and that the members who understand how the economy works need to step up to stop Nancy and the crazy liberals from doing something rash. Then those Democrats will go to Steny and tell him how terrible Nancy's crazy ideas would be, and how we can't rush into something like that without much, much more thought. Maybe Barney will try to talk to Dennis or Melissa, but it will become apparent quickly that they have no idea what they're talking about; they're just repeating by rote what the lobbyists told them to say. Melissa may actually be dumber than Sarah Palin. Barney will realize he might as well talk to the lobbyists directly and save a step. The lobbyists will agree to something inconsequential, but certainly nothing that would really affect the industry's conduct. Then the leadership will do the math and conclude that because the vast majority of Republicans will vote against any bill, we can't get enough votes without the Dennis and Melissa crowd. The only way, our leadership will conclude, to get anything at all passed is to include nothing more than the inconsequential proposals that the lobbyists agreed to. Then we'll all go along because it would be wildly irresponsible not to act when we're staring over the brink of a complete collapse of world financial markets.

I'd diagram it for you if I had a chalkboard. I've seen the play again and again, and it always goes for long yardage.

The only defense for the play is for a significant group of Democrats to say they won't vote for any proposal that isn't unpalatable to industry, and mean it. It's a pretty high stakes game of chicken, but otherwise we come out of this with nothing but a $700 billion giveaway to a crooked industry.
Source.
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post #140 of 2754
9/22/08 at 2:29pm
Quote:
Originally Posted by dynamotv View Post
Let's wait 5 minutes. He might still be for the bailout. That crazy decisive McCain. You know where he stands for at least a day.
He might be a little freaked over the price tag.
$1.8 Trillion Bailout: Where the Money's Going
Quote:
Following are details of actions, proposals and amounts:

—Up to $700 billion to buy assets from struggling institutions. The plan is aimed at sopping up residential and commercial mortgages from financial institutions but gives Treasury broad latitude.

—Up to $50 billion from the Great Depression-era Exchange Stabilization Fund to guarantee principal in money market mutual funds to provide the same confidence that consumers have in federally insured bank deposits.

—The Fed committed to make unspecified discount window loans to financial institutions to finance the purchase of assets from money market funds to aid redemptions.

—At least $10 billion in Treasury direct purchases of mortgage-backed securities in September. In doubling the program on Friday, the Treasury said it may purchase even more in the months ahead.

—Up to $144 billion in additional MBS purchases by Fannie Mae and Freddie Mac.The Treasury announced they would increase purchases up to the newly expanded investment portfolio limits of $850 billion each. On July 30, the Fannie portfolio stood at $758.1 billion with Freddie's at $798.2 billion.

—$85 billion loan for AIG, which would give the Federal government a 79.9 percent stake and avoid a bankruptcy filing for the embattled insurer. AIG management will be dismissed.

—At least $87 billion in repayments to JPMorgan Chase [JPM 42.37 -4.68 (-9.95%) ] for providing financing to underpin trades with units of bankrupt investment bank Lehman Brothers [LEH 0.18 -0.0351 (-16.32%) ]. Paulson said over the weekend he was adamant that public funds not be used to rescue the firm.

—$200 billion for Fannie Mae and Freddie Mac. The Treasury will inject up to $100 billion into each institution by purchasing preferred stock to shore up their capital as needed. The deal puts the two housing finance firms under government control.

—$300 billion for the Federal Housing Administration to refinance failing mortgage into new, reduced-principal loans with a federal guarantee, passed as part of a broad housing rescue bill.

—$4 billion in grants to local communities to help them buy and repair homes abandoned due to mortgage foreclosures.

—$29 billion in financing for JPMorgan Chase's government-brokered buyout of Bear Stearns in March. The Fed agreed to take $30 billion in questionable Bear assets as collateral, making JPMorgan liable for the first $1 billion in losses, while agreeing to shoulder any further losses.

—At least $200 billion of currently outstanding loans to banks issued through the Fed's Term Auction Facility, which was recently expanded to allow for longer loans of 84 days alongside the previous 28-day credits.

For the record, I think it should be entirely closed door. There shouldn't be any information leaking out about who is involved with what is going on. I also think there should be a press blackout until the events are over. We don't need the press printing "apocalyptic" or "Doom" while these things are going on. Only positive information should be flowing out, any disagreements or any bartering between parties should be done privately behind closed doors and they can be aired afterwards. It isn't going to affect us as a voter until Nov 4th but it certainly hits the day to day, hour by hour.

It is also a grave mistake to bail out the deadbeat home owners. It's a slippery slope that only is used for political purposes. How do you determine which home owners get help? How do you prevent people who have already lost their homes during this crisis (that has lasted for 2 years) from suing because help wasn't offered to them? How do you reward people for bad behavior? I'm sorry, ignorance of the law is not an excuse for any crime, it shouldn't be an excuse for a bad mortgage.

As to just giving 700 billion dollars away? Fuck that. I say we get the deeds. I'm all for the bailout, like, tomorrow (not kidding). But congress agrees that we'll Imminent domain an equivalent number of properties from a variety of companies that will benefit from the bailout. Then funnel them into the newly nationalized Fannie Mae and Freddie Mac enabling us the taxpayers to see a return on investment. In the areas that are very bad, we can perhaps turn the land that is vacant into some sort of government outreach center or housing project. Revitalize the business's that have fled due to no customers.

That's if we actually wanted to do something... no, what you're seeing is bolstering for voters since this is an election year and it's pathetic on both sides. (mostly the Democrats)


There are a lot of options that should be taken but there is nothing serious on the table that actually looks out for the American Taxpayer (me and you).
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post #141 of 2754
9/22/08 at 2:31pm
You just contradicted yourself, Snaieke. Everything you posted is negated by the whole "I think everything should be closed door" stuff. Secrecy = breeding ground for corruption, in case the last 8 years didn't make that abundantly clear.
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post #142 of 2754
9/22/08 at 2:44pm
Quote:
Originally Posted by Snaieke View Post
For the record, I think it should be entirely closed door. There shouldn't be any information leaking out about who is involved with what is going on. I also think there should be a press blackout until the events are over. We don't need the press printing "apocalyptic" or "Doom" while these things are going on. Only positive information should be flowing out, any disagreements or any bartering between parties should be done privately behind closed doors and they can be aired afterwards.
Yeah, that worked out great the last 8 years. What the fuck is wrong with you?
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post #143 of 2754
9/22/08 at 2:55pm
On CEO pay, tax companies more that compensate their execs too disproportionately from the rest of their employees. I'm all for modifying behavior with taxes.

They don't like it, they can move to another country and get payed their ridiculous sums there.

Companies that are bailed out, we have every right to dictate some sanity here. If we're bailing them out why shouldn't we have the right to modify behavior more recently, my tax money should not be spent in their outrageous salaries.
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post #144 of 2754
9/22/08 at 3:21pm
Quote:
Originally Posted by yt View Post
You just contradicted yourself, Snaieke. Everything you posted is negated by the whole "I think everything should be closed door" stuff. Secrecy = breeding ground for corruption, in case the last 8 years didn't make that abundantly clear.
Quote:
Originally Posted by Ron Vogel View Post
Yeah, that worked out great the last 8 years. What the fuck is wrong with you?
If you don't understand investor confidence, there isn't much I can do to educate you. You should note, I said it should be filmed and released afterwards. I'm not talking 2015.. after the bill has been passed works dandy.
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post #145 of 2754
9/22/08 at 3:29pm
Quote:
Originally Posted by Snaieke View Post
If you don't understand investor confidence, there isn't much I can do to educate you. You should note, I said it should be filmed and released afterwards. I'm not talking 2015.. after the bill has been passed works dandy.
I don´t know enough about economy to add something of enlightening value to this thread but this is just plain and scary wrong.

Whatever perception of democracy you have you fail miserably on it. One of the remaining (albeit somewhat shallow) pillars of democracy is the participation of the people on every legal draft. At least by proxy through lobbyists and interest groups.

And this bill might very well be one of the most far-reaching and impacting of this decade.

Shutting of the public and letting it be decided behind closed doors? Whatever is the sense behind informing the unworthy public when everything is said and done? Catering to what you call "investor confidence" lead us to this disaster in the first place and acknowledges an accumulation of power in their hands that is simply not acceptable.
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post #146 of 2754
9/22/08 at 3:43pm
Quote:
Originally Posted by Jan View Post
I don´t know enough about economy to add something of enlightening value to this thread but this is just plain and scary wrong.

Whatever perception of democracy you have you fail miserably on it. One of the remaining (albeit somewhat shallow) pillars of democracy is the participation of the people on every legal draft. At least by proxy through lobbyists and interest groups.

And this bill might very well be one of the most far-reaching and impacting of this decade.

Shutting of the public and letting it be decided behind closed doors? Whatever is the sense behind informing the unworthy public when everything is said and done? Catering to what you call "investor confidence" lead us to this disaster in the first place and acknowledges an accumulation of power in their hands that is simply not acceptable.

The problem is, you're thinking of this in terms of Democracy. There is nothing Democratic about this. The people aren't voting for this, the people have no say in this. There is not enough time for marches, or protests or a voice to be heard FOR the people. At this point the politicians will do what they do and if the details emerge while they're doing it or after it will not change the end result, the only thing that will change is investor confidence as politicians shift position or try to politicize this debacle. The further the stock market shifts and investor confidence is lost the more aid that will be required and the more any leverage for earnest politicians to benefit the American people will be lost. As each point drops in the stockmarket, more pressure is mounted on these politicians. As each billion is withdrawn, more and more urgency is warranted for this. This isn't about Democracy, this is about preventing total economic collapse.

edit-

Case in point

Quote:
NEW YORK (AP) - Oil prices spiked more than $25 a barrel Monday—the biggest one-day price jump ever—as anxiety over the government's $700 billion bailout plan battered the dollar and touched off frenzied buying of safe-haven investments including crude

Oil spikes $25 a barrel on anxiety over US bailout
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post #147 of 2754
9/22/08 at 3:55pm
While I disagree with Snaieke on the secrecy part of the bill, he is partially right about investor confidence.

Last week, we saw slow increases in crude prices until today's jump. Also, gold jumped to a record one day price last week as well.

If I had more money to invest, I wouldn't be putting it into stocks but commodities like oil and gold that are sure to not plummet like some stocks might in the next few weeks. People will still need oil and gold.
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post #148 of 2754
9/22/08 at 3:58pm
Quote:
Originally Posted by Snaieke View Post
The problem is, you're thinking of this in terms of Democracy.
No, the problem is when people think about the U.S. government as anything BUT a democracy. Enter illegal wiretapping, torture, massive bailouts.
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post #149 of 2754
9/22/08 at 4:20pm
Quote:
Originally Posted by ElCapitanAmerica View Post
On CEO pay, tax companies more that compensate their execs too disproportionately from the rest of their employees. I'm all for modifying behavior with taxes.
That's going to be really hard, e.g., how much do you value stock options? That alone is in the realm of undecided economic theory.

It would have to vary from industry to industry (e.g., finance vs oil vs IT), company to company (e.g., Monsanto vs Dow Chemical), and even down to specific management structure (e.g., combined CEO/Chairman vs split). The regulatory and accounting burden would be enormous.

Quote:
Originally Posted by ElCapitanAmerica View Post
They don't like it, they can move to another country and get payed their ridiculous sums there.
That means putting tighter restrictions on the use and reporting of capital moved abroad (for companies incorporated outside of the USA plus foreign subsidiaries).

Look how long (and unsuccessful) you've been at trying to regulate tax havens.

I don't disagree with the sentiments, in general, but the more complex a system the more likely it will discourage business and encourage gamesmanshp.
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post #150 of 2754
9/22/08 at 4:28pm
Quote:
Originally Posted by Snaieke View Post
But congress agrees that we'll Imminent domain an equivalent number of properties from a variety of companies that will benefit from the bailout.
Emminent Domain.

Multiple issues:
  • Do you trust the government to pick and manage the seized assets?
  • Who pays the cost of maintaining the assets?
  • Seizure involves just compensation -- do you trust the government not to either richly reward or rip off the companies?
It would be better, as suggested earlier, just to take an ownership stake in the companies in proportion to the bailout.
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