# Senate hearing on the bailout



## cuttlefish (24 September 2008)

Was interesting to hear Paulson and Bernanke speaking on the fly.  I'm not convinced anyone's done the numbers and the skeptical part of me thinks it will be interesting to see how quickly they blow the 700 billion and come back for more - its not clear how they came up with the figure.   It'll be interesting to see whether they can actually raise the money as well and what price they'll have to pay for it in terms of interest. My understanding is they have to issue debt to raise the funds and someone has to buy it (private capital, foreign governments etc.).

Some of the senators were a bit out of their depth but there were some good questions in there as well.  Paulson's asked for some pretty sweeping powers and indeminities.  You also have to wonder how the CEO of Goldman Sachs from 1999 to 2006 can claim not to have been part of the cause of the problem or been aware of the problem.  And I can also understand there is skepticism about now giving him 700 billion and pretty wide ranging powers to help bail out banks and investment banks.   A lot of rhetoric about controls, oversight and transparency but no substance in the bill proposal as yet by the sounds of it.  Its also interesting that Paulson will be gone again early next year and there will be a new secretary coming in.

It still looks like a badly managed business not facing up to reality to me but time will tell I guess.


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## noirua (24 September 2008)

cuttlefish said:


> Was interesting to hear Paulson and Bernanke speaking on the fly.  I'm not convinced anyone's done the numbers and the skeptical part of me thinks it will be interesting to see how quickly they blow the 700 billion and come back for more - its not clear how they came up with the figure.   It'll be interesting to see whether they can actually raise the money as well and what price they'll have to pay for it in terms of interest. My understanding is they have to issue debt to raise the funds and someone has to buy it (private capital, foreign governments etc.).
> 
> Some of the senators were a bit out of their depth but there were some good questions in there as well.  Paulson's asked for some pretty sweeping powers and indeminities.  You also have to wonder how the CEO of Goldman Sachs from 1999 to 2006 can claim not to have been part of the cause of the problem or been aware of the problem.  And I can also understand there is skepticism about now giving him 700 billion and pretty wide ranging powers to help bail out banks and investment banks.   A lot of rhetoric about controls, oversight and transparency but no substance in the bill proposal as yet by the sounds of it.  Its also interesting that Paulson will be gone again early next year and there will be a new secretary coming in.
> 
> It still looks like a badly managed business not facing up to reality to me but time will tell I guess.



Very interesting, thanks.

I remember the Hong Kong Government bailing out their stock market about 7 years ago by buying shares in all of the major and important companies.  The result was the index recovered rapidly despite all the murmurings.
Later on, when the market recovered, they made very hefty profits.

The USA's position is quite different, but is still investing in mortgages to take the weight off the banks. Later on, perhaps very much later on, these will prove far more lucrative than some imagine.

The Democrats will spend their time getting guarantees for this package. They dare not vote against it though.


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## Calliope (24 September 2008)

The Senate (and the taxpayer) are faced with a nasty conundrum. Should they;

Bail out the irresponsible lenders, or,

Bail out the irresponsible lenders and the irresponsible borrowers, or,

Do nothing, in which case the taxpayers will not be paying taxes because they will have no income.


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## njc.corp (24 September 2008)

Calliope said:


> The Senate (and the taxpayer) are faced with a nasty conundrum. Should they;
> 
> Bail out the irresponsible lenders, or,
> 
> ...




very good thoughts-

let it crash-

this is a gamble-what happens if they aprove the loan and it backfire's?

if their is 3 risk's already why do u want to take on one more?

thank god i dont live in america-

they are lazy and irresponsible people-they have always been-

always looking for handouts-

no bail out-

let history take it's course so they can learn from it again-

Thanks

Nick--


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## CAB SAV (24 September 2008)

I'm sure there will be a bailout, the filthy rich will take care of their mates, Buffett will make millions and the middle class will disappear. Rich class will run a country of growing poorer class. Democracy will be gone and replaced by Plutocracy.


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## njc.corp (24 September 2008)

CAB SAV said:


> I'm sure there will be a bailout, the filthy rich will take care of their mates, Buffett will make millions and the middle class will disappear. Rich class will run a country of growing poorer class. Democracy will be gone and replaced by Plutocracy.




well another good point-

for buffet to come out and buy some of goldman-well maybe its a good time to buy something of value for the long term-

the road to recovery is going to be long but for their sake i hope its not longer then expected-

Thanks

Nick--


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## Green08 (24 September 2008)

I watched part of it until I fell asleep.

Agree the questions were good and direct the responses from Paulson and BB were so vague and repeaticious.  Paulson always looks as though he is jumpy and on edge - I just can't get the feeling out of me this is to save himself and his pals.  

I do notice alot of "This is best for the American home owner and the financial stablity of America"  

HELLO - you have deceived the rest of the world and taken our money too!  The Life Insurance and Super tied to AIG.  Englands demand from Lehmans of $8 Billion to Lehaman NY.   Considering Paulson was CEO of Goldman Sachs for sometime he MUST of known what was going on his last year there receiving $37 million in bonuses.  If he was geniunely concerned for the toxic waste he could bery well have instigated the government to put in regulations  years ago.  But just sat there.  We may never be able to trace the amounts of money 'passed under the table' to keep this crisis from blossoming.  I don't trust any of them - 3 pages!!!  what a joke


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## Julia (24 September 2008)

cuttlefish said:


> Was interesting to hear Paulson and Bernanke speaking on the fly.  I'm not convinced anyone's done the numbers and the skeptical part of me thinks it will be interesting to see how quickly they blow the 700 billion and come back for more - its not clear how they came up with the figure.   It'll be interesting to see whether they can actually raise the money as well and what price they'll have to pay for it in terms of interest. My understanding is they have to issue debt to raise the funds and someone has to buy it (private capital, foreign governments etc.).
> 
> Some of the senators were a bit out of their depth but there were some good questions in there as well.  Paulson's asked for some pretty sweeping powers and indeminities.  You also have to wonder how the CEO of Goldman Sachs from 1999 to 2006 can claim not to have been part of the cause of the problem or been aware of the problem.  And I can also understand there is skepticism about now giving him 700 billion and pretty wide ranging powers to help bail out banks and investment banks.   A lot of rhetoric about controls, oversight and transparency but no substance in the bill proposal as yet by the sounds of it.  Its also interesting that Paulson will be gone again early next year and there will be a new secretary coming in.
> 
> It still looks like a badly managed business not facing up to reality to me but time will tell I guess.



Cuttlefish, all your above points were made by Prof. Jeffrey Sachs in an interview onRadio National this morning.   He said "they simply don't have a plan".   The written bail out 'plan' consists of ten paragraphs.  He also echoed your scepticism about Paulson's being the architect of any bail out, given his obvious implication in the causing of the whole mess.


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## pepperoni (24 September 2008)

The $700b is just to pay the many $50m executive salaries, a few $300m golden parachutes and thousands of $1m bonuses.

But the continuation of the consumption of the super rich will keep the economy health for years to come.  We have done the numbers. Trust us.


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## Junior (24 September 2008)

njc.corp said:


> thank god i dont live in america-
> 
> they are lazy and irresponsible people-they have always been-
> 
> ...




Hmm, that's a sweeping generalisation.  Plenty of those types in Australia too.


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## cuttlefish (24 September 2008)

Julia said:


> Cuttlefish, all your above points were made by Prof. Jeffrey Sachs in an interview onRadio National this morning.   He said "they simply don't have a plan".   The written bail out 'plan' consists of ten paragraphs.  He also echoed your scepticism about Paulson's being the architect of any bail out, given his obvious implication in the causing of the whole mess.




Maybe he reads ASF!    Actually I think anyone watching it would draw similar conclusions - it appeared very much a case of give us a lot of money and trust us to do the right thing.   I don't think they have that much choice at this juncture but were I a US senator I would be asking a lot of questions as well - particularly about how they came up with the 700 billion figure in the first place.


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## wildkactus (24 September 2008)

Read in the Paper (scmp) about where this 700b fits into what has already been spent, it gave a table view and it had listed about 1.1 trillion in spend so far (not including this bill). the articule even hinted at it was still a long way short.
there where a lot of small lots that make up a large chuck of change.

It will be interesting to see the bill in its final form, how may changes / amendments it has, and to see if it turns into a christmas tree bill.


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## Green08 (24 September 2008)

on CNBC they had a guy on who made a very important point.

This package of taking on at least 1 million homes and holding them to maturity has an inherent flaw.  You basically become the landlord so any broken pipes, smashed windows, etc need to be fixed - more money - to keep the value of the property.  Your relying on the resident to do all this when being strapped for cash.  With some of these mortagages on 30 year terms that is alot of maintenance to the keep value and make a profit. 

He made other points with the RTC which went over my head


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## fimmwolf (24 September 2008)

Paulson's plan doesn't help the people struggling to pay their mortgages actually pay them. Their mortgages will remain intact with their respective banks.

It doesn't offer them (joe citizen) part ownership of the corporations they are bailing out. Yet they expect every man, woman and child to fork out $2000 to pay off the bad assets held by the banks.

He (paulson) expects to be able to spend the money without review.



> "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''




What a farce!


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## Green08 (24 September 2008)

Apparently Paulson and BB have information on what would / could happen though they don't want to disclose it as they fear the markets will panic...I didn't realise that they had crystal balls to determine exactly what would happen.  If they have information (which is I think is dubious) announce it and let the people decide.


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## Julia (24 September 2008)

fimmwolf said:


> Paulson's plan doesn't help the people struggling to pay their mortgages actually pay them. Their mortgages will remain intact with their respective banks.
> 
> It doesn't offer them (joe citizen) part ownership of the corporations they are bailing out. Yet they expect every man, woman and child to fork out $2000 to pay off the bad assets held by the banks.
> 
> ...



Yes, it is indeed.   And hopefully the Democrats will continue to refuse to be bulldozed into agreeing with the Bill until some of these concerns are addressed.


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## cuttlefish (24 September 2008)

fimmwolf said:


> Paulson's plan doesn't help the people struggling to pay their mortgages actually pay them. Their mortgages will remain intact with their respective banks.
> 
> It doesn't offer them (joe citizen) part ownership of the corporations they are bailing out. Yet they expect every man, woman and child to fork out $2000 to pay off the bad assets held by the banks.
> 
> ...




I don't see any reason why the government should be helping people that can't pay their mortgages any more than they should be helping investment bankers.  If someone takes out a mortgage and can't pay it - then unfortunately in a free market system they have to bear the consequences.  

The reality is that people being irresponsible and taking out mortgages that they had no chance of being able to pay back is what created the mess in the first place - along with the greedy sales people that sold the mortgage to them regardless and pocketed the commissions - but at the end of the day the consumer is responsible for their own decision to take the mortgage out in the first place (or the equity loan or the credit card or the student loan etc. etc. etc.).

The ideal would be that they wouldn't bail anyone out at all.  They may have been better off letting the institutions (fannie, freddy, AIG etc.) and the banks that are in difficulty all go under but they would still have had to capitalise the FDIC to cope with it or face almost certain civil unrest. 

The bad subprime paper would still have existed but would have been sold by administrators at real market value to private and foreign investors.  End result possibly similar to the outcome of the current bailout - though probably far more difficult to control. It would also have likely created a very big confidence crisis in the USD which would have potentially created a new host of problems.  

Though this may all still be there to come and this current bailout may just be postponing the problem. It really does depend on whether they've actually run some figures and quantified the problem to come up with the $700 billion figure or are just flying blind.


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## Macquack (25 September 2008)

cuttlefish said:


> The reality is that people being irresponsible and taking out mortgages that they had no chance of being able to pay back is what created the mess in the first place - along with the greedy sales people that sold the mortgage to them regardless and pocketed the commissions -




....and the chief regulator at the time, Federal Reserve Chairman - Alan Greenspan.

If the proposal is to bail out wall street and do nothing for main street, then 
it would be only fair that Greenspan be subject to a pubic flogging to entertain the masses.


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## 2020hindsight (25 September 2008)

Bush to address the nation in "a couple of hours"

http://www.aol.com.au/news/story/White-House-Bush-mulling-speech-to-nation/982781/index.html



> With a financial rescue plan facing a tough sell in Congress, President George W. Bush has scheduled a major address Wednesday that he hopes will convince regular Americans of its relevance and "get this over the goal line" with U.S. lawmakers.
> 
> The address, to be delivered from the White House's grand East Room, is to be 12 to 14 minutes long, White House press secretary Dana Perino said. Bush last gave a prime-time address to the nation 377 days ago. This one, expected to be carried by all five major television outlets, could be the last of his presidency.
> 
> ...



etc


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## Calliope (25 September 2008)

I am relying on *Bird and Fortune* to come up with a solution.


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## noirua (25 September 2008)

John McCain is now in Washington and will help to redesign the package.  So all will be well. No worries! Obama's still campaigning, could this be a big mistake?


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## wayneL (25 September 2008)

OMG OMG!

Even that nincompoop Kaletsky sees the awful truth.... sort of (He's still in La La land):

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4820549.ece


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## 2020hindsight (25 September 2008)

wayneL said:


> OMG OMG!
> 
> Even that nincompoop Kaletsky sees the awful truth.... sort of (He's still in La La land):
> 
> http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4820549.ece




Interesting that Malcolm Turnbull was singing the praises of Henry Paulson, the US Treasury Secretary, this morning on AM.  "Just the man to lead the world out of this etc".  

Apparently when Turnbull worked for Goldman as as Partner, Paulson was Senior Partner 

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4820549.ece


> *  Save the world? Hank just didn't have a clue
> The staggering incompetence of the US Treasury Secretary is now acknowledged - and is a disaster for George Bush
> 
> Mr Paulson may be a former chairman of Goldman Sachs*, but as US Treasury Secretary he does not know what he is doing. His recent blunders, starting with the “rescue” of Fannie Mae, have triggered unintended consequences around the world, resulting in the death-spiral of financial values. *But last Friday Mr Paulson outdid even these Rumsfeldian achievements, when he demanded $700 billion from Congress for a “comprehensive and fundamental” solution to the global financial crisis,* without apparently having any idea of what he would actually do.
> ...




This article ends up full circle back with Paulson's plan...  (having rubbished it) 

The "error" according to that article seems to be that Bush etc have given away the political initiative to the Dems,  who will (maybe?) soften the blow to the public. ala "Main St" as they like to call it.  (time will tell of course).  


> But because Mr Paulson has lost the political initiative, this bailout will now be led by the Democratic leadership in Congress and will be structured around its priorities - relief from mortgage foreclosures, restrictions on bankers' pay and big government shareholdings in US banks. For President Bush it is a disaster, dashing his last faint hope of having a tangible achievement to his name before he leaves office




Here're those excerpts from ABC's AM this morning... (interview with Malcolm Turnbull)
http://www.abc.net.au/am/content/2008/s2373734.htm


> CHRIS UHLMANN: Now you're a former chairman and managing director of Goldman Sachs. How much blame should merchant banks take for the current financial mess?
> 
> MALCOLM TURNBULL: Well as Hank Paulson has said, there's plenty of blame to go around and I agree with those legislators in the US that say that executives of financial institutions should not be rewarded. Indeed, they should get nothing out of this and I'm sure Congress will ensure that happens.
> 
> ...






> CHRIS UHLMANN:Now how can you trade in that kind of money, how can you trade in that kind of system and tell the world that that was a good way to behave?
> 
> MALCOLM TURNBULL: Well I'm not saying, *I'm saying it was a bad way to behave. It was clearly very mistaken*.
> 
> ...






> But the real issue though is one of political leadership and you need to have people who are prepared to lead, who know what they're doing, who understand financial crises and financial problems and the world is lucky to have Hank there.
> 
> I mean, let me tell you Chris, China is an incredibly important player in this. If the Chinese lose confidence in the US dollar, then the consequences will be considerable, very dire indeed. Paulson when he became Treasury Secretary was a man who had personal relationships with the entire Chinese leadership, had been to China more than 80 times in the previous 10 years... etc


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## tcoates (25 September 2008)

Wayne,

Rather skeptical on everything that I read. 

That is, damned if they do, and damned if the don't. The fact remains is that we are in this position 'serious economic crisis' (not my headline) and that something needs to be done.

I probably don't think that a real plan could be hatched in one week given the length of time that it generally takes governments to create plans - except for emergency measures.

With that in mind...

1. who is a credible commentator (in your view) which provides an objective view? 

2. what is the real solution?

Again...  damned if they do, and damned if the don't.  And (sadly?) the the market and the world moves on while they all argue.

Tim


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## tcoates (25 September 2008)

PS to previous post...

I do look at (read) most articles on this crisis but it is at the point that (in once sense) I don't care anymore. 

It is being treated like any natural disaster in coverage (at least on the web) and there a nothing new being said as to a solution. For example, in the 24 hours there are more than 68000 web pages on the net re "us bailout"

Tim


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## Julia (25 September 2008)

tcoates said:


> Wayne,
> 
> R
> 1. who is a credible commentator (in your view) which provides an objective view?
> ...



I'd also be interested in what you think *should* happen, Wayne?


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## Julia (25 September 2008)

cuttlefish said:


> Maybe he reads ASF!:



Given that Prof Sachs is considered amongst the 100 most influential people in the world, that may be a little unlikely!
(I was rather suggesting that your own thoughts appeared to equal the intellectual rigour applied by Prof Sachs.)




cuttlefish said:


> I don't see any reason why the government should be helping people that can't pay their mortgages any more than they should be helping investment bankers.  If someone takes out a mortgage and can't pay it - then unfortunately in a free market system they have to bear the consequences.
> 
> The reality is that people being irresponsible and taking out mortgages that they had no chance of being able to pay back is what created the mess in the first place - along with the greedy sales people that sold the mortgage to them regardless and pocketed the commissions - but at the end of the day the consumer is responsible for their own decision to take the mortgage out in the first place (or the equity loan or the credit card or the student loan etc. etc. etc.).



Completely agree, Cuttlefish.   I wasn't suggesting this should happen, but rather that I could feel for the resentment of the taxpayer being asked to fund the excesses of Wall Street, especially when the main architects of the disaster have pocketed multiple millions in bonuses.



> The ideal would be that they wouldn't bail anyone out at all.  They may have been better off letting the institutions (fannie, freddy, AIG etc.) and the banks that are in difficulty all go under but they would still have had to capitalise the FDIC to cope with it or face almost certain civil unrest.
> 
> The bad subprime paper would still have existed but would have been sold by administrators at real market value to private and foreign investors.  End result possibly similar to the outcome of the current bailout - though probably far more difficult to control. It would also have likely created a very big confidence crisis in the USD which would have potentially created a new host of problems.
> 
> Though this may all still be there to come and this current bailout may just be postponing the problem. It really does depend on whether they've actually run some figures and quantified the problem to come up with the $700 billion figure or are just flying blind.



Seems a bit like the flying blind option at present.


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## bean (25 September 2008)

A paper submitted to congress on the Bail

Proposed $700 Billion Bailout Is Too Little, Too Late to End Debt Crisis; Too Much, Too Soon for U.S. Bond Markets

September 24, 2008 |

JUPITER, FL, September 24, 2008 ”” The proposal before Congress for a $700 billion financial industry bailout will not only fail to end the massive U.S. debt crisis but could actually aggravate the crisis by driving up interest rates, according to a white paper submitted to Congress and banking regulators today by Weiss Research, Inc. Therefore, Weiss recommends limiting and reducing the bailout as much as possible, while bolstering existing safety nets for consumers.

Based on recently released FDIC and Federal Reserve data, Weiss Research finds that:

*1. 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure, with total assets of $3.6 trillion, or 36 times the assets of banks on the FDIC’s list of troubled institutions.*

*2. Among those with $5 billion or more in assets, 61 banks and 25 thrifts are heavily exposed to nonperforming mortgages.
*
*3. The bailouts announced and proposed to date, although expected to cost over $1 trillion, are too small to rescue most institutions at risk, let alone address multiple problems with U.S. interest-bearing debts outstanding of $51 trillion and derivatives held by U.S. banks of $180 trillion.
*

Martin D. Weiss, president of Weiss Research, comments: “There should be no illusion that the $700 billion estimate proposed by the Administration will be enough to end the crisis. Nor should there be any false hopes that the market for U.S. government securities can absorb the additional burden of a $700 billion bailout without putting major upward pressure on U.S. interest rates, aggravating the very debt crisis that the government is seeking to alleviate.” Among its policy recommendations, Weiss urges Congress to:

1. Severely limit the government’s authority to buy bad private-sector debts by requiring it to pay strictly fair market value, including a substantial discount that reflects their poor liquidity.

2. Disclose to the public that there are significant risks in the financial system that the government is not able to address.

3. Focus more resources on strengthening existing safety nets, including FDIC insurance of bank deposits, SIPC coverage of brokerage accounts and state guarantee associations that cover insurance policies.

“Rather than focusing on the protection of imprudent institutions and speculators,” concludes Weiss, “Congress should do more to protect prudent individuals and savers.”

Regardless of what Congress decides, Weiss recommends that individuals continue to invest and save prudently, seeking the safest havens for their money, such as safe banks and U.S. Treasury bills or equivalent.

The Weiss Research white paper, “Proposed $700 Billion Bailout Is Too Little, Too Late to End the Debt Crisis; Too Much, Too Soon for the U.S. Bond Market,” is available at
http://www.moneyandmarkets.com/files/documents/Final-Bailout-White-Paper.pdf.

Weiss Research Submits Policy
Recommendations to Congress Today


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## fimmwolf (25 September 2008)

> I don't see any reason why the government should be helping people that can't pay their mortgages any more than they should be helping investment bankers.





Sure, I'm with you all the way. To hell with this new American Socialist Republic.
Let's kick eight million struggling Americans out of their homes. And where's Pink when I need him?  (pink floyd)

I mean c'mon, I can think of a few people who could really use that 700 billion. 

Let's see, there's Richard Fuld, he only made $354 million during his five year tenure with Lehman brothers.

What about ex-Bear Stearns Cos. President Warren Spector, who sold $382 million in stock before resigning in 2007, nice timing Warren 

Then there's Merrill Lynch boss John Thain, who had to go three-ways in 200 million.

Peter Kraus, strategy head for Goldman got a groovy $US95 million

Oh yeah, don't forget Merrill Lynch Trading chief Thomas Montag struggling with a measley $76 million!

And I'm sure Mr Paulson wasn't thinking of keeping any of it himself, no sir-ree, he's got mates to look after.

<end sarcastic rant>


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## pepperoni (25 September 2008)

Wednesday, September 24, 2008

Dear Friends,

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters."

That describes the current bailout package to a T. And we're being told it's unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

• The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

• Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

• Then there's this: "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." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

In liberty,

Ron Paul


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## cuttlefish (25 September 2008)

Julia said:


> Given that Prof Sachs is considered amongst the 100 most influential people in the world, that may be a little unlikely!




Don't worry my comment was purely tongue-in-cheek. 




			
				julia said:
			
		

> Seems a bit like the flying blind option at present.




I agree, particularly if these numbers from the Weiss report that pepperoni posted are correct: Truly scary.



			
				pepperoni said:
			
		

> 1. 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure, with total assets of $3.6 trillion, or 36 times the assets of banks on the FDIC’s list of troubled institutions.
> 
> 2. Among those with $5 billion or more in assets, 61 banks and 25 thrifts are heavily exposed to nonperforming mortgages.
> 
> 3. The bailouts announced and proposed to date, although expected to cost over $1 trillion, are too small to rescue most institutions at risk, let alone address multiple problems with U.S. interest-bearing debts outstanding of $51 trillion and derivatives held by U.S. banks of $180 trillion.





Interesting that the report suggested capitalising the FDIC - I think that may have been a better way to go as well though I doubt (especially based on the above figures) that 700 billion would be close to enough to capitalise the FDIC if there are that many banks under threat.


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## cuttlefish (25 September 2008)

fimmwolf said:


> Sure, I'm with you all the way. To hell with this new American Socialist Republic.
> Let's kick eight million struggling Americans out of their homes. And where's Pink when I need him?  (pink floyd)
> 
> I mean c'mon, I can think of a few people who could really use that 700 billion.
> ...




America preaches capitalism and free-markets almost like a religion.  Live by the sword, die by the sword.   The wall street bankers were greedy but so were the private citizens that overgeared to buy houses and goods they couldn't afford.   But like I said in my post I don't believe either should have been getting a helping hand so don't paint me as a supporter of the executives of the institutions that participated in creating the mess because it is incorrect.

There's plenty of homeless people around the world that could do with a helping hand and a lot of them aren't homeless because they overstretched the mortgage to buy the latest flat screen TV.


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## explod (25 September 2008)

Yahknow, the total debt of the US is over 90 trillion.  It was half that when Chief Burnin Bush took charge 8 years ago.  The derivatives component which is in addition and seperate is deflating as we speak, was measured at 62 trillion.    And it is all lookin like a total mess;  152 trillion of trash, repeat 152 trillion of TRASH.    And here on this thread we are discussing 700 billion as a bailout to help the shiny a'Sed top end of Wall street.

Yar gotta be joking.

Good to be in gold by jove.


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## fimmwolf (25 September 2008)

There are 2 groups

One that swoons, another that struggles.

I know which group should pay


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## cuttlefish (25 September 2008)

fimmwolf said:


> There are 2 groups
> 
> One that swoons, another that struggles.
> 
> I know which group should pay




Yeah - thats easy - both should pay - both are guilty of being greedy and irresponsible. The ones that shouldn't pay are those that didn't overgear, lived within their means and kept money aside for an emergency situation.  

Unfortunately they are the ones that will actually end up paying.


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## Julia (25 September 2008)

And maybe spare a thought for the smiles on the faces of the Chinese, so long considered inferior by the great U.S. of A.  Here is an extract from an article by Michael West:



> While more than $US500 billion of writedowns have been taken in the West, Bloomberg data shows the Chinese have incurred losses on mortgage-backed securities in the order of just $US4.3 billion.
> 
> According to a Bloomberg article, "It's ironic Paulson has become the manager of many large financial institutions,'' said Wang Jun, a finance specialist at the World Bank in Beijing. "He will have to ask the Chinese leaders about their experience of managing state-owned assets.''
> 
> ...




BusinessDay


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## dhukka (25 September 2008)

pepperoni said:


> Wednesday, September 24, 2008
> 
> Dear Friends,
> 
> ...




I think history will show that one of biggest lost opportunites for true change in the United States was that Ron Paul was passed over for a borderline senile old fool like McCain. Obama may mouth all the right platitutes but Ron Paul was the only presidential candidate that represented true change. The only candidate who wants to end the USA's foreign policy of global hegemony, eliminate the Federal Reserve and return the country to a policy of sound money to encourage savings instead of rampant, unsustainable debt driven consumerism.


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## wayneL (25 September 2008)

tcoates said:


> Wayne,
> 
> Rather skeptical on everything that I read.
> 
> ...




re 1. I don't read Oz papers anymore, and I can't think of one credible commentator there anyway. Kaletsky, as 2020 noted, doesn't know whether he is Arther or Martha. As little as 4 months ago he was preaching endless bullishness and an impregnable economy. These days, he has cognitive dissonance, again as 2020 noted.

Commentators who have foreseen this whole schmozzle include Jeff Randall, Ambrose Evans-Pritchard and Peter Schiff. All have got it pretty well spot on.

re 2. see below



Julia said:


> I'd also be interested in what you think *should* happen, Wayne?




It's more of a case of what should have happened Julia. The above commentators, have been banging on about this for a long time, as has myself and several others here at ASF; only to suffer mocking and derision from those who now have egg all over their faces.

What should be done now? Well unfortunately, to avoid the complete meltdown of the whole financial system, a bail-out is imperative. But as with all radical solutions, it is the fine print that matters. The devil is in the detail.

The problem with the proposal on the table is that there is no fine print. Paulson and Uncle Ben want _carte blanche_ to do whatever they think without any oversight whatsover. The lunatics want charge of the asylum.

That means Wall Street gets mountains of cash thrown at it and those responsible for this mess continue to amass fortunes with impunity at the expense of Joe and Martha Sixpack. NO WAY! A despicable moral hazard at its most repugnant worst.

If the world needs to bail out these schmucks, then the prudent deserve their pound of flesh, and the execs deserve to suffer the consequences of their imprudence.


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## Julia (25 September 2008)

wayneL;340765


It's more of a case of what should [U said:
			
		

> have [/U]happened Julia.



Yes, of course it is.  But the mess now exists so there needs to be a solution found.  This is what I was hoping you might be able to suggest in terms of the detail which seems to be lacking in the current ten paragraph bail out proposal effectively giving Mr Paulson carte blanche as you have suggested.



> What should be done now? Well unfortunately, to avoid the complete meltdown of the whole financial system, a bail-out is imperative. But as with all radical solutions, it is the fine print that matters. The devil is in the detail.



OK.   But if you were a US Senator and had the opportunity to write in that fine print, perhaps including some regulatory changes for the future, and including also some sort of responsibility being placed at the door of the wealthy CEO's who have engineered this remarkable feat of incompetence, what would you include?


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## nomore4s (25 September 2008)

wayneL said:


> If the world needs to bail out these schmucks, then the prudent deserve their pound of flesh, and the execs deserve to suffer the consequences of their imprudence.




Unfortunatly this is probably not going to happen as one of the not so great traits of our society now is a lack of consequences for your own actions. I don't see this situation being any different.


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## wayneL (25 September 2008)

Julia said:


> OK.   But if you were a US Senator and had the opportunity to write in that fine print, perhaps including some regulatory changes for the future, and including also some sort of responsibility being placed at the door of the wealthy CEO's who have engineered this remarkable feat of incompetence, what would you include?



Oh Lord! On this I admit to suffering extreme cognitive dissonance.

To achieve these aims within the framework of the bail-out plan is tantamount to socialism. I would prefer a more free market solution, but that would dis-include the bail-out.

But as the bail-out is a massive intervention of the state in the free market, we will have to have a state solution to repercussions. No less than the wisdom of Solomon is required to structure that.

Some things that been suggested:

*Some sort of oversight on how the funds are distributed.
*Capping of executive remuneration at $400k p/a whilst any bail-out funds are in use.
*Restructuring of bonuses to reflect medium term outcomes rather than very short term ones.
*Punitive interest rates on the bail-out funds.
*Restructuring of financial regulation (not more but better) to keep pace with finance "innovations".
*Public lynching of CEOs :

Whatever form it takes, someone has to be keeping an eye on a Goldman Sachs CEO who engineered a great deal of this mess, on what he does with the better part of a trillion dollars. That is for sure and certain.


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## dhukka (25 September 2008)

wayneL said:


> What should be done now? *Well unfortunately, to avoid the complete meltdown of the whole financial system*, a bail-out is imperative. But as with all radical solutions, it is the fine print that matters. The devil is in the detail.





I'm surprised to see you say that wayne. It seems that a false ultimatum has now become fact. From day one we've been told by Bernanke and Paulson that this bailout, which is basically a blank cheque to buy toxic crap of any flavour they want with a $700 billion revolving credit line, is better than the alternative. The alternative we are left to guess is a total freeze of credit markets, bank runs and bankruptcies, soaring unemployment or more generally a great depression like scenario. 

Remember that these two clueless fools have been dead wrong over the last 12 months and now we are expected to believe that they have the solution and further, we are expected to believe that they know what will happen if they don't do it. I have read at least 3 other proposals, one which doesn't even involve public money and then read twice as many articles laying out reasons why Paulson and bernanke's plan won't work.

I don't pretend to know what the result would be in the event of no intervention but I can't just buy that doing nothing will result in armageddon because Paulson and Bernanke say so. And so what if it does? I for one say let the chips fall where they may, this process will happen sooner or later. The US is just pushing the day of reckoning further into the future by propping up a system that is broken. 

Anyway, seems I'm tilting at windmills, the deal is all but done.


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## wayneL (25 September 2008)

dhukka said:


> I'm surprised to see you say that wayne. It seems that a false ultimatum has now become fact. From day one we've been told by Bernanke and Paulson that this bailout, which is basically a blank cheque to buy toxic crap of any flavour they want with a $700 billion revolving credit line, is better than the alternative. The alternative we are left to guess is a total freeze of credit markets, bank runs and bankruptcies, soaring unemployment or more generally a great depression like scenario.
> 
> Remember that these two clueless fools have been dead wrong over the last 12 months and now we are expected to believe that they have the solution and further, we are expected to believe that they know what will happen if they don't do it. I have read at least 3 other proposals, one which doesn't even involve public money and then read twice as many articles laying out reasons why Paulson and bernanke's plan won't work.
> 
> ...



Yeah good points Dhukka. Sucked in. 

Totally agree with your last comment.


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## gfresh (25 September 2008)

Question is.. if it is broken, when did it start to be broken? When did it ever work properly anyway?

After the devastation of WWI, we had the roaring 20's, then Depression in the 30's, and then the US muddled along until the 40's, where there was another big world war, then there was the 50's, where the US tried to "fight off" communism, and fight a proxy war against communism in Korea, and then in the 60's, they decided they would like to take it to Vietnam, which continued into the 70's, which they lost.. whilst nearly causing WWIII along the way. By the 70's they were nearly broke, and their economy muddled along paying back the debts until the early 80's, and then in the 80's they grew until 1987 when their stock market crashed, and then in the early 90's whilst in a recession, they decided to take on Iraq.. Then they had some good times until the late 90's, when dot con pushed them into another recession. Then slightly after they declared another war against "Terrorism", whilst the Fed slashed interest rates too low, and this grew into a housing bubble, and then... 

Really when we look back at these events, it all seems quite bad at every step along the way. They really do quite well at getting into a war most decades don't they...


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## refined silver (26 September 2008)

> Today in London, the ailing Bradford & Bingley mortgage lender – down 90% on the stock market since Sept. '07 – *said it's written off or sold all "toxic" assets at zero,* sparking a £133 million ($246m) charge against profits.




There we go. Don't need any bodgy reverse auction now. We know the true value of many of these "troubled assets" - ZERO!!!. Sort of like my Macmin options.


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## wayneL (26 September 2008)

Senate dissent.

Rep. Marcy Kaptur - Bugger The Barracuda, let this woman be VP, nay, PRESIDENT.


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## wayneL (26 September 2008)

Yowza, this Ms Kaptur is one angry lady... Kaptur for Pres.

This one from a few days ago. :whip:chainsaw::bigun2::rocketwho:rippergun


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## cuttlefish (26 September 2008)

I think its interesting that wall street cops ALL of the blame for this.   The actual reality is that the toxic debt exists because the private individuals that took out the loans often had no means _or intention _ of actually paying them back.  

Quite a lot of the sub-prime debt was created when greedy individuals borrowed money to buy properties that they were intending to on-sell for a profit a year or less later and thus they didn't care whether they were going to be able to pay off the loan or not, because they only had eyes for the quick windfall profits they would make.  When the music stopped a lot of them ended up with mortgages they wouldn't be able to repay.  

Is this not greed and irresponsible behaviour? 

But individuals taking responsibilities for their own actions in the land of the law suit - pretty unlikely.   Far easier to blame it on someone else.

Its way too easy to blame it all on one camp imo. 

The wall street bankers definitely need to carry a lot of the responsibility for the situation because they have failed in their own risk management strategies - in particular  maintaining independent credit assessments and independant audit of brokered mortgages.

Blame also needs to be born by the mortgage brokers themselves that helped people to lie and cheat about their assets and incomes in order to get loans.  Again the mortgage brokers were also motivated by greed - greed for easy commissions.  

The government and regulators also need to share the blame for failing to recognise and address the obvious and growing problem far earlier - in fact the Reserve and Treasury were probably the best equipped to both recognise the sheer size of the housing bubble earlier and to take measures to address it aggressively earlier.

But it shouldn't be forgotten that individuals greed was also a key driver in the creation of the current problem that the US is facing.


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## It's Snake Pliskin (26 September 2008)

cuttlefish said:


> I think its interesting that wall street cops ALL of the blame for this.   The actual reality is that the toxic debt exists because the private individuals that took out the loans often had no means _or intention _ of actually paying them back.
> 
> Quite a lot of the sub-prime debt was created when greedy individuals borrowed money to buy properties that they were intending to on-sell for a profit a year or less later and thus they didn't care whether they were going to be able to pay off the loan or not, because they only had eyes for the quick windfall profits they would make.  When the music stopped a lot of them ended up with mortgages they wouldn't be able to repay.
> 
> ...




Good point Cuttlefish.
In Australia there was a whole culture of buying, renovating and flipping for profit.


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## cuttlefish (26 September 2008)

Her speech in the second video is very good - its hard not to agree with her assessment.   The bailout money would be better directed at working with stressed mortgage holders to try to come to a workable compromise and if necessary reduce the level of debt in some cases to make it work.

I disagreed with the Bear Sterns bailout when it occured and don't think any wall street banks should be bailed out.  I think fannie, freddie and AIG are a different situation because their instruments are so pervasive through the financial environment that it would have caused systemic issues to let them fold.

Its certainly an emotive situation.


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## cuttlefish (26 September 2008)

Though purist economic theory (I'm guessing as I'm not an economist) would say that waiving some of the outstanding debt on a mortgage in order to prevent the individual from going bankrupt is only serving to encourage/reward the malinvestment of taking out the mortgage in the first place.  By not triggering the sell off of the non-productive investment at true market prices it is only causing an ongoing wastage of productivity on the malinvestment rather than allowing the productivity to be redirected to a socially productive investment.

In summary - is it better for a homeowner to spend 10 years working to pay off a $500k debt on a house that has a true market value of $300k in order to 'save face' and not have them lose their home.  Or is it better to have the debt written off  - the home that is reposessed will get sold at true market value ($300k) and the $200k of productivity that would normally have been directed to a $200k black hole would instead get directed to a socially productive investment (possibly developing a business, an invention, an idea, or even just productive labour in an area where it is in demand - e.g. constructing a new home in an area that is actually facing a housing shortage).


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## wayneL (26 September 2008)

cuttlefish said:


> Though purist economic theory (I'm guessing as I'm not an economist) would say that waiving some of the outstanding debt on a mortgage in order to prevent the individual from going bankrupt is only serving to encourage/reward the malinvestment of taking out the mortgage in the first place.  By not triggering the sell off of the non-productive investment at true market prices it is only causing an ongoing wastage of productivity on the malinvestment rather than allwing the productivity to be redirected to a socially productive investment.
> 
> In summary - is it better for a homeowner to spend 10 years working to pay off a $500k debt on a house that has a true market value of $300k in order to 'save face' and not have them lose their home.  Or is it better to have the debt written off  - the home that is reposessed will get sold at true market value ($300k) and the $200k of productivity that would normally have been directed to a $200k black hole would instead get directed to a socially productive investment (possibly developing a business, an invention, an idea, or even just productive labour in an area where it is in demand - e.g. constructing a new home in an area that is actually facing a housing shortage).




Seems obvious to me, write it off.


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## cuttlefish (26 September 2008)

wayneL said:
			
		

> Seems obvious to me, write it off.




Which is why  







			
				wayneL said:
			
		

> Kaptur for Pres.



 is probably not really a good idea! 

Though Paulson in control bailing out his wall street investment bank mates bad investments isn't going to help things either.

(and the longer Paulson directs US productivity toward paying off the debt on bad investments, rather than allowing the free market to write it off and redirect labour and capital to productive investments ,the worse off and more prolonged the US recession is going to be imo).


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## wayneL (26 September 2008)

cuttlefish said:


> Which is why   is probably not really a good idea!
> 
> Though Paulson in control bailing out his wall street investment bank mates bad investments isn't going to help things either.
> 
> (and the longer Paulson directs US productivity toward paying off the debt on bad investments, rather than allowing the free market to write it off and redirect labour and capital to productive investments ,the worse off and more prolonged the US recession is going to be imo).




Yeah agree about Kaptur. It was just nice to see a legislator giving the system a serve. It is actually quite surprising the number of otherwise savvy folk with this attitude... politics over prudence?


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## cuttlefish (26 September 2008)

wayneL said:


> Yeah agree about Kaptur. It was just nice to see a legislator giving the system a serve. It is actually quite surprising the number of otherwise savvy folk with this attitude... politics over prudence?





She's got guts and eloquence - if I lived in Ohio I'd feel well served.

Looks like Paulson and Bernanke are going to get to throw a little food at the beast for a while yet.


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## Nashezz (26 September 2008)

cuttlefish said:


> I think its interesting that wall street cops ALL of the blame for this.   The actual reality is that the toxic debt exists because the private individuals that took out the loans often had no means _or intention _ of actually paying them back.
> 
> Quite a lot of the sub-prime debt was created when greedy individuals borrowed money to buy properties that they were intending to on-sell for a profit a year or less later and thus they didn't care whether they were going to be able to pay off the loan or not, because they only had eyes for the quick windfall profits they would make.  When the music stopped a lot of them ended up with mortgages they wouldn't be able to repay.
> 
> ...




I see what you are saying Cuttlefish but the essence of a mortgage is that fiduciary responsibility rests with the bank/lender until the mortgage is repaid. If a lender is lending money to someone that can't pay I believe that is a problem with the lender (and their check system) not the person. The majority of regulation and law is made on the assumption that people are stupid - not far from the truth I think, but particularly true when it comes to any kind of financial instruments. Banks and lenders can't be afforded this same grace, even if it is true.


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## fimmwolf (26 September 2008)

Cant imagine why Mrs Kaptor might be upset with the bankers.

As we all know, it's the borrowers fault.

Why would a low income earner accept a 300K loan, no money down, no questions asked, when they are told that they will profit just from re-selling the property they can't afford in the booming property market.

I mean how were the banks to know interest rates might go up?

Surely they couldn't have seen the property bubble bursting either.

no no, definitely the borrowers fault!


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## Macquack (26 September 2008)

wayneL said:


> Senate dissent.
> 
> Rep. Marcy Kaptur - Bugger The Barracuda, let this woman be VP, nay, PRESIDENT.
> 
> .....Yowza, this Ms Kaptur is one angry lady... Kaptur for Pres.




Give it to them, Marcy Kaptur.

She is angry for the people (taxpayers) who are sick and tired of picking up the bill for somebody elses excesses.

Love this quote -
"Those who created and profited from this game of games must be brought to justice. The assets that they stole must be returned to the american taxpayers, right down to the tyres on their mercedes."          Marcy Kaptur.


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## Buddy (26 September 2008)

cuttlefish said:


> I think its interesting that wall street cops ALL of the blame for this.   The actual reality is that the toxic debt exists because the private individuals that took out the loans often had no means _or intention _ of actually paying them back.
> 
> Quite a lot of the sub-prime debt was created when greedy individuals borrowed money to buy properties that they were intending to on-sell for a profit a year or less later and thus they didn't care whether they were going to be able to pay off the loan or not, because they only had eyes for the quick windfall profits they would make.  When the music stopped a lot of them ended up with mortgages they wouldn't be able to repay.
> 
> ...




Maybe you are right cut fish.
However, when I was a lad, or so it goes................
I can actually remember when banks checked your credentials before offering a loan. And you actually had to pay a (substantial) deposit on, say a house or land! If you didnt have a (substantial) deposit, and the ability to pay the loan back, you were told f off - there's the door, sir!  As for women taking out loans...........well.........that's another matter..........we dont do that.

I think the word they used in that system was prudential financing, or something like that.

Let 'em sink I say. The whole useless lot of 'em.  It's a race to the bottom.


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## robert toms (26 September 2008)

I heard the Swedish finance minister (at the time) speak about how they bailed out their insolvent banks in the nineties.I hope that I understood him .
He stressed that first the shareholders had to lose their money,then the government stepped in and paid the banks' debts etc...and then the bank was refloated if possible.
The Swede said that the Americans would never do this.
The profligate and incompetent are going to rewarded under the US scheme it seems.


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## refined silver (26 September 2008)

I've said a few times, $700b while absurdly huge, it can't fix a $1.1quadrillion dollar OTC derivatives meltdown.

The problem is 1300 times bigger than the bailout. 

*If you get a 1% loss in the OTC derivatives *(which are all privately negotiated, non-standards, no clearinghouse, depends on the loser in the transaction for payment, etc), *thats $11 trillion!!! *

*Last week the Fed pumped $188b each day into the money markets!!! *Thats nearly a trillion already! 

Its 4 times the amount of the previous record of $48b per day which was the previous week!!!

http://www.reuters.com/article/ousiv/idUSTRE48O9B920080925

$700b, even though bigger than the entire defense budget, education or health budget of the US, won't come close to fixing it!!! 

Its all over. Most people just don't have a clue yet.


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## Buddy (26 September 2008)

refined silver said:


> I've said a few times, $700b while absurdly huge, it can't fix a $1.1quadrillion dollar OTC derivatives meltdown.
> 
> The problem is 1300 times bigger than the bailout.
> 
> ...




Yup, I fear you are correct silv.
Of course the really interesting question is will the civilised world (and that does not include the USA) be able to insulate itself from the US race to the bottom. Equally Australia? Not sure this is possible, despite what krudd, ducky and the RBA say.  After all, China has been financing the US for years now. If the finance dries up, the USD attains the "value" of toilet paper, and if the US punter can no longer afford to purchase "cheap" Chinese crap, then the dominos start to fall.

Funniest thing about this (but I ain't laughing) is that all those USA (and a few others as well) idiots in the 50's & 60's waffling on about the domino effect in Asia were probably correct. Socialism is creeping up on the USA.  Ironic thing is that the first domino is the USA itself!

The free market is dead. Long live the free market!


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## nunthewiser (26 September 2008)

Thanks for the posts Silver....... good value


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## dhukka (26 September 2008)

Good interview with Chris Whalen on how to resolve the current crisis without or with a minimum of taxpayer money. That is if you can sit through the mindnumbing stupidity of the CNBC reporters.

I think he nails the problem with the Paulson/Bernanke plan. That is, that swapping treasuries for bad assets isn't going to get banks to lend in the current environment when they are still so capital constrained.  You can lead a horse to water but you can't make it drink Also I think he's the first person I've seen on the financial media who has said, what everyone who hasn't got the head up the ass should know by now, and that is that Paulson is basically incompetent and should "find something else to do."


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## Macquack (26 September 2008)

Buddy said:


> Maybe you are right cut fish.
> However, when I was a lad, or so it goes................
> I can actually remember when banks checked your credentials before offering a loan. And you actually had to pay a (substantial) deposit on, say a house or land! If you didnt have a (substantial) deposit, and the ability to pay the loan back, you were told f off - there's the door, sir!  As for women taking out loans...........well.........that's another matter..........we dont do that.
> 
> ...




I second that motion.

I put this whole mess down to one main cause, the *total disregard for control of the aggregate money supply*. Minimum reserve ratio constraints on banks (the only brake on fractional reserve banking) are obsolete in current day financing. The powers that be should have seen this coming.


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## dhukka (26 September 2008)

I must say I'm feeling very encouraged by recent developments on this bailout plan. It looked like a done deal yesterday but thanks to the House republicans this thing is being held up. I applaud senator Shelby for questioning Paulson's plan, getting input from outside economists and for listening to his constituents.


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## wayneL (27 September 2008)

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/09/26/do2606.xml

Jeff Randall hits the nail on the head.


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## Aussiejeff (13 December 2008)

**SHHHH!**

Be vewwy, vewwy quiet!! It's a $ECWET!

---------------

*Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral*_.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

“*If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,*” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets."_


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