Well my learned American friends, are you happy with the government bailouts of investment banks? The tax payer will bare the brunt of the all the public money being used to bail out in my opinion the greedy banking fat cat ass holes who caused the big mess in the first place. You'll be getting tax increases not decreases. bush and congress again, incompetent, like most governments these days.
The real issue....government bailout, using public money
- Thread starter speres
- Start date
america is structurally imploding. both militarily and economically. All on Bush's and the Majority republican congress watch.
difficult to feel sorry for americans.
after all, they voted for the imbeciles TWICE.
Now, the fear is palpable. With the government bailout of mortgage behemoths Fannie Mae and Freddie Mac, followed by Lehman Brothers' seeming death spiral and even more banks in trouble this week (et tu, WaMu? Merrill??), everyone's wondering just when the bleeding will stop. For market bloggers, key questions at the moment pertain to the limits of government bailouts and the fate of Lehman:
⢠Investment advisor Michael Shedlock takes Fannie and Freddie management to task for squandering "every penny of capital they had. One might have thought that insolvency would have been reason enough to start taking less lending risks instead of continuing on the same foolish path... But no! Fresh with a $100 billion taxpayer bailout, the very first thing out of [Fannie Mae CEO] Tom Lund's mouth is to inform everyone that nothing has changed, and it's business as usual. âBusiness as usual' is exactly why we are in this mess in the first place."
⢠Market veteran David Merkel wonders "just how much can the U.S. government guarantee?... Who doesn't want to be guaranteed by the government? The auto companies are in line, can I get in line too? I could do amazing things with a $50 billion credit line from the government."
⢠Indeed, is there reason to believe non-financials like GM and American Airlines will be bailed out as well? Paul Kedrosky has a helpful metaphor to explain why that's not necessarily the case.
⢠Were Fannie and Freddie "just too big," as VP candidate Palin stated? Well, that wasn't necessarily the problem; Felix Salmon says "the marginalization of Fannie and Freddie during the housing boom would probably, on net, have been a bad thing. Insofar as anybody was sticking up for old-fashioned underwriting standards, it was the GSEs, and I suspect that if they hadn't been around, prime underwriting would have suffered the same race to the bottom as subprime." Salmon supported Sunday's GSE bailout under the circumstances: "Let's just do this thing, people, and get the companies run by technocrats in the public service rather than CEOs beholden to a small group of shareholders."
⢠Economist Mark Thoma sees in the bailout the ceding of policy independence by U.S. authorities. It means that the U.S. joins a "list of nations that have had to go, hat in hands, to their creditors - Indonesia, South Korea, Thailand, Russia, Brazil, etc. Do the implications resonate in Washington, D.C.?" Thoma wants to be sure that government policy "cushions the downside" of this new state of affairs, "easing the structural transition to an economy not dependent upon foreign official financing..."
⢠Michelle Leder takes a close look at the huge severance packages the departing Fannie and Freddie CEOs will receive. "[T]he figures being talked about for Mudd and Syron are $9.3 million and $14.1 million respectively. But given the over-complicated nature of both executives' employment contracts... the numbers seem a bit more open to interpretation."
Lehman on the Brink
An eavesdropping WSJ reporter caught a Lehman Brothers employee Thursday afternoon chatting on his cell outside the office: "It's over, man... unless we get bought out in the next 24 hours, it's over." So it seems - reports overnight indicate that the Fed and Treasury are at work trying to broker a Bear Stearns-style fire sale of Lehman.
⢠Lehman is "a sad tale, a classic story of hubris and greed," says Wall Street veteran Roger Ehrenberg. With Washington's move to sell Lehman, "we're going in the right direction, but we still seem to be a ways away from the time when the Fed and the Treasury will do what is right and fair in the marketplace: LET THEM FAIL."
⢠David Reilly at WSJ.com's Heard on the Street: "If the Federal Reserve now backstops an emergency sale of Lehman, this will only reinforce the idea that the cavalry will always ride to creditors' rescue in supposedly too-important-to-fail firms. That would especially be the case if a bailout were organized so soon after the Treasury rescued creditors of Fannie Mae and Freddie Mac... To avoid reckless lending in the future, failure has to be an option."
⢠Yves Smith at Naked Capitalism thinks "we may have a bit of brinksmanship going. It appeared during the Bear Stearns negotiations that Jamie Dimon played his position as the only game in town to considerable advantage. The Fed and Treasury would be advised not to make themselves again to be hostage to one bidder, but that may be unavoidable."
⢠London-based hedge fund trader Macro Man laments: "Another day, another US government intervention... it's a damned shame that LEH has gone to the wall, but being a damned shame isn't necessarily a good criterion for government intervention. Readers across the world can no doubt think of domestic issues that are a damned shame but have yet have yielded no government response."
⢠Investment advisor Dave Fry: "If the government backstops potential losses through a deal to save Lehman Brothers, it shouldn't shock anyone. It will lead to a knee jerk rally and then we'll have reality to deal with once again, as an ongoing credit squeeze continues to keep home prices falling. That's because no one can qualify to buy a home - even from the few willing to lend."
⢠Martin Hutchinson tries to answer the key question: "Just where were all the risk-management experts who should have assessed the pitfalls these companies faced, and how could they have missed the massive risks that are now threatening to take this entire sector down?"
And finally, before you consider buying the beaten-down stock of Fannie, Freddie, Lehman or any other financial firm that's recently been decimated, take heed of the lesson from legendary investor Bill Miller, as conveyed by New York Times blogger Joe Nocera. Oh, how the mighty have fallen.
http://finance.yahoo.com/expert/article/stockblogs/107360
⢠Investment advisor Michael Shedlock takes Fannie and Freddie management to task for squandering "every penny of capital they had. One might have thought that insolvency would have been reason enough to start taking less lending risks instead of continuing on the same foolish path... But no! Fresh with a $100 billion taxpayer bailout, the very first thing out of [Fannie Mae CEO] Tom Lund's mouth is to inform everyone that nothing has changed, and it's business as usual. âBusiness as usual' is exactly why we are in this mess in the first place."
⢠Market veteran David Merkel wonders "just how much can the U.S. government guarantee?... Who doesn't want to be guaranteed by the government? The auto companies are in line, can I get in line too? I could do amazing things with a $50 billion credit line from the government."
⢠Indeed, is there reason to believe non-financials like GM and American Airlines will be bailed out as well? Paul Kedrosky has a helpful metaphor to explain why that's not necessarily the case.
⢠Were Fannie and Freddie "just too big," as VP candidate Palin stated? Well, that wasn't necessarily the problem; Felix Salmon says "the marginalization of Fannie and Freddie during the housing boom would probably, on net, have been a bad thing. Insofar as anybody was sticking up for old-fashioned underwriting standards, it was the GSEs, and I suspect that if they hadn't been around, prime underwriting would have suffered the same race to the bottom as subprime." Salmon supported Sunday's GSE bailout under the circumstances: "Let's just do this thing, people, and get the companies run by technocrats in the public service rather than CEOs beholden to a small group of shareholders."
⢠Economist Mark Thoma sees in the bailout the ceding of policy independence by U.S. authorities. It means that the U.S. joins a "list of nations that have had to go, hat in hands, to their creditors - Indonesia, South Korea, Thailand, Russia, Brazil, etc. Do the implications resonate in Washington, D.C.?" Thoma wants to be sure that government policy "cushions the downside" of this new state of affairs, "easing the structural transition to an economy not dependent upon foreign official financing..."
⢠Michelle Leder takes a close look at the huge severance packages the departing Fannie and Freddie CEOs will receive. "[T]he figures being talked about for Mudd and Syron are $9.3 million and $14.1 million respectively. But given the over-complicated nature of both executives' employment contracts... the numbers seem a bit more open to interpretation."
Lehman on the Brink
An eavesdropping WSJ reporter caught a Lehman Brothers employee Thursday afternoon chatting on his cell outside the office: "It's over, man... unless we get bought out in the next 24 hours, it's over." So it seems - reports overnight indicate that the Fed and Treasury are at work trying to broker a Bear Stearns-style fire sale of Lehman.
⢠Lehman is "a sad tale, a classic story of hubris and greed," says Wall Street veteran Roger Ehrenberg. With Washington's move to sell Lehman, "we're going in the right direction, but we still seem to be a ways away from the time when the Fed and the Treasury will do what is right and fair in the marketplace: LET THEM FAIL."
⢠David Reilly at WSJ.com's Heard on the Street: "If the Federal Reserve now backstops an emergency sale of Lehman, this will only reinforce the idea that the cavalry will always ride to creditors' rescue in supposedly too-important-to-fail firms. That would especially be the case if a bailout were organized so soon after the Treasury rescued creditors of Fannie Mae and Freddie Mac... To avoid reckless lending in the future, failure has to be an option."
⢠Yves Smith at Naked Capitalism thinks "we may have a bit of brinksmanship going. It appeared during the Bear Stearns negotiations that Jamie Dimon played his position as the only game in town to considerable advantage. The Fed and Treasury would be advised not to make themselves again to be hostage to one bidder, but that may be unavoidable."
⢠London-based hedge fund trader Macro Man laments: "Another day, another US government intervention... it's a damned shame that LEH has gone to the wall, but being a damned shame isn't necessarily a good criterion for government intervention. Readers across the world can no doubt think of domestic issues that are a damned shame but have yet have yielded no government response."
⢠Investment advisor Dave Fry: "If the government backstops potential losses through a deal to save Lehman Brothers, it shouldn't shock anyone. It will lead to a knee jerk rally and then we'll have reality to deal with once again, as an ongoing credit squeeze continues to keep home prices falling. That's because no one can qualify to buy a home - even from the few willing to lend."
⢠Martin Hutchinson tries to answer the key question: "Just where were all the risk-management experts who should have assessed the pitfalls these companies faced, and how could they have missed the massive risks that are now threatening to take this entire sector down?"
And finally, before you consider buying the beaten-down stock of Fannie, Freddie, Lehman or any other financial firm that's recently been decimated, take heed of the lesson from legendary investor Bill Miller, as conveyed by New York Times blogger Joe Nocera. Oh, how the mighty have fallen.
http://finance.yahoo.com/expert/article/stockblogs/107360
WASHINGTON (Reuters) - The United States surged into action on Friday to launch an all-out attack against the worst financial crisis since the Great Depression, readying a plan to tap hundreds of billions of dollars in taxpayer funds to buy up toxic mortgage-related debt.
Capping a week that has reshaped Wall Street, Treasury Secretary Henry Paulson urged Congress to quickly agree on a program for huge purchases of bad debts held by banks and other financial institutions.
Lawmakers promised fast action on the plan, which two banking industry sources put in the $500 billion to $800 billion range.
Losses on mortgage-related debts have choked the financial system, forced lenders into bankruptcy and led the economy to what President George W. Bush called a "pivotal" moment.
"America's economy is facing unprecedented challenges, and we are responding with unprecedented action," Bush told reporters in the White House Rose Garden.
After having taken a series of other emergency steps that failed to erect a firewall against the spreading credit turmoil, U.S. authorities turned their attention to the underlying problem -- the rising tide of bad mortgage debt.
Paulson offered few details on Treasury's proposal but said he would work through the weekend and next week with Congress to get a program put in place. The proposal being sent to lawmakers would run only a few pages, a source said. A congressional aide said staff on Capitol Hill would be briefed on the plan on Saturday morning.
Rep. Steny Hoyer, the Democratic leader in the House of Representatives, said the chamber would likely take up a bill to implement the program early next week. House Speaker Nancy Pelosi said lawmakers would stay in town past their hoped-for adjournment next Friday if needed to pass it. Continued...
http://www.reuters.com/article/newsOne/idUSN1945959820080920
Capping a week that has reshaped Wall Street, Treasury Secretary Henry Paulson urged Congress to quickly agree on a program for huge purchases of bad debts held by banks and other financial institutions.
Lawmakers promised fast action on the plan, which two banking industry sources put in the $500 billion to $800 billion range.
Losses on mortgage-related debts have choked the financial system, forced lenders into bankruptcy and led the economy to what President George W. Bush called a "pivotal" moment.
"America's economy is facing unprecedented challenges, and we are responding with unprecedented action," Bush told reporters in the White House Rose Garden.
After having taken a series of other emergency steps that failed to erect a firewall against the spreading credit turmoil, U.S. authorities turned their attention to the underlying problem -- the rising tide of bad mortgage debt.
Paulson offered few details on Treasury's proposal but said he would work through the weekend and next week with Congress to get a program put in place. The proposal being sent to lawmakers would run only a few pages, a source said. A congressional aide said staff on Capitol Hill would be briefed on the plan on Saturday morning.
Rep. Steny Hoyer, the Democratic leader in the House of Representatives, said the chamber would likely take up a bill to implement the program early next week. House Speaker Nancy Pelosi said lawmakers would stay in town past their hoped-for adjournment next Friday if needed to pass it. Continued...
http://www.reuters.com/article/newsOne/idUSN1945959820080920
On the topic of public money...
I HAVE TO PASS A URINE TEST FOR MY JOB... SO I AGREE 100%.
Like a lot of folks in this country, I have a job. I work, they pay me. I pay my taxes and the government distributes my taxes as it sees fit. In order to get that paycheck, I am required to pass a random urine test with which I have no problem. What I do have a problem with is the distribution of my taxes to people who don't have to pass a urine test! Shouldn't one have to pass a urine test to get a welfare check because I have to pass one to earn it for them? Understand, I have no problem with helping people get back on their feet. I do, on the other hand, have a problem with helping someone sitting on their ASS, doing drugs, while I work. . . . Can you imagine how much money the state would save if people had to pass a urine test to get a public assistance check? Something has to change in this country, and soon. And not just with us becoming a Socialist Nation now with the Government buying, or the say "helping", 2/3 of the financial market. Mark my words, this is a step toward Communism.
In the words of Thomas Jefferson..."Any Nation that is big enough to give you anything you want can also take anything it wants from you."
I HAVE TO PASS A URINE TEST FOR MY JOB... SO I AGREE 100%.
Like a lot of folks in this country, I have a job. I work, they pay me. I pay my taxes and the government distributes my taxes as it sees fit. In order to get that paycheck, I am required to pass a random urine test with which I have no problem. What I do have a problem with is the distribution of my taxes to people who don't have to pass a urine test! Shouldn't one have to pass a urine test to get a welfare check because I have to pass one to earn it for them? Understand, I have no problem with helping people get back on their feet. I do, on the other hand, have a problem with helping someone sitting on their ASS, doing drugs, while I work. . . . Can you imagine how much money the state would save if people had to pass a urine test to get a public assistance check? Something has to change in this country, and soon. And not just with us becoming a Socialist Nation now with the Government buying, or the say "helping", 2/3 of the financial market. Mark my words, this is a step toward Communism.
In the words of Thomas Jefferson..."Any Nation that is big enough to give you anything you want can also take anything it wants from you."
Choice? What choices? Gore vs. Bush = country suffers. Kerry vs. Bush - country suffers. Obama vs. Mac = country suffers. This is like being asked whether you prefer being shot, or being stabbed to death. Dead is dead!
And where was the peoples choice on appointing the criminals that run these financial institutions? We have no say at all. Did you get a call regarding your thoughts on the bailouts using YOUR money? Guess I missed that call. You're only fooling yourself if you think your vote, much less your opinion means anything at all.
Pelosi, Kerry May Share Investor Pain as AIG Stakes Evaporate
http://www.bloomberg.com/apps/news?pid=20601109&sid=aSEtGBXG0C0s&refer=home
http://www.bloomberg.com/apps/news?pid=20601109&sid=aSEtGBXG0C0s&refer=home
paulson worked for goldman
people have been talking about these problems for years
i talked with a good friend of mine last night - he made a good, but modest income as a mortgage broker until about 3 years ago, but made difficult transition to get out - because he could plainly see what many on this site were talking about for years - people were talking about this on this site in 2004. the fed fannie and gov could have just enforced traditional lending standards - that's all it took
why couldnt people 'compensated' with millions see the same thing?
why is the first thing we hear from paulson 'ONE TRILLION - OR ELSE!!!!"?
this was armed robber, plain and simple
one of the biggest in the world
anyone that thinks such a huge wealth transfer in just hours with so little detail is without MAJOR scandal is a fool
people have been talking about these problems for years
i talked with a good friend of mine last night - he made a good, but modest income as a mortgage broker until about 3 years ago, but made difficult transition to get out - because he could plainly see what many on this site were talking about for years - people were talking about this on this site in 2004. the fed fannie and gov could have just enforced traditional lending standards - that's all it took
why couldnt people 'compensated' with millions see the same thing?
why is the first thing we hear from paulson 'ONE TRILLION - OR ELSE!!!!"?
this was armed robber, plain and simple
one of the biggest in the world
anyone that thinks such a huge wealth transfer in just hours with so little detail is without MAJOR scandal is a fool