Bailout vote

[taterhill]

I would hate to have a heart attack in front of one of these congessmen...

[Pine Barrens Mafia]

Plus, you don't seem to twig to the simple fact that Wall Street is in a world of hurt either way. Either we let banks go under...which benefits no one. Or we inject some liquidity into the capital markets by letting banks trade illiquid assets for cash at a substantial discount to the purchase price of those assets, in which case the banks have to write down the losses and are hammered...but at least the credit markets still function, which benefits everyone.

 

Question is, will the banks LOAN OUT the money that's freed up by this plan or will they hoard it? Pardon my lack of faith in these ill-managed institutions.

 

You seem to think the only way to change behavior is to inflict lots of pain...and you're right. But YOU seem to have this "all or nothing" belief that if the pain isn't as extreme as possible, then it's business as usual. The likelihood of even $700B sorting everything out and making everything sunshine and rainbows is precisely zero. The best case with that amount of money would be to keep the financial industry solvent for a few years in hopes that it sorts its sh-- out...which will be plenty painful enough.

 

Key words there: "in hopes that it sorts its sh-- out". $700B had better buy a whole lot of hope. I'd like to see an ironclad timetable for which the Motherment would be responsible for spinning off all owned bad assets. Say, of 3 years or less.

[Wacka]

People should go to jail, including some congressmen for gross incompetence. Reforms were suggested in the past and people like Dodd and Frank said nothing was wrong. Both of them and others should be frog marched to prison.

[Pine Barrens Mafia]

The irresponsible get hurt either way. And I'm fine with that. (And I'm arguably one of them since the wife maxed out her credit cards. And I'm still fine with that.)

 

But why the hell should the entire global financial system collapse because of a minority of dumbasses who don't know what a "balloon payment" is?

 

It's going to happen either way. Either with the single largest growth in the Federal Government's abusive power or by the collapse of a still free-ish market.

[DC Tom]

Question is, will the banks LOAN OUT the money that's freed up by this plan or will they hoard it? Pardon my lack of faith in these ill-managed institutions.

 

Uh, yeah. What do you think their business model is, gather all their dough in a great big pile and roll in it?

[SDS]

Uh, yeah. What do you think their business model is, gather all their dough in a great big pile and roll in it?

 

 

I was going to post something similar, but decided to pass...

[Pine Barrens Mafia]

Uh, yeah. What do you think their business model is, gather all their dough in a great big pile and roll in it?

 

You mean like they're doing now? I mean, this "liquidity crisis" is CAUSED by the banks hoarding what liquid assets they have to guard against future markdowns, correct?

[bills_fan]

Maybe the best thing that can happen is the market not to rebound before they get something done. The fall in stocks must have lit a fire under someone's ass. Can't the Democrats just get enough votes together themselves with maybe a few more Republicans?

 

 

I think that people will begin to see how severe the problem is when, in a span of a month, the market is off 1500-2000 points and they are not getting their paychecks on either 10/15 or 10/30. Then they open their 3Q, 401(k) statements.

 

As I have said before, I think that over the past two decades, we have fermented a great deal of societal acrimony. People are angry and far less civil. This will not be fundamental rethinking of our financial system...at least, not yet. People need to get that anger out. What I am saying is that it could get ugly.

 

Perhaps I overanalyze, but let me ask the military experts on the board (of which I am no expert)....when was the last time an active-duty military unit was pulled from a battlefront (Iraq) and stationed stateside, on active duty?

 

From the article linked below...

 

It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.

 

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.

 

Federal homeland defense? Defense support of civil authorities? Who is expecting what?

 

Be careful what you wish for. Unintended consequences can have lasting ramifications. Better to choose the imperfect solution that leads to a better day than to meltdown the system.

 

http://www.armytimes.com/news/2008/09/army_homeland_090708w/

[meazza]

Question is, will the banks LOAN OUT the money that's freed up by this plan or will they hoard it? Pardon my lack of faith in these ill-managed institutions.

 

 

 

Key words there: "in hopes that it sorts its sh-- out". $700B had better buy a whole lot of hope. I'd like to see an ironclad timetable for which the Motherment would be responsible for spinning off all owned bad assets. Say, of 3 years or less.

 

Since the banks make money mostly by loaning, i'm guessing yes...

[colin]

it's a bit of damned if you do damned if you don't.

 

there are a lot of bad things (including the slippery slope we step onto) associated with the bailout, but the 64 dollar question is what happens if we don't?

 

a good (but far from certain) result with no bail out is we have the fed just continue to flood liquidity into the market as necessary, some players go down but not too many (and with the result of positive cannibalization) and credit markets continue, just with much higher prices on borrowing.

 

a bad (and far from impossible) result is a mini depression/big recession.

 

this thing reeks of a bit of a rush job tho, perhaps something needs to be done but can we be certain the right thing will be done?

 

lots of chances to cut this off at the pass were missed in the past 10+ years, hopefully (fat effing chance) the correct adjustments will be made that should have been before (including freddie and fannie, the boondoggles that they are).

[meazza]

You mean like they're doing now? I mean, this "liquidity crisis" is CAUSED by the banks hoarding what liquid assets they have to guard against future markdowns, correct?

 

Because they need the cash flow simply to cover their increased collateral?

[Pine Barrens Mafia]

Because they need the cash flow simply to cover their increased collateral?

 

And they'd have no incentive to do the same thing post-"bailout"? That's all I'm saying.

[Kelly the Dog]

Truly amazing discussion between David Shuster, the reporter, and Douglas Holtz-Eakin, McCain's chief economic advisor. This is funny stuff.

 

SHUSTER: Joining us now John McCain's chief economic adviser. Douglas Holtz-Eakin, John McCain said over the weekend that he wasn't phoning it in, that would get lawmakers to get support this, Republicans. What happened?

 

 

HOLTZ-EAKIN: Well, David, today Barack Obama failed the American people. what should have been a --

 

SHUSTER: Whoa, specifically, how did they fail them?

 

HOLTZ-EAKIN: At every point when John McCain came and tried to put together a negotiating process with all parties at the table --

 

SHUSTER: Whoa, back up a sec. You said today. How was John McCain involved in negotiations today? If you can't answer that specifically, how did the democrats fail them today?

 

HOLTZ-EAKIN: Today, Speaker Pelosi delivered an incendiary partisan speech at a moment when bipartisanship was needed to prevail. John McCain put together a process where the Republicans were at the table. At every point in that process as he tried to develop --

 

SHUSTER: Let's take your first point, Doug. So you're saying, fair enough, partisan speech. fair enough. That would also then mean that republicans today put their own feelings, their own hurt feelings about partisanship, ahead of the good of the country. right?

 

HOLTZ-EAKIN: Look, John McCain worked the phones today. He worked the phones every day. He's visited with members of the Republican party. This was a tough vote. A week ago they were excluded from the process. There was no deal. Taxpayers weren't protected. He moved the bill to match the principles they wanted. They really were counting on some Democratic participation in that.

 

SHUSTER: Doug, if he was moving it as much as you said, why was John McCain nowhere to be found on Saturday night? I mean, he was off having dinner with the Liebermans, which is fine, but up on Capitol Hill you have the House Republicans, the Democrats, Secretary Paulson eating pizza out of boxes in the Speaker's office negotiating until 1:00 in the morning. Where was John McCain on Saturday night?

 

HOLTZ-EAKIN: Let us be very clear that John McCain understands that had he looked like he would have been the key to the success, the Democrats would have attacked him and killed the deal. That's what you saw today. They were not going to let McCain do the job that he was trying to do, deliver a bill to help the American people. The American people will lose as a result of this. John McCain understood if he had kept a low profile, talked to members of Congress as he did, called those members who were reluctant, he did his job and doing it with the low profile necessary.

 

SHUSTER: Where was the low profile last Thursday, Doug, when John McCain decided he needed to suspend his campaign and go to a meeting at the White House? Where was the low profile then?

 

HOLTZ-EAKIN: Beginning last Tuesday, Harry Reid said Republicans needed to be in on this. John McCain needed to deliver votes. Speaker Pelosi said continuously she was not going to deliver Democratic votes. Republicans had to do it first. John McCain suspended his campaign to get relief for the American families.

 

SHUSTER: Right back to the original point.

 

HOLTZ-EAKIN: Yes, we are.

 

SHUSTER: No, no. Wait a second.

 

HOLTZ-EAKIN: We are back to the Democrats once again sabotaging a bipartisan effort to help the American families.

 

SHUSTER: You said he was there to deliver Republican votes. The fact of the matter is, he did not.

 

HOLTZ-EAKIN: He took process from dead in the water to a vote in the House of Representatives this morning. absolutely dead in the water, no hope whatsoever, a bill everyone condemned. This morning we had a vote only because of John McCain. That vote could have been successful, but the Democrats behaved poorly. That's too bad.

 

SHUSTER: Because the Democrats' poor behavior, because Republicans got their feelings hurt, that's why this vote blew up, right?

 

HOLTZ-EAKIN: This is a serious matter that should have been conducted in a serious bipartisan fashion. That's not what we saw at many points in this process. The Democrats displayed no commitment. Where was Barack Obama today? If you look at what he said, he was praising the passage of the bill. Bill didn't pass.

 

SHUSTER: He was supporting it and you issued a statement saying he wasn't supporting it. Doug, first of all, before we go, only about 20 seconds, what does John McCain think we ought to do next?

 

HOLTZ-EAKIN: He's going to land and you'll hear from him. He's in Iowa right now. Tune in.

 

SHUSTER: Douglas Holtz-Eakin, economic advisor for the McCain campaign, thanks for coming on.

[DC Tom]

Perhaps I overanalyze, but let me ask the military experts on the board (of which I am no expert)....when was the last time an active-duty military unit was pulled from a battlefront (Iraq) and stationed stateside, on active duty?

 

From the article linked below...

 

 

 

Federal homeland defense? Defense support of civil authorities? Who is expecting what?

 

You overanalyze. It looks like the BCT was rotated home normally, then assigned to NORTHCOM for a newly defined continuing mission (which itself looks like a result of the 82nd Airborne's deployment to New Orleans in '05). This would have to have been planned several months in advance (6-12), and looks like more of an "on-call" training mission (they train for civil defense while maintaining readiness to deploy to a disaster site).

 

Though if you check rense.com, I'm sure they'll tell you it was specifically transferred to the continental US as part of the Bush/Cheney October coup to overthrow the Republic.

[DC Tom]

Truly amazing discussion between David Shuster, the reporter, and Douglas Holtz-Eakin, McCain's chief economic advisor. This is funny stuff.

 

 

 

!@#$ it, I'm voting Nader.

[bills_fan]

You overanalyze. It looks like the BCT was rotated home normally, then assigned to NORTHCOM for a newly defined continuing mission (which itself looks like a result of the 82nd Airborne's deployment to New Orleans in '05). This would have to have been planned several months in advance (6-12), and looks like more of an "on-call" training mission (they train for civil defense while maintaining readiness to deploy to a disaster site).

 

Though if you check rense.com, I'm sure they'll tell you it was specifically transferred to the continental US as part of the Bush/Cheney October coup to overthrow the Republic.

 

 

Thanks for the laugh. And the reality check. Working 20/24 hours for three weeks in a row will tend to make someone a little batty!

[taterhill]

Time to do a little cross referencing here

[Pine Barrens Mafia]

One of the great things about this is all the airtime Erin Burnett is getting. She can balance my ledger ANY day.

 

My market is UP when Erin's on the screen...

[Lurker]

Truly amazing discussion between David Shuster, the reporter, and Douglas Holtz-Eakin, McCain's chief economic advisor. This is funny stuff.

Gotta love it that two-thirds of the Republican house voted against it, yet it's Obama's fault for not passing. George Orwell, I hope you're laughing wherever you are...

 

Is it just me, or is Douglas Holtz-Eakin the Sarah Palin of economic advisors?

[molson_golden2002]

I think that people will begin to see how severe the problem is when, in a span of a month, the market is off 1500-2000 points and they are not getting their paychecks on either 10/15 or 10/30. Then they open their 3Q, 401(k) statements.

 

As I have said before, I think that over the past two decades, we have fermented a great deal of societal acrimony. People are angry and far less civil. This will not be fundamental rethinking of our financial system...at least, not yet. People need to get that anger out. What I am saying is that it could get ugly.

 

Perhaps I overanalyze, but let me ask the military experts on the board (of which I am no expert)....when was the last time an active-duty military unit was pulled from a battlefront (Iraq) and stationed stateside, on active duty?

 

From the article linked below...

 

 

 

Federal homeland defense? Defense support of civil authorities? Who is expecting what?

 

Be careful what you wish for. Unintended consequences can have lasting ramifications. Better to choose the imperfect solution that leads to a better day than to meltdown the system.

 

http://www.armytimes.com/news/2008/09/army_homeland_090708w/

I think the mood is already swinging. The normal media has seemed to jump on this big time and the guys that were doing everything they possibly could to kill this--Dobbs, Rush and Beck--from what I have seen seem to be backing off. Lou Dobbs on the radio today on my drive home was trying to laugh off the drop on Wall Street, and Beck had a couple of Wall Street Journal guys on that supported the bailout. Rush I don't know about, though. Buzzflash, a left wing internet site I go to had articles bashing this bailout, but then switched over to blaming McCain for its failure So I take that as a sign people are waking up.

 

My concern is, when the tax revenue drops, the government will have to make that up by borrowing anyway, or they risk a drop in consumer spending if they cut government spending. So we will spend the money anyway, but not in the area that will free up credit. You mentioned early about run away inflation, and I think that could happen if the gov has to keep borrowing and borrowing. Where would it stop? Might as well put the money where it will do the most good.