Stop This Madness Stop The Bailout

[supra5677]

I don't care if your left right or center.. Email you congress man or woman and stop this CRAZY BAILOUT!! 1 TRILLION DOLLARS to investment banks and hedgefunds? This is insane.. The fate out our country is at hand..

[ModerateRepublican]

You do know the estimated cost of a credit freeze and the resulting 20%-30% decline in the dollar is $18Trillion - $35 Trillion over next decade.

The "fat cats" already got rich. That is in the past.
The stocks have already declined and investors lost billions. That is in the past.

What happens is right now.

Did you know banks are refusing (for first time in 70 years) to lend money to each other?

You know why? Every bank is afraid that they won't have enough capital to covers losses. Every bank is looking out for #1. They will ensure they stay in business.

Banks aren't loaning money to ANYONE.

Need a car? You need cash.
Need a house? You need cash.
Need to sell your house? Find a buyer with $250K cash or you become a bank yourself.

Businesses need credit to "ride out" declining revenue. If they have no credit then one of two things happen.
1) Massive layoffs. 10%-15% unemployment. Increased unemployment means lower GDP which means more companies struggling, which means more layoffs, etc. A downward spiral.

2) Many companies will be unable to overcome negative cashflow. When their source of credit dries up they go bankrupt. Massive loss of wealth across all sectors.

It gets worse. All this devalues the dollar. The lower exchange rate results in lower earnings for foreign companies/individuals on Treasuries.

China owns $2T in Treasury Bonds. As the "real interest rate" declines with the declining $ China will be under pressure to sell off the US Treasuries. If China drops $2T on the open market yields will spike.

The US currently gets lowest interest rates in the world. A jump from <4% to 11%, 12%, 15% would make future debt more expensive.

The cost to do nothing is beyond punishing "some rich people".

[Frances]

Like Lou Dobbs said today: Both parties are equally repsonsible for this mess.
And Henry Paulson is nothing but an empty suit, and needs to get over himself.

[supra5677]

I agree something should be done.. But why are we bailing out these people 100% dollar for dollar, when there securities are only worth .30 cents on the dollar?

Why does Paulson want no oversite? Is he insane. He was telling Goldman Sachs his former company to shortsale all of the derivatives. Guess what company is left standing? Goldman Sachs. The dems and repubs need to be walked outside and dragged down the streets of America.

This is pirate dollars on the backs of the taxpayers...

[Calico]

Like Lou Dobbs said today: Both parties are equally repsonsible for this mess.
And Henry Paulson is nothing but an empty suit, and needs to get over himself.

Exactly right!

[ModerateRepublican]

I agree something should be done.. But why are we bailing out these people 100% dollar for dollar, when there securities are only worth .30 cents on the dollar?

Why does Paulson want no oversite? Is he insane. He was telling Goldman Sachs his former company to shortsale all of the derivatives. Guess what company is left standing? Goldman Sachs. The dems and repubs need to be walked outside and dragged down the streets of America.

This is pirate dollars on the backs of the taxpayers...

Nobody has said we are going to pay $1 on the $. The media just likes the big numbers. We will be spending up to $700 B but we shouldn't pay more than fair maket value.

If Congress does either:
1) overpay for the debt
2) give Paulson complete spending authority

well then the problem is with Congress. They are idiots (both parties).

Congress should hire some top talent on a % basis to aggressively negotiate down the sale price. Give them say 2% of the PROFIT realized by TAXPAYERS when debt is sold back after market recovers in 5-10 yrs. If taxpayers lose money they get no bonus. If they earn taxpayers $100 million they get $2 million dollar bonus. Start getting the heavy talent working FOR taxpayers.

[DC_Mark]

My main concern is whether the Paulson plan would work. After researching the topic a bit, I'm now really worried that this "bail-out" could end up causing more institutions to fail.

The following article does a good job explaining two rule changes in 2007 that are seriously exacerbating the problem:

http://blogs.wsj.com/deals/2008/09/22/why-has-the-credit-crunch-been-so-bad-look-to-washington/

Many experts are now saying they were mistakes. The government need to roll them back before trying something new.

[supra5677]

Hey moderate republican i like your style.. I could actually go for something like that....

[pnevai]

All of this is underpinned by the one thing everone likes to ignore. What happens when the mortgages continue to default and now the govt becomes the landlord? All of this all of this money is funded by the montly payments of home owners the vast majority that are in way over their heads. As they continue to default it is the rest of us, that will be paying these mortgages even when we dont own a house.

I would love to see Obama try to even hint that he will not raise taxes on everyone. Because there is no way in hell that keeping the tax rates the same will ever pay off this bail out. The Govt can not even guess when if ever they will be able to sell off the bad paper they already bought.

BTW I think Hedge funds should be illegal

[AsianNYForHillary]

The cost to do nothing is beyond punishing "some rich people".

Totally agree with you.

[pnevai]

It is a spiraing abyss, Wages have stagnated or have gone down, jobs are being shipped overseas at a exponential rate, so the only hope many people had to own a home was enticed by these mortgage predators, the speculators artificially jacked up the prices and the lending industry was happy to oblige. More and more people saw their chance not realizing that they were in over thier heads, as it seemed property values were never going to stop going up.

But stark reality slammed home as prices could only go so high (I remember watching this house flipping show where a guy renoveted a shack in the Watts section of LA and put a $450,000 selling price on it)

The financial nit wits have their heads so stuck up in the nebulous virtual numbers worrld that they forget that the bedrock of what makes the financial world tick is people, thier salaries IE JOBS. To them it is all a numbers game but it is based in real life blood and bone.

Take away decent well paying jobs and who is going to keep your financial empire afloat. Unless drastic actions are taken regarding Jobs and energey indenpendence in this country then this is only going to be the tip of the iceberg.

[Frances]

22 Sep 08
Bill Moyers & Michael Winship: Peninsula Peace & Justice Center
Moguls Steal Home While Companies Strike Out

If religion is no longer th soul of capitalism, as Max Weber once taught, we can trave just a few miles north of wall street to Yankee stadium for a different metaphor to try to
understnad the continuing follies of the new gilded age.

From our office in Manhattan, we look out on the tall, gleaming skyscrapers that are catherdrals of wealth and power - the Olympus ruled by the gods of finance, the temples of the might, the holy of holies, whose priests guard the sacred texts of salvation - the once containing the secrets of subprime lending and derivatives as mysterious and elusive as the Grail itself.

This last couple of weeks, ordiinary mortals below could clmost hear the ripcords of golden parachutes being pulled as the divinities on high prepared for soft, safe landiings - all this while tossing their workers like sacrificial lambs into the purgatory of unemployment.

During the lst five years of his tenure as CEO of now bankrupt Lehman Brothers,
RICHARD FULD'S total take was $354 million. John Tahin, the current chairman of Merrill Lynch, taken over this week by Bank of America, has been on the job for just nine
months. He pockedted a $15 million signing bonus. His predecessor, Stan O'Neal retired with a package of $161 illion, after the company reported an $8 billion loss in a single
quarter. And remember Bear Stearns's Chairman James Cayne? After the company collasped earlier this year and was up for sale at bargain basement prices, he sold his stake for more than $60 million.

Daniel Mudd & Richard Syron, the former heads of Fannie Mae & Freddie Mac -aka the
gods who failed - are fighting to keep severance packages of close to $24 million combined - on top of the millions in salary each earned last year while slaughtering the
golden calf. As it is written in the Gospel According to Me, when the going gets tought, the tough get going.

Bill Moyers goes on in this article to compare the Yankee Stadium (new one at $1.3 billion) , this season Alex Rodriquez had a better year than both of them. A-Rod is make $28 million, just part of an annual Yanakee payrol of $209 million, the richest in baseball. Their owner, George Steinbrenner, is among the Forbes 400, one of the country's richest tycoons.
Meanwhile, there will be more luxury suites and party rooms where fat cats can gather, safely removed from the sweaty masses. Corporations and wealthy individuals will be able to rent the luxury suites for anywhere from $600,00 - $850,000 a year, tax
deductibel, assuming they haven't filed for bankruptcy this week.

Note in 2007 John Thain was paid $83.1 million. These people don't answer to any laws, they are above the law, bunch of rich scumbags!

[truebluesenior]

For me, a remember when and where we are at today. Also, to pass on to younger members of our forum that were not born or politically active during another period in time. In the 1980s, get big government off our backs was the then Republican President Ronald Reagan's war cry. Corporation lobbyists, with a compliant Congress, put into laws deregulating, privatizing and dramatically lowering taxes on the rich. Reagan left office with our citizens holding the bag for the highest tax deficit in the history of this country. Four years later, President Clinton took office and dramatically restructured the tax system, the rich paying their share, the middle class prospering and when he left office, we had the largest financial surplus in our history. This past week Senator Clinton emphatically outlined a fix to this financial crisis. She stated the core must include the common people in the mix. Senator McCain needs to return to a 2000 straight express mindset on this and not mouthing advice from that clique of corporate lobbyists surrounding him with meaningless words like "reform." If Senator McCain is elected and chooses to draw from his well of courage, he is in position to be a great President. I am not confident. Skipping the top, I am going to vote a straight Democratic ticket with the knowledge that a Democratic majority in the House and Senate will provide a firewall if he chooses to not break from Reagan/Bush's disastrous policies.

[Den2006]

I don't like the sound of this bailout and now that Congress has started to put it's fingers in the pie I'm even more aprehensive. Their getting way to wild and free with our money up there and I'm not onboard with any rush to action on this. Government interference has caused a lot of this problem to begin with and frankly I don't have a lot of faith in thier judgment at this point.

[hejiranyc]

Trust me when I tell you how utterly DISGUSTING these Wall Street douchebags are- they have completely destroyed the quality of life in NYC by driving the prices of everything up to a ridiculous level. I'm so happy this garbage is being flushed out of the city so that "real" people can actually afford to live here again.

That being said... here are my conditions for a bailout:

1) The U.S. government buys both the junk/subprime and AAA prime stuff equally at a 1:1 ratio (it's no fair that we take on only the junk). Alternatively, the government could take over all the junk, but at pennies on the dollar.

2) Executive compensation for any bailed out company will be capped at $400,000 per year, just like the federal government pay scale. Including bonuses.

3) The U.S. government takes on a 50% ownership stake in any bailed out companies in exchange for buying the junk.

4) The U.S. government takes on an ownership interest in the Federal Reserve. Ben Bernanke should be canned. The discount lending rate should start being increased in order to prop up the dollar.

5) All existing mortgage holders are eligible to elect for mortgage refinancing at, or slightly above the federal discount lending rate, not just the homeowners in trouble. This will stave off foreclosures as well as preserve home prices.

6) Henry Paulson gets canned without a golden parachute (and put on trial). In fact, NOBODDY from a bailed out company receives a parachute.

7) New regulations and new enforcement of existing regulations.

8) The U.S. government reserves the right to sell or not sell these newly acquired assets at the time of its choosing and not according to some timetable.

9) A new initiative to crackdown on cases of mortgage fraud and to impose heavy fines on lending institutions that acted unethically or refused to heed lending standards.

We basically need to gut the banks and then hit the reset button. And they should never ever be allowed to get so highly leveraged.

[pnevai]

Just think, the democrats entire platform just went out the window. Universal Healthcare Gone, can't afford it now.
Investment is all those green jobs, BAM gone as well, no money.
Go right down the line and honestly I can not see how the defict will be eliminated in the next 20 years.

One thing is for sure our troops will be coming home like it or not because we certainly can't afford to keep then there, both in Afghanistan and Iraq. The necessity or not of this bail out is not going to leave much money left for anything. Expect to see big cuts in all government sectors. Education, Highways, National Parks the works. All the while the fat cats drift happily along on thier golden parachutes.

[pnevai]

5) All existing mortgage holders are eligible to elect for mortgage refinancing at, or slightly above the federal discount lending rate, not just the homeowners in trouble. This will stave off foreclosures as well as preserve home prices.

Sorry but that is a half truth. Bottom line is that very many of the foreclosures are for homes that were bought at obscenely inflated prices. I know I am surrounded by those types of home here in Florida.

Many of these people purchased houses that were up to 100% over traditional market value for the geographic area. Now those same homes have dropped back to pre bubble prices and even below. So these people are holding $360,000 mortgages on property worth only 180 to 200K. No matter what the rate they can not afford the mortgage, second No lender not a single one even the government will take over that debt, or I would cerrtainly hope not.

Right now if you have areoun 150K or so in cash you can take your pick of New 4 bedroom homes with pool 1/2 acre here in Fla that were selling for 300k or better just 4 years ago.

Most peiple on this board or the USA do not know what kind of feeding frnezy it was, here in FLA no sooner than a developer finished a subdivision, and opened it up for buyers, for a week before people would camp out in lines stretching for miles to jump in and snap up the porperties, many of these were the speculators that sat on them a bit and sold for healthy profits and many were duped by the mortgage companies, it escallated and escallated there were even incident of violence at some of these openings amongst people in line.

Sorry but this will do nothing to keep home values up and nor should it, when the prices were way out of line to begin with.

[Mrsawd]

Who is behind all this insanity !

We need to get to the Bottom of it and figure it out quick!

[ragdoll]

Most of our politicians have learned nothing from our forefathers. I will say that as crazy as Ron Paul sounds sometimes, he has been telling us that this was going to happen. Not enough people believed him and took him seriously.

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson

"If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered." Thomas Jefferson

"If taxes are laid upon us without our having a legal representation where they are laid, we are reduced from the character of free subjects to the state of tributary slaves." Samuel Adams

"We must not let our rulers load us with perpetual debt. We must make our selection between economy and liberty or profusion and servitude. If we run into such debts as that we must be taxed in our meat in our drink, in our necessities and comforts, in our labors and in our amusements, for our callings and our creeds...our people.. must come to labor sixteen hours in the twenty-four, give earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live.. We have not time to think, no means of calling the mis-managers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow suffers. Our landholders, too...retaining indeed the title and stewardship of estates called theirs, but held really in trust for the treasury, must...be contented with penury, obscurity and exile.. private fortunes are destroyed by public as well as by private extravagance.

This is the tendency of all human governments. A departure from principle becomes a precedent for a second; that second for a third; and so on, till the bulk of society is reduced to mere automatons of misery, to have no sensibilities left but for sinning and suffering... And the fore horse of this frightful team is public debt. Taxation follows that, and in it's train wretchedness and oppression." Thomas Jefferson

[Hillforceone]

http://www.hillaryclintonforum.net/discussion/showthread.php?t=31471

[DC_Mark]

An article at a Swedish site worth looking at:

The Bush administration's handling of the financial crisis is in part inspired by a successful Swedish bank rescue in the 1990s, but one crucial deviation could cost US taxpayers dearly, one of the architects of the Swedish plan said on Monday.

http://www.thelocal.se/14496/20080922/

[Agent 00½ FL]

I am getting started on my Letter writing. Does anyone know the Bill number?

[hillary1]

Like Lou Dobbs said today: Both parties are equally repsonsible for this mess.
And Henry Paulson is nothing but an empty suit, and needs to get over himself.

who else is stepping up, BARNEY FRANK, WHERE HAS HE BEEN AS THE CHAIR OF THE BANKING AND FINANCE COMMITTEE, CHRIS DODD, ON THE BANKING AND FINANCE COMMITTEE, HARRY REID, SENATE MAJORITY LEADER, NANCY PELOSI, SPEAKER OF THE HOUSE, WHO IS STEPPING UP, WHERE WERE ALL THESE PEOPLE IN CONGRESS WHO TOOK MONEY FROM FANNIE AND FREDDIE, WHO ALLOWED COUNTRYWIDE FINANCIAL TO PLUNDER AND WHO WAS THE CONGRESSMAN WHO TOOK PERKS FROM THEM, THE FOA'S, FRIENDS OF ANGELO, WHO BAILED OUT WITH MILLIONS

CONGRESS IS POINTING THE FINGER, BUT WHO THE HELL IS WATCHING THE STORE, CONGRESS CREATED THIS MESS GOING BACK TO THE CARTER DAYS, AND RIGHT UP TO THE BUSH ADMINISTRATION, AND WE ALLOWED IT, NOW WE NEED TO MARCH, AND TAKE THESE PEOPLE OUT OF CONGRESS, AND PUT NEW BLOOD, NEW FACES IN

OTHERWISE, ITS THE SAME OLD SAME OLD, AND NO ONE SHOULD COMPLAIN, JUST BE ON THE ALERT IF THIS BAILOUT OF $1 TRILLION DOES NOT WORK

THEN WHO SHALL WE BLAME WHILE WE ARE WAITING ON THE FOODLINES

[timepassages]

Sorry but that is a half truth. Bottom line is that very many of the foreclosures are for homes that were bought at obscenely inflated prices. I know I am surrounded by those types of home here in Florida.

Many of these people purchased houses that were up to 100% over traditional market value for the geographic area. Now those same homes have dropped back to pre bubble prices and even below. So these people are holding $360,000 mortgages on property worth only 180 to 200K. No matter what the rate they can not afford the mortgage, second No lender not a single one even the government will take over that debt, or I would cerrtainly hope not.

Right now if you have areoun 150K or so in cash you can take your pick of New 4 bedroom homes with pool 1/2 acre here in Fla that were selling for 300k or better just 4 years ago.

Most peiple on this board or the USA do not know what kind of feeding frnezy it was, here in FLA no sooner than a developer finished a subdivision, and opened it up for buyers, for a week before people would camp out in lines stretching for miles to jump in and snap up the porperties, many of these were the speculators that sat on them a bit and sold for healthy profits and many were duped by the mortgage companies, it escallated and escallated there were even incident of violence at some of these openings amongst people in line.

Sorry but this will do nothing to keep home values up and nor should it, when the prices were way out of line to begin with.

I understand this completely. I say homes in WY sell for 100,000.00 that were not even livable. They had no furnace, water pipes all broken, broken windows, even a large 17 foot hold dug in the backyard. (to fix the septic tank, which had to be replaced). One had no doors, they had been removed. This is only one example, there are many accross the country. What happened was that, beacuse of the amount of home sales, basied on lower standards by the mortgage industry, more homes were in demand, thus driving the prices to crazy amounts. Buyers got loans baised on lies, no jobs, no downpayment, ect. Bad credit? It did not matter. SO, if you open up sales to anyone with a heartbeat, you need more homes, supply and demand, thus it appears there is a houseing shortage, and drives prices way up...
The question is not about this bailout, it has to be done.

I work in the mortage industry and can tell you that if it is not, this economy will colaspe. Much like the great depression. This affect not only the banks, but all employees of those banks. It will trickle down to every part of our lives. If banks close, and jobs are lost, they stop buying everything from gas to grocieres. Which means even service realted jobs will be lost. I agree this big shots should not be rewarded, but not we have no choice. people cannot now even sell the homes they bought because now the prices have dropped below what is owed on them. This has all happened, due to loose government regs, regarding the houseing market. "The Flipper" took advantage of a situation and made it worse, but pocketing loads of money. The more time congress wastes, the worse it gets. Granted I do not think, any of this bail out is deserved, they did it to themselves. If it was only the bigshots going down, I would love it! But its not that way........

[hejiranyc]

Sorry but that is a half truth. Bottom line is that very many of the foreclosures are for homes that were bought at obscenely inflated prices. I know I am surrounded by those types of home here in Florida.

Many of these people purchased houses that were up to 100% over traditional market value for the geographic area. Now those same homes have dropped back to pre bubble prices and even below. So these people are holding $360,000 mortgages on property worth only 180 to 200K. No matter what the rate they can not afford the mortgage, second No lender not a single one even the government will take over that debt, or I would cerrtainly hope not.

Right now if you have areoun 150K or so in cash you can take your pick of New 4 bedroom homes with pool 1/2 acre here in Fla that were selling for 300k or better just 4 years ago.

Most peiple on this board or the USA do not know what kind of feeding frnezy it was, here in FLA no sooner than a developer finished a subdivision, and opened it up for buyers, for a week before people would camp out in lines stretching for miles to jump in and snap up the porperties, many of these were the speculators that sat on them a bit and sold for healthy profits and many were duped by the mortgage companies, it escallated and escallated there were even incident of violence at some of these openings amongst people in line.

Sorry but this will do nothing to keep home values up and nor should it, when the prices were way out of line to begin with.

Oh, I'm not saying that home prices should be inflated back to where they were a couple of years ago. What I meant is that home prices would not nosedive even further from where they are today. I agree, the bottom has fallen out of a lot of key bubble areas like SoCal, Phoenix, Vegas, South Florida, etc. I am just hoping that prices will finally come back down to earth in NYC, where prices have continued to rise throughout the contraction in the housing market. :mad:

I agree with you about Florida. My parents bought a house in Port St. Lucie 20 years ago for about $42K, and at the height of the bubble they could probably have gotten $150K for it. Now they would be lucky to sell it for $60K, which is not exactly a great return on investment, especially if you consider the high price of homeowners insurance, taxes and all of the updates/renovations needed on a 20-year-old house. I can imagine that the Miami skyline will be dotted with the skeletons of lots of half-finished condo towers now that the money tap has completely dried up.

[wasGOPnowInd]

Sorry, I must disagree with the title of this thread. The "bailout" will protect millions of businesses with millions of employees from going under. The "bailout" will stabilize the markets, and prevent the dollar from becoming completely worthless, which in turn would drive the cost of consumer goods through the roof. Ultimately, the cost to government in the form of unemployment checks, welfare checks, and a depression that makes the one in the 30's look like "the good ole days" pales by comparison to any "bailout". Yes, the CEOs of companies who did this should be investigated, and like Enron, there should be a corresponding regulatory response, as was done with Sarbanes-Oxley. But, we are not saving a "them", we are saving all of us!

[hejiranyc]

But, we are not saving a "them", we are saving all of us!

Sorry I have to disagree... we are not "saving" anything with this bailout. We are merely putting a bandaid onto a much larger problem that will not go away anytime soon. I agree with Ron Paul's statement today in the sense that we have to allow for a quick, rapid correction rather than a prolonged, painful flatline. Indeed, the Depression was prolonged due to government intervention and attempts at manipulating a situation that was pretty much FUBAR.

[wasGOPnowInd]

Sorry I have to disagree... we are not "saving" anything with this bailout. We are merely putting a bandaid onto a much larger problem that will not go away anytime soon. I agree with Ron Paul's statement today in the sense that we have to allow for a quick, rapid correction rather than a prolonged, painful flatline. Indeed, the Depression was prolonged due to government intervention and attempts at manipulating a situation that was pretty much FUBAR.

No one is denying that this is a band-aid measure meant to stop the bleeding. However, without it, the markets will continue to degrade, companies will continue to fail, and regulatory measures will never be able to address the underlying problem. Sometimes it is necessary to stop the bleeding before any additional medical intervention and prevention can take place. Talking about prevention before circumventing the current medical emergency will lead to debating over a dead patient.

[hejiranyc]

No one is denying that this is a band-aid measure meant to stop the bleeding. However, without it, the markets will continue to degrade, companies will continue to fail, and regulatory measures will never be able to address the underlying problem. Sometimes it is necessary to stop the bleeding before any additional medical intervention and prevention can take place. Talking about prevention before circumventing the current medical emergency will lead to debating over a dead patient.

I agree... something has to be done. But simply throwing money at the situation and allowing those banks to continue as before is just immoral. All 300 million of us should become shareholders in these companies, and we should receive income if/when the assumed assets are ever sold at a profit. It's time that we socialize the gains too.

[Tea toaD]

I agree this is madness. But the bigwigs are putting the fear of a full blown recession/depression out there if this is not done.:confused: Worse some say then the crash of '29:(

[hejiranyc]

I agree this is madness. But the bigwigs are putting the fear of a full blown recession/depression out there if this is not done.:confused: Worse some say then the crash of '29:(

But look who's doing the fearmongering- the very people who stand to make obscene boatloads of cash from a bailout. I just can't believe what I'm hearing... the reason Paulson balked at the stipulations about compensation caps and golden parachutes is that banks would be discouraged from participating in the bailout. I mean, HELLO, if the system was in such dire straits, wouldn't the banks be willing to accept any kind of a deal just to get it over with? The more I hear and read, the more I am inclined to believe that Wall Street is making one last ditch effort to fleece the American people before the party ends forever.

[hejiranyc]

Another thing that sticks in my craw is this notion that the government will buy all this subprime crap and then turn around and sell it again for a profit in the future. Bullarky! They're not stupid- if there was even the slightest chance in heck that these assets would become valuable again, they would hold on. But the sad fact is that these astronomic asset valuations are gone and will probably not return within our lifetimes.

[DC_Mark]

The focus should be on fixing the financial system. Punitive measures like the compensation cap are distractions. Astronomical executives pay packages that grab headlines consist mainly of stock grants and options anyway. They aren't worth much now.

I do agree that the government should receive equity in return for buying the bad loans, as per the Swedish model. I'm hoping that aspect was left out deliberately so that Democrats can bring it in and claim some credit.

[wasGOPnowInd]

I agree... something has to be done. But simply throwing money at the situation and allowing those banks to continue as before is just immoral. All 300 million of us should become shareholders in these companies, and we should receive income if/when the assumed assets are ever sold at a profit. It's time that we socialize the gains too.

The Feds (so, essentially, us) will be making quite a hefty profit on the Bridge Loan to AIG - over 11% interest! Not a bad return on the investment. As for the purchase of the bad debt, the payoff will be a chance to breath, create regulatory measures to prevent it from happening again, an avoidance of a depression, not only here but everywhere, and the savings of dollars used to help those without jobs survive. There would have been a bailout one way or another - either the govt. intercedes and prevents the resulting depression, or the government bails out those who suffer from it later. I would rather we do this, create the stabilization needed to make it through, create preventive measures and agencies, and survive with our jobs and economy intact.

[Latina4Hillary]

I worry about my 401(K). I'm glad I decided to continue working for as long as I can. I love the work I do but the long commute is getting difficult.

[CT-Hilltopper]

This bailout is only acceptable if:

There is accountability in the future. Someone is in charge of oversight, so something like this subprime mess does not slip through the cracks and threaten to wreck the system again;

We need transparency. I want to see what these companies have on their books. Thats a reasonable request to make of any company that is willing to take the government up on its offer;

I want the CEO's of these companies that take our money to be made to put their yearly bonuses into paying off this debt. I'm not the one that started this, they did. I'm not going to be the only one that ends up suffering here either.

The government, in my opinion, hasn't been acting in the best interests of the people for a long time. We haven't had a balanced budget since Bill Clinton was President. The politicians keep spending money like there's no tomorrow, and our kids and grandkids are the ones that are going to be the ones that suffer the most.

In conclusion, I want any politician that accepted any donations from Fannie Mae, Freddie Mac, or any of these financial institutions that are affected by this bailout to have to pay that money back to we, the people, via paying down this debt. Democrat, Republican, I don't care. They can pay it back in installments, if it's too large. This whole thing pisses me off to no end, and it really pisses me off that people that I trusted and elected to look out for me looked the other way and lined their pockets while everything was falling apart around their ears.

I know I won't get any of these things, but I feel better just seeing them put down

[Agent 00½ FL]

For the love of God, they just need to get this over with. Its like having a sick Cat or Dog, you know the inevitable, but you just can't bear to make the decision.

[foxyladi]

Who is behind all this insanity !

We need to get to the Bottom of it and figure it out quick!
i agree the f.b.i is investigating now,,i want to see some people inJAIL....:mad::mad::mad:

[Agent 00½ FL]

The latest additon to this Bill is Obama wants to add Credit Card Bailout, Student Loans and Car Loans to the Bill. Is there anyone else? This is totally unaccepable. Who else is going to obtain a "Get Out Of Debt For Free Card".

[Charlie Brown]

For the love of God, they just need to get this over with. Its like having a sick Cat or Dog, you know the inevitable, but you just can't bear to make the decision.
Amen!

[DC_Mark]

One thing that the media keeps failing to get across is that the bail-out is not the government spending $700 billion. The Treasury is asking for the authority to spend that amount, which is actually more than the full value of all subprime mortgages still out there. The large number is basically a message sent by the government that it is not going to let institutions fail because of bad loans on their balance sheets. With confidence restored, banks will lend to each other again.

Structured correctly, the plan is not going to cost taxpayers that much. The problem is not the lack of money, but that it has stopped flowing through the system. If people like Obama though start tacking on all sort of debt forgiveness then we're really screwed.

[Lodi]

Just think, the democrats entire platform just went out the window. Universal Healthcare Gone, can't afford it now.
Investment is all those green jobs, BAM gone as well, no money.
Go right down the line and honestly I can not see how the defict will be eliminated in the next 20 years.

One thing is for sure our troops will be coming home like it or not because we certainly can't afford to keep then there, both in Afghanistan and Iraq. The necessity or not of this bail out is not going to leave much money left for anything. Expect to see big cuts in all government sectors. Education, Highways, National Parks the works. All the while the fat cats drift happily along on thier golden parachutes.

I'm admittedly an idiot when it comes to the financial markets (I'm an editor, not a broker), but what would happen if we instead used that money to help fund green (alternative energy) industries and created good-paying jobs instead?

[samkm]

This bailout is only acceptable if:

There is accountability in the future. Someone is in charge of oversight, so something like this subprime mess does not slip through the cracks and threaten to wreck the system again;

We need transparency. I want to see what these companies have on their books. Thats a reasonable request to make of any company that is willing to take the government up on its offer;

I want the CEO's of these companies that take our money to be made to put their yearly bonuses into paying off this debt. I'm not the one that started this, they did. I'm not going to be the only one that ends up suffering here either.

The government, in my opinion, hasn't been acting in the best interests of the people for a long time. We haven't had a balanced budget since Bill Clinton was President. The politicians keep spending money like there's no tomorrow, and our kids and grandkids are the ones that are going to be the ones that suffer the most.

In conclusion, I want any politician that accepted any donations from Fannie Mae, Freddie Mac, or any of these financial institutions that are affected by this bailout to have to pay that money back to we, the people, via paying down this debt. Democrat, Republican, I don't care. They can pay it back in installments, if it's too large. This whole thing pisses me off to no end, and it really pisses me off that people that I trusted and elected to look out for me looked the other way and lined their pockets while everything was falling apart around their ears.

I know I won't get any of these things, but I feel better just seeing them put down

I agree. These resulting bodies need some controls. Public will require disclosure by way of ratings of financial institutions provided by the Federal Reserve.

[rosesnc]

An article at a Swedish site worth looking at:



http://www.thelocal.se/14496/20080922/

I heard a talk from a Swedish gentleman who is in the States giving seminars to Administration and Congressional personnel. I hope they are paying attention, because the Swiss did their bailout right.

[hillary1]

I don't care if your left right or center.. Email you congress man or woman and stop this CRAZY BAILOUT!! 1 TRILLION DOLLARS to investment banks and hedgefunds? This is insane.. The fate out our country is at hand..

i do not know what the repercussions will be if we do not do this, i agree with many of the posts here, but if we do not, infact, what if this bail out fails, then what

recently i heard, the fed.gov. takes in $3t dollars in taxes each year, and hear we are bailing out companies to the tune of $1t, if not larger, what will happen when we cannot do what we need to do, social security, medicare, veterans benefits, etc., where will we get that money from

we can print all the money we need, but inflation will skyrocket

you can call me crazy, but, i still think this is being done very systemically, methodically by this government, it all falls into place, one government, one currency, the government is eliminating capitalism, in its place will be socialism, i thought this is what we always fought against, i think we have lost the will to fight, we continue to let those stay in office, the same ones who put us where we are today, dems and pubs

for me, it appears to be out of control, yet, i think they know exactly what they are doing

[hillary1]

i agree the f.b.i is investigating now,,i want to see some people inJAIL....:mad::mad::mad:

this is the best quote of the day


who took all this money, and why did they mislead the consumer, to me, imo, that is consumer fraud, i thought this was against the law, again it falls back on the government, why was chris dodd given such a favorable deal with countrywide financial, foa's (friends of angelo", why is he not being investigated by the ethics comittee)

why are these people always getting a slap on the wrist, then they bailout with just as much as the ceo's we are all yelling against

we need change, change in government, more transparency in governement as well

[Country_Over_Party]

3) The U.S. government takes on a 50% ownership stake in any bailed out companies in exchange for buying the junk.


Ahhhh!!! We do not need more Freddie Mac's and Fannie Mae's...

[timepassages]

I don't like that this has to be done, but it does. Here's why, if the banking system collaspes within itself. We will have a trickle down effect much like the great depression. I am not trying to scare anyone, but when banks close, this effects the whole economy. Its not like one factory closing in a town. The effects of this would be felt from coast to coast. I work in the mortage industry, and there are a lot of these bad loans. Enough to cripple our economy.

The government must go after these people, and REGULATE IT. But, first to aviod a diaster, this must be done. I understand the cost if large, but think what it would be like to have no jobs, no homes, no credit. It could happen if congress does not stop bickering and SO SOMETHING! Everyday wasted, the problem gets bigger!!

YouTube - Native Americans Against Obama-Wolves at the Door

[DC_Mark]

Ahhhh!!! We do not need more Freddie Mac's and Fannie Mae's...

Agree. One way I see them structure deals is transfer the bad loans to the government entity with the stipulation that the banks buy them back eventually, preferrably with cash, but failing that with company debt or equity.

[supra5677]

commercial banks can stay open.. investment banks can go to hell.. they don't produce anything in the real economy..they bet they lost **** em..

[Country_Over_Party]

commercial banks can stay open.. investment banks can go to hell.. they don't produce anything in the real economy..they bet they lost **** em..

Im not getting your point. What do commercial banks produce?

[supra5677]

commercial banks, small businesses, city, county, state, ports, street sweepers, grocery stores. Anything in the REAL ECONOMY. Investment banks are just paper. they don't produce technology or anything.. follow?r

[ModerateRepublican]

The media (as usual) has done a HORRIBLE Job of explaining the situation.

The banks have huge amounts of debt which is non-performing. No bank is willing to lend anyone anything right now. They have no idea how much of a cashflow shortage they will have in coming months & years. Without knowing how "short" they are going to be it makes no sense to lend any money. They need to insulate themselves by holding more cash.

So the banks are not lending. Period. What does this mean for economy?
Say a business needs to expand (more jobs) tries to get a loan and can't. No loan = no expansion. No new jobs.
Say another business is struggling. Needs a loan to cover negative cash flow. No loan = layoffs & possible bankruptcy.
Say you try to sell your house but the buyer can't get a loan. No loan = no sale. Maybe you need to sell to avoid foreclosure or to move. Another foreclosure adds to the problem.
Say auto manufactures need to sell more cars. People can't get loans. No loans = no cars. Even more losses. Even more layoffs.

The credit freeze does not have to be 100% to have massive effect on GDP. If bank even cut bank lending 20%-30% in order to build capital reserves they can cripple any growth and send us into a recession (which is nothing more than a contracting economy).

Our entire world revolves around credit. There is so much non-performing loans on the books banks are hoarding cash like a dragon. The banks will not even make overnight loans to other banks. This hasn't happened since Great Depression.

The Government MUST take this bad debt. Where the media has failed to explain the situation is the govt is not just giving away the money. They are buying the debt (for a fraction of the fair market values). The banks get cash which can be lent. The govt gets the loans.

The loans are bad, but not all will fail. They are still worth something. They aren't worht full markup because default rates are so high but they aren't worthless. Right now 95% of Americans are paying their mortgage so the vast majority of loans will have value. The govt will buy the loans for lower than their market price. The banks will suffer short term. Nobody is getting a free lunch.

To say "screw the banks", "screw the shareholders","screw the fatcats" is missing the point. When the banks freeze up and credit system grinds to a halt the US economy will contract rapidly and violently. Maybe not like Great Depression (which was bad for it's length not severity), but it will be bad.

Hindsight being 20/20 the same people saying not to do anything will be cursing the govt for being so stupid to let the financial system fail.

[Agent 00½ FL]

Commercial Banks are the backbone in many new communties.

[Still-a-Republican]

Hello all, I am not hijacking this thread but I just posted this to the boards.
Enough Already!

The Political Action Committees and blogers across the net have now gone into a red alert mode due to the pending Wall street bail out legislation. Reports indicate Switchboard operators are getting slammed with calls. Michelle Malkin has even put out an Action Alert today. Here are the numbers if you would like to participate.

TOLL FREE

Congressional Switchboard Numbers

800-833-6354
866-340-9281
877-762-8762
866-808-0065
888-355-3588
866-220-0044

Quote:
Lead Story
Kill the bailout: Illegal immigration and the mortgage mess
By Michelle Malkin • September 24, 2008 07:49 AM

My syndicated column today tackles the bailout angle no one wants to talk about: Open borders and the home loan debacle. You’ve heard a lot about Fannie/Freddie and the minority lending shakedowns, but you haven’t heard most commentators/analysts on either the left or the right talk about the massive illegal alien mortgage racket — a topic I’ve reported on for the past five years. That’s because fault lies at the feet of the crime-enabling banking industry and the ethnic lobbyists and the illegal alien-enabling Bush administration.

They screwed us. Now, they want us to fork over a trillion dollars.

Screw them.

Kill this bailout.

And I second Mark Krikorian: Credit is not a civil right. It’s not a civil right for illegal aliens. For foreign banks. For American banks. For anyone. The bailout proposal, as I noted earlier, now includes student loans and auto loan debt. Will our tax dollars next cover foreign student loan debts? Illegal alien in-state discounted college tuition debt? Where and when will it end?

Oh, but pardon me. I’m just being, you know, an ideological purist.

***

Illegal immigration and the mortgage mess
by Michelle Malkin
Creators Syndicate
Copyright 2008

The Mother of All Bailouts has many fathers. As panicked politicians prepare to fork over a trillion dollars in taxpayer funding to rescue the financial industry, they’ve fingered regulation, deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy borrowers, greedy short-sellers, and minority home ownership mau-mauers (can’t call ‘em greedy, that would be racist) for blame.

But there’s one giant paternal elephant in the room that has slipped notice: How illegal immigration, crime-enabling banks, and open-borders Bush policies fueled the mortgage crisis.

It’s no coincidence that most of the areas hardest hit by the foreclosure wave – Loudon County, Virginia, California’s Inland Empire, Stockton, San Joaquin Valley, Las Vegas, and Phoenix, for starters — also happen to be some of the nation’s largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.

Regional reports across the country have decried the subprime meltdown’s impact on illegal immigrant “victims.” A July report showed that in seven of the 10 metro areas with the highest foreclosure rates, Hispanics represented at least one-third of the population; in two of those areas – Merced and Salinas-Monterey, Calif. – Hispanics comprised half the population. The amnesty-promoting National Council of La Raza and its Development Fund have received millions in federal funds to “counsel” their constituents on obtaining mortgages with little to no money down; the group almost succeeded in attaching a $10 million earmark for itself in one of the housing bills past this spring.

For the last five years, I’ve reported on the rapidly expanding illegal alien home loan racket. The top banks clamoring for their handouts as their profits plummet, led by Wachovia and Bank of America, launched aggressive campaigns to woo illegal alien homebuyers. The quasi-governmental Wisconsin Housing and Economic Development Authority jumped in to guarantee home loans to illegal immigrants. The Washington Post noted, almost as an afterthought in a 2005 report: “Hispanics, the nation’s fastest-growing major ethnic or racial group, have been courted aggressively by real estate agents, mortgage brokers and programs for first-time buyers that offer help with closing costs. Ads proclaim: “Sin verificacion de ingresos ! Sin verificacion de documento !” — which loosely translates as, ‘Income tax forms are not required, nor are immigration papers.’”

In addition, fraudsters have engaged in massive house-flipping rings using illegal aliens as straw buyers. Among many examples cited by the FBI: a conspiracy in Las Vegas involving a former Nevada First Residential Mortgage Company branch manager who directed loan officers and processors in the origination of 233 fraudulent Federal Housing Authority loans valued at over $25 million. The defrauders manufactured and submitted false employment and income documentation for borrowers; most were illegal immigrants from Mexico. To date, the FBI reported, “58 loans with a total value of $6.2 million have gone into default, with a loss to the Housing and Urban Development Department of over $1.9 million.”

It’s the tip of the iceberg. Thanks to lax Bush administration-approved policies allowing illegal aliens to use “matricula consular cards” and taxpayer identification numbers to open bank accounts, more forms of mortgage fraud have burgeoned. Moneylenders still have no access to a verification system to check Social Security numbers before approving loans. In an interview about rampant illegal alien home loan fraud, a spokeswoman for the U.S. General Accounting Office told me five years ago:

“[C]onsidering the size of Los Angeles, New York, Chicago, Houston, and other large cities throughout the United States known to be inundated with illegal aliens, I don’t think the federal government is willing to expose this problem for financial reasons as well as for fear of political repercussions.”

Chickens coming home to roost. And law-abiding, responsible taxpayers are going to pay for it.
http://michellemalkin.com/2008/09/24...mortgage-mess/

[ModerateRepublican]

commercial banks can stay open.. investment banks can go to hell.. they don't produce anything in the real economy..they bet they lost **** em..

There are no investment banks. The last two are being reorganized as commercial banks. Once the restructuring is done there will be not a single investment bank left.

[hejiranyc]

What I don't understand is why the government is not just buying a bank outright and using it to inject liquidity into the financial system. Let these idiots with their junk instruments just disappear for good.

[supra5677]

exactly.. how are they going to learn there lesson if we pay them for their gambling and losing.. they made their bed, let them lie in it.. chartered banks should be protected.Bailing out bad paper stupid.

Let the lenders and the homeowners work together. Government should stay the hell out of this..

[Country_Over_Party]

I'm not saying commercial banks are not essential to the economy, but like investment banks they do not produce anything (They are both financiers). Investment banks and commercial banks both have important functions in the economy. I just think it is a bit naive to say we can live without investment banks without it affecting us at all.

I have always been against the bailout.
I think the economic crisis has been overblown.

It is irrelevant if these companies want a bailout, they do not have the power to make it happen. It is the government and the fed that wants this bailout and has the power to make it happen. The best way to punish investment banks is to make sure they don't get a bailout. However, I think it is a mistake to see commercial banks as morally superior to investment banks.

[Country_Over_Party]

There are no investment banks. The last two are being reorganized as commercial banks. Once the restructuring is done there will be not a single investment bank left.

That's true.

[supra5677]

commercial and local community banks are necessary to the economy. What the **** is the purpose of Credit Default Swap Derivatives? Absolutely nothing. Selling a mortage to be gambled on the stock market crazy. And then spreading these cancers all over the world? These crooks need to be taken to the Siberian Prisons!!

[DC_Mark]

The banks have huge amounts of debt which is non-performing. No bank is willing to lend anyone anything right now.

The subprime loans that are not performing have already been written down. The problem is the subprime loans that are performing. Since there's no predicting how many of these will stop performing as unemployment climbs, it's hard to price them. Banks don't know what their assets are worth, so they're hogging cash in anticipation of the next write-down. Mark-to-market accounting rule makes the situation worse, since a healthy bank could sudden see a hole in its balance sheet when a less healthy bank starts selling its securities at fire-sale price (thus setting a new, lower market value for them).

[supra5677]

1. Glass Steagal needs to be re instated. You can't have investment banks combined with commercial banks

2. Bailing out bad paper is insane. The root of the problem is the foreclosures which lead to un backed mortgage securities.

3. Let the homeowner negotiate with the lenders and government should stay the hell out of it.

4. As far as those who gambled on these credit default swap derivatives, thats the price you pay for capitalism..

[Country_Over_Party]

What the **** is the purpose of Credit Default Swap Derivatives?

Companies with debt use them to protect themselves from some major credit event, like a default.

Speculators use them so they can make money by betting on changes on the credit spread.

However, blaming the economic crisis on speculators is like blaming high oil prices on speculators. The government created the housing bubble by artificially increasing demand and the government is keeping gas prices artificially high by restricting supply.

[Memphis_Blues]

No one will ever read this but it made me feel better to send it to my congressman. I'm not a "genius" like the guys on Wall Street who managed to lose 500 billion dollars on bad loans. Okay... it's a lot worse than that but that's what they are admitting so far.

I just wish Paulson would lay out what other options they considered and why those options were rejected. What makes this 3 page plan the BEST and ONLY option presented to congress. They were not able to convice me yesterday that they even had a plan. It was more like a concept. And the concept was "Hey...let's try paying people (US and Foreign Big banks)above market prices for their bad assets and see if that helps".

Let's discuss some options that could have an equal chance of working and - you know - are actually somewhat capitaliztic in nature. And then let's reduce it to a plan and not a fuzzy concept.

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

Dear XXXX,

Following are some thoughts on initiatives which may help the current situation. I believe that it’s an overestimate to say that the distressed assets are clogging bank balance sheets. In fact, given a lack of liquidity across products, all assets are clogging the balance sheets. In addition, capital limitations are such that balance sheets are being delivered, exacerbating issues and limiting the productivity of Fed liquidity moves.

There are two significant issues which are exacerbating the credit crunch and for which solutions should be considered. They are:

* A surprising lack of liquidity among high quality securities including agency debt, mortgages, and even government guaranteed SBA pools. A number of issues have contributed to this including (1) financing challenges beyond the primary dealers and banks and (2) uncertainty about the future government support of agency issues.

* Significant capital impairments. While the Fed and Treasury can provide liquidity, many institutions are facing a combination of (1) capital impairment as a result of losses, (2) a complete inability to raise new capital, and (3) capital hoarding because of 1 & 2.

Following are some suggestions which could aid the issues and which should actually carry relatively small costs compared to the scope of the problems and other initiatives.

Liquidity Enhancements
* Provide U.S. government guarantee for Fannie, Freddie, FHLB, and FFCB senior debt and mortgage guarantees. This would ease concerns and uncertainties which exist today both globally and domestically, in the wake of Fannie / Freddie preferred losses and the continued ambiguity of the implied guarantee. Evidence of the uncertainties can be seen in (1) the wide spreads between Fannie/Freddie debt and FHLB (currently FHLB 5yr debt is 10-15bp wider than Fannie/Freddie but has historically been tighter) and (2) the fact that, even since the conservatorship announcement, many investors have elected to stop buying GSE securities. Long-term, the GSEs will need more stringent capital and growth restrictions but this move would not preclude future regulatory requirements.

* Lifting the cap on FDIC insurance for public funds deposits and Fed Funds lines drawn for failed institutions. Typically, banks either pledge securities to collateralize public funds deposits, obtain a letter of credit from the FHLB (which impacts the bank’s available lines and/or collateral) or employ other methods of credit enhancing the public funds deposits. Lifting the cap would free up bank pledgeable and would ease liquidity conditions.

* Open the Discount Window and other Fed financing facilities up to smaller regulated broker dealers, money-market funds, and a limited set of others for the purpose of financing high quality assets. Currently, there are downstream financing uncertainties which cause such firms to be unable to serve their traditional role as providers of liquidity to smaller institutions (security block sizes under $10mm).

Capital Enhancements

* Create a capital fund from which financial institutions can tap subordinated debt provided by a government fund. The fund could be open to banks to apply for funds. The capital could be senior to existing capital instruments, carry a 10% rate (or whatever is determined), count toward capital, be redeemable, be available to be tapped quickly anytime through 2010, and could require a number of concessions including paying no common dividends and giving regulators ability to restrict growth of those institutions (the point is to prevent its use for unbridled growth but instead to provide capital for asset-size preservation and modest growth).

* Declare a time-out for other-than-temporary impairment (OTTI) of debt securities including asset-backed securities, CDOs, etc. By allowing banks to avoid recognizing other-than-temporary impairment on debt securities, bank capital would not be depleted by short-term securities price fluctuations. While FAS 157 excludes distressed sales from pricing methodology, there remain extremely inconsistent practices and, in general, auditors are anxious to push OTTI write-downs when debt securities trade at significant losses. This relief should be limited to (1) the other-than-temporary impairment that occurred after January 1, 2008, (2) securities that are still owned by the bank, and (3) those securities for which the bank still expects to receive future cash flows at least equal to its carrying value. In the event the bank does not expect to receive future cash flows equal to the security’s carrying value, a loan loss model of write-down or reserving. That method is different from OTTI which, upon determining that any OTTI has occurred, required write-downs to market. For example, if a security is deemed to have OTTI because a 5% loss of principal is expected, the mark-to-market for OTTI would be to the market price even if that market price was 15% of par.

* Provide capital gains relief, encouraging equity investments. Some type of capital gains relief may encourage the injection of capital into institutions.

Future Preparation

* Establish RTC like entity to absorb and, in an orderly fashion (probably delayed into the future), sell assets of failed financial institutions. This will prepare the mechanism and comfort the market that liquidations will not be immediate or disorderly. Unlike the troubled asset fund, determining a price is not a problem once the asset has been taken over by the FDIC or other federal regulator.

* Establish reporting requirements for derivatives and contracts. More transparency will allow for better risk assessments and management.

[timepassages]

I disagree, conventional banks will not stay open. You see they sell the paper (notes) to these banks. Its the bread and butter of the banks.. They do not service alot of loans, they sell the loans to others. If banks only give loans to ones they will service or (good) paper, then they will lose money. I work for a servicer, and we buy millions of dollars worth, from banks. This will cause a trickle down effect, and will become a wave. That is why banks in Califonia closed.......If this happens nationwide we are all in for it........

[timepassages]

I'm not saying commercial banks are not essential to the economy, but like investment banks they do not produce anything (They are both financiers). Investment banks and commercial banks both have important functions in the economy. I just think it is a bit naive to say we can live without investment banks without it affecting us at all.

I have always been against the bailout.
I think the economic crisis has been overblown.

It is irrelevant if these companies want a bailout, they do not have the power to make it happen. It is the government and the fed that wants this bailout and has the power to make it happen. The best way to punish investment banks is to make sure they don't get a bailout. However, I think it is a mistake to see commercial banks as morally superior to investment banks.

I work in the industry and it is not overblown. The amount of bad paper is unbelieveable........

[supra5677]

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Home > U.S. News > Politics
Petition to Congress: Implement the Homeowner and Bank Protection Act of 2007
Increase DecreaseNOTE: The current list of signers can now be found here.

September 18, 2007 (LPAC)—The following petition from the Lyndon LaRouche Political Action Committee (LPAC) is being circulated across the United States by, and to, state and local elected officials, and to labor movement leaders, and other elected leaders, for presentation to the U.S. Congress. Emergency enactment of this bill is needed to erect a "firewall" to protect the life savings of American citizens, and to ensure that the hedge funds receive not one penny of bailout from the U.S. or any other government.

Currently, we are soliciting signatures and endorsements for this petition, from elected officials, labor leaders, and constituency group leaders, only. If you would like to endorse this petition, please send an email to, lpacpetition@gmail.com, include your full name and your organization (for identification purposes only.)

The onrushing financial crisis engulfing home mortgages, debt instruments of all types, and the banking system of the United States, threatens to set off an economic depression worse than the 1930s.

Millions of American citizens are threatened with foreclosure and loss of their homes over the upcoming months, according to studies released by RealtyTrac and Moody's Economy.com.

The hedge funds which spread this financial collapse among markets worldwide, by dominating speculation in all those markets, are now going bankrupt and demanding government bailout of their securities and derivatives. The nominal value of the derivatives based on mortgages alone is the size of the combined GDP of the nations of the world. The hedge funds, the mortgage-backed securities, the financial derivatives can not be bailed out.

This financial crisis is now threatening the integrity of both state and Federally chartered banks, as typified by the run on deposits of Northern Rock mortgage bank in Britain in September and Countrywide Financial in California during the month of August; and such a banking collapse would wipe out the life savings of American citizens, and drastically undermine the economic stability of our states and cities.

In a similar financial crisis in the 1930s, President Franklin D. Roosevelt intervened to protect banks and homeowners; for example in April 1933, he introduced legislation as a "declaration of national policy ... that the broad interests of the Nation require that special safeguards should be thrown around home ownership as a guarantee of social and economic stability..." One month earlier, his Bank Holiday reorganized the nation's failing banks under Federal protection.

The principles of the Homeowners and Bank Protection Act of 2007, proposed by economist Lyndon H. LaRouche, Jr., meet this crisis. It requires emergency action that only the United States Congress has the capability to enact. This act includes the following provisions:

Congress must establish a Federal agency to place the Federal and state chartered banks under protection, freezing all existing home mortgages for a period of however many months or years are required to adjust the values to fair prices, and restructure existing mortgages at appropriate interest rates. Further, this action would also write off all of the speculative debt obligations of mortgage-backed securities, derivatives, and other forms of Ponzi Schemes that have brought the banking system to the point of bankruptcy.
During the transitional period, all foreclosures shall be frozen, allowing American families to retain their homes. Monthly payments, the equivalent of rental payments, shall be made to designated banks, which can use the funds as collateral for normal lending practices, thus recapitalizing the banking systems. These affordable monthly payments will be factored into new mortgages, reflecting the deflating of the housing bubble, and the establishment of appropriate property valuations, and reduced fixed mortgage interest rates. This shakeout will take several years to achieve. In the interim period no homeowner shall be evicted from his or her property, and the Federal and state chartered banks shall be protected, so they can resume their traditional functions, serving local communities, and facilitating credit for investment in productive industries, agriculture, infrastructure, etc.
State governors shall assume the administrative responsibilities for implementing the program, including the "rental" assessments to designated banks, with the Federal government providing the necessary credits and guarantees to assure the successful transition.
I urge the Congress of the United States to pass legislation embodying these three principles immediately, as emergency legislation, halting a "tsunami" of foreclosures, keeping millions of American families in their homes to avert social chaos, and protecting chartered lending banks of the United States and the states.


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[Country_Over_Party]

I work in the industry and it is not overblown. The amount of bad paper is unbelieveable........

Yeah, I wrote that wrong. I think the expectations that a 700 billion dollar band-aid bailout is going to fix the economy are overblown.

[timepassages]

I agree.

[Phoenix]

I'm not an economist, but it feels like we're in for some kind of a depression no matter what we do. So, why not just get on with it. The sooner it starts, the sooner it's over.

I hear about the Great Depression from my older neighbors all the time. It was a bad thing, but life goes on. They actually have good memories from those times.

Maybe it will take a depression to snap us out of our consumerism mindset here in the US. I mean...what were people thinking when they signed on for those dumbass loans? We're the ones who created the demand for those loans. My older neighbors are not rocket scientists...but they are very conservative with their money...live within their means...and would never even consider an ARM. I think it's because they lived through the depression.

Why not go ahead and get started with the work programs...perhaps turning our attention to alternative energy sources instead of this bail-out?

[NewHamster]

It seems the longer this goes unsettled, the more it benefits Obama.