The more I mull the idea that a bunch of completely irresponsible corporations who through default credit swaps and other exotic finance derivatives managed to crash their businesses are getting a potential $1.7 trillion bailout infuriates me. I was wondering if any of our representatives were not towing the
Corporate Party line?
Well, yes and we have a great speech from Senator Bernie Sanders (I-VT):
Where is the bailout for workers? Where is the stopping of displacing U.S. Citizen workers with foreign guest workers? Where is our single payer universal health care?
When it comes to doing anything for US citizens, for the middle class we hear Oh no! That's Socialist! Where is the rebuilding of the United States manufacturing base? Where is the outrage at constant layoffs, of treating workers as if they are disposable, simply to boost quarterly profits? Where is the outrage over corporations with outrageous executive pay while age discrimination runs rampant? Where is the emergency meeting over our trade deficit and eroding standard of living? Nope. For years now the middle class and working American suffers and at worse we are told these inane policies do the opposite of what we know they do and at best, we get silence.
Even Jim Cramer quipped it would simply be cheaper to give every American $50,000 dollars to pay for their mortgage than this.
Is there anyone else at least pointing to the risk of Wall Street? How these very institutions lobbied, bought off and cajoled our government to enable them to go out and hang themselves with their new lack of regulation?
Because of the vital role Fannie Mae and Freddie Mac play for home owners and housing in America, we could have made it clear the government will back them against market speculators, while protecting tax payers at the same time. Unfortunately, this bill is set up to extend credit without reform or restriction, putting tax payers at risk unnecessarily
That brings about irresponsible financial management, irresponsible corporate management. We should have learned something from Enron. Twenty years ago something should have been learned from the savings and loan bail out.
Sen. Bernie Sanders plan
Sanders policy recommendations came out today.
Here are his bullet points on just the bailout. There is quite a bit more in the link.
Since currently the game is rigged so Wall Street cannot lose because if they do lose....it is determined they are too big to fail...it makes sense to carve out ownership in these companies to the taxpayers in return and try to give them the rewards in this can't lose game they play so somehow the American people can't lose and these fat cats....really do lose as they should.
Hillary recommends HOLC
Boy, she was on the case and is recommending creation of a Home Owners’ Loan Corporation (HOLC). Dr. Doom (Roubini) is recommending the exact same thing.
You should watch this. Not only does she know all of the issues, she's presenting this fairly diplomatically and this would directly benefit main street vs. wall street.
Contrast Hillary to Obama & McCain
Obama, McCain mum on Paulson's bill
Ya all, what can I say. I think ya all know what I want to say.
Roubini and Hillary Have Real Ideas and the Crime Scene
We are returning, painfully, to a day of plain mortgages with a new version of the Home Loan Bank Board, the FHA and VA. No mortgage backed securities. Just mortgages. For a moment, let's look back at the Crime Scene this week.
-for a short while, 90 Treasuries yielded 0.10 % - 10 basis points, for reference compare that to the nadir of 90 day yields in 1932 - 62 basis points - lower yields in this depression than the last.
- gold prices, driven by market forces alone, spiked more this week than any other time, including the Soviet invasion of Afghanistan - excepting 1934 and 1971, when FDR and Nixon closed the windows nationally and internationally and doubled prices
- all interbank lending stopped, remarkable when considering that interbank lending for trade continued through the Bank Holiday of the Great Depression all the way back to Florence, Milan and Genoa of the 1450's !!
- the increase proposed in the Debt Ceiling will raise to $11.3 Trillion, percentage-wise the greatest percentage increase since FDR's 1934 Budget
- for the first time, the U.S. underwrote the assets of an insurance company - AIG, this had always been done through state funds and other insurers
To insure the bets of a fool, like the mortgage banks, you need and even greater fool - AIG. To insure the assets of AIG, you need the greatest of fools, Bush and Poulson.
I posted her entire speech and plan in a comment. She sure does and frankly I watched that speech and read her proposal and she is dead on and just thought to myself, boy did the wrong person get the nomination. I'm sorry but she is so on it in comparison to Obama it's just frightening.
I want a do over on the primary!
Here is the comment with the embedded video speech.
One who Trumps both Hillary and Roubini.
I listened to a House Banking Committee hearing in January.
Ron Paul questioned Bernanke at length. He said that the U.S.is bankrupt, the dollar worthless, we can't go on piling up debt like this. We need to go to a gold standard. He is still running.
I also listened to the Obama and McCain Eco's on Lou. Neither really understand what actually happens at ground level when you move mortgage backed securities to a federal entity: a write down in primary or secondary capital. There is little voluntary "lifting of the Kimono."
But truth be told, there are about 4 options:
1) move the mortgage backed and mortgages at fair market value - any bank in this situation will take a hair cut and few will volunteer unless forced or desperate
2) take the mortgages at face - a terrible option but it could happen - taxpayers get raped
3) strip out mortgage backed from mortgages , pay FMV for mortgage backed securities, sell mortgage backed securities for profit bought at loss - Wall Street types love this and this will almost certainly happen
4) take the mortgages at FMV, forget the mortgage backed securities and make the bank sell and eat losses on mortgage backed securities
5) put all in a HOLB, FHA, VA and forget private solutions.
The plan is a HOLC, which will assuredly absorb some losses but enable refinancing on mortgages.
Are you kidding on Ron Paul?
I'm also talking about legislation that is already written, already analyzed, already vetted versus a new piece of legislation thrown together in the middle of the night.
What I'm saying is because she was running she had economic advisers and they worked on these policies, bills for months and months....so they are literally all typed up, ready to go, could be passed in hours.