$700B bailout floundered!

Aaron's picture
Submitted by Aaron on Mon, 2008-09-29 19:18

I'm dreading looking at my stocks - and also very apprehensive that more attempts at other slightly-modified incarnations of bailout bills are to follow. However, I have to report and be glad that the House rejected the current bailout bill. That's $700B that's not coming off the printing presses today.

Aaron


( categories: )

Tooting my own horn, but playing a sad dirge

atlascott's picture

When the initial bill was rejected, I wrote:

"Before Friday, there will be enough behind the scenes payoffs, back alley promises, and other skulldudgery to buy off the last few they need to convince, and the bailout will happen."

Sure enough, the stupid, crooked sons of bitches did it. And exactly in the way I said. They should be ashamed of themselves.

Scott DeSalvo

www.desalvolaw.com
FREE Injury Report and CD Reveal the Secrets You Need to Know to Protect Your RIGHTS!

"..This isn't about raising

Elijah's picture

"..This isn't about raising revenue, it's about blowing it all on whiskey and whores! ..."

For a moment I thought you were talking about a weekend trip to Sydney! (and not to be sneezed at) ha ha! 

But seriously, ...I am appalled at what the Senate has done and only hope the House of Representatives see sense [tomorrow] and reject this nonsense.

http://www.nzcapitalist.blogspot.com/ 

Soup's On At The Cannibal-Pot, Kids

Billy Beck's picture

"How is it possible for the Senate to pass a bill before congress?"

Oh, dear. The Senate is a part of congress. I just saw someone over at Reason's Hit & Run blog make this mistake. (Helpful hint: when the Senate and the House are sitting together, that's known as a "joint session of Congress".)

It is possible for legislative bills to originate in the Senate. What is unconstitutional is for a bill for "raising revenue" to originate in the Senate. (See Article I, section 7 of the goddamned hideous motherfucking U.S. Constitution.) What happened yesterday in the Senate was that they took H.R. 1424, which was originally introduced in March 2007 and passed the House as the Genetic Information Nondiscrimination Act of 2008, and substituted the text of the Senate version of the bailout horror.

See? A bit of cut & paste, and off we go. Nothin' to it.

Everybody in the pot.

Marcus- Per Article I,

Aaron's picture

Marcus-

Per Article I, section 7 of the US Constitution-

"All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills."

This isn't about raising revenue, it's about blowing it all on whiskey and whores!

Nice Video Clip Marcus!

Rocketfuel's picture

Great clip Marcus - Thanks for posting!

Bill Thomas

http://www.linkedin.com/in/rocketfuel

www.RocketfuelSigns.com

 

Glenn Beck on Obama's evil economics...

Marcus's picture

How is it possible for the Senate to pass a bill...

Marcus's picture

...before congress?

"The Senate version, aimed at winning over just 12 extra House Republicans and Democrats needed to reverse Monday’s defeat, contains more than $100 billion of tax breaks, including relief for businesses — popular with Republicans — and help for more than 20 million middle-class taxpayers to avoid higher levies under the alternative minimum tax."

http://www.timesonline.co.uk/t...

Tax cuts! Is this too good to be true?

Surreal conditions

gregster's picture

But great if your kid likes bows and arrows.

"Many voiced disdain for the extra tax breaks the Senate added to the financial-rescue package.

They ranged from a one-year fix to prevent the alternative-minimum tax from hitting more taxpayers to extending the research credit for business to allowing rural utilities to issue tax-exempt bonds for use of renewable energy.

Also included were more obscure terms extending tax breaks for motor-sports racing tracks, makers of wooden arrows for children, and the rum excise tax for Puerto Rico and the Virgin Islands."

HAHA just thought of something

dave.dolan's picture

I got it! I just figured out how to solve this problem!

The idea is to restore investor confidence right? Well, we can just pass a bill authorizing Paulson to hold up one of those big Publishers Clearinghouse Checks that has a giant "$700 Billion" emblazened on it.  We can send Ed McMahon and the PrizePatrol (tm) with some balloons and a TV Crew. It'll be great!

 I can already hear the Chinese reaching for their wallets!

 

p.s. Offtopic aside about the web site format here: I think it's a better idea to grow the thread at the bottom. Trying to read it from the bottom up is nerve wracking.

hey

dave.dolan's picture

Right on. Screw this bailout, but it looks like we're going to be stuck with it. Mr. Bill Thomas. I can hardly believe that you said nearly exactly the same thing I did about this crisis. I actually in a heated argument was very proud of myself for having said "God damnit, no, this isn't free markets gone awry this is FDR's New Deal chickens coming home to roost."  I was, of course, laughed out of the room, but I see it, saw it, and still feel it coming in the future.  The next 'crisis,' even if this one should be averted, will be much bigger, and everyone will have higher expectations of bailouts, and be much looser with the taxpayer's checkbook.  Think about it. It's absurd!

The Average Uninformed American is saying 'this is what regulation is for, they should have made it illegal for these people to make loans to people who can't pay it back!' And what are we letting congress vote for? Granting  loans to businesses who will only have marginal ability to pay it back.  How is this irony overlooked? I'm starting  to wonder if maybe I'm seeing the fnords or something. This is ridiculous logic here.

 

The Role of Fannie Mae

Rocketfuel's picture

It is true that several things happened between 1938 and the crisis, but that was still the seed.

Here is a link to a good article on the history of Fannie: (article published in 2003!)

http://hnn.us/articles/1849.html

There were rule changes and lack of oversight that helped the crisis reach it's current point, but the reason we have inflation in housing prices is because credit was free and easy - it was free and easy because of the ability of lenders to package and sell loans into the secondary market and turn those loans into securities backed by the implicit guarantee of the US government. All of which points back to Fannie.

By the way, here is a good quick slide-show on the crisis - author unknown.

http://home.comcast.net/~preferred_user/economy.pps (you need a PowerPoint viewer)

And a funny video if you feel like helping out -

http://www.rocketfuelsigns.com/blog/2008/10/1/the-bailout-funny-video.html

 

Bill Thomas

http://www.linkedin.com/in/rocketfuel

www.RocketfuelSigns.com

 

WSS

Bill is correct. After the government entered the market it was only a matter of time before it became politically motivated rather then motivated by the market. That the political motivations didn't have a start or have a dent on the market until years later is not as important as the cause -- government interference with the market.

Wm

It started with that damned FDR . .

William Scott Scherk's picture

Bill Thomas writes:

The seed of this entire crisis can be traced back to FDR and the new deal. Fannie Mae was created in 1938 with the express purpose of using government backing to loan money to people with marginal ability to pay it back. That was a bad idea.

Bill may be partially correct about the 'seed' of the crisis, but it should be pointed out that Fannie Mae buys mortgages, rather than offer them directly to borrowers. The function, as I understand it, is to put credit back into the originating lenders.

To my eyes, another seed (one of several types of seeds that gave rise to the thicket of bad debt) was the percentage of all mortgages that could be classed as high risk, or subprime. Until the late nineties, subprime loans were a small part of the Fannie Mae (and Freddie Mac) holdings. Easy credit (meaning lots of money available) led to the housing bubble . . . check out this inflation-adjusted chart of housing prices over the bubble period, Bill, and see if you can trace it back to 1938.

WSS

Think back... way back to the New Deal

Rocketfuel's picture

Had this argument with a lefty teacher here at the school the other day. The seed of this entire crisis can be traced back to FDR and the new deal. Fannie Mae was created in 1938 with the express purpose of using government backing to loan money to people with marginal ability to pay it back. That was a bad idea.

Then add in some accounting rules that allowed banks who made bad lending decisions to pass the risk up the chain until ultimately it was a huge house of cards supported by bad loans.

It takes a while for the chickens to come home to roost, but here they are.

The government wants to buy these bad loans from the lenders who currently own them - for more than they are worth. But they don't want to even talk about the underlying cause of the problem. So the bailout isn't really a bailout, it's a handout that will just let the problem get worse in the future.

Write your lawmakers and tell them:

  • You understand the problem and are not naive
  • You are willing to take the consequence of not doing anything
  • You don't trust their ability to do anything other than screw things up worse
  • You want them to kill this bill
  • They are not the saviours of America but the cause of the problem

I mean really, this is like force feeding a staggering drunk coffee and then declaring him sober to go drive a bus full of schoolkids. Get the hell out the way Washington and quit social engineering with my money!

 

Bill Thomas

http://www.linkedin.com/in/rocketfuel

www.RocketfuelSigns.com

 

Hey there Kasper Kasper

Kiwihub-Anthony's picture

 

"I believe it is necessary and OK for this bail out plan. lets not make it a small debate."

Why?
kkulak Thanks Smiling

 

Well its alittle hard to follow.  First they are working a system which needs a little working. America does an excellent job and have some clever people, they are working in a hard world with greedy people and unhelpful countries living off them.

We are greatfull to USA, for ther excellent lead and strong economy. I would say because USA has to deal with corrupt goverments and crappy countries with socialist ideas i.e. China, Sweden, South Africa. they have a prerogative to adjust where they see fit. Because of the crappy socials countries which inhibit them from working better. 

 But my message is that NZ, makes me so sad almost sick that we have allowed a socialist government to rule. When we have books for people to read. It's so bad.

 

Kiwi-hub

Kasper's picture

"I believe it is necessary and OK for this bail out plan. lets not make it a small debate."

Why?
kkulak

The Real Reason

atlascott's picture

The reason most legislation does not pass is it does not have enough promises, earmarks, porkbarrel payments, and political concessions in it to sway all of the hogs, or enough of them.

I'd like to believe that there are enough principled legislators out there who are refusing the bailout on these grounds. But there aren't.

Before Friday, there will be enough behind the scenes payoffs, back alley promises, and other skulldudgery to buy off the last few they need to convince, and the bailout will happen.

It is treason, but it will happen.

Scott DeSalvo

www.desalvolaw.com
FREE Injury Report and CD Reveal the Secrets You Need to Know to Protect Your RIGHTS!

Marcus...

Robert's picture

Never ever underestimate the pliability of a Congressman up for re-election. Most of the Democrats that voted nay are about to face the electorate in the coming months. So are many of the Republicans.

And I can believe it when the Congressmen said that their switchboards were running hot 10-1 in favor of killing the bill. I e-mailed my Congressman four times in the last week. And for good measure I also e-mailed both MO Senators.

I can tell that I'm going to have to do it again this week just to stiffen up their jelly-like spines.

Richard....

Marcus's picture

...that may be true.

'What else could it be? The whole sorry mess is a consequence of intervention, and the "bailout" would be merely adding to it.'

But give the Republican blockers the credit when they actually DO the right thing for once, for the right reasons!

What else could it be? The

Richard Wiig's picture

What else could it be? The whole sorry mess is a consequence of intervention, and the "bailout" would be merely adding to it.

I don't think we should jump to the conclusion that this is intervention.

Although, they weren't

Richard Wiig's picture

Although, they weren't really mistakes. They were legislatively forced into making bad loans?

Republicans were blocking the bill becuse their beleif in the capitalism meant that companies should fail when they make mistakes.

I don't agree.

Kiwihub-Anthony's picture

I am a bit concerned about you people here, who I think are quite intelligent and seem to understand allot of things.  It seem it's hard to find people who are smart , understand capitalism and these matters.

I don't think we should jump to the conclusion that this is intervention.

Perhaps we are basing out understanding on a NZ political economy and our Social system.

I would say for a start. America government owns the money, there are different aspects to this that I believe do not make it a Government control. The market is a trading system Government has the responsibility to uphold, in the sense of a contract of what is a dollar and what is not. This debate needs to be worked on further. 

I believe it is necessary and OK for this bail out plan. lets not make it a small debate. 

 

And everyone thought the Republicans...

Marcus's picture

...no longer defended the free-market.

I had to smile yesterday when they explained carefully on the BBC that a group of Republicans were blocking the bill becuse their beleif in the capitalism meant that companies should fail when they make mistakes.

You can just imagine their usual lefty audience thinking to themselves - 'But capitalism = corruption, getting rich at the expense of others, greed etc..., how does this make sense? The greedy pro-capitalists are not handing over more tax-payer money to the fat cats?'

With all the lefty journalists currently bashing capitalism as a 'failed system', yesterday was a very good day!

Yes, this would be the

Elijah's picture

Yes, this would be the FIFTH bailout in the last Century!  ..and each one accepted with a promise to learn from mistakes...

1. Panic of 1907

2. 1933 Bank Crisis

3. 1974 Credit Crunch

4. Savings and Loan bailout

http://www.nzcapitalist.blogspot.com/

Thanks,

gregster's picture

but no thanks for those pearls of wisdom Jawdropping!

and they are smart enough to learn from their mistakes without harm

That's the point here 'AB' - they haven't learnt from previous regulatory mistakes. FFS

I disagree.

Kiwihub-Anthony's picture

I disagree.  I think it is necessaey and OK to help from the tax payers. 

Freemarkets are interesting. 

It could help the planet and they are smart enough to learn from their mistakes without harm. Perhaps N needs pain to learn.  

 

AB 

Yes,

gregster's picture

[I fear some kind of band-aid bill will pass in the end]

the effect of the $700 billion would have been a stitch-up job compared with your band-aid.

Agreed.

Prima Donna's picture

Let's just get it over with. Been arguing with pro-bailout Wall Street friends today -- amazing that they just don't get it.

Thankfully I've had plenty of convos with those on the side of reason and justice to balance it out. Smiling

Big score for the individual voices of American citizens today -- though I fear some kind of band-aid bill will pass in the end.

Jennifer

Housed! http://fawstin.blogsp

Bosch Fawstin's picture

Amazing...

Robert's picture

what writing a letter a day to your congressmen and both of your Senators will do...

Yes, it is splendid

Elijah's picture

Yes, it is splendid news!

I wish the American government would stop trying to hold back a tide and simply let the coming Depression get here as soon as possible.

The sooner it starts the sooner it ends; and as we all know a Great Depression is actually a sign of 'recovery' from madness...and the best thing for the World at the moment, especially as it is a splendid opportunity to start buying up assets for a fraction of their true value in order to sell them about 2015 and make a killing...so yes, I cannot wait!

http://www.nzcapitalist.blogspot.com/

Exactly! Give us the pain

James Heaps-Nelson's picture

Exactly! Give us the pain now so we can get this process over with sooner. If we keep the dollar strong, foreigners will invest here and make up for the loans you can't get from banks. Also, tight credit means that investments made are more prudent and productive.

Jim

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.