I love the “armageddon” tag. So true. Pass up the opportunity to save our financial markets because of ideology. What’s the point of an ideology if it is such a failure when put into practice? Didn’t we learn that lesson watching communism rise and fall in the USSR and Eastern Europe?

This was some random “House Republican”? How about the House Majority Leader, good ole Nancy throwing flames by using the bailout bill as a referendum on the Bush administration? She helped torpedo the bill because she could not resist her vitriolic partisanship and campaign-spin.

And I’d welcome hearings on who caused the mess we are in. My only guess as to why they have not been called is because it will not benefit the Democrat run congress.

…not to mention that 40% of the Democrats voted against the bill as well. Clearly a bipartisan defeat of the measure.

The time for partisanship passed last week. They don’t get the message. Towers and silos they can’t see out of. Replica of corporate America, unfortunately.

Once upon a time, Keynes said “in the long run, we are all dead.” This simple statement seems to be lost on many free-market enthusiasts, of which I consider myself. The reality is that free markets are indeed more efficient than regulated markets. Thus, potential gains are greater. However, potential losses are also greater as capital flows to a point where it is most efficient. Like a roller coaster, many folks simply don’t have the stomach for this kind of economic vasilation. Furthermore, I seriously doubt that one-quarter of Congress understands the free market system to which they so desparately cling.

Accordingly, we are left with two paths. We can intervene and attempt to add liquidity to the markets. This will increase inflation, taxpayer burden, and increase government oversight (since the government is so good at regulating everything else…).

OR, we can do nothing. This is likely to lead to destabilization as banks close, freeze up lending (upon which consumers and businesses are reliant), and potentially lead to deflationary pressures. In some ways, a contraction in credit is probably a nice fix since Americans use it too much anyhow. However, our economy will still contract. In addition, we may be at a disadvantage relative to other nations that are bailing out their systems.

Pick your poison.

It’s as if Wall Street is saying, “If we can’t have our millions, you’ll lose your thousands.”

http://www.sawyerspeaks.wordpress.com

You picked a bad month to stop drinking…

Well ,the times of good cheer seem to be going south.The people who Ronnie Rayguns thought so much of have finally shown their true color-green with greed. They ngot the tax breaks,the banking rules introduced after 1929 removed and the gold mine.As always, the working class gets the shaft.The great deregulations of the republican era are upon us all.As george said- we’ll have a balanced budget by 2008.

This financial problem has been brewing for decades, not just the past nine days. There have been many warnings from economists and money managers predicting a bubble in the financial markets because of the greed and unethical money manipulation. If you live by the sword, you will die from the sword. Let us not repeat history again. what the government did in the past did not work effectively and prolonged the great depression.Let them fail, “we the people” can take care of ourselves.

No one is going to write the taxpayers a check like they did with the stimulus plan (which was meager anyway) even if the bailout would make the socialist government a profit. Your Democratic congress will just spend any profits made from the bad mortgages they will be buying with your money. They will spend it on someone who probably did not pay taxes.
The Democratic controlled congress is responsible for encouraging people to buy subprime mortgages they could not afford (Bwarney Fwrank and Al Sharpton and Chris Dodd are the main culprets).
FDR started the socialist Fannie Mae. Woodrow Wilson, Democrat, started the FED (federal reserve system) and the income tax in 1914.
It’s all Democrats fault, who blame Republicans when their Democrat programs go bad.
The other Democrat programs, Medicare Medicade, and social security will also have the same bailout programs down the road.
There is no free market with fannie and freddie or the FED.

How about a chill pill everyone! let the system work through a while longer. We will get it right! Nobody likes to be told to come up with 700,000,000,000.00 anythings overnight. Let’s take our time and get it right the first time. Sure, their may be a need to prop up the financials, but theirs also a need to prop up just about everything else. We made it work with Chrysler and the Savings and Loan industry. We’ll make it work here. Anyone that sells “it has to be done in two days” is full of “s…”. And this guy is our chief economist, Good god, no wonder we are in this position.

I think the Congress has us on the road to perdition. Note this quote from this morning’s NYT online: QUOTATION OF THE DAY

“If we don’t pass it, we shouldn’t be a Congress.”
SENATOR JUDD GREGG, the lead Senate negotiator, on the bailout bill.

Unfortunately, the reps and senators are a Congress, and the only one we have at the moment.

And, re Pelosi, no Democrat should ever utter a denigrating word about Sarah Palin again! What a poor excuse for a Speaker of the House in a time of national crisis!

READ YOUR BIBLE: YOU’RE NOT SUPPOSE TO BE AFRAID OF ANYTHING AS LONG AS YOU HAVE YOUR FATHER IN HEAVEN WITH YOU. HE TAKES OUR TROUBLES IN HIS HANDS WHEN WE CAN’T COPE ANYMORE. YOU’RE RIGHT; SAY YOUR PRAYERS.

Today we lost 1.2 Trillion dollars of “what”?
What makes you think 700 billion would have changed anything?
Don’t you remember Japan’s long
demise? It is a free market and it needs to fix itself. Anything else and you will put us thru a decade if not longer of misery… those 700 billion would have fixed 2009.
But there are yet another 500 billion dollars worth of Pay Option Mortgages ready to reset in 2010 and 2011 – what will you do about those? Send another 700 billion bail out to fix them?
No greed got us into this and common sense will get us out of it.
No one will ever bail out the little guy why then should we bail out the rich?

This economic crisis was not caused by the free market but by government regulations forcing financial institutions to hand out subprime mortgages. It is a good idea to research a subject before one throws out an opinion. The 1977 Community Reinvestment Act was the beginning of the problem and you can find out all about the imposed regulations at the FDIC and Federal Reserve websites.
The government initiated this mess!

A large part of the problem was the federal government getting involved in the first place. By backing Freddie and Fanny, they two companies didn’t need to keep as high of cash reserves as they should have, and would have, if Uncle Sam wasn’t there to bail them out. And seriously, you think the federal government is going to do a better job? Since when have they been able to run things more efficiently than the private sector?!?

“That’s something to somebody, I guess. I hope, whoever they are, they feel good about it. Because I sure don’t. Do you?”
———————-

I feel great!

I see no real suffering or turmoil from this financial “crisis”. Banks are losing money on paper. A few people are losing possessions that they purchased with debt. But most people are not really doing that bad.

I think that the expectations of steady increases in income and social mobility are an illiusion. Bad times are supposed to come just like good times. It is time for people to stop living in a fantasy world where more and more debt buys more and more possesions.

If you look at the history of the world, you will see that prosperity is usually followed by struggle and despair. This is the despair part. It is just nature doing its thing.

This economic fallout is the best thing to happen to America in a long time. I know some of you are crying about your house losing value, retirement accounts losing money, falling behind on bills, not maintaining a certain lifestyle and such. But this is life. The things that Americans are going through are nothing amazing or catastrophic. Most people here eat daily, have clean water, electricity, and indoor plumbing. When you are living on the street, you have a legitimate complaint. Until then, stop complaining.

Americans live in the greatest country on Earth and they have a tendency to whine. Tsk, tsk!

You said it brohter! Nobody is running the show. If they can’t get this right then how can we hope to fix social security, healthcare and our energy policy. It’s time to revolt. Let’s start a blog that promotes legislation by the people and for the people; no constituancies only good policy. Maybe we can even draft bills for congress to vote on – hold the pork. A man can dream can’t he?

We could also use a watch dog that looks at bills, their authors and the constituancies behind the provisions proposed.

I’m beyond caring about the economy. If Main St does go down, at least we will take Wall St down with us.

I can’t wait to ransack the CEO’s mansions. Always wanted a HDTV widescreen….

For anyone thinking the bill failed because of the Pelosi rant, you should read this… seems more Republicans than Democrats were in favor of killing the bill in its current form.

http://money.cnn.com/2008/09/29/magazines/fortune
/nobailout_easton.fortune/index.htm?postversion=2008092918

Okay….so we don’t bail out the “buy now, pay later” monguls that are destroying us financially. Gee Dad, does that mean that some of us might have to actually live withing our means? Wouldn’t that be a WONDERFUL example to our FAT CATS IN DC?!! Lin Cosby, retired but still working, Farmington, Mo.

We’ll be inundated with accusations and blame coming from many parts of the globe.

My inclinations keep reminding me of college deferments during the Vietnam War.

In times of conflict obscure shelters suddenly get their beacons energized from the cries of “HELL NO, WE WON’T GO!”.

To me, this kind of conflict indicates a standards problem–where standards are high chaos is low. Where standards are low chaos is high.

Somewhere in the convulusions of my mind, I wonder what happened to those who chose college instead of combat.

Curious how modern day standaeds play a role in modern day problems?

If the DNA is corrupt, what can we expect of the model?

We refused Noah’s ark and people are surprised at the outcome? Hey, Noah was not perfect(look at the unicorn!!)but it was the best thing available at the time.”The Perfect Storm” and”Armageddon” and other Hollywood films will not beat what will happen now.But hey, when this is all over, a few years from now, things will be very, very good…..until the next time.

What Wall Street and the Administration with Paulson and Bernanke fail to understand is the people are tired of the promises of Wall Street and their ensuing failure which continues for years and years. There is no return for the common man.
Wall Street’s mismanagement, greed and now begging must go. If we have to suffer the slings and arrows of their demise then so be it! We’re ready to build new structures and new systems which allow greater stability.

Accept it – Wall Street must go!!

I don’t know what you’re scared of? I’ve lived my life right, never got in debt, and made small, but sound investments. Nothing that this economy can do can change my life. I’ve set it up to be that way. I don’t need the government to save me from myself. I can do it myself. Try it sometime.

I’m sorry, but this age of government spending has to end, and so here we are. We can’t bail out the auto manufactures, the consumers, the airlines, so-called strategic third world countries in the name of “terrorism”, and the financial markets.

Look at the bill!

The country is well on its way to bankruptcy – a fact not lost on our economic adversaries in the East.

Afraid? It’s a little late to be afraid, don’t you think?

No, now is the time for Americans to do what we do best – get to work [on fixing problems]. Handing over the Platinum Visa and saying, “Oops, my bad, let me borrow so more money to pay for that mess – Well that doesn’t do it – a fact lost on Generation ‘W’ as far as I can tell.

So, can the canonization of Reagan finally be annulled?

Speaking of empty tents, I find it surprising that so few commentators have noted the truly scary part of our world economic system, whether it be free market or socialist. The whole schebang is based on confidence in values. That is, after all, what took down all these financial companies. Investors came to believe that Bear or Lehman was not worth all that much and the companies tanked.

Most would agree that their Presidents and boards were myopic for not understanding that derivatives and insurance could not protect them from perceptions of value; once the tent was perceived empty, the stock and company followed suit.

What I find most disturbing is that one can easily replace Lehman or Bear with, say, the U.S. government. Treasury goes asking for more money to shore up its financial system, and like the firms of yesteryear, our board/congress says we don’t need the money and that everything is fine. Republicans chime in that some insurance will surely help out. Why don’t we have AIG supply it?

Meanwhile, it appears that the panic is spreading to the EU. What will happen to the global financial system if the EU comes to find their tent empty as well?

First, all those foreign investments in our financial system that have been keeping us afloat will dry right up as foreign governments shore up, well, themselves. Without anyone to help us out, and a myopic Congress refusing to raise money or impinge the ‘free market’ how long will it take for these same said foreign governments to begin acting like other investors and pull stock/debt from the U.S. creating a crisis of confidence?

The ‘bailout’, which is in essence a massive injection of taxpayer capital into product that no self respecting investor would touch with someone ELSE’s money, offers little to address the underlying problems in the economy and little likelyhood of ‘trickling down’ in a way that is effective for the majority of Americans. Need liquidity to run our businesses? Then set up a national S&L with some of the proposed 700 billion.

“fool me twice…you can’t get fooled again.”I’d hate to be Bush’s brain right now( apologies to Karl Rove.)With elections coming, our representatives in D.C. are actually listening to upset voters back home. And the voters, dumbed down by TV & an educational system that doesn’t teach students to think, may have got it wrong.Having been lied to so many times by our leaders, it was finally time to say no more!Did they think we would fall for one more big lie to accrue even more power over the financial system? An administration filled with incompetent party flacks?Whatever happens next won’t be pretty, but that’s nothing compared to the potential Credit Derivitives market collapse that would make $700B seem insignificant.Stay tuned… .

It has to be difficult for a President who led us into war under falsehoods and outright lies to have any credibility with voters or his own party on any issue; especially one that requires “immediate action to prevent calamity” (remember when Iraq was going to use their nuke any day?). To make it worse Congress is too full of partisans elected from districts gerrymandered to elect far right or far left rather than moderates. Add to that the financially illiterate Americans weaned on credit and ever rising housing. Nobody will believe it until it really is over. My prediction DOW at 8000 NASDAQ at 800.

If you truly understood all that it took to get us here and whether or not we are in really that “bad” of a financial situation as a country I would be surprised. First, both parties are to blame for where we are at – second, both parties should be blamed for not getting the bailout passed. Republicans voted 2-1 against, but only 60% of Democrats voted for it! So let’s spread blame equally on this. To the more important part of all this – the “crisis”! This is called a market correction – both in the housing market which was due to because of the soft government regulations and at the same time forced loans to bad creditors for the first time in government. Oh, and Fannie and Freddie being institutionalized to the closest thing to a government run company. Oh, why am I wasting my time with you… The only people who will make money with this bailout are the savvy investors who loves to see the market take a ride up or down. You probably don’t understand this part either though… Lovely well thought out 5 paragraph blog trying to blame a few Republicans when 200+ voted against it. Typical person who thinks it is that easy as blaming a few people…

The 3rd quarter ends tomorrow: 9/30/2008 and most voters won’t see their statements (401k’s, pensions, money markets, etc.) until November 10th, 2008. IT WILL BE FAR TOO LATE BY THEN TO DO ANYTHING, WHEN THEY FEEL THEIR PAIN, BROUGHT ON BY MC SAME, AND MC PAIN. !!!

Oh well….shouldve, couldve, wouldve listened to Obama. Such a great guy, smart, gentle, quiet, non-”politician” type,as he said he was…..everybody wanted him to be a pitbull….but he’s just who he says he is….Christ-like in his Christian faith characteristics, concerned ABOUT YOU in his committments, honest, non-adulterous,hard for him to attack a woman (1st Hill…now Pain)….

You should be scared…my wife and I have lost our life’s savings from the beginning of this year to now…because of this economy…I was on my same job for 40 years….we’ve already died before this plane crashes…..you guys just all don’t know yet (you will on Nov. 10th or so…and THEN YOU WILL KNOW YOU’RE DEAD (financially, and you won’t come back!).

So long Suckers!

Vote OBAMA/BIDEN 2008 BY Mel and Diane from Bullhead City, Arizona (66 and 64 yr. old white American couple married 44 years this year on 11/7/08)…no affairs, no corruption, no other crap, just 3 beautiful children and 9 grandchildren who we hoped would see a country that we saw as we raised them all beginning 11-7-64 (our lucky day).

I wouldn’t be so quick to blame it all on just free-marketers. There were significant defections from both sides. It’s my understanding that congressmen were also responding to voter outrage at this. So they gave voters what they want.

In the words of The Captain, “What we’ve got here is…failure to communicate.”

You are not a doom and gloom guy, you are just someone who finally sees beyond the hype and Bull that was served to you daily madison avenue style.

Be Afraid, be really afraid, not really, just learn to do with less and lower your expectations.

How bad is this gonna get: well think of it this way, if you have a job and a roof over your head and food on the table by this time next year, consider yourself lucky.

Cause many won’t have all three of those things.

The one good thing to come out of this, will be everyones appreciation for what little they have left.

It would appear that the whole country is about to go “bag lady”.

Hey you get your own shopping cart.

A form of socialism to bail out capitalism. Let the markets and companies fall and shake out naturally and let capitalism work it’s natural course. No sense in delaying an event that will surely rise again with the added stress of this bailout looming over us. Why put a band-aid on a wound that needs amputation. When you have a tooth ache you don’t keep putting ora-gel on it. You bite the bullet and listen to the drill or pull the thing out. The strong will survive. Everyone invested in the market knows there is risk involved and is warned of the fact before investing. Glad I have EIA’s. The powers that be are only worried about their billions, not if the common citizen can provide food and shelter for their loved ones. Creative leveraging and market to market analysis is the work of greedy corporations and our greedy elected officials in bed together. This is not about us it’s about them preserving their elite status.

This was not a failure of the free market. This was the total failure of government. The banks and GSEs were allowed to dismantle the depression era rules that would have prevented this crisis- like limiting leverage (borrowing). This was done mostly by Frannie and Freddie who gave law makers 220 million over the last ten years. And the creators of these risky financial instruments? You have no further to look that the Secretary of the Treasury. He was CEO at Goldman Sachs and helped invent these ‘investments’ and made over a half billion dollars doing it. He is now trying to dump this worthless paper on the American public.

no,I did not enjoy the last depression and this one will break a bunch of folks. The demo will get another 30 year run….another Herbert Hoover Republican move, and this time they opposed their own leaders…..don’t they know all of them who voted no won’t get away with the blame game?

I am way past ‘gloom-and-doom’ and well into totally fatalistic. The fact is US government didn’t control the situation early on. Even if TARP had passed today, it would have been too late. The posturings from both sides is making a bad situation worse. The final bill to the taxpayers will be several times what TARP is asking. We get to watch, for the next couple of years, the financial hurricane cutting through our daily lives…

I going to have some chicken soup, go to sleep and pray the ‘bogeyman’ goes away…

If there are no rules, you just punch the kid in the mouth who just threw doubles in Monopoly, and steal his money.

Every game has rules and the Congress abandoned them to excess in 1995, leaving us this ticking time bomb as creativity supplanted common sense in the granting of home loans, till everyone with a pulse qualified without portfolio.

The bailout is water on the fire that is consuming cash used to prop up balance sheets carrying assets that are worth so little mark to market, banks feel they have to conserve cash rather than lend it to joesixpac. Businesses are feeling the pince and unemployment is ramping up.

While we get the rule straight, we need to debrillate these hamstrung banks, or, forget them, and loan direct to joesixpac who is having trouble with his mortgage DIRECTLY. That’s about three to four trillion and the govt going into the real estate business, but it solves all problems without piecemealing a systemic range of communities, banks, insurances, and substituting Uncle Sam. It’s not capitalism, but it sure stabilizes without fascism, which is what we have now when CEO’s can drive the economy into the ground, and escape scot free with $20M bonuses. THAT’s not worth retaining believe me.

This bailout is a case study in what is wrong with Washington. Who needs the big money that the big banks and investment firms on wall street loan out? Big corporations. Most of the hometown smaller banks did not get into the subprime business to fuel quick profits for the big firm’s highly speculative derivatives. Those banks are still lending as before, and that part of our economy is doing fine. But the small banks don’t have enough to loan out to the big boys whose greed blinded them to common sense and got them into trouble. Well I have news, the big corporations have enough resources to survive the credit crunch. Sure they will have to divert capital from future expansion projects to payroll expenditures and may have to layoff some workers to make ends meet, but they are not going under. Jobs will be lost for sure and a recession is inevitable for a few years, but it is not like this kind of thing has not happened before as Paulson et al would have you believe. This bailout will very likely merely be a stop-gap for a few months as the 800 pound gorilla in the room that is driving the whole mess is falling housing value, and that is not nearly over. Paulson and Barnacke are willing to nationalize (socialize) our free markets in order to save a handful of greedy firms now. They are putting the interests of big coroporations and especially wall street firms over the interests of the rest of the economy and the people. Privatizing profits and socializing debt should never be an acceptable solution for any leader who claims to represent the interests of the people of the United States. As I alluded to above, this case study shows you who is pulling the strings of our leaders and truly running our country.

serious yes, but to go down the road of socialism is wrong. more government involvement, hasn’t worked so far. Seize assets of fannie, freddie, and aig executives.
maybe joe biden can get the multi-millionaires/billionaires on board to help out!!

With Greenspan to blame for cutting US interest rates to 1% and causing the housing bubble, SEC to blame for letting hedge funds short the banks into oblivion, commodities crashing, inflation rising, housing smashed, governments failing and world markets collapsing….ARMAGEDDON is here!!! Prepare for World War III as global unemployment escalates to 90% in 12 months, crime waves destroy cities, rogue states launch nuclear weapons obtained from societies in chaos.
**** SELL SELL SELL before world ends in 2009!!! ****

You, like many, are all too quick to blame the “free-market guys”, when in fact; it was Bush, Greenspan, and McCain, among other “free-market guys”, who put out warnings about Freddie and Fannie back in the early/mid 90’s (McCain even co-sponsored legislation for their reform in 2005). Those warnings were shouted down by Barney Frank, Christopher Dodd (who should step down),and Maxine Waters. The facts and the timeline are not in question. The Congressional record shows this to be true. It’s most amusing how the “free-market guys” wanted better oversight, while the aforementioned Democrats did not want such oversight (especially Waters, who threatened to socialize the oil industry – that’s irony).

Now, Obama is talking about how this problem was caused by “those in favor of deregulation”. Unfortunately, he is inferring that upon the Republicans, instead of looking at his own party. Perhaps all that money Obama and Biden got from Fannie Mae has distorted their memories.

To the author, can I spend YOUR money? I have a low wage job, no down deposit or collateral and bad credit. Seriously, I want a lot of money to buy a porche with. The lenders will just give it to me and Paulson will foot you the bill.

Seriously, what does this have to do with Reagan? Could you think about the taxpayers for once?

Actually yes I feel very good. Congress has finally listened to the American people who are overwhelmingly against this bailout for the very people who got us into this mess in the first place. I thought the “Be afraid, be very afraid” was a sarcastic comment on the Bush Administration’s attempt to use the financial WMD scare upon the American public again but apparently the author is actually serious when he says this.

However, the fact is that there are some financial institutions that made very poor decisions and now are going to collapse eventually whether the government pumps them up with more borrowed money (from the Chinese et al) or not. Many other financial institutions are in perfectly good shape because they did not expose themselves to bad lending decisions (the subprime market, etc.). The only way to “purge” the system of these bad financial decisions is to let the companies that made them go under. I do not see that that will lead to an “Armageddon” if you can even explain what that means.

The essential problem is that the real estate bubble has burst and no amount of government intervention can “prop up” that market because EVERYONE knows it is going down. The bailout is just another example of throwing good money (the taxpayers’) after bad (the Wall Street high rollers) like a losing Las Vegas poker hand. Everyone who knows anything about economics knows the “sunk cost” fallacy, we need to cut our losses now.

What we are seeing now in the stock market nose dive and the “freezing” of the credit markets is nothing less than economic blackmail by the big corporations that want their bailout money. Amazing how even before the bailout when they thought they were getting it suddently the markets “unfroze”. It’s all about politics, not about fundamentals.

Take a closer look at what happened today. Yes, equities lost 777 points on the Dow, but Treasuries gained. Triple A credit and gold GAINED. Oil fell ten bucks a barrel. We are redefining what good credit investment vehicles are. We are stregthening our dollar.
We have been putting off a major recession for a long time by propping up a bunch of academics theories on banking.
If you are in T-bills and gold today, you are happy. Its just not very sexy, is it? The dollar will gain as long as we stop printing money we don’t have to perpetuate this band-aide cycle of bailing out investment firms who were operated very loose and fast with the rules of what a “SECURE” investment should be.

With the way the vote went obviously neither side wants the bailout to happen, and 95% of americans and lawmakers don’t even understand the 110 pages of legislation. All the American public sees is $1trillion dollars almost a quarter of this countries national debt. Meaning each person in this country even infant would would owe the government $2500 no kidding neither side allowed the bill to pass. Yeah the years ahead may be hard but eventually the economy will stabilize again without adding another trillion dollars to the national debt. Its time that some of these institutions face the consequences of their actions, even though they may affect the country as a whole. The bailout will save them for now but what keeps this from happening again and what happens when a trillion dollars does not fix the problem? What precedent is it setting for this country in the long run. Maybe 20 years from now we will be talking about a couple trillion dollar bailout.

I’ve heard it said that the first cause of this crisis was government regulation that required banks to make loans that they would not ordinarily have been inclined to make, to have a lending portfolio that looks like America, as it were, instead of using sound assessments of lendee qualification. Once the cat of indentity-politics lending was let out of the bag of financial caution and fiduciary responsibility, there was no going back. Until now, maybe.

I don’t think Congress gets it. I don’t think “Main Street” gets it. There are probably less than 100 people in America that really get it, and here is what they know. Today, thanks in large part to Polousi running at the mouth again in her usual partisan way, Congress passed on a 700 Billion Dollar bill that might have, maybe, restored some confidence worldwide in the American econmy and perhaps created some desperatly needed liquidity. Instead, we to a One Trillion Dollar equity loss in the stock market. In One DAY!!! That affects every single American alive. Tomorrow, we may be able to even double that. This complete screwup and lack of understanding by Congress, and the public at large, may bring about a situation that makes the “Great Depression” look like a practice game. Get ready. There will be no place to hide.

Nobody wants to acknowledge the big elephant in the room. One of the biggest reasons for this mess is the fact that social engineering was forced upon the market, starting back in the late ’90’s. Certain forces were unhappy that not enough people were becoming homeowners. Banks and other lending institutions were labeled as racists for adhering to their stringent criteria for mortgages. So they got what they wnated: less regulation, more people buying homes, regardless of affordability. Well, those are the same people who left all these banks holding the bag on these ill-advised mortgages. They walk away from their obligations because they owe more than what their house is worth, or simply because they now realize they can’t make the payments. And my taxes are supposed to go towards bailing them out? I don’t think so.

The free expression of the marketplace should come with some rules. Back in the time of President Carter, the rules for financial transactions started changing as his part of his deregulation campaign. Forward to the 1990s and Mr. Clinton’s time when Fannie Mae was pressured into making more loans available to people who could not afford them. Since the government has given license to financial institutions to create debt with an almost no holds barred attitude is it any wonder that most institutions flocked to do so much like hogs at a trough?

Finally now the burdens of all that excess have come home to roost.

As long as the plates kept spinning there was no problem. Then one day the dishes started falling and now we hear mostly breaking glass as one institution after another hits the floor.

The taxpayer should not be surprised one bit that once again they get the short end of the stick but they do need to let their congresspersons know that while the sound of dishes breaking is ok if its not your dishes, it does matter when your dish gets broken.

Why one women – Nancy Pelosi – did so big mistake? It’s Horrible! What she was thinking?

I absolutly agree with killing this bailout. Yes we might go through some pain, but now the fat cats and corporate one world government wannabees are facing the american spirit that once made this country great and just may take this country back afterall, SUck it up you scardicats, take the hit and get into the fray

I don’t like the bailout plan, the main reason being that I don’t get it. As far as I can tell, its main purpose is to “stabilize” the financial markets by a) giving the banks that have a lot of crap on their hands tax payer money to run their business, b) send the message that the financial markets should be confident about lending and the right thing to do would be to carry on doing exactly whatever they were doing before.
Well, aside from the fact that a) is unfair and b) is untrue, more importantly both are serve to “prop” things up and are unsustainable. It’s trying stabilizing a bubble, and one that has already popped, at that. How is that saving anything? Can’t the taxpayer money be put to better use elsewhere? More than one company like Bank of America are seeing this as an opportunity. I know I will not shrivel up and die because of the credit freeze because I personally save and do not live my life on a credit line. And if things like homes and stocks get cheap as a result of this, I may not only survive this, but may even sight and take advantage of the opportunities. I can’t believe I am the only person or company out there who is not dangerously and chronically over-extended. Most of America apparently is over-extended, but people probably need to learn how to not be.

Cowards, the lot of you! This is just another “Boo!” by our government, in order to scare us into submission. They will strong-arm, bully, cajole, and scare in order to keep their reign over their subjects: Everyday Americans. These citizens, whom the House and Congress are supposed to be representing (meaning representing the WILL of the people, if you’ve forgotten that) have been treated as if they are ignorant, addle-pated, uneducated idiots, incapable of understanding economics. I saw this time and again this evening on news shows on all channels. Not ONE representative interviewed mentioned the will of the people as their reason for dissent. This is an outrage, and goes against everything our Constitution and our forefathers stood for!

Make no mistake, we understand, all right! And we still say, Let it burn! Let it burn, and then the nice, new, fresh, green plants will grow again, making the forest HEALTHIER. Do you get my drift, you congressional traitors?

We UNDERSTAND, we just don’t AGREE to being FLEECED any longer!

It is time to put the people responsible for this financial disaster in jail. The American people are not going to bail out criminals. It is time for the Bush admin. to just go away with all the other currupt busineses. These banks broke the law of economics for their own greed and they deserve their just deserts. It is the banks today and it will be the oil companies in the furture.

Sure, the Wall Street spoilt brats have brought about this horror. But why blame them alone?

I was on a first-time visit to the US in August, and carried back one striking observation. Main Street America indulges in mindless there-is-no-tomorrow consumption. I know that a consumer economy is good for a country, but it makes sense only if those goods are produced within the country. Else, it is just a journey to debt hell. This is fifth-grade economics.

Wall Street went on a free, wild ride and its fuel was supplied by Main Street.

Be realistic.
We the tax payer either will own the debt of the banks through this bail-out or through the back door we will own these banks in the FDIC.
After all the rethoric I don’t see any difference here.
Through FDIC we allready own the debt of Wachovia minus what the retail was worth.
I think that we will be better off doing it in an organized manner than waiting for one bnk after the other to fail.

Why should the taxpayer foot the bill for bad business decisions? If the bill is revived, as I am sure it will be, maybe I will quit paying on my mortgage and the government can bail me out too. Seems only fair.

Could not agree more. It is getting scary for main street. The Bush-Paulson plan is unacceptable. It definitely does not understand nor care for the Constitution or the plight of average Americans. It is flawed in design and favors only the financial interest at a time when it needed to be a collaborative effort that would protect our interest as well. To present the plan at the eleventh hour is the fear factor all over again…it is this or falling off the cliff. Just like our entry into the Iraq war over the WMDs. But this time the WMDs are the free market, deregulation, financial experts who got us into the mess

My, my what a ride it’s been hasn’t it. When will we learn from our mistakes instead of compounding them? Since the end of World War II the United States has been perceived as the world’s protégée of Capitalism. Well guess what – it appears the children in power on Capitol Hill and the white house have their thumbs up their asses now. They thought they could get away with “IT” for a couple more generations. What were they thinking! Another band aid patch in a system that has been teetering on disaster after 9/11. I hate to admit it boys but the bad guys were supported by us before we turned on them and decided one day they were our enemies. Too many skeletons in the closet, our noses prying into others affairs, and trying to control the world to our advantage has come to an end as you know it. Corruption in the White house and Congress has never been worse. These supposed lawmakers and followers of the Constitution are an embarrassment to our fore fathers. Drilling for oil domestically – another false fix…. The oil companies would triple the price of oil due to the “high cost” of drilling for it (notice the sarcastic way I highlighted “high cost”) Robert Kennedy once said that “Few will have the greatness to bend history itself; but each of us can work to change a small portion of events, and in the total; of all those acts will be written the history of this generation.” We had our chance to change things; instead we chose to walk into the abyss of greed. Tick – Tock its time to own up to our bad practices (there are dozens I wish I could list but don’t care to waste my time or yours) and lead by example and show the world we can pull out of this as a whole. Not by a select few greedy troublemakers, but really, for real as a whole, a nation, undivided and unwilling to compromise for second place. Batter up – the bases are loaded and it’s the end of the ninth……

Your simple minded NOBODY,

http://market-ticker.denninger.net/

You fellas might want to read in here before you wail and cry about how the bail out didn’t get passed. Bernanke already has proven that throwing money at the problem didn’t work about pushing $600b+ into the market to no avail. The problem is TRUST.

I’m just an average Joe trying to keep his family together and make minimum payments on the credit cards. IMHO, the bailout is about saving big business, not main street and certainly not the average tax payer. I respect the democrats and republicans who voted against the bill, dispite the blackmail the administration and Speaker Pelosi tried to put on them. Who does she think she is fooling? For her, this was all about keeping McCain from looking good and getting a private backing to the bailout, which would have been palitable. Instead, she torpedoed the effort to make sure the country suffered and Obama benefited. Talk about the good, the bad and the ugly side of American Politics!!

Anyway, the economy will suffer in the short run, but we will not become a socialist nation that bails out the CEOs (weird yes?). Thanks but no thanks Secretary Paulson. Go back to Wall Steet if you want to do M&A with our tax money. Let the dominoes fall Mr Potato(e) Head!

There has been a run on the banks going undetected for months. As an example people withdrew money from WAMU in the early summer. This run went on silently. I have numerous freinds that withdrew from WAMUand shifted to credit unions during this period stiil keeping their accounts open. The most recent run was anticlimatic. I am certain that the same has occurred at National City and others as well.This problem is very serious and almost irreversable. Short of drastic action by our governmant the system is near total collapse.

For the sale of $700 billion you guys lost $1.2 trillion over night. Moreover, with more banks likely to fail now, last night’s vote will likely cost the taxpayer world wide more.

If some-one buys a house, don’t let ‘em drop the keys off if the house value falls. Its quite easy really. If people know they will go to jail for debt…. most would think before they borrow.

This mess was conceived in the US. Now its time grow up, take responsibility and try to get the world out of it.

your right,there too dumb, to whats in the nations best interest.

Frankly Bing, this is a sad day in America and those who opposed this plan will go down in the history books and they will read about themselves as the idiots that opposed something they didn’t understand.

If your child was hit by a car and needed emergency surgery, the doctor explains the situation to you and then you say, ok – you are the expert, you know best, go ahead. You don’t take it upon yourself to question the doctor in a critical moment. I believe that is akin to what is happening here.

To boot – this is no longer just an American problem. It is a global problem, and they are an embarrassment.

In 1987 when the market lost about 25% of its value in one day. The people who stayed with thier investments did very well in the next few years. Let the market correct itself. I see a buying opportunity.

Jay (Allentown, PA), you’re a hypocrite. Try stepping back and re-reading your little 5:29pm rant. Then read “Why the Bailout Bombed” by Nina Easton on Fortune’s site. There’s a lot of blame to go around for the financial mess. Greedy pushers of bad loans, greedy securitizers of those loans, greedy sellers of credit default swaps, and anti-regulation fanatics with poor foresight. Don’t tell me, you’re going to say 95% of them all are/were Democrats! (For an eye opening look at the CDS market, see “The $55 Trillion Question” by Varchaver and Benner, also on the Fortune site.)

I haven’t read the bill, but If that many people from both sides of the isle voted against it there must be some serious concern about whats in the bill. On another note what is wrong with Nancy Pelosi, honestly, theve been working hard on both sides to get this accomplished and then she goes on her patisan rant? There is a place and time for that behavior, my 5 year old understands that concept maybe Pelosi should spend a week at my house learning good manners.

So much talk about free markets, but this country does not have free markets. When Smith described free markets, there were pre-requisites to the notion which are not present in our current markets; namely that the buyer and seller have equal access to information (transparency), that the sellers be price takers (not monopolies or oligopolies) and that entry and exit be relatively easy. None of these are true. In their absence, government regulation is needed to compensate. Our current government flat out refuses to regulate or even to enforce existing laws. What sort of outcome can we expect. As a previous poster commented; this is not liberty, it is license… welcome to the licentious market.

Setting aside the complexities of the financial markets, the American public is sick and tired of these ‘Fat Cat CEO’s’ that are in fact a big part of the problem getting big termination packages.

Wow from up here in the great white north it sure looks like your leadership has shot themselves in the foot and the American public in the head.There is a real leadership hole in the US and as nature abhors a vacuum what might fill it? Chaos?

Republicans have their free market principals when it suits them. But Ronnie is the guy who started running massive deficits and W just picked up where Ronnie left off. What is conservative about deficit spending? “41″ got it right when he said Ronnie practiced voodoo econimics. We would be in a lot better shape dealing with this mess if the government was not so deep in debt at this point of course we would not have this situation or our massive debt if sound fiscally conservative governement had been in place over the last 30 years.

“Under [Bill] Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001. Instead of looking at ‘outdated criteria,’ such as the mortgage applicant’s credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named ‘Caylee.’ Threatening lawsuits, Clinton’s Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn’t a joke—it’s a fact. … In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration’s affirmative action lending policies as one of the ‘hidden success stories’ of the Clinton administration, saying that ‘black and Latino homeownership has surged to the highest level ever recorded.’ Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn’t get out of their loans by selling their houses. A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it’s gone off.” —Ann Coulter

Curious-
Should we not look past Reagan, who was effective in leading economic policies from which America reaped the benefits later, or should we turn to Bill Clinton’s presidency during which he signed into action deregulation of the banking system, enabling subprime loans and loose credit into the system, thus resulting in todays economic crisis. Mmmmm…to truly follow the economic cycle, one must look before Bush and find the root of the problem.

Government intervention or not, there will be a price to pay for all of us, whether it’s $700 billion dollars of our tax money, the loss in value in our 401(k), the loss of our job or the increase in costs of groceries and gas.

The financial analyst side of me thinks like you and hopes our elected officials can put their partisan politics aside to do what’s best for our country. I’m just not sure the bail-out plan (and that’s exactly what it is and not a “rescue plan”) in its current form is necessarily that. Why should we believe Paulson and Bush when they are the ones who got us into this mess in the first place? I know Paulson is supposed to be this really smart guy, but he used to be at Goldman, so he’s one of them! And as for the Oracle in Omaha, he just invested $5B in Goldman based on his assumption that Congress would approve the plan. Pardon me if I take his sage advice with a grain of salt.

Yeah the plunging of the Dow 700 points is enough to make anyone sick. So quit watching. It might be time for Wallstreet to take its medicine. We’re going to suffer regardless of what the bozos in Washington do.

I’m very glad the latest bailout bill was defeated in the House of Representatives.

Secretary Paulsen has identified a SYMPTOM, not the root PROBLEM.

I am very angry over recent years of Greenspan’s and now Bernake’s attempting to micro tune the economy by simply printing money out of thin air.
It is time to pay the piper for our excesses.

There are other ways to “unfreeze” the credit markets that would be more in character with a Capitalist society. Given the bailout scheme recently presented, there are several glaring problems:
1 – There is apparently no good estimate of the ACTUAL AMOUNT of bad paper out there. I understand that the 700 billion dollar amount was determined because it is “a really big number”. huh?
2- There is no guarantee that banks would start lending freely, and QUICKLY, after such a proposed rescue plan, because, no one is going to be able to say, with certaintly, that ALL THE TOXIC ASSETS HAVE BEEN CLEARED. So, the banks will be slow to ramp up, given even an optimistic scenario.
3- The moral hazard issue – very real. No one will change basic irresponsible behavior without experiencing the pain of failure or bad judgement.
4 – The bailout schemes can only stave off the inevitable to a later day. We cannot continue to print money out of thin air without creating enormous inflationary problems. We need to stop “kicking the can further down the road” to future generations.

Here’s a plan vs the bailout:

1 – Create a new, TEMPORARY, bank (Bank of USA) network funded by the taxpayer (yes, print more money, this one last time) for the purpose of loaning money to anyone (creditworthy) at a reasonable rate of, say, 8% per year.
Ramp this up FAST to create liquidity in the system.

2 – Create a TEMPORARY rating agency to review finances of banks and other institutions to certify their creditworthiness. Forget the current Moody, S&P, etc, rating agencies – they have proven to be incompetent or corrupt.

Existing banks would now be forced to get off the dime and either quit the banking business, or get with the program via:
1- write off all bad paper and take their lumps, in order to get certified.
2- Get certified, in order to get back in the “game”. They would start competing with each other for business, offering loans at rates more competitive than the “Bank of USA”.
3 – Start offering small savers a good interest rate on CD’s to attract private capital.

They are going to have to get that deal back in hands. . . This country needs that 700 B. to keep the progress of the economy future.

I think there are too many ignorant people running this congress!

They just talk too much, I havent seen any action. . .

If it was me, I would have fixed everything and everyone would be happy in this country!

Actually, this situation has nothing to do with free markets. For years, the government has forced mortgage originators to give out subprime loans at artificially low interest rates. That is not a free market policy. It has also artificially lowered interest rates, creating easy credit, through the federal reserve. Banks were not greedy, but rather took risks that they didn’t understand. The free market punishes them for this. Regulation, price fixing, and bailouts are what caused and extended this problem, and they all need to stop. Bank shareholders and debtholders should rightfully lose their money. Socializing their losses hurts those who didn’t or couldn’t afford to invest by destroying the value of the dollar. A bailout would hurt the economy much more than what the fear-mongering special interest groups and politicians want you to think.

We now know Pelosi is the pit bull in lipstick- though bear in the china closet is more apt. Still, to have voted against the welfare of the country because their feelings were hurt – poor babies. The price of their feelings is much too high and Reagan can be whirling
Ronnie before anyone should knowingly, deliberately, vote against the welfare of the rest of his/her fellow citizens.

Jay from Allan Town obviously votes republican on his ballets. Seriously, they call it a “Bail Out” plan. And for whom, the rich, the individuals on wall street that have reduntantly “pimped” out mortages and lowered house rates. So we should bail out these people? And if the Gov’t does buy out these troubled firms, what happens to a free market economy? Anyone think of that; most probably just see it as a good idea, but how many good ideas have come out of the Bush Administration? Can anyone say Insurance costs on the rise, housing rates plumiting, oh and gas prices.

Pelosi’s commments were ill timed but not incorrect. Modern capitalism shows again and again that it is a powerful engine but lacks fundamental sense of right and wrong. It is up to the government to channel that force into socially acceptable paths. When indifference, ideology and incompetence take over the government, these are the consequences.

They voted against it because they were inundated with calls from the electorate saying they hated this bill and would vote them out if the agreed to it. It’s an election year. Now when people, who stand to lose most of their pension money, are willing to vote against their own short term interest, what does that tell you? That all of us were just not willing to write a blank check to the same miscreants who put us in the whole in the first place. You’re all off-base about this: everyone supports an intervention… nobody supports a blank check bailout that is widely considered by economists not to solve the problem anyways. Let them bring something reasonable containing actual logic back to the table, and then we’ll talk.

Interesting… You know, the economy is really determined by crowd think and psychology. You ought to check out _A Short History of Financial Euphoria_ by John Kenneth Galbraith or _Crashes and Panics: The Lessons of History_ by Eugene White.

Once we get through this panic, doom and gloom, people will begin to notice some “positive factors” that have been overlooked in the markets. Buying will resume. Extending credit will resume. It will build.

It will eventually result in unbridled euphoria and ungrounded optimism and we’ll have another market bubble. Then… start the down hill sell-off all over again.

This is reality. This is group think. This is economics.

At 37, I’m staying in and waiting it out… In fact, I’m going to continue to buy. Heck, the prices are great!

Actually, a financial meltdown is just what we need. The government should stand back and stop fighting the bear. We need price and wage deflation rather than more propping up with bailouts and more easy money from the Fed. Once wages and prices have settled down the economy can grow. The only government intervention that would be helpful would be to eliminate the Fed altogether.

Why should we have to bailout lenders that have been knocking us dead for years with interest? Just because some old boomber bought 20 year bonds on mortgages and is going to lose his ass. I can’t retire, why should they. It’s a bad day when the only business outside of Casinos that have a license to steal need the taxpayer to put them on the welfare dole as well.

Up theirs!

First Congress passes a Draconian revision to the bankruptcy laws for the benefit of the banks and financial fat-cats, so that the little guy, even if he goes bankrupt, still must pay his credit-card debt—AND his mortgage.

Now Congress wants that same little guy to bail out… Guess who? Banks and financial fat-cats!!!

The banking industry brought this mess on itself.

I see no reason to bail out any idiots, whether the idiots lent or borrowed.

For decades—I am 56—I have been forced to listen to all of the free-market conservatives spout off about how wonderful the free market is—and about how ordinary workers should be proud to enter the competitive arena as patriotic, red-blooded Americans standing on their own two feet in the capitalist, free-enterprise marketplace.

Well, turnabout is fair play.

What is sauce for the goose is sauce for the gander.

Let the bankers and fat cats battle it out in the free-enterprise, capitalist market.

It is The American Way.

Is this not so?

I do not believe there is a crisis, except a crisis of falling stock prices for fat-cat executives whose golden-parachute severance packages are larded with stock options.

The stupid banks will fail, the smart banks will pick up the stupid banks’ assets for a song, renegotiate the non-performing mortgages or foreclose and sell for a lower price to someone who __can__ make a lower payment.

The housing bubble must be allowed to deflate itself.

A single segment of the overall economy will have adjusted itself through the workings of the free market.

Life will go on.

Bottom line: The market rightly punishes the stupid, the foolish, the lazy, and the careless.

NO BAILOUT FOR BOZOS!!!

Looking from high above the financial mess, we see a huge credit bubble with up to 60 to 1 leverage built up by some of the major players. This is frowned upon by any competant economist.

Bad loans created by greedy mortgage lenders has finally burst the bubble. As an example, Fredie had about 50B in capital trying to cover 2.5 trillion in mortgages. With this kind of leverage, a 3% default has dealt a death blow to Fredie.

The question is: How many other financial institutions have this dangerous leverage? My bet is that there are more than enough to create a huge “house of cards”.

Since the leverage problem (up to 60 to 1) is TOO LARGE for a government bail out, the best way to restore some confidence would be to set up a program that would allow homeowners (who actually live in the homes) that are facing default access to new loans with payments set at 30% of the borrower’s income. This should go a long way to stop the drop in home values that are the major equity held by the majority of Americans.

Americans and congress could get behind this type of action.

So the Republicans think we can all buy our next car or house with cash? That’s what it will take – easy credit is gone, and expensive credit is hard to come by. That won’t slow the economy – it will throw the economy into full reverse.

The only difference between now and the 30’s is that the Great Depression was bottom-up and this is top-down.

Oh, and this time we know what is coming and could have tried to stop it…

The root cause of the problem is liberal Democrates pressuring Freddy and Fanny to make loans to people who could not afford to repay the loans. These were laughingly called NINJ loans (no income, no job). When the government uses tax dollars for social engineering, main street suffers.

I want to thank you all for this incredible outpouring of opinion, thought and analysis. If Congress was as smart as you guys, we’d all be in better shape. I want to particularly single out Jake in Minneapolis, who had the presence of mind to observe, “You picked a bad month to quit drinking.” Truer words were never spoke.

The best thing that Congress and Bush and Paulson and Bernanke can do is nothing. Bad banks will continue to fail. Prudent banks with good assets and good balance sheets will purchase those assets that have value. Life will go on. If you have been living on credit and you have a ridiculous mortgage that you can’t afford, then you should send the keys to your lender and leave. Go rent an apartment until you get your financial house in order. Let the lease on the Lexus expire and go buy a used camry. If Congress does do something, we can all be sure that it will have unintended consequences – like their Community Reinvestment Act, like Fannie Mae, like Freddie Mac, like Gramm-Leach-Bliley, like Sarbanes Oxley, like mark to market accounting, like the Fed devaluing the dollar and almost singlehandedly creating the oil inflation crisis. Does anyone really seriously believe that these “leaders” even know what to do to fix things? Aren’t these the same people that have been telling us things were fine until about two weeks ago? Anything other than an across the board massive tax cut, putting liquidity into the hands of the people who can then act to safeguard their own best interests, will not work to fix the causes of the problem. A mere bailout is just a bandaid. It’s like asking your parents for money when you can’t make your car payment. It gets you over the current hump, but it doesn’t actually improve anything for the long term. The best thing Congress can do is to leave town.

The general assumption that this bailout is better than nothing is simply unprovable. I’m not arguing that it will be worse with it than without, but to say we “have” to do something is simply wrong. What are the costs of passing this bailout. Weakeing of our currency and our national credit rating (which brings us closer to china’s pain point where they have to begin selling treasuries and causing a collapse in the dollar). Untold moral hazard as the risk/reward ratios for financial instituions remains skewed (they will find a way around any and all regulation if given enough time) and it doesn’t solve the fundamental problem. We have too much debt, and a lot of it is tied up in houses that we couldn’t afford and that aren’t worth as much as we paid for them… Until that is solved, no bailout will do anything more than postpone the inevitable washout. Gloomy enough for ya?

This bailout is for the illegal immigrants. For the past several years these illegal immigrants lived next door to me and on their foreclosure date set fire to their home. Thank God the local volunteer firefighters contained the fire. I had noticed an unusually large number of people living next door and reported it to the local authorities. They could care less. When the fire marshall showed up on the foreclosure date after the fire I reamed him out. Now the average American is reaming out Congress about this extortion….I mean bailout. If the average American didn’t pay their taxes like Charlie Wrangel they would be in jail. Not Wrangel. The average American has been doing all the right things — working hard and saving and investing. The Democrats should pay dearly for this since it’s Bill Clinton’s, Franklin Raines’ and Bob Rubin’s fault.

Anybody remember the satire film Airplane? Remember they did a takeoff on the old 60 minutes Point/Counterpoint, where James Kilpatrick and Shana Alexander would argue the liberal and conservative viewpoints for two minutes apiece? In the takeoff, the old conservative crumudgeon goes: “Shana, they bought their tickets… they knew what they were getting into! I say, let ‘em crash!” That encapsulates the entire free market/conservative yahoo perspective — and it’s why the House Republicans torpedoed the bill.

So far, the only person I’ve heard with a key component to the solution is pinko Senator Bernie Sanders.

He said (after I said it) any company that wants a government handout and would fail without it but CAN’T because it is “too big to fail”, should be split up with anti-trust action.

When an incompetently managed company isn’t allowed to fail and let better companies eat it’s lunch, that ISN’T free market. It’s government subsidized failure and fraud.

Bust em up until they are too little to seriously damage the economy. They’ll clean up their act.

Put MEANING back into the concept of financial RISK. If reckless behavior doesn’t produce frequent failure, why would anyone keep safe, secure low interest CD’s in the banks. They wouldn’t. They DIDN’T.

Bing, I rather enjoy reading your blog. And everyone is entitled to an opinion. But I must say that when you talk finances in the economy, its not your strong suit.

There isn’t one single culprit that took us to this point, but reading the responses, a lot of people hit the broad strokes. Govt mandated mortgages for the less than well off, idiotic spending of the same people that are losing the roofs over their head, corporate greed at it’s finest, mixed in with a poor congress and administration.
Hell, where does it end?

The long and short, let the economy work its way out how it’s supposed too.

Does no-one not remember that there was a hundred and something BILLION dollar housing bill that was just past last month? How much does the American Taxpayer have to suffer?

And what really takes the cake is when I read an article on CNBC that some flunky represenative says that he was getting calls at his office from his voters 200 to 1 for voting against the bailout, and he says something to the effect of ” I think when we get this passed the people will be happy”, how idiotic is that?

Well, things seem to be recovering nicely, the dow has almost reach 500 plus today likely with more to come in after hours trading, I would even suspect a near full recovery. I think one article hit it on the nail when they said yesterdays drop was fueled by fear. The dollar made a full recovery against the yen, plus gained. Everything I was afraid to tears over yesterday seems to be stablizing today. And Bing, I don’t think the fallout of votes in this bailout was the government letting us freefall, I think we really need to think about 700,000,000,000 seriously. Its not beans.

No matter how crazy things seem to be outside, remember that we are all in this boat together. It seems apparent that these are treacherous waters. Panic, frenzy and name-calling from all sides will only the boat rock harder, so let’s let the cooler-heads take the oars. I extend my wishes for a safe transition from where we are to where we are going to all my fellow passengers.

A bailout plan will not work. Do you think it is smart to continue to “keep credit flowing”, as Paulson said, when individuals and corporations are spending way more than they can afford? The ratio of debt to income for individuals and corporations is out of control!! The debt that the government holds is out of control!!!

The value of houses have increased too much, too fast and need to come back down to realistic, affordable prices. The average income and the average home prices do not match up in most areas of the country. The bailout plan is going to keep prices high, inflation will continue rising but incomes will not. Individuals and businesses will continue to go deeper and deeper in debt.

Without a bailout the businesses and banks that are healthy can make it through some rough years. Those that are using credit for daily operations should not be doing that anyway and should consider closing the doors. Those that can survive will survive without this bailout and those that live on credit will have to change their ways….finally.

The $700B bailout is money that should be used to educate our children, provide health care, and build infrastructure. I can live without a loan for a house or car for a few years but I can’t live without an education for my children.

As a taxpaying citizen and a VOTING citizen I will be watching closely who votes to pass any more bailouts, trust me they will not get my vote and I will shout it from the rooftops!!

I am going to continue to pressure my representatives to LET THE BAILOUT BILL DIE!!

“The sky is falling, the sky is falling!”
Well, let it fall and we’ll ALL pick up the pieces. Right Mr. Paulson?

When the toreador faces the charge of the bull, all of his training, diciplines and skill come into play; he exercises his defense and offense to conquer the bull.

Confidence overides fear when you are master of your game.

The toreador does not beg the the paid attendance to bail him out.

On Wall Street the wailing and sobbing are dispicable for MBAs’ groveling to get bailed out–they should be thrown out!

You americans are so fucking dumb and ignorant that I often wonder whether you’re not actually mentally retarded. What infuriates me more than anything is that the mental retardation of the average american actually affects MY life here in far off Australia. Otherwise I wouldn’t care less, each time I heard or read about yet another example of the mental retardation of the average american, I would simply shrug my shoulders & think , “what can you expect from mental defectives’. Here are the facts: “Hey Chuck, I have a great idea. Let’s lend HUNDREDS OF BILLIONS OF DOLLARS to people with NO JOBS, NO INCOME AND NO ASSETS.” WHO DOES THIS. HOW MUCH INTELLIGENCE & FORESIGHT MUST YOU HAVE TO REALISE THAT SUCH A COURSE OF ACTION WILL EVENTUALLY BE CATASTROPHIC? SURELY EVEN AMERICANS HAVE ENOUGH INTELLIGENCE TO REALISE THIS IS STUPIDITY OF THE HIGHEST MAGNITUDE. Then when an opportunity comes along to perhaps fix the problem Mr & MRS US Taxpayer get on their idealogical highhorse, “How dare you use MY taxpayer dollars to save the arse of the big bad Wall Street man. Let him BURN!” Surely mr & Mrs US taxpayer couldn’t be that mentally defective. Surely they would realise that the last time there were corporate failures of this magnitude we had a little hiccup called THE GREAT DEPRESSION. This equates to 30% unemployment. Kinda hard to make the repayments on your gas guzzling hummer, or even to buy gas for that matter, IF YOU DON”T HAVE A JOB CHUCK! WHAT INFURIATES ME NO END IS NOT THAT YOU SHOULD IMPLODE, THAT WOULD BE A CAUSE FOR GREAT CHEER, BUT THAT YOU ARE GOING TO TAKE THE REST OF THE WORLD ALONG WITH YOU!

This comment is a response to the blog entry from Michael in Westchester, Pennsylvania.

Michael- I think you have hit the nail on the head with regard to your comments about our current economic situation.
When the current call to action came from Bush and his cohorts, my original reaction was shock and disgust, but I realized that doing nothing was worse than the alternative of letting the American economy slide into a position of freefall.

Subsequently however, I’ve come to believe that the financial fallout of the current situation may well be the type of “market correction” that is exactly what is called for as a result of the last eight years of financial deregulation. The old saying is: There is no altruism in business; and that includes what is currently referred to as moral hazard in the financial sector.

Yes, it is possible to bail out our current fiscal conundrum with a huge influx of taxpayer cash; but this infusion of funds will not change the mindset that resulted in our current toxic financial position.

Although I am a liberally minded Democrat, I believe it may be time for every American to take it on the chin, and realize that the days of out-of-control consumer spending, as well as obscene CEO compensation, must be relegated firmly to a past that we can never resort to in the future.

From this moment forward, altruism must be an integral part of the capitalistic world in which we live; making profits in a global market requires that the individuals in charge of profit making decisions must also take into account the requirements of the vast majority of individuals required to produce those profits, if for no other reason than someone has to have enough money to buy the huge output of the global economic machine.

Sorry, Stanley; but I’m not scared. Not even a little bit. Out here in the hinterlands where small business deals in cash rather than debt, local companies are not hurting. Banks are not folding. It’s harvest time and life is good. In fact, once the Schadenfreude at the demise of Wall Street has a chance to kick in, life couldn’t get much better.

There are quite a few of us out here who hate, loathe and despise everything that Wall Street has become, and we’re even less enthusiastic about Washington. The only politicians who apparently understand that are the ones who voted against the bailout. As far as we’re concerned, Wall Street can go to hell, and then maybe the rest of us can get to work on restoring this country to what it was before Wall Street slimed it.

I am wounded by the suggestion that economic matters are not my strong suit. Whose strong suit are they, exactly?

Here is a very simple solution. Who caused this in the first place?
Well just take all these fat cats assets, property, domestic and over seas bank accounts and even the change out of their pockets to pay back the debt they have caused.
let them live on the streets. It is about time they pay for the mess they caused. Does anyone remember the tiny S&L scandal in the late 80’s? We tax payers had to pay this off. This is just a lot larger scale and does any remember who the Presidents where? Unless I’ve been dreaming it was Bush.After all is this not what capitalism is about? Wallstreet crashed yesterday because the vote did not go the way they wanted sounds like the poor and middle class are hostages of the elite class of Wallstreet and Politicans.
The Romans had thier bread and circuses and we have our beer and NFL. Oh well it looks like my paycheck is going to get smaller anyway it goes. So I just get a case of beer and watch ESPN and all this will go away!

I am scared too. It appears we do not have any leadership, the kind that truly puts America first, with honesty, integrity, trust for the people. Our “leaders” are mess makers, always looking to the promise of the good life for them, “lots of money”-

now what? we are to pay for these with our tax money?

the serious problen is who can we trust?

our leaders are not leaders at all.

It was government intervention that caused the whole problem – so, why is MORE government intervention using tax payers hard earned wages to bail them out a good idea? Aren’t there clauses in the Constitution that prohibit or at least put a limit on government intervention in free entersprise? Oh, I forgot – they already shredded that document and don’t use it anymore, so they could strip us of our rights and freedom.

My husband and I don’t own a home because we can’t afford to buy one. But, now we’re expected to pay for somebody else’s home and bail out the corporations that mismanaged their business – when we can’t even afford a home of our own?

We are just barely surviving on today’s economy, and both of us work very hard to earn what little we have. Our taxes are already way too high. Doesn’t anybody remember the Boston Tea Party?

The Obama administration totally lied about reducing IL taxes and increasing jobs during the convention. I sure haven’t seen it and have lived her all my life – our taxes have drastically increased and IL unemployment has at least doubled if not much more, since he took office. We had to move to the IA/IL border for work, because we couldn’t find work in IL.

We manage our finances and debt by going without and cutting expenses where we can to make sure that we don’t have excessive debt, but still have what we need to survive. About time all these corrupt politicians that voted yes and corporate executives start learning to do the same. You can’t spend money you don’t have – that’s just plain common sense that our government doesn’t seem to have.

Maybe we should try making them work so hard that they physically drop at the end of the day for very little and not enough to live on like the rest of the American middle – lower class. Then see if they want to pay more taxes when they can’t hardly survive on what they make.

I am a struggling small business owner – I’ve worked very hard and struggled for many years to make the little bit that I do. I built my business with my own sweat and hard earned money, no loans – no help from the Government. Americans have a hard time getting small business loans to get a good start, those seem to be reserved mostly for foreignors that don’t even pay taxes. But now the government wants me to bail out these wealthy executives, when they wouldn’t help me? I don’t think so.

My husband is a dislocated, but retired Maytag worker, but we both still have to work so that we can afford to eat and put a roof over our heads. Maytag’s measley pension just barely feeds us without putting a roof over our head. But now we’re expected to bail out corrupt Corporate executives that aren’t having any personal financial troubles and are living in luxury.

I can guarantee that I will NOT vote for any person that is favor of the bail out. Let the corporate executives use all that money they made mismanging it to bail themselves out. Make them spend their own money or file for bankruptcy like a other business would be legally required to do. We didn’t create this problem, they did. I’m sick and tired of doing without and not having the basic living needs to survive because of corporate crooks, corrupt politicians, and over-taxation.

Bailing them out will only make it all much worse later down the road. They need to be held accountable for their own actions, not hold the rest of us accountable for their actions. That’s the same as knowingly and wrongfully putting somebody in jail for another person’s crime.

Bing,I was emailed this and thought it would be a great bailout!This makes sense.
Hi All,
A friend of mine sent this to me. I’m for it….

Happy Friday!

This idea sounds just crazy enough to possibly work, so naturally it
won’t be given serious consideration. How great is our bureaucracy!!

I’m against the $85,000,000,000.00 bailout of AIG.

Instead, I’m in favor of giving $85,000,000,000 to America in a We
Deserve It Dividend.

To make the math simple, let’s assume there are 200,000,000 bonafide
U.S.
Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and
child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billion that equals
$425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It
Dividend.

Of course, it would NOT be tax free.

So let’s assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage – housing crisis solved.

Repay college loans – what a great boost to new grads

Put away money for college – it’ll be there

Save in a bank – create money to loan to entrepreneurs.

Buy a new car – create jobs

Invest in the market – capital drives growth

Pay for your parent’s medical insurance – health care improves

Enable Deadbeat Dads to come clean – or else

Remember this is for every adult U S Citizen 18+ including the folks who
lost their jobs at Lehman Brothers and every other company that is
cutting back. And of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it…instead of
trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is
being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult
U S Citizen 18+!

As for AIG – liquidate it.

Sell off its parts.

Let American General go back to being American General.

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it up.

Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.”

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion

We Deserve It Dividend more than I do the geniuses at AIG or in
Washington DC

And remember, The plan only really costs $59.5 Billion because $25.5
Billion is returned instantly in taxes to Uncle Sam.

Ahhh…I feel so much better getting that off my chest

There they go again. What has AMT got to do with today’s bailout vote?

They’ve been sweeping AMT under the the Congres’s rug since 1986; this matter should have been taken long ago, but they stalled!

We need separate tax reform, alone, before any other pork barrels get bailed out!

Let’s srick to the issues, O.K.?

Some very astute comments. Lets see, the fired WAMU CEO left with like 16M and the 17 day WAMU CEO left with like 20M after the WAMU takeover. For an average American to have 3M after 30 years of working, they would have to earn $100,000 per year. What is the current median workers income? $45,000 pwe year? The CEO’s compensation is obscene.
Why should anyone making 10$/hr. be in a $400,000 to $600,000 home? Why should anyone illegally in this country have been allowed to purschase a home.
The fellow from India pointed out very correctly about the consumerism in the US in relation to what we no longer make in this country. The Aussie chap pointed out how this is affecting things globally. A side note to the Aussie chap, would you like your tax dollars bailing people out who had no business being allowed to get into the homes they got into?
This problem did not originate in the last couple of weeks, nor the last couple of years, nor totally under this Administration. That CRA mentioned many times is one of the root problems.
I do not pretend to understand all of this economic mess. Underneath there are probably other parts of the problem. However, I have a huge problem with a 700B bailout, put together by people that have known for years and years the potential for this to happen. I also have a problem that they do not know if it will solve the problem as well it doesn’t appear that the root problem(s) is being solved.
Yes, it is scarey.

To the economic genius Duane, $85 billion spread among 200 million Americans comes to $425 per person.

Duane Probst – the plan sounds great, except for the math. $85 billion divided by 200 million people is $425 per person, not $425,000. To give all 200 million adult citizens each $425,000 would cost $85 TRILLION.

Duane Probst,Westerville Ohio, Is using “FUZZY MATH”

Dude it would only be $425 each. While I could use it to supplement my unemployment check, I don’t think it’s the answer.

Unfortunately, 85 billion divided by 200 million is only 425 bucks.
Dropped a few zeros there – must be an underwriter.

Yo, Duane! Hang in there! Your math is no worse than anybody else’s at this point!

The Aussie Chap would like to apologose profusely for his previous use of some very harsh language. I have been to America & genuinely found many Americans warm, friendly and helpful people. I was out of line with the obscenities I used, and there is no place for them in this forum. For this I apologise. My excuse is that due to this financial crisis in the US, I am currently sitting on stock market losses of $80,000.

As a Canadian I have a lot of sympathy for the individual taxpapyer
The taxpayer has probably lost the majority of his retirement package and could lose a job,house and automobile. Canadians went through a similar restructuring 15 years ago and it is painful. Government should be reducing debt through higher taxes,not increasing debt and mortgaging your childrens future. What kind of legacy are you leaving your children???

I am in the northeast and see people being crucified for buying mortgages for expensive homes that I have no idea how they really thought they would pay for it. But it really wasn’t a personal decision. That is what the market was offering. Funny thing is I saw a presentation a friend was making at work and apparently in 2004,5 and 6 the percentage of 15 and 30 yr mortages was negligible. In 2004 I shifted down to a 15 year and got a 4.75 rate. I think maybe I was one of handful in the US to do so. It seems everyone else bought an ARM or possibly interest only lone. Was the writing on the wall.

Something else. Can someone explain to me how banks got stuck with so many mortgage back securities? As I recall the mortgage securitization process was created to get 30 year loans off of bank balance sheets. So “investors” would hold the securities and banks could continue the lending cycle.

What is the difference between holding the security and issuing mortgages directly? (Excluding the leverage that was piled on to own them in the first place.)

Why not give the 700 billion directly to the oil companies & cut out everyone in the middle because that’s where it’s going to wind up anyway.

CRA ACORN, etc. etc.
Look up those programs and their progression bing and you’ll see that government interference in the free market is what lead us here. Under free markets the banks wouldn’t lend a dime to someone they weren’t moderately sure they could get their money back out of. It was when the government stepped in and proclaimed that requiring financial stability is racist that the banks began to lend to those that couldn’t afford a home.

In the days of my parents you saved your 20-30% and put it down on a house. Possibly not until your thirties or later. I don’t know a single person that has todays equivalent stashed away. Quite the opposite I know plenty of people with that quantity in credit card DEBT. And really, I have no sympathy for them because they know just as well as I do that they chose to spend he money at rates of 16% or more. You don’t hear crying out for a bailout of these indebted people. However, we should all feel sorry for the people who didn’t read their mortgage contract? I think not. There is risk in everything, from crossing the street to taking a loan. You dramatically increase that risk by not reading and making sure you understand what you’re signing your name too. Those that signed without understanding were accepting every last bit of that additional risk and now they should lose big because of it.

As for the credit system and companies not being able to make payroll on a line of credit. What a crock of !@#$. My business makes profits. Part of those profits gets set aside into what’s called Operating Capital. A portion of which goes to, you guess it, PAYROLL. We operating off of “cash” derived from believe it or not, PROFITS. Subsequently we make more because we don’t have to pay interest on balances carried over.
Cute concept right? You can figure out where this leads.

A credit based economy is a bad economy. If we were to base our money on a physical substance instead of imaginary numbers it would save the world a lot of grief. After all it’s hard to inflate the value of something that actually exists in a limited quantity.