Comment here.
UPDATE: I do wish he'd been able to sell us on the plan with an explanation of how we'd be taking advantage of the market and probably making a profit in the end. (If that's the case!)
IN THE COMMENTS: peter hoh said:
I heard that Wall Street traders will treat us like liberators.
AND: I made a new post out of Peter's great great comment, so if you want to comment on that or just get a fresh start in comments on the Bush speech, go there. Also, in the WSJ Andy Kessler makes the argument I wanted to hear Bush make, that we can make money by taking advantage of the market.
Firms will haggle, but eventually cave -- they need the cash. I am figuring Mr. Paulson could wind up buying more than $2 trillion in notional value loans and home equity and CDOs for his $700 billion.
Now, why didn't Bush say that? Well, he kind of hinted at it. But maybe he didn't want to say it for reasons embodied in Peter's great great comment.
Posts
214 comments:
«Oldest ‹Older 201 – 214 of 214(CNN) -- Shortly after Sen. John McCain announced on Wednesday the suspension of his campaign to tackle the economic recovery plan in Congress, his opponent questioned the timing of his decision.
Sen. John McCain said Wednesday that he will not attend Friday's presidential debate.
Sen. John McCain said Wednesday that he will not attend Friday's presidential debate.
Sen. Barack Obama said he called McCain about 8:30 a.m. Wednesday, "after determining that many of the principles that I had set forth were ones that Sen. McCain adopted as well in terms of how this financial proposal should be structured."
Democratic presidential nominee Obama said Sen. Tom Coburn, R-Oklahoma, came up with the idea of issuing a joint statement agreeing on some "broad principles" that he and McCain shared on resolving differences in the rescue plan.
McCain campaign spokesman Brian Rogers said the Republican senator did not take Obama's call but rather called him back later in the day.
Obama said, "[McCain] called me back at about 2:30 this afternoon after our rally, and I asked him to join me in issuing a joint statement to let this Congress and this administration know where we stand and what we expect from this proposal, because of the past few days, it's been clear that we have come to agree on some broad principles."
Don't Miss
Obama added that McCain agreed to the suggestion of issuing a joint statement.
McCain, according Rogers, suggested that the two presidential candidates have a meeting in Washington "to lead a bipartisan effort to solve this problem" and that they both suspend their campaigns and hold off on Friday's presidential debate. Video Watch McCain's announcement »
Obama said his intent was focused on issuing a joint statement first.
But shortly after the call ended, Obama said, his rival appeared on television announcing the suspension and the subsequent debate no-show.
Michael - your CNN polls are less then worthless shit to me.
but if we are going to keep foreclosed owners in their homes, it's (strangely) much more libertarian to make the banks do it.
How do you figure that?
Second mortgages aside, no matter what price you buy a house at, the current assessed value is meaningless UNTIL YOU SELL IT.
The notion that someone who bought a $110,000 house for $100,000 and now it's worth $90,000 (though nobody actually knows until you try to sell it) needs any help is ludicrous. Being upside down in a loan is VERY common--happens all the time with cars and few credit cards could have payment made in full by liquidating the purchases made on them.
* * *
I fail to see how doing nothing will cause hyperinflation. If anything, it will cause a deflationary cycle. Adding $700 billion into the system WILL cause inflation.
However, there are many alternatives that are much cheaper and less intrusive than spending $700 billion.
For example, get rid of the capital gains tax on the sale of any securities if 2-5 year CDs are purchased with the proceeds.
Refinance first mortgages under thread of foreclosure with the condition that the government receive a significant portion of any gains upon sale (perhaps phasing this out over time.)
* * *
As for a long term fixes; the big problem here was under capitalization. For capitalism to work, there must be genuine risk, not just paper risk. All loans should require a hard minimum percent capitalization. If this means some people can't buy homes; so be it.
One idea I've had for a while is to eliminate adjustable rate loans entirely, including credit cards. Yes, credit card companies could increase the interest on NEW purchases, but the interest rate on existing balances would be set at the time of purchase. Complicated, yes, but with computers, relatively easy.
Both these would hit those with high credit risk the hardest but that's the entire point!
Clipped from Rum, Romanism and Rebellion:
Imagine getting the following email with the heading, "EXTREMELY URGENT, YOUR ASSISTANCE NEEDED"
DEAR AMERICAN:
I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.
I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.
I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.
THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.
PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY
.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.
YOURS FAITHFULLY MINISTER OF TREASURY PAULSON
Laugh til' it hurts, because it hurts and all we can do is laugh.
Rev -- Reasonable minds differ here but, in my view, it's far more free to impose a law, even a fairly draconian law, than to have the government as a directly involved party in a transaction.
For example, I have fewer problems with the FDA taking its slow-ass time approving drugs than I do with national health care.
OT:
Benazir Bhutto's widower must be lonely. President Zardari flirts shamelessly with Governor Palin.
Hello Gorgeous
Cheers,
Victoria
Reasonable minds differ here but, in my view, it's far more free to impose a law, even a fairly draconian law, than to have the government as a directly involved party in a transaction.
There are two scenarios. In one, the government buys the property and rents it out. In the other, the government says "rent this out or we'll throw you in prison".
How, exactly, is the second scenario "more free"? You're being denied the free use of your own property and you aren't even being compensated for it.
UPDATE: I do wish he'd been able to sell us on the plan with an explanation of how we'd be taking advantage of the market and probably making a profit in the end. (If that's the case!)
Dream on. How do we know this will even work let alone make a profit?
The guys who are telling us this will work are the same idiots who didn't see this coming saying the banking system was sound just a few weeks ago. Now it's "biggest crisis since the great depression." I prefer the opinions from people who aren't politicians or have a vested interest. From what I'm reading from 'experts' is this is a dicey proposition that has a huge chance of failing.
Yikes, this headline just in.
"Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday."
Hah, does this mean they're not going to provide a $700.B loan?
A John and Ken caller points out that McCain is the only one who has experience in financial crises, what with the Keating Five S&L scandal in the 80s.
probably making a profit in the end.
It has been my experience that government is incapable of making a profit. The bureaucrats who'll run the program are just incapable of thinking in those terms and the politicians will rush to spend any returns faster than they're generated.
It's like the old joke from the early 1990s about how to divvy up the "Peace Dividend."
"50% will go to reduce the deficit
50% will go for urban renewal
50% will go for health care
50% will go for infrastructure
..."
"I like the idea Megan McArdle's kicking around, of having the government take over bad mortgages (hopefully at a discounted rate so as not to reward the lender) and then renting out the houses.
If the current occupants can afford the rent, good; if not, tough cookies for them."
Bad idea!!! Have you seen any government supervised/operated rental housing lately...as in public housing, Section 8, etc.??
This scheme is another way to hemorrhage money.
I like the idea Megan McArdle's kicking around, of having the government take over bad mortgages (hopefully at a discounted rate so as not to reward the lender) and then renting out the houses.
Dear Lord. Has Megan ever owned a rental house? This sounds like a hugely bad idea to me.
Who is responsable for this financial mess? Harry Truman? He said "The buck stops here." So let's blame him - for dying.
I'm so happy that the economic collapse happened on Bush's watch. He deserves another monumental mess and scadal - that HE and his corrupt Wall St. cronies and piss poor economic advisors caused. Tax breaks for the rich, a war that enriched Cheney and Co. to the turn of mega billiions, greedy pigs in the financial markets that went unregulated and unoverseen, etc., etc. Put them all on trial and let's get the money back to pay for the economic crisis and fallout. One year in jail for every billion that they stole would put them in jail for a thousand years.
Of course Bush should be impeached on the Letterman show for his failed self-induced abortion mess of an economy and for other past murders and crimes. They might have succeeded in obviating this abortion of an economy if only they had all douched with Coca-Cola after sex. Let's call this crisis Pretzelgate. We need to get to the bottom of why Bush failed to choke to death on a pretzel during a football game. Who saved him and destroyed the rest of us on Main St., USA in the process? What brand of pretzel was it anyway? Do YOU know? It had to be a Hoover Pretzel. A Herbert Hoover GR8 Depression era 5 cent apple-flavored (tm) pretzel? Was it the unintended consequences of the Heimlich Maneuver that caused the current crisis? Mama Cass Elliot for Prez. had she not choked to death on a ham sandwich. God Bless her sweet soul.
Post a Comment