This is why people in our government should be arrested. This is from a Forbes article back on September 23rd, so keep that context in mind. I’ve snipped the special part for you, from an LA Times lede.
The more Congress examines the Bush administration’s bailout plan, the hazier its outcome gets. At a Senate Banking Committee hearing Tuesday, lawmakers on both sides of the aisle complained of being rushed to pass legislation or else risk financial meltdown…
The committee’s top Republican, Alabama Sen. Richard Shelby, says he’s concerned about its cost and whether it will even work.
In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
Uh, wow.
Watching CSPAN now. I like the phrase ” This bill is extortion”.
How can they spend boat loads of taxpayer cash without fixing the problems first? From watching CSPAN, I am not alone with that question.
We my internet friends have been sold out.
Keep us posted Tammy.
Well, not to state the obvious but I will anyway. 700 billion IS a large number, but I can do better than that! 700,000,000,000,000!
“Hair of the Dog that bit ya” Tammy
Well, that explains why none of their numbers add up to any of the analysts figures on how much property is secured by mortages in jeopardy, or the underlying value of the properties. The low estimate of potential exposure to non-performing loans is $1.6 trillion. The high estimate is $5 trillion. This is largely due to the practice of applying massive leverage. The mortgage is made, then sold as a mortgage, combined with others into a derivative, then bundled together as a AAA-Rated top shelf security. Each time through the mill the money that is exchaned for the security goes back into the housing market, causing higher prices, and more money. Bear Sterns was leveraged 36:1. That’s $36 million eventually loaned on $1 million in property, which in Southern California became one medium sized home in a nice community.
Taxpayers may have the money to bail out the underlying property value, but the government is going to chop down every tree in the forest to print their way out of this and do the very thing they should not do, which is to re-liquidate all of the leverage, so that things can get back to “normal”. That means: Inflate the next big bubble.
Get set to see massive inflation in the comming years. I’m usually a big proponent of savings, but right now, I would make sure you have good vehicles, and everything in the house in good working order. Then use your money to destroy debt. Debt retirement should be weighed as how it fairs in terms of its after tax investment yield. Credit cards go first, variable second mortgages next, and then the mortgage. The California legislature has several working groups going on how to bust prop 13. If they ever get that accomplished, our property tax debts will replace our mortage debts.
Clearly that amount would save ACORN, Baraq’s Base, and one of the most significant infections of this financial plague.
Did anyone question who made commissions and charged fees for this largesse? I tend to think it might be bankers, brokers and attorneys.
So, as a rising tide lifts all boats, someone made a buck.
Bill looks to be defeated! Almost 100 Dems voted AGAINST it. Let’s see what they come up with next.
I still can;t figure out the voting rules for the House. Anyone privy?
Thad McCotter was awesome today. “We refused to buy toxic assets with public money” – hallelujah. He said that there are other models available to relieve and attempt to rescue the “crisis”, but this is a plan reminiscent of the Bolschevik revolution. I am really digging this guy. I love really smart people.
This will be painful, no doubt about it, but it’s never comfortable or easy to fumigate a premises (Wall Street, Washington, take your pick) and rid it of a roach infestation. But, someone (133 house republicans and 94 democrats) came into the kitchen and turned on a really bright light, and the roaches are still scurrying looking for cover.
Petulant Pelosi just couldn’t contain the diahrrea in her brain – and refused to shut her sanctimonious, bratty little mouth. Good for her. Keep it up missy. You need to go away on a nice long vacation with Mr. Paulson and Mr. Reid. And if you can’t shut your trap, we will get to finally sweep you right on out the door in 2 years.
I couldn’t even get thru a minute of Pelosi’s 5-minute speech. I don’t know what she’s talking about this “Clinton” surplus. When Bill Clinton left office the Nasdaq was in shambles. The whole dotcom meltdown happened on his watch.
Clinton wasted billions of taxpayer money on that phony Y2K stuff.
Why isn’t McCain/Palin pointing that out ?
Yes, Tammy, that’s what I’ve been hearing for the last week, there needs to be some hard jail time for the guilty in Congress and Wall Street. These jerks need to be in jail. Starting with Senator “Countrywide” Dodd and Barney Frank.