Quote of the day; Update: Bonus quote added
posted at 10:10 pm on September 19, 2008 by Allahpundit
“You know we’d be lucky… Well, I’ll leave it at that.”
*
“If it doesn’t pass, then heaven help us all.”
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unseen on September 20, 2008 at 1:41 AM
I understand the fear/greed short term credit hiccup…
but, I just don’t understand how devaluing a currency at a time when people have no to little savings, taking a blindfolded approach to social security/medicare, 25-35% asset devalutaion in the real estate sector, refusal to exploit our own oil resources, manufacturing sector moving overseas, corporate taxes second highest in world, stifling business regulations, litigation crazed lawsuit infested ambulance chasers, and dope smoking aging baby boomer socialist (yet materialistic) cheerleaders…on and on and on….I don’t understand how you don’t see there is a greater fundamental problem that causes the conditions for fear to have justification. It’s not just about fractional reserve banking.
( I apologize for my sentence structure, poor syntax, and verb tense…it’s getting late)
Saltysam on September 20, 2008 at 2:01 AM
If there is any good to come out of this,
me thinks its how Nancy will try to spin it,
and blame the Republicans,
but on the otherhand,
I don’t think the Liberals,
want to touch this one!!!!!!!!!!!!!!
canopfor on September 20, 2008 at 2:01 AM
But, but all that foreign aid we send out has made the rest of the world love us! How could we stop funding such a wonderful program?
/s obviously
funky chicken on September 20, 2008 at 2:04 AM
I wish that were the case. Unfortunately, we have the uneducated and unwashed that still insist on thinking that there is a big vault somewhere with an unlimited supply of money waiting to be distributed to themselves and those who are worthy… and most of the ones that them are in Congress.
Damiano on September 20, 2008 at 2:04 AM
And the line earlier about “for whom the bell tolls” forced me to pour a brandy.
Saltysam on September 20, 2008 at 2:06 AM
Come on, folks! The first link is to the NEW YORK TIMES and features Chicken-Little quotes from Democrat Congress critters who have come down with a massive case of the vapours when presented with the reality of actually being held accountable for something important.
The sum of what they all said: “HOLY SH*T WHAT DO WE DO?!? WE DON’T KNOW HOW TO FIX THIS BUT WE DO KNOW THAT THE FEDERAL GOV’T IS THE ONLY ONE WHO CAN!”
This should be no surprise. The Left (esp. under the Alinsky model) sees ANY crisis – real or imaginary, natural or fabricated – as a means by which the populous can be tricked into accepting a larger, more intrusive, more authoritarian, more wasteful Federal bureaucracy. The absolute, unalterable goal of the Left is the establishment of a Marxist/socialist government with the members of the revolution in the seats of power.
Harpazo on September 20, 2008 at 2:09 AM
If there is any good to come out of this,
If there is any justice in the universe, the MSM will be overcome with gratitude for the speedy actions of Bush/ Paulson and will report that it was the Bush administration who took decisive action, stayed up nights and turned this thing around this week while Reid cried “No one knows what to do” and Pelosi took the opportunity to blame the only people who were actually doing anything while she firmed up her plans to call a recess by the end of next week.
Meanwhile, Obama voted “Present” again on the same day that McCain unveiled a comprehensive action plan for moving forward.
If people cannot see these simple facts when they are screaming in their ignorant faces, I give up hope in our society.
Damiano on September 20, 2008 at 2:11 AM
I did notice that. What struck me thought, was the Bush administration, the Fed and Paulson square dancing with Chuckie and Co.
Saltysam on September 20, 2008 at 2:13 AM
GM to Tap Rest of $4.5 Billion Credit Line
Connie on September 20, 2008 at 2:14 AM
Someone said that Cramer said it’d be less money to give $50,000 to everyone who’s home is in trouble… Well there is talk–and not a bad idea, in my opinion, to let judges redo mortgage terms for people in foreclosure and bankrupty.
The banks are going to lose money anyway. The thought that the homeowner who lives in and maintains the home is less deserving than the bank is wrong in my opinion. Everyone went into these deals and the homeowner had every right to think that the banks weren’t going to lend money that couldn’t be repaid. Because that is the history of lending.
ARMs are the root of this whole thing. It seemed like a no brainer to buy twice the house for half the money per month. So what if the house seemed over priced…all the professionals thought it was a good idea (because they were paid a hefty commission) of course you can refi in a couple of years and have equity…. Everyone was doing it. Money was easy to get…
I think it was banks (loan officers) pushing people into borrowing too high of a mortgage because qualifing was based the payment for the first year (ARMs). And commissions were based on final home price so everyone had an interest in home values going up and up. And everyone made money. The homeowner was caught in the middle. The “professionals” telling them the bank wouldn’t loan it if they weren’t qualified to repay it…
petunia on September 20, 2008 at 2:14 AM
This universe?
Saltysam on September 20, 2008 at 2:16 AM
petunia on September 20, 2008 at 2:14 AM
Well, I guess I’ll just start not paying my mortgage. I know a good deal when I see it!
Saltysam on September 20, 2008 at 2:18 AM
That sounds like GM is making a run on the bank. Afraid if they don’t act now the money might be gone…
Um imaginary money I mean. Since there really isn’t actual money.
petunia on September 20, 2008 at 2:18 AM
Yes, they were good memories when someone else took care of us, made our beds and cooked our meals.
But now, we’re adults and we can have our dessert before dinner.
I can have a beer meister at home all the time! And the hangover that comes the next morning… I’ve learn to control my drinking.
This melt down is a hangover…. this is just one sector of the economy that is hurting. Grant it can hurt other sectors, but I believe the overall economy is good and will recover. The length of that recovery will depend of the government and the bail out factor. How much of their debt do we have to absorb. Where the fairness in this?
If my neighbor default on their loans, I’m I responsible to bail them out?
Where does charity begin?
Kini on September 20, 2008 at 2:20 AM
What ever happens I think your house is going to lose value. Is it going to lose more value if there are five houses on your block with auction signs on them or if your neighbors quietly have that $2000 payment lowered to $1000 and get the last 6 months of back payments tacked on the end of the loan?
petunia on September 20, 2008 at 2:21 AM
This is a joke, right?
Saltysam on September 20, 2008 at 2:21 AM
This is a joke, right?
Saltysam on September 20, 2008 at 2:21 AM
My husband was general counsel for a mortgage bank. I don’t know what you think is wrong in the way that things were working. Everyone involved in the loan was making tons of money. And all that money came from somewhere. It was the inflated price of the home that paid the commissions.
petunia on September 20, 2008 at 2:25 AM
A glass of whine, shall be mine. ^_^
Thank the Lord for Spell Check.
Kini on September 20, 2008 at 2:26 AM
Agreed.
The world was a better place when charity was not legislated.
There was an article a few months ago that contrasted this summers floods in Iowa and the Midwest with the aftermath of Katrina.
Following Katrina, you had thousands of people looting and millions of people complaining that the assistance they received wasn’t great enough or fast enough. This summer in the Midwest, you had more widespread damage and none of the complaints. Neighbors simply helped neighbors and everyone made due.
The area was still underwater in the Midwest, yet the news stopped reporting on it. Much of the area is still recovering. Yet a week hasn’t gone by since Katrina where we do not hear something about how much George Bush hates black people from LA.
It’s similar now. They are debating whether Galveston should even be rebuilt, since the damage is so extensive. Yet not a peep in the media this week, no looters were arrested and millions are still without power. A good friend of mine and his family are living in a tent outside their home (I offered for them to stay with me, but they declined) and just waiting for their power to come back on so they can start getting things together again.
Odd that Democrats have nothing to say on these matters.
Damiano on September 20, 2008 at 2:34 AM
Obama hasn’t yet made up his mind what to do! He’s voting “present” on any changes! Now that’s leadership. If it fails you are again it, if it succeeds you were for it before anyone else (but in secret), because you are too modest.
Fred 2 on September 20, 2008 at 2:34 AM
The reason that I think it might have to be some neutral party restructuring loans is because the banks are freaking out and can’t figure out what to do. No one can get financing to run the business of banking. It is awful. I don’t know what good it could possibly do to the economy to have all those unsellable houses on the market at the same time.
They are unsellable because nobody is loaning money. There are very few people who can buy a house without a loan. And even if you could who can buy your old house without a loan?
petunia on September 20, 2008 at 2:34 AM
To some, that may be devastating. To others, like me, it’s not a problem. It’s a long term commitment to stay where we are.
Speculators, house flippers and risky ventures are just that: A risk.
Risk and Rewards also requires some financial savvy, else the investor to be, shall not soon to be. The inflated price of houses worked both ways for the buyer and seller. It was just whom was holding the note when the music stopped and there was no chair left to sit is when the trouble began.
But like bidding on a piece of art… when the bidding is done… payment is due.
Kini on September 20, 2008 at 2:38 AM
Gee… it’s Georgia all over again.
Well, I will say this much for him. He’s learned to keep his mouth shut and have people think that he’s an idiot rather than open it an remove all doubt this time.
So, if it works, we’ll get the inevitable “…uuuhhh… Like I’ve always said…” and if it fails we’ll hear “more evidence of the failed policies of the Bush/ McCain administration”.
Somebody really needs to tell Barry that Dick Cheney is the Vice President, not John McCain.
Damiano on September 20, 2008 at 2:39 AM
petunia on September 20, 2008 at 2:25 AM
The homeowner caught in the middle?
I believe it was the shopper, not the homeowner; and the shopper was shopping, not caught in the middle.
All during the process, the shopper was not a homeowner. Maybe the seller was, but not the shopper.
Saltysam on September 20, 2008 at 2:42 AM
What is really bothering me on this thread is how many commentators on a nominally conservative site like Hot Air (others as well) are actually talking about how this economic crisis is somehow proof of the failure of free-market economics when most of these failed and failing sectors (not to mention other sectors too) haven’t been free-market in decades!
Both Fannie & Freddie were regulated by the federal gov’t. since the early 1990s. The direct pressuring of the mortgage industry by the Fed’s for a purely socio-political reason — to increase homeownership among minorities and the poor (traditionally Democrat voters, no? during a time when there was a Dem majority in both houses…) — is the antithesis of a free-market economy. It is the implementation of Marxism — and we now see the outcome.
And this intrusion of the federal gov’t into the marketplace (beyond the regulation of commerce between the states, with foreign nations, and with Native American tribes) is certainly not within the limits of a plain and clear reading of the Constitution, particularly Article 1.
Free-Market Capitalism is a tremendously powerful economic system. Maybe sometime this century America will actually try it.
I don’t know what the solution will be to these economic troubles (and there are more ahead — prepare now for the coming deflation of the dollar) but I DO know that it’s NOT more government intervention.
Harpazo on September 20, 2008 at 2:45 AM
Indeed.
The difference between the entitled and the ennobled.
Kini on September 20, 2008 at 2:46 AM
Charity is no longer charity when it is legislated.
Connie on September 20, 2008 at 2:46 AM
PA, MA, VA and KY
electric-rascal on September 20, 2008 at 2:47 AM
Agreed. So, question of the day:
I accept that the entitled will always feel entitled. So how we we at least get them to at least recognize that they are being used as a political token and have yet to receive the promised gifts from their supposed benefactors?
Damiano on September 20, 2008 at 2:52 AM
Better that than having us beat it out of you.
;>
soundingboard on September 20, 2008 at 2:52 AM
Nothing new there. Remember how chummy Bush tried to be with the Dem’s during his first term?
Of course, I could be totally wrong, and what Bush is trying to is tie the Democrat Congressional leadership to his administration on this issue — effectively either neutralizing any attempt by the Dem’s to lay all this blame on him (they’d be tarred with the same brush then) or managing to show everyone how much responsibility the leaders of Congress for the last 2 yrs have for this mess (increasing the Congressional Repubs’ chances of picking up more seats in November).
I really hope that Bush is that shrewd and ruthless with his enemies.
I will be greatly surprised if that’s the case, tho.
Harpazo on September 20, 2008 at 2:52 AM
The buyer wanted a new house. The loan officier tells the buyer how big of a loan he qualifies for and what the payment will be per month that payment might be even less than his rent or than his last house. The buyer looks for a house in that price range. What did the buyer do wrong?
When the buyer says oh but in 3 years my payment will be more than I can afford the loan officer says–see you in three years–we can refinance back into a lower payment plus you will have equity because house prices never fall…
The buyer–who buys what? Two or three houses in his lifetime? thinks the guy who closed four loans this month, and every month this year, knows what he’s talking about.
And the loan officier thinks he knows what he is talking about too. They did it this way for years before the priamid scheme caught up to them.
But the scheme wasn’t the fault of the homebuyer. His three years ran out and now the payment is too high. His credit is wrecked, he has to take out banckruptcy and the guy who came up with the scheme in the first place just put a 12 million dollar bonus in a bank in the Cayman Islands.
petunia on September 20, 2008 at 2:54 AM
I hope that you will help to convince Joe “I donated $360″ Biden that fact and get him to understand that taxes are neither patriotic nor religious.
This is your brain, this is your brain after the hair plug grow faster inward than outward…
Damiano on September 20, 2008 at 2:55 AM
I don’t know. The Bush that was on TV today looked a lot more like the Bush I remember from 2001. Strong, decisive and able to grab Congress by the short and curlies and explain to them what they were going to do and how fast it was going to happen.
Damiano on September 20, 2008 at 2:58 AM
It’s probably exactly what it looks like at face value. This is a potentially dangerous situation, and he is doing what he believes to be in the best interests of the country, and it is imperative to have Congress cooperate, or else their gonna hang.
Saltysam on September 20, 2008 at 2:58 AM
Um, how so?
My reading is most commentators agree there was a lack of judgment and regulatory oversight. Not to mention, plain old fashion common sense. Besides, greed….
I think what has happened is the perversion of the free market system by the liberal democrats that have oversight on the Ways and Means, Fanny and Freddie, and other regulatory agency’s.
Kini on September 20, 2008 at 2:58 AM
Harpazo
CORRECTION: ..or else they’re ALL gonna hang!
Saltysam on September 20, 2008 at 2:59 AM
Someone needs to tell Obama that leadership entails some degree of leading. Only the peanut gallery has the luxury of waiting to see how it all turns out before applauding.
Fred 2 on September 20, 2008 at 3:01 AM
I believe an argument can be made that with the elimination of the gold standard on the currency, we ceased being a free market.
Saltysam on September 20, 2008 at 3:02 AM
HA!!! You just discribed a chia pet gone bad!
Kini on September 20, 2008 at 3:03 AM
There are those in the market but I don’t think any one is worried about helping them… if they are in trouble.
I actually think those late night infomecial guys who were selling books and seminars teaching people how to speculate and that rich dad poor dad guy and so forth should be shot.
The market could handle a few flippers and investors but it couldn’t handle the influx created by those guys. But again someone was approving those loans. Investors loans should have a minimum of 20% down. If they had the down maybe those loans aren’t in trouble.
I don’t know maybe there were no down ARMs being given to investors I just don’t know.
petunia on September 20, 2008 at 3:04 AM
Pure and utter foolishness. Even Congress is trying to keep politics in check in order to deal with this crisis. We were a few days at most away from the economy tanking like we have never seen in generations, and all you can think about is who wins and loses politically.
Sorry, my friend, whether Bush wins or loses ought to be the furthest thing from his mind right now. I believe it is.
trailboss on September 20, 2008 at 3:14 AM
Adjustable Rate Mortgages – Lock and Load!
But don’t you think this is the same reasoning as the 1-900 calls?
Yes, it was a breakdown of the entire system. I bought my house at the height of the mortgage craze. I bought more, but I sold more. It was a win-win. I was offered AMR’s and all sorts of clever financing. It was the assumption that interest rates were going to continue to fall. But I didn’t buy into that.
I don’t gamble, unless I order out. I think the gamble most lender and borrowers was both the rate and the cost. Can I out run the rate and flip the cost to someone else.
it’s like stuffing your mouth with food and trying to eat at the same time.
Kini on September 20, 2008 at 3:22 AM
Here is the fix:
1 – Chis Dodd, Jamie Garllick, and anyone else who profited over a million dollars from Fanny Mae and Freddy Mack, along with those who accepted campaign contributions from them should find themselves in a cold dark jail cell.
2 – Open up the United States to Energy Production. I don’t care if you want to sell your farts, but if some environmental extremists tries to sue you, they are put in the adjoining cold dark jail cell next to the Democrats who caused this problem. Start selling a product that every country on the Earth needs, Energy.
3 – Eliminate all Capital Gains taxes to get our own money and investors back in the game. More money will flow to Washington DC that will pay off the National debt in six months.
4 – Never forget what caused this in the first place. Good “intentions” by Democratic Liberals who don’t even know how to pay a utility bill.
5 – Accountability. Name names, and just because someone works for the “government”, doesn’t mean that their fortunes can not help solve this problem. Let our children know that there are consequences to the actions that you take in life.
…………….. at least it will be a good start. Next, we go after George Soros.
Seven Percent Solution on September 20, 2008 at 3:43 AM
Palin – Seven Percent Solution ’08
Kini on September 20, 2008 at 3:49 AM
:O)
Seven Percent Solution on September 20, 2008 at 3:54 AM
On of the positive results of this is that all the unscrupulous people at the loan level will now have to reap what they have sown. No money to loan means no job.
I heard a story of a loan officer that was complacent in helping a borrower forge documents that would fool the broker.
csdeven on September 20, 2008 at 4:20 AM
It may be the furthest thing from his mind …
OldEnglish on September 20, 2008 at 4:47 AM
I don’t trust efforts to augment the impact of the urtext. Legislation REQUIRING banks & loan institutions to hand out money knowing it would not be returned will not be fixed with legislation REQUIRING tax payers foot the bill. Panic should not further enable the wrongs.
It is obvious troubles abound.
But to cure fascism with more fascism won’t set things right, only put us further beneath the iron boot of slavery to owners who are insulated that much further with each legislated “fix”.
It’s an opinion.
maverick muse on September 20, 2008 at 6:32 AM
Unbelievable… the WHOLE problem is a complete lack of personal responsibility, from John and Jane Doe to those that are supposed to represent us in Washington.
The mortgage system had lose rules shoved down their throats by Washington to assist minority lending to the point that they were more afraid of getting sued or fined for NOT making a loan than of the loan actually defaulting.
CC
CapedConservative on September 20, 2008 at 6:56 AM
Whatever bill comes out of congress to address this problem, how much do you wanna bet that the democrats will tack on a continuation of the drilling ban that is suppose to expire at the end of this month? If they do, that sets up an interesting situation. I think President Bush has mentioned that he would veto a bill that contained such an extension, and the pro-domestic energy republicans wouldn’t put up with this tactic, but this bill for the financial markets does seem to have the appearance of necessity and urgency. Who wins? I know who loses.
rslancer14 on September 20, 2008 at 7:44 AM
This is an obvious Dem hit piece. Global warming panned, so they need a new enemy for gubmint to step in to save the day.
Coronagold on September 20, 2008 at 8:03 AM
Perhaps the most stunning piece of communist claptrap to have been written on HA.
You and a few others should re-read Atlas Shrugged–you seem to have forgotten what she said. You will find the Schumers and the Dodds and the Raines and the Obamas et.al. of our world clearly represented in her book. The consequences of all of this is spelled out nicely.
I’d like to borrow some money from you Petunia. But I don’t think you have the right to be too picky about the loan terms, or my creditworthiness–after all, I need the money every bit as much as you do. It’s your social, even patriotic duty, to help me get into a house–you live in one, why shouldn’t I?
It’s not my fault if times are tight, and you have to understand if I have any problems, that I expect a judge to re-write the terms of our contract to give me more breathing room. You’re not a profiteer are you??? That would be anti-social.
JiangxiDad on September 20, 2008 at 8:25 AM
I love you.
JiangxiDad on September 20, 2008 at 8:40 AM
If the Pelosi-Reid-MoveOn Dems can figger a way to crash the economy and blame the GOP, they will try to do it. I think we can bank on it.
I expect them to mire down the legislation with leftist poison pills, for openers.
Funding the bail out will siphon off the money they planned to use for green energy, nationalized health care and other social programs. But if they allow the financial system to crash, they will see it as a historic blow to Bush, the GOP and to capitalism.
petefrt on September 20, 2008 at 8:57 AM
The racist decoder ring says…..
RAAAAAAACIST!!!!!!!
/sarc
csdeven on September 20, 2008 at 9:11 AM
Hell, We have plenty of money for all of these solar panels and windmills! WHATEVER you do, don’t drill, right Nancy?
Oh, and Obama’s 1 TRILLION in handouts sounds reeeeeal feasible right about now. McCain needs to HAMMER these libs day after day after day.
marklmail on September 20, 2008 at 9:15 AM
Uh oh, I should have known better. So it’s off to the People’s Re-education Camp for me, right?
petefrt on September 20, 2008 at 9:18 AM
The Twin Towers symbolized all of this to the islamo-fascists.
And we have almost accomplished, through our own myopic malfeasance, what OBL could only fantasize about in his wildest ‘great satan’ dreams.
It would be interesting to juxtapose the current financial market foundations in the Islamic world against those in the West, and see who is superior right now; who has the power to leverage; who has the power to manipulate and possible topple, the other.
And don’t think it hasn’t crossed the minds of the islamo-fascists. They’re gloating. And waiting.
locomotivebreath1901 on September 20, 2008 at 9:24 AM
America’s god seems to be angry. To please the god, let’s print more dollars. Get your wheelbarrows ready!
saved on September 20, 2008 at 9:34 AM
You got it, marklmail. I’m convinced that’s their bottom line. Compared to bringing us to our knees by choking off our energy supply, a financial meltdown might work better. Or use the meltdown to leverage a drilling ban. How about that one?
If Pelosi actually believes her mission is to “save the planet”, then her mission is larger than saving the USA, isn’t it. How noble to sacrifice one’s own country for the larger good.
Besides, she didn’t much like our America in the first place. And lavish support from the green energy lobby doesn’t hurt.
petefrt on September 20, 2008 at 9:34 AM
I almost fell off the couch last night when CNN actually started fact-checking this stuff and adding up all the trillions in new spending Barack Obama is promising, on top of the $1.5 trillion (at least) that the government is going to spend to fix the financial system. The guy actually said that there was no way simply increasing the tax rate on rich people could pay for all of this, and that there was no way any new administration will be able to cut taxes for anyone, much less pass out $1000 checks like Obama is promising.
I also notice that what Obama is doing is saying nothing about the chaos on Wall Street (I guess he is still waiting for Bob Rubin to tell him what to say) but still going out on the stump and promising all sorts of government handouts to the masses. That is not leadership in my book, even if it plays well on Main Street. Axelrod may think the avreage dumbass voter really doesn’t know and isn’t much affected by the Wall Street chaos.
rockmom on September 20, 2008 at 9:36 AM
It’s as I said on another thread, I think the economy will collapse–regardless of who is elected president. A combination of short-sightedness, greed, and irresponsibility has built such a shoddy edifice that it’s going to come down and I can’t think of a way to stop it. The best that can be done is to board up the windows and prepare to hunker down for the storm when it hits–and make no mistake, it will hit, and it will hit hard.
All that Bernanke and the Treasury Secretary are doing is buying time–which is more than Reid, Obama, and company are doing. Maybe I’m just being a silly Cassandra shouting mad prophecies or a Laocoon warning people not to bring that wooden horse into the city, but I hope to God that John McCain gets elected. He’s not going to be able to stop this runaway train, but he’s the best hope we have of leading the effort to clean up afterwards while still maintaining a free society. If Obama gets elected, I guarantee he will try to pull a Mussolini or Lenin–he’s got his black/brown shirts lined up ready to do his bidding and he’s already indicated a willingness to resort to demagoguery, scapegoating, and to resort to violence–whether it be cyber or physical.
Matt Helm on September 20, 2008 at 9:37 AM
This quote from the second article above….
Yeah. So what.
I’m not trying to be cavalier about a major recession or a lost decade but that in fact may be what we need after 40 years of continuing intervention by the government in preventing the free market from cleansing itself after extended periods of excess.
Each intervention in turn leads and encourages further excess. Much has already been written of the infamous “Greenspan put”. You can google it for more detail.
http://en.wikipedia.org/wiki/Greenspan_put
If you want, we all pretend to, the benefits of capitalism you have to accept the creative destruction that comes with it. The markets were crashing because the previously cheered on housing bubble had burst. Banks, brokerage firms, Fannie and Freddie, Aig et al were disappearing because they were meant to. Morgan Stanley and Goldman should have been next. They had all readily participated in the false economics of the bubble. Who forgets the 100′s of tech companies that disappeared when that bubble burst bringing down the NASDAQ 85%.
Yes people were/are losing their homes and rightly so in most cases. They were not qualified to own them in the first place and they knew it. This whole madness was an attempt to take home ownership from 65% to the current 69% starting during Clinton’s first year in office. Hello Fannie Mae.
Now once again the government has stepped into the breach to prevent the market from straightening out the mess. I find it interesting that the man waving the wand just happened to be the ex-CEO of a major instigator in this whole mess–Goldman Sachs. A firm I might add he only left in 2006 to become Treasury secretary. Of course he knows about the problem, he personally made 100′s of millions in salary and bonuses in causing it in the first place.
As we stand by and witness/cheer–talk about Stockholm syndrome–we also take as gospel Paulson/Bernanke and others description about the outcome of no action as the quote I used to start this comment. How do they know that? If they could not foresee the problem how do they know where the market solution was leading? They didn’t and they don’t. All they are certain is they did not want a free market solution. By controlling the solution at potentially trillions of dollars they get to design the future.
I’d gladly settle for a market solution. I trust the “secret hand”. With a little luck this market will rally and then roll over to new lows washing out all the firms and practices that caused all these problems to begin with. Otherwise welcome to the next, ever bigger, bubble. These new trillions are going somewhere!
patrick neid on September 20, 2008 at 9:44 AM
I think it may be the corporate taxes that you really want to get rid of. Low capital gains taxes (relative to the total tax on dividends) encourages bad corporate governance and the more casino-stile of speculation. What is a company going to do if its shareholders benefit more by a temporary increase in stock price than from dividends from the profit the company earns?
Count to 10 on September 20, 2008 at 10:07 AM
It sounds like the financial entities around the world ate too much cotton candy at the fair (booming RE market), and need some Pepto (free-market adjustments). But, the government has stepped in and prescribed a major dose of Exlax (bailout).
As a taxpayer and homeowner who doesn’t have an exotic mortgage (who’s the stupid one now, neighbor?), I expect some serious gratitude and accolades from all those assholes whose mortgage I am now going to begin paying for.
To you, I say “Thank you, and F**k you very much”.
It won’t be long before the most important conversation in this country will be about who cut in line at the soup kitchen.
BobMbx on September 20, 2008 at 10:11 AM
Great; Bush reverts 100 days before he’s done and McCain is now determined to demonstrate that he has “oatmeal” for brains…?
Maybe he forgot his Metamucil yesterday…?
J_Gocht on September 20, 2008 at 10:16 AM
I’m of the same mind with regard to the cleansing benefit of a serious recession, but govt will not let it sort itself out. It’s not in their nature – dogs bark, govts interfere.
OldEnglish on September 20, 2008 at 10:24 AM
Oh, and above all else, don’t forget that most of the people who put the country into this position are running for re-election this November (the whole House, and 1/3 of the Senate). And everyone of them is telling us right now what a good job they have done.
This must be the new math, because my old-fashioned ‘rithmetic says you can’t say you did a good job by running something into the ground. However, you can say you did good job of running something into the ground.
BobMbx on September 20, 2008 at 10:29 AM
Straight Talk, Huh…?
J_Gocht on September 20, 2008 at 10:44 AM
Survival of the economically fittest. Life’s not fair. There are risks. There are no guarantees. There is no safety net or reset button.
That’s what it means to operate in the real world. Only childrens’ games have reset buttons and mommies with band-aids and daddies to protect you from the full consequences of your actions.
America was built on the presupposition that government is not a parent or friend, but that it is a dangerous foe and must contained and controlled.
Liberty is not safe or secure. If you want security, go live in China.
Harpazo on September 20, 2008 at 10:46 AM
+1 exactly. Schumer and Dodd and Pelosi think if they can trigger a financial panic it will win their political party an election. The NY Times is extremely anxious to do anything it can to help them.
And if we had a real conservative administration, Dodd would be looking at lots of subpoenas. Sadly, Bush will let him skate. McCain may not be a doctrinaire conservative in some ways, but if he’s elected, Dodd and the rest of this bunch will be in jeopardy of being held accountable for their culpability in this mess.
funky chicken on September 20, 2008 at 10:47 AM
What market crash? Dow down by 300 one day and 500 the next? From a total of over 12,000?
It’s still over 11,000. That’s not a crash. It’s barely a hiccup. But democrats and the media are willing to scream that it is, to try to terrify people into making a run on banks so we can have financial destruction/turmoil because they think it will help get them elected. And the Bush administration continues its pattern of rolling over and letting it happen.
funky chicken on September 20, 2008 at 10:55 AM
Hello folks…!
Was that the Bush Boye, after being briefed by the experts, all over TV about an hour ago; or did these olde eyes deceive me this morning…?
Come Monday; perhaps Limbaugh, O’Reilly and Hannity can convince some of us that it was actually Obama we just saw…?
You’re jerkin’ me…!
Right…?
J_Gocht on September 20, 2008 at 11:02 AM
Finance is really not my deal, but this whole thing stinks to me.
The Fed gets itself in a lather–on an extended conference call no less–then informs congress (who apparently doesn’t really major in finance either) that the sky is falling.
They all hold a press conference and announce, striaght-faced: We’re from the government, and we’re here to help.
The world couldn’t just wait a week while they thought about it and got some considered input? We just had to plunk down eleventy gazillion dollars to buy every bad mortgage in the nation?
Great.
As noted above, what led to the crisis does not appear to have been addressed, or fixed–no lessons learned. I’m sure that day is coming. We just pushed it off a month.
TexasDan on September 20, 2008 at 11:06 AM
That’s true, and no amount of government intervention can change it. An economy owned and managed by the government is bound to fail, tomorrow or ten years from now. Once we add health care to the government portfolio, we assure an eventual economic collapse.
PattyJ on September 20, 2008 at 11:13 AM
It was 200 billion for Freddie and Fannie.
It was 85 billion for AIG.
Now it’s possible it could be a trillion or more to bail out the mortgage and investment bankers.
TexasDan, “this ain’t over till it’s over”.
Hopefully congress will stipulate that none of this bailout moolah will go for golden parachutes for the sorry SOB’s that caused it.
Keep the faith and write or call your congress people…!
J_Gocht on September 20, 2008 at 11:15 AM
That’s all that’s being done–buying time…treading water…whatever you want to call it. The only reason the markets rebounded is because the government assumed the debts–but what happens when the government can no longer afford to do that? The British survived the South Seas Bubble back in the 1720s or so because Parliament assumed the debt–and paid it off. But a similar crisis affected the French when their Mississippi Valley Company crashed due to speculation and fraud. That, combined with extravagant government spending (doesn’t this sound familiar), resulted in the French government declaring bankruptcy. As a result, French national banking system was ruined until the 19th century. This collapse was also one of the long-term contributory factors to the French Revolution.
The question we have to ask ourselves is this: who do we want at the helm when the building falls down? Do we want McCain–who, while no means perfect, will be a decisive leader and do the best he can to help clean up the mess while at the same time preserving what this country is and stands for; or will we choose Obama–a Chicago thug who will either fall apart when the crisis hits or will reveal his “inner dictator” which we’ve already seen doesn’t lie too far beneath the surface. That is what we need to keep in mind when we go to the polls.
Matt Helm on September 20, 2008 at 11:28 AM
Too late, Chris Dodd and Barney Frank already got theirs.
Calm Before the Storm on September 20, 2008 at 11:34 AM
Yeah, let Johnny Mc get his hands back into that cookie jar.
That would be my first choice, too…!
J_Gocht on September 20, 2008 at 11:42 AM
Repeal the The Community Reinvestment Act of 1977. That would be a start.
Pelayo on September 20, 2008 at 11:47 AM
Democrats and Republicans huddled together in a room to make a historic decision…then the Deomcrats run to the nearest network tv room to talk about themselves and gloat about how important they are.
Thanks Schumer and Dodd, trying to run down some more banks, Chuck?
Can’t you guys keep your mouths shut and not talk about yourselves for a day?
JeffersonFan on September 20, 2008 at 11:50 AM
I’ll take McCain, warts and all, any day over “Bugs” Obama–the Chicago thug who is either an incompetent machine politician or a would-be Mussolini.
Matt Helm on September 20, 2008 at 12:00 PM
Socialism in Action.
The government (that would be me and you) assumed the debts because the government (me and you) caused the problem. The government (me and you) through its regulatory powers forced lending institutions to make home, auto, and other loans to people who could not possibly make the mortgage payments. I say me and you are responsible for this problem because we elected these pricks.
Pelayo on September 20, 2008 at 12:03 PM
Great point
And why is it better for a corporation like a mortgage company to auction a $100,000 house for $3000 when they could refinance to a fixed 8 precent rate on $80,000 depreciated appraisal and get the $3000 back every year?
If the foreclosure rate is too high the bank loses on mass auctions which further tank home values for everyone. A tax write off is good only if you have some profits frpm other sources to protect.
The one line I keep hearing is how buyers took houses they could not afford using ARMs.
In Michigan where I live, many many middle class buyers were offered only ARMS, which were interest only at first, and those interest only payments were the same as an interest plus principal payment of a conventional mortgage. These people did not get lower payments this way, but they got zero equity in their homes and then, when the balloon hit there was nada. I guess it was differenct somewhere else, but not here in the lower middle class neighborhoods
People were fleeced and I know some of the tactics, including surprising them at signing time with the new terms
Most homebuyers are not accountants. They trust their banks and brokers and the monthly payments were typical, not obviously lower
Do not assume you are safe because you were not ‘greedy’.
entagor on September 20, 2008 at 12:07 PM
Interesting article from 2000:
The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities
Connie on September 20, 2008 at 12:16 PM
Before the crash of 1929 my frugal hard working grandparents bought a small frame home in a new ‘subdivision’ in Detroit. The market crashed and there were no jobs and no cash flow. My grandparents could not pay the mortgage to the builders.
One of the partners took aside the other and told him
1. there is no one to buy these homes
2. if we evict this couple the house will be vacant and vandalized
3. they are good people and will maintain the property (he lived across from them)
The partner agreed and my grandparents were allowed to stay – without payment. Eventually Grandpa got work and they were able to buy the house. After years of hardship, horsemeat, and labor they were able to make things right
Later when the buikder was old and dying, my grandparents moved him into their house and cared for him until his death
In that same period the neighborhood grocer kept a tab. My grandmother saw he had surplus apples and offered to take them home and bake pies for him to use or sell (she had been a professional cook). He agreed and she did this as well. Eventually they owed the tab over a thousand dollars. Years after the Depression my grandparents finally payed back this good man who told them if everyone payed him back like them he would be a rich man
Are we our bother’s keeper? The prodigal son was not worthy yet the father welcomed him back.
If we destroy the American working class to prove a point what will we have gained?
entagor on September 20, 2008 at 12:19 PM
Please do not think that the U.S. gov’t could not go bankrupt. If this deal goes through we have to watch US treasuries and the dollar very closely because if they start dropping in price then we know the gov’t has bitten off more than it can chew.
Bill C on September 20, 2008 at 12:35 PM
Those were truly wonderful examples of inspiring Americana attitude, endeavor and neighborliness, entagor.
We truly are and should be, “our brother’s keepers”…!
J_Gocht on September 20, 2008 at 12:36 PM
You should run for elected office.
Tell us, Bill. If early tomorrow morning it begins to get brighter off to the east, does that mean the sun will, in fact, come up?
BobMbx on September 20, 2008 at 1:03 PM
Yeah and I want to be Division of Brother’s Keeper Czar.
Saltysam on September 20, 2008 at 1:10 PM
Too late. HRC called dibs already.
BobMbx on September 20, 2008 at 1:13 PM
All hail the Financial Finaglers best friends Handout Hal and Bailout Ben!
KentAllard on September 20, 2008 at 1:30 PM
That was “Band of Brothers”, there never will be numbers, sufficiently courageous and brave to make up a division.
Oh and just for yuks; if you saw your neighbor’s house burning at night would your cold hearts beat strong and fast enough to wake the family and call the fire department…?
“My neighbors’ keeper’s”…
I’m damn fortunate to live out in the country where folks actually take pleasure in helping each other…!
J_Gocht on September 20, 2008 at 1:32 PM
See The Telegraph 09-19-08,Ambrose Evans-Prichard article titled “Federal Reserve needs to rediscover power to shock and awe to ease crisis”
From the same article
A theme gnawing at me daily is the 1 trillion in surplus dollars held by China because we bought cheap crap made by slave labor from a tyrrany, and because they have no intention of returning the favor by buying much from us.
Had China recirculated the trillion by buying real goods from the USA that money would be pumping our nation.
Instead it seems to be the amount of liquidity we are missing.
Will people ever understand we cannot simply be a buyer nation, especially from a China who intends to keep their trillion away from anything that might save us
We gave them our water for crumbs of bread and now they have built a swimming pool for themselves
entagor on September 20, 2008 at 1:37 PM
The only reason we shop at Wall-Mart is for vitamins and supplements, we don’t have a local health foods store.
We may pay a little more at the locally owned grocery and hardware stores?
Our family feels it’s both our patriotic and neighborly duty to support the local merchants as much as possible rather than China Inc.…!
J_Gocht on September 20, 2008 at 1:49 PM
That, plus rescind Sarbanes-Oxley and the stupid mark to market rule, which requires banks to revalue their loan balance sheet constantly, and recapitalize or sell assets to maintain an arbitrary government assigned ratio. The government caused this problem, I’m not sure how anyone can think they will solve it by any means other than getting out of our way. What bothers me most is that McCain and Palin are out on the stump right now complaining about the evil capitalists and big business, as if they were to blame, instead of admitting that dems and reps in congress themselves are the cause. All four of the candidates hoping to win in November are lousy. Who is John Galt?
Vashta.Nerada on September 20, 2008 at 1:53 PM
“…“McCain has, up until about 72 hours ago, been in favor of ripping out all the safeguards put into America’s financial systems by FDR.”
You better hope that Johnny and Sarah don’t forget where the restrooms are 72 hours from now…! ;)
J_Gocht on September 20, 2008 at 2:06 PM
I wish they would kill social security – that Ponzi scheme has run its course. In less than a decade, the bill to continue that program will make the current nationalization of banking attempt look cheap.
Vashta.Nerada on September 20, 2008 at 2:09 PM
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