Bailout deal collapses, Democrats try to blame McCain
posted at 8:07 pm on September 25, 2008 by Allahpundit
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Down goes Frazier. I missed the report on Fox earlier but Ace says it sounds like the Dems are trying to shift the blame for it from the House GOP to Maverick. Fair or no? Let’s see. Dodd lands the first blow:
Republican presidential nominee John McCain was blamed for de-railing negotiations by blindsiding lawmakers with his support for an alternative plan.
The ‘very contentious’ meeting broke up after Republican leaders said they had to go back to their rank-and-file to discuss the new proposal…
After the hour-long White House meeting, [Dodd] said: ‘What has happened here is that we have spent seven straight days to find a rescue plan for the economy.
‘What this looked like was a rescue plan for John McCain. To be distracted for two to three hours by political theatre doesn’t help.’
Democrats said the Republicans were on board with the deal until Mr McCain intervened an injected presidential politics into the situation.
The only problem? According to Marc Ambinder, citing four independent sources, McCain didn’t say much of anything during the White House meeting let alone float any alternative plans. Boehner, apparently, brought up some of the House GOP’s ideas; the Dems claim they got the impression that McCain supported those ideas, but “they concede that he did not raise them directly.” Even Reid, ever sneering, admits McCain played no major role.
Which isn’t to say that he doesn’t, in fact, support the House GOP. Quoth The Hill from an article published earlier this afternoon:
[A] key Republican lawmaker stated that Sen. John McCain (R-Ariz.) wants to explore new ideas, like loaning money to financial institutions or insuring the companies, rather than buying their toxic debt…
Rep. Spencer Bachus (Ala.), the ranking Republican on the House Financial Services Committee, attended the meeting at which some say a deal was reached. But he later issued a statement saying he wasn’t authorized to negotiate or approve any deals for House Republicans…
He added that McCain is interested in using loans or insurance rather than having the government purchase the toxic debts of Wall Street institutions.
“We would prefer a loan or supplying insurance,” Bachus told reporters. “These are the ideas Sen. McCain tried to maximize. He feels strongly we have to design a program where taxpayers won’t lose.”
Bachus, wearing a “McCain-Palin” lapel pin, said he’d talked to McCain on Wednesday night and had breakfast with McCain’s advisers Wednesday morning.
The insurance angle is at the core of the House GOP’s alternative plan. See here for the particulars. In essence, they want to scrap a taxpayer bailout, expand the feds’ power to insure mortgage-backed securities, and lift regulations to encourage private investment and rescue the financial industry that way. As for McCain, it sounds like he’s being coy because he’s not sure yet which way to break on this politically. Better hurry up: If that Hill article I linked is correct, they’re nowhere near the 100 Republican votes Pelosi wants before she’ll send the bill to the Senate and the markets, shall we say, won’t like that. Exit question: If they can’t get a deal done to save the farking economy, will next week bring us Congress’s first ever zero percent approval rating?
Update: For what it’s worth, here’s what HuffPo’s sources are telling them about the meeting:
Towards the end, McCain finally spoke up, mentioning a counter-proposal that had been offered by some conservative House Republicans, which would suspend the capital gains tax for two years and provide tax incentives to encourage firms that buy up bad debt. McCain did not discuss specifics of the plan, though, and was non-committal about supporting it.
Paulson, however, argued directly against the conservative proposal. “He said that he did not think it would work,” according to the source. At another point in the meeting, President Bush chimed in, “If money isn’t loosened, this sucker could go down” — and by sucker he meant economy…
Following the meeting, Democrats stayed talking in the Roosevelt room and Paulson approached them. Speaker Pelosi and Rep. Barney Frank shot back at Paulson that the real problem was with House Republicans, according to sources. Paulson replied, “I know, I know,” as he got down on one knee to lighten the mood. Pelosi joked back, “I didn’t know you were a Catholic.”
Update: An astute point from Baseball Crank. In all the frenzy over McCain, you know whose name you haven’t heard much of at all as mattering to this deal? Barack Obama’s.
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Without researching specifics, let me remind you that Fannie Mae and Freddie Mac investors and top management were wildly successful, too. For a while.
Any provisions in Paulson’s bailout plan to get back some of Franklin Raines’s $90 million dollars in rape winnings?
Jaibones on September 25, 2008 at 11:54 PM
So does this bailout mean that we still have to guarantee loans to houseflippers and scumbag illegal slumlords who don’t make a downpayment or ever even put a dime into the house, while they rent it out to 12 migrant workers?
If it does, let it all freaking fail..
TexasJew on September 25, 2008 at 11:54 PM
I saw the housing mess coming, but i underestimated the contagion effect. I didn’t see the entire credit market imploding. Most of us didn’t. But I changed my mind once the evidence became overwhelming. So did Ben Bernanke, Paulson, Bill Gross, Jack Welch Mitt Romney and Warren Buffet. Michelle Malkin is hardly prescient, as she is still pushing for no bill over the Paulson/Bernanke plan. That means she still doesn’t understand the collapse of the credit market and the effects it will have on this economy.
phronesis on September 25, 2008 at 11:54 PM
Our financial system is on the brink and all you can do is make personal attacks. I’m NOT a liberal.
Your attack is typical though of what others are saying. What about Bernanke and Paulson, are they also uber-liberals and Obama supporters?
bayam on September 25, 2008 at 11:54 PM
Oh, come now. You guys are running around like a bunch of chickens with your heads cut off squawking about how the sky is falling and you expect us to take you seriously? That’s absurd.
FloatingRock on September 25, 2008 at 11:55 PM
funky chicken:
I doubt that McCain used the words, down the drain. And the money will not go down the drain. It might actually turn a profit or at least break even. It is not just being handed out to people for nothing in return.
I just think a lot of people on the right figured that if the Democrats could support it, then it must suck, therefor it is their job to kill it whether they have anything better or not to replace it with. Screw the economy.
Terrye on September 25, 2008 at 11:55 PM
Oh and concerning something important…
GO BEAVERS!!!!
ClassicCon on September 25, 2008 at 11:56 PM
We are facing a crisis. Everyone agrees with that. The difference is that the urgency to pass this bill is simply rescuing those who invested in high risk schemes. If we remove them from the formula, it seems pretty clear that the way out is to bite the bullet and admit that long standing firms and people will lose their fortunes and their status as the power brokers. No big deal. There are plenty of people and companies that can fill the void quite nicely. AND, because they get the assets of the failed companies at firesale prices, their stock goes up and the economy is back on a roll.
csdeven on September 25, 2008 at 11:56 PM
I’m stocking up on ammo, buying a water purifier and loading the basement with as much canned food as I can. Then I will hunker down and kill anyone who comes near my house.
Or else I will wait for the level-headed ones to get themselves a plan that doesn’t consist of ramming a stick up America’s collective ass.
Relax people, this running around with your cheeks on fire schtick is getting old; we aren’t about to fall into Great Depression II and failed banks such as WaMu are being bought by those that aren’t failing.
Jeebus, the pessimism here is breathtaking.
Bishop on September 25, 2008 at 11:57 PM
Welcome to the club.
Jaibones on September 25, 2008 at 11:57 PM
The last time we had so many financial sector failures, it resulted in the biggest expansion ever in the federal government: The New Deal, which is almost the opposite of what you say will be learned. And even though the New Deal didn’t end the Great Depression, we’ve been living with most of the bloated government consequences ever since. Further, few people have favorable views of do-nothing Herbert Hoover and Nero fiddling while Rome burned. I doubt they could win an election, but FDR won 4.
I would prefer to prevent a rout of the financial markets. Chances are, such a solution will not be liked by some people, maybe even me, but the potential severe consequences of doing nothing seem far worse.
Loxodonta on September 25, 2008 at 11:58 PM
phronesis on September 25, 2008 at 11:54 PM
I saw it coming when the FED refused to act and then had to reverse itself a day later. The FEd was caught flat footed. told me that no one knew what was going on so started to dig deep and found a ton of things that worried me. Pulled my money out of the market at that point. Went back in for some of the rallies since then but mostly been all cash for awhile now,
unseen on September 25, 2008 at 11:59 PM
Floating Rock:
I am hysterical because I think it is possible that the Chairman of the Federal Reserve board might know more about the economy than Michelle Malkin?
As for running around like a chicken with my head cut off, where have you been for a week? Did it escape your attention that the sinking economy is the number one topic. Do you think Bush would go on TV and give an address like that for no reason?
I am not saying it is the end of the world, but for heavens sake there are some real problems out there and we need to deal with them..not have everything fall apart in partisan fighting and feuding.
Terrye on September 26, 2008 at 12:01 AM
well this chickenlittle is off to bed. Need to be fresh for the as*kicking the markets are going to get in the morning.
reality check.
futures are down big
DOW and SP off 1.5% it will get worse without gov intervention. good luck all
unseen on September 26, 2008 at 12:01 AM
I think most of this panic is because some just can’t drive an eight year old car and just can’t deal with a 32″ LCD TV instead of that 60″ plasma. They can’t buy Wranglers insead of Levi’s. That is the root. We have all allowed ourselves to be suckered into thinking everyone can be Bill Gates.
Do yourselves a favor. Pay off that car NOW, sell the boat,
give up the timeshare, and go to Wal-Mart and buy into a secured credit card and send that 29% interest Citibank card back to them covered in K-Y jelly.
Limerick on September 26, 2008 at 12:02 AM
Remember the immortal words of Andrew Carnegie:
“A man who has money during a panic is a wise and valuable citizen.”
I’m in the oil business, and that’s not a bad place to be. It’s kind of a hedge, you might say..
I’d go into gold mining, too, but I hate sandflies.
TexasJew on September 26, 2008 at 12:02 AM
We’re gonna need more than luck. I hope we are all still here on monday.
wise_man on September 26, 2008 at 12:03 AM
one more thing:
The Fed funds rate centered around 1.5% for much of the week, averaged below 1.2% last night. The Fed’s target for this rate is 2%. There’s a distinct possibility of an emergency cut in policy interest rates, as early as the wee hours of this morning.
I would also look for additional emergency measures such as expanded currency swap-lines with foreign central banks, before New York opens for trading, a mere ten hours from now.
This is a hurricane warning. There is heavy weather ahead in financial markets. We’ve made an awful lot of history in the past ten days. We may be about to make some more.
-Francis Cianfrocca
http://www.redstate.com/
unseen on September 26, 2008 at 12:04 AM
You know, there are already many doomsday cults that will cater to your every need. Google them.
FloatingRock on September 26, 2008 at 12:05 AM
LMFAO! Oh, dude…
Couldn’t agree more, and I keep laughing at all the “conservatives” commenting tonight while wetting their pants and predicting global starvation and slaughter.
Now that I say it – does this give us a reason to nuke Waziristan? Win – Win!
In the meanwhile, lilly liver RINOs, someone please explain to me how we “just lost the election” to a party that has been nothing but an economic holocaust for decades, and every thinking person in America knows it?
Jaibones on September 26, 2008 at 12:05 AM
csdeven:
What? I am sorry, but I don’t get what you are saying. This bill is not just about rescuing people who made bad decisions. And no the market won’t settle squat nicely, if there is no liquidity in the market.
Terrye on September 26, 2008 at 12:06 AM
http://www.breitbart.com/article.php?id=D93E2S100&show_article=1
Told y’all.
Go Beavers!
Sakaki on September 26, 2008 at 12:08 AM
Look at the start of any major crisis and you’ll always find people in denial. There are panic-driven events now within the realm of possibility that could result in the collapse of the entire system. Bernanke, Paulson, and experts like Warren Buffet aren’t chickens. The’re behavior is based on a very rational evaluation of the facts.
bayam on September 26, 2008 at 12:08 AM
We’re gonna need more than luck. I hope we are all still here on monday.
wise_man on September 26, 2008 at 12:03 AM
Oh please! Don’t be such a drama queen!
The sun will come out tomorrow, bet your Preferred A-series Enron that tomorrow, there’ll be sun…
Or was that pets.com?
TexasJew on September 26, 2008 at 12:09 AM
It’s NOT a Game By ANY Stretch of the Imagination, BIT How you proceed to deal with it, Do you DO IT THE RIGHT WAY OR THE WONG WAY?
Go it?
Just throwing 700 Billion fake Dollars at a problem at gonna fix anything. GOT IT.(You need some to get these scared people to settle down but 700 BILLION is way to excessive! 250 Billion should be more than enough)
You need, Tax Cuts Corporate Tax cuts slashed we have the 2nd highest Corporate Tax IN THE WORLD(that would involve Congress) that would increase investments into our markets from home and abroad, make NEW business and more jobs, The President needs to lower the Capital Gains tax(more investments, more revenues), We need to Go all in With Energy, because printing more money will lower the dollar thus making oil increase, we need More energy from home the ALL in approach OFF SHORE, ANWR, Clean Coal, Oil Shale, new Refineries, More Nuclear power plants, Wind, Solar, New Technologies, bio, conservation, ALL stuff American that will create LOTS of new jobs.. And Energy Independent, also it will help to stem the traders in the futures markets because they know that America is now going ALL in.
I would make it part of the bill that a % of the steel and Raw material other things needed for making the oil platforms and nuclear power plants and windmills, and Raw materials for the projects must be purchased in America from American Companies
This would be the growth, the industrial energy revolution, and how to become energy independent.
Chakra Hammer on September 26, 2008 at 12:10 AM
Jaibones:
Yeah, a real conservative would welcome a recession, in fact a real conservative would make the promise of hard times part of the party platform.
What are you talking about? Are you honestly going to say that only pretend conservatives who wet themselves think there is a problem with the economy?
Republicans always get poor marks from voters when it comes to economic issues. Democrats always win when that is the number one issue. Republicans do well with national security issues.
Just like the average lefty can not seem to understand why rooting for your country to lose a war might be a losing strategy…. too many people on the right can not understand why acting like concern over a financial meltdown is hysterical and silly might not be a winning strategy either.
This is why Democrats win on the economy.
Terrye on September 26, 2008 at 12:11 AM
Couldn’t agree more, and I keep laughing at all the “conservatives” commenting tonight while wetting their pants and predicting global starvation and slaughter.
Oh yes, and we will all soon be living in the world of ‘Road Warrior’.
I plan on customizing my old Yugo by painting ‘Interceptor’ on the side and adding a fake hood scoop. A strand of barbed-wire across the hood, a hockey mask on my head and a sawed-off shotgun to complete the gig.
Who wants to play the role of ‘Feral Child’?
Bishop on September 26, 2008 at 12:13 AM
I wonder how likely it is that McCain quashed the deal because he opposes it because it is socialism, and as a bonus actually relished the opportunity to stick a knife in Bush over the 2000 election?
csdeven on September 26, 2008 at 12:13 AM
You’ve asked and answered your own question. Economies correct, which sometimes means they go down and sometimes go up. It’s a natural process, like feast or famine in wilderness areas. By not resorting to socialism in an attempt to circumvent a healthy economic balance, in a sense you are helping to preserve freedom and liberty. The good news is that capitalism is far more capable of dealing with this problem than socialism, so while our efforts may not be painless, they will be relatively less painful than the socialist alternative that some here have been pushing.
FloatingRock on September 26, 2008 at 12:13 AM
Eric Cantor is my landsman!
This is the part of the Republican counterproposal that made me tear up with joy:
“Forbid government-sponsored mortgage giants Fannie Mae and Freddie Mac from issuing securities on unsound mortgages.”
No more Community Reinvestment crap! Screw ‘em! Let them rent!
Everybody in America who is diligently paying off their house, car or whatever will be paying higher interest rates for decades because of all this Robin Hood crap.
TexasJew on September 26, 2008 at 12:14 AM
Toss in the boomerang and we have a deal.
Limerick on September 26, 2008 at 12:14 AM
Chakra:
No one is throwing 700 billion dollars at anyone. Just saying that makes you sound like you do not know what you are talking about. The government is not throwing money at anything, it is acquiring assets to be sold at auction.
Now if someone else comes up with a better idea, great. I am all for a better idea. But doing nothing because you can not get just what you want might not be a good idea either.
Terrye on September 26, 2008 at 12:15 AM
I’m confused about this entire “insurance” aspect being promoted by the House Republicans. Under what criteria would that insurance be triggered? How many assets currently held by financial institutions would have triggered that insurance already? Does anyone know? If insurance is triggered, then does that mean that the Federal Government has to pay par value on those assets? Wouldn’t that be more expensive than the current plan under consideration? If “no one knows what these instruments are worth” how would the Federal Government know what premium to charge? What if an institution couldn’t pay that premium? More strains on the financial system? Would the House Republicans require all financial institutions to buy insurance? That doesn’t sound very “free market” to me at all, certainly less free-market than a voluntary reverse auction processs under consideration by Paulson and Co.
Sorry, but as a professional speculator, I put a hell of a lot more faith in the views and ideas of Hank Paulson, Bill Gross and Warren Buffett then I do members of Congress or political pundits. You lost me.
BTW, one thing this entire debate has revealed is that the degree of financial illiteracy in this country is absolutely astounding.
furytrader on September 26, 2008 at 12:15 AM
Which version… the socialist version of the bailout package or the free-market version?
FloatingRock on September 26, 2008 at 12:15 AM
Please explain the Great Depression for us then.
phronesis on September 26, 2008 at 12:15 AM
We’re gonna need more than luck. I hope we are all still here on monday.
wise_man on September 26, 2008 at 12:03 AM
Why, is the sun going to explode?
Good Gawd, I hope all you people aren’t actually cowering in the corner, clutching your family members and waiting for the end.
Get a goddam grip.
Bishop on September 26, 2008 at 12:16 AM
Yeah, we have people making up plans and numbers off the top of their heads that are extremely confident they are better than the Paulson/Bernanke plan. It would be funny if it weren’t tragic.
phronesis on September 26, 2008 at 12:17 AM
Actually you guys are correct, the world is going to end, USC is about to go down.
ClassicCon on September 26, 2008 at 12:18 AM
Floating Rock:
I bet Hoover had advisers that told him the same thing.
Terrye on September 26, 2008 at 12:19 AM
Toss in the boomerang and we have a deal.
Limerick on September 26, 2008 at 12:14 AM
I knew I could count on you. But you have to grow your hair long, be able to growl convincingly and have no claustrophobia (you will need to occasionally scurry through underground warrens).
If this is acceptable to you, welcome aboard. Know anyone who has really bad teeth and is willing to be a gyro-captain?
Bishop on September 26, 2008 at 12:19 AM
The world didn’t end in the 30s. But we had an immense amount of human suffering and tragedy that could have been avoided. It was followed by the unprecedented expansion of socialist policies in America. Some of us would like to prevent repeating that history.
phronesis on September 26, 2008 at 12:20 AM
ClassicCon:
No, it won’t end, but it will change.
Terrye on September 26, 2008 at 12:20 AM
…and it’s an election year.
FloatingRock on September 26, 2008 at 12:20 AM
Oh and concerning something important…
GO BEAVERS!!!!
ClassicCon on September 25, 2008 at 11:56 PM
One thing I learned from diligently studying this situation: did you know that many beavers actually qualified for Fannie Mae loans for their dens and generally had a better payback rate than much of the worthless crap who often got those loans?
TexasJew on September 26, 2008 at 12:21 AM
The bailout plan is not socialism. Anyone who thinks it is does not know what socialism is. It is just a knee jerk reaction to Christopher Dodd, it is no more complicated than that.
Terrye on September 26, 2008 at 12:22 AM
So once the government acquires this property with our money, will they pay back what they took from us or will it enrich a few hundred new social programs and their attendant bureaucracies?
I’m betting on the latter.
Bishop on September 26, 2008 at 12:23 AM
Floating rock:
I just knew there would be someone who would convince himself all this silliness was just some election year stunt.
Oh yeah, thousands of investors all over the world got in on the act just to make it convincing.
Terrye on September 26, 2008 at 12:24 AM
I guess I’m chevalier about it because my one and only debt is the mortgage. That is a stretch and I could well lose it, but that isn’t going to cause me to reach for the rope or the 20th floor window sash.
Darwin and God are going to step in here. I figure what Darwin wrecks God will fix, with an investment of a bit of elbow grease from us, and a prayer or two.
Roll up your sleeves and start this reconstruction the way it should be done, from the bottom up instead of the top down.
Limerick on September 26, 2008 at 12:25 AM
If my 401K get halved I’m voting democrat. Screw ya’ll. that’s how a great depression works. Kapish. Acorn can have a couple nuts.
pc on September 26, 2008 at 12:27 AM
Buying something that you know you’re not going to be repaid for is not a good investment, thats why a lower Number than $700 Billion is needed, to let the markets work.. They need Money just not that much how many 0’s is a Billion?
Chakra Hammer on September 26, 2008 at 12:28 AM
Terrye, all we want is for the folks working on this deal to clean it up, and not just swallow the Paulson, Dodd, Frank, Pelosi, Reid package hook, line, and sinker.
That’s it. If it takes until Monday or Tuesday to put something reasonable together, why would that bother you so much?
What’s wrong with killing the ACORN handout before the final deal is accepted? What’s wrong with analyzing it before spending 700 billion dollars?
funky chicken on September 26, 2008 at 12:28 AM
Small minds protect timid souls.
Saltysam on September 26, 2008 at 12:28 AM
Why they caused this.
Chakra Hammer on September 26, 2008 at 12:29 AM
It’s not a real solution, it’s absolutely ineffective as a way to resolve the problems in our financial system. Paulson and Bernanke won’t seriously consider it.
Warren Buffet is the greatest capitalist in the world and he supports this plan. Why do people think they have better credentials than Warren Buffet?
Anyway, there’s nothing socialist about protecting our economy from a meltdown. All businesses rely on a smoothly operating financial system and the access to credit; when the entire system fails, you don’t have a recession, you have a depression and massive, massive job loss along with the destruction of wealth.
Our economy is the real source of our nation’s strength and it’s worth protecting. If a collapse occurs, it’s unlikely that the world be willing to turn to Americans again for economic leadership. New York will be replaced by Tokyo, London, and Beijing.
bayam on September 26, 2008 at 12:29 AM
Basically the fed is trying to make payroll for every company on a short term line of credit. Money is drying up as people try to conserve what they have. IOU’s are going to start to get issued. Have fun with that one tough guys.
pc on September 26, 2008 at 12:29 AM
Terrye, why do you suddenly trust Paulson, Dodd, Frank, Pelosi, and Reid more than, say, Newt Gingrich?
I know why bayam does, but it seems quite odd that you are so eager to join with that crowd.
funky chicken on September 26, 2008 at 12:29 AM
Rather than debate the stupidity of people who vote for Democrats under any circumstances, I urge you to cut and paste your comments, and mine, and the comments of the hysterics that I am laughing at, and put them in a document.
Wait two weeks, and open it up and read it again.
Hysteria is always funny after a little while. “…concern over a financial meltdown…” is the key phrase to look for.
Jaibones on September 26, 2008 at 12:29 AM
The economy and tax receipts aren’t static. We go into a depression and income and capital gains disappear. Thus tax receipts become a fraction of what they were. The government pays for this one way or another.
phronesis on September 26, 2008 at 12:30 AM
“pc on September 26, 2008 at 12:27 AM
Why they caused this.
Chakra Hammer on September 26, 2008 at 12:29 AM”
But they could be expected to cause this. It’s the republican’s responsibility to stop them and they failed. Therefore if you can’t beat them, join them. Fascism 101.
pc on September 26, 2008 at 12:31 AM
I’ve already got my tent set up in the backyard. :)
FloatingRock on September 26, 2008 at 12:31 AM
The bailout plan is not socialism. Anyone who thinks it is does not know what socialism is. It is just a knee jerk reaction to Christopher Dodd, it is no more complicated than that.
Terrye on September 26, 2008 at 12:22 AM
Fannie Mae and Freddie Mac, however, as the root of this problem, became socialist institutions by guaranteeing loans to poor communities where the failure rate is often 50% or more. You try to get a loan without a verifiable income! They’d kick your ass out the front door! Not these scumbags! Voila, here’s your house sir. And for no downpayment!
So by bailing out this mess we are now simply reinforcing socialism and the taxpayers are giving the first payment to a possible multitrillion dollar liability, since the “buyers” of these properties can now dump them with no equity and we will pick up the bill.
If it looks like a lesson was learned here, which it certainly has not, then there would be a reason to lay hundreds of billions of dollars on these hysterical pricks. But if it’s just more of the same, or if, as Paulson says, the bailout could get larger, then I’d have to say: no way.
TexasJew on September 26, 2008 at 12:32 AM
Bishop:
The money from the auction sales go to the Treasury, or so I heard.
Time for bed.
Terrye on September 26, 2008 at 12:32 AM
phronesis on September 26, 2008 at 12:33 AM
This plan was devised by Bush’s team. Paulson is widely considered to be one of the brightest finance names in the country, and a lifelong Republican. Bernanke is a lifelong Republican. The Democrats are following their lead- but why does their agreement invalidate the plan?
If you trust Newt’s opinion on the economy more than Paulson or Warren Buffet, good luck with that.
bayam on September 26, 2008 at 12:34 AM
I will rent the tent if you’ll trade for my skills.
Nothing like tax free transactions!
Saltysam on September 26, 2008 at 12:34 AM
Who decided ACORN should be in on the take of this?
That’s the part I object to. The Democrats, no doubt, loading the thing up with their issues.
capitalist piglet on September 26, 2008 at 12:36 AM
I’m reminded of the fact that a drowning person, in their panic, will often drown their rescuer if the rescuer is careless or unlucky.
FloatingRock on September 26, 2008 at 12:36 AM
wow, you have no clue. this is much bigger than your mortgage. it’s about businesses not being able to function, going under and people losing their jobs. i have a small business and can’t imagine what no credit line (which we don’t even use but need to show it on paper) and a run on banks will mean for us. where are people who run companies supposed to put their money?
anna on September 26, 2008 at 12:36 AM
Bishop:
The money from the auction sales go to the Treasury, or so I heard.
Time for bed.
Terrye on September 26, 2008 at 12:32 AM
Which the Treasury will spend for even more idiotic social programs. I’d prefer to have them get precisely dick.
Sweet dreams of Paulson in a tutu..
TexasJew on September 26, 2008 at 12:37 AM
Jaibones:
Democrats do win on the economy. I am not saying that is a good thing, but they do. Largely because when the President of the United States, The Fed Chairman, both presidential candidates as well as the Secretary of the Treasury say there is a problem with the economy the average voter feels like the Democrats {flawed as they are} will respond as if there is a problem, while the conservative will smirk and call people bed wetters.
Where would they get an idea like that? The truth is most conservatives felt like there was a problem too until partisan politics raised its ugly head.
I hope it is not a big deal. I hope everything is okay fine and all we face is a crappy recession where few unimportant people lose their jobs..but when I heard Charles Krauthammer say the word collapse, I took notice.
Terrye on September 26, 2008 at 12:38 AM
The government pays for this one way or another.
phronesis on September 26, 2008 at 12:30 AM
Either/Or scenario, huh? Either the money gets spent or we fall into the New Great Depression™ (now with extra depression for added flavor)? The government isn’t paying for a damn thing, they don’t produce shit, I’M paying for this and I would like to see a plan that doesn’t consist of “here ya go, 700 billion for companies that may or may not turn a profit”.
Does the super plan ever mention tax cuts of any kind? Why did WaMu assets get bought, you would think every other bank in town would be trying to hoard what they have and hang on for dear life?
Bishop on September 26, 2008 at 12:38 AM
Best line of the day from H & C: Ann Coulter asked, “Hey, can he (Obama) debate Biden Friday night?” Gotta love her!
NightmareOnKStreet on September 26, 2008 at 12:39 AM
Once again Terrye, we can count on you to pull stuff out of your butt and spread panic and misinformation that such and such might happen.
The vast majority and I mean the vast majority of economists, Nobel winners included have said in no uncertain terms the bailout as suggested is mindless and will accomplish nothing as first presented.
Just like the immigration bill before, you are shilling for a bill you have not even read.
The real estate bubble has burst. Get over it. The market is going lower, unemployment is going up and a severe recession is a very real possibility, no matter how many king’s men you rally to pick up the pieces. But that said all the other BS, yourself and several like minded economic dwarfs are spouting about crashes, world ending events, Obama this, McCain that, you have not a clue, a dark hope perhaps.
How do I know that? Because you actually think the losers who got us into this problem are going to get us out of it if we just give them some more money delivered as a blank check. In fact based on the comments these last few days very few posters here have actually read Paulson’s original request.
Instead of shrieking and screaming about events you know nothing about why don’t you wait for the final bill to be announced and then make an intelligent decision as to its pro’s and con’s. Then you can go back to screaming about the end of the world because its not the bill you wanted.
As to the bill’s final merits that will be determined because saner people demanded more than what was originally offered. It has nothing to do with your bullshit politics that you always throw around.
I still say you are Paul Begala in drag.
patrick neid on September 26, 2008 at 12:40 AM
Texas Jew:
I heard on Fox that was to go to pay the National Debt.
Terrye on September 26, 2008 at 12:40 AM
Panic hates Liberty.
Saltysam on September 26, 2008 at 12:40 AM
You missed the point, Anna. If we had been rejecting the credit cards and the pie-in-the-sky home appreciation loans all along there wouldn’t be this frakkin crisis. All this blame being toss about about it being the Dems or the Reps, the Marxists or the Fast Eddies is the same old victimhood claptrap we have been hearing for years. WE caused this mess. Us. You, me, Mr Alphabet down the street. Only we can fix it. This bailout only postpones the problem. If this bill passes the next in line is the SS collapse.
Nope, time to pay Peter and stop robbing Paul. Time for personal responsibility and acting like a GD grownup.
Limerick on September 26, 2008 at 12:41 AM
Bishop on September 26, 2008 at 12:38 AM
Kill the capital gains tax and they could have a deal.
Make ‘em sweat…
TexasJew on September 26, 2008 at 12:42 AM
This is what is happening: McCain expects that the bill will pass the House only with the Democrats vote and the Republicans voting against (simple majority, no problem), then, twist the arm of some Republicans to pass the voting in the Senate (needs 2/3 to pass). In this way, the House Republicans can use this to win the elections and the electoral vote. Pelosi knows this, that is why she wants the Republican suppor tin the House, even if it is not needed for the bill to pass. I am Ropera and I approve this comment.
Ropera on September 26, 2008 at 12:42 AM
Some have gone topsy-turvy with their latest doomsday game
They talk about a coming disaster from night to morn
They dress themselves in fear as a tribute to it’s name
You’d think that the Grim Reaper had been reborn
But the jackanapes are always runnin’ round in some disguise
What will actually happen, the devil only knows
It’s unfortunate to note their fear just grows and grows
Tav on September 26, 2008 at 12:42 AM
Keep in mind that the Democrats can pass this bill without House Republicans. And according to the Wall Street Journal, the results won’t be desirable for anyone opposed to socialist handouts. For example, I don’t want to see judges renegotiating mortgage terms for home owners who can’t afford their monthly house payments. In my mind, that’s going to result in huge cost and will reward the most irresponsible economic behavior.
If Democrats are forced to move forward on their own, the party’s demands on the White House are sure to go up. Proposals that once seemed off the table — such as a plan to give bankruptcy judges authority to adjust mortgage terms — would likely gain new life. The prospects would also likely rise for Democratic proposals to stimulate the economy, such as new spending on roads and bridges and extended federal benefits for the unemployed.
http://online.wsj.com/article/SB122235295272975207.html
bayam on September 26, 2008 at 12:42 AM
Here, write this down and memorize it:
The bailout is about bailing out the folks holding the $45 trillion of credit default swaps… NOT the folks holding mortgage (or other debt) paper. I sent an email outlining how this works to Ed. When I went through it, I began to fully understand why they
needwant to buy essentially all the debt… all the debt that is “insured” with a credit default swap that is. Think about it. Outstanding mortgages at the end of 2007 were $7.1 trillion and they want a trillion for these bailouts? One in seven mortgages ARE NOT BAD. This involves far more debt than mortgages. That other debt (credit card, student loans, etc.) have ZERO chance of a return. The return on the mortgage debt is completely unknown. They want the amount they do so they can buy the debt supporting (highly leveraged) credit default swaps.According to this link about 9% of mortgages are in default/foreclosure…. NOT somewhere over 14%. A portion of the 9% are NOT in foreclosure… just technically in default. This is truly a flim-flam to bail out the holders of the credit default swaps.
CC
CapedConservative on September 26, 2008 at 12:43 AM
patrick:
Oh please. I have said time and again that I would be thrilled to see a better bill, another bill. When I was talking about what economists have said, I was referring not to their reaction to any particular bill…but to their concern about the situation in general. There are people here saying there is not even a problem.
And besides, patrick you can insult me all you want, call me names all you want whatever…but men like Paulson and Bernacke and even Krauthammer are not idiots who do not know what they are talking about.
Terrye on September 26, 2008 at 12:45 AM
and while you’re waiting for the heads of these companies to take personal responsibility, they’ll be walking away with tens of millions in golden parachutes while the US economy collapses. all the tough love you think you’re handing out won’t land where it’s supposed to- it’ll be small and medium sized businesses and those who rely on the jobs they provide that will suffer.
anna on September 26, 2008 at 12:45 AM
WE caused this mess. Us. You, me, Mr Alphabet down the street. Only we can fix it. This bailout only postpones the problem. If this bill passes the next in line is the SS collapse.
Nope, time to pay Peter and stop robbing Paul. Time for personal responsibility and acting like a GD grownup.
Limerick on September 26, 2008 at 12:41 AM
I certainly didn’t cause this problem, the houseflippers, mortgage bundlers, scumbags and socialist politicians caused this problem. Go kick their asses before you blame the 90% of Americans who don’t think the Federal Government is a big fat tit.
TexasJew on September 26, 2008 at 12:46 AM
Good tries at convincing people. I happen to agree with your sense of alarm. Banks are already pulling back on home equity lines, smaller banks getting out of student loans, and credit tightening up.
When the medium sized businesses can’t get a loan to continue and start laying off its workers the commenters who disagree with you will begin to see their error in assessment. No one goes to the stores to buy luxury items, restaurants begin to lose business, services ditto, etc. Spiral downward
Misguided sense of outrage at people who legally took a loan they shouldn’t have been offered in the first place — gotta teach them to be responsible. The minds will change when they can’t get a loan for that A/C that just crapped out or to cosolidate their credit cards which jump to 29% interest, etc.
Bradky on September 26, 2008 at 12:46 AM
How much does the part pay? I don’t work cheap.
FeralCat on September 26, 2008 at 12:47 AM
The whole ‘insurance’ idea has already been proven to not work.
These sub prime mortgage bundles were already known to be ‘risky’, and the buyers of those contracts all (?) (most, many, some?) wanted ‘insurance’.
Hence the invention of Credit Default Swaps (CDS) and Collateralized Debt Obligations (CDO).
Credit Default Swaps (CDS) and Collateralized Debt Obligations (CDO) were treated as ‘insurance’ against a default. It was argued that these derived contracts would reduce risk by spreading risk around, and would be beneficial because of additional income that would be generated. Instead they increase risk by involving parties that would otherwise not be involved in a simple default.
Rather than being insurance against default they became liabilities.
All of that additional income generated by all of those exotic derivatives was used to generate more derivatives, more liabilities, making the leveraged pyramid even larger.
The very presence of these exotic credit derivatives point out that the buyers and the sellers of those mortgage derivatives understood the risk involved, and wanted insurance. Unfortunately, it wasn’t insurance, and it seems to have magnified the risk, as well as serving to increase the leverage.
They made the problem worse, not better.
Having the Federal Government guarantee repayment of a mortgage is a really bad idea.
rockhauler on September 26, 2008 at 12:48 AM
Kill the capital gains tax and they could have a deal.
Make ‘em sweat…
TexasJew on September 26, 2008 at 12:42 AM
Sweet Gaia but the morons never think of that, they have so many fracking hands out for a free piece of pie that there aren’t even crumbs left for the rest of us.
Cut the damn taxes and pass a law right now which outlaws pork of any kind added to spending bills. You want to get dough for a dirt museum in Tribeca, then you can present a stand-alone bill like everyone else.
Kill the CG tax and outlaw pork, the crisis would be over by Monday and new money would be pouring in by Tuesday.
Bishop on September 26, 2008 at 12:48 AM
Why would there be a run on banks or no place to put your company’s money? If banks are FDIC insured up to $100k there is no reason to panic or not make deposits from your company. This is a psychological phenomenon. Remember after 9-11, it was “we the people” who kept the stock market from crashing as was predicted. We don’t have to cave into fear now either.
NightmareOnKStreet on September 26, 2008 at 12:51 AM
Texas Jew:
I heard on Fox that was to go to pay the National Debt.
Terrye on September 26, 2008 at 12:40 AM
And I’m Tinker Belle. Since it will go to pay off the very debt that they incur with this stupidity, that makes “as much sense as four teats on a boarhog” (to quote Barry Goldwater).
They’ll probably send it back as “Tax Credits” (aka Welfare) to the 40% of households who don’t pay a dime of Federal Income Taxes. Trust me, it ain’t going into a lockbox or back into actual taxpayers pockets or anything.
That’s all just shit.
TexasJew on September 26, 2008 at 12:51 AM
God, when did man lose his reason?
Save us, my God, if you’re there
God, can you not feel their terror like a fire in the air?
Tav on September 26, 2008 at 12:51 AM
Texas Jew:
If I thought all it would take to correct this was the average run of the mill recession, I would agree. I also think all of us played a part in this. What concerns is the lack of credit. That could be more serious than just a downturn.
I am no expert, obviously, and I am sure we will survive whatever happens.
But I am concerned that if we do not come up with a plan to bring some stability to the economy that things might get bad enough to make Obama a shoe in and with him a whole new New Deal.
Terrye on September 26, 2008 at 12:52 AM
This whole thing is due to the Democrats pushing VICE. Easy credit is like a drug. It is very easy to get addicted to it. Many people don’t have any business having lots of credit. They cannot handle it. It is too much power in their hands to use wisely.
And the sleazy drug-dealers, I mean lenders take advantage of this situation knowing they won’t be around to hold the bag.
This was a huge moral failing that the current version of the bailout will not fix, but only forestall the inevitable.
Big gov. create it and now we’ll get more big gov. without fixing the cause.
I’m now looking at my investments which are all in cash anyway and begin moving to Euro and Yen. God help us if the Chinese and other foreigners dump dollars.
Sapwolf on September 26, 2008 at 12:53 AM
Another capitalist who believes in his superiority to the knowledge of Warren Buffet?
Most of what you’re saying is true and I don’t disagree with it- this bailout will not stave off a recession or ensure a soft landing. It won’t protect us from the continued fallout of the housing bubble blow up.
But you’re missing the larger point. The goal of this bailout is to protect the nation from a complete financial meltdown, not a recession. Before 9-11, very few Americans could comprehend the possibility of a massive terrorist attack on US soil. The same can be said of people’s attitude toward another great depression. It’s hard to imagine a major disaster unfolding when nothing in our lifetimes provides a framework for comprehending the possibilities. A sound financial system that provides credit to grease the economy has become an assumption.
When smart men like Buffet, Paulson, and Bernanke say that action is needed to protect our way of life, it’s time to listen.
bayam on September 26, 2008 at 12:53 AM
Suffer? Yep, there will be that.
I’m not discounting the effect a recession will have. There will be a lot of BMWs and homes listed in the bargain sheet. Mine might well be one of those homes. But you know what? We’ll come out of it. Smarter, faster, tougher. Hard? Damn straight it will be hard but I have a feeling there are more people who’ll pull up their britches instead of pulling them down.
Limerick on September 26, 2008 at 12:53 AM
phronesis on September 26, 2008 at 12:54 AM
To deal with real problems, the market has to correct.
Increase the flow of capital into the market, thus increasing liquidity. End the transgressions against capitalism that created this problem. Expose and prosecute, if possible, the people responsible. Let the market correct the mistakes that have been made.
FloatingRock on September 26, 2008 at 12:54 AM
How much does the part pay? I don’t work cheap.
FeralCat on September 26, 2008 at 12:47 AM
This is no game, friend, no movie, according to some people here we will be living in an arid wasteland by next Wednesday and you need to take that seriously.
Now, we don’t need a cat and the feral child position has already been filled by Limerick. We DO need someone to be the stray dog that follows me around and attacks enemies, if you’re interested. I can’t guarantee that you won’t take a crossbow bolt to the chest eventually, so consider yourself warned.
Bishop on September 26, 2008 at 12:54 AM
Wamu’s assets were bought because they had to hastily put themselves up for auction or fail. This happened because the credit crisis continues to spiral out of control. And yes, there is an either / or scenario between inaction and depression. Read Milton Friedman’s A Monetary History of the United States. The Great Depression occured because the Fed shrunk the money supply at the same time bank failures were contracting the money supply. This turned a downturn into a depression. Last week the credit markets collapsed. This too amounts to a massive contraction in the money supply which will lead to depression if nothing is done. This is why Ben Bernanke and Paulson are frightened out of their minds. This is why they, along with your President and John McCain are urging action. This is why Buffet, Welch, Romney, Gross, etc. are urging action.
phronesis on September 26, 2008 at 12:55 AM
Texas Belle:
You are tinker belle?? I am clapping.
That explains a lot.
Terrye on September 26, 2008 at 12:56 AM
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