Breaking: Basic deal on bailout reached; Update: House GOP not on board yet; Update: Deal blowing up?
posted at 1:51 pm on September 25, 2008 by Allahpundit
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Just a skeleton right now. They’ll spend the next few days adding muscle, including how the funds will be phased in and whether the feds will be merely purchasing debt or going the whole nine socialist yards and buying up failing companies themselves.
The group broadly agreed there was a need for:
1) a panel to conduct oversight of how the vast sums of taxpayer cash are spent;
2) taxpayer protections — a way for taxpayers to receive some equity, through warrants, in the companies receiving government aid;
3) limits on executive compensation for officers of the companies receiving government aid — regarding golden parachutes, bonuses based on erroneous earnings (or “clawback”), and tax deductions for bonuses;
4) but a source tells ABC News that there was a problem resolving the issue of how to help homeowners facing foreclosure. Democrats want to re-write bankruptcy laws to enable judges to re-negotiate mortgages; Republicans do not.
NBC says the bankruptcy proposal is all but dead, but fear not. The same moon-eyed moron who did so much to get us into this mess isn’t giving up that easily:
Democrats also want any potential proceeds the government reaps from the bailout to go to a fund designed to pay for housing for poor families. Many Republicans oppose the very existence of the fund, which they say is a backdoor means of funneling money to liberal political groups.
Democratic demands that Congress be given greater authority over the bailout and that the government be required to help homeowners renegotiate their mortgages so they have lower monthly payments already have been accepted in principle.
Under the bailout bill, which will let the government buy huge amounts of toxic mortgage-related assets, “we’re now the biggest mortgage holder in town, and we can do serious foreclosure avoidance,” [Barney] Frank said.
I know I speak for all of us in saying how gratified I am that Barney Frank and “Countrywide Chris” Dodd are the point men for this deal on the left. For your amusement while we wait for updates, including/especially a statement from McCain (the meeting with Bush and Obama is at 4 p.m.), here’s O’Reilly in full meltdown this afternoon over what a “fat toad” Frank is and how we shouldn’t be listening to certain cigar-chomping private-jet-owning right-wing talk radio superstars given to blaming the crisis on the Clinton administration. Click the image to watch.
Update: Republican voter Bill Clinton gives the bailout thumbs up, and sounds a note being heard more frequently now on both sides: It might ultimately make more money than it costs.
Update: Boehner warns that House Republicans haven’t signed off on anything yet, but he’s “encouraged” by what he’s seen thus far.
Update: Oh my. Boehner’s suddenly calling the deal a “non-starter” and Carl Cameron quotes the McCain campaign as saying it’s “all but dead.” Paulson also suddenly seems to think it’s on life support.
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The money should go back from whence it came: The Federal Treasury.
As for renogiating mortgages, my knee jerk response is no. But then again after I thought about it for a minute, it seems to me that it would be better to have these people in these houses making payments than foreclosed on and paying rent somewhere while the house sits empty on the market.
I just hope this thing works well enough to avoid a big meltdown that hurts everyone.
I doubt that McCain is against the idea of some kind of bailout, he might be against certain provisions of one. It sounds to me in everything he has said that he wants to come up with a solution to the problem. Not just ignore it.
Terrye on September 25, 2008 at 2:53 PM
Of course. Aren’t you still saving your confederate money?
KentAllard on September 25, 2008 at 2:53 PM
Oh yea! Bigger government and more regulations!
We’ve gone from corporate welfare to upper class welfare. We rock!
angelat0763 on September 25, 2008 at 2:54 PM
I did hear Boehner say the other day that they needed to do something. He said that too many people would lose their jobs and their savings. So I think there is still hope the GOP will get onboard, but they will probably want changes.
Terrye on September 25, 2008 at 2:55 PM
No sense abandoning all one’s bargaining chips just yet, but I’m finally getting the impression that they understand the stakes.
phronesis on September 25, 2008 at 2:56 PM
Barney probably is getting turned on hearing about Bill wanting to smack him.
Bill O’Reilly – “If he was here I would hit him”
Phone Rings
Barney Franks – “Promise!!!”
Hening on September 25, 2008 at 2:58 PM
Let the deadbeats have the consequences they deserve. Why should the responsible American taxpayer bail out greedy selfish people who opted to live beyond their means by agreeing to a loan they couldn’t afford in a down market? Screw them for their greed and let the chips fall where they may! There is no reason why I should be expected to fork over $3500 of my hard-earned income to bail out stupid people.
highhopes on September 25, 2008 at 2:58 PM
Do I have voting shares in these companies for which I’m being forced into owning stock? How much equity am I receiving for the Mexican Peso bailout? Shouldn’t the US taxpayers own a large chunk of Mexico because of that?
Buddahpundit on September 25, 2008 at 2:59 PM
Only way the Fed government should be involved in a renegotiation of a loan is if its bought by Fannie or Freddie, which is now a defacto Government entity.
Let Fannie and Freddie get money at the Prime Rate to buy any loan that falls into this category… BUT…
With the provision that the person getting the loan is in this country LEGALLY.
Romeo13 on September 25, 2008 at 3:01 PM
Consider the source.
It’s a setup for more of the same, I fear.
maverick muse on September 25, 2008 at 3:01 PM
Thanks for updating that Allah. I was going to say something about the Republicans not being all gung-ho just yet. Don’t believe anything Congressional Democrats say until you hear from the horses mouth.
I’m hearing that McCain’s going up there to vote against the bailout. This is still going to get interesting.
Sultry Beauty on September 25, 2008 at 3:02 PM
Let’s put lipstick on that US debt and hope the Chinese continue to bankroll the US economy.
lexhamfox on September 25, 2008 at 3:02 PM
And you can go to hell too.
FiveWays on September 25, 2008 at 3:02 PM
It is very interesting watching the insiders play the news reporters.
“we have a deal” “no deal”
“do too”
“do not”
“McCain saved it”
“did not”
“did too”
rockhauler on September 25, 2008 at 3:04 PM
Sultry:
If McCain votes against the bailout and millions of people lose their jobs Republicans will not be back in a majority for decades. One word: Hoover.
I have not gotten any sweetheart loans or anything else, but if I lose my job or my loans get called in or both I will blame the people fighting the bailout just as much as the people who started all this.
I think McCain will try to fix it. If he does not, I am not sure I will vote. And I have always been a strong supporter of the Republican candidate. But this is too important for this ideological game playing.
Terrye on September 25, 2008 at 3:07 PM
Well you probably should but you don’t and you won’t. On the other hand we will own you and what is still mostly your country in another generation once we all get our amnesty and take over. Instead of trying to save the economy of what is still your nation you Gingos should be spending your time el aprendizaje del Espanol and learning how to pick la lechuga.
VinyFoxy on September 25, 2008 at 3:07 PM
Ditto.
phronesis on September 25, 2008 at 3:08 PM
Let’s see…
The American taxpayers spent too much money they didn’t have, so they went to the bank.
The banks loaned out money that they didn’t have, so they went to the government.
The government gives a bunch of money to the banks that they don’t have, so the government goes to China….
Hmmm…
cntrlfrk on September 25, 2008 at 3:08 PM
I’m sure if the deal is queered because McCain votes against it, you life will be much, much better under an Obama administration….
CC
CapedConservative on September 25, 2008 at 3:09 PM
And believe me if the taxpayer watches the economy collapse the people who stopped the only thing that might have stopped the collapse will not be heroes. They had better hope that things are not as bad as the analysts and economists say.
And I am not some fly by night supporter. I voted in 2006 when other sat home and pouted. I gave money to the RNC and the McCain campaign.
Terrye on September 25, 2008 at 3:10 PM
I see that you have still not recovered from your decapitation of last night.
KentAllard on September 25, 2008 at 3:10 PM
It won’t matter either way because the market crash and economic depression would make an Obama victory inevitable.
phronesis on September 25, 2008 at 3:10 PM
Looks like it’s a deal:
Agreement Reached on Bailout Ahead of High-Level Meeting – WSJ.com
Proposal Breaks $700 Billion Into Installments
starfleet_dude on September 25, 2008 at 3:11 PM
Fantastic spoof on the bailout:
The Dark Bailout
iamse7en on September 25, 2008 at 3:11 PM
I wish someone shut Shep Smith up. He’s an adrenalin junkie and fear monger. A perfect example of (too) little knowledge in the wrong hands.
Connie on September 25, 2008 at 3:12 PM
You look lonely in that toilet bowl KentSalad.
*FLUSH*
There ya go.
FiveWays on September 25, 2008 at 3:13 PM
If true, I’d feel better about having him as the nominee since he tends to jump on with Democrats when it comes to domestic issues.
There is no other way to say this: A federal bailout is fundamentally wrong and fiscally irresponsible. Actions should have consequences and those who agreed to loans that only make sense in an upmarket should face the consequences of being unrealistic about how much house they can afford. The lenders who allowed these mortgages should face the consequences of writing bad loans. Fannie and Freddie should face the consequences of bad stewardship. Barney Frank, Chris Dodd, and the entire Congress should face the consequences of refusing to provide clearly needed oversight (dating back to April 2001).
highhopes on September 25, 2008 at 3:14 PM
CC:
I have said those same words to so many pouting conservatives over the last 3 months it is almost funny. All the people who promised to sit home over immigration or some other issue. The people who called a Bushbot or a McCainiac for supporting the Republican candidate when I should have been home sulking and proving how my vote was not for sale. blah blah blah.
But here we are in the midst of what might well be the most important and dangerous period our economy has seen in decades and people could care less. They just don’t like the Democrats, don’t like anything to do with the government and really do not give a rat’s ass about everyone else. They do not care that Bush has pushed this and that he is the Republican president. None of that matters to them. They do not care if Republicans get blamed for the carnage and suffer politically. No, none of that is important.
They just want to kill the deal, like with immigration. Show everyone how powerful they are and they are hoping that McCain will help them do it.
Well excuse me, I have intended to vote for McCain. I would not vote for Obama under any circumstances, but after all the crap I have taken from the real conservatives in recent months I do not need the lecture.
Terrye on September 25, 2008 at 3:15 PM
I was right. Your head is still detached from the rest of you and from it’s blood supply. Maybe you could get a neighboor to staple or duct tape it back on for you
KentAllard on September 25, 2008 at 3:16 PM
And how has it managed to survive all this week without the precious deal? I’m sure some deal will be reached. I disagree with any bailout being made by taxpayers. Threats of “we’ll be in a great depression” or the reverse “we’ll now be socialst” are both overstatements to influence opinion. I always disagree with movements towards socialism and I believe maintaining a democratic free market society is better than one less democratic and less freemarket. An opinion… we all have one.
CC
CapedConservative on September 25, 2008 at 3:17 PM
The moonbats are livid over the apparent progress and also livid that Boehner is “stalling”
I love it
lodge on September 25, 2008 at 3:17 PM
Don’t worry super old dude John will come into town, eventually, afterall except for the guy from the Dakotas who had a stroke, no one has been more absent from the senate, to shoot the meteor barring down on us from outer space. Of course he is old and needs his time outs.
So let me get this right, the GOP is “negotiating” on how to save the US from certain disaster from little boy Blue George’s speech? Hey they been rubber stamping him for years, why stop now.
Monkei on September 25, 2008 at 3:17 PM
highhopes:
If they do not do this, the people who will suffer the consequences are not the people who made the mistakes…it will be millions of people who had nothing at all to do with any of this.
Terrye on September 25, 2008 at 3:17 PM
CC:
Maybe he has managed to survive because people have not lost their jobs yet. However, if this deal dies, you could see that changing very soon.
Terrye on September 25, 2008 at 3:19 PM
Run along now… grownups are talking here…
CC
CapedConservative on September 25, 2008 at 3:19 PM
OOPS! Look like a floater!
*FLUSH* *FLUSH*
FiveWays on September 25, 2008 at 3:19 PM
Living here in the south I hear the same statement, except I always hear the words “I would never vote for a black man” added to yours.
Monkei on September 25, 2008 at 3:19 PM
and implicit in could is could not….
CC
CapedConservative on September 25, 2008 at 3:19 PM
still looking, can’t find one, of course reading here, then writing here, then trying to find grownups, well that is three things and I can’t be expected to be able to do more than one thing at a time. TIME OUT.
Monkei on September 25, 2008 at 3:20 PM
lodge:
ANSWER is every bit as much against this deal as some people on the right are. Strange bedfellows and all that.
Terrye on September 25, 2008 at 3:21 PM
Go to your room! That sure sounds like a southern racist to me… I’m sure they would delicately use the term “black man”. Troll
CC
CapedConservative on September 25, 2008 at 3:21 PM
Well mostly true I suppose, but certainly and obviously not entirely by any stretch.
KentAllard on September 25, 2008 at 3:22 PM
What you, and others, do not understand is that many of us are Conservatives first…
This “bailout” could be done using Conservative principals, by allowing the FED to LOAN money to private institutions to buy up this debt. They could even use Fannie and Freddie to do it (as they already exist, and have the infrastructure to do it)…
Many of us see this as a direct power grab by the Government, even going so far as to say how much a CEO can get paid? to have the ability to rewrite Contracts through the court?
And all the while, the people who created this problem are going to spend 100s of billions of our money.
Just because its a REPUBLICAN who puts forth a SOCIALIST policy, does not make it right.
You can continue to drink the Kool aid… and continue with your partisan Republican us vs them outlook, while I personaly will stick with my beleifs.
Romeo13 on September 25, 2008 at 3:22 PM
*FLUSH*
FiveWays on September 25, 2008 at 3:23 PM
There really should be an age requirement to comment here. At least 8 years old anyway.
KentAllard on September 25, 2008 at 3:24 PM
I appologise, I mistook your position.
Sorry.
Romeo13 on September 25, 2008 at 3:26 PM
I had nothing to do with this. Why should I have to pay for others greed? Why should I lose $3500 of my hard earned money for living within my means? Is that fair? Show me where and when it became government’s responsibilty to bail out greedy selfish deadbeats.
highhopes on September 25, 2008 at 3:26 PM
CC:
Are you saying that it will not have an effect on public opinion if Wall Street crashes, credit dries up and millions of people lose their jobs? Are all these people who have said this crisis is real, from the President to McCain to Bernacke to Paulson to even Boehner are part of some conspiracy to create fear in people and carry out some nefarious socialist plot? And only you can save us? Or something like that?
I have been promoting a McCain candidacy back when people called me traitor for doing it. But if McCain votes agains this without any better idea, what is the point in putting his candidacy on hold? He can say NO without taking time of the campaign trail. Personally I don’t think he is that irresponsible. At least I hope not. if he is I have misjudged him.
Terrye on September 25, 2008 at 3:26 PM
Now they say the House AND Senate approve of the bailout.
Pic of Barney Frank, Chuck Shumer and Chris Dodd on CNN about made me hurl.
cntrlfrk on September 25, 2008 at 3:30 PM
Has anyone considered the “Black Wednesday” scenario?
Consider this and this.
“The crisis occurred (to greatly oversimplify) because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid. You didn’t have to own a mortgage to make the bets. These bets, called Credit Default Swaps, are complex. But in a nutshell, they allow someone to profit immensely – staggeringly – if large numbers of subprime mortgages are not paid off and go into default.
The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the subprime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse…)”
JohnJ on September 25, 2008 at 3:30 PM
highopes:
For one thing, this plan could actually turn a profit or at least break even.
And besides, this whole thing was part of the economy for years. It helped create jobs and taxes just like the dot com bubble. I am not saying you had any part in giving out loans, but if this thing crashes you will pay for it in all probability, we all will. That is the whole point.
Terrye on September 25, 2008 at 3:30 PM
From townhall (boy, I miss MKH):
db on September 25, 2008 at 3:30 PM
Sen. Bunning just dropped a bomb on Shep Smith.
NO DEAL!
Go Jim!
fossten on September 25, 2008 at 3:33 PM
A see an awful lot of assumptions there:
Wall St. Crashes
Credit dries up
Million lose jobs
Don’t forget… those people that are saying that are speculating on what “could” happen. No one knows what will happen. To state so for a fact would be to demonstrate an attribute of a moron.
I think someone in another thread said something about why not bail out a portion of those in trouble with loans? why nationalize it? To quote Bunning (R) just speaking, this is the worst example of socialism.
I agree with that assessment. If you want to argue from the position of absolute extremes, then yes, I would prefer to suffer through a “great depression” than become socialist.
CC
CapedConservative on September 25, 2008 at 3:33 PM
*FLUSH*
More crap down the crapper.
FiveWays on September 25, 2008 at 3:33 PM
I don’t disagree with that. Now if you can devise a way in which only those parties and not the rest of us face the consequences, then I’d say go for it.
BUT if you can’t limit the damage to only those guilty parties, then you have to act in the interest of the innocent and the economy as a whole. If the guilty get away with it, well that’s why life sometimes sucks.
PackerBronco on September 25, 2008 at 3:34 PM
Nope, House Repubs are saying they don’t even know what the deal is supposed to be…
And the “deal” was cut by replacing the Head Repub on the banking commitee with his second…
Romeo13 on September 25, 2008 at 3:34 PM
Romeo:
I am no lefty, not by a long shot, but when Ron Paul and ANSWER on the same side it makes you wonder.
I support this for the simple that is beats the alternative. I am not going to stand on some ideological principle and say I would rather see it all crash and burn than do a bailout. And I just can not believe that McCain would do that either.
And I do intend to vote, but if this does not go through, I will think less of a lot of people I used to like and respect.
Terrye on September 25, 2008 at 3:35 PM
Packer:
A lot of the guilty are already gone from positions with the companies. In fact a lot of the companies are already gone.
Terrye on September 25, 2008 at 3:37 PM
Into darkness, into danger
Into storms that rip the night
Don’t give in, don’t give up
But give thanks for the glorious fight
Someone has to face the valley
Rush in, we have to rally and win, boys
When the world is saying not to
By God, you know you’ve got to march on, boys
Never hold back your step for a moment
Never doubt that your courage will grow
Yes, it’s higher and higher
And into the fire we go
Tav on September 25, 2008 at 3:37 PM
Did someone pass a law requiring crash and burn? Why is that is “assumed” to be fact? Looks to me like their threats are working quite well… and some people don’t understand how Obama could be elected…
CC
CapedConservative on September 25, 2008 at 3:37 PM
The meeting between Bush and the Congressional leaders and the candidates is this afternoon. I doubt if there would be any real resolution before that.
Terrye on September 25, 2008 at 3:38 PM
If McCain is going to sign on, it’s best to let it linger for a while, so as to appear the hero.
drjohn on September 25, 2008 at 3:38 PM
They are not the ones being bailed out – the banks are. If the banks cannot capitalize the market, stocks, loans, etc dry up, and it will cost you quite a bit more than $3500.
Vashta.Nerada on September 25, 2008 at 3:39 PM
My own opinion is that people would be more willing to support a bailout if secured the return on investment. Plans to use the possible profit (a stretch imho) for other government programs as suggested is only going to alienate taxpayers further. I think that roi must be a provision if they want public support.
Spirit of 1776 on September 25, 2008 at 3:40 PM
Either way, there are going to be severe consequences… it’s just a matter of how good can things get when this is past. I think becoming more socialist tends to limit the upside.
CC
CapedConservative on September 25, 2008 at 3:41 PM
CC:
Have you been in a cave? I mean really? Are you completely oblivious to what is going on the credit markets? Do you simply not understand the issue here?
I am in my 50’s and I have never seen a President do a prime time address on an economic issue. I have never seen a President call all the leaders to the White House for a meeting like this. Do you think Bush is just messing with you? Do you think all these analysts and experts who are talking a breakdown in the credit markets and a long steep decline are just playing you?
Go educate yourself on the issue. That is not my job.
Well, if you don’t want to believe it, fine. But I would rather be wrong and devise a plan like this than ignore the dire risks and do nothing. We can recover from the former a lot easier than the latter.
Terrye on September 25, 2008 at 3:42 PM
I know. It’s hilarious. These tards actually think that when the politicians yabber about “the taxpayer making money” that we (the taxpayers) will actually see a single cent.
The gubmint may make money eventually (not a certainty by any means), which will be squandered to buy votes along with all the other money they take from us.
LimeyGeek on September 25, 2008 at 3:42 PM
Yeah, only problem is that there are other alternatives to Crash and Burn…
Like opening up the FED lending spigot to companies at the Prime Rate. Set up a quick law to allow holding companies for this debt, which can use FED money at Prime to buy this debt, and hold it locked.
Gets it off the books, without costing the Taxpayer a dime, or allowing for a Socialistic control of business to develop.
Romeo13 on September 25, 2008 at 3:42 PM
It’s raining and pouring 700 Billions in DC
JoeBrooks on September 25, 2008 at 3:44 PM
We’ve explained why we assume that in thread after thread. People just ignore it. The credit markets came to a halt last week. This is all it takes to destroy the economy.
phronesis on September 25, 2008 at 3:45 PM
Are there mountains that surround us?
Are there walls that block the way?
Knock ‘em down, strip ‘em back boys
And forward and into the fray
Into terror, into valour
Charge ahead, no, never turn
Yes, it’s into the fire we fly
And the devil will burn
Tav on September 25, 2008 at 3:45 PM
CC:
We are not becoming more socialistic. We made money off the S&L bailout. We made money off the Chrysler bailout. We were still a capitalists country after both of those bailouts.
But, if banks collapse the government will have to intervene and create new ones. That will be more socialistic.
Unless of course you think we will just bury our worthless money in a coffee can in the back yard until things get better.If they do.
Terrye on September 25, 2008 at 3:45 PM
Yes, there will be severe consequences. They need to put forward a decent plan that puts liquidity back in the market, with the least amount of socialist interference. It is like excising a tumor – you feel bad for several months, but at least you don’t have cancer anymore.
Vashta.Nerada on September 25, 2008 at 3:46 PM
CC:
It is not what could happen. It is what will happen if we allow nature to take its course and just let the global financial system go to hell.
For heavens sake, do you have any idea how close we came to the credit market collapsing last week?
Maybe there will be some unforseen event or a miracle intervene and save us, but I would not count on it.
Terrye on September 25, 2008 at 3:50 PM
I agreed with the S&L bailout, since they were picking up real assets and reselling them, but we lost money on the deal – $400B in assets taken and $130B loss at the end. Could have been worse, though.
Vashta.Nerada on September 25, 2008 at 3:50 PM
You need to read the “deal”…
It forces companies who use the bail out to give not only the asset in question to the Feds, but company equity as well.
It also limits their free business decision as to Employee compensation.
It also MAY (still not done) give courts the ability to renetotiate a private contract (mortgage aggreements).
How, are those three things NOT Socialistic?
I don’t have as much of a philisophical problem with Paulson’s straight buying of assets, as I have with what this is morphing into.
Romeo13 on September 25, 2008 at 3:51 PM
Maybe there will be some unforseen event or a miracle intervene and save us, but I would not count on it.
Terrye on September 25, 2008 at 3:50 PM
phronesis on September 25, 2008 at 3:52 PM
Well, no, not exactly. As a matter of fact, the first piece of morning news I read was that one of our MAJOR overseas financial source (that would be China) was directed to stop lending money to our banks because of our problem. The market is so delicate that NOTHING happened. Then again, I guess that isn’t really important news… someone providing daily operating funds stopping.
I too am in my 50s. I saw another President make speeches under dire circumstances. I saw the prime rate go to 21% based on a poor decision by poor decision makers. I think I see it happening again. Where were you yesterday when there were some 17 pages on a thread going back and forth over just this issue… do it or don’t. Opinions are divided, but the reasons for supporting or not supporting are consistent. So to paraphrase, our founding fathers risked their personal fortunes and their very lives for a free, democratic, freemarket society. I think I can at least risk some personal fortune to keep it going. I understand the viewpoint of those that disagree. I have a very close friend that I fish with that is retired and has seen his portfolio shrink by $200K in the last few months. We will just have to agree to disagree and, as it always does, time will tell.
CC
CapedConservative on September 25, 2008 at 3:53 PM
Romeo:
I think a lot of changes will have to be made. And I think there is a lot of blame to go around too. I heard someone say a day or two ago that if Greenspan had not had such an easy money policy a lot of these lenders would not have been able to make these loans in the first place.
We need new rules, that is for sure.
Terrye on September 25, 2008 at 3:53 PM
You’re right about this one. That would be really bad if its permanent but we don’t know that yet. I’m hoping (and cautiously optimistic) that these stakes will be sold once the facility is ended.
phronesis on September 25, 2008 at 3:56 PM
The comments were directed at the notion that if I don’t fall in line and support this socialist endeavor, innocent people will be hurt. I had nothing to do with this, why should I pay one cent for corporate greed or idiots who live beyond their means? The market can take up the slack if the government and well-intentioned fools don’t make it the government’s responsibilty to bail out losers.
highhopes on September 25, 2008 at 3:58 PM
CC:
Opinions are not divided on one simple fact: this is the most serious financial problem our country has faced since WW2. If you want to bury your head in the sand, fine. I am not going to waste any more time arguing with you. But you had better hope you are right, because if you are not, and conservatives kill this deal, they will be the ones who get the blame for what follows. Count on it.
Government helped create this situation and they have an obligation to deal with it now. I personally think it is ridiculous to think that embracing recession or depression is patriotic. I doubt very much if the founding fathers would do that themselves.
Where was I yesterday?… on a lot of that thread, and that is why I don’t want to waste any more time on this now.
Terrye on September 25, 2008 at 4:05 PM
Way too early to be making new rules. We are still in full blown hysterics and political rhetoric. No rule passed anytime soon will be valid and well thought out.
highhopes on September 25, 2008 at 4:07 PM
Only the free market can save the free-market, and some are simply beyond saving. It’s a fact of life. This bailout can only prolong and exacerbate the pain. You can’t have your cake and eat it to, it’s just impossible. The only real solution is to increase the flow of capital in the markets, resolve the underlying causes of this problem and then let the market correct itself but at a slower pace. People who expected the prices of houses to continue past the stratosphere and into space were simply wrong. The people who aided and abetted them were too.
FloatingRock on September 25, 2008 at 4:07 PM
highopes:
No, but you had something to do with the decision to let it go to hell. That is like saying, I did not run over the kid in the street. Why should I lose a day’s work stopping to help her? Not my kid, not problem. But then again, it could be your kid.
And if this thing gets really bad, it could be your job, your life savings, your pension plan….
Terrye on September 25, 2008 at 4:07 PM
You or I would be among the innocent people being hurt. The mortgage mess and the SOX writedowns have sucked so much liquidity out of the market that commercial paper used to make short term loans between businesses has almost ground to a halt. No paper, no loans, businesses start to lay off, then more homeowners default, causing more writedowns, causing more liquidity problems, ad ininitem until we are really screwed. Our fight right now is to try and keep the bailout as an RTC type loan or purchase of some firms, and an orderly dissolving of the crap loans, with the bailout organization then being wound down.
Vashta.Nerada on September 25, 2008 at 4:07 PM
I really love this threat of financial meltdown if we don’t do this. I still work and am I glad I am not retired and living off a fixed or semi-fixed income. The current money supply indicator used for estimating inflation impact is M2. It is currently just over $7 Trillion. No one seems to be at all concerned about the inflationary effect of this move… toss another trillion in (even though they were worried about the $50 billion earlier this year). As far as the government goes, they have to love it. If they can fuel the inflation fire and run some wages up, they can boost the tax collections. In the mean time, all those folks on retirement will be paying $5 for a $1 loaf of bread. It is almost never the snake you see in advance that bites you.
CC
CapedConservative on September 25, 2008 at 4:09 PM
Helped create is the operative word. That doesn’t mean they should bail out the deadbeats who also share some responsiblity for this situation. That doesn’t mean the government should take on all the bad debt of greedy companies. All it means is they have to look for a way forward. That’s where their obligation stops.
highhopes on September 25, 2008 at 4:09 PM
Floating Rock:
Only the free market can save us? The market is not working right now, that is the problem.
It is seizing up.
If being a good conservative means that I have to embrace the Great Depression 2 as if it were some cleansing spiritual experience we all need to go through in order to get closer to the market God, then to hell with it. That is nuts. The free market can be made to work without committing financial suicide in the process. All we are talking about here is taking some toxic assets off the market and allowing it to right itself at which time we auction off said assets. That is not communism for heavens sake.
Terrye on September 25, 2008 at 4:13 PM
There have been assessments of housing counseling interventions that show considerable success in avoiding foreclosure — the figure for 2007 showed almost 97 percent of those receiving counseling for foreclosure avoidance were successful.
Abt were supposed to do a formal evaluation for HUD PD&R but I’m not sure it was ever funded.
My concerns with allowing unpaid principal balance alterations by bankruptcy courts are that this
(1) directly affects the value of MBSes containing the altered-principal mortgages;
(2) may take years to play out, causing a long period of uncertainty about the value of those assets;
(3) may well overwhelm the U.S. bankruptcy court infrastructure (i.e. can the system handle all the new cases?).
DrSteve on September 25, 2008 at 4:13 PM
highopes:
Deadbeats? You don’t have the slightest idea what you are talking about. I used to think that all the unreasonable fanatics were on the left. Not so.
Most of the people who will be hurt by this are not now, nor have they ever been dead beats.
Terrye on September 25, 2008 at 4:16 PM
Listen to me, I have fantasy dreams I can spin you
Fantasy dreams to linger within you
Close your eyes and we’ll ride my fantasy machine
I’ll sing you stories of dreamers whose fantasies used to fill me
And the fantasies that will be
For, you see, fantasy is one thing I do well
Tav on September 25, 2008 at 4:17 PM
The government’s history of fooling with the free market is glowing… Nixon – wage/price controls… Carter and gasoline. Works really well. Again, M2 is currently just over $7 trillion. We were worried about inflation when the decision was made to pump out a mere $50 billion in give-a-ways. Gee, I wonder what another trillion will do?
CC
CapedConservative on September 25, 2008 at 4:23 PM
Well there are deadbeats you see
If not you
And surly not me
Must be all those fellows behind the tree!
Tav on September 25, 2008 at 4:24 PM
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