Reps. Kaptur & DeFazio on “Let’s Play Bailout” [Update: Senate Letter]
By SusanUnPC on September 30, 2008 at 7:45 PM in Economy
UPDATE PREFACE: Today I talked to a friend, a professional person whose sister and brother-in-law in California own a printing business with 250 employees. Every month they take out a short-term loan to cover payroll until the customer payments come in. They CANNOT get a loan this month to make the payroll. They have never been unable to get a loan before. The banks cannot loan them money because CREDIT IS FROZEN. This is a REAL crisis. We need to do something now. I present the following as a very interesting offering. I have NO clue if it’s the answer. I’m simply reporting. But we’d BETTER DO SOMETHING. (It may not be hitting you individually yet, but trust me — it is hitting real people all around this country. As my friend said today, what will her daughter do? Will she have to lay off 250 employees? Think about that, multiplied THOUSANDS of times around this nation. This is real. Update 2: As Charles Krauthammer said on Brit Hume’s show today, the reason that Hank Paulson and Ben Bernanke are running around “like men with their hair on fire” is that they’ve seen the credit numbers, and they are gravely worried. If there’s no credit, there’s no business in this country. It’s that serious.)
………………
I just heard Reps. Marcy Kaptur (D-Ohio) and Peter DeFazio (D-Ore.) on CNN’s Lou Dobbs discussing a way to regulate the 25% of subprime mortgages that are in trouble (75%, they say, are sound), and to solve our fiscal crisis without a huge taxpayer bailout. [I'm not certain that's a good description of what they said -- I am waiting to get the transcript; in the meantime read the speech by Rep. Kaptur and press release from Sens. Cantwell & Lieberman below] (I am no expert, but their approach sounds prudent. It is based on how the savings & loans catastrophe was handled as well as on Swedish and Finnish models.)
Reps. Kaptur and DeFazio urge us all to call our U.S. Senators before they vote — tomorrow night — on a full-blown bailout plan, and urge them to vote Nay. Call 202-224-3121.
Here is Marcy Kaptur giving her now-famous “Let’s Play Bail-Out” speech on the floor of the House (and it’s notable that this video has been viewed 369,584 times). Yes, she and Rep. DeFazio voted against the plan yesterday. They are also receiving attention from Sen. Maria Cantwell (D-Wash.), who told them she is interested and will be taking their proposal to Sen. Judd Gregg (R-N.H.) BELOW the fold is the transcript of Rep. Kaptur’s formal speech: “America needs a real financial reform, not a bailout.” See also: “September 30, 2008: Congresswoman Kaptur Votes Against Bill To Bail Out ‘Reckless’ Wall Street.”
It sounds like Reps. Kaptur and DeFazio have the makings of a sound plan that should be considered as an alternative to the massive bailout. I am pleased that my senator, Maria Cantwell, is in communication with them since she is particularly sharp in areas of finance. When Lou Dobbs’ interview is available with by video or transcript, I’ll rush to get it up here. I think you’ll find it as fascinating as I did. Below is more information on their proposal. I’ll continue to add details as I find them.
From Rep. Kaptur’s House Web site:
The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
Ms. KAPTUR. Madam Speaker, I would like to place in the Record the measuring sticks against which I will weigh any proposal brought before this Congress to bail out Wall Street investment houses.
Number one, financial reform must come first. America needs reform, not a bailout. Over the last 20 years, legislation has been passed by this Congress, H.R. 1278 in 1989 called FIRREA, interstate banking in 1994 which created those big mega banks, and H.R. 10/S. 900 in 1999, which overturned the Glass-Steagall Act that allowed banking, real estate and insurance all to be under the roof of the same firm.
Well all those bills together have created a highly concentrated financial system, particularly in housing finance, rather than a decentralized one like that which we had for most of the 20th century. This bailout is the result of high-risk misbehavior by distant financial giants. They have sucked equity out of local communities and turned local markets into derivative, debt-ridden communities rather than independent, robust, credit markets with prudent savings and lending practices.
Reform should restore those prudent and transparent banking practices defining the difference between banks and investment houses and protecting and restoring the protections that existed prior to 1999 when that Glass-Steagall Act was eliminated. Conflicts of interest at bond rating agencies should be addressed by such agencies becoming public. Reform, as I say, and regulation should come first out the door before the money, not later
Number two, Main Street housing market deflation must be stabilized as step one. A moratorium should be placed on all home foreclosures for 120 days. That will take us into the new year. And deflation in the housing market really is what has triggered this credit crunch. The Federal Reserve could use its influence through its regionalized structure to bring parties together to work out affected loans in places like Ohio to stabilize local real estate and housing markets. That is where the real assets are and where the markets must clear and adjust.
What a crime it would be if people are thrown out of their homes and an institution somewhere over in England like Barclays becomes the owner of those assets and gets them at fire-sale prices. We need to put those assets back in the hands of the American people.
The traditional home loan backed by savings deposits was converted into a bond during the 1990s and then securitized into those international markets. The time-tested loan standards of character, collateral and collectibility were shelved, and therefore to reform this system it must be decentralized again, with the community savings and home loan bank system being reestablished with an emphasis on increasing savings deposits with enhanced local mortgage origination and oversight, as opposed to concentration of activity in Wall Street investment houses.
Number three, a new Financial Assets Management Board should be formed to manage this mortgage refinancing and workouts at the local level, similar to FDR’s Homeowner Loan Corporation.
Fourth, the Department of Justice should be authorized to investigate the wrongdoers, to track down the fraud, misrepresentation of asset value, insider trading and related crimes in this scandal. There should be over 500 attorneys and accountants and support staff to conduct thorough investigations, forensic accounting and prosecution.
Fifth, any Federal dollar that is expended must result in equity to our taxpayers. If our people are going to be forced to fund unlimited private sector bad debt, our people must receive an equity share in every Wall Street financial company proportional to the amount of bad debt held that is shifted to the taxpayer.
Our people are being asked to take 100 percent of the risk. They should be afforded the benefit of any future profits. A 0.25 percent transaction fee should be charged on every Wall Street trade or Chicago Board of Trade transaction, and that $150 billion a year that will be yielded should pay the American people back over time.
Sixth, a select congressional committee should be established to hold hearings, do proper oversight and advise the next President and Congress on mortgage and financial recovery operations and additional means to assure any necessary repayment of public investment.
Seven, standards for executives and compensation structure in the financial services industry should be established. Those outlandish salaries that they get should be curbed, and all bonuses, stock options and exceptional compensation for those individuals and their boards of directors should be discouraged. We should help to pay the bill by going after some of their assets.
Finally, Madam Speaker, I would like to place this in the RECORD, and also include bankruptcy reform as one of the major changes that we need to make in any measure. These are the steps that would actually result in market recovery, not just bailing out unknown assets and bad debts from Wall Street.
Kaptur: Real Reform or Nothing–Financial Reform Must Come First
America needs real financial reform first, not a bailout. Over the last 20 years, legislation passed by Congress (HR 1278 in 1989, HR 3841 in 1994, and HR 10/S 900 in 1999) has highly concentrated financial activities on Wall Street–particularly housing finance–rather than decentralized them. This bailout is the result of high risk misbehavior by distant financial giants. They have sucked equity out of local communities and turned local markets into derivative, debt-ridden communities rather than independent robust credit markets with prudent savings and lending practices.
Such reform should restore prudent and transparent banking practices. Reform of the deregulated financial structure should start with defining the difference between banks and investment houses and restoring protection that existed prior to 1999 when the Glass-Steagall Act was eliminated. Each should have defined activities and be regulated separately.
Conflicts of interest at bond rating agencies should be addressed by such agencies becoming public.
Reform and regulation should come first, not later. Franklin Delano Roosevelt invented the basic framework that served
America well for the last century. Congress should adapt it to current challenges on a Jeffersonian model, not the proposed Hamiltonian approach.
MAIN STREET HOUSING MARKET DEFLATION MUST BE STABILIZED AS STEP ONELegislation should mandate a moratorium on all home foreclosures for 120 days. Deflation in the housing market has triggered this credit crunch. The Federal Reserve must use its influence through its regionalized structure to bring parties together to work out affected loans to stabilize local real estate and housing markets. That is where the real assets are and where the market must clear and adjust. Before the Federal Reserve and Treasury, or its consultants, can foreclose upon any home, it must first certify under criminal penalty that a workout was attempted with the mortgage. A workout certification on every home will be required. Additionally, a 120-day moratorium will drastically reduce the amount of capital needed. Otherwise, millions more of our citizens will be foreclosed and financial giants like Barclay’s will pick up local real estate at fire sale prices.
The cowboy banking that accelerated in the last 20 years concentrated financial power on Wall Street and huge regional mega-banks. The traditional home loan, backed by savings deposits, was converted into a bond that was securitized into international markets. The time tested loan standards of character, collateral, and collectibility were shelved. They must be restored. To reform the system, it must be decentralized, with the community savings and home loan bank system being reestablished, with an emphasis on increasing savings deposits, enhanced local mortgage origination and oversight, as opposed to concentration of activity in Wall Street investment houses. These local institutions should be empowered to do workouts and supported through any housing finance provided. The federal incentives for savings and home loan institutions, as existed pre-FIRREA, should be restored.
In a letter to Congress the CEO of BB&T states, “The primary beneficiaries of the proposed rescue are Goldman Sachs and Morgan Stanley.” This is essentially unfair and improperly focused. Attention must be placed on restoring value to local housing real estate markets.
A NEW FINANCIAL ASSETS MANAGEMENT BOARD SHOULD BE FORMED TO MANAGE MORTGAGE REFINANCING AND WORKOUTS (SIMILAR TO FDR’S HOME OWNER LOAN CORPORATION)
Board Members: Secretary of Treasury, Federal Reserve Chairman, Comptroller General of the United States, Appointees of House Speaker, House Minority Leader, Senate Majority Leader, and Senate Minority Leader, Appointee from the States Attorneys General, U.S. Attorney General.
DEPARTMENT OF JUSTICE SHOULD BE AUTHORIZED TO INVESTIGATE
Creation of a Special Prosecutor position at the U.S. Department of Justice with authority and adequate funding to track down the fraud, misrepresentation of asset value, insider trading, and related crimes in this scandal.
Funds should be allocated to hire 500 or more attorneys and accountants and support staff to conduct thorough investigation, forensic accounting, and prosecution.
Recovery of assets fraudulently or illegally obtained by individuals, Boards of Directors, and institutions involved shall be required retroactive to the decade of the 1990s to the present.
EQUITY TO TAXPAYERS MUST BE MANDATED
If U.S. taxpayers are forced to fund unlimited private sector bad debt, they must receive an equity share in every Wall Street financial company proportional to the amount of bad debt held that is shifted to the government.
Since taxpayers are assuming 100 percent of the risk, they should be afforded the benefit of any future profits. Those profits should be placed in a special lock box account for Social Security. The trustee should be restrained to investments in AAA state and local bonds.
Taxpayers who have been up-do-date on home mortgage payments but who will be required to help fund the bailout should be afforded lower interest rates on their existing home mortgages to total the amount being borrowed from them.
A .25 percent transaction fee should be charged on every Wall Street or Chicago Board of Trade transaction and the funds yielded should be used to pay back the loan for U.S. taxpayers, this fee will yield about $150 billion annually.
A SELECT CONGRESSIONAL COMMITTEE SHOULD BE ESTABLISHED
A cross-jurisdictional Select Committee of Congress should be established in both chambers to hold hearings, do proper oversight, and advise the next Congress and President on mortgage and financial recovery operations and additional means to assure any necessary repayment of the public investment.
STANDARDS FOR EXECUTIVES AND COMPENSATION STRUCTURE IN THE FINANCIAL SERVICES INDUSTRY ESTABLISHED
Compensation for financial executives at all levels should be limited to five year rolling average, made public on a quarterly basis, similar to Securities and Exchange Commission filings.
Alternatively, compensation for top executives at financial houses should not exceed the salary of the President of the United States until such time as the federal government recovers or receives repayment for any financing that may be provided.
Anyone who had major responsibility for buying or selling these junk bonds should be permanently banned from holding any position in any company dealing with financing of any sort.
All bonuses, stock options, and exceptional compensation (present and post for 10 years) for those individuals and their Boards of Directors should be disgorged. This should be a responsibility of the Department of Justice’s investigations. Since executives and Boards of Directors were paid for fraudulent transactions and likely insider trading, their earnings were assumed under false pretenses.
New leverage ratios should be devised and incorporated with this law, probably 10:1, not 30:1.
Anyone or any company involved in leveraging or selling any sub-par mortgages involved in the bailout should be banned from employment by Treasury to help in these workouts.
Secretary Paulson and all political appointees in the U.S. Treasury and the Federal Reserve should be required to renew their public disclosure statements as circumstances have changed since their original filings.
All financial institutions and executives that will benefit from this bailout in any way should be banned from making any political contributions this election cycle and during the 111th Congress.
ADDITIONAL FINANCIAL SYSTEM REPORTING AND TRANSPARENCY REQUIREMENTS MUST BE REQUIRED
The Financial industry, including hedge funds, shall comply with new regulations involving disclosure, capital requirements, conflicts of interest, and market manipulation.
All hedge funds must immediately disclose holdings.
Hedge fund profits must be taxed at the sane rate as other financial corporations, their current rate is 15% on current income with a capital gains rate of only 5%.
Consumer credit debt must be reported quarterly to assure Congress has complete information on market conditions that may impact future solvency.
The source of the bailout money must be explicitly identified as well as the costs and nature of the financing agreement. If foreign nations, banks, or sovereign wealth funds provide monies, and trade or defense concessions are inherent in the agreement, Congress shall require certification from Treasury and the Federal Reserve that no side deals were transacted as a part of the agreement.
A provision should be included that if such side deals of any kind that may be implied or thought to exist, the United States is not bound by it.
As part of the legislation, the Secretary of Treasury and the Federal Reserve Chairman are required to provide a statement as to how the arrangement will be executed in order to avoid fueling inflation and rising interest rates.
BANKRUPTCY REFORM
Bankruptcy law should be changed to give bankruptcy judges the authority to: Reset primary mortgages during personal bankruptcies; and Release credit card holder from that debt in personal bankruptcy.
:::::::::::::::
UPDATE, the first portion of a press release from the Web site of Sen. Maria Cantwell, D.-Wash.
Cantwell, Lieberman Urge Leadership to Jumpstart Fundamental Financial Reform; Investigate Root Causes Behind Financial Crisis; and Hold Reckless Parties Accountable Thursday, September 25,2008
WASHINGTON, DC – Today, U.S. Senators Maria Cantwell (D-WA) and Joe Lieberman (ID-CT) sent the following letter to Senator Reid, Senator McConnell, Speaker Pelosi, Representative Boehner, Senator Dodd, Senator Shelby, Representative Frank, and Representative Bachus, asking them to ensure there are clear mechanisms for long-term transparency, accountability, and reform in the current financial recovery package.
“Any financial recovery package that Congress enacts must put transparency and tough rules in place to make sure consumers are protected,”said Cantwell. “While the financial markets need emergency surgery today their long-term health is dependent on prevention. We need to establish a robust regulatory regime capable of overseeing today’s complex global marketplace. We also need to determine what went wrong, hold bad actors accountable and apply the lessons learned to prevent future financial market meltdowns.”“In addition to protecting homeowners and taxpayers and holding Wall Street executives accountable, it is critical that the financial rescue package jumpstart the process of fundamental reform of our financial markets so that we never again find ourselves in this position. Under our proposal, in four months, the National Commission for Financial Regulatory Reform will provide Congress with a specific plan for comprehensive reform of the financial system that will strengthen the stability of our financial infrastructure and protect the long-term interests of American taxpayers, investors, and businesses. With the Commission recommendations in hand, the next Congress will be able to immediately begin moving forward with the fundamental reforms we desperately need,” said Lieberman.Our nation, our taxpayers, and our communities need real reform or nothing.
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By Sarah Palin (Release date: November 17. 2009)
I watched part of this…it was good. They said they only needed one brave Senator to filibuster it. Lou said he would post the phone number on his website for people to call the Capital about not passing the bill.
Yes. Then DeFazio said two senators would be best for the filibuster so that one of them could go to the bathroom.
now, that’s strategy.
I don’t mean to be judgmental but your friend’s business is not being run as a business. You owe payroll as it is earned, and if you don’t have it you owe it to people to tell them as much. That printing business is either shady or every cent is taken out with no profits set aside to pay for employees.
I’d say that employer’s irresponsibility has nothing to do with me, they provide zero reason for the bill. If anything, they provide a counterargument– capitalism is driven by creative destruction, let some businesses that are run responsibly come up in their failure’s vacuum.
Nonsense. Commercial paper is the lifeblood of American business. It is seizing up.
I went to my senator’s page and found the letter that she (Maria Cantwell) and Joe Lieberman co-authored to all in charge, from Barney Frank to Chris Dodd, demanding regulation, and more. I think I’ll append it to this post — probably most people won’t read it, but it looks quite important and has the right emphasis on — quoting from her letter — “a mechanism to hold accountable the bad actors responsible for the current financial meltdown.”
What a load of self-righteous crap from this Member of the House. She is part of the problem, they all have their hand out and it looks like the DEMS were getting most of it, they were buying Protection. When you watch that Video of all the DEMS on the Sub-Committee for GSE’s, Waters, Meeks, etc. defending Fannie and accusing the Republicans of leading a modern Witchhunt because they want to put some reulation on giving loans to deadbeats. The problem with the sub-prime loans is that the Gov’t wanted them to be given. Wasn’t Obama one of the Lawyers in Chicago suing Banks for ACORN to force them to give more sub-prime loans??
SusanUnPC,
I think Barney Frank is one of the bad actors. DeFazio is my congressman, and because of his unresponsive attitude to my questions about Barry, I am undervoting this year. I have voted for him in every election, but not this one. He may be correct and leading the charge against a bad bailout but where was he when Barry was foisted on us?
That lets my Senators out; both have the spines of an invertebrate.
i heart lou dobbs!
I haven’t read the rest of the post. I will go back to do so. DeFazio was on Thom Hartmann today. (We hear him in the afternoon, but it may well be a morning broadcast.) DeFazio sounded, well… sound.
It seems like a good plan, and knowing it was based on the Swedish and Finnish models means good news. There may be a podcast of the broadcast.
Kaptur is the prototype functional, working representative who produces results. The proposal is well rounded, (obviously the work of several good minds working together with legitimacy, to achieve a solution, not to craft a political package) convincing and easy to comprehend. It speaks to the universal principles in which we all are steeped. It has a ring of truth.
Ah! But that a certain Senator had such substance!
wow! a great speech and proposal. Rep. Kaptur represents the common sense and basic decency of the REAL american people. Pelosi, Reid, Frank, Bush, McCain and Obama are poseurs. Throw the bums out.
swW anN
Yes. Marcy Kaptur should be on everyone’s V-P list!
We need strong, intelligent and compassionate represenantives.
And yes, let’s get the WallStreet Predators’ assets “all the way down to their Mercedes tires”!!
Right on, Marcy! You rock, girl! If only Barry Megalomaniac had one-tenth of your grit….
Marcy would have made an excellent member of Hillary Clinton White House staff….
Right. This means in rough terms that banks who otherwise would guard their assets and not throw money into the harbour would be wrong in their risk assessments 3/4 of the time.
Yeah right. These two dillweeds are no better at maths and finance than they are at politics - where they’re already setting records for the all-time low.
Que? Exactly what models would those be? What crises in Scandinavia in particular is one referring to? I’ve not heard of a one.
Yeah and the Swedish and Finnish models are SOCIALIST and we can’t have that! OK they work well but still and all - socialism? It’s a big step. There might be no turning back!
PS. They don’t have leaders like Obama in Scandinavia. (Thank goodness.) They actually had a crook in power recently in the one country but he’s gone now - and the conservatives have taken over.
We can have socialism if we want it—and that’s what we want.
A vast majority of Americans want a universal healthcare system. In case you didn’t know, that’s socialism. Most Americans also want more gun control. Most Americans also want the government to take a stronger roll in regulating corporations, the environment, etc.
So most Americans disagree with you. They want more socialism.
That is utter bull, perry.
Fuckin’ A.
Andy Lewis
Did you go to Kindergarten in Hawaii with the stutteringly monosyllabic Obama? Buy a lexicon for use in an extreme right-or-left wing rag….
Hey Andy
Cut the crap! F*** you!
Perry
You rock, man! No, it ain’t “Socialist” to want gun control and it aint’ Socialist to demand Universal health care for all Americans. Both should be godgiven rights, in a sane democratic society.
But unfortunately, friend, we live in a jungle of greed and the rules are dictated by Wall Street not Main Street.
Countries like Finland, Norway, Sweeden and most notably our neighbor Canada have Universal health care - and prosper while Americans get screwed by thier Wallstreet Congress and Senate!
Social Democratic Party is what’s needed, bro!
Canada is NOT a Socialist country! Yet in l965, thanks to the efforts of their 3rd Party, and while there was a ‘minority government’, they approved the UNIVERSAL HEALTH CARE ACT.
And guess what? Since 1965, the major cause of Bankruptcies and foreclosures has NOT been….MEDICAL BILLS!
And foreign companies are flocking to Canada to start their operations, shunning Dallas and L.A…..’cause they got a “healthy and govern-subsidized Work force”!….
UNIVERSAL HEALTH CARE is not a Socialist principle. It should be the god-given right of every citizen. Hillary has known this for decades. And she knows that in order to stimulate a sickeringly stagnant Economy, you need to introduce stimulus via spending on Universal Health Care!
Or is it better to play socialist by bailing out Wall Street private Greeders? Now’s the time for bold action–and it’s too bloddy bad that Obamyopia and McSame do not provide leadership worth xeroxing a dollar bill on…..
Please consider that I was typing that from my memory — and not from the transcript. It could well be that it was *I* who incorrectly interpreted what they said.
So jump all over me rather than these two who are trying to present some real solutions.
Geeesh.
Anyway, I’ll post the Lou Dobbs transcript + video (if available) as soon as I can get it.
Susan your fine….You do a great job. NQ Rocks!
Keep us posted thanks.
OT - Would you mind changing your name, workingclass? Every time I see it, I’m reminded that Texas abused Arkansas this past week. My cry of “Don’t gore the boar” didn’t seem to work!
“It could well be that it was *I* who incorrectly interpreted what they said. ”
If you are referring to the Swedish, Finn remark,you are correct, here is an article from the NYT:
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em
Sounds like a “bailout” many Americans can live with, esp. the middle class. Not only are taxpayers not burden with Wall Street malfeasance, it also would address corruption.
Great post, thanks.
Lemos has a full description of the financial crisis that the Swedish model successfully addressed at “By the Fault.”
Were it not for dill weeds, pickles would be as significant to sandwiches as Zoroastrianism is religion today.
[ADMIN: COMMENT REMOVED. IRRELEVANT TO TOPIC. And such off-topic remarks should be posted on Open Threads. Also, gratuitous attack comments are not allowed on any thread.]
Oh woo-hoo another brainwashed Obama bot with her knickers in a twist.
Actually, I wouldn’t describe that as gay-bashing. Not at all.
I saw it as a low-key respectful way to refer to lesbianism — lots better than not being able to acknowledge it at all.
Low key? THEM thinking that we CHOSE this lifestyle is 100% of the PROBLEM. It’s what leads them to want to ban us from getting married, ban us from having rights, try to “Save” us.
I don’t care how many gay friends she said she has. If she thinks we made choice, we have a huge PROBLEM in my opinion.
Here is my argument to the “choice” insanity. Did you choose your spouse or did you have some innate animal unconscious urge? Did you choose to get married in the first place? Did you choose to have children? Did you choose to have no children? Did you choose your car? Should anyone be discriminated against because of “choices”? Shall we as a society decide that blue cars are OK and therefore insure them, but those who want and choose red cars cannot get insurance? We are free to choose in this country.
Heterosexuals go around thinking that they should get all of the government perks because somehow they are unable to make any choices.
If her friend is gay then obviously it is not a choice Sarah would make as she is not gay. It’s kind of a “duh” statement, but they can’t all be worth carving in stone.
Do you know anything about gay rights?
The NATURE vs. NUTURE argument is the Number One issue.
But YOU don’t know her friend, and YOU don’t know how her friend dealt with who SHE is.
That’s bullsh*t and you know it. If my comment was an attack on Obama you’d be fine with letting the entire thread get off topic in order to bash hiim.
That’s fine. I know there’s no excuse for what she said, and in your hearts so do you.
Hypocrites.
Speaking of hypocrites would you care for some seasoning for your own words?
Check out this link if you are confused about how it all got so bad….
http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true&pli=1
that speech rocked…she’s right on…
O’Reilly had John Kerry on his show the other day and point blank said in 2005 Dem’s wouldn’t pass regulation for mortgage industry, Kerry wouldn’t friggin’ answer him…he just tried to deflect the question and say it was the Republicans. Lyin’ sack of shit.
Why didn’t the minority Dem party do something in 2005? The GOP majority had both houses of Congress and the Oval Office.
Who could have imagined?
Ineffectual lyin’ sack of sh*t.
Does all that Reps. Marcy Kaptur (D-Ohio) and Peter DeFazio (D-Ore) spoke of sound strikingly familiar to what Hillary has been speaking of for months now?
Please mel, please.
Unfreaking believable.
Mary Kaptur will be voting for Sarah Palin for VP.
Only Gov. Palin is free of all of these unethical practices.
Only she can serve with the clean record to ensure that Rep. Kaptur proposals can be carried out to fruition.
Vote Sarah Palin for VP. The only one free from sins and ready to get our country’s resources to produce a good living for us.
AWESOME….
Without any language addressing the mortgages and foreclosures, the bailout bill is a giveaway and will only postpone the day of reckoning, which will make things much, much worse. We need to nip this in the bud - ADDRESS HOUSING NOW before this becomes a long slow bleed, destroying confidence in the process, like the 20-year Japan recession they’re only recovering from now.
I did my part and left a message for both of my Senators.
“The traditional home loan backed by savings deposits was converted into a bond during the 1990s and then securitized into those international markets. The time-tested loan standards of character, collateral and collectibility were shelved, and therefore to reform this system it must be decentralized again, with the community savings and home loan bank system being reestablished with an emphasis on increasing savings deposits with enhanced local mortgage origination and oversight, as opposed to concentration of activity in Wall Street investment houses.”
I agree with this, but lending standards will have to be raised. No more “NINJA” loans, etc.
When ownership of loans is localized, standards naturally will be higher because local banks will not want to lose their money.
When lenders can make loans to low-income homebuyers, then wash their hands of the consequences by packaging up the mortgages into securities, they can continue to make loans to people who can’t afford to pay.
Bingo…
and make a tidy little profit and say seeya suckers.
Those who bought the securities had nothing but greed in their eyes only seeing the potential “money” without ever stopping to see if people would actually pay it. Then of course as long as they could sell it to some other greedy sucker it was OK for them.
It is a pyramid scheme.
Check this out. Makes lots of sense to me. Definitely worth a read. What do you think?
http://www.daveramsey.com/common_sense_fix.txt
I agree with what Dave Ramsey says. I’ve been saying that here at my house for a couple of weeks. No bail out would be required if we did this.
I’m watching CSPAN write now with a batch of Dem Reps standing with Marcy
They are talking about being RUSHED into this decision. They are also saying…guess what, they said the sky would fall..it hasn’t. We don’t need 700 billion to fix the problem.
When I started researching this issue there was absolutely NO ALTERNATIVES to be found out on the net. I do believe Marcy has been a GIANT KILLER … that video of her talking about this has 100,000s of view.
I think the message got out that we were being stampeded.
THANK YOU MARCY!
Excellent leadership!!!
Testing
I was having trouble posting this.
This shows why we need more open deliberation before we throw money into a quick fix which might stir the pot even more.
Here is one point of view. I am not saying this is the solution, but it is a point of view that deserves to be part of a public debate.
http://www.cnn.com/2008/POLITICS/09/29/
miron.bailout/index.html?iref=mpstoryview
I had to break up the link into two parts in order to post this.
http://www.kaptur.house.gov/index.php?option=com_content&task=view&id=152
go give Marcy a thank you…the more of us speak up for her.. the more power she has
this is even a more fun performance of the same marcy kaptur
http://www.youtube.com/watch?v=mbD62gNi9WE&feature=related
i have a bracelet
Thanks for the “Want Mama to bail out” youtube link with MARCY KAPTUR! What a woman! What a Democratic Voice! What intelligence, compassion and guts!…
If only Obamarama had 1/100th of her attributes…
You go, Marcy!
And i loved her analogy of the “Big bank boys running home to Mama for the big bucks….while bilking the taxpayers”!
Lieberman is good buddies with McCain, maybe Mac will pick up on this proposal as well…I saw the CSpan tonight…Marcy was great.
Oh sweet! That would be fantastic.
Lieberman is one of the senators from my state and I emailed him and asked that if a bailout had to take place if he would back Representative Kaptur’s plan. I also emailed Rep Kaptur regarding her speech…wish she was a rep from my district. However… I didn’t bother to email Senator Chris Dudd (not a typo).
McCain/Palin ‘08
I’m still smarting from Senator Dodd’s faux FISA filibuster.
Susan UnPC
please make the video
http://www.youtube.com/watch?v=mbD62gNi9WE&feature=related
i n a post. the same Marcy Kaptur at her best fighting for “we the people”
The Senator’s website is “experiencing technical difficulties” tonight. Can’t get through to contact. LOL
Wynn was on H&C and he also said something along the same line as this…liquidity to the Banks to fix their own real estate transaction out in their community where they will be able to price these houses @ the current market rate and then work with the owner to see if they can get into a conventional loan format…he felt that the government would be the last group to do this effectively…he said the taxpayers would get repayed first…and that the loss would be the bank’s debt they would have to write off.
Trump said something similar this am…
This is a youtube video of Lou Dobbs from yesterday when he did a segment on ACORN.
Yeah and it’s entitled ‘Lou Dobbs tries…’ What pathetic hopeless people. Good night, America. Next you know some Obamabot will come out and blame it all on Donald Duck.
Hey guys, join me tonight.
Tonight’s Special Guest Pennsylvania Attorney Phillip J.Berg with updates on his lawsuit against Obama and DNC. Mr.Berg will discuss his response to Obama and the DNC’s motion to dismiss his lawsuit of Obama’s citizenship to be President.
Join me[Matt] Tonight at 11PM ET!!! Call-in number 347-202-0443
http://www.blogtalkradio.com/My-Two-Cents
I made it 1:52 into the video before I became dizzy and puked a little.
drink some kool aid. will fix it
Yes of course it is.
a new video by Heidi Li
http://tinyurl.com/4zdllc
the old car salesman
Brilliant!
The only solution to this fiasco is to elect Obama as the president of USA.
Obama will then travel to the Middle Easts and ask for his fellow Muslim brothers from the Kingdoms of the Middle Easts to bail-out USA.
For anyone in the US who needs hard cash for urgent use, he or she has to proselytize to Muslim.
In return for the bail-out, Obama agrees to change the country name from the United States of America to the United Islamic States of America.
Only one thing wrong with an otherwise brilliant plan.
The arabs already own the US.
But the name is good. Perhaps UISBA?
Sounds good, but much of it isn’t… Looking at her points:
1) First: financial reform must come first, etc. OK, how about being more specific. She complains about FIRREA, is she really proposing to go back to the pre-interstate banking days? And re Glass-Steagal, she has been overtaken by the facts on the ground - JP Morgan Chase “rescued” Bear Stearns, is she proposing unwinding that and making BS a free-standing entity again (and how would that happen); Lehman declared bankruptcy, the other investment banks have converted themselves into “regular” banks; etc. Now her point about the rating agencies IS sound, Standard and Poor’s, Moody’s, Fitch, have all contributed mightily to this mess and so far have not been called out!
2. Second: Main Street housing market deflation must be stabilized as step one. A moratorium should be placed on all home foreclosures for 120 days, etc. OK, so maybe temporarily stopping foreclosures is a good idea, but how exactly does doing that stop the value of the property from continuing to go down? There’s no cause and effect there!
3. Third, a new Financial Assets Management Board should be formed Ok, I’m not sure what this does, it may be a good thing to do to avoid a repeat, but it isn’t going to take care of the current issue.
4. Fourth, the Department of Justice should be authorized to investigate the wrongdoers, etc. Ditto for investigating the heck out of this, good idea to do, but not a fix for the current problems…
5. Fifth, any Federal dollar that is expended must result in equity to our taxpayers, etc. Good, but how do you do this? Her suggestion, a transaction fee of 0.25% on every trade, doesn’t help the American people… Who do you think will be paying that fee? You and me!
6. Sixth, a select congressional committee should be established to hold hearings, do proper oversight and advise the next President and Congress, etc… Same as #3 and #4 above.
7. Seven, standards for executives and compensation structure in the financial services industry should be established. Those outlandish salaries that they get should be curbed, etc. Once again feels good, doesn’t cure the current crisis. Not every financial company CEO ripped off their stockholders, you want to nail the ones that did, but what about the rest? This one’s a feel good for the masses” measure, not much more.
So, at the end of all that I don’t see much that is going to fix the current mess. The devil’s in the details - it’s nice to say reform but you have to be specific, and she is not…
The Investment Banks are dead. High Leverage is dead. Growth will be immeasurably slowed. How much - who knows?
The completely unregulated derivatives market was and is the problem.
There is an entire generation of amoral business school carnivores who have built their lives around this kind of value-free exploitation. Half a quadrillion dollars, by some estimates, of faith based valuation is at stake.
In the old days, not so long ago, wealth was based on manufacturing. Without our manufacturing base, this country will become a pauper. Right now some of our largest manufacturers are selling their blood, their manufacturing plants and entire engineering organizations, to stay afloat, which they will, albeit as mere shadows of their former selves.
Presuming that black Democrats in the House who voted against the bailout were motivated solely by the fact that disbursements to ACORN had been eliminated from the original proposal not only sounds racist but is also demonstrably wrong. Indeed, like most other legislators who voted against the bill, more likely they were responding to the expressed will of their constituents (in their desire to be re-elected).
http://online.wsj.com/article/SB122273395169288417.html
Members of the Congressional Black Caucus felt pressure from opposition to the package that was mounted by some prominent African-American radio personalities, who objected because it failed to address their listeners’ everyday concerns, such as health-care costs. Among members of the caucus who voted against the deal were Democrats John Lewis of Georgia, John Conyers of Michigan and Jesse Jackson Jr. of Illinois.
Bev Smith, a nationally syndicated talk-show host on American Urban Radio Networks, said the Congressional Black Caucus members might have been influenced in part by a national campaign she organized, along with other radio hosts, calling for their audiences to contact members and voice their opposition to the plan.
When the bailout proposal was announced, she brought on economists and other financial experts to discuss the financial problems it ostensibly would solve. “Last week, I asked my
audience to call their legislators and tell them if they vote for this without thorough investigation and without knowing the impact, we’re going to kick their butts out of Washington, D.C. My audience flooded the Capitol Hill lines,” she said.
The feelings were evident on blogs and Web posts. One contributor to blackamericaweb.com urged others to contact their representatives and senators by email and to “Tell them to vote NO on the bailout. This is the biggest robbery of the US in the history of this nation.”
http://online.wsj.com/article/SB122273395169288417.html
The reason you see Black Congressmen with 30 years on the job, like John Conyers, is because they are in safe, almost all black districts. As long as you win the Primary you get your job for another 2 years, sometimes they don’t even have a Republican to run against. The Democratic Black Caucus are probably getting a little heat from the Video featuring the new CEO of Fannie talking to them, saying they were “Family”. Then the Republicans made the DEMS take that ACORN money out, they didn’t like that.
ACORN Astroturfing.
1) Reform, as I say, and regulation should come first out the door before the money, not later
All hedge funds must immediately disclose holdings.
wonder what that little black phone book looks like. Hellava a Roledex.
I know this is not a open thread but I heard this guy on Greta say that Obama was on Bill Maher show and said something that would come back and get him if he would happen to be on the ticket…Anyone know when he was on and what he said?
I found this
Bill Maher And Barack Obama
It is Obama talking about religion…you decide
OT
But has anyone read the transcript of Gov Palin’s interview, not with that “gotcha chic” but Hugh something. Anyway, just wanted to say it was good. In my opinion the best part was her comment about her son calling his girlfriend first before her. My aunt used to get SO pissed because all of us (90% of my family is military) would call, well in my case my boyfriend before her and she would always run into my BFs mother somewhere and she would always talk about something that she didnt know about…dont mean to get longwinded just found it interesting because its weird to hear someone talk about stuff like that. Not weird but like they actually experience shit you do. Yeah, I know that sounds crazy. Okay, I will shut up now since I cant think of the word or phrase I am looking for.
Get this. There is no requirement of proof of citizenship to vote? And ACORN register illegal aliens? No wonder the country’s going to the dogs - the system is allowing it!
http://youtube.com/watch?v=-dTvZKjaVFw
OHIO!!
Gotta love us.
Voter fraud in Ohio will backfire on Obama. The media is all over it. This may be his October surprise and he’ll be doing it to himself. Ahh, what leadership material. Again.
Yesterday’s big drop in the DOW was just a sample from “Wall Street” to let us know what they will do if the bailout doesn’t happen. This is like a form of financial terrorism. “Wall Street” is holding the American citizens hostage, has strapped a bomb to itself, and is threatening to blow us all up if we don’t do as directed. We have to do as they say or we all get hurt.
That is what I thought…giving them a taste of what they will do if they don’t get their money.
Today was the first time that I thought the bailout will have to pass. With GWB in the White House and the Goldman-Sachs guy as Treasury Secretary, we don’t stand a chance. Another POTUS and his/her administration might have stood up to the terrorism, but not these two. They are part of the problem. Remember when Goldman-Sachs predicted $100 a barrel oil. Soon after, we got it. I think Goldman-Sachs is the head of the monster.
Just my hysterical two cents.
Original story from Aug 2007 documenting Biden’s false claim that he was “shot at in Iraq”
http://thehill.com/leading-the-news/biden-revises-claim-he-was-shot-at-in-iraq-2007-08-08.html
This whole bailout business is a SCAM. The markets will recover like it always does after a fall. Here’s what happen if we DO NOT bailout WALLSTREET. The gas prices decline, the housing market becomes affordable, food prices become lower, You now have people able to afford gas, housing, food that gives companies a better workforce, more production bringing in more jobs. It’s a cleansing, a fresh start for the economy. This bailout is only to reward the crooks and supply kick back to those in congress. It’s ripping off the taxpayers. Say no to this bailout and get this country on the right track. Already the housing market has fell to a July low ( affordable housing) Gas down $10.00 and dropping, this is all good news. Don’t be a sucker for the SCAM
VP debate moderator Ifill
releasing pro-Obama book
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=76645
Whoa! I know that businesses will suffer because they cannot get their normal line of credit. I know that businesses will be forced to postpone growth plans on hold. I know that the conditions will mean that employees will face hardships. But, these conditions have been known to the politicians for years and neither the Democrats nor the Republicans did anything to avoid the situation in which we find ourselves now. To open the treasury so that those who raided the coffers of the banks get rewarded is no way to run a government. I’m not against coming up with a solution that puts liquidity back into the banks, but it has to be done with a bill that works, that has true accountability and does not give undue power to Paulson. The whole agreement was nothing more than kabuki theater. The bill that was voted down was no better than the initial bill that Pelosi had told the world that there was some kind of agreement.
Below are notes (I simplified) taken from an analyst during a telephone conversation with treasury:
1) Treasury trenching is a formality. Treasury could in fact take the 700 billion right away. Not sure why Dems fought so hard for a fig leaf.
2. The tap dancing is because Pelosi and company doesn’t want people to know it’s a sweetheart deal. The public won’t be following each individual transaction to see exactly what price is being paid. So ridiculously overpriced asset sales can be hidden in the details, and by the time some reporter (or blogger
combs through and analyzes the transactions, the deed will have been done. But if Paulson makes a statement that assets will be bought at par before the bailout’s even begun, that will be reported and might kill the deal.
3. Paulson wants to sweeten the pot to encourage banks to come “voluntarily”. Why should the treasury be begging banks to borrow from taxpayers? Bailout should be the absolute last option for a bank. I.e., it should be so unpalatable, so unprofitable for a bank and its executives that they exhaust every private means of survival before coming for their public “reaming”.
4. The exec comp provisions are a joke.
Taxpayer losses are undetermined.
Oversight: The committee will file toothless reports that no one will ever cares about.
Remember Fannie Mae and Freddie Mac cooked the books, and when the auditors reported it in 2005, Congress looked the other way.
Pelosi and company don’t get it.
Let’s demand that Congress deals with the problem instead of putting band-aids. And let’s make sure that Pelosi, Reid and the Republicans understand that they did absolutely nothing and they must act responsibly because we hold both parties responsible for the mess.
A Joke I found at Greta Wire…we need to laugh every now and then.
Good joke. I’d say it was sad too, if I gave a damn anymore.
No one in good faith, can honestly claim that the current bailout scheme on the table of Paulson, Frank and Dodd is the only option. It is not the only option.
The trillion dollar taxpayers bailout scheme, being peddled by Hank Paulson, Barney Frank, Chris Dodd, et al. is doomed to fail, this will not solve anything. It will trigger Weimar hyperinflation immediately, will bring down the whole banking system, and, contrary to Gordon Brown’s fantasies, will not save the hopelessly bankrupt British banking system.
The option is a multi-stepped solution:
First, as properly regulated banking is an essential aspect of any economy, we must save the state and Federally chartered commercial banks and thrifts. That means two things: First, we must extract the relevant banking functions from banks which have often become virtual casinos of speculative bets, and second, we must restore the modern regulatory regime established by President Franklin Roosevelt, beginning with the restoration of Glass-Steagall.
Second, Congress, in coordination with the Fed, must establish a two-tiered credit system. The Fed must immediately increase short-term rates to 4 percent, to send a clear signal that the U.S. government is behind a strong dollar.
Third, Congress, using its Constitutional authority, must issue trillions of dollars in low-interest credit for earmarked infrastructure projects, in the vital interest of the nation. We need high-speed rail and maglev, nuclear power, water management, new hospitals, repairs on our bridges and roads. These kinds of projects should be financed through capital budgeting, authorized by Congress at 1-2 percent interest.”
Fourth, the United States, Russia, China and India must take the lead in convening a treaty conference to establish a new international financial system, based on fixed exchange rates, along the conceptual lines of what Franklin Roosevelt did in 1944 with the original Bretton Woods System. We can and must put the bankrupt current international financial system through bankruptcy reorganization, and launch, on a global scale, the domestic capital investment in massive infrastructure.
The Glass-Steagall Act of 1933 was one of the most important banking regulations ever passed, as it prohibited any commercial bank from engaging in investment banking activities. As FDR told the House of Morgan: You can be a commercial bank, or an investment bank, but you can’t be both. This was done to prevent a raft of abuses which occurred in the 1920s and early 1930s, as the bankers saved themselves at the expense of their customers and the public.
Glass-Steagall forced the House of Morgan to split into two separate institutions, an act for which FDR has never been forgiven by the bankers; but FDR was entirely correct, as recent events have demonstrated. The banks began to chip away at Glass-Steagall in the 1980s, and it was finally repealed in 1999, after the illegal merger of Travelers and Citicorp to form Citigroup in 1998. The repeal of Glass-Steagall opened the floodgates, as the banks expanded their speculative activities, until the distinctions between commercial banking and investment banking have virtually disappeared. As has the solvency of the system.
First, I am a conservative reader who really likes and enjoys your site. While I don’t always agree, you make me think and I am very grateful for that. Please keep up the great work. For what its worth, I am becoming more of a fan of Senator Clinton. I wish she was more directly involved in the current financial crisis negotiations
I’ve also worked in finance for awhile and have increasingly come to doubt the TARP program pushed by Paulson/Bush/Pelosi/Reid. I wondered if you’d discussed something like the following plan:
http://bigpicture.typepad.com/comments/2008/09/an-alternative.html
Sorry if I messed up the link!!! Here’s the text and I do think some who are interested in this will also enjoy the bigpicture site;
Bill King, who I have quoted many times in this space, puts forth an intelligent alternative to the two plans circulating D.C. — the DOA Paulson Bailout plan, and the even sillier House Republican Plan.
I would strongly suggest the economic staff of both Presidential candidates review this.
Here are Bill’s starting premises:
• The US credit system is broken.
• The Paulsen-Bernanke Bailout Plan does not insure that those banks and brokers that receive bailout aid will increase lending. The reality is the market is hoarding liquidity and these banks are likely to do the same. More importantly consumer lending has been a small, often insignificant part of their business. They made money by trading and through securitization of debt.
• It is necessary to create a new system parallel with the existing dysfunctional system in order to mitigate the inevitable economic and financial damage and to facilitate, as seamless as possible, the transition to a functioning financial system or new model of credit and banking.
• The Wall Street model, securitization and extreme leverage, is obsolete.
• US financial institutions need to recapitalize.
• Hank and Ben assert that it is paramount to keep credit flowing to consumers; the bail out is a necessary adjunct.
• Paulsen and Hank’s bailout plan is tantamount to bailing out Univac, Digital Equipment, etc, in the eighties, which would’ve retarded the development of Dell, Microsoft, Intel and other nascent technology companies.
• It’s wasteful & foolish to put more money in an obsolete non-functioning system
• Big banks and brokers made most of their earnings over the past several years in trading, not consumer lending. And now their derivatives are THE problem
• If you want to get money to the consumer: the less middlemen, the better.
• Decentralization of liquidity, lending and risk is necessary to refurbish the financial system. The illiquidity of a few large banks is collapsing the system.
Basics of the King Report Bailout Plan:
• Directly recapitalize banks by the US government allocating $500B into a plan for community-type banks to increase their capital in partnership with the government.
• The government would match existing or some percentage of existing bank capital. If it would be better, a separate bank could be created. Place a limit of say $1B per bank.
• This would create $5 trillion of credit at conservative 10 to 1 leverage. This is more than the entire private mortgage market. It is a much better use of capital instead of absorbing $700B of losses with
no means to discern resultant credit creation.
• Give the banks a tax rate of 15% on consumer and commercial lending for 5 years and the right to buy out the government share of the operation at some premium.
• Only banks that meet some metric, like a Texas Ratio of 50, are eligible.
• To help the big banks, allow them to create a consumer & commercial lending facility with the 15% tax rate benefit. This should entice private equity and sovereign funds as well as Wall Street remuneration that was garnered over the past decade or so.
• Prohibit trading, especially derivatives, in consumer & Commercial lending operations. However pure hedging would be allowed.
• Immediately increase FDIC-insured bank deposits and money funds to $1 million per eligible account.
Further considerations:
• Foreign banks in the US could be included if they have respective funding from their government.
• The real estate problem is due to the fact that American incomes do NOT support current prices. Easy credit allowed them to purchase homes they couldn’t afford.
• Any solution to clear the real estate market must entail hiking income, which is very difficult, or allowing prices to drop to levels that the average American can support. This helps average Americans, not the big banks and investors stuck with overpriced mortgages.
• No bailout for the imprudent and reckless but a means to directly help Americans and procure capital from private and sovereign sources because a new financial system must be implemented.
• This is not likely to be the final model but it is a stop-gap measure that will resonate with average Americans. It’s a way to connect with Middle America because it benefits them directly and is not an exclusive Wall Street bailout.
• The cause of our current financial morass is Big Government + Big Business = Crony Capitalism + Funny Money = concentration of wealth and risk + declining US living standards.
• The solution is decentralization of the financial system, like the tech industry, which will lower systemic risk, foster competition and yield better ideas, services and companies.
>
Thanks, Bill — great stuff.
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DITTO THAT!
Thanks, and good luck in the playoffs. I hope the Cubs beat the Dodgers and then make it through the World Series.
One question, is Soriano healthy? I hope he has a great post season. Used to watch him when he was a Texas Ranger
Thanks for supporting the Cubbies! “Everyone has a bad century.”
P.S. (I think Soriano is okay).
The CUBS! HAH! There’s an organization that could really use a bailout …
TXN in WA said:
“• The real estate problem is due to the fact that American incomes do NOT support current prices. Easy credit allowed them to purchase homes they couldn’t afford.
• Any solution to clear the real estate market must entail hiking income, which is very difficult, or allowing prices to drop to levels that the average American can support. This helps average Americans, not the big banks and investors stuck with overpriced mortgages.”
And the renter says, AMEN. Bailing out homeowners so that home prices don’t decline further consigns me, and others who acted responsibly and didn’t take out a sucker ARM mortgage we knew would adjust to an unaffordable payment 5 years later, to much difficulty in escaping the non-land-owning class and will still cripple real estate markets into the future. How so? Suppose some folks with bailed out sucker mortgages want to move up or need to transfer across the country? They won’t get the same gimmee terms on their new mortgage, which will instead be at market interest rates, and as with their adjusted ARM (pre-bailout), won’t be affordable unless they’re doing something like moving from King County, Washington to suburban Atlanta, Georgia.
I said it elsewhere in this thread, and I’ll say it again:
1. *NO* to the tax dollars of this single, no dependents, no mortgage, salaried (so, no chance to take business deductions to reduce income), small-portfolioed (so, no chance to sell a few securities for a temporary capital loss and buy them back 30 days later) working woman being used to bail out the unwise homeowners whose net worths once bailed out may be larger (in some cases, much larger) than mine.
2. *NO* to this new idea put forth by Rep. Kaptur to extend similar make-nice benefits to homeowners who can already afford their mortgages, again at the expense of someone like me who exercised financial discipline during the housing bubble and may be permanently left out of the housing market unless the real estate market correction continues.
3. Godawfully-especially-*NO* to extending benefits like these to anyone on a dwelling that is not their primary residence; and in fact, the mortgage rate if adjusted down should be adjusted up immediately if the homeowner keeps holding the home as an investment but moves to another as primary residence. Speculators should not get a break, under any circumstances.
On other notes,
Decentralization of the financial system just seems like it is so obviously the answer, that I wonder what I’m missing. Gee, we have some institutions too big to fail, so what do we do? We take them over and firesale them to other big institutions, making even bigger institutions! That just seems to be backwards. Shouldn’t we be breaking them up, increasing competition, etc.?
And I love the tax break to encourage banks to lend! That is right on. I share others’ misgivings about a bailout plan that, it is “hoped”, will get credit flowing again. (On NQ, we all know hope floats, right?) What’s missing from it are solid incentives, like this proposed tax break, to incline banks to start lending again (rather than just take the bailout money to pad their asset base and execs’ paychecks).
It’s time for me to read up on this Bill King guy. I’ve never heard of him before, but his ideas seem like common sense to me.
I love NQ—THIS is America!
No. This is Bizarro world. But I do love NQ. These PUMAs are too funny beyond words.
All ya gotta do is leave that basement, Kelvin. Get a life. Cut the apron strings.
SusanUnPC,
Here is the transcript with the quote:
She is soooo full of sh*t. It is not only affecting sub-prime loans today, but also prime loans.
Millions of people are now underwater on their mortgages.
According to one of the google headlines that passed under my nose today, Phoenix housing prices are dropping at a 29% annualized rate.
Any business that must rely on credit to make payroll every month is not being run as soundly as it could be.
Perhaps the owners should suck a little less capital out … just wait a month or two until the float’s back in their favor. Is the owners’ profit greater than or less than one month’s payroll (order of magnitude)? If it’s greater than or equal to, then chalk this one up to simple lack of discipline.
That’s the great thing about a shakeout if it in fact happens - it will force people to return to more sound business practices.
GRRRR… Once again someone’s advocating protecting homeowners who made stupid decisions to buy into an overpriced, speculative market. I agree with a lot of what she said, but disagree strongly with that.
And now she’s just mentioned the worst variant of homeowner welfare I’ve heard yet. Because Rep. Kaptur apparently feels bad that homeowners who are current on their mortgages are footing the bill for this, she wants to lower their interest rates commensurate to the amount being taken from them to fund the bailout.
Hello! (Bellevue waves) Hello! Over here! It’s me — THE RENTER! You know, one of those who doesn’t even get a mortgage deduction, let alone the chance to build a bit of equity and watch an asset appreciate every year. The kind of person all these folks with sucker mortgages are terrified about going back to be, after losing their too-good-to-be-true deals.
I acted *responsibly*. I could afford a sucker mortgage’s initial terms, but not what I expected the terms would be after the ARM adjusted a few years after closing, so ** I DID NOT BUY INTO THE HOUSING BUBBLE **. It’s not right that my tax money is being used to bail out people with a higher net worth — in some cases, by six figures — than my own. Rep. Kaptur, I’m curious about what’s in this for me. Could you please speak to that? Thanks much.
[ I expect that the answer is, "Sorry, not much, you don't matter," and sits about as well with me as it does when an Obot says it. (I figure that's a sentiment NQ readers will instantly understand.)
Do I care about the credit markets? I have seniority at a Fortune 500. I do my job well. I haven't had a credit card in 20 years, and pay cash when I need a new vehicle. I'd rather see a round of housing deflation, so that folks see a fair 5% or so return on their investment per year over the past 5-7 years, but a lot of this 10%, 15%, 17% annual appreciation gets reversed. Main Street needs the opportunity to learn firsthand that if a deal looks too good to be true, it probably is. And folks like me need an entre' to the housing market at more fair prices that don't require one's income going up 20% a year, while saving for a down payment, in order to ever stand a chance of buying a home.
What this bailout is doing, from my perspective, is making it only more difficult for those of us who acted responsibly and didn't buy even though we had the option of too-good-to-be-true mortgage terms, to escape permanent membership in the apparently-irrelevant-to-lawmakers non-land-holding class and consigning me to poverty in a retirement that will probably come when I'm 82. ]
details on the DeFazio Bill with video of the press conference.
Look, they can force them to make short term loans this evening…this is a smoke screen to get people to pass a very bad bill.
What you need to do is demand this administration force banks or loan it themselves those short term small business loans. There is only a SBA that could also be a resource and immediately address it.
But soft! What new devilry is this?
The Senate version of the bill has added some relief from the AMT and some other tax cuts designed to appeal to House Republicans.
Let’s review the events of the last week:
First, we were ignored.
Then, after we spoke up and helped force the House to overturn this “tar baby” (credit to Rep. Kaptur), we were told that we really didn’t understand the implications of doing nothing.
We’ve read in newspapers around the world that the rejection of the bailout plan marks the end of the U.S.’ dominant position in the world economy.
We’ve been threatened with our businesses, our houses, our jobs. I’m surprised I haven’t gotten a call from Paulson saying “Beautiful family ya got der. Would be a shame t’ see anyting happen to ‘em.”
Now, just when we thought it wasn’t possible to be subject to any further insults, we are being offered a little hush money. A little coinage in the Garden of Gethsemane. Our palms are being greased with a little AMT relief. I believe the technical term for this is a “Reacharound”.
Here’s what I wrote to an Illinois House Republican who opposed the bail-out earlier tonight:
I have heard late tonight on the news from FOX that everyone is lined up to vote tomorrow evening on a bailout that is acceptable to house republicans who stood strong and opposed the Paulson “suggestion” (and its iterations).
I am not even in your district. I cannot ‘vote you out’ at any point if you support this “new” bailout.
A governmental financial act of saving poor investment decisions is a shift into a kind of political philosophy, which in a past era our revolutionary Constitution was borne upon. This 700 billion dollar bailout and doing NOTHING are not the only alternatives. Earlier on, I watched you and other brave, sound fiscal thinkers propose at least two other ideas:
1. Gov’t buys preferred stock in the parts of Wall Street holding the “innovative” paper while they unwind the mortgages;
2. Gov’t insures the mortgages, Wall Street pays the premium, while the real value of the mortgages, and thus the paper, slowly unwinds.
These are sound fiscal ideas. The media is not reporting them and that’s okay with me so long as you’re still supporting them. Please stay strong and hold your group. They’re terrifying everyone with the media but most of us know it. As I told your financial committee staffer on Sunday morning, I’m one of those PUMA people. Which makes me a Republican for this vote (+ down ticket races). This issue only fuels us more. We are WAY out in front of Country First - we’re country before party!
Please…Country First! No bailout!!
Some more links for renters unhappy that not only are the 2% with problem mortgages being offered handouts, but that if Rep. Kaptur has her way, the other 98% of homeowners will get one, too. And sorry, I still can’t create links in my browser so you’ll have to cut and paste them.
“Rant: The War on Renters” (warning, may offend those who don’t want to know our HRC was a bad-mortgage bailout fan; I’m not pleased, but again, I vote for the package, not the single issue) — http://reason.com/news/show/126798.html
Self-explanatory petition against bailing out homeowners who made bad investment decisions — http://www.angryrenter.com
Former House Maj Leader Dick Armey talking about why angryrenter.com was set up — http://www.youtube.com/watch?v=EAKtsIFPuyk&feature=related
The rescue plan will be approved today in the senate and tomorrow in the house. how many congressmen own stocks? do you think they want to lose their own money by voting “nay” again. End of the story.
At least they’ll have the courage to use their names when they vote!
Rush is talking about this today. What a farce this is. What earmarks have been added… I’m scared for the future of the United States, it will NO longer be the US is Obama wins.