The House has passed the economic bailout bill 263 to 171
money.cnn.com
money.cnn.com
When we buy up this toxic paper, we're in charge. We can do the kind of loan modifications we've been urging [the industry coalition]...
Here's a clip of Maxine:
http://www.youtube.com/watch?v=KN6s1KVFBNg
...she is making a threat to nationalize the oil industry, but flubs the word. The reporters basically laugh at her, and compare her to Hugo Chavez. Guess what? The imbecile wasn't that far off...
We have no real conception of how screwed we are, but we know one thing: The credit market is now fully subject to political constraints. To what degree is hard to say. But congress has already been forcing banks to give loans to unqualified people (a big part of the original problem) and so the same practice will likely continue. Except, banks know full well that every bad loan can be sold to the taxpayer at full price.
An unbelievable coup.
I don't like the paternalistic and interventionist style he has but he isn't Fidel Castro. In many ways, he is quite a capitalist.
Anyway, Venezuela is screwed.
Rather, the reporters did. And Waters was also elected democratically. And that's not the point; the point is the media's reaction to nationalization then and now.
To me that line makes him own the journalists's remarks about Chavez.
The Good:
A non trivial part of the market freeze was due to the uncertainty about the bailout. Will it pass and if so at exactly what price will the Feds buy the toxic junk. Rather then sell, people were waiting. Perhaps now things can start moving again.
So this may be better then doing nothing.
The Bad:
The may be worse then doing nothing. We may spend a whole lot of money and not make a profit on it. Steal (by inflation) from all the people who save, to give to the bankers, and the bankers could still fail.
Many experts argue a better alternative would have been to pick a few winners re-capitalize them and then let everyone else fail. The core issue here is solvency not liquidity, the bailout addresses liquidity, which many consider just a symptom, not the disease.
More may have to be done, like re-capitalization, yet more may not be done because while this time there are no pitch forks in DC, there may well be next time. And thus, this could be worse the doing nothing.
'Ain't economics fun.
"So is this good or bad for the economy?
Bubble: bigger
Collapse: inevitable
Distance to fall: farther
Dollar: worthless"Bueller? Anyone, anyone?
In 2004 there was a small $0.39 excise tax levied on weapons. Unfortunately, $0.30 target arrows are considered weapons under the law so they got a 130% tax accidentally levied on them.
Any politician or journalist that grouses about arrow makers getting special handouts is either uninformed or attempting to deceive you. I recommend you ignore them as a source of future information.
thank you, Sunlight Foundation.
And, BTW, it's open source, so, if you want to play with it, you can.
They are not attempting to deceive anybody. The issue is the bank bailout, not arrows, not AMT, not anything else stuck in there to sweeten the pot. The fact that people are pointing out how much CRAP has to go into a bill to get it passed into law is germane and important to know.
That changed over the last week, as articles like this one came out:
http://www.bizjournals.com/twincities/stories/2008/09/29/dai...
So there's been another week to form the consensus: The bill sucks, but the problem is real, and there's no clearly differentiated, politically viable, non-sucky alternative that will arrive in time.
The moral of this story, as with so many stories, is that the right way to deal with dire emergencies is to avoid causing them in the first place.
Further, the FDIC is already running low on funds, we should be slow to make new promises when we are already uncertain with regard to meeting present obligations. Additionally, raising the limit on FDIC insurance will make it harder to determine when a bank is in trouble. Now I am not naive, I am sure that was the idea behind raising the limit in the first place. But the less educated among us actually believe this was done to protect their money.
Lastly, $150 billion in tax cuts? These people really need to get some cost accountants.
The FDIC is indeed running low on funds and raising the limit at this point in time is a bad idea. However, the FDIC limit does not hide the financial health of a bank or have any direct impact on it for that matter. The limit governs what happens to customer deposits after the bank fails. Having a higher limit may indirectly help troubled banks by placating their depositors and convincing said depositors that their money is safer.
About the tax cuts. The $150 billion is a drop in the bucket. If you really want to bring costs in line, take a very hard look at Social Security, Medicaid, Medicare, and Defense spending. Everything else (except now this bailout) is a rounding error compared to those.
Early indications that a bank needs to be looked at comes to the FDIC because people with more than $100000 start moving excess money to different banks. FDIC starts to look at them, and that is where the lowest form of all quants comes in. The "shorter". They get wind. I don't know how, but you and I both know it always happens, and the bank's stock starts a death spiral. Putting more pressure on their capital ratios, which have to factor in cheap stock now. Also, in fractional reserve banking, the fees charged by the FDIC to the banks SHOULD depend on the amount that the FDIC is insuring accounts for. There is NOTHING in the bill about raising fees. I'm sure we can all imagine that fees will probably not be raised, as the idea is to help with liquidity, not hinder it. So right there the banks just got something for nothing in terms of insurance. Helping their financial position appear safer.
Maybe we are talking about two different things. Could you please explain why you believe this does not help the banks to appear financially healthy longer?
If you consider $150 billion a 'drop in the bucket' then salud! I think $150 billion here, $150 billion there, and pretty soon you are talking about real money. Consider the possibility that you believe it to be a small amount because you agree with this bill. What if we gave $150 billion to fund welfare? How about we give $150 billion to fund the salaries of H1B workers? Or we blow $150 billion on 2 toilets for stealth bombers? Is it still a drop in the bucket?
Right. So why bother with accounting standards at all? They're just going to break the rules anyway....
From his appearance on CNN's crossfire: http://www.youtube.com/watch?v=vmj6JADOZ-8
http://www.govtrack.us/special/econstimbill/changes.xpd?id=4
I know [who he is] and besides this he is almost a financial saint. Still, he backs this bailout and will make huge profit on it. Oh, and the bailout favors his other investments.
Being foreign, the bailout favors me as it helps my savings indirectly. But it is the largest scam in history.
I don't know anything about his involvement with Goldman, but maybe he realized the government will do the wrong thing anyway so he might as well profit from it.
Buffet has gone on record multiple times (cnn, print interviews) saying he would be the person who buys the mortgages from the banks and resales them later if he could get a 700 billion dollar or comparable loan.
The mortgages are current artificially low because everyone is scared. If you can buy them low and sell them once the fear is gone, you could make a ton of money.
People will make money on this situation, the government will completely mess up some aspects of this, articles will be written 'exposing' all the problems.
For instance, http://ph.news.yahoo.com/rtrs/20080924/tbs-buffett-bailout-7...
The US government has a pretty poor track record for "emergency proposals" and other decisions these last 8 years, so I understand the skepticism. I'd vote against it myself. But there's more to the story than what you hear in most inflamed internet postings. Buffett himself says that we eventually need to roll some heads, but that it shouldn't be our first priority.
They shouldn't buy them at what they're carrying, what the carrying value is, necessarily.
They should buy them at the kind of prices that are available in the market.
People who are buying these instruments in the market are expecting to make
15 to 20 percent on those instruments. If the government makes anything over its
cost of borrowing, this deal will come out with a profit. And I would bet it will come out with
a profit, actually...Note that I'm not asking whether he knows how to make money - clearly he does: witness putting $5.000.000.000 into Goldman Sachs and then lobbying like hell for the bailout of ....... ..... (guess who?)
This remains the best thing I've ready so far, in terms of something brief and at the same time thoughtful:
http://www.marginalrevolution.com/marginalrevolution/2008/10...
So well said !
I'm not sure how I feel about it. I don't like to see discussions deteriorate like this. But on the other hand, I feel like participating in the discussion may be a good way of gaining an understanding ultimately bringing the level back up.
I also think its frustrating for communities like this one, of relatively smart people, that there is something going on in the world that is effecting us that we don't fully understand (normally we are the ones doing the explaining to the lay-people !).
Torch: $15
Freedom: Priceless
P.S. This is a joke...
Thinking the Democrats were the good guys is your first mistake. The sooner we all realize neither side is good, the better. They are both equally bad in only slightly different ways. The Democrats are mostly impotent. They do nothing. They talk a great game and have some good ideas, but they almost invariably fail to execute. The Republicans know how to get things done. The only problem is it's often in the interests of a very small, elite minority.
Thinking one side is the 'good guys' is a big part of the problem we have right now. Fifty one percent of the population thinks the Republicans are the 'good guys' and continue to vote party lines, despite 8 years of bad policies and low approval ratings, instead of voting based on qualifications and track records.
Part of me still hates him for that.
those living under a monarchy or dictatorship get to say "Well I didn't vote for you~"
(but it's not like anywhere else is preferable)
Maybe you could take it back and get another one.