It's funny how I can totally disagree with MBBF & molson in the General Election thread and totally agree with them here. :D

I know. It seems like we are all crossing over here.

Step towards the white light! Just give in to your true calling! :D

FWIW.....I think more positive discussion is done in threads like these with a varied set of people than is ever done in Congress. They're too busy patting each other's backs and slipping in pet projects. I haven't seen any FOFC earmarks entered into the discussion thus far.

I've stated this question before...and perhaps it is uninformed, or just plain ignorant...but while I wouldnt classify myself as a socialist, if we are going to essentially create government-partially owned banks by buying bad assets in exchange for equity; why not create "FED Bank" tomorrow which is completely owned and operated by the government, and free of all the bad assets/high risks of these other FI's? You could then slowly begin privatizing it over time buy selling equity at differing stages...but at least you'd be starting clean.

Who loses out? Private investors? Other global FI's? Who else? And if we're on the verge of a global economic meltdown...should we even care?

Hey, I've already taken the first step and agreed with you in this thread. It's time for you to reciprocate and agree with me in the General Election thread. The Kool-Aid, you know it tastes good.... :D


Based on my (brief, sure) time working on Capitol Hill, it seemed to me that everything they said about it being an "echo chamber" is 100% true. It's the rare Congresscritter that really steps back and thinks about things, much less has a good back-and-forth discussion with someone with which they disagree. I'd say it's even more true today than it was just 10-15 years ago, but that's another thread....

I became (and still am) pretty good friends with a few guys that were lobbyists for some major government contractors during my 1 1/2 years living in Baltimore. My cynical nature towards anything that these Congressman say in public comes from finding out just how dirty Washington is on the inside. I think that congressmen spend more time talking with lobbyists than they do with their constituents or their fellow members in Congress. The general public doesn't have a clue in that regard.

So we've got this measure, which is entirely symbolic at best and actually harmful at worst, the M2M rules which are symbolic at best and harmful long term (not at worst, pretty much guaranteed). Let's go along with their $700b plan, I'm sure it's better thought out (and add another $150b of pork to get it passed. And no Molson, tax cuts are not the opposite of pork - cutting spending is. Tax cuts without a concurrent reduction in spending only exacerbate our long-term problems. Which is why I'm mostly unswayed by arguments we could make {up to} $1.2t back - we're just going to waste it anyways, and it will ratchet up government spending for that year, never to come back down again.)

The reasons behind this bailout are 90% psychological, and it annoys me to no end. "The American Public" would rather have stability than prosperity, Congress desperately wants to preserve stability and their cushy seats. The Banks aren't stabilizing themselves by unloading their securities at ~$.30/$1 in the private sector because they think a gov't bailout will buy them at $.50/$1. Overall, this is merly going to ensure it is more likely to be 20-years of stagnant growth rather than a sharp 1-2 year downturn and a recovery.

Right, and these politicans are motivated by their elections in the next 1-2 years, so their stance on this makes perfect sense.

Exactly. Status quo wins again, always. I'm literally nauseated/depressed right now.

Not entirely though, because it was pointed out in the partisan part of the thread, it was legislators not running for re-election who voted overwhelmingly for the bailout. Maybe as a favor to their fellow legislators, or maybe they really think it is a good/"necessary" thing.

Maybe more appropriate for that other thread about cool images and what not...funny though.

Or maybe they're the ones least likely to give a flying fark what the voters in their district think or want.

Check out this response from a Senator in Georgia.
From another board:

I sent both GA Senators emails regarding the bailout last week and again yesterday afternoon. I have not heard from Sen. Isakson but did receive this email from Sen. Chambliss today:


Dear Mr. XXXX :



Thank you for contacting me regarding the turmoil in our financial markets and the actions taken by the United States Treasury as they pertain to several leading financial institutions. It is good to hear from you.



This is the most serious and critical domestic issue I have dealt with in my 14 years in Congress. We have been betrayed by many people and by abuse of the system. Now we have two significant choices to make - do nothing or take action.



I strongly believe that doing nothing will destroy the financial security of millions of Americans and possibly lead us into a depression. I just as strongly believe the bill as now negotiated will arrest the crisis and begin to turn our economy around.



The bill that I voted for is not a bailout. H.R. 1424, "The Emergency Economic Stabilization Act," is crafted to address the crisis; restore security for the American taxpayer; and return our nation to the strongest economic power in the world. And in the process this bill enables us to root out and punish those who cheated us all.



I know that my vote in favor of this package was not the politically popular thing to do, but this is not a popularity contest. This is about the future of our country and the future that my children and grandchildren will inherit. I have absolutely no doubt in my mind or my heart that my vote in support of this measure was the right thing for our economy, for Georgians, and for our country.



My first reaction was one of anger and frustration. How could this happen in the strongest economy in the world? How could the best financial system in the world fail? After calming down, I realized the seriousness of the situation and the consequences of Congress failing to act.



The Treasury Department submitted a proposal to Congress requesting authority to purchase troubled assets from financial institutions. This program was intended to address the root cause of the market stresses by removing these assets from the financial system.



I did not support the original proposal submitted by the Administration because it did not address the critical needs of the American taxpayer, community banks, retirees, and small businesses and it concentrated too much power in a small group to administer the plan.



As the conversations in Washington and across the nation continued over how to address the challenge before us and as the details of the problems in our financial sector were revealed daily, I became convinced that something had to be done and done soon.



Moreover, when the House rejected the plan, the economy suffered a $1.2 trillion dollar blow in the stock market, which only made more apparent the impact this credit crunch is having on Main Street . Specifically, in some cases, Georgia community banks are unable to make auto loans.



Below are details of the legislation:



TAXPAYERS ARE PROTECTED. In its current form, the legislation before the Senate protects taxpayers in many ways. Accountability, safeguards, and oversight measures are numerous. There will be transparency, public reports, and triggers to end the program if, for some reason, it is not effective or end the program early if it is more successful. Moreover, I worked to negotiate a mechanism to stop all transfers of taxpayer funds if necessary. That said , I believe this legislation will be effective.



NOT A BLANK CHECK. I opposed the President's initial request to simply give a blank check to Secretary Paulson. I also opposed the second version submitted by the President and Congressional Democrats that would have given taxpayer money to liberal groups such as ACORN. Let me be clear - this current bill, the bill in the Senate, is not a blank check for anyone. First, it allows the release of $250 billion to purchase these toxic loans. Then, Congress can release another $100 billion but only with Presidential involvement and certification that it is necessary. And only if absolutely necessary and again with Presidential certification and Congressional approval, the remaining $350 billion could be released. However, I do not believe the entire $700 billion authorized will be necessary or used.



NO GOLDEN PARACHUTES. CEOs and other executive officers who drove their companies into the ground will not be able to walk away with millions leaving taxpayers holding the bill. Those companies that choose to participate in the program will be subject to strict compensation limits.



NO NEW GOVERNMENT SPENDING. The language is clear - all revenue generated through the repayment of any assets purchased and any sold must be used to pay down the national debt. No money will go to pork projects, new government spending, or liberal groups such as ACORN.



HELP FOR MAIN STREET . As this crisis continues, community banks are being affected more and more. Car loans and home loans, even to those with good credit, are drying up. People are losing their retirement savings. Small businesses are now having difficulty getting loans to make payroll or grow their business to create new jobs. If we allow this to continue, jobs will be lost, more retirement accounts will be impacted, and credit will get even tighter.



PUNISH CRIMINALS. The Federal Government is actively investigating cases of fraud and abuse. Where wrongdoing is found, the perpetrators, including, if implicated, members of Congress will be brought to justice. We have already seen subpoenas issued for records at Fannie Mae and Freddie Mac. This bill demands cooperation with the Federal Bureau of Investigation (FBI) and I expect we will see more subpoenas and criminal prosecution.



ADDRESS THE UNDERLYING CAUSE WHILE WE TREAT THE SYMPTOMS. We are seeing the symptoms now - lack of trust in the banking industry, daily tightening of the credit markets, losses in personal retirement accounts - and while this legislation addresses those issues, it also goes further to treat the cancer that got us here. This legislation authorizes the Securities and Exchange Commission (SEC) to modify the 'mark to market' accounting procedures that magnified this crisis by forcing banks to mark down the value of assets they had no intention of selling in the near future. This mark down of value caused a corresponding loss of value to the institutions. The SEC has already begun the process to modify this procedure.



RETURN TRUST IN THE BANKS. By increasing the Federal Deposit Insurance Corporation (FDIC) protection on bank accounts from the current $100,000 to $250,000, taxpayers and bank customers can once again trust that their money is safe in the bank of their choice.



DEBT REPAYMENT. Toxic loans will be purchased at a discount and 100% of the monies repaid to the government will go to reduce the debt we incur in this process. While we shouldn't expect full repayment, it is possible that all of the money expended will be repaid.



PROTECT OUR NATIONAL SECURITY. If we do not act and this crisis spreads like a cancer to every segment of our economy, it will destroy not only taxpayer savings but it will erode our ability to fund our military, supply our troops with the resources they need, and protect our homeland.



NO TIME FOR POLITICAL FINGER POINTING. There is plenty of blame to go around but now is not the time to throw stones, now is the time to address this crisis and get our economy moving again.



FOR THE COUNTRY; NOT POLITICAL POPULARITY. This is not a popularity contest, this is a crisis. And since this crisis began, I have had numerous conversations with economists, community bankers, small business owners, and taxpayers. I have weighed the costs of inaction versus the costs of unpopular action. I support this bill because it is good for the country, it is the right thing to do today for taxpayers and tomorrow for my children and grandchildren, and it is necessary to get our economy moving again.



Strong capital markets are vital to a prosperous U.S. economy and given the renewed focus of our regulators and market participants, I remain confident in our financial markets and our overall economy.



However, history warns us against inaction by hard lessons learned. Delaying to act would be a repeat of the mistakes of the 1920s, when thousands of banks failed before significant confidence was restored to our financial markets.



If you would like to receive timely email alerts regarding the latest congressional actions and my weekly e-newsletter, please sign up via my web site at: www.chambliss.senate.gov . Please let me know whenever I may be of assistance.
-----------------------------------------------------------------------------------

**The bolded part is funny. Uh..it's not a popularity contest? Well, if 80% of his constituents were against the bailout, and were willing to risk a "Depression" to let the market work itself out...??

....then he is a very brave man. Especially considering he IS up for election in a few weeks (and the challenger has started closing in on him the polls). If he is really voting because he believes it is nessecary (which I think he just might be in this case, because I know this isn't a popular vote here), then he is doing exactly what he was elected for. Shoot, I wasn't going to vote for him, but I just might now.

Dang, I said earlier I'd definitely be for if proceeds would go toward national debt. Doubly approved.

Fear not! Help is on the way!

Our chief investment officer has declared tomorrow "Park Backward and Wear a Rally Cap Day." This is a tried and true strategy, so you should see some market effects by, say, Tuesday at the latest.

They need a Rally Monkey.

Why were the Barney Franks, Maxine Waters and Chris Dodds put in control of our financial sector? And more importantly, why are they still in control of it?

Wiki is our friend ;)

Christopher John Dodd (born May 27, 1944) is an American lawyer and Democratic politician, who is currently serving as the senior U.S. Senator from Connecticut. Dodd served as a U.S. Representative from Connecticut from 1975 until 1981, when he became a Senator. He served as general chairman of the Democratic National Committee from 1995 to 1997. He is now the state's senior Senator. He currently serves as Chairman of the Senate Banking Committee.

Barnett "Barney" Frank (born March 31, 1940) is an American politician and a member of the United States House of Representatives. He is a Democrat and has represented Massachusetts's 4th congressional district since 1981. The district includes many of Boston's western and southern suburbs — such as Brookline, Newton, and Foxborough — as well as the South Coast. He is the chairman of the House Financial Services Committee.

Maxine Waters (born Maxine Moore Carr on August 15, 1938) has served as a Democratic member of the United States House of Representatives since 1991, representing the 35th District of California (map). Committee on Financial Services
* Subcommittee on Housing and Community Opportunity (Chair)
* Subcommittee on Financial Institutions and Consumer Credit

So, the answer to your question is:
1) Political affiliation & relationship to congressional control by party
2) Seniority
3) Committee Assignments

Yeah, I have to give Senator Chambliss some props for that. Too often we have politicians doing things because they'll help them win elections rather than what they think is right.

anyone know if they think they have the votes to pass this tomorrow?

If God willing, no.

If you see them call a vote, they think they've got 'em.
If you don't, they don't think so.

And your reason for Bush, McCain, Palin, the Senate Republicans and numerous Republican commentators supporting is .....

Think you folks are underestimating the power of parking backwards.

Oh, I've worked at the Massachusetts State House before :) (for a rep who attacked the Speaker Finneran publicly before he was finally indicted and forced out - into a private lobbying job paying 500k/yr); I know the why. I just don't get the bigger why if ya know what I mean. (And there I know all about the 11% Congressional approval rating, but 70%+ approval ratings of individual Congressmen.)

Sadly my firsthand knowledge of state-level politics tells me even decentralization wouldn't have that big an effect.

Harry Reid drops the pretense on talking down the economy:

Later in the same story, this was quoted:
Ladies and Gentlemen, your leader of the US Senate!

Insurers dive on Reid's 'bankrupt' quote - Oct. 2, 2008

Wasn't talking about "support", was commenting on the question about how those particular folks ended up in positions influencing the banking industry.
Try reading the post again & this time take note of the original question I quoted as replying to.

Ah, I didn't realise that it was just a statement of fact and did not mean to express an opinion in the debate in this thread ;)

But I would still be interested in your answer to the question as to why this collection of notable Republicans would support this bill. Incidentally you can to that list Gingrich and Rove.

Is it really pretense?

A politician carelessly makes a statement that causes a run on insurance stocks don't you think they'd come down on him like a ton of bricks to deny he made the statement in the hope the pressure would come off the stocks?

Wells Fargo says it is acquiring Wachovia for $15.1 billion, as Wachovia ends talks with rival suitor Citigroup.

Seems funny to me, given that Wachovia announced the sale to Citigroup on its website. In fact, its still there.

Yeah that it is odd. I just heard a radio ad from Wachovia on my way home saying something to the effect of "Wachovia is now a part of Citigroup..."

159K more jobs slashed last month and unemployment stays steady at 6.1%

SI

I got the impression that the Citigroup 'sale' was a firesale arranged by the goverment rather than one that Wachovia wanted or were involved in (similar to the WaMu break up).

The new offer looks more realistic in terms of pricing imho and shows just how badly the goverment institutions are paniced in terms of forcing sales through (still can't believe WaMu were dissolved so cheaply).

Interesting article on how the credit crunch is causing problems at the automakers:

Credit crisis sends auto sales plunging - Oct. 1, 2008

I wonder if Bill Heard was included in those that had their credit cut off? And I wonder how many cases similar to his are out there if so.

For those not familiar, that was one of the largest GM dealers in the country who shut down operations last week due to a combination of reasons. Among the reasons was having their credit cut off by GMAC because of concerns about the dealer's financial situation. And those concerns in part involved continuing investigations into unethical (and possibly illegal) business practices.

In other words, I wonder how much of the credit crunch in this sector may be self-inflicted to some degree.

So today we'll see if the pork loaded into the Senate bill is enough to get 13 Reps to change their vote. *sigh*

From an earmark perspective, this one is worse than the last one. I wasn't happy at all about it. I hope this bill doesn't pass either to make a clear signal that the junk won't be tolerated, but I probably shouldn't hold my breath.

I think it'll pass because:

1. The stock market swings this week scared enough of the population into submission.

2. Everyone in the House wants to get back to the campaign trail.


It is very disappointing that a bill of this importance has to get bogged down with earmarks. That's shameful.

It is likely to pass, but with even less Republican votes than before. Many democrats standing on the side last time will vote for it now. I know John Lewis has already said he'll vote for it this time, as well as most of the black caucus, because Obama is actively recruiting them to.

Well, to start, they don't have toxic mortgages, they have toxic derivatives, and those are becoming toxic because of default risk. A big part of that default risk is coming from the banks not doing the reasonable thing and reworking their network of mortgages, either because they do not own the base asset to rework it, they don't want to offend the holders of these toxic contracts, or they are just plain ignorant or set in their ways that they insist people pay a usury rate or default.

My thoughts on the matter are you go to the root of the bad bank statements, the actual mortgages that are about to default causing these contracts to go belly up... Repair those mortgages that can be repaired, and create a structure for disentangling the derivatives and restoring some proportion of value to those banks. We don't guess the market value of the toxic contracts, we make it a business to clean up the imaginary ties and claim some value on the contract (otherwise the contract is treated as worthless).

The reason I prefer this, is that it will establish some very clear equity in the program from the start... it cannot be undone by a stock market panic, because the government basically gets the mother of all bargin real estate deals. We still potentially lose a portion of the 750 billion investment, we still potentially have the ability to get all 750 billion repaid with interest, but we make the central actors in the drama operate out in the public eye, and don't give the gamblers who got us in the mess a new infusion of borrowed chips. I know that mindset too, some will get that money and try to chase their losses with the next big win, and they will bet wrong.

Problem with my plan, it does not have any big lobbyists pushing it. There are a lot of people with a lot of money who have a lot to gain from having all their bad decisions for the last 5-10 years erased, but keep all their good ones intact. If I was one of them and unethical I would push it too, and act like its the end of the world to sell it (unfortunately I'm middle class and ethical once in a while ;) ).

We don't necessarilly save the country by rewarding the banks bad behavior, I don't want banks to close, so maybe this means taking the contracts AND the mortgages off the books, and the banks get a net zero for the whole until it gets untangled (BTW that means that yes they need to give up some of the goodies along with the bad). Maybe we set up a short term liquidity fix with a FED bank as described earlier (although it would need a lot of controls to avoid inflation boom, it should handle day to day cash/credit conversion only, not loans)... Instead we are getting politicians saying "we must do this for the economy" while at the same time saying "I do not support this bill" since they think the double speak will help their election chances (like the honorably representitive of Georgia). All allusion to '1984' aside, its obvious the politicos are hedging their position in case this thing goes sour, which indicates that the stink is getting bad enough that even they are getting ready to bolt.

It'll pass, hopefully the world won't end, but don't be surprised when it doesn't magically get saved. Hedge your bets and don't get caught in the next bubble is all I can say.

From the looks of the early voting, looks like the Republicans will split down the middle on the new bill while the Democrats have switched to the 'Yea' side en masse.

The bill is passed - the financial world is saved!!!

Ok, not really. Hopefully this will at least give our country some time to look at how we got to this point and as so many congressional people promised in their speeches on the floor, to act to make sure that these types of problems do not happen again in the future.

It's also a relief to not look at the market and be watching the numbers to the down side go speeding through the roof. The market had a nice rally and the rally was sold as every talking head figured it would be. The next few months will surely be filled with ups and downs because at the end of the day here nothing is fixed. We do have a chance to fix it though and hopefully our leaders will not blow that opportunity. This bill was never a solution to the problem - hopefully it allows the credit markets to flow and lets things stabalize enough so we can solve the problems.

Yes, nothing a little pork couldn't solve!

Man, is it frustrating to hear of all the ancillary bullshit that got packed into this thing.

:mad:

My stocks are getting pooed on.

And the wooden toy arrow market and racetracks and black lung disability and Puerto Rican Rum and bikers that commute...

Good god....

Like Gary said this should unsqueeze the credit market over the next few weeks and give the Fed and treausury time to plan their next move....which should be rate cuts I'd imagine.

Selfish short-sightedness is on the above side of the argument.

They are making a desperate attempt to stave off a problem. They have unwittingly made it incredibly likely that the coming crash will be many times worse than this one would have been.

But no worries. We hopefully won't be in a good bit of economic hurt in the short-term if they get lucky and this works. But our children will be in a hell of a lot more trouble long-term. Yea for us.

Well...since this seems to be aimed at short-term (aka short-sighted) goals...hopefully this adds enough credit lending to get my damn house sold so I can get started with my new company. Ugh.