![[SeMissourian.com]](http://www.t-g.com/images/nameplate.png)
|
|
Fair ~ High: 74°F ~ Low: 47°F |
|
Stop The Insanity: A Look at the Paulson Plan
Posted Wednesday, September 24, 2008, at 9:46 AM<< Previous | Read comments | Respond | Email link | Next >>
The following is from President Woodrow Wilson's book "The New Freedom: A Call for the Emancipation of the Generous Energies of a People" (New York and Garden City: Doubleday, Page & Company, 1913). These statements highlight in my opinion what happened then when he signed the Federal Reserve Act of 1913 into law, and what is happening now as Treasurer Paulson insists we act quickly and ask no questions. "A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men ... [W]e have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men." Wilson also wrote: "Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it."
Here it is the original proposal that Treasurer Paulson expected the Congress to rubber stamp for the president to sign. Please read it, your children will be paying for this just as much as you will be. Text of Draft Proposal for Bailout Plan
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS Section 1. Short Title. This Act may be cited as _. Sec. 2. Purchases of Mortgage-Related Assets. (a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States. (b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation: (1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties; (2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts; (3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them; (4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and (5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act. Sec. 3. Considerations. In exercising the authorities granted in this Act, the Secretary shall take into consideration means for-- (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer. Sec. 4. Reports to Congress. Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3. Sec. 5. Rights; Management; Sale of Mortgage-Related Assets. (a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act. (b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom. (c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act. (d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9. Sec. 6. Maximum Amount of Authorized Purchases. The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time Sec. 7. Funding. For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure. Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. Sec. 9. Termination of Authority. The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act. Sec. 10. Increase in Statutory Limit on the Public Debt. Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000. Sec. 11. Credit Reform. The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable. Sec. 12. Definitions. For purposes of this section, the following definitions shall apply: (1) Mortgage-Related Assets.--The term "mortgage-related assets" means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008. (2) Secretary.--The term "Secretary" means the Secretary of the Treasury. (3) United States.--The term "United States" means the States, territories, and possessions of the United States and the District of Columbia.
Treasury Secretary Paulson expects the American government to hand over $700,000,000,000 to him directly and has the nerve to include the terms laid out in Section 8 of the text above? WHO IS THIS GUY? "Section 8. Review: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Doesn't anyone think it strange that they want us to give them a lot of money, but in Section 3 the taxpayer(the lender) is secondary to the banks(the borrowers) interests, and when we give them this substantial sum of money, we the taxpayer are actually prohibited from determining how the money is being used!?! They say, "Trust me, the alternative is worse." I think I would like to hear the alternative before I give you this much unchecked power Treasurer Paulson! Which mortgage related assets is he speaking of directly, only failed mortgages or all mortgages? The entire plan and the manner in which it is being sold to the American people leaves one with a feeling of uneasiness. After months of stating that the economy is sound and the banks are resilient, all of a sudden the alternatives are worse and there is no more time to wait. They expect us to trust them?!? This is not how our government is supposed to work. A group of unelected men that are all connected are not supposed to be in control, issuing demands that may or may not be what is ultimately good for the American people. How are we supposed to know if we are being told lies if we don't have time to examine and question? In the past, I have seen documentaries about the Federal Reserve that some of my friends insisted I watch and I always walked away with a skeptical feeling. Hearing the producers of the videos tell me that my dollar bill said "Federal Reserve Note" and was backed by nothing didn't change the fact that I could go down to McDonald's and buy a cheeseburger with it. But after reading the plan outlined above to enslave our children and grandchildren with debt, and for months watching them lie to us about the soundness of our economy, I have to agree with many of the things that have been said about the Federal Reserve. One day I could be imprisoned for this very blog. Please write to your representatives and senators. Please tell them to take a stand against greed and tyranny. Our nation depends on it. Additional Reading and Viewing: Contact your elected official: http://www.usa.gov/Contact/Elected.shtml Direct from Treasurer Paulson's mouth: Part One - http://www.youtube.com/watch?v=nHmY-awlt... Part Two - http://www.youtube.com/watch?v=S7TmKXLZw... Information about the Federal Reserve: http://en.wikipedia.org/wiki/The_Federal... One Man's Opinion: http://www.youtube.com/watch?v=jx-lXwl9T...
And in case you missed it last night, The Daily Show with Jon Stewart was an eye-opener.
Comments Showing comments in chronological order [Show most recent comments first] |
Hot topics Who Has the Answer??(28 ~ 8:04 AM, Nov 4)
The Side Effects of Increased Communication
The War Expands
Love Thy Neighbour As Thyself
450,000 Doctors Can't Be Wrong
|
![[Feed icon]](http://www.t-g.com/images/icons/feed-icon-14x14.png){kind=icon}
Hmm... No Way! No How! No Bailout!
I wish everyone shared your sentiment Darrick.
Oh yes, I did miss where Secretary Paulson defines what "Mortgage Related Assets" is to him in Section 12:
(1) Mortgage-Related Assets.--The term "mortgage-related assets" means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
He sure is handy with that broad brush he paints with isn't he?
I also understand they slipped in student loans and credit cards into the bill. I still say the government should not be bailing out either these companies or anyone else for that matter.
This is crazy, I know I throw this word around alot, but this sounds alot like socialism. I mean it seems like the govt could take over any mortgage it wanted to with this plan. The govt is not in the mortgage business. If these companies go under than some other companies will by them out piece by piece. It may take some time but it will happen. The govt has no business spending my money in this manner, or like you said Nathan, my children and grandchildrens money. I just want to scream.
In the original plan, Treasurer Secretary Paulson wanted us to give Treasurer Secretary Paulson, the former Chairman of Goldman Sachs, $700 billion dollars with zero oversight with the requirement that any investigation into the matter would be against the law. He wants two years to spend it on what ever mortgage, commercial or residential, he sees fit. There is deception in this plan on a grand scale.
This all has me wondering? What ever happened to writing off bad debt? I thought banks did that all the time.
This is beyond unfair. I have had my money on the same cd for over three years, and this entire last year the rate has decreased, meaning less money for those who wish to save...
What is wrong with this picture? Throwing money at the situation will not fix it... Uprooting those who created it, perhaps, will.
The Devil is in the details with this plan...there is no buyout just a bailout.
Seems to me the government would be just as well off to buy the sub prime mortagages and refinanace them so people could actually afford their payments instead of handing over 700 billion for them to do as they pleased. At least then we would have the assets to go along with our purchases.
Isn't most of the 700 Billion going to cover the loss of what the banks "would" have made if the loans had been paid through a 30 year ARM..
When these properties were foreclosed on they went to foreclosure sale..the banks did not get the full price of the loans, in some cases not even the market value of the home, the balance is "Bad Debt" which is what our 700 Billion is buying. We aren't buying the property it was sold at foreclosure sales.
The difference in the loan amount and the actual sale price is what the homeowner would still owe and if he could have paid that don't you think he would have kept his house to begin with? Thus it is Bad Debt
If you divide $700 billion dollars by 300 million Americans you come up with $2,333.33 per person. So in my household we collectively will owe $14,000 plus interest.
I agree with you greasemonkey, it does sound a lot like socialism. We keep letting the government gradually take away our rights which if it keeps going we will have socialism instead of the representative government we presently have.
I don't know. It is a very complex situation. I think the little guy is going to pay in the end, regardless of the chosen course of action. We always do. While I have not thought it through completely yet, I think it may be better for the little guy to get it over with now with a temporary deferment of the pain and some potential reduction of the actual costs through attempting to recoup some losses from the lenders, and the effects of time on the debt. We are in a vulnerable position right now and adding more negatives to the actual economy would likely have an exponential effect to the dismay of business and consumers alike. It could also be argued that a percentage of the "debt" taken on for the bailout could be covered by the "real tax revenues" it would protect in the next few years. I do not know though, It is just too much to look at in such a short time. I do believe that it must be thoroughly evaluated before any decision is made. I do not see any benefit in acting without all of the variables being exhausted.
I don't know. It is a very complex situation. I think the little guy is going to pay in the end, regardless of the chosen course of action. We always do. While I have not thought it through completely yet, I think it may be better for the little guy to get it over with now with a temporary deferment of the pain and some potential reduction of the actual costs through attempting to recoup some losses from the lenders, and the effects of time on the debt. We are in a vulnerable position right now and adding more negatives to the actual economy would likely have an exponential effect to the dismay of business and consumers alike. It could also be argued that a percentage of the "debt" taken on for the bailout could be covered by the "real tax revenues" it would protect in the next few years. I do not know though, It is just too much to look at in such a short time. I do believe that it must be thoroughly evaluated before any decision is made. I do not see any benefit in acting without all of the variables being exhausted.
-- Posted by memyselfi on Wed, Sep 24, 2008, at 11:36 AM
Don't you get nervous and skeptical though when a proposal like the one above is given with warnings that if we do not pass it as written it will not work? Paulson draws up a plan for us to give him $700,000,000,000 to spend on any mortgage, and requires in said plan a requirement that no one (not Congress, not the court, not the FBI, NO ONE!!!) can investigate or bring a case against him or examine what is being done with the money. Does this sound normal? Is this how our government is supposed to function?
We are in a vulnerable position right now and adding more negatives to the actual economy would likely have an exponential effect to the dismay of business and consumers alike.
-- Posted by memyselfi on Wed, Sep 24, 2008, at 11:36 AM
And don't believe the hype... the very people that will benefit from this money are the ones spreading these lies. The only thing these people know for certain is that $700 billion dollars will go along way towards removing bad debt from their balance sheets. It was their money and they placed bad bets with it. Now they must pay the price for their mistakes and we must ensure that they can never take us down with them again.
Me thinkist its sounds a wee little fishy. I wish I could spend money with absolutely NO accountability.
Nathan,
The lack of accountability should be enough to scare most people, representatives and citizens alike. Do we know were most of our representatives stand right now on this issue? Most of what I am hearing is just confusion.
Has anyone read Naomi Klein's book "The Shock Doctrine". The basic premise of the book is that every time there is a legitimate crisis or a perceived crisis, our leaders overstate the implications in order to diminish the rights and powers of the citizens, or in this case, to saddle the citizens with additional debt. Such was the case after 9/11 with the implementation of the Patriot Act and may be the case now with the government bailout of failing financial institutions.
I am very skeptical whenever anyone asks for immunity from future actions, but could we expect any less from any part of this administration? As far as the hype, I not only do not believe it, I have heard very little of it. I get the majority of my news from the News Hour 2 or 3 days a week. I do not keep up with the pundits, or their experts. The reality of the situation is that our economy is all interconnected today. This particular situation differs from so many others, in that market confidence and availability of credit is at stake. I am not saying that a bailout is the only solution, just one solution that may be better than doing nothing. I do not have a definite opinion yet, and I doubt many people really do. Even if we had all the facts presented before us today, it would take a considerable amount of time to work through it. There are just too many unnamed variables, not only regarding the debt and how that would play out in different scenarios, but also the most basic factors the bailout itself. One question I would need to have answered is exactly how much more red ink is expected to be forthcoming from other companies. I understand the market forces argument and if everything else were equal, and we still lived in a system of classical economics, I would agree. I understand the privatization of public funds position that everyone is offended by, and I do not discount it. I also see clearly the ensuing public seizure of private funds that everyone dreads, and I am most certainly in the group that dreads it. I do fully understand the hesitation; I just believe the potential for serious problems in our economy does loom large, and that the fallout of the problems may make the initial numbers insignificant.
I have also in the past been drawn to various conspiracy theories including the one volfanatic brings up. I cannot comment either way as to their validity, as I do not know. I can say without hesitation that even if that is the case, what can be done about it? We have little choice but to trust in the longevity and fitness of our system of checks and balances, regardless of what a few may try to achieve. The same tug of war of power has been playing out in the background for centuries in this country and it was predicted long before our society ever came into being.
How about this? Instead of this deal, why not the govt start their own mortgage company and simply refinance homeowners? Why give more money to these greedy turds when it is easier to help the homeowner. Why the hell should we help golden turd collector keep their learjet or rolex?
It was his bad decision not the taxpayers.
I swear if this passes, it will go down in history as the closing moments of the United States of America.
OK time for the voice of the loyal opposition....
For those of you who say "no way no how" the alternative is less attractive. Remember the Fed chairman has never worked on Wall Street and has no real ties there. You can tell from the tenor of his comments (and yes I'm boring enough to have watched much of the testimony on C-SPAN) that he knows that if something isn't done QUICKLY things are going to turn south. He's also considered on expert on the causes of the Great Depression and he knows this has the potential to be every bit as bad. Not only that we'll take a lot of other countries with us.
I strongly agree that there has to be some mechanism for oversight. Paulson knew that wasn't going to fly the minute he wrote it on paper, but it DID get their attention.
The proposal is not just a capital outlay of 700B. Essentially every American will become an investor in this process. The 700B would be used to bid on securities in a reverse auction process with other private equity firms. Once the securities are bought they can then be dismantled into their individual parts or sold again whole. Either way the asset will be sold again, probably at a loss maybe at a small gain. But it will keep many banks from closing by getting rid of assets that no one currently wants.
As far help for people who signed bad deals and now can't make the payments, I'm pretty neutral. It's a side show to the big show as cruel as that sounds. By increasing liquidity banks may be more willing to work with borrowers.
If you want a study on how not to handle this look at recent events in Japan. They went through something similar in the early 90's. By their own admission, they waited too late and then made the process so onerous that banks couldn't or wouldn't take part. The result was a severe contraction of what was, at the time, the world's second largest economy.
Tim,
What good is giving all of these companies money when the folks who keep their bottom line fat are STILL broke? It is the very people who couldn't afford their loans that helped drive these companies to such bleak futures, so how is forgiving the company their debt, without addressing the REAL problem going to solve anything? This will essentially set up the potential for even more failure.
Conservative talk radio hosts like to point the finger at President Bill Clinton using some idiotic logic involving a borrower's race and their ability to repay a loan. As you can see from this particular expert ( http://finance.yahoo.com/banking-budgeti... ) it all began between 2000 and 2003 with cheap money.
Also after reading these few articles it is pretty easy to see that the government at the time (the Republicans) lowered important restrictions that would have reduced the severity of this problem greatly.
From http://www.minyanville.com/articles/MER-... :
"As President Bush said, it doesn't help to find who is at fault. What matters is we have to get out of this mess. While I think the losses from AIG will be rather minor overall, if you add up Fannie and Freddie and a new RTC, coupled with the stimulus package, you can easily get to $500 billion."
"For such a price, we'd better get a new regulatory scheme that requires reduced leverage. Want to get really mad? Up until 2003, all investment banks were allowed only 12 to 1 leverage. Then in 2004, the SEC basically gave five banks the ability to lever up 30 or even 40 to 1. Bet you can guess the five banks. Bear, Lehman, Merrill, Morgan (MS) and Goldman (GS). Three down."
While assigning blame does nothing to fix the problem we are now faced with, I must fight fire with fire if these silly quasi-GOP radio talk shows insist on spewing utter nonsense about how Bill Clinton is the person to blame here. The truth of the matter is, that the Republicans and George W. Bush were the ones that were supposed to be in charge of overseeing this important area of operation and they failed miserably giving in to banking interests. Don't agree? Just look at the changes made to bankruptcy laws. Was that not a bank backed venture? Wasn't that particular bill originally written by MBNA? The Republicans forgot what they went to Washington to do originally and now we are all paying the price to the tune of almost one trillion dollars.
That's just it. Their bottom lines aren't fat, in fact they're shrinking. When that happens credit for normal business operations gets tight. Like it or not (and I don't) American business runs on available credit lines. Once there's a significant reduction in available credit, there will be extensive business loss and with it the loss of jobs. That will only make the problem worse.
I agree there has to be a fundamental paradigm shift in the way Americans view credit. Over the past 30 years (an aside, the sub-prime market was actually started at the request of Jimmy Carter to help stimulate the economy when HIS economic policies failed) there has been a massive expansion of the money supply. Though borrowing from foreign banks the government has used available capital to steer the economy in the direction for maximal voter impact. We MUST get back to sound lending practices even if it means a slow contraction of the money supply. It is the only way to ensure steady growth and keep inflation in check. The expansion of the money supply has done more to drive prices up (including oil) than any other single factor.
I totally agree with you Tim. Growth at any cost is a terrible policy and the fast expansion has created more problems than benefits. What are they in such a hurry for? Giving home loans and $40,000 truck loans to 20 year old adults that are uncertain what their true goals in life are is a nice thing to do, but not always best.
Nathan . . . unfortunately the blame is both with the Democrats and Republicans. Pointing fingers though never solves the problem but Bush did warn Congress about problems with Fannie Mae and Freddie Mac but Democrats stalled any action on that plus the Democrats have had control of Congress for the past two years and havent done anything to prevent this mess just like the Republicans didnt the previous years they were in control. It basically goes back to a failure of the whole government to recognize the problem and address it.
"7. Financial institutions were revealed as vastly undercapitalized. As the quality of their debt portfolios deteriorated, investment banks wrote off billions of dollars of bad assets each quarter, causing their reserves to shrivel. Commercial banks are leveraged with perhaps ten times as much in assets as capital. But some investment banks leveraged themselves more than 30 to 1, to the point that should anything go seriously wrong with those assets, their businesses could fail. The same held true of Fannie Mae and Freddie Mac, which own or guarantee more than $5 trillion in mortgage debt."
http://finance.yahoo.com/banking-budgeti...
The law that enabled Fannie and Freddie to loan out 30 to their 1 was a Republican policy enacted when they controlled both houses of Congress and the White House. What I am saying is that Republicans passed bills that were supported and sometimes written by banks that have caused this credit shortfall.
No matter how much money we give Wall Street or even let them write off as bad debt it will do no good until the Housing market stabilizes. People who have mortgages can not refinance when they got these loans 2 or 3 years ago their homes was appraising for much higher than they are today. When they try to refinance there is not enough equity in their home for refinancing.
There is not a bank in the world no matter what your credit is that is going to refinance you for a home loan if your home is appraising say at $100,000 and you still owe $160,000.
All 700 Billion dollars will do is pay the salaries for the excutives to stay afloat and at the rate they are being paid it won't last long.
Nathan, I do not think it is a party issue at all. Both major parties have proven for years where their loyalties lie. If you want to look at root causes and how we have gotten to this point, the most basic one is that we as proletarians have been forced into the position of being opposed to our own best interests. We are dependant on the success of the very entities that survive through our oppression. It is actually an idealistic social control if you really think about it.
I do not know if you would be interested, but this link contains the information from a multi-part radio program that was aired about 8 or 10 years ago called Wizards of Money. You may be able to find an mp3, but I didn't spend too much time looking. I do not claim it is perfect or completely un-biased, and it is already somewhat dated, but you may find it enlightening.
http://www.takeoverworld.info/mp3/wom/wi...
I will check that out memyselfi. While there is a need for a federal reserve system and the fundamentals of the system are sound, it seems to me that there must be more government control over the financial sector than what currently exists. If these private institutions are capable of causing problems that affect us all, then these particular institutions must have great transparency and the government agencies assigned to oversee their operations must do their jobs. For months now we have been told that the economy is sound and there is nothing to worry about. I understand that panics are a real threat and to say certain things is not beneficial, being lied to also creates problems and weakens trust when the problem becomes too large to hide. While no one party is entirely to blame here and these problems have been a long time coming, I still believe that this situation was sponsored by bank for banks and in the end will benefit banks, and the Republicans that were in control at the time allowed the banks to have their way in the name of economic growth. The housing market is just one piece of the pie though and Democrats have certainly made their fair share of bad decisions.
Credit in this nation is out of control and some basic limits on interest rates and fees as well as debt-to-income ratios must be established. Yes, controlling these things goes against the free market, but when everyone's tax dollars are being spent to pay for the mistakes of a few, the problem becomes a socialist endeavor. Subtle government control to keep private companies in check somewhat and maintaining balance in the system is not necessarily a bad thing in my opinion.
Please do check out the link if you get a chance. I do not add many and I wouldn't include this one if it were not so pertinent. It is unfortunately long and to be perfectly honest, the interviews are not really appropriate for everyone as they are directed to an audience with fairly high levels of comprehension, but it is worth the effort. It will go a long way toward explaining where the oversight has been, and why.
Interestingly enough the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 that I mentioned was able to be passed with the help of 15 Democrats (all of whom had received campaign contributions from MBNA, notably Joseph R. Biden, Jr. (D-DE) $147,700) that joined with their Republican colleagues to sign it into law.
More interestingly, if the bill needed 90% of the vote, I bet it would have received it, but it would still have been "close" to failure.
CEOs who got out before crisis left with millions
Stanley O'Neal walked away from Merrill Lynch with a package now worth about $66 million. Less than a year later, the storied investment house was forced into a takeover by Bank of America.
Ken Thompson was ousted from Wachovia in June with a "golden parachute" now worth more than $5 million, and Chuck Prince was forced out at Citigroup with a parting gift now valued at $16 million.
These guys took all this risk, and ultimately they won't have to suffer the consequences of their decisions," Under the government plan, the long-gone CEOs would not have to give anything back, said Steven W. Adamske, a spokesman for the House Committee on Financial Services. He said there was no constitutional way to recoup pay retroactively
http://news.yahoo.com/s/ap/20080925/ap_o...
So they get away with Millions while the stocks crash and expect us to bail them out..
It appears that some people have some reservations about this plan...
http://news.yahoo.com/s/ap/20080926/ap_o...
I wonder could I go to the bank and tell them I need a bail out for the debt of my student loans? I mean if the tax payers are going to bail out the banks why want the banks bail out there loan borrowers. Makes as much since as the Bail Out from the govt. The very people who can't pay the house notes are the ones who will "pay in taxes" the lending companies for giving anybody with a pulse a loan to buy a home. Everything comes full circle..
The law that enabled Fannie and Freddie to loan out 30 to their 1 was a Republican policy enacted when they controlled both houses of Congress and the White House. What I am saying is that Republicans passed bills that were supported and sometimes written by banks that have caused this credit shortfall.
Nathan - can you point me to the legislation you are referring to? Glass-Steagall was reapealed under Clinton.
I think what bothers me most about the whole thing is that I would venture to bet "all" of these financial institutions have known this was coming for a "very" long time. I used to work for a company owned by Morgan Stanley - these guys were OBSESSED with every dime on every line of the P&L.
Out there somewhere - every financial institution going down has had someone looking at their real books all along and I'd venture to say it's a pretty darn good bet they separated their assets to protect themselves long ago. So - even the ones failing will be doing business as usual although under a different company name with no debt to look back on.
Then they will probably buy back the bad debt in managable chunks and pursue people to their graves in order to collect as much as possible.
Although I "like" the idea above about bailing out the homeowners instead by refinancing to affordable payments - a lot of these mortgages were made to cater to illegals - Michelle Malkin has written about this several times the last few days - here is a link to one of her postings: http://michellemalkin.com/2008/09/27/div...
As far as conspiriacy theories go - the only way for them to perpetrate the North American Union they "aren't" creating is to bankrupt the country and crash the dollar. http://spp.gov/
Don't think the Government would bail me out of anything.
"Stupid thought."
It failed... Thank goodness!
Nathan, Did you get a chance to look at that link yet? If so, did you notice a correlation between the timing of this economic crisis and the proximity to election day? Did you know that more nations in the Arabian Peninsula are pegged to the dollar than in South America?