Thread: The BAILOUT!

Sorry Miss Piggy- no changes to the bankruptcy laws for individual "small guys".


Congress releases copies of the final House version of the Bailout bill, agreed to in committee late last night:

http://www.house.gov/apps/list/press...ss092808.shtml

Executive "Golden Parachute Bailout" pay, which had been an issue, is treated with a simple 20% surchange tax.

Bottom line, executives can continue to get paid exorbitant amounts- they just have to pay a 20% surcharge tax on those exorbitant amounts.

And the bill DOES NOT limit compensation for those executives who stay- it simply limits the tax deductibility by the company of compensation above 500K per year. The companies can still pay their executives multi-millions if they like, they just can't deduct the huge salaries from their tax bills.

And Holders of Freddie Mac and Fanny May preferred shares (NOT common shares) get special treatment.

Man, that is one ugly bill.

But did you expect anything more of our Congress?

What Michael Moore has to say about the bailout this morning-
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Friends,

Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.

No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is:

"Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.

"Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.

"At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.

"Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions."

Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout.

The problem is, nobody truly knows what this "collapse" is all about. Even Treasury Secretary Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone.

And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!

Falling for whom? NOTHING in this "bailout" package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.

Health insurance? Mike, why are you bringing this up? What's this got to do with the Wall Street collapse?

It has everything to do with it. This so-called "collapse" was triggered by the massive defaulting and foreclosures going on with people's home mortgages. Do you know why so many Americans are losing their homes?

To hear the Republicans describe it, it's because too many working class idiots were given mortgages that they really couldn't afford. Here's the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage "crisis" may never have happened.

This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!

I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something -- NOW! Here's what you can do immediately:

1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they've made. Tell him we know he has the smarts to slow this thing down and figure out what's the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street.

2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC).

3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama.
When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again!

Yours,

Michael Moore
MMFlint@aol.com
MichaelMoore.com

P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.

P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we'll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say "NO!" If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.




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Well, it certainly is an interesting observation, no?

Originally Posted by James48843

What Michael Moore has to say about the bailout this morning-

I won't listen to that buffoon.

Originally Posted by Greg

I won't listen to that buffoon.

Name calling now? Really?

Originally Posted by Greg

I won't listen to that buffoon.

AMEN!!

Originally Posted by Greg

I won't listen to that buffoon.

Listen to who you like. You are welcome to.

By the way- have you found anybody is actually in favor of voting for this?

It's easy to pick on America when you're not running for re-election within our borders but, this guy gets my vote!!!

----Just food for thought here before you start feeling so down and out in America ....Don't we have Federal Home Loan Banks (created in 1935 mind you) that already have the infrastructure in place to deal with putting up collateral for securitizing mortgage instruments? Couldn't this be part of the solution? It seems all these erotic instruments were created to circumvent common sense lending practices... well, shouldn't common sense be used when cleaning up this mess instead of just creating more rules (oh, and throwing money at the problem)??? what do I know anyway?

--- oh well.... read on ...

Sept. 29 (Bloomberg) -- Canadian Prime Minister Stephen Harper, vying for re-election on Oct. 14, signaled his government can do little to help resolve the financial crisis that he and his Group of Seven colleagues say was caused by U.S. policies.
Poor oversight, cheap credit and a tax structure that may encourage housing bubbles are among the reasons for the turmoil roiling U.S. markets, Harper said in an interview. Canada has stronger regulation than the U.S. and its financial institutions are ``strongly capitalized,'' Harper said.
``A lot of things have gone wrong here and, by the way, there were a lot of warning signs. This should not be a huge surprise,'' Harper, 49, said aboard his campaign plane. ``I certainly had expressed my concerns about some of these things to my American counterparts in the time leading up to this.''
Harper joined a growing chorus of criticism within the Group of Seven industrialized nations over the way the financial system has been managed in the world's biggest economy, highlighting the U.S.'s isolation as it seeks to stop the rout. Canada is the biggest U.S. trading partner and one of its closest G-7 allies.
French President Nicolas Sarkozy, speaking at the United Nations on Sept. 23, urged a November summit of the world's major economies to deal with the ``mad system'' that he says produced the meltdown. German Finance Minister Peer Steinbrueck used a speech last week to say the ``Anglo-Saxon'' model of banking has ``an exaggerated fixation on returns.''
`New rules'
Sarkozy told reporters his proposed meeting should establish ``principles and new rules'' to regulate financial markets and punish those who ``jeopardize people's savings.'' Leaders should focus on excessive executive salaries that reward success without penalizing failure, he said.
U.S. allies have refused to back Treasury Secretary Henry Paulson's $700 billion rescue plan. Earlier, Paulson had said he was confident that several nations would take steps comparable to his measure, under which the government would buy up mortgage-related securities to stem the financial crisis.
Asked whether there was anything more that Canada might be able to do to help restore stability in global markets, Harper said: ``Not that comes to mind.''
Playing Catch-Up
While there may be ``legislative steps'' in the future to bolster regulation, Harper said Canada has better rules than the U.S. and its financial system is dominated by commercial banks with ``clear asset bases,'' not institutions involved in the ``merchant banking, money manager'' area that are more vulnerable.
``Far more preferable to properly regulate and manage the system than to have to step in later,'' Harper said. Stronger oversight in Canada means ``right now, we're avoiding having to go in and be the underwriter of private financial industries.''
Harper said one factor behind the U.S. crisis is ``over- deregulation'' and regulators that often are grasping to play ``catch-up'' with increasingly complex financial instruments. There is also an ``inherent bias'' in the U.S. tax code that gives homeowners incentives to take on too much debt, he said.
U.S. taxpayers are allowed to deduct the interest on their home mortgages, something not permitted in Canada.
``Some of it may be regulation, some of it may be, and this would be something not popular to say if I were an American politician, mortgage interest deductibility,'' Harper said. ``There is an inherent bias in the tax code for people over-leveraging.''
Mismanagement
He also cited ``mismanagement'' of housing lenders Freddie Mac and Fannie Mae, which were taken over earlier this month, and indications the Federal Reserve may have kept borrowing costs too low. ``Interest rates had gone down too far'' in the U.S., Harper said.
The Bank of Canada's reluctance to tame the country's currency by cutting interest rates may have helped Canada avoid being in a similar position, Harper said. The gap between Canadian and U.S. benchmark interest rates widened to the most since June 2004 earlier this year, keeping Canada's currency close to parity with the U.S. dollar which hurt exports.
``The Bank of Canada deserves to be complimented,'' Harper said. ``Some of us were skeptical at the time about, you know, that we were allowing the differential to widen and seeing the dollar going up.''
The U.S. now has few options but to bail out investors, Harper said, adding he's optimistic Paulson's plan will help.
``The first objective right now is stability of the financial system, Harper said.
Polls show Harper's Conservatives are poised for their first back-to-back victories in two decades, largely because of the party's perceived superiority on economic issues. An Ipsos Reid poll on Sept. 22 showed 26 percent of Canadians say the economy is their top campaign issue, compared with 11 percent for the environment.
Harper, Canada's first elected Conservative prime minister since Brian Mulroney served from 1984 to 1993, ended 13 years of Liberal rule when he won power in 2006. He had to govern with 27 seats short of a majority in the 308-member Parliament, meaning he needed rival parties' help to pass legislation.
To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net.


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Originally Posted by James48843

Listen to who you like. You are welcome to.

By the way- have you found anybody is actually in favor of voting for this?

Lots of Democrats, the same ones who tanked FNM and FRE by lowering the lending standards, not regulating them, and telling everyone that FRE and FNM are just fine.

Originally Posted by James48843

What Michael Moore has to say about the bailout this morning-
Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this.

Some people don't like to read Michael Moore. They might prefer the same ideas, with toned down rhetoric, if they come with the assurance of expertise. Nobel prize winning economist Joseph E. Stiglitz says, "...an alternative explanation for Wall Street's celebration: the banks realized that they were about to get a free ride at taxpayers' expense."

XL-entLady's Account Talk

The experts - the people who have devoted their lives to trying to understand how economies work - are asking the politicians to slow down and develop a more thoughtful response to the situation.

XL-entLady's Account Talk

We need to ensure our representatives know we support that position.

Lady

Paulson may have destroyed any possiblity of intervention OR non-intervention working by calling the plan a "$700 Billion Dollar BAILOUT" and then saying that if this doesn't go through yesterday Wall Street is going to spiral, which instantly gets the electorate going for the pitchforks, and the markets in panic. Worst of all makes anyone in the know that it's the entire lending industry that's in danger, not just Wall Street fatcats, panic and NOT lend money until something passes. So, now whether or not this lending idea is going to work, if nothing passes I expect the whole lending system will gum up completely, because he's told them if there isn't a "bailout" the wheels will fall off. He's destroyed confidence in the lending system working without the BAILOUT. And lending *is* based on confidence. Thanks, Secretary Panicman. You've really ***ed up the entire financial system, if it wasn't jogging toward there already.

The Dems are only voting for it because the lending system is drying up, and Paulson went and scared everyone still in it that the sky will fall if they don't get this BAILOUT. You would think he did it on purpose to force the Democrats to pass this mess or be accused of fiddling while the economy goes into Recession so that McCain would win, if Paulson didn't look like a deer in the headlights.

The McCain ad released yesterday says that the Republicans wrote all of the admendments to the bill "in the last few days" is not true, and actually undermines the fact that the best amendment in my eyes, the one proposing an alternative that is insurance, was sponsored by a Republican (and he may even have written it) - Eric Cantor (R-VA). It is this amendment that may have led to the Bush Tea Party Rebellion, the House Republicans wanted it in. Other admenments dealing with structured release of monies, limiting "golden parachutes", docking Banking Executive pay (opposed by Republicans because it interferes with the market), and more oversight in general were already in the package that was supposedly a slam dunk before the Tea Party. This was *before* McCain showed up. The current McCain ad more or less says Obama fiddled and McCain was responsible for all of the edits to the bill and the Democrats came up with this $700 B bailout, and were going to pass it without any changes. Pluleeeze.

Really the Democrats should let the economy tank, and forget voting for any version of this Albatross if they want to just get election year hay out of this. But then they are all fiddlers as the lending system tanks, because there was a crisis in lending already, and Paulson's words made it panic.

In the past few days, the Dems(Nancy Polosi, BArney Frank, etc...) have been trying very hard to get this bill finalized. Ask yourselves why? Why did they have announcements every other hour saying "we have a deal, we have a deal!"

The Republicans have been talking a good show, but will more than likely vote yes.

IMO, this has nothing to do with being Dems or Repubs. This is about wall st. whores working for wall st. 99% of the people are against this bailout. It might be time for a revolt.