Hurrah!! The Bail Out Defeated 228 to 205

Tallen234 · Post by **Tallen234** » Wed Oct 01, 2008 3:32 pm

Good Questions. See Below

DreamStalker wrote:
I heard the same things on the news but it still does not make sense. How can they be toxic worthless securities but still have 85% to 95% value? ... and therefore how will 700 billion be recouped?

[the toxic securities are toxic because there is no market for them.

Yes, but the hope is there will be (and should be) a market for them eventually. These are regular mortgages (yours, mine, your neighbors), but a percentage of them have "issues". These are still homes that have value, maybe not 100% of the purchase price of the home, but some percentage of the purchase price (after cleaning up the home, etc.). When these mortgages are bundled into securities, they become investment vehicles, i.e. your mortgage payment becomes part of a revenue stream for the investors who bought these securities. Original lenders sell these mortgages to free up more money to lend to more people who need credit. When the real estate market tanks, the value of these securities declines. Right now, the real estate market is in crisis. So, nobody wants to buy these securities in this market. This lack of demand, because of the mark to market accounting makes them worth 0. But there is something tangible there. Just think if you bought a SUV on a loan of 30,000. When you drive it off the lot, it depreciates to 25,000. If gas went up to 20.00 a gallon, the market for your SUV is shot. So, right now, at that moment in time, you have a car you can sell for parts, but it is still drivable and could be worth something in the future.

The CEO's of these companies bear a lot of the blame for this. They saw the problem, consumer greed, property values droping and foreclosures starting, but they still hung onto these securities in the hope that the market would turn around.

How does increasing FDIC to 250K make the bailout any better?

This is a consumer confidence issue. They haven't raised the FDIC insurance rate in something like 15 or 20 years, people have been moving their savings/checking/business accounts from smaller banks to bigger banks (or even take their $$$ out of the banking system entirely) as they are afraid they may lose their life savings. See my example above where a savings account that was greater than $100,000 is now in jeopardy because a small bank went under (as part of this larger crisis). Also, my wife changed her business account to Bank of American (from WaMu) because of these issues. So, the increase in insurance will increase confidence in the system.

How does deregulating market to market accounting make anything less toxic?

Because banks cannot free up any money on their balances sheets because these mortgages are worth 0 on their balance sheet because of the mark to market valuation. Remember, these are still homes that can be foreclosed on and sold. So, there is a brick and mortar asset that exists.

Seems like allowing FDIC to insure mortgages would make FDIC less stable (ie. where will they come up with the money to pay claims?).

If the FDIC guarantees bank losses resulting from failed mortgage-backed securities, this would provide immediate value to the securities and a foundation for which they could then be sold. It is my understanding that the Treasury Department would finance that insurance by assessing a premium on outstanding mortgage-backed securities. Right now, the only viable investment instrument involving mortgage backed securities are those that are insured. The investor knows how much they are worth, he can value it (right now he can't because he doesn't know how much the foreclosed houses will sell for, etc.).

Yes it is a mess. The cleanup should be paid by the ones who made the mess ... of course Exxon still has not paid for their mess of Prince William Sound 20 years ago

Unfortunately, it is not this simple. Who's to blame? Mary Creamcheese who wanted to move out of her apartment and buy a house with 0% financing on her minimum wage salary, because she thought her new purchase would double its value in one year? The government who allowed Fannie and Freddie to issue subprime loans to people with horrible risk profiles? Other lending institutions who also abandoned reasonable lending requirements and actually loaned the money the people who couldn't afford it. Huge institutional investors who jumped at mortgage backed securities. If nothing is done, the people that will pay for it will be you and me. With horrific liquidity issues, as banks continue to hoard cash, expect credit lines on credit cards will be reduced, foreclosure proceedings accelerated, car-leasing programs suspended. This could also lead to most Americans not being able to buy a home, car or tractor unless paid for in cash. As the credit markets shutdown, the mortgage, auto and small-business loan markets will nearly disappear. And the economy will grind to a near halt.

Please remember that there is a world pool of money out there that everyone is saving, insurance companies are hoarding money to cover future losses, pension funds are hoarding money to cover future pensions, 401k funds, central bank funds, etc. Moreover, this world pool has increased significantly over the past 20 years or so with poor countries selling oil to rich countries. China and India came online, so they had a lot of money. EVERYONE HAD MONEY TO INVEST. At the same time, under Alan Greenspan's reign, the price of money was pretty low (fed funds rate), so investors were not buying treasury bonds that were at 1%. So, a number looked at mortage backed securities where homeowners were paying 5-8% interest on their loans. By combining these mortgages into the 1000's you can reduce the risk, so the BIG INVESTORS would be interested in socking their money into this investment vehicle. So, the risk profiles began to get looser, let's start lending to people who can't afford it. Governments got on board with the mantra of this will help the poor and disadvantaged. Credit agencies jumped on board and gave mortgage backed securities their seal of approval (some were rated as strong as US Treasury Bonds). The housing bubble perpetuated the problem, home values are up, make is easier to get loans, buy more homes, home values increase, people take out home equity lines to buy jet skis, plasma screens, etc. at the same time, small banks are borrowing from big banks in order to lend more money to create more mortage based securities to sell to Wall Street.....SO......once the market reversed, then the CR*P hit the fan. SO, now this global pool of money isn't really sure what it has, it may have p*ssed away one third or a half of its value. So now, these global investors are avoid all risk. COUNTRIES are having a hard time getting a loan of money.

Nevertheless, if nobody pays for the cleanup, somebody should go directly to jail, not pass go, and not collect 700 billion dollars!!

roster · Post by **roster** » Wed Oct 01, 2008 7:33 pm

Country4ever wrote:....... Anyhow......back to my initial question: Why would so many small business owners need a loan to pay their employees?

In retail, for instance, sales tend to be seasonal. Money is needed to build inventories, including floor stock, prior to the season. During the slow season you still retain and pay your employees.

Another example, a company buys a product and it takes say 30 days to sell it. They give the customer 30 days to pay the invoice. In the meantime the customer has had to pay its suppliers and employees but it has not collected the money for the sale. It needs to borrow.

A third example, a business wants to open a new location on the other side of town. It needs to erect a building and stock it with whatever. Money will be borrowed to do this well before any revenues come in.

Typically small business owners cannot raise the capital needed to build, run and expand a business without borrowing.

Now you can argue that nothing should be done unless you have the cash to pay for it upfront. This would result in economies that would grow very slowly. The great expansion in economies and improvement in living conditions that occurred over the last 50 years would not have been possible if capital could not be raised by borrowing.

Borrowing is one way that hardworking poor people often build businesses and pull themselves into well-to-do status. I came from a poor area of the rural south and watched all of my uncles do this - from poverty to successful businessmen and one farmer. Without credit, they would have never made it.

Wulfman · Post by **Wulfman** » Wed Oct 01, 2008 8:02 pm

rooster wrote:
Country4ever wrote:....... Anyhow......back to my initial question: Why would so many small business owners need a loan to pay their employees?
In retail, for instance, sales tend to be seasonal. Money is needed to build inventories, including floor stock, prior to the season. During the slow season you still retain and pay your employees.

Another example, a company buys a product and it takes say 30 days to sell it. They give the customer 30 days to pay the invoice. In the meantime the customer has had to pay its suppliers and employees but it has not collected the money for the sale. It needs to borrow.

A third example, a business wants to open a new location on the other side of town. It needs to erect a building and stock it with whatever. Money will be borrowed to do this well before any revenues come in.

Typically small business owners cannot raise the capital needed to build, run and expand a business without borrowing.

Now you can argue that nothing should be done unless you have the cash to pay for it upfront. This would result in economies that would grow very slowly. The great expansion in economies and improvement in living conditions that occurred over the last 50 years would not have been possible if capital could not be raised by borrowing.

Borrowing is one way that hardworking poor people often build businesses and pull themselves into well-to-do status. I came from a poor area of the rural south and watched all of my uncles do this - from poverty to successful businessmen and one farmer. Without credit, they would have never made it.

The question that was raised just a little bit ago on one of the channels I was watching is whether the banks would actually use this money to free up lending/borrowing or whether the banks would use it for their own liquidity and still not make any loans. It still has to go back to the House of Representatives for their vote.

If this "mess" is just the tip of a bigger iceberg, then it's just more "good" (?) money thrown after bad.

Den

ac0gn · Post by **ac0gn** » Wed Oct 01, 2008 8:14 pm

Good Evening,

I agree that we need to do something. I figure as long as they are going to hand out the money no matter what we think they should give us all the money and let us pay off our loans ect. That way the money will roll up hill and we all win.

Good evening

Shaun

Tallen234 · Post by **Tallen234** » Wed Oct 01, 2008 8:21 pm

That is a good point, but the banks are in the "business" of using the money, so I think it will be used. But, I think your concern was why, at least partially, the House Republicans (or at least a portion of them) wanted to require the Treasury Department to guarantee/insure bank losses resulting from failed mortgage-backed securities originated prior to the plan's enactment (rather than buy them). This would provide value to the securities (you don't have to factor in foreclosures and uncertain property costs) and a foundation for which they could then be sold. The Treasury Department would finance that insurance by assessing a premium on outstanding (and future) mortgage-backed securities.

Wulfman wrote: The question that was raised just a little bit ago on one of the channels I was watching is whether the banks would actually use this money to free up lending/borrowing or whether the banks would use it for their own liquidity and still not make any loans. It still has to go back to the House of Representatives for their vote.

If this "mess" is just the tip of a bigger iceberg, then it's just more "good" (?) money thrown after bad.

Den

roster · Post by **roster** » Wed Oct 01, 2008 8:32 pm

ac0gn wrote:........ I figure as long as they are going to hand out the money no matter what we think they should give us all the money and let us pay off our loans ect. .....

$700B is about $2,330 per capita. Count my wife and me and it is about $4,660 (tax free I hope). We are spending about $80,000 per year (kids' college fund is separate and already set aside). That will keep us going for about 21 days. I am sure our politicos will have another crisis for us when this runs out.

Wulfman · Post by **Wulfman** » Wed Oct 01, 2008 8:52 pm

Tallen234 wrote:That is a good point, but the banks are in the "business" of using the money, so I think it will be used. But, I think your concern was why, at least partially, the House Republicans (or at least a portion of them) wanted to require the Treasury Department to guarantee/insure bank losses resulting from failed mortgage-backed securities originated prior to the plan's enactment (rather than buy them). This would provide value to the securities (you don't have to factor in foreclosures and uncertain property costs) and a foundation for which they could then be sold. The Treasury Department would finance that insurance by assessing a premium on outstanding (and future) mortgage-backed securities.

Wulfman wrote: The question that was raised just a little bit ago on one of the channels I was watching is whether the banks would actually use this money to free up lending/borrowing or whether the banks would use it for their own liquidity and still not make any loans. It still has to go back to the House of Representatives for their vote.

If this "mess" is just the tip of a bigger iceberg, then it's just more "good" (?) money thrown after bad.

Den

For the record.......I spent about 7 1/2 years IN banking in the late 60's and early 70's.....and then about 3 years working for a banking computer software company in the early 80's......then did some (computer) consulting for some banks in the late 80's and early 90's......so, I'm familiar with what goes on in that industry.

Oh, there's no doubt that the money will be "used". The question/problem is what for? I haven't actually seen the bill (and wonder how many of those legislators actually DID read it) but it doesn't sound to me like there's any "oversight" in there and true to our government's stupidity, they just have the habit of "throwing money at problems" without knowing what the Hell they're doing. AND, they (legislators) have to keep their campaign contributions coming in from the special interest groups.

Here's a question I've posed to many people in the past......with no answer......
How many other businesses make money with both their assets AND liabilities?

On a bank accounting ledger, the deposits are "liabilities" (because they owe them to the customers), but yet they charge fees for "servicing" those accounts.
On the other side of the ledger, the loans are "assets" (because they are owed TO the bank by the borrowers), and they charge interest (income) for lending the money (which, by the way, is based on their deposits (liabilities) and capital).

Hmmmmm???

Den

Bert_Mathews · Post by **Bert_Mathews** » Thu Oct 02, 2008 6:01 am

Wulfman wrote:
rooster wrote:The question that was raised just a little bit ago on one of the channels I was watching is whether the banks would actually use this money to free up lending/borrowing or whether the banks would use it for their own liquidity and still not make any loans. It still has to go back to the House of Representatives for their vote.

If this "mess" is just the tip of a bigger iceberg, then it's just more "good" (?) money thrown after bad.

Den

The USA has a infrastructure ( roads - bridges - ect. ) that if they tossed 1/2 of the 700B to replace / update. We would have more work money spent in the USA and like we ended the last depression.
The Banks DO NOT "Produce" ANYTHING --- just paperwork............. and they need more? Maybe they are the ones with the BOMB of mass destruction?

BERT

roster · Post by **roster** » Thu Oct 02, 2008 7:40 am

Bert_Mathews wrote: ........The Banks DO NOT "Produce" ANYTHING --- just paperwork............. ....

Well managed banks produce good credit markets which are fundamental to strong economies and good societies.

It is very sad that government policies and corruption have resulted in very poor management of some of our largest banks.

We humans can s@#$ things up even in the best of times.

DreamStalker · Post by **DreamStalker** » Thu Oct 02, 2008 8:40 am

Tallen234 wrote: Good Questions. See Below

DreamStalker wrote: I heard the same things on the news but it still does not make sense. How can they be toxic worthless securities but still have 85% to 95% value? ... and therefore how will 700 billion be recouped?
the toxic securities are toxic because there is no market for them.

Yes, but the hope is there will be (and should be) a market for them eventually. These are regular mortgages (yours, mine, your neighbors), but a percentage of them have "issues". These are still homes that have value, maybe not 100% of the purchase price of the home, but some percentage of the purchase price (after cleaning up the home, etc.). When these mortgages are bundled into securities, they become investment vehicles, i.e. your mortgage payment becomes part of a revenue stream for the investors who bought these securities. Original lenders sell these mortgages to free up more money to lend to more people who need credit. When the real estate market tanks, the value of these securities declines. Right now, the real estate market is in crisis. So, nobody wants to buy these securities in this market. This lack of demand, because of the mark to market accounting makes them worth 0. But there is something tangible there. Just think if you bought a SUV on a loan of 30,000. When you drive it off the lot, it depreciates to 25,000. If gas went up to 20.00 a gallon, the market for your SUV is shot. So, right now, at that moment in time, you have a car you can sell for parts, but it is still drivable and could be worth something in the future.

The CEO's of these companies bear a lot of the blame for this. They saw the problem, consumer greed, property values droping and foreclosures starting, but they still hung onto these securities in the hope that the market would turn around.

I understand why they are toxic … what I was asking is how can they be worthless and still have 85% to 95% value? I guess you really didn’t mean to say that they are “worthless” as that would be illogical. IMO, the CEO’s should be sued for negligence and/or fraud.

Tallen234 wrote:
DreamStalker wrote: How does increasing FDIC to 250K make the bailout any better?
This is a consumer confidence issue. They haven't raised the FDIC insurance rate in something like 15 or 20 years, people have been moving their savings/checking/business accounts from smaller banks to bigger banks (or even take their $$$ out of the banking system entirely) as they are afraid they may lose their life savings. See my example above where a savings account that was greater than $100,000 is now in jeopardy because a small bank went under (as part of this larger crisis). Also, my wife changed her business account to Bank of American (from WaMu) because of these issues. So, the increase in insurance will increase confidence in the system.

IMO increasing the FDIC insurance from $100K to $250K without an increase in the premiums will only provide a false sense of security … the same false sense of security that led the financial system into the current mess. I think it is a good idea to increase to the $250K to keep up with inflation but not such a good idea if there are insufficient funds to cover claims.

Tallen234 wrote:
DreamStalker wrote: How does deregulating market to market accounting make anything less toxic?
Because banks cannot free up any money on their balances sheets because these mortgages are worth 0 on their balance sheet because of the mark to market valuation. Remember, these are still homes that can be foreclosed on and sold. So, there is a brick and mortar asset that exists.

Perhaps they need to just revise the market to market rules rather than suspending them altogether. Again, IMO, removing the rules even temporarily only opens up the mess for additional fraud and speculation.

Tallen234 wrote:
DreamStalker wrote: Seems like allowing FDIC to insure mortgages would make FDIC less stable (ie. where will they come up with the money to pay claims?).
If the FDIC guarantees bank losses resulting from failed mortgage-backed securities, this would provide immediate value to the securities and a foundation for which they could then be sold. It is my understanding that the Treasury Department would finance that insurance by assessing a premium on outstanding mortgage-backed securities. Right now, the only viable investment instrument involving mortgage backed securities are those that are insured. The investor knows how much they are worth, he can value it (right now he can't because he doesn't know how much the foreclosed houses will sell for, etc.).

Yes that is one of the primary things that caused the mess. I think that is what Warren Buffet referred to as the financial weapons of mass destruction. These greedy banking people decided not to insure the mortgages and instead use these complicated contracts (derivatives?) instead of mortgage insurance. Again, IMO, adding a greater burden to the FDIC would tend to make it become less stable. The investors who bought the uninsured mortgages took the risk and they should be forced to take the losses for their decisions.

Tallen234 wrote:
DreamStalker wrote: Yes it is a mess. The cleanup should be paid by the ones who made the mess ... of course Exxon still has not paid for their mess of Prince William Sound 20 years ago
Unfortunately, it is not this simple. Who's to blame? Mary Creamcheese who wanted to move out of her apartment and buy a house with 0% financing on her minimum wage salary, because she thought her new purchase would double its value in one year? The government who allowed Fannie and Freddie to issue subprime loans to people with horrible risk profiles? Other lending institutions who also abandoned reasonable lending requirements and actually loaned the money the people who couldn't afford it. Huge institutional investors who jumped at mortgage backed securities. If nothing is done, the people that will pay for it will be you and me. With horrific liquidity issues, as banks continue to hoard cash, expect credit lines on credit cards will be reduced, foreclosure proceedings accelerated, car-leasing programs suspended. This could also lead to most Americans not being able to buy a home, car or tractor unless paid for in cash. As the credit markets shutdown, the mortgage, auto and small-business loan markets will nearly disappear. And the economy will grind to a near halt.

Please remember that there is a world pool of money out there that everyone is saving, insurance companies are hoarding money to cover future losses, pension funds are hoarding money to cover future pensions, 401k funds, central bank funds, etc. Moreover, this world pool has increased significantly over the past 20 years or so with poor countries selling oil to rich countries. China and India came online, so they had a lot of money. EVERYONE HAD MONEY TO INVEST. At the same time, under Alan Greenspan's reign, the price of money was pretty low (fed funds rate), so investors were not buying treasury bonds that were at 1%. So, a number looked at mortage backed securities where homeowners were paying 5-8% interest on their loans. By combining these mortgages into the 1000's you can reduce the risk, so the BIG INVESTORS would be interested in socking their money into this investment vehicle. So, the risk profiles began to get looser, let's start lending to people who can't afford it. Governments got on board with the mantra of this will help the poor and disadvantaged. Credit agencies jumped on board and gave mortgage backed securities their seal of approval (some were rated as strong as US Treasury Bonds). The housing bubble perpetuated the problem, home values are up, make is easier to get loans, buy more homes, home values increase, people take out home equity lines to buy jet skis, plasma screens, etc. at the same time, small banks are borrowing from big banks in order to lend more money to create more mortage based securities to sell to Wall Street.....SO......once the market reversed, then the CR*P hit the fan. SO, now this global pool of money isn't really sure what it has, it may have p*ssed away one third or a half of its value. So now, these global investors are avoid all risk. COUNTRIES are having a hard time getting a loan of money.

First of all, please remember that WE WILL PAY regardless of whether this bailout (and it is a bailout even with the senate’s “sweet” lipstick on it) is passed or not. And if the bailout does pass the house, I’m still not convinced that the doom’s day predictions can be avoided … forestalled perhaps, but not avoided. I see it as a pay now or pay more later situation.

Yes many are to blame from poor little Mary Creamcheese to should’a known better Alan Greenspan and a bunch more in between. However, the bulk of the blame can easily be placed on government officials and Wall Street and financial CEOs … who happen to be the ones who benefited the most.

Although I realize that without this bailout, many innocents will be hurt, in the long run, the bailout will still hurt innocents. Yes, I know, now they are calling the bailout pig with lipstick a “rescue plan” and that the tax payer will get the $700 billion back … but I have not been convinced that the tax payer will get all or even most of the $700 billion back. They have not even considered the interest costs for this huge addition to the national debt nor the added costs that this bailout will have on devaluating the dollar. Unfortunately, they (government) were hoping the crap would not hit the fan until after the elections but failed to realize that the stink would precede the crap. So now they are trying to mask the stink with a quick $700 billion scented lipstick (oh that’s right, they increased it by an extra $100+ billion last night didn't they?).

mindy · Post by **mindy** » Thu Oct 02, 2008 10:16 am

I have many mixed feelings about the issues involved in the so-called "Bail Out". Here's an op ed article from the New York Times that presents some historical information and compares Japan's financial history with ours. I'm sure there are many arguments different ways but I found this one thought-provoking.

Code: Select all

OP-ED COLUMNIST
Save the Fat Cats 
By NICHOLAS D. KRISTOF
Published: October 1, 2008 

In the early 1990s, when I was a foreign correspondent looking for my next overseas posting with The Times, I sought Japan. At the time, Tokyo was an awe-inspiring economic titan, arguably the most important capital outside the United States.
Then Japanese politicians, acting with the same sublime ineptitude that our own House of Representatives displayed this week, ignored a growing banking crisis and dithered on a bailout. And so I watched from Tokyo as a mighty economy melted like an iceberg in the Caribbean.
Japan’s failure to respond urgently and decisively to its banking mess caused the country to endure a “lost decade” of economic stagnation. If America wants to avoid Japan’s decline, the House should follow the Senate’s lead and approve the bailout — immediately.
Just as in the U.S. today, most Japanese did not initially appreciate how devastating a banking crisis could be to the real economy. Banks and real estate tycoons in Japan were corrupt, profligate and unsympathetic figures, and no one wanted to help them. On corporate expense accounts, they sipped coffee with gold leaf and patronized “no-panties shabu-shabu” restaurants, which had mirrored floors and miniskirted waitresses.
In short, the businessmen involved were jerks. And, whether in Japan or the U.S., it’s challenging for politicians to frame a bailout with the slogan: Save the jerks!
Japanese politicians didn’t want to rescue such unpopular fat cats and didn’t see any emergency. So Japan’s economy slowly lost air, and the biggest losers were the small futon makers who couldn’t get credit and the farmers on remote islands who lost ferry service when the government eventually had to cut back on spending.
For those of you accustomed to bull markets, who think we’re sure to come out of this quickly, remember this: Japan’s main stock index is still less than one-third of its level of 19 years ago. 
In 1993, after Japanese stocks had already tumbled for several years, an American friend told me that he was going to invest in Japanese stocks. “I don’t know what they’re going to do for the next couple of years,” he said, “but we all know that over five years they’ll recover and do better than American stocks.” Since then, Japanese stocks have lost another 40 percent of their value.
The Federal Reserve chairman, Ben Bernanke, is an expert on Japan’s lost decade, and the president of the New York Fed, Timothy Geithner, lived in Tokyo during that debacle, and their experience no doubt is one reason for the urgency of Washington’s response. The lesson from Japan is pretty clear: Hold your nose and support a bailout, in particular to clean up banking assets.
All this said, critics of the bailout have reason to be furious. It is profoundly unfair that working-class American families lose their homes, their jobs, their savings, while plutocrats who caused the problem get rescued.
If the Congressional critics of the bailout want to do some lasting good, they should come back in January — after approving the bailout now — with a series of tough measures to improve governance and inject more fairness in the economy. 
A starting point would be to remove tax subsidies on executive pay and allow courts to restructure mortgages as they do other kinds of debt. The Institute for Policy Studies in Washington estimates that U.S. taxpayers every year provide more than $20 billion in tax subsidies for executive pay.
Among the strongest critics of inflated executive pay have been Warren Buffett and the late management guru, Peter Drucker, who argued that C.E.O. salaries should peak at no more than 20 or 25 times those of the average worker. (Last year, C.E.O.’s got an average of 344 times the wages of the typical worker.)
The truth is that with the complicity of boards of directors, C.E.O.’s hijack shareholder wealth in ways that are unconscionable. As The Wall Street Journal reported in June, if Eugene Isenberg, the 78-year-old C.E.O. of Nabors Industries, were to drop dead one of these days, his estate would be entitled to a “severance payment” of at least $263 million — more than the firm’s first-quarter net earnings.
With such greed oozing out of the corporate suite, and with financial companies enjoying the confidence of only 10 percent of Americans today (down from 36 percent in 2000), it’s no wonder that voters are repulsed by the idea of helping banks. Wall Street urgently needs to undertake its own housecleaning, for the public revulsion toward it undermines its own long-term interests.
But, for now, the priority is to get credit flowing again in the arteries of commerce, even if that means saving the jerks. Otherwise, we risk becoming Japan. 
I invite you to visit my blog, www.nytimes.com/ontheground, and join me on Facebook at www.facebook.com/kristof.

I hope you'll find it as interesting as I did.

Mindy

DreamStalker · Post by **DreamStalker** » Thu Oct 02, 2008 10:54 am

What I found most interesting is that if Bernanke is an expert on the Japanese banking meltdown of the 90's ... why did he wait until the very last week before it is supposedly too late to save us from the predicited doom?

roster · Post by **roster** » Thu Oct 02, 2008 11:01 am

mindy wrote: .......“no-panties shabu-shabu” restaurants ...........

When I dine out I expect all the help to be wearing underwear.

mindy · Post by **mindy** » Thu Oct 02, 2008 11:09 am

rooster wrote:
When I dine out I expect all the help to be wearing underwear.

Heh-heh ... I guess that means you're one of the good guys, Rooster

Mindy

Slinky · Post by **Slinky** » Thu Oct 02, 2008 11:23 am

Nicholas D Kristof wrote: ... critics of the bailout have reason to be furious. It is profoundly unfair that working-class American families lose their homes, their jobs, their savings, while plutocrats who caused the problem get rescued. ...

No Sh*t, Dicky Tracy! Like who tipped you off, Sam Spade?

Nicholas D Kristof wrote: ... If the Congressional critics of the bailout want to do some lasting good, they should come back in January — after approving the bailout now — with a series of tough measures to improve governance and inject more fairness in the economy. ...

WHY WAIT?

Nicholas D Kristof wrote: ... A starting point would be to remove tax subsidies on executive pay and allow courts to restructure mortgages as they do other kinds of debt. The Institute for Policy Studies in Washington estimates that U.S. taxpayers every year provide more than $20 billion in tax subsidies for executive pay.
Among the strongest critics of inflated executive pay have been Warren Buffett and the late management guru, Peter Drucker, who argued that C.E.O. salaries should peak at no more than 20 or 25 times those of the average worker. (Last year, C.E.O.’s got an average of 344 times the wages of the typical worker.) ...

What Misters Kristoff, Buffett and Drucker fail(ed) to mention is that NO OTHER COUNTRY in the world has that large a disparity between workers and the upper echolons of business.

Nicholas D Kristof wrote: ... The truth is that with the complicity of boards of directors, C.E.O.’s hijack shareholder wealth in ways that are unconscionable. As The Wall Street Journal reported in June, if Eugene Isenberg, the 78-year-old C.E.O. of Nabors Industries, were to drop dead one of these days, his estate would be entitled to a “severance payment” of at least $263 million — more than the firm’s first-quarter net earnings.
With such greed oozing out of the corporate suite, and with financial companies enjoying the confidence of only 10 percent of Americans today (down from 36 percent in 2000), it’s no wonder that voters are repulsed by the idea of helping banks. Wall Street urgently needs to undertake its own housecleaning, for the public revulsion toward it undermines its own long-term interests.

How about no bail outs for second homes, refinance mortgages in danger of foreclosure at TODAY's property values and make them conventional mortgages at 6% interest which has usually been a reasonable and fair conventional mortgage rate. This would allow the mortgage lenders to see a good return on these refinancings w/in a reasonable future. Let the principal payments from the foreclosed mortgage be the down payment for the refinanced mortgage.

How about financing improvements to our infrastructure thereby increasing jobs AND improving the country's needs: road projects, waste water treatment improvements, highway bridge repair and safening, etc. instead of bailing out the fat cats on Wall Street and in our government?

How about severence packages of failed companies' CEOs and upper echelons of management limited to ONE YEAR'S SALARY, no perks, no stock options, no bonuses. How about NO payments or any type of reimbursements for the fat cat Boards of Directors and their removal?

Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

Re: Hurrah!! The Bail Out Defeated 228 to 205

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