What do you think of the Government bailout?

[Divia]

First, I'm not gonna agrue the the republicans messedit up or that the dems did. Truth of the matter is whats done is done.

A part of me is a little upset at some people who thought they could afford
300 thousand dollar houses when they say oh only make 80 grand a year. Why would you ever think you can afford such a house? And our society just plain sucks. Credit. credit. credit. I dont see why people failed to see this was a good idea. Hello 1929 anyone?

I'm on the fence about the bailout. I really want to hear it from a UK perspective because at least I think they would be a little more neutral in it. I cant trust the republicans or the dems.

What do you think?

[sweetpotatoboy]

I think what's p*ssing off most people outside the US is that we've all now been affected by something happened almost exclusively in the US market.

The main reason it's p*ssing me off is that I work in the financial sector, so obviously job security is a worry. Thankfully, so far, so OK, and we've been living with instability since last year. But I'm not actually at a bank and would be hesitant to join any bank right now (though there's one potential opportunity I'm considering).

Also, and importantly, I'm needing to be completely up to date with what's going on, so my reading time is spent on that, with little time for leisure reading... :mad:

[donroc]

I also believe there is plenty of blame for both parties and two Presidents and what has been done must now be fixed.

Two areas that should be handled negatively in my opinion.

1. No golden parachutes for any CEO who ran his/her company into the ground by dealing with bad paper.

2. No bailout/aid for house flippers and people who falsified applications to obtain a mortage for homes they could not afford if the RE market went south as it did.

3. Jail time for all lenders engaged in fraud.

What must be done:

1. Ensure banks can and will lend to qualified home buyers and businesses.
2. Readjust mortgages for those who can show proof of fraud by mortgage lenders so they can keep her homes.
3. Aid to those who lost their homes through fraud by lenders.

Alas, "the devil will be in the details."

[Leyland]

I'm in agreement with Donroc about solutions for the problem. I also agree with Divia about people buying McMansions they couldn't afford - what did they think would happen? It's like that commercial with the guy barbecueing in his yard as he describes all the expensive items he has and says the only way to afford it all is to be in debt 'up to his eyeballs'.

If every American is like this, then we're toast!! Is it fair to say that greed and/or the need for instant gratification is a root cause for our credit disaster? Or is the average American so clueless that a scam or fraudulant lender has such easy success?

I have a managable amount of 'good debt' in that I only have a mortgage on a fairly modest property of which I own just more than 50% equity - the bank owning the rest! No car payment on the six year old car and no credit card debt I can't pay off each month. The idea of being seriously in debt for so much more than I can afford scares me like you wouldn't believe! I've been somewhat deep in credit card before, so I learned my lesson and got myself out on my own.

So the US doesn't have universal health care, but we will have universal mortgage care.

[MLE]

The problem with blaming the government is that we are a society where people are free to make their own financial choices. We like this part.

But then, people start out their lives by making stupid coices. That's how we learn. Then we feel bad, for ourselves or for others, when the consequences come home. So we want the government to fix it.

Those in government depend on votes. And it's not their money. So they do what it takes to fix it. But since this gets between people and the valuable lessons they need to learn to succeed in the next round, they don't learn. Believe me, you couldn't train a dog this way -- and people are a lot smarter and more self-interested than dogs.

Both parties had people doing stupid things, but that pales in comparison to the stupid choices consumers will make, grabbing for what they cannot yet afford, and the venial choices corporate smucks will make to get richer. If we can't stand to watch the pain of letting the market correct itself (where many innocent people get hurt along with the guilty, just like everything else in life) then we should realize we are choosing the frustration of cradle-to-grave nanny state government.

But for the record, the president has about as much control of the economy as a surfer has of a wave. He just rides it in and hopes it won't kill him. I know more now about Herbert Hoover, and the depression had almost nothing to do with him; and as for the 'fix' FDR did, it was the beginning of the nanny-state that now has us committed to 'do something' and created the problem of the baby boom coming up to retirement and expecting social security, with little per capita savings. We didn't have enough kids to make that happen, regardless of government choices. Do the math.

[donroc]

I received this amusing email that almost makes sense:



If you are against the $85,000,000,000.00 bailout here is a plan that could work.

Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child.
So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free.

So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife team has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads

Put away money for college - it'll be there

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs

Invest in the market - capital drives growth

Pay for your parent's medical insurance - health care improves

Enable Deadbeat Dads to come clean - or else

Remember this is for every adult U S Citizen 18+ including the folks who
lost their jobs at Lehman Brothers and every other company that is cutting
back. And, of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of
trickling out a puny $1000.00 ('vote buy') economic incentive that is being
proposed by one of our candidates for President.

If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

What about the Wallstreet loans..... liquidate them

Sell off its parts.

Let the private sector bargain hunters cut it up and clean it up.

Sure it's a crazy idea that can will never happen...but the numbers are wild.

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion



And remember, This plan only really costs $59.5 Billion because $25.5
Billion is returned instantly in taxes to Uncle Sam.

[Leyland]

and as for the 'fix' FDR did, it was the beginning of the nanny-state that now has us committed to 'do something' and created the problem of the baby boom coming up to retirement and expecting social security, with little per capita savings. We didn't have enough kids to make that happen, regardless of government choices. Do the math.

I'm fortunate in that I won't need to use my 401k savings for at least 20-25 years so I'm not in a panic about the fluctuating balance in my account being 'corrected' every quarter when I view the statement. I'll keep contributing every pay period for those next 20 years and wear my rose colored glasses in the expectation that I'll have made money on those contribs all along throughout these market ups and downs. It sure will be nice if I get Social Security benefits too, but won't hold my breath on that.

I also hope my home/property is serving as a dependable investment as well, and I'll be able to sell it for a nice profit come the day I need to move into a senior assisted living complex! ;)

[Leyland]

Donroc -

$85,000,000,000.00 divided by 200,000,000 is $425. Not $425,000. Did I miss something?

[donroc]

I think the sender may be mathmatically challenged, but it was the spirit of the thing that amused me. :D

[Leyland]

Yeah - I agree with the sentiment! There's so much more we can do with our money than what we have done (or not done concerning other social issues).

Please excuse my accountant's brain. I used to work for a bank in Charlotte NC where I was responsible for preparing the SEC reports, the Call Reports to the OCC and the regulatory reports to the Federal Reserve. This was about ten years ago - my, how things have changed!

[donroc]

Yeah - I agree with the sentiment! There's so much more we can do with our money than what we have done (or not done concerning other social issues).

Please excuse my accountant's brain. I used to work for a bank in Charlotte NC where I was responsible for preparing the SEC reports, the Call Reports to the OCC and the regulatory reports to the Federal Reserve. This was about ten years ago - my, how things have changed!


We could use you both in the government and at some of the failed institutions.

[Leyland]

Nah, Don! I've been in public accounting now for the past seven years and have gotten used to tax season abuse. :D However, if I should be required to come to the aid and service of my fellow Americans - I surely would.

[Misfit]

I haven't read up enough yet (yeah, I know I'm bad) on the proposed bailout, but I do not like the fact that we keep making mistakes and doing stupid things and then expect the government to bail us out. That's not how one learns from their mistakes. Me, I've been a little credit card stupid but instead of being a victim I've cut expenses and I'm not going on leisure trips - even with the air miles you still end up spending money on food, rental cards, etc. More time for reading that way anyway :p

It's not just consumers at fault, it's the banks as well and I'm not talking about mortgages. I've had a few current and former customers of my company who have filed personal bankruptcy in the last six months or so, and when I looked at the financial statement I was just floored at not only the large number of multiple credit cards they had obtained and the amounts owing on same cards was mind numbing. Especially with one couple who we know are incapable of paying a bill the boss and I were scratching our heads wondering WTH the banks were thinking granting them that much credit.

But, government makes it so easy to file bankruptcy with little or no shame and off they go on their merry ways. I even had a customer who filed a couple of years ago and he'd sent papa in Poland $20K as repayment for a *cough* loan along with a nice refi on the house that they frittered away, yet they got their debts discharged with nary a slap on the hand.

Here's a fun example -- I know of a business owner that filed suit against his bank when he defaulted. He claimed that it was the bank's fault for loaning them more money than they were able to repay. OK........

[LCW]

Everytime I turn on the news I get nauseated!! This is just an awful situation to be in and there is plenty of blame to go around, starting with those who pushed for and allowed so much irresponsible deregulation of the market.

It's clear that some form of a "bailout" is needed but what as to what form it will take is "beyond my paygrade" to try to form an opinion on. What I do want to know, and what not one single politician or appointee has addressed, is where does this huge figure of 700 billion dollars come from?? Is that the exact value of the bad morgatge debt and the casualties that come along with it? Is it what is required to square off the debt plus inject more money into a sluggish market? Where did this astronimical sum come from? I want to know who came up with this figure and I want the justification for it itemized and put on the internet for American's to inspect!!

And while we're on the subject!!! Why can we borrow nearly a trillion dollars in a corporate welfare plan (so much "free market" proponents) and billions of dollars for a war but we can't provide American's with health insurance, can't fix our schools, and can't fix our roads?? Nice priorities there, Mr. Government!!!

[LCW]

I think what's p*ssing off most people outside the US is that we've all now been affected by something happened almost exclusively in the US market.




Well, to be fair, the strength of the US economy and the buying power of our consumers has created countless jobs around the world and has supported the economies of entire nations! Sometimes you gotta take the bitter with the sweet, ya know!

[donroc]

Here in Florida, more than a few Europeans and South Americans also became involved in the house-flipping schemes as well as investing in our institutions and markets.

[Leyland]

but we can't provide American's with health insurance, can't fix our schools, and can't fix our roads?? Nice priorities there, Mr. Government!!!

Quick question - aren't road and school repairs and maintenance administered by local and state governments and funded primarily through local tax revenue? The federal government is not typically involved at that level, correct? Federal funding might be required, but the local school boards and state level DOT's have to ask. Does the federal government (Mr. Govenment?) refuse to assist with funding, in your opinion, 1lila1?

I'd hate for the funds required to continue war activities and the credit crisis financial bailout cause the federal government to refuse to properly fund schools and roads. How much has the shortfall been in the past?

[LCW]

Quick question - aren't road and school repairs and maintenance administered by local and state governments and funded primarily through local tax revenue? The federal government is not typically involved at that level, correct? Federal funding might be required, but the local school boards and state level DOT's have to ask. Does the federal government (Mr. Govenment?) refuse to assist with funding, in your opinion, 1lila1?



Yes, they are administered at state and local levels but money from the Federal budget does go to these things. To say it's not involved, IMO, isn't correct. Of course, it's involved! It holds a significant part of the purse strings for these projects!

And don't even get me started on the way schools in this country are funded! That's a whole other rant/topic! ;)

My point is that when the Government, whether local, state, or federal, WANTS to fund something it finds a way! And as an American and a taxpayer, I find that the easiest, although admittedly simplistic, way to look at a government's priorities (despite it's rhetoric) is to look at where it puts its money!!

[princess garnet]

Suze Orman has this article (http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=SP&SRCN=suzescoop&GnavID=1&SnavID=134&TnavID=&NewsID=161) on her website. There are additional articles in the same section.
If you get MSNBC, her show airs Saturdays at 9 pm and midnight.

[Telynor]

This mess has been brewing for a long long time. Without any oversight to lending practices, 'easy credit', and people spending far too more than what they earn has lead us to this catastrophe. Would putting nearly a trillion dollars into the system help -- not really. I'm really against the 'golden parachutes' for the CEO's that ruined their companies.

It's greed that fuelled this crash (and it is a crash, but no one in government has the b---s to say so), along with one of the worst administrations in this country's history. It's been building ever since Reagan took office in '81.

The only way to stabilize this mess is to get the country working again, and nail the companies that have tremendous tax breaks. Everyone of us in the middle and lower classes pay our taxes, and do it without grumbling. But large corporations with their lobbyists get handouts that are just too much. Revamping the tax system so that it is fair and equitiable for everyone would be a step in the right direction. If you're heavily in debt now, smartest thing to do is to get yourself out of debt, pay down your bills, and knuckle under and learn to live under a budget. It's not that hard to get out of debt, and once you do so, it's a very good feeling.

[Divia]

I agree that its far too easy for people to get credit these days. And its far too eaasy for people to use credit cards when they want that new LCD TV or that new sweater or whatever it is. Its annoying and tiresome that I work hard for my money yet I rarely see it. I try not to spend above my means. I saved up over the course of 4 months to buy a ring. walked into Kays and plopped down the 700 bucks. I thought the lady was gonna die. But tahts how people should do things, but they dont.

I want to say that this crunch is gonna make people realize how poorly they ahve been living, but I doubt it.

And I just heard the other day that a CEO took over a company for like 6 days and left and now he is gonna get a muliti million dollar deal. How the hell is that fair???????

[Leyland]

I just wonder where we'd be now if Rep. Barney Frank (D-MA) hadn't opposed the Bush administration's and other Republicans' attempt at a regulatory overhaul of the housing finance industry back in 2003. The following is a Frank quote from a NY Times article:

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

The outline of the plan is also quoted from NY Times:

"Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates."

Here's a link to the article - http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B 63&sec=&spon=&&scp=1&sq=New%20Agency%20Proposed%20to%20Oversee%20Freddi e%20Mac%20and%20Fannie%20Mae&st=cse

As Telynor stated, the mess has been brewing for a long time. Apparently, oversight of Fannie Mae and Freddie Mac has been acknowledged as being broken for the last five years. And I understand that the housing market expected for homes to keep appreciating in value. I assume this lead everyone to believe that underlying problems could be ridden out without consequence. Guess not.

I'm glad that so many people have had a chance to buy a house for the first time in the last ten years, but should they have been given the opportunity if they really couldn't afford it once they got it? I saw on a business program today that a year ago Frank approved a bill that allowed people to obtain FHA backed loans with zero percent down. Unbelievable. Remember the generations of hardworking people that saved up and went without so they had a down payment for a home? Equity is such a huge factor in attaining and keeping such an important asset.

[Telynor]

One of my favourite authors, Robert Heinlein, mentioned in his The Notebooks of Lazarus Long that:

Pay in cash or do without. Knowledge of debt eats up marital harmony as well as peace of mind.

And oh, how true that is! My ex, The Weasel, had not a clue about money or the real world, and continually had bills or was out of work, while I slaved away for years trying to figure out how to make him happy. (he was a con-man, through and through) For about the last ten years, I've been living on a cash only basis, and this week, we got the notification that the mortgage on J's home has been paid off.

All they have to do now is recreate debtor's prison or sponging houses -- that would end most people buying on credit. However, with easy credit and the high interest rates, most people have dug themselves in so deeply that there's almost no way that they can dig themselves out.

[Divia]

I believe the average household debt is 10 grand on credit cards.

[LCW]

10 grand in cc debt?? That's crazy! I guess we are lucky that we don't have any debt other than a mortgage and student loan debt. It's a big chunk but nothing unmanageable, we have very low interest rates, and we get big tax writeoffs from them every year. We do use cc's for some things but we could pay it off it we wanted to. I admit that I used to be a carefree spender, although I never went into debt for it, but my fiance is really good with money and has taught me a lot. I've learned to respect small amounts of money and that the constant bleeding of $5 here or 10 there is what really eats up your money. We usually bring lunch, cook at home, don't drive expensive cars, don't go out to too many expensive dinners, and manage to put back a good amount of savings. We pretty much live simple and under our means and we don't feel deprived at all.

[Leyland]

I use credit cards constantly to accumulate air miles instead of using my debit card, but try to go online every two weeks or so and draft the balance from my checking account as if it were a debit card. That's worked fairly well for me the last few years. Those little $5 and $10's do add up as 1lila1 says and it helps to see them add up online. Especially all the Amazon hits my balance takes from buying books you wonderful people have recommended here! ;)

I think I've got enough cc miles for a free round trip ticket, but it seems that I can't get the travel dates or times I want for the free air ticket anymore. So I think I'll start using my Barnes & Noble Mastercard all the time and get points for freebies there.

Again, going online and seeing latest transactions and current balance is a good psychological tool for controlling personal finance. That is, unless you're a master of denial. :(

[Telynor]

I just saw on CNN that the bailout has failed in the House.

[Divia]

Yeah I saw that too. I want to read it, but its all one big mystery to us all. What is in it? I dont want to give wall street a blank check.

[princess garnet]

Wow, the Dow fell 778 pts in 1 day! :eek:
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/29/AR2008092900623.html?hpid=topnews
I can see tomorrow's newspaper headlines...

[Leyland]

I hope the average American with 401k savings now understands that the bill wasn't for the benefit of Wall St financial firms so much, but for we, the people. This market plunge is horrific and affects every American with securities investments - namely retirement savings. I understand the members of the House that voted against the bill did so because their constituents demanded it. Pelosi wasn't any help either. I think those people are wrong.

I want our government/us to buy these bad investments now and get the credit machine back up and running. I'd hate for any of us to be working for a company that relies on a line of credit to meet payroll and not be able to get it. That's the most dire possibilty I can think of happening.

We unfortunately need a government intervention and I hope another bill gets drafted very soon. I watched TV all day during the crash in 1987 in disbelief. Scary stuff.

[Divia]

I heard, and I'm not sure if I understood this correctly but because the DOW fell so much that Americans who had stakes in stock lost ahem 1 TRILLION dollars.

:eek:

[diamondlil]

And that is just in the US. All the stock markets around the world are following suit as well.

In terms of percentage, the crash is supposed to be worse than the one in 1929.

[Divia]

That doesnt give me a warm fuzzy feeling inside!:(

[LCW]

I heard, and I'm not sure if I understood this correctly but because the DOW fell so much that Americans who had stakes in stock lost ahem 1 TRILLION dollars.

:eek:


Yep, you heard right! The house Republicans threw a trillion dollar temper tantrum!!

[donroc]

Repeat, 90 dems voted nay including a dozen or more on Barney Frank's committee.

Market is up 150+ this AM re. futures. Overseas is doing better too.

Lotsa manure spread by both sides.

A mild panic always shakes up the gamblers.

Drop yesterday was #17 in % on the panic scale.

The middle class (and who agrees on what that is?) was getting the shaft. The White House was helping the fat cats with a blank check. The lefty dems were buying votes from the poor with big bucks going to ACORN and other handout orgs.

Small businesses were being hurt most.

The crisis will be resolved with a bit more time, cooler heads, and less posturing -- and some fools in Congress on both sides keeping quiet for a change.

[Alaric]

In terms of percentage, the crash is supposed to be worse than the one in 1929.

But without nearly as severe consequences, which is the key thing. The rise of the Chinese, Indian, Russian and Brazilian economies means the damage is less for a lot of countries whose trade and stocks there have increased dramatically. For Australia there is no real noticeable impact on our exports as our #1 market is China, not the United States, which is one of the biggest differences so we can take the hit better.

Still, it's not the end of the world (unlike what the mass media want us to believe). This crash isn't as bad as the one in 1987. I mean, there's recessions all the time and countries bounce back as strong as ever. Japan went worse than this in the 80s and bounced back so strongly they were unaffected by the Asian Financial Crisis of 1997. In fifteen years time there will probably be another recession, and another one after that, and another after that. It's the consequence of a free market capitalist economy!

[Rowan]

Okay, my first question is... is this really a debate if we're all of the same mind? :p I mean I've not read every single post verbatim, but I get the feeling that we're all of the same mind on this subject.

You know, I'm 36 and I admit that in my 20s I made some very poor financial decisions. I didn't exactly go crazy with two credit cards - never maxed them out or even came close - but I backed myself into a corner that I couldn't easily get out of on the meager salary I made. Comparatively speaking, my debt was a drop in the bucket, but not once did I ever ask for any kind of help from the government for the mistake I made. As someone else said (I think it was MLE), people want to be free of Big Brother until we mess up our lives and then expect BB to race in and make everything better. Oh how wonderful life would be if that happened in every aspect of our lives!!

Just the other night, I was talking to a neighbour across the street who'd come over to visit. We were standing outside chatting when he said, "You see we're about to lose some neighbours?" I hadn't, until then, noticed the For Sale sign in front of the house two doors down from him. "They can't handle the payments anymore. They're paying $2,000 a month." My jaw hit the ground. Now I live with my parents so I don't have to make any mortgage payments, but I am more than certain they don't pay over $1,000 a month, if that. Apparently the couple had horrible credit and put very little toward a downpayment. But they had to have a house.

I have a friend in Florida who lives in a two bedroom apartment with her boyfriend and his three daughters. You can imagine they want to live in a house in the worst way, but unlike most people they know what they can afford and what they can't.

I don't want this bailout any more than anyone else does mostly because no one really knows if it will work or not. I think all CEOs and all other top executives should be stripped of their assets and paid minimum wage like real Americans are. Add up all that money and see how far that gets us in reviving the economy.

What depresses me most about all of this is the fact that it takes away from me being able to achieve my dreams. All of those fat cats on Wall Street don't give a flying rat's arse about anyone but themselves. :( :( :(

[Leyland]

I don't want this bailout any more than anyone else does mostly because no one really knows if it will work or not. I think all CEOs and all other top executives should be stripped of their assets and paid minimum wage like real Americans are. Add up all that money and see how far that gets us in reviving the economy.

I'd like to see CEO's who've essentially criminally 'mismanaged' these financial firms to be assessed some very high penalties considering the outcomes of their executive decisions.

Bills can be revised, so I'd like to have seen the one voted upon passed yesterday primarily to prevent yesterday's historic stock market plunge. No law is written in stone, so at least a passed bill could have been in the works and changed under bipartisan efforts before continuing along the process.

I surely don't want a government intervention at this point to set a precedent for future credit mismanagement bailouts, but I believe that the devalued mortgage backed securities the government would purchase and hold, would become profitable in the future. I've got faith in most of my fellow citizens. :)

[LCW]

You know how they all say that there will be no "golden parachutes" for CEO's?? That's BS!! Any NEW contracts made with CEO's of companies participating in the bailout will not go over $500,000 but if the CEO ALREADY has a contract for $50 million dollars it will be honored! So even the fatcats who screwed everything up will still walk away with millions since their original contracts will be honored. WTH???

:confused::mad::confused::mad::confused:

[Rowan]

I'm so glad that, for the most part, no one here is pointing fingers at who is to blame outside of those who mismanaged money entrusted to them. I'm getting weary of the Democrats and Republicans saying it's the others fault for this mess.

[Misfit]

Here's (http://www.sfgate.com:80/cgi-bin/article.cgi?f=/c/a/2008/10/03/MNR813AHDN.DTL) an interesting tidbit on the bailout package.

[LCW]

I'm so glad that, for the most part, no one here is pointing fingers at who is to blame outside of those who mismanaged money entrusted to them. I'm getting weary of the Democrats and Republicans saying it's the others fault for this mess.

I agree! The problem is that there is so much blame to go around on the part of politicians on both sides that noone dares to do that!

And thanks for the link, Misfit!

[donroc]

If there must be pork, it is a pity that writers do not have a strong lobbyist to get Congress to reinstate income averaging for authors and screenwriters who struggle at low or no pay for years and then suddenly make a 6 or 7 figure sale.

[Leyland]

If there must be pork, it is a pity that writers do not have a strong lobbyist to get Congress to reinstate income averaging for authors and screenwriters who struggle at low or no pay for years and then suddenly make a 6 or 7 figure sale.

Installment type sales receipts might come in handy in this instance. Instead of receiving a huge upfront payment when a successful novel finally gets published, maybe the same 6-7 figure contract price could be spread over the next few years according to sales volume and then taxed through an allocation of revenue. That would help the publishers cash flow management as well.

Of course, some people want sudden wealth, but also have to be willing to pay the taxman! Just some random thoughts.

[Margaret]

I don't like seeing some of this pork barrel stuff being added to the bailout bill. But I also don't like seeing the article equate all of the add-ons as gratuitous pork. I live in Oregon, so I know that rural schools here have been desperately strapped for cash because the program that has replaced the lost tax money from timber companies, which they used to depend on to pay for county services (like schools, law enforcement, etc.) is expiring, and Republicans in Congress and the Bush Administration have balked at renewing it. These counties are desperate for revenue. How to provide it can be debated, but I do not consider this to be "pork" in the same league as tax breaks for specific businesses (like rum producers) above and beyond the normal corporate tax structure. Of course, the rum producers probably have a good argument why the tax break they want isn't pork either - maybe it will keep them from laying off workers - but I'd like to see what they pay their CEOs before we start lavishing tax breaks on any business in this country.

I don't see why anyone in this country can't have a truly wonderful life on, say, a maximum of $500,000 a year. These multi-million-dollar CEO salaries are ridiculous. Back in the 1960s, the tax structure had a top rate of 90% for income over a set amount. I'd be very happy to reinstitute a 90% income tax rate for all income that exceeds $500,000 a year, and I will be standing in line to pay it when that $1 million advance for my novel comes in!

[Telynor]

I'm rather incensed about the whole mess. What infuriates me are the more ridiculous bits of pork that gets tossed in -- I'm thinking about the 'subsidy for the makers of wooden arrows for children' bit -- but I am also sympathetic about the crying need for funding for some truly serious measures. In any case, many of these problems can be solved by the introduction of a line item veto, but that's something I don't think will ever get through Congress.

In any case, I did fire off an angry email to my local congresscritter, and informed her that she wasn't going to be getting my vote this november. I say, vote the incumbents out!

Phffft.

[Leyland]

I say, vote the incumbents out! Phffft.

I'm considering doing precisely that! Every last man and woman of them and then demand term limitations for ALL politicians. I'm a South Carolinian - no more Stroms and Fritzes! Seriously, I'm so disenchanted with career politicians.

[diamondlil]

The financial crisis is really escalating with another huge drop on stock markets around the world.

From an Australian point of view, the biggest issues are around the value of the Australian dollar at this point in time. 9 weeks ago, the Australian dollar bought 98c US. Today, it is down to 73c. Such a huge drop in such a short time.

[LCW]

I'm just sick about this whole thing...still!! I just can't believe the incompetence of the US government to put over 800 billion dollars on the taxpayers credit card and then STILL not a one penny to of relief for the average homeowner who got scammed by the predatory lenders! Not one penny!! Yes, people were stupid and got sucked into loans they couldn't afford but since when does greed, fraud, and corporate incompetence get rewarded while stupidity is left to stew in its own juices? It's an abomination!

But I'll tell you one thing, it sure has made me count my blessings!! The biggest on being that in a few weeks not only do I get to vote our Chaplin In Chief out of office but my congressman as well! Good riddance!

[Divia]

I want to know who is gonna bail my sad ass out when I'm freezing this winter because I cant pay my heating bill. Oh, right...that would be no one. So meanwhile I can freeze in a house thats in the bitter Northeast while all those rich pigs on wallstreet just keep getting fatter and fatter.

[Telynor]

It's sickening. I intend to vote against returning my congresscritter -- Kirsten Gillibrand -- back into Congress. She's failed in her job, as far as I am concerned, and I've gotten into the habit of sending daily emails. Why not, after all? I (and other NY taxpayers) are paying her bills. I say -- vote every incumbent out of office this year -- the entire House of Representatives is up for elections this year, along with a third of the Senate. And don't forget your state and local elected officials as well.

I figure that J and I have lost about 25% of our savings and investments this year so far. We're holding on, but just barely.

[donroc]

At the very least, the entire oversight committee in the House and those in the Senate Finance committee who are running for reelection should be dumped.

[diamondlil]

It's sickening. I intend to vote against returning my congresscritter -- Kirsten Gillibrand -- back into Congress. She's failed in her job, as far as I am concerned, and I've gotten into the habit of sending daily emails. Why not, after all? I (and other NY taxpayers) are paying her bills. I say -- vote every incumbent out of office this year -- the entire House of Representatives is up for elections this year, along with a third of the Senate. And don't forget your state and local elected officials as well.

I figure that J and I have lost about 25% of our savings and investments this year so far. We're holding on, but just barely.

I do get what you are saying, but doesn't the quality of the replacements matter as well?

[Telynor]

I do get what you are saying, but doesn't the quality of the replacements matter as well?

Yes it does. But sadly, as long as the US has the two party system, not much is going to change. Being the skeptical cynic that I am, I don't see it changing much, and the next lot is going to be as rotten as the one before, but at least I will have the satisfaction of kicking someone who isn't doing a good job out of that cozy nest they are in.

[diamondlil]

Fair enough. We have a two party system here as well, and quite often there seems to be very little difference between the major options.

[Misfit]

It's tough when there are no good choices, as I'm facing even state wide right now. Worse yet, the back biting and nasty nasty campaign ads are worse then ever. What a turn off.

[LCW]

Yep, the gloves are off and the campaigns are getting nasty! But I do give Obama credit for trying to rise above this BS and change the tone of political campaigns. Unfortunately McCain is sinking in the polls, is way behind in electoral votes, and more and more swing states are going towards Obama. His campaign is desperate and frantically going negative out of desperation. Obama tried to stay positive and talk about the issues but he has no choice but to respond to the vitriol coming from the right. In '04 John Kerry thought the American public was too smart to fall for the swiftboat BS with a President and VP who didn't even serve allowing an American hero to be denegrated on their behalf. Kerry thought it was beneath him to respond to such garbage and we all know how well that went, don't we?

[Divia]

I really think whoever wins will be a one termer. I just dont see these problems going away. And furthermore I dont think it matters who wins now. We are screwed no matter what. :(

[Leyland]

I hope the next administration can be tough enough to deny politicians who make decisions such as Barney Frank (D-MA) who forced (and I use the word deliberately) goverment sponsored organzations to lower standards in last decade or so to a degree that defies basic common sense in allowing people to have extraordinarily easy access to housing they can't afford in the long term - given that the value of the securities are based on an occasionally volatile industry, the real estate market. Both the Republicans and Democrats are to blame for failing American citizens this way. I put a bit more blame on the Dems because they are the party that pushed for the bills allowing the housing market to become glutted by their housing plans and policies. I doubt I'll vote for a single Democrat in November primarily because of Frank. It's that one bad apple syndrome for me. I've voted for Greens and other independents before, as well as Republicans, so I'm probably going to be a an independent protest voter this time around.

Here's some info about Frank's influence from Wiki:

Collapse of Government Sponsored Housing
Amidst the 2008 financial market turmoil, billionaire Rupert R. Murdoch has repeatedly pointed blame at Frank and a few others as the root cause of the recent housing crisis.[13] In a recent interview, Murdoch claimed that Frank's plan in the early nineties pushed Fannie Mae and Freddie Mac to make "bad" loans to "underprivileged" families.[14] An anonymous opinion piece published in The Wall Street Journal (owned by Murdoch's News Corp) on September 9, 2008 further describes Barney Frank as the Patron Saint of Fannie Mae and Freddie Mac.[15]

In 2003 Frank rejected Bush administration proposals for increased oversight of the mortgage lending industry and stated "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."[16] With the sub-prime collapse, the Bush administration changed course in 2008, and James B. Lockhart, the chief regulator of Fannie and Freddie, adjusted the companies’ lending standards so they could purchase as much as $40 billion in new subprime loans. Some in Congress praised the move."[17]

On July 14, 2008 in an interview on business news channel CNBC Frank said, "I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They're not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward. They're in a housing market. I do think their prospects going forward are very solid. And in fact, we're going to do some things that are going to improve them."[18]

Conflict of Interest
Frank has collected tens of thousands of dollars from Fannie Mae and Freddie Mac in campaign contributions - $42,350 since 1989. Also, Frank's former boyfriend, Herb Moses, was an executive at Fannie Mae from 1991 to 1998, where he "helped develop many of Fannie Mae’s affordable housing and home improvement lending programs." The relationship ended around the same time Moses left the company to start a pottery business, and Frank continued support of the companies after the relationship ended.[19] Fox News reported that in 1991, "the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively,

I'm troubled by Frank's seeming lack of independence from Fannie Mae and Freddie Mac considering his romantic relationship with Herb Moses, the executive there. And is $42,350 a lot of campaign contribution money to accept from these companies? I think Frank ought to one of the career politicians that takes a huge fall for this financial disaster.

[Divia]

Its all a bunch of crap. If you cant afford a house you cant afford a house. If you cant afford a 30o thou house then you cant afford it. Why the banks were giving money to these people is beyond me. And why these stupid people took it is beyond me. I daresay very few people live within their means these days and thats whats gotten us into this heap of trouble. :mad:

[Misfit]

Its all a bunch of crap. If you cant afford a house you cant afford a house. If you cant afford a 30o thou house then you cant afford it. Why the banks were giving money to these people is beyond me. And why these stupid people took it is beyond me. I daresay very few people live within their means these days and thats whats gotten us into this heap of trouble. :mad:

That's a big part of the whole problem, the banks are giving people way too much credit than they can possibly handle, it's too easy for people to file bankruptcy and the bank's left holding the bag and whining to congress to bail them out from their own stupid mistakes.

I'm sure I've stated it previously in this thread but I've seen a couple of recent bankruptcy petitions filed by people I knew were incapable of paying a bill and yet the amount of credit card debt was unbelievable -- worse yet some were multiple credit card accounts issued by the same bank (Bank of Am and Wells Fargo seemed to be the most common of those).

[Leyland]

If you cant afford a house you cant afford a house. If you cant afford a 30o thou house then you cant afford it. Why the banks were giving money to these people is beyond me.

Because some Democrat party leaders decided that everyone, especially those with limited means, should be able to afford a house and thus forced mortgage lenders/banks to make the loans. That's a side of the Democratic party I really really don't like. I understand the sympathetic motive to make everything all better for the underprivileged (and get their votes), but it's a stupid and dangerous attitude to assume that most of these people have the personal management skills to take on the responsibilty or at least to learn the skills lacked. Anyone should be able to budget their use of credit, allow a cushion for unexpected expenses or increases in known expenses, and balance a check book, but then maybe they can't or worse, won't.

And why these stupid people took it is beyond me. I daresay very few people live within their means these days and thats whats gotten us into this heap of trouble.

Ah well, we'll all be paying for this collective stupidity for a long time to come. I certainly hope the stock market will recover at least half its recent losses in the next twelve months.

[LCW]

Because some Democrat party leaders decided that everyone, especially those with limited means, should be able to afford a house and thus forced mortgage lenders/banks to make the loans. That's a side of the Democratic party I really really don't like.

Umm, am I the only one remembers the constant bragging by George Bush about how the Republicans were really the one's who helped minorities and lower income people afford homes? What about the whole push by the Bush Republicans to create an "ownership society"?

There is blame to go around and for anyone, regardless of their political persuasions, to be putting the blame on ONE party is really short sighted. Yes, the Democrats may have gone to far in making sure that the American dream was alive and well for ALL Americans and that contributed to the problem but Republicans constant deregulation and favors thrown to the big finance companies and banks contributed as much if not more. And lets not forget that the Banks and mortgage companies took this deregulation and ran with it creating new financial products, mortgage bundling, and predatory loans. They defrauded gullible people who were just trying to get their piece of the pie. Stupid? Yes, but it's easy to pass the buck to the powerless and defenseless while allowing the banks and predatory lenders off the hook. And lets not forget those companies made billions of dollars off these people that they scammed!!!

There is PLENTY of blame to go around here on both parties and the financial institutions, and idiots who bought what they couldn't afford. And if we as voters don't recognize that then we will vote ourselves right back in this s#$thole in a few more years. Playing the blame game and blindly throwing mud on those whose political views we don't agree with might make us feel better but it's only going to make things worse!

[Leyland]

but Republicans constant deregulation and favors thrown to the big finance companies and banks contributed as much if not more.

That's a side of the Republican party I really really don't like.

[Leyland]

Seriously, many times the economic problems we face are tied to underlying human nature characteristics such as greed, corruption, and misplaced optimism, or war or other military actions, and so on. I suspect we'll always be trying to find federal governmental policies to protect against unscrupulous people who find ways to get away with harmful practices or don't contribute a fair responsible share. Sarbanes-Oxley is one such recent policy.

I'm sure Alexander Hamilton and all those Secretaries of the Treasury who followed have really had their work cut out for them. The United States continues to be a work in progress. Remember this bailout issue?

In the Report on Public Credit, the Secretary made a controversial proposal that would have the federal government assume state debts incurred during the Revolution. This would, in effect, give the federal government much more power by placing the country's most serious financial obligation in the hands of the federal, rather than the state governments.

The primary criticism of the plan was spearheaded by Secretary of State Thomas Jefferson and Representative James Madison. Some states, like Jefferson's Virginia, had paid almost half of their debts, and felt that their taxpayers should not be assessed again to bail out the less provident. They further argued that the plan passed beyond the scope of the new Constitutional government. from Wiki.

[chuck]

I think it would be a good thing to reintroduce the Pillory sentence again....All those Greedy C.E.O.'s who took huge bonuses and ran and the Bankers/ Brokers who sold the toxic mortgages and then resold them again for a quick buck should all be candidates for the Pillory.....Save your rotten fruit and eggs....They need to be Publicly Humiliated...

[Telynor]

Pity we couldn't slap a guillotine down in times square -- I'm joking, I'm joking, but it makes for a satisfying image.

People, sadly, are just plain stupid when it comes to money. And now it has come time to pay the piper, to use a cliche. Those who have the wits to survive and know how to cut back will make it, those who can't, won't. I know that's harsh words, but that just simply the way it is. And sadly, mathematics and economics tend to have a simple rule at their heart -- mess around with the formula that 1+1=2 and it will all eventually collapse. What we need right now is someone like FDR who had the wits to keep people from panicking, and managed to get through the '30's, despite mass unemployment and breadlines.

I do apologize for being such a cynic, but I fear that it is all going to get much worse before it gets better.

[Divia]

cynic or not I quite agree with you! Things will get far worse before they get better and that is downright fearful. I barely held onto my crappy job this year, I fear next year it maybe gone!

[donroc]

I had to share this email.

MARKET TERMS


NEW STOCK MARKET TERMS




CEO --Chief Embezzlement Officer.


CFO-- Corporate Fraud Officer.


BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.


BEAR MARKET -- A 6 to 18 month period when the kids get no allowance,

the wife gets no jewelry, and the husband gets no sex.


VALUE INVESTING -- The art of buying low and selling lower.


P/E RATIO -- The percentage of investors wetting their pants as the

market keeps crashing.


BROKER -- What my broker has made me.


STANDARD & POOR -- Your life in a nutshell.


STOCK ANALYST -- Idiot who just downgraded your stock.


STOCK SPLIT -- When your ex-wife and her lawyer split your assets

equally between themselves.


MARKET CORRECTION -- The day after you buy stocks.


CASH FLOW-- The movement your money makes as it disappears down the toilet.


YAHOO -- What you yell after selling it to some poor sucker for $240 per share.


WINDOWS -- What you jump out of when you're the sucker who bought

Yahoo @ $240 per share.


INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.


PROFIT -- An archaic word

[Leyland]

Thanks Don! Great laugh here before starting the work day ... love the definition of CEO and CFO.

[donroc]

You are welcome.

Gallows humor.

If we cannot laugh, we cry.

[Leyland]

The term gallows humor was in my thoughts on the way to work today - the six month extension due date for personal tax returns is just a week away. I wonder what kind of wild tax season I'll be in for in a few months - our firm typically prepare returns for clients with lots of market trading activity and I think I'll probably see some scary stuff in some year end statements. I really feel for the people planning on retiring in the next few years.

[Rowan]

I find it ironic that the very government who has their job at our discretion (surely someone in Washington D.C. remembers the the government is by the People and for the People) ridicule one another about worrying about 'saving their jobs' rather than voting to go along with this bailout.

We elect politicians and essentially they work for us. In normal business settings, don't employees get fired for doing whatever they want rather than what their boss wants? I know if I went into work one day and either of my bosses told me to do something and rather than doing it I just sat back and read a book all day, they'd tell me to take a hike.

What I would like to see happen, but I know will never realistically happen, is for those who voted for the bailout package initially and criticised the nay-sayers for voting no out of fear or losing their jobs, be impeached. Unless of course their term ends in November. Then we can just vote them all out of office.

Here in Louisiana, the governor was going to sign into legislation a pay-raise for part-time idiots in office. When the word impeachment was floated around, his tune changed.

I've completely lost faith in the federal government and the local government here in Louisiana too, even though our current governor seems okay for the most part. I will not be voting in this election.


Edited to add this photo I just saw on Yahoo of a Zero Dollar bill...

http://i245.photobucket.com/albums/gg54/ComplicatedFemale/capt_e633bf32116a419b9a6cc4801b67a5.jpg

[Hoopking]

I don't think there is any short term fix that can be done. The only long term fix that I can see is needed, is to somehow get everyone in our USA to see that there is a major over population in this country, and see if the tide can be turned to decrease our size. I wish when I was young that I would have been smarter and only had 1 maybe 2 kids but I am part of the problem having 5. In Arizona alone we have increased to the point that our agriculture is being pushed down to Mexico and South America. Just 5 years ago we had 5 inspectors for fruits and vegetables we are down to 1 inspector because we have no more farmlands. They have been given up for housing. When will the people of America ever learn. I honestly don't believe we have had a president that has cared for the country since Abe Lincoln. It is all about money and glory now. Another thing that kind of eats at me is how many houses does one person or family need? How many movie stars or richer people in general have at least two homes maybe as many as 5. Then they sell for a higher price and push the market value up so high that the regular people have to pay $300,000 for a house that is only worth $75,000. So the unfortunate lower middle class can't afford to buy a nice house for their family and look to the easy lenders to help them have a home to support their family. Whew glad I got that off my chest.:D

[Spitfire]

The government bailout, is only a bandaid solution to the economic problem. Which is so much huger than just the US, it is actually a global economic problem, as the world stock market is so intertwined. I heard on the news that they are now turning to the UN to find a solution, as it is too big of a problem for any one nation.