I find no comfort in admitting that there is not a dimes worth of difference between dems and repups. They could care less about the people that have put them in office. The two that are running for the highest office in the free world are nothing but jokes, to be laughed at. I have no confidence in either one them that they will actually do what they say them will do. What they will do is line their own pockets with the hard earned dollars that Americans send them. I am very sad this day and only pray that the American people will rise up and put a stop the this insanity

Steal a truck, go to jail. Steal a train, go to Congress.

Blackhedd
We appreciate the cogent narritive you have provided all of us on the financial crisis. My questions are: When will this bill go online for public review? Is the ACORN proviso stripped out once it gets on paper? What avenue does the public have for protest if to use John McCain’s phrase this bill is FESTOONED with Christmas trees?
Thanks!

they’ll pass this, which is probably key to keeping the markets afloat, but it’ll piss off everyone so much that we’ll finally see some real turnover in Congress and get some of these guys ousted.

As long as the focus remains on the short term (Monday’s market opening), we are screwed. This ‘deal’ will burden the free market and prevent long term recovery. Hopefully, enough Republicans will refuse to drink the kool-aide. There is NO easy way out of this situation, but the current legislation does not address some of the key causes this mess – Congress creating incentives to provide loans in accordance to their liberal social engineering desires.

Top picture of Drudge Report this morning shows Nancy speaking but the dems are behind her smiling as they announce the bailout deal. The biggest smile is grampa Reid. This is not a smiling moment, they should be weeping as our country is being sold out. Oh, wait, they just got a chunk of cash for them now to play with and we the people are now going to pay for their play money.

Wonderful. Great. Fabulous. You think that this fixes anything? See ya in 2020, with a $1.5-trillion price tag. Just more money tossed away until they come around again like the idiotic beggars that they are, and we get to bail these air-holes out again. And again. And again. This is the “nauseum” part of ad nauseum.

I can remember when bankers were respected members of the community. Lesson number one everywhere in the world: don’t crap your own nest. Apparently that doesn’t apply to our financial geniuses.

and absolutely nothing long term that will make life better. This is a terrible deal and we are stuck with it now. As well as a permanent minority for the GOP.

As we saw earlier in the week, a photo-op does not mean the deal has been closed. That requires votes, and if Boehner couldn’t manufacture votes last week, this weekend did not make his job any easier. I agree that the House Republican insurance scheme was “ridiculous”, but it wasn’t designed to solve the liquidity problem. It was put forward to give House Republicans some political cover. Now that the idea has been made “optional”, it will both cause no harm economically, and do no good politically.

Deprived of a clean brake on the bailout, Republican House Members are forced to go home, at least 100 of them, having voted for the bailout. The current strategy seems to be to say Fanny and Freddy as often as possible and make the point that Democrats caused the crisis by supporting the bloated mortgage giants. This strategy may work, but incumbent House Republicans using it had better make sure they have never taken campaign contributions from Fann/Fred.

This is a pretty grim set of options for the unfortunate House Republicans chosen by Boehner to fall on their swords for the good of the Republic. If you were asked to risk your job by doing something you didn’t believe in, would you? When asked why you must do it, you’re told that a leader you no longer trust said that it was necessary. Honestly, would you risk your livelihood and career in such a situation?

What’s the old saying? “A recession is when your neighbor looses his job; a depression is when you lose yours.” I don’t think 100 House Republicans will vote for this bailout just 30 some days out from an election. We will see Monday.

We need a complete reorganization of the people who are running the marketing departments of banks and securities firms. Out of this crisis the most important thing that should happen is a total reevaluation of the practice of selling risk to the public as though it was cotton candy.

The first lesson is that second mortgages (now known as Home Equity Loans) should be created, advertised and promulgated as shameful again. Never, ever again should the marketing department of a major bank be allowed to place an ad in a glossy newsweekly encouraging people to borrow on their home equity to go on vacation or buy a toy for themselves, or to finance braces for their kids or piano lessons. The first and most important lesson of this catastrophe must be that credit is a responsibility.

The roots of this crisis is in the zeitgeist of free n’easy carefree lending that banks and other financial institutions helped create among the people in this country. They did it deliberately, and they can change their behavior just as quickly. Bank of America started giving credit cards to illegal aliens. Large lenders started placing ads with sunny depictions of second mortgages as a way to mine the gold that was in people’s own homes. Nevermind the fact that it was encouraging people to spend their only real nest egg on junk.

The people who willfully created these ads should be marched out in front of the cameras and publicly flogged.

TomOConnor: I bet you believe in Santa too!! GET REAL!!

I will not support my members of Congress this November if they vote for this piece of crap!!!!

I understand as unclogging credit market arteries for FUTURE good loans:

WSJ article

The summary issued by Ms. Pelosi’s office said the legislation will include provisions giving Treasury the ability to work with cash-strapped homeowners whose mortgages are purchased by the federal government to refinance into a more affordable mortgage. Other foreclosure-prevention measures included in the agreement are an extension of the tax holiday for homeowners who face foreclosure, as well as a tax break for community banks who held shares of Fannie Mae and Freddie Mac. The rescue plan will allow affected banks to take an immediate tax deduction on losses from investments in the two firms, which were taken over by the federal government earlier this month.

Why should particular mortgagors that are “cash-strapped”, i.e. gambled on property they couldn’t afford would appreciate in value so that they could re-fi with an affordable mtg payment down the road, be preferred?

I may bring an equal protection case on behalf of other mortgagors. I almost won a case (3-2) in the SC Supreme Court that was similar.

more later

But ‘Hedd, please comment on the concept of the fed govt of rescuing gamblers, as this is the most abhorrent provision to my mind.

I am interested to see what your thoughts are on one of my biggest concerns about this package, the U.S. Govt receiving warrants. My concern is that once the warrants are converted into equity stakes, then the government, especially if Dems are still in the majority, the Govt will begin demanding representation on Boards. I know this was not a problem when the Govt. loaned Chrysler capital back in the 80′s, but the landscape in Washington is much different today. Dems view Wall Street as completely out of control and can only be reigned in by regulations, which I will bet almost anything will be excessive. What better way for Dems to ultimately regulate than to have someone (probably a bureaucrat) on a firm’s board. Or they would begin rewarding their friends, much the way many Ambassador positions are currently filled.

Perhaps Republicans should demand that a non-representation clause be inserted into any warrants issued in this deal.

They should also be very careful in setting the expiration date in these warrants. Don’t allow the Govt to be a part of private capital markets for too long.

Just interested in your opinion.

In addition, I have read more info about this issue than the info I read when writing my dissertation. I would like to tell you that I have found your analyses to be some of the best.

Best regards.

Charles

More at: Bail Out Score Card

Thanks for posting this.

Thanks for posting this.

I’m new to this site relatively young. Recently, I have paid more and more attention to politics but I cannot say with definity that I am either republican or democrat. But I wanted to know how all this mess started. Sure, the left wants to blame the right and the right wants to blame the left. But placing blame is not going to fix anything. I know that our elected officials are “chugging away” trying to get this $700B passed but are our elected officials think about their constituents? How does this bill affect those of us who don’t make a boat load of money? And why is it important to bail out folks who got in over their heads and took on mortgages they knew they couldn’t afford? I know that the media says that if this doesn’t pass it will be nearly impossible to get credit, so folks will be screwed. But it seems like given the price tag and the fact that (when I do have children) my childrens children will still be paying on this debt; it seems like we are screwed anyway. Why is it important to vote when our elected officials dont care about us “little people” anyway?

Thaddeus McCotter(R-Mich) just said On Fox News John Boehner HAS NOT Brought it to the House Reps. to sign off on it

a “Wall St” tax, as opposed presumably to a tax that would affect other people and guaranteed to punish plutocrats. Of course it wouldn’t be used for five years and then only if “taxpayers” [evidently a separate class]lose in the bail out process. Right !

You create a problem through two gigantic agencies disrupting a huge market segment, then you proceed to step in and make it worse. The sharks can’t lose.

just an update for those who are curious. while congress and paulson are saying its all done and are all smiles, representative mccotter is saying minority leader boehner has just to sign off on it.

mccotter is on record this morning saying the house gop will not back down to a give away of 700 billion of tax payer money.

we will see if that holds up or if it looks like the few crumbs given up to the house gop will get things passed before the asian market opens.

my personal opinion is what they agreed on passes today and the house gop is left screaming while congress turns the lights out again much like they did a month ago with no energy solutions coming to help the people.

i hope not, and if nothing passes today; i know it may hurt me and many of us in the market greatly until a solution is set for paulson, but i’m willing to loose serious money short term in trade for throwing 700 billion of mistakes by wall street and under qualified loan buyers on all on americans backs.

I read here a lot but don’t usually post. Thank you, Francis, for all that you tell us.

I just looked at the South China Morning Post, and I don’t see any indication that the markets there are thrilled. Perhaps it’s a bit early.

I hope this works. I work for county government and I can see the worry on some peoples’faces. Others have no clue that there is a problem.

I’m just hoping to ride it out without disaster.

I wonder how far down FA Hayek’s Road to Serfdom we are right now?

The free market is undoubtedly the most incredible and moral financial concept ever created by man. It is trillions of voluntary exchanges that lead to the most efficient allocation of resources. It doesn’t care what race you are, whether you speak English, your age or sex. It has created more wealth than any other economic system.

But it is essential that it is allowed to perform creative destruction. Otherwise, we are left with huge amounts of capital sitting in places that are not as productive and drag the economy.

The notion that Congress or government bureaucrats can more efficiently perform these functions is lunacy. It has been shown time and time again that this is impossible. Regulations do nothing but cause distortions in the market forces which cause a misallocation of resources.

This bailout deal in whatever shape it takes is an enormous power grab by the central government and we are allowing it because we don’t want to face the market piper. We are giving up our freedom and liberty to protect our 401K or home value in the short run.

You can point blame at the Republican administration that is nationalizing once again, or to the Dems who sought to block Freddie/Fannie reforms, or the creation of Freddie/Fannie in the ’30s, or the creation of the Federal Reserve in 1913. Either way, the outcome is exactly what you can expect when you leave government with this power.

Instead of leaving the market to wipe out the bad ideas we perpetuate them with low interest loans or regulatory rules that distort things. And we (Republicans) are just as complicit in this regard as we try to push certain agendas like home ownership. Heck McCain during the debate mentioned our “great regulatory agencies.”

All I know is that if you believe that this plan will work you are completely naive and are unfamiliar with the past history of our congress and executive branch and other governments around the world. Congress will never allow a pile of money from these trades to sit around or go towards the debt despite what today’s bill looks like (it will change). It will now have the authority to rule how all mortgages are handled since it now has a national interest stake. It will regulate trading in the stock market and probably work even harder to prevent any type of failure.

My party, which was only barely a party of freedom and liberty, just handed away the keys to our economy to the bureaucrats and Congress. Who is left to fight for freedom? If there is a split on this conservative website with an abandonment of principles and we know the folks who vote Dem are pro-socialism then that leaves very few who would fight for liberty.

Today is truly a sad day.

I wonder how far down FA Hayek’s Road to Serfdom we are right now?

The free market is undoubtedly the most incredible and moral financial concept ever created by man. It is trillions of voluntary exchanges that lead to the most efficient allocation of resources. It doesn’t care what race you are, whether you speak English, your age or sex. It has created more wealth than any other economic system.

But it is essential that it is allowed to perform creative destruction. Otherwise, we are left with huge amounts of capital sitting in places that are not as productive and drag the economy.

The notion that Congress or government bureaucrats can more efficiently perform these functions is lunacy. It has been shown time and time again that this is impossible. Regulations do nothing but cause distortions in the market forces which cause a misallocation of resources.

This bailout deal in whatever shape it takes is an enormous power grab by the central government and we are allowing it because we don’t want to face the market piper. We are giving up our freedom and liberty to protect our 401K or home value in the short run.

You can point blame at the Republican administration that is nationalizing once again, or to the Dems who sought to block Freddie/Fannie reforms, or the creation of Freddie/Fannie in the ’30s, or the creation of the Federal Reserve in 1913. Either way, the outcome is exactly what you can expect when you leave government with this power.

Instead of leaving the market to wipe out the bad ideas we perpetuate them with low interest loans or regulatory rules that distort things. And we (Republicans) are just as complicit in this regard as we try to push certain agendas like home ownership. Heck McCain during the debate mentioned our “great regulatory agencies.”

All I know is that if you believe that this plan will work you are completely naive and are unfamiliar with the past history of our congress and executive branch and other governments around the world. Congress will never allow a pile of money from these trades to sit around or go towards the debt despite what today’s bill looks like (it will change). It will now have the authority to rule how all mortgages are handled since it now has a national interest stake. It will regulate trading in the stock market and probably work even harder to prevent any type of failure.

My party, which was only barely a party of freedom and liberty, just handed away the keys to our economy to the bureaucrats and Congress. Who is left to fight for freedom? If there is a split on this conservative website with an abandonment of principles and we know the folks who vote Dem are pro-socialism then that leaves very few who would fight for liberty.

Today is truly a sad day.

1. Socialized Housing. (You may THINK temporary. This will make the RTC look like a walk in the park. Why is this NOT an incentive for MORE to walk away from their house?)

2. The inmates are still running the prison. (The current expectation is there will be MORE inmates next year. Warden, Obama would not be there impose control.)

God Help Us.

just saw those two both giving 1 minute house speeches against the current bill and what it will do to the people.

that definitely tells me just how bad it is if those two are together.

i would also suggest watching you tube’s burning down the house like i just did. it lays a lot of blame at the democrat feet and shows where GW and mccain actually made efforts to stem the oncoming crisis.
did GW or mccain do enough IMO, no; but no one did and it looks like mccain and the house gop are the route to stop these practices, everyone else looks to just be stopping the bleeding.

If you really think this Federal WS bailout is going to stop the bleeding you are delusional.

It’s $65 Trillion dollar market that is failing.

$700 Billion….LOL.

Well at least Paulson’s $500Million in GS stock is okay.

And I don’t care who you want to blame.
It happened on the GOP watch.
We will pay accordingly.

The only certainties are lots of pain and suffering, and a USD swirling down the drain.

Blackhedd,

I’ve started following your diary because I believe that this is where the good information lives on this and other financial matters.

However, these words of yours (above) greatly concern me: “Congressional staffers expect to be feverishly writing this legislation throughout the day today, so I can’t tell you what’s going to be in and what’s not.”

That said, why should we not look upon this Congressional action as no less than Nationalization of the US Financial Markets by Congress? Why should we not oppose this takeover in every way? Why is, as I have suggested here, this deal better than no deal?

I am starting to wonder about my fellow Red Staters, many of whom seem perfectly content to let our financial system implode – which when it drags down the financial systems of most other industrialized countries will cause a financial nightmare that could dwarf the Great Depression.

While the first plan indeed had flaws, the new one sounds like it has had the flaws mostly addressed.

Here is the link to a good FAQ on what was hammered out:

http://townhall.com/blog/g/f221f126-9983-4e0e-bb89-a64a7fa16868

We’re not going to get perfection – that is the reality of being the minority party. But we actually are getting more than we logically should have because our congressional leaders grew spines and refused to support the plan without changes.

Now I am in a real panic!

ever since early this year, according to Fox Business Network and CNBC.

Paulson’s former-Under-Secretary Robert Steele worked up the plan last January when the markets were tanking before the Fed did their 3/4 point rate cut.

Robert Steele is now the new CEO of Wachovia, which is facing a series of difficulties that I detail in a diary about the liberal activists who sold it hundred of billions worth of toxic loans.

The Paulson “Do Or Die” urgency on this matter is partially to try to keep the political interests at bay on this bailout. He could have rolled it out at any time this year. He did it now to put a gun to the heads of the politicians who would normally never dream of voting for such a thing.

Sad part is it probably is only a band-aid at best. The biggest problem facing the markets is the future of the economy and future regulatory environment for the financial sector. Banks won’t start really making loans unless and until they have more clarity on both. This is only a stop-gap to prevent he credit markets from completely seizing up in the next month or so.

NT

NT