Archive for Wall Street Bailout

Those Who Voted No

Posted in Politics with tags on October 1, 2008 by gyma

The Senate voted tonight on that steroid-laden bailout rescue plan.  I do believe action needs to be taken, but this is the wrong approach.  Here’s a list of those who voted no:

Allard (R)
Barasso (R)
Brownback (R)
Bunning (R)
Cantwell (D)
Cochran (R)
Crapo (R)
DeMint (R)
Dole (R)
Dorgan (D)
Enzi (R)
Feingold (D)
Inhofe (R)
Johnson (D)
Landrieu (D)
Nelson (FL) (D)
Roberts (R)
Sanders (I)
Sessions (R)
Shelby (R)
Stabenow (D)
Tester (D)
Vitter (R)
Wicker (R)
Wyden (D)

One of my senators, Wayne Allard who isn’t running for re-election and is otherwise worthless, voted no.  I’m also very disappointed that both McCain and Obama voted yes.  This just feels like a sell out to the Wall Street wizards and lobbyists at the expense of the rest of us. 

I’m really not all that impressed that it included a bunch of stuff congress needs to pass as stand alone bills, like fixing the alternative minimum tax.  I also wonder how many senators actually read the entire bill before they voted.

I’m hoping cooler heads prevail in the House and they send something vastly better back to the Senate.

Senate Version Of Bailout Bill

Posted in Economy with tags , on October 1, 2008 by gyma

I’ve just started slogging through the 451-page version of the bailout bill.  My first thought was, wow from 3 pages to 451!  That’s a lot of ink.

Honestly, I’m having trouble reading through all this and skipped through some of the introductory pages.  By the time I got to page 16, I discovered the makeup of the Oversight Board.  It includes the following 5 characters:

  1. The Chairman of the Federal Reserve (Ben Bernanke)
  2. The Secretary of the Treasury (Henry Paulson)
  3. The Director of the Federal Housing Finance Agency (James B. Lockhart III)
  4. The Chairman of the SEC (Christopher Cox, the guy McCain wants to fire)
  5. The Secretary of Housing and Urban Development (Steve Preston)

Does this inspire confidence?  Not for me.  Bernanke, Cox, and Paulson are clearly part of the problem, not the solution.  Preston is relatively new in his position, but he is a former investment banker with Lehman Brothers.  You should also know that Preston replaced Alphonso Jackson, a Bush  loyalist, who was forced to resign for multiple wrongdoings.

As for Lockhart, the FHFA is a new agency created just last summer, in part to oversee Fannie Mae and Freddie Mac. 

This isn’t so much oversight as it is the foxes guarding the hen house.  They couldn’t find at least three independent outsiders to put on this board?

We are truly being played as suckers.  I’ll continue digging to see if it gets better or worse.  Any bets?

UPDATE:  I’m up to page 70 now where I found Sec. 125 which creates a Congressional Oversight Panel.  The panel would be comprised of five members as follows:

  1. 1 person appointed by the Speaker of the House of Representatives
  2. 1 person appointed by the Minority Leader of the House of Representatives
  3. 1 person appointed by the Majority Leader of the Senate
  4. 1 person appointed by the Minority Leader of the Senate
  5. 1 person appointed by the Speaker of the House of Representatives and the Majority Leader of the Senate, after consulting with the Minority Leaders of the House of Representatives and Senate

and will apparently provide regular reports to congress on the current state of the financial markets and the regulatory system.

2nd UPDATE:  The insertion of the increase in FDIC insurance from $100,000 to $250,000 begins on page 91.  I found it interesting that this is a temporary increase that would expire on December 31, 2009.  If you are one of the poor souls who might have more than $250,000 $100,000 in one institution at the end of 2009, you’d better get a calendar right now and put a big red X on December 31 so you remember to divvy up those accounts or risk losing a great deal of money.

Starting on page 115 you’ll find all the other “sweeteners” added to this bill to encourage its passage.  The list is mind boggling.  It includes extensions of renewable energy credits, the creation of some new clean renewable energy bonds, something to do with a special rule to implement FERC (Federal Energy Regulatory Commission) and state electric restructuring policy, the expansion and modification of investment credits for coal gasification, a temporary increase in the coal excise tax to help fund a trust account for black lung disease, the creation of a carbon audit of the tax code, an increase in tax credits for biodiesel and renewable diesel, an extension and modification of alternative fuel credit, the creation of a tax credit for the purchase of plug-in electric vehicles, a modification to the energy efficiency credits available for appliances produced after 2007, an extension to the AMT (Alternative Minimum Tax) Relief bill, extensions of other IRS deductions such as state and and local sales taxes, qualified tuition, expenses for school teachers, and tax-free distributions from IRA accounts to charitable institutions, etc.  I’m now at page 275 and I need a break.  More later.

3rd UPDATE:  Starting on page 270 you’ll find the beginning of the business tax provisions including things like extensions of the research credit, a new markets tax credit, the extensions of some cost recoveries for improvements to restaurants and retail spaces, something that has to do with the amount of excise tax paid to bring rum into this country from Puerto Rico (!), an extension of the economic development credit for American Samoa, an extension of the mine rescue team training credit, an Indian employment credit, a provision for accelerated depreciation for business property on Indian reservations, a 7-year cost recovery period for motorsports racing track facilities, an extension of the work opportunity tax credit for Hurricane Katrina employees, tax incentives for investment in the District of Columbia, an extension and modification of duty suspension on wool products, some provisions related to film and television productions, exemption from excise tax for certain wooden arrows designed for use by children (I’m serious – it’s on page 300), income averaging for amounts received in connection with the Exxon Valdez litigation, and a modification on the penalties on tax return preparers who understate taxpayers liability.

Starting on page 310 you will find the addition of the “Paul Wellstone and Pete Domenci Mental Health Parity and Addiction Equity Act of 2008.”  By election day I might need to take advantage of this myself.

The mental health portion goes through page 344 where you’ll find something for rural schools followed by something for states that contain federal lands. 

Skip ahead to page 394 and you can read about the “Heartland Disaster Tax Relief of 2008” which will provide temporary tax relief for areas damaged by severe storms, tornadoes, and flooding during 2008.

And there’s a bunch of other junk in there including something about people who commute on their bicycles.

The only thing I couldn’t find was something for dwarfs.  Otherwise I think the senate covered all its bases.

So when your representative votes for this bill do you think he/she was voting to bail out Wall Street or for that provision to exempt excise taxes on wooden arrows? 

Egads!

Country First? What A Joke!

Posted in Politics with tags , on September 30, 2008 by gyma

I had a bad feeling about how this bailout plan was going to play out politically and now I have my answer.  Apparently everything, including the financial solvency of the country, is a game to them.  Rather than act like grown-ups trying to solve a problem, caused by their own deregulation policies, they want to firmly place the blame on the Democrats. 

I was pleased to see several commentators take Republican strategists to task this morning by asking a very important question:  “So are you saying that Republicans voted against putting country first because they had their feelings hurt by Nancy Pelosi?”

This is an ad the Republicans sent out before the vote yesterday.  They were so certain the Democratic majority would pass the bill that they were ready to pounce on them for doing so.  Very mature on their part.

[h/t Balloon Juice]

Yes or No?

Posted in Economy, Politics with tags on September 29, 2008 by gyma

I’m more confused now than ever.  Do I call my representative and tell her to vote for or against the proposed bailout?

Warren Buffett says yes.  Paul Krugman basically agrees and grudgingly says it needs to be passed.  Nouriel Roubini, whom I’ve seen on The Charlie Rose Show, says no.  And then there’s Michael Moore, who sent me an email this morning urging protests, etc. over the bailout.  I wouldn’t call Moore a financial expert but he’s mad as hell over how the Wall Street fat cats have stuck it to the little guy and apparently are now coming in for the kill.

No one is able to say with much confidence that this plan will work.  Equally disturbing is what might occur if no action is taken.  As I write this post the Dow is down about 290 points, so investors aren’t feeling the love this morning either.

It’s very easy to sit here and say we absolutely should not give Wall Street this money.  They broke it, they own it.  It’s also easy to fall prey to fear and agree with the Chicken Littles who are claiming the sky is falling, the sky is falling.

My guess is that the answer falls somewhere between the two extremes.  Is that the plan Congress is currently considering? 

Who knows.  I think I’ll go bury my head in the sand for a couple of days. 

At least Mr. gyma and I are out of the market and our money is safely deposited in one of the newly failed banks.  I feel better already.

Paulson’s Demands

Posted in Politics with tags , , on September 24, 2008 by gyma

One of the things President Bush said tonight got me screaming at the television.  It was when he said they were worried executives wouldn’t want to participate in the program if restrictions were put on their compensation.

Makes me think this really can’t be as dire as they keep telling us.  Since when does a drowning individual dictate to his rescuers how and when he’s going to be rescued?

I wanted to make sure my ears were working correctly so I googled to find the answer.  According to Forbes:

Dodd proposed his own counter-proposal to Paulson’s plan earlier this week. Among other things, it calls for limits on executive compensation at troubled firms and for the Treasury to take a contingent equity stake in those firms. On Tuesday, Paulson rebuffed both ideas, as it might discourage firms from participating in the bailout program.

Earlier in this same article, I was surprised to discover the answer to that nagging question about how they arrived at the $700 billion figure:

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

This really sounds more like something The Onion would publish, doesn’t it?

Eliot Knew Too Much

Posted in Politics with tags , , on September 24, 2008 by gyma

Back in February 2008, Eliot Spitzer wrote an op-ed piece for the Washington Post.  About a month later Spitzer was forced to resign as Governor of New York.  I wonder if the two are related?

The title of the op-ed was “Predatory Lender’s Partner in Crime” and that partner happened to be the Bush Administration.  Imagine that!

It seems several attorneys general, including Spitzer at the time, noticed a pattern developing that was putting consumers at risk.  It was the sub-prime mortgage mess and even then it was obvious to anyone with two eyes and two brain cells to rub together that this wasn’t going to end well.

So Spitzer and others banded together to either pass laws against predatory lending or make agreements with subprime lenders who were involved in predatory lending. 

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Keep this in mind all week while you hear Paulson and the rest of the White House bandits trying to convince you the world is coming to an end.

Schmucks.

[h/t no fish, no nuts]

Predictions

Posted in Politics with tags , , , , on September 24, 2008 by gyma

President Bush will address the nation in about an hour and here are my predictions:

  1. The word bailout will not be used.
  2. The word dire will be used often.
  3. The drinking word of the night will be crisis.  You will hear it repeatedly.
  4. If he could, he would tell us not passing this whopper of a bill will result in a mushroom cloud of toxic paper.
  5. This address will be to scare us, not enlighten.  When he’s done you will not know any more about the hows and whys.
  6. The stock market will close down tomorrow.
  7. There will be no deal by Friday evening and John McCain will be a no-show at the debate and it will be all Barack Obama’s fault.

John McCain was interviewed by Katie Couric on this evening’s news.  You can watch that interview here.  Notice how he laughs nervously several times throughout the interview.  That reminds me of you-know-who.

UPDATE:  At least there wasn’t any smirking tonight.  Bush did a fairly credible job explaining how we got in this mess, but I think he should have taken some personal responsibility for this mess.  Fall on the sword, something like.  Bottom line is I don’t think he helped convince too many people.

My favorite part of the talk was when Bush said this bailout must take place so families will be able to continue borrowing to meet their needs.  Does anyone in this country live within their means anymore?