What part of "NO" don't they understand?!
Posted by: Archimedes on Oct 02, 2008 - 02:44 PM
Politics
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As reported on CNN this morning, it appears that our representatives still haven't figured out that, well, they're supposed to be representing us. And from the sentiment expressed by the masses, it's become clear that this is NOT what American's are looking for - a solution provided and maintained by the same government that brought us here in the FIRST place!
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How blatantly obvious is it? How painfully obvious is it? How hard is it for them to see that this is not in the best interest of the country and the over bloated financial system. No matter which way you cut this, it's still and always going to be bad news.
They continue to forcast doom and gloom...or at least NOW they do. Not three months ago, Paulson, Bernanke and our idiot president all said that the economy is strong - that it'll come out of this. Then in the 11th hour, along comes Paulson who, by the way, is supposed to be a financial genius - that was why he was hired right? Along comes THIS idiot and says, "the situation is dire - gimme $700B to give to Wall Street".
Jah! Right!!! Need I remind these people again, as if I haven't already in email correspondence to my senators and congressmen, this is the SAME idiot that was the CEO of Goldman Sachs since 1995 until he took his seat in 2006. Oh, and why was he offered the job? Because the PREVIOUS Secratary of the Treasury was FIRED because he disagreed with Idiot Bush's fiscal policies! Go freakin' figure!!
In any case, without getting too much into saying what rotten, dirty, lying scoundrels these guys are, because that goes without saying, let's examine this miserable plan and it's derivatives that have sprung forth since.
The first plan was a doozy! Two and a half pages that essentially said, "give the Secretary of the Treasury $700B dollars of taxpayer money, which we don't have by the way, in addition to the several hundred billion that we've already spent on bailing out AIG, Fannie Mae, Freddy Mac, IndyMac, Bear Stearns, Washington Mutual, etc. Yep, give him ultimate domain over the better part of a trillion dollars, which is about one tenth of the national debt at present, and make it such that he has no accountability to anyone, not the judicial system, not the investigatory branch of congress, not anyone".
Yep, a doozy. That was pretty much the entirety of the plan so that he could go and buy out all of the “illiquid assets”, which are essentially junk bonds with no redeemable value…kind of like the present administration. So then the congress gets involved. Now a lot of REALLY good questions were asked. And it “appeared” that they were listening to the constituents, particularly the republicans as they know that they’re already in a shitstorm anyway after so blindly following their illustrious leader, President Pinhead. In any case, they get involved and work through the weekend because they feel like that HAVE to do something. And a document that ORIGINALLY starts out as two and a half pages turns into a novel of over 100 pages! Now if I know anything about lawmakers it’s that they can so convolute a law and fill it so full of loopholes and doublespeak that even THEY can’t interpret it! And so they managed to do just that.
Some of the things they touted as being most important were “protections for the taxpayers”. Well, PROTECTIONS in my book would mean that they weren’t going to SPEND my money or indebt me to the tune of $4000 per every person in my family, including myself. All of this in response to the failing housing markets because the market was overinflated to begin with, supply began to exceed to demand, and because of the deregulation of the credit industries such that they were able to make loans to STUPID people (yes, I said it) that bought houses and took out mortgages that were WAY outside of their means if they were to have been intelligent enough to look further down the road. Things like ARM loans, interest only loans or principle only loans, low document or no document loans and ALL manner of bullshit. And then those loans would be packaged up in bundles and sold upstream as a security?! Doesn’t sound very secure to me. And if I’m going to be investing in it as heavily as some of these banks obviously did, you might think that they would do the homework and actually LOOK at what they’re buying. If they had, they might not be where they are now.
In any case, let’s look for a moment at some of the protections…
1. That they would cap CEO and/or executives pay for any bank that took advantage of their plan and sold these “securities” or “illiquid assets” (can someone say oxymoron?) to the government. TRUTH TIME!! This particular “protection had a “grandfather clause” in it. If the executives took office after the 1st of September, then they were exempt. Only CEOs that took office after the 1st would be affected. Translation: the current CEO can rape the company, sell it out in large part to the government, collect their “golden parachute” and then skip out and laugh their way all the way to the bank…or more to the point, away from the bank.
2. They said that they would be able to renegotiate the mortgages that they bought to keep people in their homes for those that were in distress. TRUTH TIME!! I read the proposed bill. And it was only allowed under certain circumstances. And that didn’t look to be nearly so often as they probably SHOULD have been able to do. Frankly, my thoughts are that if these companies are going to be selling these securities, then they’re NO LONGER property of the banks and thereby they shouldn’t have any god damn say in the matter!!
3. They said that the injection of capital would free up credit so they could start lending again. TRUTH TIME!! Yeah, maybe it would. But here’s a newsflash for all of you pinheads on Capital Hill…this allows them to continue “status quo”. And it will NOT solve the underlying problem.
And these are just a few of the problems with the bill that is full of loopholes. Let’s also look at some of the flaws…
First problem…Where the hell do they think they’re going to get the money in the immediate? Well, simple answer for them is “we’ll just print it”. Jah! Wonderful thought, you bunch of assholes. Here’s how that works. Since we are NO LONGER on the gold standard, our money is essentially just a “government bond”. So what does this mean? Here’s how it works. The American dollar, much like any other currency at this moment is just another commodity. It can be traded and it goes up and down in value simply under the basis of “supply and demand”. The greater the amount of dollars on the market, the less they’re worth. And for some reason they think that this is a good way to do business. Basic concept here is that if you have a pie, let’s say apple pie as that is all American as also it seems that such moronic economic policies are ALSO all American. If you cut that pie into eight pieces to feed eight people, you still have one whole pie. If that pie weighs two pounds, than that’s two pounds cut eight ways. If you want to instead cut it into ten pieces, it doesn’t increase the mass of the pie. It’s not like, “gee, we must have had more pie than we thought”. No, you just cut it up differently. And while you feed more people, you feed ‘em less. So it is with the dollar. Cut up whatever our value is, and since we’re at it and I’ll make mention of the fact that we’re 10 Trillion (that’s Trillion with a “T”) dollars in debt, we *should* be worth absolutely nothing, but cut up our entire worth in any way you like – we’re still in debt and our dollar is simply worth less.
So what does that mean? Well it means that you and me down here on Main Street are going to find that our dollar doesn’t go as far any more. It’s not to say that things are going to get more expensive – the value of those things is going to maintain at its present rate. It’s our less effectual dollar that’s going to be the culprit, which means that essentially, it will take MORE of our dollars to do the exact same thing it did before. Pretty simple, eh? I’ve no degree, but it seems to me that this should be a pretty simple concept for the pinheads on Capital Hill. The additional money that they’d need to print, and thereby take a loan out from the Federal Reserve Bank to do so, would increase our national deficit, decrease the value of our dollar and lead to inflation. That means that ordinary commodities such as home heating oil, gas, groceries, all of sudden these things “appear” to be going up in price, when the reality is that their value is constant…it’s just that our dollar is being reduced to the value of the peso!
Second problem…if you weren’t struggling already, given the rate of inflation that will probably result, hell, should have resulted ALREADY, you might be shortly. And for those that were on the edge or whose mortgages might be considered “distressed” are probably going to go over the edge. Now considering this whole thing seems to have been reported to have been as a result of the failure of the home load market, what do you think this is going to do for those already on the edge? Well, as I see it, you’re going to see MORE foreclosures, and yet another wave of mortgages that are going to be considered “distressed” as ordinary people find themselves not being able to make ends meet because of the rising costs of living just based on inflation. This rash will continue until such time that the current mortgages that are in distress right at this moment.
Third problem, or more appropriate put, misassumption...The issue as they’re presenting it is that the credit market has "seized" up. And as they explain it, this money is needed to free up the credit market. Otherwise, we down here on Main Street aren’t going to be able to get loans, etc. “It will affect Main Street in that they won’t be able to get home equity loans, won’t be able to get car loans, won’t be able to get mortgages, won’t be able to get credit cards”. NEWSFLASH, ladies and gentlemen! The LAST thing we need down here on Main Street is more CREDIT. That’s what landed us in this mess! I would put it to you that the reason people are defaulting is because they are having problems with the credit they have RIGHT NOW. And if someone is having problems making payments, then giving them more credit isn’t going to solve the problem. More credit is one of the LAST things on our minds. We’re worried right now which bill we’re going to pay this week – our mortgage, our car payment, our heat, our health insurance, our groceries…which of these can we skimp on? Which of these can we do without the most. So the idea of taking out another loan is pretty much a waste of time and effort on all fronts.
Fourth issue…buying up the securities is about as useful as tits on a tomcat. There’s a reason they call these things “illiquid assets”, duh! Because they have no intrinsic value and are likely NOT to have any in the foreseeable future. It’s not as though the government would have a vested interests in the properties underlying the mortgage securities themselves. Just the securities…that’s just stupid! You know, that’s the problem with this whole financial system. Only in today’s market could debt be considered a tradable commodity. Give me something physical that I can lay my hands on that, should the borrower go south, I can lay my hands on and say “are mine”. On this same note, part of the problem is the continued drop in pricing on homes. Well, that’s a NATURAL thing, ladies and gentlemen. The market was overinflated to begin with, not unlike when the dot com bubble burst in the 90s. The values of homes is vastly overinflated. And while the supply didn’t meet the demand, that might have been all right, but with as many contractors began to specialize in pounding out these cookie cutter homes one after another before they even had a buyer, the supply quickly began to outgrow the demand. Couple with that all of a sudden a flux of homes hitting the market as a result of foul mortgages being foreclosed on, guess what – you now have a glut. And what the government is presently trying to do to “save the day” is, in part, price fixing, to keep the overinflated prices. Well, ladies and gentlemen, here’s the deal. Once again, the simple law of supply and demand applies. There are more houses than there are buyers. This means that the price needs to go down. That’s the way it works.
Fifth Issue…and I think I’ll stop at five, although I’m SURE I could go on. Aside from the fact that only the U.S. Government would be dumb enough to say, “sure, these things are worthless to you, so we’ll buy ‘em…because I’m sure there’d be no taxpayers that would be rushing out to buy these damn things, even aside from that, the government seems to think that at SOME point, they’re going to be worth something. Even if they WERE…they’re transitory. More to the point, if we’re going to go back to the law of supply and demand, so you take all of these off the books of the banks, essentially balancing their sheets for them, at some point if, as the government says they’re going to, they presume that they’re going to sell these things back and maybe even MAKE money. Okay, one more lesson in supply and demand, ladies and gentlemen. First of all, it’s become apparent that these were called “toxic” debts for a reason. I don’t think you’re EVER going to find a buyer for them. So demand is going to be pretty freakin’ low to begin with. But let’s just say that the “hold to maturity” value is kinda reached. That’s a nice thought. But when the government starts to release these things…what do you think is going to happen? When they REMOVE them from the market, the price on existing such securities *might* go up, although that’s still speculative. If I were an investment bank, I’d never want to get into such securities EVER again. But let’s just say for a moment that they do. Okay, when the government finally deems that there’s some value in these things and release them onto Wall Street again, what’s the net effect? Simple. Where they were removed from the market and thereby increased the value of those that remained, the reintroduction of these back into the market are going to create an artificial glut of them again and drive the prices RIGHT BACK DOWN. Simple supply and demand, ladies and gentlemen, it’s not rocket science despite what all of these high flying economists, bank CEOs and people like Paulson and Bernanke think. It’s just plain not that difficult to wrap your mind around if you try.
Aside from ALL of this, put EVERYHING else aside, two simple facts remain that cannot be disputed. First, you’re trusting that PAULSON has the answer to “save us all”. Ummm…isn’t this one of the previous CEOs for one of the biggest investment banks in the world? And wouldn’t it be fair to say that it’s the practices of the investment banks that we’re here right now? More to the point, taking seven hundred billion dollars from the American taxpayers to give to the big investment banks that make billions a year, or did until their greed caught up with them, don’t you think that in considering their level of greed that the most inevitable outcome would be that they simply say, “cool, we have more money to play with again – WE’RE BACK IN BUSINESS!!” I mean c’mon! This plan had no sooner been announced in Congress (thank God it failed there the first time ‘round) when Washington Mutual went up in smoke…and the CEO, who had been there a whopping eighteen days, finding himself bereft o a job was compensated for his fabulous work by Washington Mutual to the tune of THIRTEEN MILLION DOLLARS. That’s what? Seven hundred and fifty thousand dollars or so A DAY?!
And yet our government prescribes that this is the single best direction for our tax dollars ignoring all other possibilities. OH! And let’s not even forget such loopholes as this “insurance” that might serve as an alternative, which was proposed by the Republicans as a means that institutions might solve the problem with their own money by buying insurance for these securities from the government that they “might not have to take advantage of”. Ummm…at the rate that banks are failing, somehow I don’t think there’s a lot of reality in that thought. More to the point, this option also doesn’t have a cap. There’s a real possibility that such a loophole could wind up costing us even MORE than the original bill!! I won’t even go into the fact that these things should ALREADY be insured. What the hell did you think AIG did…and you see what it did to them! More to the point, if anyone were to look at the facts, the insurance on assets held by these kinds of investments is a damn lucrative market…until it all comes crashing down like the house of cards it is. The insurance business that backs this thing, which was worth all of $900B in 2001 is now valued at almost FIFTY SEVEN TRILLION DOLLARS, ladies and gentlemen – that’s TRILLION with a “T”. The entire gross product of the entire earth – the entire wage of the whole f*cking planet is about $300 Billion less than that – no joke!
Oh, and as the $700B goes? That particular amount? It doesn’t have anything to do with an actual figure of what kind of money might be need to actually solve the problem as these mortgages are so far reaching that nobody KNOWS how much money would be needed. Those that advised Mr. Paulson just wanted a “really big number”…to make us feel better that they’re trying to do something. Well, lemme tell ya, I sure as hell don’t! That’s MY money!!! I don’t like big numbers where that’s concerned! And my money travels upstream fast enough already whenever I whip out my debit card or such to buy something!! Now you’re going to just skip the f*cking middleman and take the money out of my wallet and just GIVE it to Wall Street! NICE! It’s at least EFFICIENT – I’ll give you that!
And so it seems that the sentiment across the nation is that this is bullshit, and rightfully so. If you ask me, this congress and the administration are just hell bent on spending big taxpayer dollars. And even if we had it to spare, even if we WANTED to take on that kind of responsibility, I have to wonder why the hell you’d go in THIS direction! Giving money to Wall Street is akin to trying to bail out the Titanic with a beach pail! Yet this government seems bent on spending as much money as they can as quickly as they can.
And I’ve read and heard from a lot of pissed off people who’ve said, “I don’t want my money spent like that”! Join the club…
But what really got me is that, in some ways, when they say that, at the same time they say, “we should put that money into alternative energy” or “we should put that into education”.
Well, here’s a couple of thoughts to answer to that…
First, it’s not like we have money there to SPEND. We shouldn’t be spending any money at ALL outside of that which we’re already wasting until such time that we reel in our costs! Just because someone proposed that we should spend $700B, and bear in mind that that person or collection of people are idiots, that doesn’t mean that just because their thoughts of where to spend it are ill thought out, that we should instead spend money we DON’T HAVE elsewhere. The point is that we shouldn’t be spending it AT ALL.
But…if we ARE bent on spending it, here’s a couple MORE points…
IF we’re going to spend this money, I put to everyone that, first of all, education is NOT going to solve the problem. It’s a noble thought. And I don’t doubt that our education system needs attention, but all in good time. I mean, all of these f*cknuts on Capital Hill consider themselves educated, many of them holding degrees from some of the most prestigious schools in America, as are many of the CEO’s of the very investment companies that have brought this country to its knees. Seems to me that for all of their education, they’ve still managed to f*ck things up pretty well. Doesn’t speak much to education.
As for investing in alternate energy, I one hundred percent agree that this is someplace we HAVE to go. But right now we need to invest into saving this market (although I personally think we should let it tank). But to invest such money into things that are supposed to “indirectly” fix the problem, like stabilizing the markets so that it trickles down to the consumers and borrowers, and that includes into alternative energy right now, these things are not going to provide the kind of relief necessary to keep more people from falling into bankruptcy, foreclosure and keep them from losing their homes.
What really astonishes me is that this is the same administration that when a $4.5B bill was presented to do something about the existing distressed loans, President Pinhead vetoed it saying he “didn’t want to reward poor decision making”. Jah!!! And this is different exactly f*cking how?!
Here’s a suggestion, and I’ve made this suggestion in email to my representatives. We should be focusing on correcting the problem at the source. There’s a program in place right now through the FHA that would allow a person who is having difficulties with their mortgage to refinance under a government owned/backed mortgage with a fixed rate, thereby ensuring the individual can make a go of it. The only caveat being that, if the homeowner ever sells the home, then 50% of the profits go back to the government. Sounds like a pretty good deal to me. And it’s surely going to have a much more direct affect on actual tax payers. The idea behind this particular solution falls in line with the fact that you don’t build a house from the roof down. You start from the foundation up. And if you don’t do it that way, then your house is bound to fall down. Perhaps this money would be better spent by doing government refinancing of such subprime loans that are in such jeopardy of bringing the market down. In doing this, the lending institution that originated the loan would get their money back, or at least the principle, and thereby get the capital injection they need that would filter UPSTREAM for a chance and the homeowner would be given a chance to make a go of it. If they still fail, that’s probably indicative that the individual probably got into a loan that they shouldn’t have been able to afford in the first place and the government is at least left with a physical asset that retains some value.
But whatever the case, whatever the reasoning, whatever we seem to say, it all seems to fall on deaf ears. This government seems to have turned their back on us altogether to rescue the few. This plan is foul all around on so many levels. From the risk of inflation – no, scratch that…guarantee of inflation, to not addressing the issue from its root. And beyond anything else that can be said, it bears repeating that you can’t have a “free market “ and “free enterprise” AND government intervention. It just doesn’t work that way. These two things are mutually exclusive. And if you don’t allow the markets to fail, then they can never right themselves. And in so rescuing these organizations that have made such poor decisions under the auspices that these organizations are “too big to fail”, our government is sending a message that they endorse this and they are there to rescue them whenever they f*ck up…with our money. I’m sorry, I have significant problems with that. And it’s time that this government started to listen to the very people they claim to represent.
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