The Market

[Aiello]

The market just dropped like 750 points after the House failed to pass the bailout. Crap.

[Thelasko]

I just don't get it. Why don't people understand, if banks fail, their savings/retirement/job goes with it. This isn't only a problem for the super rich, it effects everyone.

Maybe I underestimate the number of people without savings/retirement plans. Maybe people see the bank failing as their only way to get out to debt.

[LaRoza]

The market just dropped like 750 points after the House failed to pass the bailout. Crap.

"lighthearted and enjoyable discussions"

Watching...

[KiwiNZ]

This will have far reaching affects . The impact will be felt globally.

The IT sector will be hard hit as companies cut back their IT expenditure. It will reduce investment and as such have a marked affect on innovation.

[zmjjmz]

Yeah, this is really bad.
Not much more to say though, it's not like I have any money in the DOW.

[NoSmokingBandit]

The government (under clintons administration) started to pressure lendors to take higher risk and give loans to people that have no means of paying it off. Unsurprisingly this came back to bite our economy in the ***. Now the government expects the middle class families to bail out the lower class families to the upper class families can keep their million-dollar CEO jobs.
Irony. She's a fickle bitch.

[KiwiNZ]

You dont need to have money invested in the Dow to lose . Your Life Insurance , House insurance etc is at risk. Interest rates will rise dramatically. Wages will be cut if not lost completely.

People need to realize this will affect everyone not just the rich. In fact the poor are at greater risk.I dont think this is understood by many.

As for IT , it is seen as a luxury by the bean counters so its the first to be trimmed from budgets. I fear there will be wide spread job loses in this sector , There will be many companies that will go to the wall. Large and small.

[linux2.6.24-19-generic]

The government (under clintons administration) started to pressure lendors to take higher risk and give loans to people that have no means of paying it off. Unsurprisingly this came back to bite our economy in the ***. Now the government expects the middle class families to bail out the lower class families to the upper class families can keep their million-dollar CEO jobs.
Irony. She's a fickle bitch.

Correct. This is ONE reason people don't want to go along with it. The second reason is we would instantly go from a semi-capitalist country into a deeply socialist country overnight.

Most Amercians don't want that. Including me. I would rather go through a major depression and be better off in the long term.

Socialist policy got us here, adding more socialist policy won't help.

[NoSmokingBandit]

Correct. This is ONE reason people don't want to go along with it. The second reason is we would instantly go from a semi-capitalist country into a deeply socialist country overnight.

Most Amercians don't want that. Including me. I would rather go through a major depression and be better off in the long term.

Socialist policy got us here, adding more socialist policy won't help.

can you be my new friend?
:D

[oldsoundguy]

A bail out will eventually pass. Has to. Just that this particular version was giving everything away with little or no guarantee and with few provisos for a watchdog agency, not enough cut to the salaries of the fat cats that got us here, and zip in the way of payback schedules for the taxpayers. You don't give away the farm because the fox got into the chicken coop and ate all of the chickens. Although things are incredibly intertwined, this is not a one note economy.

And I have lost a BOATLOAD since Bush got elected and enrolled in economics 101 after much reluctance.

[mick222]

Correct. This is ONE reason people don't want to go along with it. The second reason is we would instantly go from a semi-capitalist country into a deeply socialist country overnight.

so can you tell me how a very liberally regulated economy is semi capitalism. The truth is your country and mine embarked on an experiment into unbridled capitalism which gave us good growth but like all other booms eventually the bubble bursts. We need a period of regulation and maybe more socialist policies to redress the balance in society.
How can bankers getting golden parachutes for watching there companies go burst be justifiable. When it is the ordinary people who have no stake in the stock markets who have to pay in the end.

[klange]

Correct. This is ONE reason people don't want to go along with it. The second reason is we would instantly go from a semi-capitalist country into a deeply socialist country overnight.

Most Amercians don't want that. Including me. I would rather go through a major depression and be better off in the long term.

Socialist policy got us here, adding more socialist policy won't help.

European nations do this all the time.
Look at what happened the last time when we did nothing. I'll give you a hint: Worldwide depression.

[NoSmokingBandit]

What is this "unbridled capitalism" of which you speak? All this started when Clinton's administration pushed lendors to give loans to families who couldnt afford to pay it back. The government stepped in and told businesses what to do and they effed it all up for middle class families like myself. Now they want me to pay for it. Please......PLEASE show me this "unbridled capitalism" that got us into this mess.

[Sephoroth]

778 points down...Ouch....

[t0p]

What is this "unbridled capitalism" of which you speak? All this started when Clinton's administration pushed lendors to give loans to families who couldnt afford to pay it back. The government stepped in and told businesses what to do and they effed it all up for middle class families like myself. Now they want me to pay for it. Please......PLEASE show me this "unbridled capitalism" that got us into this mess.

I'm interested to know where you got this idea from that Clinton forced the mortgage lenders to dish out cash to all and sundry. Mortgage lenders getting into the high-risk market was not limited to the USA. Banks got into it in the UK too, and so far the UK government has nationalized 2 banks. Big companies have gone down in Italy too. And the Benelux countries (Belgium, Netherlands, Luxembourg) have also found themselves in this poke.

This was all most certainly unbridled capitalism - bankers got into a crazy paper chase, building up huge "assets" in the shape of high-risk loans. They were speculating madly on a dangerous bubble. Then the bubble burst... and those reckless bankers want their governments to bail them out. But I say No!! Why should my tax payments go towards some fat cat's retirement fund? Let 'em all go to the wall!

[bruce89]

Now they want me to pay for it.


But I say No!! Why should my tax payments go towards some fat cat's retirement fund? Let 'em all go to the wall!

Blissfully ignoring the fact if these banks go down, so do your savings.

[NoSmokingBandit]

Blissfully ignoring the fact if these banks go down, so do your savings.
Yet if i pay their way out of their own mess my savings dwindle as well. So i am left with 2 options. Spend a ton of money bailing out a big corporation who got themselves into a mess or i lose a bunch of money when they fall on their face.
I'd rather be poor and smug than just poor.

[klange]

How about everyone in the US pays, weighted by income, an average of around $3000 and we call it a day?

[Thelasko]

Just that this particular version was giving everything away with little or no guarantee and with few provisos for a watchdog agency...

Also a common misconception, the government would be buying mortgages at a steep discount, not giving the money away. The mortgage is backed by a physical house. If the owner of the house defaults on his/her mortgage the government will then own the house.

Is that house worthless? If all goes well, the government will be able to sell those houses, or even better, the owner pays off the mortgage, and the taxpayers will be repaid.

Many people think the American people will end up making money on this deal.

The big issue at the moment is that no one trusts the Bush Administration to do as it says (with good reason given the history). As long as it does what it says, the plan should work.

An alternate option is to raise the limits on FDIC insurance. Think about it, the $100,000 cap on the insurance is from the 1930s. Adjusted for inflation, it should be $1m or more.

[bruce89]

Yet if i pay their way out of their own mess my savings dwindle as well. So i am left with 2 options. Spend a ton of money bailing out a big corporation who got themselves into a mess or i lose a bunch of money when they fall on their face.
I'd rather be poor and smug than just poor.

Depending on your wealth, you will find bailing them out is cheaper than losing it all. Also, the shock from the banks collapsing would destroy other sectors.

[Thelasko]

How about everyone in the US pays, weighted by income, an average of around $3000 and we call it a day?
I figure $2333.33 but I like your style.

[bruce89]

I figure $2333.33 but I like your style.

I was going to send my souvenir $2 note back to the Federal Reserve. I'm afraid I have no more.

[AusIV4]

Blissfully ignoring the fact if these banks go down, so do your savings.

Not in the US, they don't. The Federal Deposit Insurance Commission (http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation) guarantees deposits in banks up to $100,000. If you have any where near that much in savings, much of it should be invested in a well diversified stock portfolio (and when I say diversified, part of the implication is international).

I'm not stating my opinion on the bailout one way or another, but I've seen several people falsely asserting that people's savings accounts are dependent on the bailout, and I want to set the record straight.

[bruce89]

Not in the US, they don't. The Federal Deposit Insurance Commission (http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation) guarantees deposits in banks up to $100,000. If you have any where near that much in savings, much of it should be invested in a well diversified stock portfolio (and when I say diversified, part of the implication is international).

Ah, but surely the taxpayer pays for that money.

In Britain, it's "only" £35,000.

[Gordy]

Could someone give me a lone?

[bruce89]

Could someone give me a lone?

Ranger?

Sorry, couldn't help it.

Seriously, what do you think got us in this mess in the first place?

[AusIV4]

Ah, but surely the taxpayer pays for that money.

Yes and no. This is my understanding:

Banks pay insurance premiums to belong to the FDIC. The FDIC takes those premiums and gives them to the Treasury department where they are added to coffers along with tax dollars, and are spent on various federal programs. When the FDIC has to pay out, the treasury has to produced the money.

So the taxpayer pays for FDIC payouts, but the FDIC premiums pay for various programs for the taxpayers.

[Koori23]

Remember about 3 years ago everybody? Housing boom like there's no tomorrow. Everybody was buying up property, refinancing, getting suckered into ARM's and such..

Well guess what? It serves them right.

The scary thing about this 700 Billion bucks is.. Uh.. We are in a deficit to begin with, they don't actually have 700 Billion to dish out.

I'm wondering if anyone anywhere is seeing the security risk to the country doing this.

[klange]

Remember about 3 years ago everybody? Housing boom like there's no tomorrow. Everybody was buying up property, refinancing, getting suckered into ARM's and such..

Well guess what? It serves them right.

The scary thing about this 700 Billion bucks is.. Uh.. We are in a deficit to begin with, they don't actually have 700 Billion to dish out.

I'm wondering if anyone anywhere is seeing the security risk to the country doing this.

First off: Yeah, it does serve them right, and they should pay for it. But if we don't bail them out, we're all ****ed.

Second: The US government has always, since day 1, been in a deficit. Has yet to stop them from buying stuff.

[Frak]

I remember Japan bailed out some banks back in around May or June (I could be wrong). Anyways, the bailouts, while very craftily made, failed in the long run. The economy tanked again, even though no more bad loans were being paid out. One bailout wasn't enough, even with the massive "temporary gift".

Either way, Milton Friedman was right when he said inflation/recession is a temporary event. It does bounce back up, only panic makes it keep falling.

[doas777]

All this started when Clinton's administration pushed lendors to give loans to families who couldnt afford to pay it back. The government stepped in and told businesses what to do and they effed it all up for middle class families like myself.

can you back that up with a link? I've heard a few mouthpeices of AM radio say that, but I'm still waiting for a reaonably neutral source to support it.

I'd also say that a 777 point drop is the very exemplification of "unbridled capitalism".

[NoSmokingBandit]

This article is best:
http://themessthatgreenspanmade.blogspot.com/2007/12/clinton-housing-bubble.html

This is a bit about the inflation of the housing market:
http://prorev.com/2008/09/clinton-bush-housing-bubble-biggest-in.html

And another...:
http://alhambrablog.blogspot.com/2007/12/clinton-housing-bubble.html

Just google "clinton housing bubble" and you will find a few good articles and a billion terrible ones, much like any bit of news :D

[Thelasko]

Not in the US, they don't. The Federal Deposit Insurance Commission (http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation) guarantees deposits in banks up to $100,000. If you have any where near that much in savings, much of it should be invested in a well diversified stock portfolio (and when I say diversified, part of the implication is international).
$100k isn't what it used to be. Where do you think your company keeps it's payroll money? Diversification, even globallly, won't make a difference. This is a systemic and global problem. (http://www.cnn.com/2008/WORLD/asiapcf/09/29/asia.stocks/)

can you back that up with a link? I've heard a few mouthpeices of AM radio say that, but I'm still waiting for a reaonably neutral source to support it.
Republicans will point to the Community Reinvestment Act (http://en.wikipedia.org/wiki/Community_Reinvestment_Act) and democrats will point to the Gram-Leach-Bliley Act (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act) as the cause of the problem.

Many economists agree, increasing the limits of deposit insurance (http://www.latimes.com/business/la-fi-petruno26-2008jul26,1,2039671.column) is a good idea. The $100k amount was set in 1933. How much could $100k buy in 1933 and how much can it buy now?

*correction the FDIC limits were raised in 1980 (http://landru.i-link-2.net/monques/dereg80.html) from $40,000 to $100,000.

[SunnyRabbiera]

I just don't get it. Why don't people understand, if banks fail, their savings/retirement/job goes with it. This isn't only a problem for the super rich, it effects everyone.

Maybe I underestimate the number of people without savings/retirement plans. Maybe people see the bank failing as their only way to get out to debt.

Well yes, as many have overwhelming debt thanks to the economic vacuum.
This bailout will solve nothing, really bailing out wall street isnt going to solve a blasted thing, they want to bail it out as it will be cheaper to bail out wall street then to bail out main street.
And guess who was probably going to help out wall street?
Us the bloody taxpayers, the corruption in our government is as plain as day.
I say let these big companies falter and be reclaimed, they acted in foolishness and now they suffer.
Maybe its a good thing, sure to retirement and stuff like that will suffer greatly but maybe rebuilding the whole thing again will be beneficial.
I mean look what happened after the great depression, the rebound was probably the best thing to happen.
But still despite the positives that might come out of this, there will be many negatives along the way, people loosing jobs, homes and money.
These are dire times, where everyone will suffer.

[rustybronco]

The government (under clintons administration) started to pressure lendors to take higher risk and give loans to people that have no means of paying it off.

All this started when Clinton's administration pushed lendors to give loans to families who couldnt afford to pay it back.
Note*** Republican congress at the time of Clinton's administration.

peoples greed got us where we are...

yes I am a Republican/conservative.

[Tomosaur]

The source of the problem is bad business tactics. By bailing the banks out - you legitimise their tactics and set a precedent for future bailouts. All a bailout would do is provide a temporary fix to a massive problem.

Yes, the cost of banks failing is going to hurt - but in the long-run, it is better to take the hit now and rebuild banks in a fairer, less risky, and more economically sound way, than allow banks to continue down this road and ultimately have to face an EVEN WORSE crisis than we're facing right now.

Unfortunately for the US - since it is US banks which have mainly caused the problem (I'm not trying to pass blame here, just calling it like I see it), the US is probably going to get hit worse. The UK (where I am) is already nationalising banks and the government is hoping to push through a bailout similar to the US one. I will be protesting it out of principle, but I don't really think a bailout of UK banks will be quite as bad an idea as a bailout for US banks.

Many people say 'oh the bailout will allow greater oversight of the banks so the problem won't happen again'. To them I say - you're deluded. As long as your government can be bought and lobbied, there is no real chance in hell anybody is going to face the music for screwing up so badly.

This is the ultimate test of capitalism and the free market. If it can not suvive by practicing what it preaches, then perhaps it's time we took a good long look at the whole sorry affair and change the way we do things.

Tying an old rag to a punctured pipe doesn't solve the problem, it just slows the leak. A bailout isn't going to solve the fundamental problems which led to this crisis.

[LaRoza]

Politics isn't a subject for the Cafe.

[KiwiNZ]

I have reopened this . Whilst there is a political element to this issue it goes way beyond politics.

[linux2.6.24-19-generic]

FACT: In 2003 Bush tried to reign in freddie mae and freddie mac. FACT: In 2005 McCain also made an attempt. FACT: Democrats that were running these entities opposed this and denied that there was even a problem. FACT: These government run entities were holding onto nearly half of all the sub prime mortgages in the country.

This is common knowledge among people interested in looking at things like the Congressional record of the United States Government.

I'm not making any judgments, just giving a few relevant facts on this issue. A lot of people seem to people in denial about these facts, but if you care to know the truth you can find it. Don't just take my word for it, and don't just guess about it. Go find the truth.

[cardinals_fan]

I believe the fundamental problem is one of entitlement. American schoolchildren are taught from an early age that everyone is a winner, all stories end with "happily ever after", and we are all special in our own way. This has created a powerful feeling of entitlement. People think that they deserve something just because of who they are. This is what leads to obsessive materialism and the "need" to own things beyond one's means - which is the root problem here.

Does that mean that preschoolers shoud be force-read The Little Matchgirl and taught that life is hateful and ruinous? Of course not. However, the soppy belief that the education system should teach children to feel good about themselves and be proud of America is folly. Unfortunately, that's what schools do now.

[rustybronco]

reading material.

http://www.metroactive.com/bohemian/04.23.08/news-0817.html
http://www.bohemian.com/bohemian/05.28.08/news-0822.html
http://www.metrosantacruz.com/bohemian/06.25.08/news-0826.html
http://www.bohemian.com/bohemian/08.06.08/news-0832.html
http://www.bohemian.com/bohemian/09.10.08/news-0837.html

[LaRoza]

I have reopened this . Whilst there is a political element to this issue it goes way beyond politics.

Still think so?

[mips]

Still think so?

Gets :popcorn: and sits back to watch :)

[rustybronco]

I have taken this a little out of context.

like you might find around a water cooler at work...

as you can imagine, it's a widely debated subject.

arguments need not come from passion.

[cardinals_fan]

Still think so?
It is if you look beyond the Democrat vs. Republican squabbling.

[LaRoza]

It is if you look beyond the Democrat vs. Republican squabbling.

You mean, if I look beyond the political posts it isn't political? Yes, of course.

[koenn]

Gets :popcorn: and sits back to watch :)
same.

[toupeiro]

Usually, if I post something as fact, I do my best to give a citation wherever and whenever I can. The reality is, your facts are only as good as your sources, and quite frankly, I highly doubt ANY of anyones sources are credible when it comes to this topic. so boldfacing FACT: in this thread is worth about as much as the dollar is these days.

Quit mud slinging! Accept there is no silver bullet answer, there is no one party to blame! Get your own affairs in order, prepare for a major economic recession, do your best to keep your heads above water, and the next time you start hearing and seeing things like this in the news you don't like, don't sit on your couch or on a website complaining and blaming, get involved! We're in this situation because EVERYONE in the US has become totally complacent and self-absorbed about the welfare of this country and its citizens. From the baker to the CEO, the general attitude is pretty much the same: If it doesn't affect peoples little circles, you don't care enough to rally, or protest, or write congressmen, or speak out, until its far too late to do anything but ride out the results of their greed and our complacency. This country lost its entire sense of itself, and its been (is being) exploited now, and has been the majority of my near 29 years of life. This isn't political, its about a reality check for every American citizen on whats important that impacts us all regardless of some ridiculous political affiliation. Don't like it? Then, Change it!

If I get infracted for this, then so be it! I'm just really tired of everyone trying to pin this on everyone without owning up to their responsibilities. Yes, the banks were greedy and wrong to approve a $450,000 home loan with a 30,000 vehicle and a good FICO score as collateral, but at the same time, if you are living off $40,000 a year, you know damn good and well you can't afford a $450,000 home. Did you REALLY think you were going to make an extra 50-80,000 per year before your adjustable intrest rate kicked in? Did you really?

[Greyed]

We're in this situation because EVERYONE in the US has become totally complacent and self-absorbed about the welfare of this country and its citizens. From the baker to the CEO, the general attitude is pretty much the same: If it doesn't affect peoples little circles, you don't care enough to rally, or protest, or write congressmen, or speak out, until its far too late to do anything but ride out the results of their greed and our complacency.

Speak for yourself in that generalization, please.

My main complaint in all this isn't the fingerpointing in how we got here but the fact that we're going to bail these people out. In the past 8 years I had 3 years unemployed broke into 2 18 month blocks. During those 18 months I was able to pay my rent, pay off my loan on two vehicles and never miss a payment on 2 credit card loans set to 30% interest. In fact I was barely even late on most of my bills; maybe 2-3 times in the past 8 years and none of it when I was unemployed. My wife and I argued about filing for bankruptcy. I was opposed to it and we pulled through.

In that time I have applied for several loans at 20% interest so I can pay off the 30% interest credit cards and save money on my monthly expenses. A few thousand dollars extra a year would go a long way to pulling me out of debt. Every time my applications were denied because of too much revolving debt. Nevermind that I barely ever use the cards and the whole point of the loans is to get rid of that revolving debt!

So here's what it looks like to me. I have been a good investment for the past 8 years. Never missed, barely ever late, even under a crushing 30% interest on some loans. These banks won't loan to me to help me get out from under my debt but they loaned billions to people who flat out lied on their credit application (something I have never done, silly me) then defaulted on their loans. Because of this foolish practice they are now looking for a bail-out funded by the taxpayers; a group which I am a part of.

They didn't give me a chance to get out from my debts. Why the HELL should I give them a hand? They've been socking me with 30% interest for over a decade and now they want more!?

Screw'em! They should get exactly the same amount of help they gave me. None. Not that that'll happen since we have shills in office (from both major parties, make no mistake) who think my wallet is their personal playpen.

If I had my druthers I'd say let them fail and let the people help out other people and cut-out the middle man altogether! (http://www.prosper.com/)

[toupeiro]

Speak for yourself in that generalization, please.




I did point out I was generalizing. kind of silly to speak for myself in a generalization like that... Obviously a generalization isn't going to be 100% applicable, but I believe it certainly covers the actions of the greater majority. I'm not talking about feelings or personal positions, I'm generalizing about how people in the US behave, and I don't think I am far off at all! Most people might not like to hear it, well tough. I'd rather someone tell me honestly that I've been complacent and am partly to blame than to have someone feed a bunch of hot air to me that its all the politicians and I'm in no way responsible for the condition the country is in. This country's voice has been asleep since the 1960's and early 70's, and its really, really sad.

And as far as the bailout, here is another point to sort of back up what I am talking about.

You say screw them, but thats not enough. I've heard a constitutional lawyer tell me that there is absolutely nothing written in the constitution of the United States that gives congress the power to bail out private companies with taxpayer money. Vote, or no vote, it is illegal! I've only ever seen one other constitutional lawyer mention this publicly on CNN, and it was never brought up again. Go figure?

If you want to do something about it, raise awareness that its 100% ILLEGAL for them to do this in your communities, and rally enough people to take it further than that. Thats where I am starting.

I would speak for myself in that statement, except I am choosing not to argue this one from my computer chair. I hope others will do the same.

Constitution of the United States: Article 1, Section 9: LIMITS OF CONGRESS


"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

"In addition, each member of the Senate voting yes on this alleged Bill did in fact, with full knowledge execute an illegal act under "Color of Law" to pass as piece of revenue legislation by amendment with full knowledge that the Bill had been defeated in the House of Representatives just two days earlier. They have complete legal understanding that only a Bill that has been properly submitted by first receiving a majority of votes in the House of Representatives could be amended and passed by the Senate."

[fatality_uk]

Right now, the financial sector & larger corporations are stoking the problem to drag out further concessions from World governments. There is more than enough hard currency in the World. Equity/liquidity is a problem that can be solved in hours, literally.

If the banks & corporations wanted to switch ON the inter-bank / inter-corporation lending that has taken place for decades, they could do it almost instantly.

I see within one month, there will be a pan-global agreement securing three month lending within the LIBOR and relevant national lending systems. When this gets into the public domain, it will be dressed up as a funding security package, or some other nonsensical plan.


The fact of the matter is once again, those who are charged with securing our money, will be the ones to make a HUGE profit from this fiasco.

[Thelasko]

Wow, the market is tanking big time today. It really seems like the market would be better if the bail out bill didn't get passed. The morning the bailout plan failed in the House, the market was already down. It just continued it's trend. The next day it gained back much of it's losses. Then, every time the government made new headway in passing the bill, the market went down further. With the bill signed into law, the market is nosediving at an even faster rate than before.

[fatality_uk]

Wow, the market is tanking big time today. It really seems like the market would be better if the bail out bill didn't get passed. The morning the bailout plan failed in the House, the market was already down. It just continued it's trend. The next day it gained back much of it's losses. Then, every time the government made new headway in passing the bill, the market went down further. With the bill signed into law, the market is nosediving at an even faster rate than before.

See my post above. Why would "The Markets" gain anything when they are waiting for governments to bail them out totally?

Sadly, this isn't anything to do with credit deployment any more :(

[toupeiro]

See my post above. Why would "The Markets" gain anything when they are waiting for governments to bail them out totally?

Sadly, this isn't anything to do with credit deployment any more :(

The only discrepency there is that when the Bill was voted down by the house, the market tanked, then they boosted back up the next day, then when the Senate ILLEGALLY amended a failed Bill approving the bailout, the market tanked again.

The markets are gaining nothing because the bailout is artificial, they are just shifting a huge concentration of debt back on us, when they have no legal grounds to do so. There is no appropriation for taxpayer dollars to bail out private sector business, and every senator who knowingly amended a failed bill and circumvented the 2 house system of the United States should go to prison. Nothing is going to fix this magically. You can't bail this problem out, and even if you could, not at the cost of the fundamentals of US Democracy. It physically makes me a bit sick to my stomach.

[Frak]

The only discrepency there is that when the Bill was voted down by the house, the market tanked, then they boosted back up the next day, then when the Senate ILLEGALLY amended a failed Bill approving the bailout, the market tanked again.

Here's how it works

Bill is made -> Bill sent to Senate -> Senate approves bill and sends it to House -> House votes down the bill and makes suggestions on it -> Bill sent back to Senate -> Bill is amended and sent back to the house -> Bill passes house.

My own Governor told me about that some months ago.

[toupeiro]

Here's how it works

Bill is made -> Bill sent to Senate -> Senate approves bill and sends it to House -> House votes down the bill and makes suggestions on it -> Bill sent back to Senate -> Bill is amended and sent back to the house -> Bill passes house.

My own Governor told me about that some months ago.

That may be how it works in this example, and that is 100% illegal! Let me further explain why (besides the other point I made which is taken verbatim from the constitution of the United States about Congress and the Treasury)



Constitution Article 1, Section Seven

All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

House Resolution 1424 (which is also a constitutional amendment) states that you can only amend a bill that has been passed!

So, as you can see, this is illegal on multiple levels! This Bill NEVER PASSED the House so it was absolutely illegal for the Senate to even amend a failed bill let alone pass it. That is the whole point of a two house system! If one house can overrule the other, its all over with as far as democracy is concerned!

The US Congress swore an oath before taking their office to support the Constitution of the United States (Article 6). If they do not, then they have commited crimes against the United States.

That is how it works...

[bruce89]

So, as you can see, this is illegal on multiple levels! This Bill NEVER PASSED the House so it was absolutely illegal for the Senate to even amend a failed bill let alone pass it. That is the whole point of a two house system! If one house can overrule the other, its all over with as far as democracy is concerned!

I was under the impression both the Senate and the HoR approved this bill.

That said, Britain does it differently.

[oldsoundguy]

think you missed .. nowhere in that bill is the proviso for raising the revenue .. it is just a spending bill. NOW they have to go back and figure out how to pay for it and that will originate in the House. (why the market has not "jumped on the bandwagon" Holding their breath to find out just who's ox is gonna get gored and you can believe it most likely will be those with the least political clout that will foot the majority of the bill!)

I belong to a club that got a federal grant to build a building to house a series of museum type displays. They got the grant but the funds have never been allocated! So we wait and wait and wait .. it has been over 4 years now since the grant was agreed to and the membership is dwindling as there is no activity!

[toupeiro]

think you missed .. nowhere in that bill is the proviso for raising the revenue .. it is just a spending bill. NOW they have to go back and figure out how to pay for it and that will originate in the House. (why the market has not "jumped on the bandwagon" Holding their breath to find out just who's ox is gonna get gored and you can believe it most likely will be those with the least political clout that will foot the majority of the bill!)

I belong to a club that got a federal grant to build a building to house a series of museum type displays. They got the grant but the funds have never been allocated! So we wait and wait and wait .. it has been over 4 years now since the grant was agreed to and the membership is dwindling as there is no activity!

I dont think I've missed it. As I mentioned, there are no appropriations by law to acquire this 700+ Billion from the US Treasury, which is where they are breaking The First constitutional amendment I quoted, Article 1, Section 9. Because there are no appropriations by law which exist, they are raising the revenue illegally, which is what breaks the point I made: Article 1, Section 7. Finally, House Resolution 1424 clarifies that the senate can only amend a bill passed by the house, which this bill was not.

Governmental Definition of Revenue:
"the increase in assets of governmental funds that do not increase liability or recovery of expenditure. This revenue is obtained from taxes, licenses and fees."


To Recap:
Article 1, Section 7
Article 1, Section 9
House Resolution 1424

Bailout Bill = illegal

I did not pass the bar or anything, but I do take a great personal interest in US History, and the Constitution is a huge portion of that history. These articles of the Constitution do not leave much open to interpretation, its pretty clear and pointed. Everything proposed by this bill directly contradicts the fundamentals of what our country is built apon. I do not believe everything I hear on the news, or read on the web, but I do believe what the constitution says to hold merit.

[bruce89]

Bailout Bill = illegal

Surely it doesn't matter. Reality doesn't conform to the law sometimes.

I'd hate to know what would have happened market-wise if the bill wasn't passed.

[zmjjmz]

I dont think I've missed it. As I mentioned, there are no appropriations by law to acquire this money from the US Treasury, which is where they are breaking The First constitutional amendment I quoted, Article 1, Section 9. Because there are no appropriations by law which exist, they are raising the revenue illegally, which is what breaks the point I made: Article 1, Section 7. Finally, House Resolution 1424 clarifies that the senate can only amend a bill passed by the house, which this bill was not.

Governmental Definition of Revenue:
"the increase in assets of governmental funds that do not increase liability or recovery of expenditure. This revenue is obtained from taxes, licenses and fees."


To Recap:
Article 1, Section 7
Article 1, Section 9
House Resolution 1424

Bailout Bill = illegal
It's either that or a recession.

[toupeiro]

It's either that or a recession.

OK, do you really think there won't be a recession??! Besides, I'll accept a recession if it means leaning our country of the excess and bad policies we've become too complacent about and we come out of it a stronger country. As far as I am concerned, a recession at this point, is unavoidable, especially with all the world market impacts.. But, I am not willing to compromise some of the oldest and most important values of this country to only put us deeper into the hole... We got ourselve into this mess, politicians, corporations and citizens alike. There is no easy button to fix this, and the 700 billion dollar bailout is more a self-destruct button than it is anything else...

[toupeiro]

Surely it doesn't matter. Reality doesn't conform to the law sometimes.

I'd hate to know what would have happened market-wise if the bill wasn't passed.


Well.. If you look at the day following its failure in the house, the market rebounded! Then if you look at the market the day the senate illegally overrode the bill, it plumetted again. Call if a coincidence if you want, but either way it answers your qestion..

[bruce89]

OK, do you really think there won't be a recession??! Besides, I'll accept a recession if it means leaning our country of the excess and bad policies we've become too complacent about and we come out of it a stronger country.


I don't know how the utter ruination of your (and the world's) economy would be a good thing™. Also, I fail to see the attraction of people losing their bank deposits.

[cardinals_fan]

I don't know how the utter ruination of your (and the world's) economy would be a good thing™. Also, I fail to see the attraction of people losing their bank deposits.
In my opinion, they should have broadened the FDIC and left it at that. That keeps people's savings safe, but only costs money in the event that it is needed.

[bruce89]

In my opinion, they should have broadened the FDIC and left it at that. That keeps people's savings safe, but only costs money in the event that it is needed.

There are 2 snags with that.


Some people would still lose (you could argue that would be for the better)
Large numbers of jobs would be lost


I suspect that propping the banks up will be cheaper than paying back depositors after them closing down. Germany alone has £ 1.3 trillion in deposits.

[cardinals_fan]

There are 2 snags with that.


Some people would still lose (you could argue that would be for the better)
Large numbers of jobs would be lost


I suspect that propping the banks up will be cheaper than paying back depositors after them closing down. Germany alone has £ 1.3 trillion in deposits.
Some people deserve to lose. They were dumb, and now they should pay.

Overall, think about what percent of the economy was actually lost from subprime mortgages defaulting. The real problem is that investors have gotten scared, and banks with losses have stopped lending. If they didn't have the promise of a healthy trillion dollar bailout, I think that most banks would fix their own problems. Warren Buffet buying Goldman Sachs stock and Citigroup/Wells Fargo buying Wachovia at discount prices are examples of how large businesses will buy others with bigger problems and fix things themselves. Perhaps the government could have offered a tax credit to companies that purchased ailing rivals...?

[rustybronco]

I dont think I've missed it. As I mentioned, there are no appropriations by law to acquire this 700+ Billion from the US Treasury...

http://www.bohemian.com/bohemian/08.06.08/news-0832.html

No, the evil I'm talking about is the evil that lies buried in one paragraph of the 694-page housing bill that was passed by Congress and signed by President Bush last week. It is the evil of a monstrous national debt, some $10.615 trillion, authorized in Section 3083 of that bill called "Increase in Statutory Limit on the Public Debt."

Look even more closely and you'll see the little-noticed Section 3083. You see a national debt ceiling raised by $800 billion, because we are blackmailed into thinking our economy will collapse if we don't raise it. Imagine that $800 billion spent on our nation's schools, healthcare or decaying infrastructure. Imagine an $800 billion investment in alternative energy and our nation's energy independence.

Again, remember that this bailout insures up to $300 billion in refinanced mortgages. The remainder—$500 billion—could conceivably be spent on other bailouts that loom ahead.

it's already been appropriated...

http://www.govtrack.us/congress/bill.xpd?bill=h110-3221

http://www.govtrack.us/congress/billtext.xpd?bill=h110-3221
Sec. 3083. Increase in statutory limit on the public debt.

They appropriated the money by increasing the national debit under the guise of a housing bill (who wouldn't want save home owners from forclosure right? ;) ) then waited a few months and declared a crisis knowing full well what the monies would be used for.
we have been scammed.

[bruce89]

Some people deserve to lose. They were dumb, and now they should pay.

That is utter hatred.

[cardinals_fan]

That is utter hatred.
I'm getting deeply sick of the babying nature that pervades this country. Instead of suing the state park for not putting up a fence, maybe people should remember not to step so close to the edge.

EDIT: To be a bit more specific, I believe there are three groups at fault for what has happened (and I am part of one of them). I hold all three equally liable. They are:

1) The lenders who offered "low-cost", adjustable rate mortgages to people who couldn't afford them.
2) The people who used these mortgages to buy houses they knew they couldn't really afford.
3) The investors (and the investors in the investors) who put money into supporting this unsustainable housing market.

[zmjjmz]

I'm getting deeply sick of the babying nature that pervades this country. Instead of suing the state park for not putting up a fence, maybe people should remember not to step so close to the edge.

EDIT: To be a bit more specific, I believe there are three groups at fault for what has happened (and I am part of one of them). I hold all three equally liable. They are:

1) The lenders who offered "low-cost", adjustable rate mortgages to people who couldn't afford them.
2) The people who used these mortgages to buy houses they knew they couldn't really afford.
3) The investors (and the investors in the investors) who put money into supporting this unsustainable housing market.
Don't forget the gov't that supported and encouraged this behavior.

[cardinals_fan]

Don't forget the gov't that supported and encouraged this behavior.
I would say that they fit into category #3, because they too have "invested" in the current housing market. But they aren't investors in the most literal sense, so perhaps there should be a fourth group.

[LaRoza]

I closed this thread before, but it was re-opened. In my opinion, it is very political and shouldn't be here (but, admins are admins).

Please do not get political in it, even though it is open.

I am sure no one wants any warnings or infractions, and I don't feel like I should close a thread an admin opened without consulting that admin.

[cardinals_fan]

I closed this thread before, but it was re-opened. In my opinion, it is very political and shouldn't be here (but, admins are admins).

Please do not get political in it, even though it is open.

I am sure no one wants any warnings or infractions, and I don't feel like I should close a thread an admin opened without consulting that admin.
If the pretense of this thread is judged to be inappropriate for the Cafe, it should of course be closed. In any case, I'll write a blog post summing up my opinions soon, so those who are foolish enough to desire my thoughts can hear them there.

EDIT: This would also depend on what you consider 'political'. In any democracy (or even a constitutional republic), everything pertaining to government can be considered political. If the markets and their relationship to any government intervention therefore fit the bill as political, the thread should be closed.

[zmjjmz]

If the pretense of this thread is judged to be inappropriate for the Cafe, it should of course be closed. In any case, I'll write a blog post summing up my opinions soon, so those who are foolish enough to desire my thoughts can hear them there.

I believe there's already a thread for this in NOMGPP, but I might just post another one anyways.

[LaRoza]

If the pretense of this thread is judged to be inappropriate for the Cafe, it should of course be closed.


That is what I said ;)

[kavon89]

http://www.sinfest.net/archive_page.php?comicID=2952

funny but sadly true comic ;z

I'm really surprised that our troubles (that i heard was rooted in housing?) has such a large impact on the rest of the world.

[cardinals_fan]

http://www.sinfest.net/archive_page.php?comicID=2952

funny but sadly true comic ;z

I'm really surprised that our troubles (that i heard was rooted in housing?) has such a large impact on the rest of the world.
That's hilarious. This presentation (http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true&pli=1) is also a funny intro. Be aware that it includes some not-safe-for-work language.

[toupeiro]

I don't know how the utter ruination of your (and the world's) economy would be a good thing™. Also, I fail to see the attraction of people losing their bank deposits.

Guess what, stealing that money from the treasury and breaking legislation isn't going to save our economy from ruination. Don't forget that aside from this, we also have a multi-trillion dollar deficit.. This is just the last jenga block before the tumble in my personal opinion.

I don't see why we should cease to be a democracy because of corporate greed and people agreeing to sign into loans they knew their income could not cover once the variable rate kicked in. I'm not willing to sacrifice this country like that. Ultimately, what I am willing and not willing to do will not determine what will and what won't happen but as long as I don't suddenly vanish, you can bet I'll do everything in my means to raise awareness about it and speak very vocally against it, in hopes that people remember they have that same power. My home lost over 120,000 dollars in equity in one year and continues to lose equity! I didn't qualify for any kind of a stimulus check (which that whole effort was a joke if you ask me), yet I still don't feel this is the right thing to do. I was smart enough not to get into a variable loan, and even if the economy crashes and if I am without a Job, I don't think we should sacrifice this countries principles and fundamental laws! The minute we as citizens agree to that, then we deserve whatever we get.

my .02

[pbpersson]

"lighthearted and enjoyable discussions"

Watching...

This isn't lighthearted and enjoyable?

Would it help if I added a dancing partying smiley? :)

\\:D/

[Tamlynmac]

I hope no one finds this offensive. Like many others, I am very worried and concerned about not only our economy but our countries ability to recover.

One thing that really bothers me is the additional bloat that was added to the bailout. We have been deceived by professionals. They can't even assure us that this so called "Rescue Plan" will work. A massive amount of capital thrown at institutions that made bad investments (loans) in the mortgage market. In our economy either your profitable or your not. Companies acquire other companies without government intervention on a regular basis. Why should the people bail out any institution or business? Does the small business that fails on main street get a government bailout - why not?

I seriously worry about the impact on all of our children and grand children that may actually be the group to shoulder this debt.

Do we really want our government running a national health care system, when they can't even take the responsibility / accountability of watch dogging our economy? Heaven help us.

On the lighter side: How many elected government officials does it take to change 2 light bulbs? All of them - two to stand on the tables and hold the bulbs - the rest to
"Turn the Tables".:lolflag:

[mips]

http://www.theinquirer.net/gb/inquirer/news/2008/10/03/congress-set-sell-country

Just a link, no comments from me.

[Thelasko]

On the lighter side: How many elected government officials does it take to change 2 light bulbs? All of them - two to stand on the tables and hold the bulbs - the rest to
"Turn the Tables".:lolflag:
That's why I'm strictly voting firefighter (http://www.youtube.com/watch?v=VO6DORwBzuA) in our next election.

[Thelasko]

Ladies and Gentleman:

I should probably wait until the dust has cleared to say this, but I think the market has reached the bottom. Why am I saying this?

Think if this financial crisis as a MASSIVE accounting error. For the past five years, we have overstated how much money we have. Once the markets were aware of this error, they corrected it.

Five years ago, the DOW was at 8000, and today it is once again.

If the market continues to fall, we will be in much bigger trouble. It will become more than a correction, it will be a full failure of the financial markets.

Thelasko

[TBOL3]

Yep, didn't it fall another 500 points again today?

Hopefully we can get it up there again.