RSSGovernment Socialist Bailout: Wasn’t the Point of the Bail Out Package to Stabilize the Markets?
Wasn’t $700 billion supposed to stop this from happening? This is why quick fixes do not work.
The government, both the President and members in the House and Senate told the American people that the purpose of the $700 + billion bail out was to stabilize the markets. As Michelle Malkin points out that is hardly the case.
- Markets in Asia tumble amid fears of growing financial turmoil
- London plunges as banks pump billions into market
- US STOCKS-Futures tumble as credit woes fan global rout
- European Turmoil Hits U.S. Stock Futures
European, Asian markets plunge on crisis fears
Investors took scant comfort from Washington’s passage of a US$700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry on Friday because of the uncertainty still hanging over the details of the deal and the degree to which it will help.
It would appear that Asian investors are skeptical of the bail out plan. This is wjy throwing money at a problem never works. A comprehenisve plan and method to fix the problem which created the crisis is needed. That and a couple of people behind bars. So much for the government having a clue that you do not correct capitalism with socialism.
Just when America thought that $700 billion was the answer to the American economic woes, the “Fed sees Lending to Companies, States as Next Crisis Fronts.” I guess the America tax payer is supposed to bail out everyone.
Companies from Goodyear Tire & Rubber Co. and Duke Energy Corp. to Gannett Co. and Caterpillar Inc. are being forced to tap emergency credit lines or pay more to borrow as investors flee even firms with few links to the subprime-mortgage debacle. California Governor Arnold Schwarzenegger says his and other states may need emergency federal loans as funding dries up.
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24 Responses to “Government Socialist Bailout: Wasn’t the Point of the Bail Out Package to Stabilize the Markets?”
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Quick money throwing fixes never work.
Hhmmmpppph! Or as the Jewish would say,
“Oy Vey!” SM is right though—we saw this one coming~~throwing good money after bad money isn’t always the answer appparently.
Barney Frank—-CAN YOU HEAR US?? What a tool.
Let’s track down the “experts” who told us, smugly, that the impact of the subprime mortgage scandal would be limited. So much for them, huh?
I don’t pretend to know more about the economy and its workings, or even as much, as does the Federal Reserve. But I’ve always thought that whenever government identifies the cause of something, its diagnosis is rooted in obsolete thinking and is always out of date.
Don’t know where I’m going with this train of thought … but it looks as though Plan A of the ‘experts’ isn’t solving the problem. The commentators just say that the markets are focusing on the swift downhill path of our economy, not the ‘quick fix.’
What are we going to do if we can’t continue to attract the foreign investment that has been allowing our deficit spending for so long?
I’d like to have the states handle more of their own concerns. Unlike the federal government, the states don’t print their own money. So perhaps, with more power in state governments, fiscal sanity could be restored.
Perhaps.
On Monday morning, the Dow Jones industrial average went below 10,000 for the first time in four years. The market fell 2% in the opening moments.
Tom Joad, you aren’t gone yet ….
(In case anyone here doesn’t know, Tom Joad was the protagonist in Steinbeck’s “The Grapes of Wrath.”)
Wall Street tumbles amid global sell-off
AP
1 minute ago
(Oct. 6)
NEW YORK – Wall Street tumbled Monday, joining a selloff around the world as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments. The Dow Jones industrials skidded more than 300 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain.
The markets have come to the sobering realization that the Bush administration’s $700 billion rescue plan won’t work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France’s BNP Paribas agreed to acquire a 75 percent stake in Fortis’s Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
The Federal Reserve also took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks’ reserves and will expand its loan program to squeezed banks.
(end of article)
So the government’s answer is to lend the banks even more money. Are we seeing a house of cards?
I think the UFO that Kucinich saw was really a vulture.
http://www.wilytrax.com
2 Things to remember:
1.) When you are sick, sick enough to go to the doctor and get an injection of antibiotics – it’s not an IMMEDIATE cure. Takes several hours to begin to feel markedly better… This problem wasn’t created overnight, nor will it be fixed overnight. Will prolly take min of 15-30 days to begin to feel the trickle down improvements.
2.) They should have made it clear that this was only a THEORY of what would improve the markets -not the absolute remedy. There was a chance that this infusion would NOT work. They couldn’t risk telling everyone that, we were already in a desperate place, something HAD to be done. Doing nothing would have been CERTAIN death. Nevertheless, we need to give the market time to respond and repair.
Richard says:
I’d like to have the states handle more of their own concerns. Unlike the federal government, the states don’t print their own money. So perhaps, with more power in state governments, fiscal sanity could be restored.
Perhaps
*****************************************
Sounds like a good idea, Richard. Thing is…will we live long enough to see this in our lifetime. As long as the BOZOS up on Capital Hill…namely Barney Frank and Nancy Pelosi are in charge….I see more of the same. At first I had great faith in her- now I am severely disappointed and not just because she is a Dem. She has, in my eyes anyway—caused more harm than good. Congress truly needs to be overhauled once again.
**McCain/Palin ’08
CAN WE GET OUR MONEY BACK?
Here is something else to try:
For the next six months, lower everyone’s mortgage rate by 1% point.
The lowered payments will:
1.) Make it easier for people who are behind to get caught up.
2.) Easier for caught up people to make two payments – or use the extra money to funnel back into the economy by paying down credit cards or helping with heating utilities etc.
Right now the Dow is down about 7% and the Nasdaq about 8%. The plunge has been nonstop today.
Aren’t we glad that we got the bailout … without that, the market would be in a real mess.
Meanwhile, there’s an AP article out … even as Lehman Brothers was pleading for federal help, its CEO scoffed at ideas that executives should not get millions of dollars in bonuses.
Not cut their pay, mind you … get BONUSES.
Wasn’t the rule that extraordinary performance, and that alone, justified bonuses? Well, their performance was extraordinary enough.
The board of directors and CEO of that company are my first suggestions for jail terms.
WASHINGTON – Days from becoming the largest bankruptcy in U.S. history, Lehman Brothers steered millions to departing executives even while pleading for a federal rescue, Congress was told Monday.
As well, executives who feared for their bonuses in the company’s last months were told not to worry, according to documents cited at a congressional hearing. One executive said he was embarrassed when employees suggested that Lehman executives forgo bonuses, and cracked: “I’m not sure what’s in the water.”
The first hearing into what caused the nation’s financial markets to collapse last month, precipitating a $700 billion bailout, opened with finger-pointing and glimpses into internal company documents from Lehman’s chaotic last hours.
Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, said the giant investment bank was “a company in which there was no accountability for failure.” Lehman’s collapse set off a panic that within days had President Bush and Treasury Secretary Henry Paulson asking Congress to pass the rescue plan for the financial sector.
Richard S. Fuld Jr., chief executive officer of Lehman Brothers, declared to the committee “I take full responsibility for the decisions that I made and for the actions that I took.” He defended his actions as “prudent and appropriate” based on information he had at the time.
“I feel horrible about what happened,” he said.
Waxman questioned Fuld on whether it was true he took home some $480 million in compensation since 2000, and asked: “Is that fair?”
Fuld took off his glasses, held them, and looked uncomfortable. He said his compensation was not quite that much.
“We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders,” he said. Fuld said he took home over $300 million in those years — some $60 million in cash compensation.
Waxman read excerpts from Lehman documents in which a recommendation that top management should forgo bonuses was apparently brushed aside. He also cited a Sept. 11 request to Lehman’s compensation board that three executives leaving the company be given $20 million in “special payments.”
“In other words, even as Mr. Fuld was pleading with Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation,” Waxman said before Fuld appeared as a witness.
The government let Lehman go under Sept. 15, only to bail out insurance giant American International Group the next day, in a cascading series of financial shocks and failures that put Washington on track for the multibillion-dollar rescue starting the end of that week.
Waxman described that plan as a life-support measure. “It may keep our economy from collapsing but it won’t make it healthy again,” he said.
That sentiment echoed on Wall Street, where the Dow Jones industrials sank below 10,000 on Monday for the first time in four years. Investors fear the crisis will weigh down the global economy and the bailout won’t work quickly to loosen credit markets.
The rescue plan, now law, was so rushed that the usual congressional scrutiny is only coming now, after the fact.
“Although it comes too late to help Lehman Brothers, the so-called bailout program will have to make wrenching choices, picking winners and losers from a shattered and fragile economic landscape,” said Rep. Tom Davis of Virginia, the committee’s senior Republican.
Waxman said that in January, Fuld and his board were warned the company’s “liquidity can disappear quite fast.”
Despite that warning, he said, “Mr. Fuld depleted Lehman’s capital reserves by over $10 billion through year-end bonuses, stock buybacks, and dividend payments.”
Waxman quoted Fuld as saying in one document, “Don’t worry” to the suggestion that executives go without bonuses.
That suggestion came from Lehman’s money management subsidiary, Neuberger Berman. Waxman quoted George H. Walker, President Bush’s cousin and a Lehman executive who oversaw some Neuberger Berman employees, as responding with a dismissive tone to the idea of going without bonuses.
“Sorry team,” he wrote to the executive committee, according to Waxman. “I’m not sure what’s in the water at 605 Third Avenue today…. I’m embarrassed and I apologize.”
Rep. Elijah Cummings, D-Md., said: “I wonder how he sleeps at night.”
Fuld said in his statement that the company did everything it could to limits its risks and save itself.
“In the end, despite all our efforts, we were overwhelmed, others were overwhelmed, and still other institutions would have been overwhelmed had the government not stepped in to save them,” he said.
So how is all of this going to work in the election?
Will Obama persuade the American people that McCain is tied to Bush and the powers that be in Washington, who sat by and let all this happen?
Or will McCain persuade us that Obama’s liberal friends in the Senate (Frank, Dodd, et al) should have been exercising their regulatory authority and failed to do so … probably spending their time chasing campaign contributions … and that a true whole new crowd is needed in DC, the “maverick” government that he espouses?
Or will we be so disgusted that many more people will turn to third parties (Ralph Nader is crowing about how the market debacle proves he was right all along), or simply not vote?
Just remember … don’t blame me … I nominated moderator Klassen.
Richard,
Who says they’ll be an election? Possible scenario: “terrorist attack,” martial law, and Bush is given total power forever.
Of course, our votes don’t count anyway. I look for McCain to be elected. They need a hawk to conquer the Middle East for Israel. Palin has already said she will go to war with Russia. The wicked media has already called Obama the next JFK, so if they make him President, he may receive the same fate. This will start their “helter skelter” race war which will also lead to martial law. There are many ways this could play out, and they are all bad for us.
The Dow, which you see plunging, is NOT a supply and demand market as you’ve been told. All stock prices are UNILATERALLY controlled by just one man, the specialist, and he pushes the stock up or down at will. Bottom line: they can push the market down 4000 points any day regardless of public buying or selling. The NYSE is a completely rigged game. If the market crashes, why will it crash? Is it because the public is selling, as we will be told? NO, it’s because the EXCHANGE INSIDERS have already sold their stock and established their short positions. As the public finally sells off at the bottom, the insiders will cover their shorts.
Richard,
I just looked at the Dow chart today. If you can see it, notice how they go down to exactly the 9500 level, and then in the last hour, they go back to precisely the 10000 level. This shows price fixing. What are they doing? Without checking the volume, it looks like they are “cleaning their book” (triggering sell orders placed by public) down to the 9500 level and then they went up in the last hour 500 points to unload the inventory to buyers. This is a possible way of looking at this. If this is the case, then they are now prepared to go lower because they have picked up stock and sold it off in the last hour. I’m just giving an example of how the market really works.
I love it how Barack (though McCain isn’t perfect either) wants to setup a “windfall profits” tax on oil companies to punish them for their success…
http://online.wsj.com/article/SB121780636275808495.html?mod=opinion_main_review_and_outlooks
Yet give billions away to companies and banks that really shouldn’t be in business in the first place if they need tax money to stay alive.
Now here’s a candidate that knows what their talking about:
http://www.huffingtonpost.com/bob-barr/economic-chaos-increases_b_132195.html
It seems anxiety from the financial crisis is reaching new highs, but the tipping point for one individual came at the Lehman Brothers gym in the midst of the company’s collapse.
While former Lehman CEO Richard Fuld was testifying before the House Oversight Committee Oct. 6, CNBC reported he had been punched in the face at the Lehman Brothers gym after it was announced the firm was going bankrupt. CNBC and Vanity Fair contributor Vicki Ward said Fuld was attacked at the gym on a Sunday following the bankruptcy.
“Frankly, I sat there and listened and I’m with the guy who apparently, the day before Barclays announced they were coming in and Lehman had already filed for bankruptcy, went over to him in the gym and punched him because that’s how I feel when I, you know, when I watched that,” Ward said on the Oct. 6 “Power Lunch.” “I didn’t think he was contrite at all, I thought he was arrogant.”
Ward confirmed previous reports about the incident that reportedly occurred Sept. 21 and said the information came from “two very senior sources.”
“From two very senior sources – one incredibly senior source – that he went to the gym after … Lehman was announced as going under. He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold. And frankly after having watched this, I’d have done the same too.”
Ward determined Fuld deserved the beating based on his testimony before the committee.
“I thought he was shameless,” Ward said. “I thought it was appalling. He blamed everyone. He blamed, as you say, ‘naked short sellers’ over and over in case we didn’t get the point, when in fact hedge funds like Harbinger had money locked up in Lehman and was shorting it to try and make the most of the money that they already had. He blamed everybody but himself.”
Lehman Brothers filed for bankruptcy in September 2008 and its assets were later snatched up by the British bank Barclays for $1.35 billion, which included Lehman’s Midtown Manhattan office tower with a $960 million price tag.
In 2006, Fuld was named #1 CEO in the Brokers & Asset Managers category, by Institutional Investor magazine.[citation needed] In 2007 he received a $22 million bonus.[5]
Fuld serves on the board of directors of the Federal Reserve Bank of New York and is a member of the International Business Council of the World Economic Forum and the Business Council. He also serves on the Board of Trustees of Middlebury College and New York-Presbyterian Hospital, as well as on the board of directors of the Robin Hood Foundation.[6]
Following Lehman Brothers’ filing for bankruptcy, New York Times columnist Nicholas D. Kristof awarded Fuld his annual Michael Eisner Award “for corporate rapacity and poor corporate governance”.[7]
Fuld will testify at a congressional hearing early October 2008[8].
too funny.. on the board of Directors for the Robin Hood Foundation.. mmmm didn’t Robin Hood take from the rich and give to the poor?
Now tonight they are saying on tv..that Barney Frank was having a romantic long term relationship with an executive Herb Moses from Fannie Mae back in the 90′s when all this stuff first started.. Don’t think I have ever been so sick of govt as I have been the past month.
Bush said today it will take time for this 700 billion to work..probably after the same one’s who got us here, take their cuts again, there should be 150 bucks left to put in this mess. To hear these people on tv talking harshly to Mr. Fuld when they sat on their butts for years and let it go on too, makes one sick. One set of laws for the middle working class and none for the upper class..
Heard tonight.. Mr. Fuld made 300 million in the last 8 years working for Lehman’s.
What, on earth, did they need with all those wooden arrows?
Rum?
.
Something tells me, this is only the beginning.
.
Thanks, George Bush, for playing that
International Fear card…
again and again and again.
.
The man that cried, “WOLF”
.
I agree with ALL of you!
Ofcourse, I was hoping that the house would get
some backbone and stand up to the president and
find another solution…
What do I know?
.
We’ll be paying into the ‘George Bush Trust Fund’
til the day we die…
and, then some.
.
I think that if we cry “Bush, Bush, Bush, Bush,” we are making a terrible mistake.
Who are the natural allies of big-spending government? The Democrats.
And when the Bush administration tried to interest Congress in clipping the wings of Freddie Mac and Fannie Mae, who were opposed?
Democrats like Chris Dodd (head of the Senate Finance and Banking Committee, which was supposed to be regulating the financial industry, and who was a major recipient of campaign contributions from it) and Barney Frank.
I heard tonight that the approval rating for Congress now is only 13%, nearly a record low.
That’s far lower than for Bush or for either presidential candidate.
This is why I think we need to reform the governmental system. The best way of reducing Congress’ ability to screw us all is to reduce its ability to fork out money.
That in turn will mean a total revamp of our government system. But I for one would like to see each state get a lot more autonomy in how it runs things, how it chooses to use its resources … and cutting out a lot of the federal grant process, meaning that ALL the states would keep more of their money to start.
We could only be a better country for it.
This is not, of course, to champion Bush. But those in Congress who are pointing the finger and screaming the loudest are, in my opinion, hoping that they can thereby evade the spotlight of public indignation themselves.
Let’s not let them get away with it.
And let’s not let them shout, “Who knew that these CEOs were getting away with all this?”
Who knew? You people in Congress knew damn well, but you wouldn’t upset the applecart that steered all the benefits and money to YOU.
And we the people wind up paying the price.
This is ALL you need to know about what is the major cause of our economic downturn:
Subject: Clinton points figure at the Democrats!
Whole article interesting
See the last two paragraphs for Clinton’s statement.. :>)
Lawmaker Accused of Fannie Mae Conflict of Interest Friday , October 03,
2008
By Bill Sammon
ADVERTISEMENT
WASHINGTON –
Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.
So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.
Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank’s relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.
Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.
“It’s absolutely a conflict,” said Dan Gainor, vice president of the Business & Media Institute. “He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?
“If this had been his ex-wife and he was Republican, I would bet every penny I have – or at least what’s not in the stock market – that this would be considered germane,” added Gainor, a T. Boone Pickens Fellow.
“But everybody wants to avoid it because he’s gay. It’s the quintessential double standard.”
A top GOP House aide agreed.
“C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?” the aide told FOX News. “No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws.”
Frank’s office did not immediately respond to requests for comment.
Frank met Moses in 1987, the same year he became the first openly gay member of Congress.
“I am the only member of the congressional gay spouse caucus,” Moses wrote in the Washington Post in 1991. “On Capitol Hill, Barney always introduces me as his lover.”
The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses “helped develop many of Fannie Mae’s affordable housing and home improvement lending programs.”
Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.
Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants. In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of today’s economic crisis.
“I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac,” Clinton said recently.
Bill Sammon is FOX News’ Washington Deputy Managing Editor.
It’s funny, every single American in bed with the tree-hugging, pantie biting liberals, blames our economy on the Iraq war when Globally, people are suffering as well….
Nice job Barney Frank…..now it’s time for you to get on your knees to the American people not your boyfriend(s) at key financial institutions that backed bad mortgages.