Posted on 09/23/2008 8:16:06 PM PDT by Wuli
In my view, the actions of Paulson and Berneke could be self-fulfilling prophets of the crisis of confidence they claim to be trying to head off.
They are creating a psychology that if their high-handed action is not taken, things cannot possibly get better.
Whether or not that belief is true, if enough investors and those who need capital accept that idea, then their behavior - how that belief will make them change their financial behavior - will make the crisis that Paulson is predicting come true - not because it has to; not because there are no valid alternatives to his proposals.
His own mood about the certainty of what he wants to do, if he’s not allowed to do it, could help create the very crisis of confidence, crisis of trust in the financial system, he claims he is trying to prevent.
Sorry Mr. Paulson, you are not generating confidence.
And, if Paulson's shouting fire in a crowded theater was not enough; I am always wary when Congress, either on its own or on request, tries to make major, historic changes in a hurry. No good has ever come of it, and much ill has.
Paulson should be sent packing back to Goldman Sachs, where he can work on way to keep them solvent without access to the treasury he now controls.
What I get from their predictions is that they are fear-mongering, and their agenda is other than what they say.
The fear mongering is obvious. Question is what are they really thinking?
Their biggest error is sounding far too confident in predicting scary scenarios which are largely unpredictable.
Sorry ... the “New Tone” is in effect.
I agree... Bush should ask them to resign. Unfortunately, Bush supports their corrupt strategy...
By all means, let’s have the clowns in Congress and Wall Street that created this mess come up with the solution.
Not.
Paulson is ex-CEO of Goldman Sachs. Conflict of Interest—end of story. He helped create this mess as CEO and now he has the solution.
Not.
He will have power to disperse $ 700 billion of newly created money. To whom? How? Under what conditons?
Oh that’s right—he does not want to have any oversight or review by anyone but him.
Not.
We are going to give more power to an unelected Cabinet official with less accountability to the people than we would to the President.
Not.
Members of Congress like Frank, Dodd, Schumer—who created this mess, are going to vote on this?
Not.
This is your posterity and your posterior that these clowns are ready to send down the river.
Call your members of Congress tomorrow while we still ghave a country left and tell them no bailout.
My solution—get all the Wall St. and Banker heads and Bernanke in room and tell them no one leaves until they come up with a rational solution that spreads the pain and the risk amongst all of these jerks. They all made money on this con game and now they can all take a hit for the home team of they want to stay in business.
As for me, the American taxpayer, I’ve already contributed $ 900 billion in bailouts of all kinds this year so far.
Enough is enough.
According to the left in this country, we're already in a recession anyways!
Did you happen to hear that, MISTER Paulson, you sanctimonious and unindicted former Goldman thief?
While I don’t pretend to understand the hill of sh*t that these clowns have created, including congress, my gut instinct is uneasy about their manipulative fix. It really reminds me of someone trying to sell me a snake oil remedy.
A very small change could calm things down quite a bit.
End the demand that every “investment” of every type be given a current “mark to market value”, on the books.
It is not simply that many “derivative” and “credit swap” investments have some amount of possibly inflated-valued mortgages under them, it is that even in a “good” market today’s “mark to market” value is not relevant to what the seller or the investor expect the potential value to be for those type of investments.
Ending the “mark to market” rule would allow markets themselves, markets that need to judge the firms that have these investments, to ask for clarification and judge for themselves if that clarification satisfies them. Those markets can then find a basis for selling, buying or dumping any of those investments.
But for now, the “mark to market” rule makes the assumption that they will never have good value, which requires the regulatory constant lowering of the value of “capital” some institutions hold and constant raising of the value of “debt” others hold; when in fact, it will only be in time that any final value in many of the derivatives will be, and would have been anyway, settled.
We are trying to apply old fashioned rules to a new class of products that those rules were not designed for.
Paulson at Treasury, Cox at the SEC and Berneke at the Fed, could end half the problem by dumping the mark to market rule; which would restore some sanity to capital and debt valuations on the books, restoring some basis for greater capital liquidity - without “bailing out” anyone.
Light the torches and sharpen the pitchforks.
And we need to arrest every investment banker that sold loans they knew they could never collect and to arrest every home buyer who lied about their income in order to defraud the lenders into giving them bad loans.
When I bought my first home I had to prove to the lenders that I really didn't need a loan.
These same institutions that would foreclose on a mortgage on a grieving widow at the drop of a hat are now crawling on their hands and knees and begging the widow and her fellow taxpayers to bail them out. Spit!
Quite frankly what we need in this nation is a good old fashioned depression. Maybe then we can learn to save instead of borrow and we can learn that when you do borrow money you'd better be ready to pay it back (or someone named Guido will come and break your legs).
Hey George, put ol’ Brownie in there.
Or get Harriet Meyers.
Couldn’t agree more. Something smells really bad here, especially this “do it by 5pm today, don’t read it, just sign here” fear-mongering.
Just a month ago, President Bush was assuring us all that the economic fundamentals were strong and the economy as a whole was resilient. Tough times, but we’d weather them. I’m assuming he consulted with his advisors (including Bernanke and Paulson) before he repeatedly made these statements over the past weeks and months.
And now suddenly, WHAM!, this same top-notch talent is telling us the country and world will be in ruins if we don’t sign something we won’t even have time to read by Friday.
This power grab by the Treasury Secretary also makes me very uneasy. The problem with a power grab like this is it becomes impossible to reverse. And sooner or later, maybe not for decades, but sooner or later, the dems will get back in the White House. That’s my litmus test for any power grab like this - would I want the ‘other side’ to have this authority?
We live in very scary times.
I came across this video as I jumped around youtube...
http://www.youtube.com/watch?v=bC1Dt9byPj8
It’s from May of this year...notice how the FOX business bozos chuckle at the thought that there is credit trouble on the horizon....quote “Hank Paulson may be right, the worst is over” ..yuck yuck yuck
Dear Secretary Paulson:
As a representative of the Bush Administration, you have proposed a financial bailout program of $700 billion – over $2,000 for every man, woman, and child in the country. We are appalled that your proposal puts the cost of this bailout on average Americans; that it contains no provisions reversing failed deregulatory policies; that it allows executives at these failed institutions to continue to make exorbitant salaries and bonuses, and that your proposal contains no help for average Americans who themselves are facing severe economic hardships.
While the Administration has quickly rallied to help Wall Street, it has ignored the needs of the declining middle class. Since President Bush has been in office the wealthiest people in this country have made out like bandits and have not had it so good since the 1920s. The top one-tenth of one percent now earn more income than the bottom 50 percent of Americans and the top one percent own more wealth than the bottom 90 percent. Incredibly, the richest 400 people in our country saw their wealth increase by $670 billion during the Bush presidency.
Having mismanaged the economy for 8 years while continually insisting that, “The fundamentals of our economy are strong,” the Bush Administration, six weeks before an election, wants the middle class of this country to bail out Wall Street to the tune of one trillion dollars. Meanwhile the wealthiest people, those who have benefited most from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd.
Any plan to clean up the mess on Wall Street must:
In closing, we believe it is appropriate to act quickly to address any systemic danger to our economy. But that does not mean that we need to give a blank check to the financial sector.
Sincerely,
Senator Bernie Sanders
Citizen Co-Signers
__________________________________________________________
Typical liberal: you can't see the names of those who have signed. I'm sure all the names will be as legit as Cook County on a Tuesday in November.
So, I signed a name (Congress IsaBunchOfIdiots) and his stupid form took it. I respectfully suggest that FReepers let this SOB have it
Exactly!
And these are the same guys who supposedly have the know-how to tell us how to get out of this mess now!
Note to self: tune in to see what that windbag Kudlow has to say these days.
“But for now, the “mark to market” rule makes the assumption that they will never have good value, which requires the regulatory constant lowering of the value of “capital” some institutions hold and constant raising of the value of “debt” others hold; when in fact, it will only be in time that any final value in many of the derivatives will be, and would have been anyway, settled.”
There is some validity in what you say, but the credit market is frozen precisely because the banks know all too well how rotten their own assets are and can only infer that all the other banks have equally fetid assets. Thus there is a general unwillingness to transact. So, yeah, it will take time for the markets to calm down, but time is not especially available. And, those financial entities that do not have the staying power to ride it out for time uncertain will HAVE to liquidate, and recent marks have not been pretty. .06, .11, .22, these are grotesque haircuts! Did I mention that in some cases, the sellers reportedly had to finance those sales as well? So it’s like a worldwide game of chicken.
Plus, there has been massive fraud, so there is little or no appetite for these assets from folks not already heavily engaged. Korea Development Bank balked at buying Lehman. Whatever his name is, Mr Citigroup of Saudi Arabia, said “no mas”, having been burned by his earlier stake. So you tell me, who goes first? What’s needed is transparency, leading to rebuilt confidence, and the Hanktator’s plan does NOTHING in this department. In fact, it continues the opacity. It is deadly dangerous, never mind being a de facto overthrow of the Constitution via that “no recourse, no review” clause which scares the crap out of me. And IMO, it should do the same to you and anyone else who calls themselves a conservative.
Meanwhile, we have seen something in the markets this week, before Friday, that we do not want to see: We saw the markets fall BUT we did NOT see money seeking safe haven in bonds, which is what we expect. We saw yields RISE, meaning bonds sold off. This means capital flight, and frankly, with the rule changes Hank has inflicted upon the markets, I’m not surprised. Shocked to see it, but not surprised. You can be a bull or a bear but you do not want to see capital flight out of your domestic market. That’s curtains. So bottom line, this $700 bil thingy is IMO throwing vast money into a tornado which will cheerfully suck it up, and it will simply end up in the hands of Hanks’ pals. Sorry to sound conspiratorial, but this guy has lied. He has said this thing was done 4 or 5 times, he didn’t see any of this coming, and he has unquestionable ties and loyalties to the Wall St bankster class. So he’s not the total genius. And if he’s not the total genius then maybe he shouldn’t be trusted with mankind’s biggest blank check and maybe he shouldn’t be walking into Congress and holding his BAZOOKA up to their heads and demanding they agree to abdicate the Consitution. That’s a terrorist move if you don’t mind me saying so.
lol at myself, my screen cut off the B in Bush, and I thought it said Rush must ask him to resign.
Maybe that would work :)
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