Posted on 10/01/2008 7:43:30 PM PDT by Aria
s America created its own variety of communism with the U.S. Treasury Department’s bailout of two beleaguered government-sponsored enterprises (GSEs), Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE)? According to Rogers Holding CEO Jim Rogers, the answer is yes.
“America is more communist than China is right now,” Rogers told CNBC Europe’s “Squawk Box Europe” September 8. “You can at least have a free market in housing and a lot of other things in China. And you can see that this is welfare for the rich. This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters."
Rogers, known for launching the Quantum Fund with left-wing heavyweight George Soros, said the bailout was not benefiting homeowners or helping average citizens improve their standing for a home mortgage.
“It’s not bailing out the homeowners who are in trouble, by the way,” Rogers said. “It’s not bailing out people who want a mortgage – it’s just bailing out financial institutions. This is not my idea of the way things are supposed to be, but if that’s what America wants, you know, it can elect people who are going to do it. I think it’s a mistake.”
The Rogers Holdings CEO had little confidence that Democratic presidential nominee Sen. Barack Obama, Ill., or Republican vice-presidential nominee, Alaska Gov. Sarah Palin, would be able to do anything to steer Fannie or Freddie on a more stable path.
“This is a big huge mess and neither one of them has a clue as to what to do next year,” Rogers said. “Bank stocks around the world are going through the roof, that’s because they’ve all been bailed out. You don’t see the homeowners in Kansas going through the roof because they’re not being bailed out.”
Rogers had previously called for Fannie and Freddie to be allowed to go bankrupt. “They should not be bailed out,” he told “Worldwide Exchange” July 15. “This is outrageous. Who are these people who are taking our money and doing this and ruining America?”
“Let the patient go bankrupt,” he said. “We have courts in America; they will be reorganized.”
Fannie Mae and Freddie Mac were “wove a mantle of invincibility” through lobbying according to a September 8 Wall Street Journal “Deal Journal” blog post. According to the Journal’s Heidi N. Moore, the mortgage giants had $170 million in lobbying bills in the past decade and spent $3.5 million on lobbying just in this year’s first quarter, spreading their largesse among 42 outside lobbying firms.
Earlier on September 8, CNBC “Mad Money” host Jim Cramer called the bailout “a homerun plan” on MSNBC’s “Morning Joe.”
I thought Cramer was against it.
I have heard people say that China is now an economically freer nation than America. They were saying that before the bailout.
I don’t know where Cramer is on this - this is Jim Rogers who, despite being a partner with Soros, has been very prescient and profitable in the financial world.
And one can still smoke in restaurants, eat transfats, have plastic bags and drink alcohol before riding their bicycles there.
“
CEO: Fannie/Freddie Bailout Makes America ‘More Communist than China’
“
I can’t recall the title/author, but I did read the liner notes on
a book about China and the USA.
The premise of the book is that with all the business deals, the
Chinese have changed the USA much more than the USA has changed China.
(at least on a business level...the lure of the huge markets make
the USA businesses just curtsy and bow to the Chinese)
until the next olympics...then they’ll kick you out and poison your toothpaste
I didn't think I could feel worse after the vote tonight, but now I do. I give up, I'm going to bed.
From the article -
Earlier on September 8, CNBC “Mad Money” host Jim Cramer called the bailout “a homerun plan” on MSNBC’s “Morning Joe.”
And poison your babies.
He is not an “acolyte” of Soros. He has a portfolio manager and trader for him, but he does not share Soros’ ideology.
I won't live until the next Olympics in China.
Meanwhile, it would be nice to be able to smoke a cigar or cigarette and have a beer somewhere (at the same time).
Darned tootin'!
Some poor pregnant waitress is paying taxes so some incompetent executive somewhere can make a yacht payment.
Maybe more truth like this.
Exactly!
Companies operate in bankruptcy and emerge from it. While in bankruptcy, the government can trade some of their bad paper for equity, essentially recapitalizing with us (the taxpayers) owning the institution that comes out of bankruptcy. Then, there should be a pre-scheduled sale of the stock over time with the proceeds going back to the Treasury.
The great advantage of this plan is that the management and owners who benefited during the good times are cleared out of the jobs and capital respectively. That is the market teaching a lesson that won't be forgotten soon.
Anything short of 100% shareholder losses and fired management is a prescription for repetition of this same crisis in just a few more years. Nobody will learn.
Perhaps.
I’m not really a class-warfare guy, but this “bailout” is really a transfer of wealth from relatively prudent less wealthy taxpayers to the imprudent rich.
That frosts my gourd.
I don’t really know but I’m guessing that Rogers track record is way better than Cramer’s, who as I recall was recommending Wachovia recently.
It’s not socialism. It’s feudalism. The elite v. us.
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