Posted on 10/05/2008 6:18:18 AM PDT by Daffynition
Fears are mounting that many Wall Street banks and financial firms will refuse to participate in the US government's $700bn bail-out package, leaving global markets and world economies in a perilous state for months to come.
'There is a growing feeling that banks ... might instead decide to tough it out,' said Thomas Caldwell, chairman and CEO of Caldwell Financial, a $1bn-plus fund manager.
For the past two weeks all eyes in the market have been focused on US Congress and its attempts to pass Treasury Secretary Henry Paulson's bail-out package - a bill to allow the US government to buy up to $700bn of toxic mortgage-related assets from American banks, which would in theory free the credit markets and set the gears of global commerce spinning once more.
Last Monday, after the bill was thrown out by the House of Representatives, more than $1 trillion was wiped off the value of US stocks as the market was gripped by panic. The bill was passed on Friday afternoon, however, after the inclusion of $149bn of tax breaks and strict rules for participating banks.
But Wall Street analysts, believe the addition of so many terms to the bill might deter potential participants.
One of the least attractive elements is a section designed to curb executive pay at banks that participate in the bail-out package. These include limiting stock-related pay and banning 'golden parachutes' for executives.
'I think this hodge-podge of regulations and rules will be enough to put many [chief executives] off participating,' Caldwell said.
[snip]
(Excerpt) Read more at guardian.co.uk ...
This is where I think these *bad mortgages* can be re-written the right way .... one-by-one, and the holders suffer the consequences for their stupidity, if necessary... without a government bailout.
Or what is the PC term now, *rescue*? PFFFFT!
If you;ve ever worked somewhere where Chairman and CEO are the same, you will recognize how atrocious it is. CEO is allowed to run the company into the ground without any sort of accountability. An independent board might just fire a rotten CEO but one controlled by the CEO never will. How else do you explain chumps like Jeff Immelt keeping his job at GE? Stock is down almost 70% since he took over, he’s still in charge and nobody can get rid of him.
This is where I think these *bad mortgages* can be re-written the right way .... one-by-one, and the holders suffer the consequences for their stupidity, if necessary... without a government bailout.
Or what is the PC term now, *rescue*? PFFFFT!
Paulson and Bush just wanted $700 billion in used, unmarked bills, to hand out to Paulson's cronies with no strings attached and no accountability.
If the minimum control and oversight in the bill that passed is enough to keep some multi-billion dollar companies from taking taxpayer handouts then they aren't hurting as badly as we were told.
Thanks for that.
No, but they are the only two options that end at the White House. . .
We all have to sacrifice for the good of the nation.
So, if they’re not going to take the money, I will.
You’ll thank me later.
The free-market system played a large role in creating this mess with CDOs and CDSs. Ratings agencies lied about the quality of bonds. I’m sorry, but the free markets failed here. And the greed of executives was a critical aspect. They would play games to maximize their pay and the consequences to the world financial systems be damned. To blame government for all of what we are seeing is to live in as much denial as the Dems who only blame the private sector and deny their role in Fannie and Freddie.
What McCain should have done was come out against the “second” bill-which the Senate approved. That version of the bailout was loaded with pork and earmarks. He could have then used his vote against it, and obama’s vote for it as another example of wasteful washington spending-at a time when this country can not afford it.
Personally, I wish he would have. Politically, I can see where he simply could not have. He was screwed by too many pubbie Senators. The final vote was 74 for. It would have accomplished nothing but to allow McCain to get shredded.
I see that Citibank has just sued to stop the transfer to Wells Fargo. The Arabs who control Citibank must be bent out of shape.
He’s not a Maverick, he’s a flaming Pinto.
This would not be a bad thing.
In this case the free market created an interlocking system of derivatives capable of completely obliterating the global economy as we know it. Warren Buffet himself called them finacial weapons of mass destruction. The rest of the world is not interested in your end game of financial destruction as proof the free market works. You approach destroys the village to save it. No idea or concept works by itself, and free markets are no exception.
Good. I’ve got friends (and an investment) in a community bank that has NEVER made a sub-prime loan, even at the height of the craziness a few years ago. They are still taking deposits and making loans. People are abandoning the over-leveraged Wall Street houses of cards and putting their money in safe, prudent local banks.
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