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Photograph of Treasury Secretary Paulson, left, and Fed Chairman Bernanke, right, from the AP
Yesterday was a mixed day for the financial sector. Congress still had questions about the government's proposed $700 billion bailout plan for financial firms, sending the market down. But the after-market close announcement that Warren Buffett would invest $5 billion in Goldman Sachs has sent stock futures higher. But now there's word that the FBI is searching for possible fraud at Fannie Mae, Freddie Mac, Lehman Brothers and AIG.
The Wall Street Journal reported that Secretary Treasury Henry Paulson and Federal Reserve Chairman Ben Bernanke "faced an unfriendly reception from the Senate Banking Committee." Bernanke warned that the "credit markets would seize up" if Congress didn't act soon while Paulson tried to reassure that the taxpayers wouldn't get screwed in the bailout deal. But, the WSJ notes:
Lawmakers pushed back against Mr. Paulson for seeking nearly limitless authority in how the program would be structured. Mr. Paulson remained on the defensive throughout, conceding that he would ensure oversight and enforce conflict-of-interest policies but sidestepping most questions over how. Lawmakers appeared unconvinced until the end.Keep in mind, Paulson is former Chairman and CEO of Goldman Sachs.
The issue for Congress is less about the concept of a bailout, but the details--specifically, executive pay (why reward failure?), helping homeowners who face disclosures, what will American taxpayers get back in return. The NY Times's David Leonhardt writes, "Congress has done a pretty good job of identifying the biggest weaknesses in the Paulson plan, like its vagueness," but adds "There's no time to waste." Related: The NY Times looks at lopsided executive pay.
Just now, on CNBC, Buffett said, the credit crisis was "an economic Pearl Harbor," and pledged his support for Paulson's plan, "The market could not have taken another week...I think it was the last thing Hank Paulson wanted to do, but there's no Plan B for this.''
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can you believe that that guy kicked the cat? i can't believe it, i can not believe it. Ugh! it just makes me so *arrrr*. Can you believe it? i can't believe it. I want that man killed, kill him he has got to die...and get raped in prison...by a large cat...
can someone bail HIM out so i can attack him myself?
i love cats.
how about that economy, ay guys?
"an economic Pearl Harbor"?
OK, what does that mean? Cause me no understand, just pay your debt, right? if you'd pay your debt this wouldn't happen so expect more calls.
Pearl Harbor! Yes we have been attacked! By uh...shady derivative trading and mortgage practices.
It makes sense that if the Congress (i.e., the taxpayers) are helping to bail out these banks, then Congress (i.e., the taxpayers) should have a say in placing limits on how much these incompetent bankers are paid.
At least they didn't call it an economic 9/11.
No Mr. Buffet, Pearl Harbor was a sudden surprise attack.
Wall Street had seen this coming. They let it happen. Because they knew they would profit and the rest of us would pay. So if that's the case, and this is 'Pearl Harbor' then we should of course retaliate against wall street and the mortgage derivative market like we did to the entire Japanese fleet. Maybe we should just put an end to the entire thing with one huge act of congressionally-mandated corporate annihilation, sweep out the broken system manned by the overcompensated assholes who dragged us into what will surely be a long and painful mess - and start again.
Yes, ok. Now your Pearl Harbor reference makes sense afterall.
Said it is only a paper moon
Sailing over a cardboard sea,
But it wouldn't be make believe
If you believed in me.
Say it is only a canvas sky
Hanging over a muslin tree,
But it wouldn't be make believe
If you believed in me.
Without your love,
It's a honky-tonk parade.
Without your love,
It's a melody played in a penny arcade.
It's a barnum and bailey world,
Just as phony as it can be,
But it wouldn't be make believe
If you believed in me.
This is another Iraq-type situation. It sucks how we got here, but now we're here and there are only bad options. From what I've heard from the country's financial minds, like Buffet & Paulson, the bailout is the best option we have to keep people in their homes.
This whole problem is caused by people not being able to pay their mortgages, so we have to step in and help them or this whole mess will spread everywhere like it's already threatened to with insurance, retail, industrials, etc. And this isn't going to just swallow $700B like the war, it's going to tie up that amount of capital for a few years to wait for housing to recover. Chances are the government will actually make money on this deal over the long haul because people don't want to lose their homes, they don't want to go bankrupt. The government has to restore order to the system or banks won't loan anyone money and we'll all be screwed.
The exec pay packages suck, but they'll be investigated and most of those boneheads have already been fired, so what do you want? This is going to cost a truckload of money no matter what we do, so we might as well just pull the trigger and work with this plan.
I wish I could believe this would help.
"False Pretenses Part II"
Bush playing "Bush"
Paulson playing "Rumsfeld"
Bernake Playing "UN Weapons Inspector"
Wall Street Playing "Cheney's privite corporate military contractors"
New Location, US Coiffures vs. Old location, Iraq.
Haven't we seen this script before?
It's time for a biblical-style Jubilee year.
Declare all debts null and void. Cancel all home mortgages, cancel all student loans, and all credit card debt. It's time to reset this broken system and start anew.
Bailout plan in 3 words: Stick 'em up.
Write Congress and oppose the bailout.
http://www.congress.org/congressorg/headlines.tt
Seriously.
"...there is no Plan B."
Yes there is: let this thing go and spend the money creating a green economy.