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RE: House defeats the bailout bill!!! - 9/29/2008 7:01:44 PM
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LivingParadox
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Love it! Love it! High Drama here...did anyone notice it took both Democrats and Republicans to say no to this bailout. So Wall Street takes a hit...it needed to take a hit. And once it stablizes it can build on good foundation.
Although it will be painful to everybody especially those with 401k dollars shrinking but breaking up the greed of these conglomerates in the long run is good business. There are people that have made fortunes out there looking for ways to invest and if Wall Street isn't so bloated they might actually put it to smaller companies who will need empoyees and smaller banks. Novel thought, wouldn't it be great to have 100 smaller companies to compete than 5 major conglomerates?
Now do I think Congress is going to have to do something? Yes, but continuing to prop-up those who knew better isn't it.
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RE: House defeats the bailout bill!!! - 9/29/2008 7:03:23 PM
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GroupW
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From: Up in the hills of Colorado (very BIG hills...)
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quote:
ORIGINAL: HighPlainsDrifter
A good article HERE about the current crisis.
I think an auctioning, of sorts, of this bad debt (much of which is probably not that bad) and establishing valuations is a really good start to clearing the chaff.
That's where the current interplay between economics, accounting, and bank regulation gets a bit perverse. Here's one example. Back in February, I bought a AA-rated bond backed by certain AAA tranches of several commercial mortgage backed securities. The price was 25 cents on the dollar.
Here's the wierd part - for me to EVER take a loss on that investment, we would have to see commercial mortgage default rates that are higher than anything ever known to have happened. I am less likely to take a loss on this investment than I am in any one of a number of corporate bonds that have far less credit protection and far more risk and are priced WAY better.
Now, is the 25 cents on the dollar a real valuation? In a sense, it is. In another, it isn't. The common definition of fair value is when a willing buyer and a willing seller agree on a price. So what's the problem? The 25 cents price wasn't a willing seller. It was a stressed seller.
So if we mark everyone's holdings at these distressed levels, we still really don't have a true value. We have clarity on the distressed value, but we don't have a true market valuation since there is no functioning market.
Nonetheless, having established the so-called "market value", I now have to mark this and all other holdings in my portfolio to this "market". Now, I have to take a huge loss, which results in insufficient capitalization levels for me to continue to do business.
On the one hand, I want clarity and honest accounting, but yet on the other if I do so I am completely shut down because today's "market values" don't reflect true value. (Case in point - some derivatives contracts on CMBS are priced at such low levels that they imply that more than 100% of the loans in the pool will default. How do you get more than 100% of the loans defaulting ??????)
The regulations punish me unnecessarily for being so brave and honest.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: House defeats the bailout bill!!! - 9/29/2008 7:09:38 PM
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ekserekseez
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quote:
Well considering no less than Nancy Pelosi sunk this ship, I highly doubt if the plan now is to head in the direction of less government. In fact I think the Democrats are going to successfully paint this as a Republican failure, and so use it to usher in a greater majority, an agreeable President, and a lot more government.
That's what I mean. McCain or Obama, the only difference will be how fast it happens.
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RE: House defeats the bailout bill!!! - 9/29/2008 7:13:37 PM
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GroupW
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quote:
ORIGINAL: ekserekseez
quote:
Well considering no less than Nancy Pelosi sunk this ship, I highly doubt if the plan now is to head in the direction of less government. In fact I think the Democrats are going to successfully paint this as a Republican failure, and so use it to usher in a greater majority, an agreeable President, and a lot more government.
That's what I mean. McCain or Obama, the only difference will be how fast it happens.
You can blame it on Pelosi for a stupid speech (which it was), or you can blame it on Eric Cantor for reacting emotionally to a stupid speech with stupid decision in order to make the stupid point that it's all someone else's stupid fault (which he did). Cantor also tried to claim that he didn't have enough time to get up to speed on the problem despite the fact that this has been building for about 22 months now. Is he really THAT slow?
Really, there's so much stupidity in all of this that one person or one party just isn't capable of committing all of it. Noone is THAT stupid.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: House defeats the bailout bill!!! - 9/29/2008 7:20:38 PM
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Jhud
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quote:
Really, there's so much stupidity in all of this that one person or one party just isn't capable of committing all of it. Noone is THAT stupid.
It's like a negative synergistic effect.
_____________________________
Jack
It has been said that politics is the second oldest profession. I have learned that it bears a striking resemblance to the first..
- Ronald Reagan
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RE: House defeats the bailout bill!!! - 9/29/2008 7:23:52 PM
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ekserekseez
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Who even listens to what Pelosi says? I would like to think that GOPers who voted against it did it out of principle, and not because they were in a snit because Nancy called them a name.
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RE: House defeats the bailout bill!!! - 9/29/2008 7:34:39 PM
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LivingParadox
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uh.
The vote against the measure was 228 to 205, with 133 Republicans turning against President Bush to join 95 Democrats in opposition. The bill was backed by 140 Democrats and 65 Republicans.
Seems like a pretty bi-partisan vote to me. I'm glad they stood up for the American public. Does this mean they should do nothing, no. But Wall Street needs to take a hit to not propogate this kind of inflated earnings.
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RE: House defeats the bailout bill!!! - 9/29/2008 7:35:12 PM
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GroupW
Posts: 2911
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quote:
ORIGINAL: ekserekseez
Who even listens to what Pelosi says? I would like to think that GOPers who voted against it did it out of principle, and not because they were in a snit because Nancy called them a name.
That's probably the case, but it's not what Eric Cantor actually said this afternoon. I was watching Bloomberg when he came on after the vote and said that it might have actually passed had she not tried to get political with the speech.
I about blew my peanut butter sandwich all over the TV screen. Then he made matters worse by claiming not to have had enough time to get up to speed on the economy and the bill.
Now, I think their principles here are a bit confused, but I'm willing to agree that they acted on principle and not sheer idiocy.
BT
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: House defeats the bailout bill!!! - 9/29/2008 7:40:17 PM
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LivingParadox
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I think we saw Democracy at it's finest.
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RE: House defeats the bailout bill!!! - 9/29/2008 7:43:20 PM
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GroupW
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quote:
ORIGINAL: LivingParadox
I think we saw Democracy at it's finest.
Then I'm really depressed. I think you saw populism at its worst.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: House defeats the bailout bill!!! - 9/29/2008 7:46:32 PM
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LivingParadox
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I trust the populist opinion much more than elitest greed.
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RE: House defeats the bailout bill!!! - 9/29/2008 7:50:13 PM
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GroupW
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LivingParadox-
If popular opinion knew anything about economics, I would agree. Popular opinion however is woefully undereducated on this point and subject to making severe and unfortunate mistakes in the application of its opinion.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: House defeats the bailout bill!!! - 9/29/2008 7:51:42 PM
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GroupW
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Actually, elitist greed isn't completely unworkable as an economic system. In fact, we rely heavily upon it. And greed isn't limited to the elite. The greed of the common man is complicit in this crisis.
BT
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: House defeats the bailout bill!!! - 9/29/2008 7:58:51 PM
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LivingParadox
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Truth of the matter is that those who have gotten rich off of deceit and bad investments are wanting you and me to foot the bill. I haven't suggested that "nothing" be done, but bailing out those who caused the problem and letting them design it to their liking isn't in my interest either. There are ways to to stablize the market but allowing those who made bad investments to reap those rewards in the natural outcome. Yes, it will hurt us for a while but at least when it stabilizes it will be a good foundation.
I suppose the system that centralizes the finances in the hands of a few has served us so well over the past decade -- maybe if we allow the free market system to cycle with decentralization of power it may actually recover under free competetion.
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RE: House defeats the bailout bill!!! - 9/29/2008 8:01:25 PM
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Jhud
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quote:
Truth of the matter is that those who have gotten rich off of deceit and bad investments are wanting you and me to foot the bill. I haven't suggested that "nothing" be done, but bailing out those who caused the problem and letting them design it to their liking isn't in my interest either. There are ways to to stablize the market but allowing those who made bad investments to reap those rewards in the natural outcome. Yes, it will hurt us for a while but at least when it stabilizes it will be a good foundation.
I suppose the system that centralizes the finances in the hands of a few has served us so well over the past decade -- maybe if we allow the free market system to cycle with decentralization of power it may actually recover under free competetion.
How would the bill that failed have allowed those who made bad investments to 'reap rewards'?
_____________________________
Jack
It has been said that politics is the second oldest profession. I have learned that it bears a striking resemblance to the first..
- Ronald Reagan
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RE: House defeats the bailout bill!!! - 9/29/2008 8:03:38 PM
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leonfigg3
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quote:
ORIGINAL: GregandJenny
What needs to happen is the House of represenative needs to work and get a plan. They need to talk to experts, advisers, the people they serve, and they need to explain it in layman's terms. Right now people don't understand for the most part the implications of spending 700 billion vs not spending 700 billion. All they here is were going to spend 700 billion, and they aren't comfortable with that. They don't understand, they aren't feeling part of the process here. The Law makers need to be helping their constituents understand this.
Then we need to start teaching people how all of this works so that they understand how wall street and main street are connected.
Until people feel they have the facts and aren't trying to be "scared" into a situation this will be a long road.
G
And just how many decades do you think that all of this will take?
We do not have decades to find a solution, or find a way to deal with the hard times that are bound to happen not matter how we respond.
The fact is that the basic problem is that the average person does not want to hear what we need to hear. As a result we elect politicians that know that if they told us what we need to hear, they will never get elected.They know that if they did what they need to do, they will neither get elected, nor reelected.
Leadership and statesmanship require politiians to do the unpopular for the greater good. Sadly, we have fallen under the spell of politicians and not leaders and statesmen. Sadly, we have forced our leaders and statesmen to be politicians first and fore-most.
Could be that the House of Representatives is trying to turn things around.
Experts and politicians are telling us that we have no choice but to do something now to forestall, or even divert the coming financial collapse. We do have a choice. We can let the collpase happen, allow leaders to do the right thing to get us out of it.
I find it interesting that the Bible says that humans can not solve everything, and probably should not really try becuase it would me interferring with God's plan, and keep Him from dealing with us and teaching us.
< Message edited by leonfigg3 -- 9/29/2008 8:15:10 PM >
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RE: House defeats the bailout bill!!! - 9/29/2008 8:09:34 PM
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LivingParadox
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Personally, I believe letting Wall Street take a hit isn't the worst thing to happen. Now allowing it to continue into a free fall would be bad. I don't think that's what's going on here -- I think it's not allowing fear to dictate a vote is what's going on here.
If the market is confident of it's value then those selling off stock are acting in greed. What a sweetheart deal -- you charge the credit card up to the max and sell all the items purchased, stick away the profits in an off-shore account and I'll purchase your debt to pay off...but it's ok -- we've got to keep that credit line open so you can stay in business.
Here's a thought, why don't you take those items you bought and maybe have to sell them at 80 percent of value, you might have to sell to more than one person. And if after doing these things....maybe just, you can rebuild.
With oversite, allow the market to correct itself.
< Message edited by LivingParadox -- 9/29/2008 8:24:40 PM >
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RE: House defeats the bailout bill!!! - 9/29/2008 8:34:20 PM
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huangshan
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quote:
ORIGINAL: ekserekseez
I will take another Great Depression over the eventual purges in the style of Stalin and Mao that a socialist government will eventually lead to.
It was ignorance of history and lack of a long view of the future that caused this mess. And now the same ignorance of lack of vision have led to the bailout.
This bailout will be just the beginning. Wait for a universal cancellation of debt, or some similar travesty. They will not be long coming. The last thing we need to do now is fund huge government to become even more obtrusive. It's not worth it in the long run to end up a Marxists state, which may be a decade or a generation away, but will be greatly hastened by this sort of bailout.
It's ironic that you talk of "ignorance of history" in the middle of this post. A bailout isn't going to lead to Mao, or Stalin. They came to power after violent revolutions and wars, and started off as totalitarian dictatorships. Read some books, champ.
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RE: House defeats the bailout bill!!! - 9/29/2008 8:35:46 PM
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bzirk
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quote:
ORIGINAL: HighPlainsDrifter
One other conclusion I've come to is that anyone who suggests they know exactly what the fallout will be from this package failing, or what the consequences would be from passing it is delusional. No one knows on either score, and that's a fact.
I agree.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: House defeats the bailout bill!!! - 9/29/2008 8:38:05 PM
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LivingParadox
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quote:
ORIGINAL: bzirk
quote:
ORIGINAL: HighPlainsDrifter
One other conclusion I've come to is that anyone who suggests they know exactly what the fallout will be from this package failing, or what the consequences would be from passing it is delusional. No one knows on either score, and that's a fact.
I agree.
That I agree. Let the market correct under the scruity of a watchful eye.
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RE: House defeats the bailout bill!!! - 9/29/2008 8:39:10 PM
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ekserekseez
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quote:
I don't really trust either; but I have news for you, the populist opinion is about to get a healthy dose of reality when they realize they are only hurting themselves.
Maybe they need to hurt, and hurt bad, to drive the lesson home for another generation. Unfortunately, some people only learn the hard way. Maybe most people.
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RE: House defeats the bailout bill!!! - 9/29/2008 8:40:08 PM
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cog41
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I called my Reps office and asked to him to vote NO.
Well, he voted NO!
Also enouraged Mr. Cornyn to vote No if it gets that far.
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Psalm 122:6 Pray for the peace of Jerusalem: "May they prosper who love you."
Hook'em Horns! Roll Tide!
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RE: House defeats the bailout bill!!! - 9/29/2008 8:55:41 PM
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iampiper13
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Fox News has the votes broke down by state, party and yea or nay Here
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God Bless
Steve
Psalms 138:3 CEV When I asked for your help, you answered my prayer and gave me courage.
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