At this point with the election a little more than a month away it makes sense to leave the bailout for after the election. The enviroment is too politicaly charged to get anything done that doesn’t pander to almost everyone.
After the election no one has to worry for at least 2 years, maybe they can take a long term view and actually try to fix the problem.
Looks like the bailout is in need of its own bailout. I thought McCain was going to suspend his campaign untl the situation was resolved.
I think in the end the bailout failure will be looked at as the time when America finally put down the credit crack pipe, but it might also turn out to be the time America re-lived the dust bowl.
I have been trying to get my head around the bailout and the mortgage mess I have a feeling that some people who read this blog and the guy who created it, understand the financial industries better than I do; but my take on it, is that the mortgages are tied to assets that exist just not at the value they were at when the mortgages were issued.
Many people bought homes planning on them increasing in value and probably paid a premium for them, also people probably used loans they didn’t understand, to buy these homes. I know when I bought my home the mortgage people kept pushing interest only loans, the sales pitch was “they give you the most flexability” or “over time they consistantly have the lowest interest rates” I got a fixed rate and I sleep better because of it, but is sounds like many people went with the interest only loans, maybe that is why Ambien has been such a success.
I don’t see how buying all these mortgages at inflated prices fixxes the problem. People are still stuck in houses that they bought not because it was a place they wanted to live, but because it was a place they thought would make them some money. People will still have mortgages that the principal balance never goes down and in some cases increases every month. It doesn’t matter if the bank owns the loans or the government the loans homeowners situation is still bad.
It seems like it would make more sense to set up an agency for people who want to stay in their home, where they can get a low fixed rate loan up to the amount of the other loans on their home, regardless of their credit score; or some other plan that allows people a chance to keep their home but lets the speculaters on both sides of the issue pay the price for speculating in the wrong direction.
The other thing about the bailout is why not wait until after the election, right now either John McCain or Barack Obama will be the next president and we will know which one in 40 days. Why not wait until we know who will be the next leader of the country before we rush into a solution that may have long-term effects and hamstring the next president for their entire first term.
I am watching Bush’s press conference. He is saying that we will get most of the money used for the bailout back when the economy improves. This sounds like “liberating Iraq will pay for itself”.
It also seems that easy money, in the form of low interest loans, creates consumption which may be good for the economy in the short term, is not sustainable for a long period of time.
It might be better to end the nations credit addiction now rather than a few years from now.
In the past few weeks the US government has taken over some of the worlds largest companies. These companies should have been shining examples of what a free un-regulated market can accomplish, instead they have become examples of short term greed winning out over long-term viability, and the government has had to step in to save them.
Much like an eighteen-year-old. College student who needs their parents to wire a few thousand to pay-off their gambling debts, these companies thought they knew what they were doing and they got spanked.
I doubt the teenagers will learn from this but, hopefully their parents will hide the credit cards from them in the future.
It looks like the bailout is little more than the government buying all the bad debts of a few corporations. While this will help poorly managed companies to stay afloat it will do little to end the crisis.
I just saw Robert Lutz, the chairman of GM, on Colbert and at one point he said GM’s new electric car had a 1.4 liter engine which he said was equal to 70 cubic inches. I am not much of a car guy but I am pretty sure 1.4 liters is equal to 84 cubic inches. That may seem trivial but this is the chairman of what was once the biggest car company in the world. He should at least be able to convert liters to cubic inches.
I can see why GM is in trouble, but the new electric car sounds good depending on the price.
I finally got a chance to watch the season premier of the Terminator on fox. Why is it Fox news sucks so bad but their series are head and shoulders above the other networks.
Anyway, it looks like the Terminators are finding religion, and the sole reason that Cameron does not go bad is that she is an atheist. At least that is what I take from the scene in the church where she says the jesus thing is not part of her wiring. This was part of the theme in Battle Star Galactica as well, where the Cylons were also religious. I wonder if the moral of these machine versus human shows is that machines are fine until you give them a irrational propasition like religion and then they destroy man kind because no one can live up to the standards set by religion.
Whatever you take from the show the season premier was awesome.
BTW if you liked “6″ in Battle star Galactica the actress who played her has a recurring role in Burn Notice. Yeah, I watch too much TV.
Discussing Michael Richards
This is going to be the focus tomorrow…buckle your seat belts! Trying to get it right in my head over the weekend wasn’t easy, until Sunday night came and there was no announcement to be made out of the Treasury Dept…here’s my take:
I picked up a couple of different scenarios that sounded possible, but the theme throughout seemed to be that the banking community had to come together and each eat a piece of Lehman’s worst ABS…apparently an altruistic streak runs through all great bankers…wow…What I’m worrying about is that the market has been trading w/ the impression that the treasury will consume the bad deals and coordinate like they did with Bear Sterns. Moral hazard is front and center, since Merrill bit the bullet and sold it’s distressed holdings for 30 cents on the dollar, there hasn’t been another one of these cleansings that has made news since then. The fact that Merrill could find buyers for what it had to get off of its books, means that Lehman can find a market once they decide to stop playing games…all I read is that ABS (CMO, CMBS, CDO, etc) are too complex to compare the holdings of one firm to another…this is a bad argument to use against the government or short sellers who are demanding that the firm mark those assets to market. Once Merrill was able to move its distressed debt to others in the market, the music stopped…no more ragtime
During Katrina: During the storm and for several days afterwards, several thousand men, women, and children as young as ten — many of them being held in pre-trial detention on minor offenses — were effectively abandoned as floodwaters rose and the power went out, plunging the cells into darkness. As deputies fled their posts, prisoners were left standing up to their chests in sewage-contaminated floodwaters, without food, drinking water, or ventilation. (200801_ISS_KatrinaHumanRights)
Present Day: Galveston Sheriff leaves inmates, deputies, in hurricane’s path – Galveston Island residents were told to flee Hurricane Ike or face “certain death,” but the Sheriff has inexplicably decided not to evacuate 1,000 prisoners from the county jail, even though serious flooding has already begun. (Grits For Breakfast)
If I was John Stewart or Stephen Colbert I would vote for Palin/McCain. The jokes practicaly write themselves.
Olberman should also consider voting for them as his worst persons in the world series would be taken care of for the next four years as well.
I haven’t seen it yet but I hear McCain has an ad out with scary wolves running around. In 2004 Bush also used wolves to scare people. Why are conservatives scared of wolves?
THis question is not completely rhetorical. At one point a local conservative yacker here in Denver suggested that Denver needed to do something about coyotes that can be found in the city. I don’t think their are any reports of coyotes attacking humans ever and I would be surprised if their are more than a handful of wolf attacks in the last hundred years. So why do conservatives hate these animals so much? My guess is that unlike the domestic dog these wild K9′s are not dependant on humans and have instead been able to live relatively free lives. For some reason the idea that an animal that sort of looks like it should depend on us does not need us not only seems to annoy certain people it seems to scare them as well.
Just a thought, when you hear conservatives talk about freedom and self-reliance it seems to only count as long as they have the final say on how much freedom you really have. Too much independance seems to scare them.
Maybe John McCain and Sarah Palin have more in common than we knew, they both like to abuse the power of their positions.
Sarah Palin for whatever reason seams very popular with republican base, in fact she seems much more popular than John McCain. How long before McCain starts trying to remind people he is running for president and Palin is just along for the ride. Or when do people start asking McCain if he agrees with his running mate regarding abortion or which books to ban. Of course to answer that, Palin would have to say where she stands on the issues and right now she is not talking to the press.
At some point McCain will have to state what his positions are and at that time he will either lose Palin’s base or lose every moderate.
Another posibility is that Palin supporters vote for McCain hoping he dies and their girl becomes president and starts the world towards the end of days they all dream of. One thing is for sure if McCain wins he better hire a food taster.
Obama “I ain’t scared of you m*****f******!” –
His best set in my opinion…it’s on from the first line. In my top 5 of all time.
After watching some of the Republican convention and following the rise and fall of the conservative movement I cannot help but feel they have turned cynism into a political movement. Somehow conservatives have managed to take anyone with ideals and define them as naive. The mocking tone taken by Palin and Guiliani towards community organizing pretty much sums up the entire movement, anyone who tries to make things better for the working class is naive and perhaps stupid.
We all know the only way to help anyone is to make the rich richer so that they can hire the rest of us to wash their cars and clean their planes. The fact that this attitude is self serving is lost on the people like Guiliani and Palin they really believe that no one cares about anyone but the affluent and in their world they are right. They don’t talk to anyone unless that person can give them money or some other benefit. The idea of doing something good for another person doesn’t even make sense to them unless their is something in it for them.
The entire Republican convention was about trying to convince enough people to stay cynical and give John McCain a lifetime achievement award, the idea being it doesn’t matter who is president anyway. This election will show whether or not most the country is bitter and decides to screw over the US and the rest of the world by voting for McCain or moves in a different and more optamistic direction.
Did McCain just do his acceptance speech in front of a green screen, and I thought McCain didn’t have a sense of humor.
This is a roast performance for the ages…Sal the Stockbroker, now working on the Stern show…the horse sound is something he’ll regret for the rest of his life…
Well here you go…the Palin thread got me thinking about it again, and the reality of what those nimrods actually did to themselves is becoming apparent.
The Palin family is a trainwreck. Her 17 year-old daughter is pregnant, her sister is in the midst of a nasty divorce and Palin may have used her influence against her ex-brother-in-law and before the election is over who knows what else we will find out about the Palin family and their problems.
Yet, social conservatives like Palin are telling the rest of us how to live our lives. Now they are trying to make it legal for health care providers to refuse tp provide birth control to anyone they feel like. This way we can have more teeage mothers. I don’t know if social conservatives know they are misreable and wan to drag the rest of us down with them or if they are just stupid, but it is important to point out the failing of the conservative lifestyle whenever possible, as they are trying to force it on the rest of us any chance they get.
Palin’s 17 year-old unmarried daughter is pregnant. Palin is becoming a case study in everything that is wrong with social conservatives.