What idiot or group of idiots decided to give away taxpayer money without any strings? Who does business this way? I get the whole "banks need liquidity to move the economy" thing but c'mon, banks are taking that free money and sitting on it or investing it elsewhere. Obviously the banks were giving loans away too easily before but to suddenly cut off everything is just as bad. If banks don't want to loan, fine, but don't ask everyone else to fund their mistakes as Wall Street continues to live the life of Riley and using Uncle Sam's cash at below inflation rates. If the tables were turned, you know the banks would be asking for the world so why not treat them the same way?
What makes it worse is that none of the candidates are saying much about this bailout. Are they really in agreement with this policy of supporting the lifestyle decisions of Wall Street? Sure we are seeing tens of thousands of Wall Street bankers being fired but we have yet to see any real changes on Wall Street. Just like last year - despite record lows - we're going to read about bonuses that are more than most people make in a lifetime or tens of lifetimes and guess who is funding it all? Lots of people would love the Wall Street lifestyle, but I don't see Wall Street lining up to fund it without strings.
"High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets, and the broader economy," Bernanke said in remarks prepared for delivery to the Columbia University School of Business in New York.
Naturally none of this prevents him from a strict whatever-Wall-Street-wants policy of cushy bailouts and rate cuts. What next? Is Bernanke going to boldly state that interest rate cuts to banks don't transfer to individuals or that when the dollar goes down, gas prices go up with each rate cut?
Where the heck were Bernanke and Greenspan, the Fed, and the Republicans when this fragile system was being built up? They're all supposed to be so smart, so how did they honestly think that real estate would always increase? Have they never studied bubble economies before? How did we get stuck with such an incompetent bunch?
Supporting education makes fantastic sense but aren't we just feeding the bubble by injecting even more cash? The cost of universities in the US has become crazy, unlike any other Western/rich country. No matter how you spin it, it's impossible to say that the easy money credit hasn't fed the high cost of universities. Take a look at the endowment funds that the top schools have and ask how tuition could be so out of control when these schools are sitting on so much money. A few schools are now changing their tuition plans for normal families but that's only because of pressure (or threats of action) by Congress.
Graduating from college with over $120,000 of debt not to mention credit card debt that students all have these days is a bad way to enter the working world. Sure, we can and we should help but this system needs a drastic overhaul and one that does not center around the credit industry cashing in.
Not just anyone drops $8 million in the middle of a housing slump but of course, Tony Blair works for JP Morgan, who we propped up with billions in taxpayer money so people like this could be paid to live luxurious lifestyles despite being costly screwups. Our tax dollars at work.
Tony and Cherie Blair have bought the £4m former home of legendary actor Sir John Gielgud, it was reported last night. The Grade I listed stately home near Chequers is the Blairs' sixth property in their growing portfolio.
South Pavilion in Wotton Underwood, Buckinghamshire, has seven bedrooms, a "magnificent" weather-vane tower and sprawling grounds, including ornamental gardens two paddocks and a converted outbuilding.
What strikes me about this article is the similarities to the US in 1929 after the crash. People in China are losing everything, throwing themselves out of windows and wondering how they will survive. Then there are a few choice comments by typically smug financial types (from Credit Suisse and Morgan Stanley) who say "tough luck." It's not that I don't agree to some extent, but hey, look at Wall Street or City bankers in London and see how "tough luck" has worked out for them. Yea, they're really hurting with taxpayer bailouts as they continue to luxurious lifestyles on other peoples money. Hard times, indeed.
The small Chinese investors, much like American investors, have every right to be angry. The Chinese government (like in the US, UK and EU) loved the cash generated by the stock market and the prestige of a fast-growing market was an added bonus. Governments are always much too happy to feed a bubble and then when it goes 'poof' they run for the hills, so yes, the Chinese, the Americans and everywhere else have every damned reason to be angry. It's irresponsible for governments anywhere to promote bubbles and they ought to live with the consequences. Of course, this sad story also helps put the government outrage over the Olympic protests into proper perspective. (Hint, think Saddam Hussein if you want to see the American version of this old distraction.) China has many more problems to come and their stock market crash is only the beginning.
Obviously they aren't reading Larry Kudlow and the CNBC cheerleaders. Of course, Kudlow only hobnobs with the same spongers who just received hundreds of billions in bailout money, so they don't see the economic difficulties in quite the same way as the rest. Must be nice.
Seven in 10 people questioned in a CNN/Opinion Research Corporation survey released Friday say things are going badly, with only 30 percent saying things are going well.
"It's been 16 years since the public gave the country's condition such a bad rating: January 1992, to be precise, in the last year in office of the last president named Bush," CNN pollster Keating Holland said.
"Seventy percent is a lot worse than two years ago, when 48 percent thought times were bad and the Republicans lost control of Congress," CNN Senior Political Analyst Bill Schneider added.
Their big mistake was not being worth billions and having connections to the highest levels of Congress and the Administration. If they did, they too would receive billions upon billions and nobody would ask questions and everyone could live today as they did yesterday. Polite company doesn't ask uncomfortable questions about money. Especially when it's not even theirs to shovel out. What do the Democrats have to say for themselves now? They all too easily allowed the banks to get their bankruptcy law and then bailed out the damned banks without question.
Bankruptcy filings by U.S. consumers jumped 47.7 percent in April from one year ago as families cope with fallout from the subprime mortgage crisis, the American Bankruptcy Institute said.
The 92,291 bankruptcy filings in April also marked an increase of 7 percent from March, the non-partisan institute said.
"Banks have come to realise in the recent crisis that they are paying the price for having designed compensation packages which provide incentives that are not, in the long run, in the interests of the banks themselves, and I would like to think that would change," King said.
Last week the director-general of the CBI, Richard Lambert, said the bonus culture in the City and Wall Street had been responsible for much of the excessive risk-taking that led to the collapse of the US mortgage and housing markets.
King said yesterday, however, that the hubris of which the City had been guilty had now disappeared, as banks were having to raise capital from their shareholders and cut jobs to repair their balance sheets. "I don't think there is much hubris around today. I hope we do not return to this hubris ... it is important that people learn the lessons from this crisis."
I'm sure the banks are learning a good hard lesson as we throw more bailout cash at them without strings. They must be all a quiver with fear. The bankers are no doubt selling their third and fourth houses on Craigslist, right there with their with their yachts and Bentley.
Not a problem though because we just bailed out Wall Street so Mozilo, O'Neil, Prince and their millionaire buddies could all keep their tens of millions in bonus money. They're all a great bunch and the trickle down economics will surely be kicking in at any moment.
If the Democrats fail to speak out and join the rest of America, they deserve to get kicked aside in the fall. People are furious and yet the Democrats miss another opportunity to join voters of all political stripes.
While it may seem odd that so many banks are scrambling around the world for cash, I can somewhat live with it. Raising capital from foreign governments that will now have a role in a major bank is unsettling if you think this out into the future, but it could be worse. What is much more problematic is that these banks continue to be fed by taxpayers in the US and UK (and no doubt elsewhere) to prevent them from having to raise even more capital.
The banks have no issue with raising more capital to pay for their problems so why are taxpayers - who are already suffering due to banking problems - bailing out banks? It's obvious they get much better terms from taxpayers during this process but what taxpayer wouldn't want to see some friendly terms given back in their direction? To hell with the gamblers in the banking industry, but politicians on both sides of the pond are much too proper to say what everyone in the real world is already thinking. Maybe the voters will just say to hell with the politicians who are going along with this and vote them out.
Predictable. Unless you are a Fortune 500 company and multi-multi-multi-millionaire, you can go Cheney yourself.
Some congressional Republicans also oppose Frank's proposal, saying it essentially forces one neighbor to pay for the mistakes of another.
"You're telling the guy who did it right that he has to help pay for the guy who did it wrong," said Rep. Jeb Hensarling, R-Texas. "When people are struggling to pay for their mortgages, they shouldn't be forced to pay for their neighbors' mortgage.
"I think about 95 percent of America is either renting a home, they own their home outright, or they're current on their mortgage," he said. "So 95 percent of America who's doing it right is asked to help bail out 5 percent of America who probably wasn't doing it right."
OK, so explain why bailing out the richest of the rich on Wall Street was acceptable? Where the hell are the Democrats on that bailout, dammit? The Wall Street bailout is one of the worst displays of cowardice since voting for war with Iraq and Iran. The bailout was weeks ago and besides a few entertaining moments of embarrassment for O'Neil, Prince and Mozilo, the Democrats have done nothing and said nothing about this disgusting corporate welfare. They are only too happy to hide in the corner on this issue but let the poor suffer on health care, unemployment, you name it.
The Republicans like to look back at certain events in history and selectively remember bits and pieces. For example, even today many believe that if only we did (fill in the blank) we could have won Vietnam. Uh huh, right. Another classic theory is that the Great Depression ushered in unnecessary 'socialist' programs that block individual initiative, forcing people to rely on government handouts. Read through this link and think about just how much the likes of Mozilo, O'Neil, Prince and their kind have manipulated the US system in their favor at the expense of everyone else. Let these people play on the same level field as the rest of us and let's see how well everyone does. Here's one of the more interesting perks for America's executives:
Perhaps the most bizarre compensation a CEO receives is assistance paying their income tax on their pay and perks. A new report from The Corporate Library delves into the increasingly common practice of "grossing up".
In a nutshell that means the company picks up the income tax liabilities a CEO faces on his perks, and sometimes even his pay and bonuses. The Corporate Library, in examining 3,297 proxy statements filed between February 2007 and February 2008 found that 20% of CEOs (more than 650 individuals) receive tax gross-ups on part of their income.
To many, Angelo Mozilo is the face of failure. Under his watch he managed to build Countrywide Financial into the largest lender in the US and then almost as quickly, drive it in to the ground where Bank of America would buy it in a fire sale and reap tax benefits for years. Jobs lost, house evictions, ruined lives, it's all there courtesy of Mozilo. So just how tough are times for this failure? They're so bad that he scraped together $132 million in 2007 despite his magnificent failure.
As I've said before, these people who scream about the free market wouldn't know the free market if it bit them in the ass. In an earlier time, after the Crash of '29 for example, people such as Mozilo would be standing on a street corner begging for handouts much like the people who have lost their houses courtesy of his schemes. When I listen to Republicans talking about people needing to toughen up and quit relying on the system, well, what about Mozilo? How is it possible in this day and age to screw up so badly yet walk away so wealthy? It's easy, because this is the system that the GOP created where only the middle class and poor lose. Risk has been minimized at the top and it's everyone else who is stuck with the bill. Good work, when you can find it.
If only Massachusetts was the only state to see such figures. Ignoring pesky oversight issues was definitely the way to go. In fact, the financial industry is still thankful that Congress is letting them slide and not questioning the bailout for Wall Street. See how well industry can self-regulate? Charles Prince, Stanley O'Neal and Angelo Mozilo really appreciate the lack of serious action. Democrats are completely missing the issue if they continue their inaction. Enough of the talk, time to take some action.
Almost 1,200 Massachusetts properties were seized by mortgage companies in March, an increase of more than 140 percent from the number of foreclosures in March 2007, according to data from Warren Group.
Foreclosures during the first three months of the year topped 2,800, also up about 140 percent over the same period last year. Massachusetts is on pace to shatter the previous record for the most foreclosures in a year, set in 1992.
Lehman Brothers and Wall Street cheerleaders can say whatever they like but we are nowhere near the end of this. Anyone who says they know the full extent of the losses is either a liar or a fool. The range continues to grow but it's only a range and could be considerably worse.
Nine months after the crisis in the American mortgage market began to tear through the financial world, the cost to banks, in terms of their own sinking investments, is approaching $300 billion. To shore up their weakened finances, one bank after another is racing to raise capital — a total of $160 billion so far.
The pain is far from over. Even the most optimistic forecasters say banks will suffer billions of dollars in additional write-downs on mortgage investments and other debt in the months ahead. The final figure for the banks write-downs could eventually exceed $750 billion — twice some early estimates — if the economy sinks into a prolonged recession, some analysts say.
What will the neighbors say? TPMCafe has a great blog about Will calling out the corporate welfare to Wall Street, going far to the left of mainstream Democrats. Of course, it also raises serious questions about the Democrats and how they managed to keep quiet and do nothing while this has unfolded. How in the world did they let this happen and why?
While most Democrats seem to have no objection to these huge welfare grants to the incredibly rich, Georg Will does.
Will argues that as a condition of accepting Fed bailouts, the banks' executives should agree to restrict their pay to $124,010, the maximum for federal civil servants. This seems eminently fair. After all, no one is forcing the banks to accept money from the Fed. If they think they can do better without it, then they don't have to take it.
It is remarkable that only a right-winger like Will seems upset about the Fed giving taxpayers' money to the very richest people in the country with no strings attached.
Good grief, it will never end. Did anyone in the Bush administration or GOP ever stop to ask questions? Just like on Wall Street or Iraq or post-Katrina, oversight has been completely lacking. And this is what McSame wants more of for the US. How many more surprise bailouts can we afford?
Sallie Mae , the largest U.S. student loan company, on Thursday affirmed its 2008 profit forecast, but warned of a "train wreck" in the $85 billion education financing market without urgent government intervention.
John McCain proudly supported privatizing Social Security to Wall Street a few years ago, so what does he have to say now? Now that the big financials are coughing up more bad numbers (WSJ reporting $6 - $8 billion more write downs for Merrill Lynch) we need to clearly understand how McCain thinks this is such a good idea. Why in the world would anyone want to risk the future of Social Security with Wild West gamblers? It only proves how little he knows about Wall Street and Main Street if he was so eager to outsource our future to these people.
For starters he ought to be talking about the fleecing of American retirement plans due to excessive charges by Wall Street but no, don't expect McCain to offer any common sense talk about protecting normal Americans. McCain doesn't travel in those circles and his advisers are all in the pocket of the Wall Street companies that are looking for their next taxpayer sponsored handout.
When the Republicans talk about an ownership society, they mean the banks and collection agencies own everything. I can't wait to hear McCain tell us how his economic plan would have avoided all of this but gee, I don't think he is going to throw his entire economic team who built this system under the bus. Not yet at least:
The numbers, compiled by online foreclosure marketplace RealtyTrac, also show increasing numbers of homeowners content simply to walk away from their mortgages as the amount they owe on their homes exceeds their value.
RealtyTrac said there were 234,685 foreclosure findings in March, up 5 percent from February and 57 percent from March 2007. One in every 538 US households received a foreclosure filing -- a default notice, auction sale notice or bank repossession -- during the month.
Could McCain be any worse with his grasp of economics? Who is he talking about and what kind of investors? Wall Street? Pension plan companies? American individuals planning their 401K? Real estate? Republicans who engineered this problem? Marrying heiresses to family fortunes? Who is he talking about? McCain is attempting to get the word 'greedy' out there but is too much of a coward to point the finger at anyone so one has to assume he's blaming all Americans. Greed has always played a role on Wall Street and our economic system with the drive to make more money (selling beer, for example) a cornerstone of the system. Right or wrong, it's just how the US system works.
It's pretty obvious that there was excessive greed on Wall Street as well as with real estate speculators but instead of throwing out blanket statements, how about some details or is McCain afraid of angering his base? Is he straight talk or mushy-mouth talk? Is it too much to ask to have McCain specify what went wrong and how we ended up with this recession? McCain needs to admit that his own party with his own votes created the severe economic problems in the US. His party and his advisers supported the excessive greed by Wall Street and they failed to offer any proper balance to the dream list requested by the financial industry. Where was his outrage about greed when all of this was happening? The problem didn't just start yesterday, so let's get more details from McCain.
