OK – Congress has tanked so far.
Neither candidate has come up with a plan.
How about this: Together WE can. Collectively.
Am I serious? You bet I am.
For starters, STOP calling what is needed a “bailout” – START calling it a “Restructuring”.
Who knows. Maybe Barney Frank will get inspired – and saved – by YOU!!
Besides, the PAC-man like “gobbling up” by Bain Capitol, Warren Buffet, Bank of America is also underway.
Please share widely!
Here is my thought of the moment ..
Global Economy My a** …
It is reported that in the past week a number of Chines BAnks actualy set up subsidiaries in California in order to transfer their bas assets onto its books .. which of course would then be dumped onto the US taxpayers ..
The provision allowing this near crime on the people has got to be AXED pronto before I would talk to anyone further on the matter.
How can anybody come here and start a sentence with “It is reported that…” and then not include a single link in that comment?
http://www.chinaeconomicreview…
<
p>I hadn’t thought about this in terms of the bail-out, but it IS fascinating that Mellon and Goldman Sachs were scouring the world for bad debt – weren’t we producing enough at home? Come to think of it – how many of these bad derivatives also have bad Chinese/European debt as a component?
<
p>2. Better than letting the Giant Chompers eat distressed, undervalued companies and securities and become the King Kong Chompers?
<
p>3. Better than a “loot ’em on the way out” boondogle?
<
p>Well?
<
p>Here I go with a put up or shut up again.
Noone else seems to be nibbling. Should I throw in the first line or do you want to?
The goal of any proposal must begin and end with the intent to RESTORE CONFIDENCE in the markets. Government should not interest itself in the profitability or loss from any transaction or by any investment. It can not pick and choose as this action is seen as totalitarian. No one in their right minds will play in a ficxed game.
If nothing else these past few years should have shown everyone that government meddling into free markets DESTROYS confidence.
Any proposal aimed at restoring confidence would need to limit any government involvement to incidental. Government can not be seen as FIXING PRICES or having prefered enterprises.
<
p>I was just re-reading the failed bill and wasnt aware that the following change that had been inserted as an “window dressing”.
*********************************************************
Section 132 of the proposed Emergency Economic Stabilization Act of 2008, titled “Authority to Suspend Mark-to-Market Accounting” restates the Securities and Exchange Commission’s authority to suspend the application of FAS 157 if the SEC determines that it is in the public interest and protects investors.
<
p>Section 133 of the proposed Act, titled “Study on Mark-to-Market Accounting,” requires the SEC, in consultation with the Federal Reserve Board and the Department of the Treasury, to conduct a study on mark-to-market accounting standards as provided in FAS 157, including its effects on balance sheets, impact on the quality of financial information, and other matters, and to report to Congress within 90 days on its findings.[4]
*********************************************************
<
p>Perhaps it would be in all of our interests if the SEC would begin its “study” as would have been included in section 133 and determione to what extent this CHANGE IN ACCOUNTING RULES would allow the financial inmdustry to do its own flipping laundry and stay out of our pockets.
http://www.phoenixrealestategu…
<
p>I admit I am such a wonk that I now have my network printer printing it out [damn – it jammed it up – I am going to have to get someone else to print it with a heavier duty machine tomorrow]. Oh well!!
<
p>Nomad – I just did not have time during the work day. I know one of my friends in the financial industries tells me he is already up to 11 loopholes that would have allowed departing executives of the failed companies to loot us on their way out the door and bypass the protections. Mind you, I don’t have his list of the “chapter and verse” where he says these loop holes are lurking. Read away. If I didn’t have to work full time I would gladly take a full week and pick this apart and be part of a rewrite team. I love doing that sort of thing, actually.
Someone said they got rid of the golden parachutes and replaced them with camoflage ones đŸ™‚
Something tells me you’d do a better job than the authors have done. Lotta people out there in the field would miss you though.
not us.
<
p>that’s my input. If they need their bad debt bought, tax wall street transactions (which we don’t currently do). 25 cents per stock transaction would amount to $350 billion a year. They can pay for their own damn buyout.
If, as Ry says currently there is no “toll”, no tax, no self-pay for governmental infrastructure AND a 25 CENT a transaction would generate 350 billion dollars [RY – where is your source for these two assertions, please] – well, user fees, why not? User fees for Wall Street, why not?
Transactions on Wall Street occur with no fees and no taxes whatsoever at the present time.
There is a transaction fee but if I recall it is something in the range of 3 cents per share. I think its used to fund the sec.
The SEC “section 31 fee” is based on the dollar value of the transaction. It’s $5.60/$1000000.
I remember it as being the annoying factor that causes me to have to calculate into the pennies when doing my schedual D’s. Everything is something and 97 cents đŸ™‚
front-paged post a few days ago. i think it was actually kos. the quick math was done taking just 25 cents and multiplying that per transaction and $350 billion was the result. The post came as a result of an economist who wanted a .5% tax on each transaction to fund it and the point was made that even if such a small sum were ‘too much,’ then even just a flat 25 cent transaction cost would net $350 billion.
I know it sounds attractive. Because a quarter, hey. We can all pay a quarter.
<
p>But there’s no free $350 billion lunch.
<
p>Here’s what would happen.
<
p>There are other stock markets. Not in the USA. Everyone would simply use off-shore brokerage. And foreign stock buyers would buy Microsoft and GE in London and Singapore, not NYC.
<
p>You’d get much, much, much less than the $350 billion.
<
p>And the tax would cause some other side effects you probably don’t want….but can read about if you like dense econ reading – and let’s face, who doesn’t – in this IMF paper.
<
p>That’s what happened when the Swedes did this back in 1983. Good ol Swedes. (That was back when they had Wilander, Edberg, Jarryd, Sundstrom….frigging bad-ass blond band of Borg-inspired backhands).
<
p>Trading activity went down and down.
<
p>They repealed the tax in 1991.
each transaction, use some other measure that would keep Wall Street accountable for their mess. I’m not saying my suggestion is the best way to do it, I only threw it out there as a general idea. Surely, something can be thought up that would hold Wall Street accountable and protect the citizens of this country in all the details. Maybe it’s the ’92 plan from Sweden, maybe it’s something else. All I know is it better not be a massive blank check that doesn’t combat the underlying problems.
<
p>The market doesn’t work if there’s no risk for major investors. I don’t see anyone in Government screaming about bailing me out of the hundreds and hundreds and hundreds (and hundreds) I pay in college loans every month for having gone to state school – and believe me, I struggle a lot more paying them than the already-wealthy investors this plan would bail out. Yet, I took on that debt and now have to be held accountable to it. So should Wall Street. If anything close to Paulson’s plan passes, it’s asinine and borderline criminal as far as I’m concerned. We need solutions and the faster the better, but the Treasury’s plan was no solution – one way or the other, the solution to this plan has to be funded by Wall Street and not ordinary Americans who had little to nothing to do with this mess.
So part of the question is how to put some skin back in, as part of the restructuring. Most economic activity pays at least some of its real costs.
Nobody was sufficiently interested to generate a discussion. Look at my recent posts if you are interested.
<
p>And the proposal by Paulson is a bailout, not a restructuring. It also doesn’t address the actual problems in the economy.
<
p>Either the interest rate data is being faked somehow, or else there isn’t a widespread crisis in the credit markets. Non-financial companies are able to borrow at historically low rates right now. Local banks are filling with deposits as people flee the huge banks that they no longer trust.
<
p>The worst part of this proposal is that we have given the investment banks the power of extortion. If they sell everything they can for the next two days, the markets will drop enough that Congress will panic and give them all the money they ask for. The big banks that benefit from this giveaway have huge incentives to cancel every line of credit they can today. Wall Street can manufacture an apparent crisis at a small cost to their profits any time they want to. The first problem we have to solve is how to break up oversized banks to prevent them from having so much power.
you should link to your posts. I’ve linked them to a few places, too. Honestly, you may even want to think of writing a diary.
We have now reached a point that there is an incestous relationship between Wall Street, big business in USA/worldwide and our executive and legislative branch of government. The tail is now wagging the dog.
<
p>The unwillingness of banks to lend has already taken it’s toll in aviation. jet Blue and another smaller carrier have cancelled aircraft orders with Embraer due ti lending. Numerous corporations and individuals have contacted Embraer and advised them to put a “hold” on their orders pending financing difficulties.
<
p>Is there an intentional manipulation of congress going on
by “big business”? Do they actually have us over a barrel?
<
p>I think the new congress needs to look at the de centralization of financial assets in US business. a restructuring of corporations to make them smaller and more manageable and to protect the US economy from future failures so that one company or several companies can’t take the entire house down ie AIG.
<
p>AND—it’s about time that Congress answers to the people. Time for a whole new crowd in Congress. They have just proved to the voters that they are currently unwilling or incapable of doing the people’s business.
It is the removal of firm regulation, and lack of transparency as well as perverse tax incentives that have fueled the current lack of integrity in our financial institutions.
<
p>A “perverse tax incentive” for example is that economic activity which leads to loss of local jobs [by which I mean jobs in the USA] is rewarded.
<
p>The tax code and financial market/product/institution regulation should be structured to reward desired outcomes and extinguish harmful outcomes.
<
p>Unfortunately, greed [i.e. maximizing personal gain] is what is rewarded absent clear, consistent regulation and transparency.
When the music stops, someone must pay. The present financial system leaves us always in search of that last chair. This time around, the wealthy are not being accommodated as quickly as they were in ’29. But, their money is on the line and they have much more resources that we; they’ll do alright. After all, they write the rules.
<
p>There will always be a new scheme to increase credit. And, as any Ponzi scheme, the first ones in make money. The way out is to end using money as debt. Regulation is always only temporary. Remember, Barney Frank and Joe Kennedy – as well as many others – led the way in moving regulation aside for their own purposes. What is past is prologue. The only solution is to change the monetary system to prevent this naturally.
<
p>Changing the monetary system wouldn’t be easy. It would require a marshaling of intelligent people to come up with a safe method of scraping the old system and implementing a sound monetary policy. Are there any intelligent people left that can do this? A Manhattan Project for money? A concept you can take to the bank.
Set up direct loans from the Fed to the businesses and persons looking for them. Set up regulations to avoid deceit that would lead to bad loans, and penalties for any that got throught the screen. Let investors buy into unique treasuries to create the fund (guaranteed, with lower corresponding lower interest rate), and loan out at a somewhat higher rate to those needing the loans. No bail-out for those who made the bad loans while giving out excessive executive compensation.
I’m sure you have all been waiting with bated breath. Let the weak financial institutions fail. My feeling is “let the rich get poor”, I bet they have money squirrelled away. Less bills for the general population, more money in the general population’s pocket. Then you can afford to raise taxes to care for people who need it. I know, too simplistic.