I'm not talking about that abomination the House Repubs have put forward on behalf of McCain. I'm talking what Dems hammered out over the last few days. Here are the known particulars: I want to see more pain for Wall Street... greater oversight, many, many criminal prosecutions, going after ill-gotten gains of the last 10 years, etc. I want to see less money committed to this... particularly after reading: I don't like how Paulson can get another $100 billion by just asking. I do like the oversight. I do like how Congress can simply stop it at $350 billion. I like the equity. I like the compensation part. I like judicial review. I like the homeowner stuff in theory. The details have to be carefully arrived at, as I don't want to reward some sumbitch who is intentionally living beyond their means and I certainly don't want to subsidize his stupid house purchase. What I really want are major structural and attitudinal changes to Wall Street, but this doesn't go there. I still think the whole crisis is overstated and I think a lot of this is about two things: one last grab by the Bushies and intentionally crippling President Obama. I can, however, hold my nose on this... but one compromise to the House Repubs/McCain and I'm willing to let it sink. Thoughts?
Other than window dressing, it's not much of a compromise for the taxpayers. Congress gets a little more control, and I suppose that's a tiny bit better than turning it all over to the Treasury, but it's still probably going to sink the dollar, and it's definitely going to screw the taxpayers.
How can Wall Street not change? Who will give them the $ to borrow so heavily again? Credit will never be as loose as it was - investors just won't accept that much risk for such little return. Enough people have been burned that people's willingness to accept things at face value (hello S&P/Moody ratings) is shot...Wall Street's credibility is so shot that anything that they do that is unfamiliar won't get touched (i.e, in the past people just bought debt b/c someone said it was AAA even if they didnt' understand what they where buying exactly) Who is going to lend to homeowners under a liar loan? Will we ever see days again where people buy houses on ARMs expecting they'll just flip it? People got greedy thinking easy money was to be had and now everyone has learned that borrowing cuts both ways.....
One more thing. The whole executive pay thing is a distraction. It feels good, but compared to the rest of the bailout, it's meaningles for Main Street. It's awfully similar to the phone company protection measure in the PATRIOT Act. It only serves to move the debate from how bad the citizens are getting screwed to something that Congress can argue about.
Of course it's meaningless as it only applies to the companies that apply for assistance - however it sends a pretty big gigantic signal to boards & management that if something is not done about executive pay packages, Congress is ready to step in. I predict a rash of "Say-on-Pay" resolutions being put on proxy statements and eventually adopted this proxy season for public companies (thus far there's less than 10 companies that do it).
This essentially is the same plan, tax payer dollar will be used to buy BBB papers. I find it rather funny a few small changes to the facade make whole lot of people feel like its now a "compromise". I guess whatever it takes to get something done. Now, lets get this thing started before the market loses all confidence.
If only. I wonder what would be best... ... ... oh yes, now I remember... To crush your enemies, see them driven before you, and to hear the lamentation of the women.
I dislike the changes from 700b to 350b. This whole thing is smoke and mirrors anyways. Just tell everyone 700b, write down 700b and spend less. the 700b was just pulled out of the aid anyways, changing the number this late in the game, does not provide the confidence this is trying to manufacture,
This plan isn't exempt from Judicial Review and can be cut off halfway - those aren't small changes those are two huge differnces right there. Sunday's Paulson bill was about 3 pages. The drafts of congress' version are about 40-50 pages long. That's a pretty big markup.
The compromise sounds pretty reasonable I like the idea of giving the money in phases with oversight. I don't have a lot of support for bailing out homeowners who took out crazy adjustable rate interest only loans, but I guess if we are bailing out the lenders who made these stupid loans we can help out the homeowners a little as well. Also, I don't really care that a CEO gets paid alot. That doesn't really affect me.
Funny to see you back here. All week long I have been reading articles in the financial press about the difficulty of measuring the value of these troubled assets and have heard Messrs. Berananke and Paulson testify about the same thing. Do you still think you and your computer can determine the value of these assets to a certainty? If so you may be needed in Washington.
Don't. I've done a lot of research on this and the trend was pointing one way before this month - it's only going to gain momentum, and only in one direction.
The whole 700 billion thing was just a big number that they were hoping to have some "shock and awe" value to boost the confidence of the market. The actual buying of the level 3 assets could take a long time, its not like they were going to spend all 700 billion in one shot anyway. Judicial review? Don't think its all that relevant at this stage.
