Wall Street’s cheering the Paulson Plan - a multi-billion-dollar taxpayer-funded effort to contain the credit market crisis. But a backdraft is underway in the blogosphere. Strategist-blogger Barry Ritholtz lays it out here in The Big Picture:
We now see that the grand experiment of deregulation has ended, and ended badly. The deregulation movement is now an historical footnote, just another interest group, and once in power they turned into socialists.
Comments rolling into Calculated Risk are uniformly negative, with the two presidential candidates coming in for some scorn for supporting the asset relief plan.
A temporary ban on short-selling from the SEC is drawing some arrows as well from Zac Bissonnette in BloggingStocks:
It’s clear why the SEC is now banning it: this isn’t about leveling the playing field or making the market more fair or efficient. This about the SEC using its power to manipulate the market upward.
Some close to the Street were critical of the ramifications too. “Wall Street has discovered a great business where the upside is potentially unlimited, but the downside is ultimately put on the taxpayers’ tab,” Cary Leahey, economist and managing director of Decision Economics told Reuters.
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In response, do feelings “for other people’s pain nor grief” apply only to the monied who stand to lose or do the interests of the working class who will be paying this bill, with interest, for generations to come matter at all?
- Posted by Buck in NCThere will always be criticisms from some quarters over any type of proposal. Unfortunately, most critics sit in their arm chair and do not have any feelings for other people’s pain nor grief.
- Posted by Michael56What Paulson proposed is the right thing to do and it is definitely what the Americans paid their govt to do - look after the economy and the people who cannot help themselves. The critics who must be brilliant people who can do no wrong do not need any help. We mortals do and thats why we have representatives in Congress.
“once in power they turned into socialists.”
Oh what utter nonsense! Can one of these pseudo-smithian-Chicagoans please consider the fact that their heroes were the ones running amuck making tonnes of money and not creating jobs, and that there might be another description of a situation that arises when government has to step in? Does every government intervention mean “socialism”?
Come on Reuters, are these the only bloggers you found?
No, the neo-con-freemarketeers simply put on their blinders and pretend that the world is as simple as 2 + 2 = 4.
Sorry boys, it isn’t “socialist” it’s reality.
- Posted by TalleyrandAccording to Bill Gross of Pimco he thinks the Government will buy securities for 65 cants on the dollar http://biz.yahoo.com/rb/080919/financial _bailout_gross.html
- Posted by david gI have bonds offered to me at 3 cents and lower all day.
These are the most complicated securities ever created and few know how to value them (a bond worth 3 cents looks cheap at 65 cents if you don’t understand it).
Wall Street selling Hundreds of Billions worth of toxic junk to the US taxpayer is the most dangerous situation I can imagine for the financial health of this country. They have proven themselves to be reckless, why would we trust them now? Who will be looking out for the taxpayer(me) and the future of this country for my 3 children?
Do we trust Hank Paulson and Ben Bernanke, they have shown their incompetence and the fact they are liars, how can we trust them now?
Can you imagine the way Wall Street will game the system to sell Billions of worthless bonds to you and me at inflated prices, so they can make Billions in bonuses.
This must be stopped, call write, email your representatives and demand no bailout.
New responsible business will step up in short order to fill the gap, thats what free markets do.
Well kiddies.. I doubt if anyone is asking..but I will. I seem to have read that in 2009-10 there will 2/3 MORE SUB PRIME loans going into “ADJUSTMENT”.. now if none can meet the “adjustments in 2007-08″ and we will have 2/3 MORE. And we “Need $700 BILLION” plus what is not being discussed like interest on that loan from China or.. HOW MUCH will 2009-10 COST when that bunch of sub primes blows up… DOES ANYONE remember that one that is waiting to be introduced to the congress and Treas.. NOT sure if the paper they are selling to Treasury NOW has that stuff in it..does anyone know.. as if NOT…well good bye usa.. ANYONE know about the 2009-10 sub primes or should we not ask as no one is talking about them? Those would be ARM and other funny money zero down etc loans in the 3-5 year ARM of 2006-07 that follow the ones of 2003-05 blowing out now?
- Posted by chuck Nashville TNNo Oversight, let out kids suffer - while we will enjoy the moment. The same people who took home millions of dollars of bonuses- get to keep running us into more misery in future. Thanks to our leaders. I agree, the sadest part of the story, letting ex-banker Paulson have all authority to help his buddies out. Shame on congress for not having a spine to stand up to this.
- Posted by Paul11The ‘Mother of all Bailouts’ should be answered with the ‘Mother of all Class Action Suits’. The class here being all most of the people in this country. If you can sue a physician for medical malpractice, an attorney for legal malpractice, why not the C-level managers, and members of the board of directors for financial malpractice? Or anyone who issued a mortgage without checking the applicant credit rating or proof of income? These people are specialists and should have exercised due diligence an practices acceptable and appropriate to their industry. That they didn’t act accordingly is negligent and shows malfeasance on their part, despite whether or not government regulations were in place.
For that matter include lawmakers, people at the Dept. of Treasury, Federal Reserve right up to the executive branch for not working in the nation’s best interest?
- Posted by SimonThis is a direct result of Republican policy and dogma. It all started with Reagan and his cronies and their deregulate, “private sector knows best”, dismantle FDR’s programs way of governing. The same idea didn’t work in the 1920’s and it can’t work now. Greed will always find a way. These are the same folks that love to buy stuff from China/asia (read WALMART) because the prices are low and profit in US high. Yet they never have a problem that China is one of the most bureacratic economies in the world, they don’t question that as long as they can buy low and sell high.
- Posted by RalphJP Morgan…Citi….BAnk of America…Each with 2 trillion on the table. I hope these guys don’t come calling on Uncle to bail them out. Our economic goose is cooked if so.
- Posted by Dave34This isn’t over. This window of opportunity is closing and the money is being created out of thin air. Good for the top few but horrible for the rest of us who will actually have to pay for all of this and fight the wars to defend it. The government has sold america and it’s posterity off to a few world elite. A massive re-structuring of financial business the whole world over. A centralization of power. Let this stand as an example again that our government is not here to act in the interests of americans, instead they will act in the interest of whoever they’re in business with or whomever helps them accomplish they’re task. It is beyond comprehension that we have obama/mccain running for our president and that members congress and the federal preserve are still able to walk in the sun. How much is enough? How long will it take people to realize that the current “choice” is standard washington fascism at it ’s best and is the enemy of all free thinking and sovereign people. America sure has alot to learn and so desperately needs to gain the intestinal fortitude to do what’s right.
- Posted by jasonTo give Paulson authority to decide which assets to purchase, at what price, without any oversight authority from Congress or the courts is INSANE. This is an “emergency” used to put the fox in charge of the henhouse. Look for Goldman assetsand assets of other favored firms to be purchased at 100%.
- Posted by LindaNeither Wall Street nor the United States, will survive the consequences of what promises to be…a multi-trillion dollar BLOW-OUT.
- Posted by Dr. Gary L. GlumThis insane “mother of all bailouts” proposed for the benefit of those who brought us “creative accounting”, derivatives, usury in credit card rates, foreclosures, etc., is probably going to pass Congress. At the very least, the taxpayers should be “thrown a bone’. As part of the deal, all banks should be required to forgive 100% of student loan debt (public and private) to American citizens. That is a drop in the bucket of something like $1.5 trillion that has being proposed and already handed out. Further, all mortgage payments made should go the US Treasury, with a small “servicing fee” going to the banks.
- Posted by MikeThere are three failures that made up this horror that is far from finished as now being “deb5ted up and bowed waved to next administration to do the real work.
- Posted by chuck1. Gov Agencies/WH/Congress on BOTH sides over last 20-25 years has been bought by WS/Banks and the monies, D by Hedge funds/lawyers, R by Wall St and both by banks. They no longer care, nor ‘represent the people
2. Corp usa has come under the “anonymous money forecasters, annalists and experts, investors” that are never ID’d, bu given total nay/yea over how things operate under the guise of “free markets” which we rarely practice if at all. REAL FM means invest back into firms, not gut and strip them.
3. A population that has for last 30 years is a product of a education systems the dumbed down usa to point where “anything goes” as long as it plays well on 30 sec “nitwit networks news”. Simply put that “boring stuff on money, government and such is a waste of time, as I will never use it”. and now it shows. as none it seems have.
RIP usa, the great experiment failed.. and like Rome has done so as citizens know more about what is going on in the big screen and arena, then Wall St’s and Congress..RIP usa, it was fun ride, but now, you finally have to get it off the tiger,.. and most simply do no know how.. as it will not “Be fun”!
Just as republicans live and breathe deregulation, so do democrats live and breathe big government, big spending and big taxes and I just can’t see giving anymore money for any reason to anything that is not related to me or my family.
Unfortunately as much as people would like to see some regulation, the democrats are going to use this opportunity to swing things too far to their side instead of balancing it out. Neither one of them knows how to have a happy medium
- Posted by HankThis is the beginning of Socialism in the United States. Not only has the government seized control of the financial markets, they are proposing to RAISE THE NATIONAL DEBT LIMIT TO 11 TRILLION DOLLARS. They also are proposing to give a massive amount of unchecked power to the Secretary of the Treasury. Every American should be contacting their representatives and DEMANDING THEY VOTE AGAINST THIS BAILOUT!
- Posted by ETThe American will bear the debt of its speculators and banks for generations, and the whole country is bearing the debt of the world. Today, Bush and Paulson may seemed to have officially committed America to its death spiral in a universe that is adjusting itself to a “post-America” world. Sadly, the American people do not realize that their passivity and acquiesce, their indifference and disinterest, and their blind obedience to regulated and controlled media news finally destroyed what is left of what the government hasn’t already destroyed. They have forfeited Democracy in favor of a variant of National Socialism. They are witnessing one of the most significant events in American history and barely realize or understand it.
- Posted by M BucciRegardless of the solution chosen to get us out of this situation, the pack that has been leading the US into this mess should be replaced. Decently salaried men with more than their bonuses and the interests of shareholders in mind, is what the country needs now. Boring and conservative grey mouses, that take their lunchpack every morning when they ride the tube to their decenlty furnished offices they should be. Like Warren Buffet who doesn’t spend millions and earns billions.
- Posted by Jeroen BergMany are at fault: the borrowers who thought their houses could never decline in value, greenspan who kept interest rates too low for too long, the banks who stupidly lent and over leveraged themselves, and of course the regulators who let all that go on as it was clear that a real estate/banking crisis was a disaster waiting to happen. Lessons learnt by our grand parents during the 1930’s were forgotten.
- Posted by JacquesThis is the day of the national sub-prime loan reckoning. Americans have been living too high on the hog for years, borrowing money from China and the Middle East to play their lethal games around the world that only makes international relations worse. Just cut your military spending in half, raise taxes on the super wealthy, balance you annual budgets (Why is there no talk of a balanced budget amendment? Can you still trust politicians with your money?) and reduce you lust for having “everything now”. This greedy generation has impoverished its children and grand-children significantly. And the sad thing is that Mr. Average America just doesn’t get it. They think that they can afford to traipse militarily throughout the world at little cost. Now you will have to pay the piper.
- Posted by JDonald