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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I want a televised comprehensive explanation of the problem before I support this. I want all the cards on the table. I want to know that we aren’t being railroaded into something before Bush leaves office. I want to mobilize.
- Posted by ChrisOK - There seems to be consensus that this stinks. I think everyone agrees that it feels like we are being asked to act in a far to hasty manner. But what does anyone who has posted plan to do? This one really calls for a MARCH. Don’t you think?
- Posted by ChrisWhy isn’t anyone mentioning Greenspan? He’s much to blame. You can’t bring the cost of borrowing money to 1%. The interest you are paying on that money is less then the inflation on it. Greenspan set the banquet table and deregulation handed out free tickets to the party. Now that the parties over we get to sweep up the mess. But what choice do we have? Rather then being vindictive lets make the best of the opportunity. Now that I am a part owner in AIG and others its time make policy decisions that show that the economy was always been here to serve people not people for the economy.
- Posted by JulsThe cost of buying the 2 million foreclosed homes, in lieu of foreclosure, would be $400 billion (if my math is ok) But once again, the sheep are meant to be shorn-
- Posted by rayboFirst, the debt crisis is partly a consequence of relying on debt to finance the Iraq War, because the war. In addition, the debt crisis is partly a consequence of a post-9/11 economic policy that relied on stimulating the residential construction market even though the U.S. housing stock was already the best in the world and there had not been any significant change in demand for new housing. Furthermore, we are seeing the error of Vice President Cheney’s often-quoted remark that one lesson of the Reagan years is that deficit spending doesn’t matter; in fact, the current crisis is exactly what happens if a government acts like deficit spending doesn’t matter. This Administration may have to take second place to the Hoover Administration for most disastrous domestic policy in U.S. history. But, when you combine this with the shocking and devastating foreign policy crises we are burdened with, the currently Administration is without question the absolute worst in U.S. history overall. Perhaps the only surprise is that, despite the overwhelming incompetence at the top, both Secretary Paulson and Chairman Bernanke seem to be, not only extremely competent, but exactly the right people in the right place at the right time to address the economic crisis.
- Posted by BobTo make the bailout justified, what will the government propose to do to collect on these debts that the almighty businesses cannot do? This question must be answered.
This is a typical Republican response to protect businesses from enduring consequences of their behavior.
The Breakdown of the financial Institutions is itself a problem, but it is also a SYMPTOM of a systemic problem that commands a solution. Artificial resuscitation alone is not enough.
The Homeowners don’t have the ability to pay their mortgage
Deregulation and lack of oversight allowed this to happen since Ronal Reagan’s deregulation.
Wages have been declining making mortgage payment more difficult.
Jobs went overseas and without government or union protection full-time jobs broken up to form part-time jobs so employers are not required to pay medical benefits, etc.
Loss of healthcare resulted in people having to pay for lifesaving medications (Diabetic, Cancer, heart failure), instead of mortgage.
All the above economical phenomena will have an impact on the outcome of the bailout; therefore they must be addressed as part of the plan.
The top 1 percent needs to pay their fair portion of tax,
A Stimulus plan needs to include a tax break for the middle-low income people to free up funds to repay their mortgage and a $1000 to help make purchases that they couldn’t.
More regulation and oversight of the Financial Institutions.
The government (much like any investor) needs to develop a portfolio of tax resources that includes the top 1 percent and businesses with off-shore accounts.
- Posted by Nelson RaverWell folks…the $700 Bil has come down to “them verse us”.. and it looks like “them” won.. so unless the “other 95%” elects new folks to office, regardless of party.. or pulls a French Revolution.. and marches on DC. . if we can afford it after the corn is used for eth… we will simply have to, as the lady said “Let them (us) eat cakes”.. as said.. if the corn has not been used for eth..
- Posted by chuckAmusing in a way.. no one knew it was happening, no one was fired for it happening (”to Fire” means toss out without the platinum chuts (as now days “golden” packages for Dir or VP levels) no in congress had a clue and none in DC had a clue.. Perhaps we should have a new holiday.. Sep 21… as it seems kind of a virgin birth of economic breakdown as “a gee just happened and none knew it was coming”..
A new holiday (Call it Hanky P Day) to celebrate the day the “Wall St/Banker account scrolls were found in a cave in NYC. They were brought to the holy city of DC and put on alter of the Hanky P. He had his lord, had his lord Bush tell nation, “All harken, soothsayer Hanky P spoke unto me as I find we are broke”.. and the 535 wise men and women came forth to him with offering from the peoples and said. “hey we lost millions to, so we bring the commoners gold to pay us back what the money changes lost” and the world was as it was before.. corrupted and led by the lord(s) of incompetence who told the commoners,”greed is good” (for the rulers and lords) and the people said “aw @)&*%#” and went about their tasks..
Gee, I do not know what everyone is complaining about.
1. CEO’s of failed companies have pocketed millions of dollars that will be invested in the economy.
2. Market forces are at work and have eliminated companies that could not compete.
Ronald Reagan would be proud of what GWB has wrought. It is, after all, the culmination of the former’s legacy.
- Posted by RonThe supposed “rescue” of the banking system is not socialism. It is pure Republicanism (Republicanism = ripping off the federal coffers). It is bad enough the Republicans have been reaping huge profits through their war-profiteering… now they will make even more money for their fellow criminals by bailing them out yet again with taxpayers money.
- Posted by ChuckIn eight short years Bush has managed to destroy the Constitution and now effectively bankrupted America.
If Bush did not wear a US Flag Lapel Pin he would perhaps be recognized for the true enemy he is.
McCain, since he is a Republican, is obviously just as much of a criminal.
The cost of this bailout to US Taxpayers will be more than a trillion dollars.
In the end, your money will be worth less.
This Administration has brought incompetence, corruption and greed to new levels, exceeded only by countries such as Zimbabwe, Russia, Thailand and others.
Consider this - the conservatives have given us an $11 trillion deficit. It is time for a thousand dollar bill to replace the hundred.
Enjoy
- Posted by Leonard MagazineGive me my 6,000.00. Then I Can decide if I want to bail these billionaires out (this bailout also includes FOREIGN banks)!
- Posted by Beverly from Colorado SpringsW’s crowd–the gang that hasn’t shot straight yet–simply is not competent to be entrusted with the kind of authority they’re requesting. If given their head, they’ll make a bad situation incomparably worse. Give them a sow’s ear and they’ll turn it into pig****.
Look, for the moment, just restore the uptick rule, which THEY suspended a year ago–and see what happens. And hand a broom to Wall Street and demand that it clean up its own mess. I think it would do a better job.
- Posted by AchshavRather odd.. not one person is saying how this was allowed to happen, seems the press and the/their “experts” missed what was going on,the “Harvard MBA’s et al on Wall St “missed” what was going on, the “bankers and investors” missed what was going on. and of course CONGRESS/WH/Agencies “missed” what was going on. and it seems even after the funny accounting methods of Enron era, the Accounting firms “missed what was going on… And most got holiday bonus’s for “missing” what was going on.
- Posted by chuckSo it seems via the ruling class… we have a new King with no controls of any kind.. so “long live Kind Hank” as the upper 4% need more and concern for citizens is “missing”. Amazing how little the public has said.. so bye usa.. as NO ONE is telling us what it will really cost or HOW IT HAPPENED.. perhaps some should be in jail for it.. “Long live King Hanky Panky”, Lords and Ladies of Congress.. and their Robber Barons of Wall-St and “investors”…
The nation is dead.. “long live the king(S)”
Crooked as a dogs hind leg.
- Posted by Michael McKeeHow are they going to track the 700 billion dollars? Who is going to walk away from this crisis with an obscene amount of money in their bank account? Why aren’t we prosecuting those responsible for the whole thing in the first place? Are they going to track the seven billion dollars the same way they tracked the money sent to Afganistan? The same people are handling this new fiasco. Give me a reason to trust and I’ll give you a hundred why I shouldn’t.
- Posted by Michael McKeeindubitably, it is not SIMPly a partisan production; and if you truly believe your vote counts any longer, may want to think again. the electoral college is at the heart of the demise of a once Democratic Republic. We the People were disenfranchised the moment those guys stepped foot on Plymouth Rock, since the hemp hit the Bay, and since our founding fathers’ slaves turned another cheek. ‘Make no mistake’, the New World Order will ever be remembered to have been established in our era - September 11, 1991 - Bush I address to the nation. Mount Olympus is sliding into the Sea, and ever-vigilant Nameless One will gobble it up, just as sure as we’ll rise again to repeat the mistakes of eons…and yes, SOME derivatives have been let wild. But more likely its the 40 to 1 debt ratios allowed to be carried around by the Big 5 - an albatross none could withstand forever!
- Posted by ballywho!Hey! Quit picking on Henry Paulson. He is set to become “the King of America” (unlimited power; unreviewable by the courts). I like how George Bush opined on the bailout. He is all for capitalism and a free market…except when he’s not for them.
- Posted by MurfAs what other citizen seen what the Fed n SEC in panic mode n still digging bigger hole to bury themself.how is the citizen going to pay for all debts n wars that going on in Iraq.
- Posted by visvisIF SEC stop investor from selling stock then your currency US$ will not be that value as u have depress your own currency n value will be lesser then other country.
- Posted by visvisNext will be your wallet what is in there your credit card(s) .
- Posted by visvis