Hey! This isn't fair! We little folks are bailing out the big banks

[JDPriestly]

but we aren't getting anything in return. I don't want an interest in their mismanaged, incompetent companies. Do you?

If the government can step in and help the banks pay the debts of big companies, let the government step in and reduce the interest rates on the debts of ordinary consumers, and I'm talking about those usurious credit card interest rates.

So let's all demand that in return for helping out the banks, Congress should pass anti-usury laws, federal anti-usury laws that protect borrowers from excessive interest rates.

And while I'm ranting, do you know what the word "extortion" means?

Here's a definition I found on-line:

The use, or the express or implicit threat of the use, of violence or other criminal means to cause harm to person, reputation, or property as a means to obtain property from someone else with his consent. USC 18

The Hobbs Act defines "extortion" as "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right." 18 U.S.C. S 1951(b)(2).

http://www.lectlaw.com/def/e073.htm

The "market" as represented by the Bush administration has just threatened the American people and the world with economic disaster and made ordinary Americans cough up 700 billion dollars that we don't have and that we need for healthcare and schools and economic development.

You can say that the bailout is in our interest, that it is necessary all you want, but as we have seen today, the money was always available. It was always there, and a lot of it was really ours. It should have been paid to ordinary Americans in wages and Social Security and pensions, but fat cats withdrew it from the stock market and refused to put it back until we agreed to pay ransom for our money. They've been doing this stuff all along. You put money in a bank account and then suddenly you are told that you have to pay fees for various things just to let the bank continue to use your money. Those extra fees? You never agreed to them. They weren't an express part of your contract with the bank when you set up your account. The bank just reserved the right to extort extra money from you at its own whim whenever it wished. Usually we don't complain or even notice. But this time these fat cats overdid it.

The crisis was made up. It was extortion. We see that now.

The powers that be see that the American people and Congress caved to their extortion and are giving them money, they are returning a little money to the market. Hey, that's our money and the rich guys are going to make fortunes on it. What are we getting in return?

Now, I'm a compassionate person, but I oppose giving in to extortion, especially when the extortion is being perpetrated by the extremely wealthy.

We gave in to extortion in the S&L crisis. Now we are giving into extortion again. It's getting to be a habit of Republican administrations. Extortion by big business followed by a bailout at taxpayer expense -- and always as a Republican administration is coming to an end. And each time it gets worse.

And, to rant on a different topic, isn't this purchase of interests in companies and banks what you call socialism? What are these Republicans doing? I thought they believed in free enterprise unto death? What a bunch of phonies. I remember how the Republicans ranted and raved against the Communists in China throughout the 50s and 60s, and then, how Nixon did an about face and recognized China. Any Democrat who had opened the door to China would have met with Republican calls for a treason trial.

The Republican Party should just change its name to the Hypocrites' Party. That name would be more accurate. What a bunch of crooks.

Any comments? Am I wrong? What can we do about this?

[thunder rising]

1. The crisis was made up. It IS extortion. We see that now.

[pnwmom]

5. The crisis is real. n/t

[JDPriestly]

8. Prove that it was real.

Where did bulls' money come from today? It was there all the time. The Paulson money has not begun to flow yet.

This was sheer extortion.

And Congressman Sherman said that threats of martial law were mentioned to another member of congress. That is a threat of violence. There were threats of loss of property.

Ordinary Americans entrusted their life savings to these criminals and they used it for their own purposes -- paying themselves magnificent salaries and building themselves palaces. And then, they came with their handout.

I have a friend who is homeless. She gets disability but it isn't enough to pay a monthly rent and still eat.

And you should see what pittances people get from Social Security after putting a good percentage of their paycheck into the fund all their lives. It isn't really enough to live on for most people who have earned average wages during their working years.

Wall Street just committed extortion on the little folks in America -- and no one has asked them for anything real in return. Getting an interest in their crumby companies is worthless. They are selling bad investments yet again -- and this time to the government.

As soon as we became a part of the global economy, we lost our national identity. Wall Street cares about money, not the welfare of the American people. We have just agreed to hand over our money to wealthy institutions. And, guess what, we are not even requiring them to invest it here in our country. They can spend it anywhere they wish, and I assure you they will spend very little of it on providing better jobs, more efficient energy and a better future for Americans. Most of the money will be spend in other countries. Wall Street is not just greedy, it is traitorous.

[pnwmom]

9. At least two states, California and Massachusetts, have had trouble

simply borrowing the money they need to pay their usual expenses. Credit is a critical piece of how businesses and institutions do normal business. The credit liquidity crisis is undeniable.

If you don't believe the crisis is real, read Paul Krugman, the liberal economist who won the Nobel Prize in economics today. He says the current situation is "terrifying."

[JDPriestly]

10. California's problems are due to Proposition 13.

And the fact that the wealthy in California do not pay their fair share of taxes.

I live in California. The Democratic legislature wanted Schwarzenegger to re-impose a small car tax that he had lifted in order to get elected years ago. Schwarzenegger refused and was unable to balance the budget. As I understand it, Schwarzenegger then said that our state should just borrow the money. Now, what lender would want to loan to a state if the citizens refused to pay a small tax like that. How can the lenders trust that they will get their money back if the citizenry is so corrupt that it refuses to pay a small tax?

[pnwmom]

13. In the normal course of business, states borrow money. They have to pay

employees every month, but tax receipts come in in a much more irregular basis. This isn't a question of Gov. S. suddenly deciding to borrow money. That's a routine course of business in large institutions or businesses.

[JDPriestly]

18. The government still bills corporations who own huge properties

(think the studios) at rates that have only gone up very little from what they paid years ago.

Besides, the refusal to loan money is at the bottom of the problem. I'm saying that the refusal to loan money is simply obstinacy. The same folks who are refusing to lend the money will insist that the "fundamentals" of the economy are strong. So, if the fundamentals are strong, why did they take their money out of the stock market?

The problem is that the global economy has set off a race to the bottom with regard to wages. Americans don't make enough to maintain the standard of living that they had as children. They expect that if they have two wage earners in a family, they should be able to afford two decent cars and a comfortably sized house and cable TV and occasional meals out. But in fact wages don't stretch that far. That, however, is not a banking crisis. That is a wages crisis and nothing is being done about wages. This bail out does not even address the problem with excessive interest rates charged on credit cards.

[pnwmom]

19. McCain is the ONLY one who has recently said

the fundamentals of the economy are strong. Banks are increasingly afraid of lending to each other because the credit swap derivative problem makes them unable to trust each others balance sheets.

[Gregorian]

16. I don't believe that.

Prop 13 has been around for a long time. Wouldn't we have seen problems well before now? And besides, prop 13 isn't helping those out when they spend a million on a house. They pay ten grand per year on property tax. There is only a segment of the state that is allowed the true benefits of Prop 13. Yes, those who have owned property for a zillion years, only pay taxes based on a historic value.

This is a problem due to loans being given to unqualified people, from what I've learned. Although that may not be completely true. I don't know anyone who honestly knows.

[JDPriestly]

31. The problem is that loans were bundled so that the lenders did not

notice that they were buying loans that were obviously bad risks.

This procedure originated with Bill Seidman and the Resolution Trust Corporation.

Here is a tape of a Thom Hartmann show in which Seidman and Hartmann discuss this procedure.

http://search.everyzing.com/viewMedia.jsp?dedupe=1&index=3&num=10&col=en-all-pod-ep&e=21194150&start=0&q=life+and+health+issues&expand=true&il=en&match=query,channel&filter=1

It is a podcast of the Hartmann show on 10/13/08.

The link between this procedure and the sub-prime mortgage crisis is that this procedure permitted the problems with the loans to be ignored.

There is also a lot of a fraud in the loans, but the main problem is that the lenders thought that if they just bunched the loans up and then sliced the bunches into segments, they would still make their money even though some (turned out to actually be a lot) of the loans were bad.

The bad loans were not just bad because they were made to poor people. Some of them were made to middle class people like the well paid lawyer who was foreclosed in the house behind us. He was a good credit risk by any measure. He graduated with a J.D. from a well known Eastern school and never lost his job. He simply paid far too much for the house in an overheated market. He was young and did not know better. The bank should have known that the market was overheating and should have stopped making subprime mortgages.

[geckosfeet]

11. I live in MA. No such shortage. A projected budget shortfall but AFAIK

banks are lending and people are borrowing.

BTW - projected budget shortfall because of lower taxes, slower economy and business write offs due to economy.

[pnwmom]

14. Wrong. The STATE is having trouble borrowing, so it's asking for federal help.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajNjk_xRku.Y&refer=home

Oct. 7 (Bloomberg) -- Massachusetts scrapped a $750 million offering of short-term notes for the second time in two weeks as turmoil in the credit markets undermined demand.

The state, which asked federal officials for a short-term loan if it can't complete the deal, needs money for expenses as tax collections slow. The average cost to borrow for a year in the municipal market rose to 2.44 percent on Oct. 2, a Bond Buyer index shows, the highest relative to the Federal Reserve's overnight lending benchmark in more than four years.

``We're not going to sell into a bad market when we don't have to,'' said state Treasurer Timothy Cahill in a statement this morning. ``The state's cash position is solid. We will be patient and seek this additional liquidity when we have more confidence that we will get the best price for taxpayers.''

States and cities that borrow in the $2.66 trillion municipal market have struggled to raise money in recent weeks amid upheaval on Wall Street following the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc. Issuers have postponed more than $12 billion in bond and note sales as investment banks and securities firms, facing capital constraints, cut their support for the market, Bloomberg data show.

SNIP

[geckosfeet]

32. Well, then, we simply interpret events differently.

California, States Urge Feds to Widen Market Bailout

It sounds to me, like states holding crappy securities want to be eligible for some of the handouts. Why should bUshes, chEneys and their extended circle of incompetent accountants and money managers be the only ones in line for our money.

The state needs to raise some cash to make up for a budget shortfall. They are looking at options. A fed buyout (loan) from the 700 billion is one option. Selling state bonds is another. Selling longer term securities is another.

But, I agree, there are potential liquidity problems and one has to wonder why, if the state has these other options it chooses to request bailout money from the feds. My take is that we are eligible and should take advantage of the opportunity. I have not read the fine print but I assume that the recently passed handout bill permits state legislatures to sell off their worthless securities.

[pnwmom]

34. You're misunderstanding the situation.

It's not a case of the states needing to "raise some cash to make up for a budget shortfall." It's a cash-flow issue. Employees have to be paid monthly but tax receipts come in on an irregular basis. Short term securities are sold to cover the temporary shortfalls. This isn't an aberration; using credit lines in this way is a normal business practice. All large organizations do this in one way or another.

From the link: "California Governor Arnold Schwarzenegger wrote to the Treasury Department last week to say his state and others may need federal help as tax-exempt bonds are being shunned by investors, leaving governments short of funds to meet expenses while awaiting tax payments."

[geckosfeet]

35. If investors refuse to buy state bonds then they are fucked. That's how

we raise cash. Since tax revenues are way down, and if you say the state can't get overnight/short term access to cash, then indeed there is a liquidity problem. But this impacts all businesses and financial institutions and should in fairness affect all forms of lending.

My point is that tax revenues are down, the state has a budget shortfall. They need to make it up so they try to sell off short term securities (no one wants them) or sell bonds, which you are saying no one wants. They will have to sell longer term securities (stocks) in a grossly devalued market.

My other point is that states should also be eligible for some of the bail/handout.

[Mind_your_head]

17. What's AFAIK?

Why can't people define the acronyism.....we ALL HAVE FIELDS of specialty, which all have their own acronyisms......I'm not a cool kid in your work group b/c I don't know that 'alphabet soup' term!!!

Pisses me off!

TIA <-----Thanks in Advance,
M_Y_H <------ short for Mind_your_head (my DU 'name')

[Horse with no Name]

20. As Far As I Know=AFAIK n/t

[Mind_your_head]

22. Thank you.. n/t

[Horse with no Name]

23. YW.

:rofl:

[Mind_your_head]

24. Why are you laughing? What's so funny?

:shrug:

[Mind_your_head]

26. Horse with no 'sense' would be a better 'handle for you!

You've offended me when I asked an honest question!

[Horse with no Name]

27. I didn't mean to offend you

and I am sorry if I did.:shrug:

[Mind_your_head]

28. I'll accept your apology, but I still don't understand why you laughed?

[Horse with no Name]

29. Because you were upset about people using acronyms

And you said "Thank you"...which I typically type "TY" when I am on the internet.
I was just jesting with you when I typed my typical "YW".
I truly didn't mean to be offensive and I laughing at the direction of the conversation...most definitely not at you.

[Mind_your_head]

30. Yeah, okay......

I'll believe ya THIS time ;-)

:shakes hand:

[Bryn]

12. I have a question

Why won't the Congress pass anti-usury laws, federal anti-usury laws that protect borrowers from excessive interest rates? Why won't they? Damn it! If they don't, they don't care about us little people.

It used to be easier to pay back loans, credit cards when I was in my 20's and 30's. We used to have grace time. We don't have grace time anymore. Interest rates were low. It's hard to make a dent now because the government ALLOWED banks to rob us. We should make a strong stand on this one. Those big companies had it so EASY, oh boy, we GAVE them billions of dollars of our tax money. Whoopsie!

[Mind_your_head]

25. Don't ask that, you'll be laughed at! (see above) n/t

[Douglas Carpenter]

33. to believe that the financial crisis is not real - one would have to believe

that every financial media in every country in the entire world is part of this conspiracy and is intentionally lying.

One would have to believe that almost every single economist in every single country in the world is in on this conspiracy and is intentionally lying.

One would have to believe that every country in the world is in on this conspiracy and is intentionally lying.

One would have to believe that every individual working in the financial industry in every country in the world is part of this conspiracy and is intentionally lying - including by own brother.

One would have to believe that real estate values did not really bubble and then fall back.

One would have to believe that thousands and thousands of millionaires all over the world intentionally destroyed their own fortunes and ruined their own careers.

One would have to believe that George W. Bush intentionally handed the presidency to Barack Obama on a silver platter.

One would have to believe that the Republican Party intentionally discredited its own core ideology for at least a generation to come and is intentionally trying to make itself a permanent minority party.

The words ludicrous or absurd do not go far enough to describe how bizarre it is to claim that the international financial crisis is not very, very real.

[pnwmom]

2. I agree that we need a return to usury laws. n/t

[mediaman007]

3. Well, if we get a big enough share in the banks,

we will sit on the board of directors. There we can at least have a say in the pay structure of the executives.

[Fed_Up_Grammy]

4. Very well stated and I agree with every word.

[JDPriestly]

7. Thanks.

[fascisthunter]

6. Too Late... It's Fascism

[malaise]

15. I was always against the bailout

but I'll take partial nationalization over giving the crooks all the money. It destroys their cult-like paradigm and it won't take long for the people to hit the streets of the globe demanding their bail out for 'social good'.

[HughBeaumont]

21. Oh, we're getting something in return.

It's called "Recession" and, in all likelihood, "more job losses".

Bewsh. Where FAILURE is a way of life.