I want this bailout, if it has an equity stake. This will be helping future generations.

[redqueen]

How can people be against any bailout at all?

I was jumping for joy this morning. Literally, jumping for joy in my bedroom as I watched Nancy Pelosi state that a requirement for the bailout would be some kind of compensation for the citizens of this country.

I'm going to keep calling and encouraging my Senators, Representative, and both Majority and Minority leaders, pushing for our equity stake.

Doing this bailout will soften the effect of the correction that needs to happen. There's no need for a crash. A recession would be much better for everyone in the world, not just "Wall Street".

[Junkdrawer]

1. Do you support the bailout of bad credit card, auto loan and student loan debt?

Because, last I heard, Paulson will be able to buy those things from banks.

[redqueen]

4. Where did you hear it from?

Was the bailout originally tailored to only help banks which were failing due to mortgage loans and those kinds of loans alone?

I'd need a lot more information on that.

[Junkdrawer]

10. "Student, car debt quietly added to bailout plan"...

In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other "troubled" assets held by banks.

The changes, which were included in draft language that also opened the bailout program to foreign banks with extensive loan operations in the United States, potentially added tens of billions of dollars to the cost of the program.

Although it was a major addition to what was already the nation's largest-ever bailout, it did not become part of the debate between Democrats and the Treasury over details of the program. A Monday counterproposal by Senate Banking Committee Chairman Christopher J. Dodd included such consumer loans as well as mortgages, just as the Treasury's draft did Saturday night.

"The costs of the bailout will be significantly higher than originally considered or acknowledged," said Joshua Rosner, managing director of Graham Fisher & Co., who charged that the Treasury and Federal Reserve have not been "forthright" about the ultimate cost to the public. The plan gives Treasury the discretion to buy the non-mortgage loans and securities in consultation with the Fed.

...

http://www.washtimes.com/news/2008/sep/23/student-car-debt-quietly-added/

There was also a NYT article that Dodd's counter proposal had these same provisions, but I don't have a convenient link. It was buried in the NYT article. It seems no one wants to talk about this publicly.

[redqueen]

17. Time to start making noise about it then.

I love always having new reasons to harrangue these people. I just like cracking whips. :)

1 (800) 828 - 0498
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1 (866) 338 - 1015
1 (877) 851 - 6437
1 (800) 459 - 1887

[Romulox]

23. The irony is that DEBTORS can't get out of student loan or auto debt in bankruptcy

But their rich creditors can! :puke:

[Junkdrawer]

30. Absolutely true. Bankers first is the common theme. n/t

[El Pinko]

2. Explain to me how a massive explosion of debt on top of debt and further devaluing of the currency-

...is going to translate into any sort of "equity" for anyone?

[redqueen]

7. We sell off the assets later.

We're going to have a massive explosion of debt and further devaluation of currency whether we bail them out or not. The only difference is how much, how fast, and the consequences in future years.

[El Pinko]

12. To whom pray tell?

The foreign countries who financed our real estate binge already practically own us.

Even after the bailout, the rows upon rows of stucco crapboxes will STILL continue to plummet in value, even as things like food and fuel soar.


If you want to end the economic destruction, you need broadbased WAGE INFLATION, and the only way to do that is a massive program to create domestic jobs and bring back value-added industries to the states.

Giving a trillion to the rich is not going to fix a damn thing.

[Virginia Dare]

16. The Europeans and the Japanese will come bargain hunting..

they've already been doing that with the falling dollar.

[redqueen]

18. We can't sell them immediately... we wait till after the recession is over.

This has already been done in Sweden. I'm not sure if they ended up selling to foreign investors, but I'd imagine there'd be a mix of ownership.

[Virginia Dare]

52. That could take ten years by some accounts...n/t

[redqueen]

54. It will take longer than that. (nt)

[El Pinko]

20. Where did you buy those rose-colored glasses?

I really need a pair.

[Virginia Dare]

51. I'm not suggesting this will lift us into glory....

but they will likely come shopping, probably for the upper end properties. Doesn't help most of us out.

[redqueen]

56. True... but what will help most of us out...

is getting this correction to be more of a soft landing than a crash. That will help everyone.

And also, it gets a little true socialism started, and under a republican president. Score. :)

[Virginia Dare]

57. I sincerely hope it works, but I have my doubts...

it's a broad plan, but since nobody can see into the future who knows how it will work out. The devil is in the details, and nobody has time to worry about those right now.

[redqueen]

58. Okay time for me to post *my* pipe dream...

since they're so popular, what the heck, right?

So remember how the unitary executive fanboys had their USA PATRIOT Act wish list all ready and waiting for the 'catalyzing event'? What if our power to the people types had such a list, and put all those goodies in this urgently, desperately needed rescue bill?

Ah, dreams. :) Next I'm gonna imagine what I'd do if I won the lotto. :P

[Virginia Dare]

59. I'm with you all the way there!...

make this the neo-cons 9/11 in reverse :hi:

[Virginia Dare]

60. dupe

make this the neo-cons 9/11 in reverse :hi:

[Toucano]

21. I think if we buy the paper at a fraction of it's value

The banks can take it off their books and their balance sheet improves rapidly. They are then willing to make new loans at normal, pre-deregulation terms. No more 110% financing with zero money down and "stated" income mortgages.

The Treasury then holds the paper until the value of the property normalizes and begins to appreciate.

Eventually, the Treasury sells the paper back to the private sector for a profit.

It's a scheme to buy the private banking sector time, as I see it.

The idea is that without a quarterly profit to meet, the government can carry the debt more easily.


We have to let judges rewrite the existing mortgages that haven't already defaulted, too. Actually, I think the banks should be willing to do this voluntarily and should have done it all along when they saw this coming.

If they were making profit on an adjustable rate mortgage before the rates increased, why not just go back to the rate the people were able to keep up the payments at? Just because the terms were adjustable doesn't mean they have to adjust. Especially if it means getting a big fat goose egg instead of *something* every month.


The part I think may cause any plan to fail is the underestimated unemployment. Obama's job creation program might be able to forestall the negative impact of that.

[Virginia Dare]

53. The part that worries me is..

"until the value of the property normalizes and begins to appreciate". That's the unkown factor here, how long will that take? Many experts that I've heard have said we aren't even close to the bottom of the market yet, so there will be an additional depreciation first. It could take years. Meanwhile, those properties sit empty and falling into disrepair.

[Romulox]

24. Just like another HELOC will make the average American "rich". nt

[Virginia Dare]

3. IF we have to accept this, then that should definitely be a requirement..n/t

[redqueen]

9. It already is, per Pelosi this morning.

Hence the jumping for joy. :)

[Virginia Dare]

13. It looks like aside from all the spinning..

that the Dems are in the driver's seat right now.

[redqueen]

19. Exactly! This is an ENORMOUS opportunity...

we need to seize it.

[David__77]

5. I disagree.

This is not required to avert "disaster." If the banks fail, the government can seize them and administer the financial sector.

[redqueen]

11. That's what the equity stake has to include... enough control that we can sell off

the equity in the banks that we are buying now at a later date.

I think this would also be a more reassuring method to global markets... would want to hear experts' opinions on that though.

[David__77]

36. I guess investment is fine, but it must be at market value.

The whole point of "bailout" is that the state would be paying a premium on these assets, i.e., it would be paying more than would private investors. I disagree with this. If the state wants to get into the business of owning banks and financial institutions generally, I'm all for it. But no way should the people get stuck with the consequences with wild speculative activity.

[redqueen]

42. Agree completely.

Today I'm calling to demand they even drain any share capital before giving out any cash. They should get no profit. None.

[David__77]

44. Then I wouldn't even call it a "bailout."

We have a rare opportunity to really hit these big financiers and fundamentally shift the power polarization in this country. No bailout, let's call it something else as it must not enrich those who made bad choices.

[redqueen]

46. Well IMO there really is an urgent need for cash.

A few enormous banks can handle the storm... but the rest will fall like dominoes and be gobbled up like guppies. One thing that worries me more than an imperfect bill is that much consolidation of power among banks.

So it really is a bailout, but it's bailing a lot more people out than just the people who made bad choices.

[ozone_man]

64. Only if we buy the toxic securities at market prices.

Like David says, that would not be a bailout in the normal sense. It's a handout. There are market buyers for these toxic derivatives, but Goldman Sachs doesn't want to sell them at market prices. They want the government to buy them at full price at maturity, which is what Bernanke said. What a ridiculous thing to say. It gives you an idea where his allegiance lies. Not with the public.

The housing market may not reach maturity for 15 years if there is a depression. The best lesson for Wall Street would be to let these companies fail and pick up the pieces. Otherwise, they'll continue to be irresponsible.

The problem is debt not so much credit and there is not enough money to pay all the debt that's out there.

Any good plan would be to go after the credit card companies who are gouging with 29% rates. This is one huge place where the debt is accumulating. And there should be a cap on mortgage rates.

We have to end these credit default swaps or severely regulate them.

As far as these banks are concerned, I would say let them fail and follow the normal route for bankruptcy. Maybe we want to nationalize some of them after that, buying them at fire sale prices. What a fitting end! I think the public would be happier with that, acquiring Goldman Sachs for close to nothing. :)

[TooBigaTent]

6. Unless "we the people" who would pay for this wind up owning the corps, this bailout is

nothing more than a total gift to the assholes who caused it.

And I have absolutely no faith that the legislation will do anything positive for main street. "Our" Congress-cretins have not delivered on anything they promised in too many years to trust them with anything of this scale.

I am willing to wait until the new Congress and Prez is in office to revisit it. But there is absolutely NO NEED to rush into anything before January.

You trust George and his cronies to agree to anything that is the least beneficial to the nation as a whole?

Have you learned nothing in the past eight years?

[redqueen]

14. Why be ugly? Yes, I've learned plenty.

That's what an EQUITY STAKE means, it's not a gift.

And yes it doesn't need to be done today or else the world ends... but you do know what happened with WaMu last night, right? It's not an emergency, but I think January is unrealistic.

[riverdeep]

8. The problem is, we are starting from THEIR assumptions.

Bad bad mistake. They have defined the acceptable areas of debate. Like, 'Iraq is a terrible threat to the United States, it's only a matter of how to respond'. The basic assumption itself needs to be questioned. Not that the economy is in bad shape, but that taxpayer funded solutions should form the cornerstone of the proposal.

[redqueen]

22. There is no "should"... we have examples of this already.

We can learn from Japan's mistakes. We can learn from Sweden's success.

[Toucano]

25. You're right there.

It sucks because I feel like I can't make a judgment because I don't know all the facts.

I knew invading Iraq was a mistake, but this time I'm not sure.

[redqueen]

27. The difference in this case is that we have more recent examples to study & learn from.

With Iraq we had to go back to Britain's experience there (and it told us what we needed to know quite clearly).

In this case it happened in Japan and they screwed it up... it happened in Sweden and they came out fine.

[slipslidingaway]

33. Agree, we accepted the big picture and just started to fiddle with

the details.

Surely there are other ideas that should be discussed.

[Lance_Boyle]

15. If you like it so much, you wanna fund MY $10,000 worth, too?

This is not a rescue, and it's not a bailout. This is Bush Doctrine economic policy - preemptive financial war against a threat that may or may not exist, and if it does exist, may or may not be as dire as bushco wants you to believe. You can guess who benefits. Hint - it ain't you or me.

[redqueen]

26. It WAS, in the original form. With equity and regulation (control) added in...

it becomes a gift.

You do know Sweden had this same problem spent MORE on it (as a share of GDP) and came out ahead, right?

[shimmergal]

62. Equity shares and re-regulation are

Just TWO of the several good features the congressional dems have managed to smuggle into the plan.

I'd prefer going with Kucinich's proposal, to give each American a $2300 equity certificate in the eventual properties, but if it has to be the nation. as a whole, so be it. It's still a BIG step that will set a precedent. Eventually, maybe Big Oil and Health CAre corps will follow.

IF renegotiation of at-risk mortgages is included, that's plus point no. 3. Again, it'd be better to have it happen automatically--how about an automatic lowering of the principal of every mortgage originating after 20?? And/or have them automatically reset to their original interest rates. ('course I know the first would need to vary by locality). Oh well, tying it to Bankruptcy couts , probably guarantees full employment for banks and lawyers, as so many people flood the bankruptcy process. Maybe, too, it'll force the demise of the Bankruptcy Act.

[sinkingfeeling]

28. They're calling these wonderful assets we'll be buying 'toxic' for a reason.

[redqueen]

29. We should be learning from history, not acting as if this has never happened before. (nt)

[Fla Dem]

61. They are toxic...to the firms currently holding them. To the governement they are simply assets

that will sit in the Treasury, many of which will be paid by the homeowners. Not all of these mortgages are in default. At some point their value will rise above what the gov't paid for them. The gov't can then sell them at a profit, which should go back to the taxpayer. I saw a figure the other day that said 95% of mortgagees pay their loans on time. But even the good mortgages are choking the financial institutions now, nobody (investors) will buy them because the housing market has depreciated so much.

[Morning Dew]

31. reset some of those mortgages to 40 years

so people can afford to pay until the housing market recovers. That might help get some $ back in the coffers.

[redqueen]

35. I hope you're calling and demanding it!

We have the upper hand at the moment... let's push hard... a bailout IS going to happen, it's just a question of implementation now.

[Morning Dew]

40. it just occurred to me . . .

so I haven't called yet.

Thanks for the suggestion!

[redqueen]

47. Thank *you* for another reason to call them.

:)

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[HamdenRice]

32. I agree. When the NY Times endorses a proposal first floated by Dennis ...

I mean people what are we thinking?

[redqueen]

34. That we should shoot ourselves in the foot at EVERY given opportunity,

apparently.

And this, IMO... is a ONCE IN A LIFETIME opportunity.

They manufactured this crsis thinking they could control the outcome. It's out of their hands now and they are pissed. Dem and Republican voters are in agreement on this and it's fucking wonderful. :)

[HamdenRice]

37. Another thing: Politically we could never carry out nationalizations under Obama

They're already calling him a socialist. Better we set up the socialist framework under Bush and flesh it out under Obama.

If we run out the clock, nationalization will be off the table.

[redqueen]

39. Excellent point!

I had no idea so many people were opposed to ANY bailout.... or any bailout that wasn't 100% perfect.

*sigh*

And I was actually feeling quite hopeful and excited this morning. :P

[IndianaJones]

38. you rock. nt.

[redqueen]

43. Aw, you.

:blush:

:hi:

[JHB]

41. And no offshoring

With equity we'd have more leverage to make these firms cut thier costs from the greedy top, not by offshoring the low-level jobs.

[redqueen]

45. Another great idea... another round of calls!

:woohoo:

[slipslidingaway]

48. Bernanke testimony from the other day...

if this is their plan then the upside is limited IMO.

http://www.247wallst.com/2008/09/paulson-plan-sh.html


"...Bernanke spelled out the benefits that would accrue when the government can buy these mortgage assets at close to "hold to maturity" prices instead of the "fire-sale price."


...Buying troubled bank assets at above where they would be valued in a free market now and at a price which is near to the potential price when they mature is a great handout to the banks but undermines almost any chance that the Treasury will ever get any meaningful yield from the bailout.

Taxpayers lose any chance of being made whole."

[bvar22]

49. K&R

Sending to "The Greatest".

We need to stop calling the Democratic Plan a "Bailout".

The Democratic Plan is a "Buy In".

The framing is very important.

[bvar22]

50. Equity, Oversight, Transparency, and Re-Regulation....

I could go for that.

[redqueen]

55. Thanks!

:hi:

[izzybeans]

63. It depends on what they buy and at what price. As of now we are buying trash

for inflated prices. Now if we get market value or discounted prices on them and an Obama administration can couple that with meaningful financial support to "main street" in ways that can elevate the value of the junk we are about to by, then I agree.

Right now nothing is a sure bet.

I think we are being sold a pack of lies to begin with. None of this will change the "fundamentals" that have gone so wrong.