Monthly Archives: September 2008

Why is NBC trying to panic the American public!

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Yesterday the House of Representatives rightly defeated a bailout package that would have largely let the Wall Street financial speculators off the hook for their idiotic and greedy behavior of the past decade.  This morning on the Today show, the so-called “financial reporters were trying to incite a panic amongst their viewers to try and get them to call their representatives to pass the bill.  Among the items included in a “report” on why this bailout is so important was a mention that interest rates on 30 year fixed rate mortgages had climbed by 0.25 percent over the last six months.  This little tidbit in and of itself is absolutely meaningless.  Fluctuations of a quarter point meant nothing earlier this decade and they don’t mean any more now. What might have provided some context to this argument would have been a mention on what the actual rates are right now for a 30 mortgage, but none was forthcoming.  Based on this you might expect that we were back in the 18 percent days of the early Reagan years.

In fact a quick check online of mortgage interest rates shows a 30 year fixed loan running about 5.8-5.9 percent. That’s less than half a point more than the rate we got when we refinanced in 2002 (5.5 percent). Yes it’s higher but not ridiculously higher.

The report then goes on to ask why we should pay to bail out banks because our neighbors lied on their loan applications.  First of all this is not only irresponsible, it’s also a lie!  The reality is that most people didn’t lie on their loan applications, the banks lied to themselves in ignoring the financial resources of borrowers in making the loans.  Banks loaned people way more money than they could afford to repay based on the false premise that prices would continue to climb and they could dump off the risk on unwitting investors in mortgage backed securities.

Why is NBC so desperate to create a financial panic?  Could it have anything to do with the fact that NBC is owned by General Electric? And the fact that a large unit of that company is GE Capital which is heavily into the leasing and finance business?  What is the likelihood that GE Capital is up to their eyeballs in this fiasco and they are looking for a handout?  I’m guessing its pretty high. I would say that after you call your Representative and Senator and encourage them not to bail out Wall Street, your next call should be to NBC to tell them to stop yelling fire in the crowded theater.

$13.6 Million for 18 days on the job

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This is why no deal should be made to bail out Wall St with some major oversight.  Under no circumstances should Hank Paulsen be given a blank check when you have someone like Alan Fishman can walk away from the biggest bank failure in US history with $13.6 million.  It’s bad enough that he might get that kind of money but Fishman had been CEO of Washington Mutual for only 18 days when it collapsed and was taken over by the FDIC before be turned over to JP Morgan Chase. This sort of profligate pay for executives who do nothing positive for a company must not be allowed to continue. As I said before, every dime taken in profits by executives and traders in this mess should be be paid back to the federal government in return for any kind of bailout.   In addition, executive pay needs to be capped in some way, not just for the financial business, but all businesses.  The tax deductions for executive pay needs to be limited to some reasonable multiple of the average salary of other employees. These obscene numbers must stop!

Arrogance and ignorance are a dangerous combination

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Watching the first debate tonight my first impression is that its good to see a more relaxed format that allows McCain and Obama to go back and forth and respond the other.

More importantly, though it’s clear that McCain is both ignorant and arrogant. The fact that McCain absolutely refused to look at Obama throughout the entire debate was a sign of utter arrogance and perhaps even racism. He seemed to be absolutely seathing with anger through much of the debate. Clearly McCain does not have the temperment to be the leader of anything much less the United States.

Obama on the other hand regularly looked over and spoke directly to his opponent.  This is a thoughtful man who is clearly very intelligent and listens to those he speaking with.  This is man who seems to have the judgment necessary to deal with problems that this country is increasingly facing.

On the subject of the Wall Street bailout McCain unsurprisingly refused to acknowledge that his deregulatory policies were large to blame for this fiasco.  Now he wants to cut another $300 billion in corporate taxes claiming that the US has the one of the highest corporate tax rates at 35 percent. What he doesn’t talk about is that fact that the net tax rate that American corporations pay is among the lowest in the world due to all the loopholes and tax breaks.

Combine all of this with his choice of Sarah Palin as running mate and he has demonstrated that he doesn’t have the judgement needed to be president.

Not one penny!

This entry was posted in politics stupid consumerism and tagged bailout banking crisis financial mortgage on by (updated 5695 days ago)

That’s what the staff of investment banks that invested in risky mortgage securities should get in bonuses.  Before we spend a dime of taxpayer money bailing out these banks because they bet and lost, every penny that has been paid in bonuses to anyone involved in these transactions should be returned to the banks and used to pay off  their debts.  Sure it’s probably only a tiny fraction of what is owed, but if we are going to spend the money it’s the least that they can do.

British bank Barclay’s that agreed to buy the bankrupt Lehman Brothers last week has apparently committed to paying out up to $2.5 billion in bonuses to the top 200 staff at Lehman as part of the acquisition.  I’m sorry but anyone who would pay out that kind of cash to the people that created this mess in the first place does not deserve a bailout.

I say if we are going to spend any taxpayer money, the only thing we should do is buy the foreclosed homes from the banks at current market values minus a discount for our troubles and then sell or rent them back to the occupants at a reasonable price and affordable terms.  This would allow people to potentially keep a roof over their heads, keep homes occupied so that communities aren’t abandoned and allowed to rot and allow the government to eventually recover some of the initial expense.

These terms would of course be substantially less than what the banks are currently owed, but that is simply the price they need to pay for their foolish investments in the first place. I wrote about this more than three years ago and I hate to say it but I was spot on.  This whole mess was easy to see coming and completely avoidable were it not for the greed of the bankers and their confidence that the Republicans would bail them out if they messed up.  They need to pay up now, and anyone who was involved in this should be permanently barred from ever working in the finance market again.  Perhaps if we let the geniuses who created this debacle rot on the vine for once future generations will learn a lesson. Or not.

Forget Sarah for Veep! Palin for President! Michael that is…

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Only an desperate idiot with dementia would even consider a domionist, theocratic nut-job like the current governor of Alaska for the second slot on the presidential election ticket.  But since so many Americans seems willing to seriously consider the utterly unqualified Sarah Palin as a viable candidate to step into the White House if and when McCain kicks the bucket, I would like to throw my support behind a Palin would be far better suited to the job.  Plus he probably already knows what the Bush doctrine is.