It's a Bull Market in Government Intervention 72 comments
James Picerno
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First it was Bear Stearns. Then the government bailed out Fannie Mae (FNM) and Freddie Mac (FRE). Before the ink was dry on that deal, Uncle Sam loaned $85 billion to insurance giant AIG in exchange for an 80% stake in the company. Along the way, the Fed has been throwing money every which way, depending on the day.
But wait: there's more. In the last 24 hours, a new round of government bailout efforts are underway. Yesterday, Congressional, Federal Reserve and Treasury officials were talking of launching a massive government fund to buy up the toxic securities from investment banks and other institutions. Meanwhile, the SEC announced a ban on short selling on nearly 800 financial stocks. And the Treasury is now insuring money market funds to shore up sentiment in the wake of news that the Reserve Fund — a money market portfolio — broke the buck this week, i.e., its net asset value fell below $1. The drop stoked fears that even cash equivalents might not be safe.
The government, in other words, is throwing everything but the kitchen sink at the bear market. There's some logic to this, of course. Preventing bank runs and the like is just common sense. But how much is too much? Or too little? Alas, intervention is an art, not a science. Financial turmoil of the degree we've seen this week is rare, and so there's not a lot of precedent. The early 1930s are an obvious era for study, but the relevance is limited, since two or three have changed the days of FDR and "brother can you spare a dime."
Meanwhile, asset prices want to fall, and interest rates want to rise (i.e., those rates that involved private parties that can't print their own money). But the government is doing everything in its power to keep Mr. Market from having his way. This is reasonable, up to a point, although it's a safe bet that it'll take time before we know where reason ended and moral hazard began.
One can be forgiven for wondering if the latest batch of fixes will fare any better than the previous ones. Since the Bear Stearns bailout earlier this year, each new "solution" was initially greeted with cheers in the stock market only to be followed by more selling. Will the new fixes do any better?
Maybe. But it's debatable if government intervention, massive though it is in cumulative terms these past months, can engineer a bullish aura of any duration.
For the moment, however, hope springs eternal. Out of the gate this morning, stocks surged skyward. But after the warm glow of yet another of government intervention cools, how much bullish enthusiasm will remain? As troubling as all the toxic securities problem is, it's still a symptom of deeper problem, starting with the correcting real estate market. Meanwhile, there's the issue of consumer spending, which was already faltering before the latest ills went ballistic. It's hard to imagine that Joe Sixpack will take inspiration from all this news and run out and buy a new wide-screen TV.
The government can keep bailing out firms, buying up securities no one else wants, and guaranteeing money market funds. But the cycle will have its way eventually, in part because sentiment and psychology can't be denied.
It's worth repeating the reality that prices want to fall and interest rates want to rise. It's not clear that the government can change that reality. And while the government theoretically has access to unlimited amounts money to throw at problems, in practice there's a limit if only because the dollar is regularly valued vis a vis other currencies and gold. At some point, cranking up the printing presses to bail out Acme Finance is self-defeating because the marginal gains of injecting liquidity are more than offset by a slump in the purchasing power of the buck.
Of course, we're talking of medium- and long-term worries, and for the moment all the concern is about what happens in two hours. But at some point the fires will stop burning, the smoke will clear and the crowd will look out six months or a year and reassess prices and interest rates. This much is clear: fundamentals will regain their place as the dominant force in pricing. Exactly when that happens is unclear. Meantime, it's all noise.
Remember, too, that financial crises are nothing new, nor are interventions of one sort or another. In the panic of 1907, for instance, J.P. Morgan--the man--orchestrated a private-sector bailout of sorts. In some sense, we're not in uncharted territory in 2008. The future, on the other hand, is always unknown.
The details of the full government-sponsored bailouts will determine much of what happens in the markets and the economy in coming years. The challenge is that we don't yet know the details, and the future, well, it's still the future.
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This article has 72 comments:
if this doesn't push interest rates substantially higher i don't know what will. the socialists got their bailout. i suspect their euphoria will be short lived.
It appears that national socialism has been established by those who told us the greatest threat was socialism, just like last time. Perhaps it always happens that way.
BTW, did anybody realize that the govt. now owns a majority stake in their house, and that they pay the govt. to live in it. Creepy? Anyone?
My question is who do we have to save next to save the world?
The challenge as I see it is the government minions are blowing the wad trying to save Wall Street. Unfortunately, they are simply passing along the liability to taxpayers, kind of like what happened in Japan in the early 1990s after their meltdown (that is still underway).
The problem is that as the recession worsens, Main Street will be next, consumer spending will fall as more get laid off and the economy weakens. Given that the Fed and government have now discouraged foreigners from investing in Treasuries see tradesystemguru.com/im... who will be left to bail out Main Street amid rising interest rates?
Now Paulson is asking a blank check from the Congress to the tune of over 800 billion dollars. Apparently he has moved up to using a nuclear bomb. And the true cost will be in trillions of dollars.
Time and time again, Paulson has proved that his words are meaningless. Remember how he reassured us in 2007 by saying that the US and global economies were never better? If the Congress goes along with his proposal again, there is something seriously wrong with the workings of our "democracy." All the incumbent senators and congressmen should be thrown out with Paulson. More importantly, vote against the presidential candidate that sympathizes with Paulson's plan.
it's also interesting (and quite funny) to watch the greedy bankers scream like hell about the treasury's plan to insure money market funds. banks will lose billions in deposits if this happens unless they match money market rates. ordinarily it would be hilarious but it's hard to laugh at our country having become a bananna republic. there is more capitalism in china and russia than in the united socialist states of america.
In any case: some time ago a contributor to this introduced the book:
Confessions of a subprime lender. An insider's tale of greed, fraud &
ignorance ... by Richard Bitner / lendingsanity.com
I found it very interesting, informative, useful. And it probably was
useful for many others as well, those not taken by surprise.
Banks may survive,
Save the world,
Buy my Junk,
Sounds like a ViX Garage Sale
that I don't wont to go too.
Banks may survive,
Save the world,
Buy my Junk,
Sounds like a ViX Garage Sale
that I don't wont to go too.
$500 billion. Devastating throw weight indeed.
"And while the government theoretically has access to unlimited amounts money to throw at problems, in practice there's a limit if only because the dollar is regularly valued vis a vis other currencies and gold. At some point, cranking up the printing presses to bail out Acme Finance is self-defeating because the marginal gains of injecting liquidity are more than offset by a slump in the purchasing power of the buck."
Beware. The Govt. tells YOU not to panic, but panics itself.. They do not want a run on banks because they need our money in there to hold this stack of cards together.
I have already made my run on my banks weeks ago in order to beat the inevitable crowds. I purchased the very thing that my Govt. does NOT want me to buy - Gold and Silver. They are trying to hold off the panic post election by applying bandaids to a gushing artery. Don't be fooled.
If foreign countries bail on the dollar, by taking what they have and moving into gold, silver and oil, the dollar is dead. They hold billions of dollars of toxic debt...I imagine they might decide they would rather be holding a safer alternative.
Doesn't it make sense to get in to Gold before your dollar won't buy any?
www.nytimes.com/2008/0...
One paragraph jumped off the page at me because of its incredible irony... it describes an almost 100% reversal in the economic ideology of the two great cold war superpowers.
“Probably a period of struggle for existence and survival is coming,” said Dmitri Lutsenko, a member of the board of directors for Mr. Polonsky’s Mirax Group, which is building Europe’s tallest skyscraper beside the Moscow River. “The strong businesses will become stronger, and the weak ones will be wiped out of the market,” he said.
Absolutely mind boggling.
Mr. Lutensko speaks of the quintessential capitalist market theory, what I call financial darwinism, where the strong, growing, innovative shall attract the capital - and our Republikaan business and political leaders evoke the image of a socialist nightmare, where the weak and broken are temporarily propped up and force fed hundreds of billions of dollars of scarce capital that will now not be allocated to the growth of a strong economy. In America, the weak and dying are bailed out, and the strong are starved out.
News just hit... Dumbya looking for $700 BILLION now for the bailout. Democrats and Repugnants alike should be ASHAMED at what they are creating, absolutely ASHAMED.
news.yahoo.com/s/ap/20...
Americans, Get Ready for an Enormous Tax Bill
Posted Sep 19, 2008 01:36pm EDT by Aaron Task in Investing, Newsmakers, Recession, Banking
Related: JPM, AIG, XLF, ^DJI, ^GSPC, BAC, C
"America's economy is facing unprecedented challenges. We're responding with unprecedented measures," President Bush declared in a press conference Friday.
Bush, of course, was speaking of the government's coordinated efforts to tackle a financial crisis that has roiled global markets and brought down venerable financial institutions.
"These measures will require us to put a significant amount of taxpayer dollars on the line," the President added.
Ah, yes. There is no free lunch. Just how significant an amount of taxpayer dollars remains unknown, but it's going to be massive.
Estimates of the proposal to let the government buy bad assets from banks range from $500 billion to $1 trillion -- and that's in addition to costs already incurred for various government actions this year, including, but not limited to:
• $29 billion to fund JPMorgan's takeover of Bear Stearns
• Up to $200 billion each for nationalization of Fannie Mae/Freddie Mac
• Up to $85 billion for AIG
• $50 billion to insure money market funds
• Approximately $300 billion of Fed liquidity measures this week alone.
"It's impossible to put any reasonable estimate on what it's going to cost us as taxpayers," says Tom Brown of Bankstocks.com and Second Curve Capital. "We know it's going to cost an awful lot [and] the more they borrow the more interest rates go up and the more taxes we'll have to pay."
Just remember this on election day, and vote all the filth out regardless of party. Try and vote like you give a darn for your fellow man. Most of the greedy b**stards in power don't give a hoot about you or me or your aging parents...they vote knowing they can sleep peacefully in one of their 7 houses.
They are a politically savvy bunch, so they must have seen something far worse just around the corner, something like a near 100% probability that there would be a run on the banks next week.
Now that would have been just as, or more, expensive than the bailout, and even worse (much worse), the expense would be immediate and not spread out over several years.
So in my mind the Bush bailout was inevitable, the lesser evil (but not by much) of two bad options. Therefore I'm not sure it signals a new American Socialism, just a continuation of business-as-usual.
I'm not convinced of the 'short the dollar' theory, which presumes that foreign currencies are healthier than the $$ right now. I doubt it.
The alternative is to take your cash and buy Gold and Silver which is exactly what Washington doesn't want you to do... which is exactly why you should be doing it.
Think about the people that re-entered their WTC building, not affected by the first plane, after exiting the building and being told by "authorities" to go back inside.
Think about the recent Hurricanes in the Gulf of Mexico. Did officials say, "don't panic and leave the area"? No, they said, "better safe than sorry, leave the area immediately".
Why then are these same government officials and TV pundits telling me to not worry about it?
Disclosure: Bought SDS on Friday's dip. Portfolio loaded with silver. Retirement in US Treasuries since last July. Currently constructing a bubble-wrap suit to place over my kevlar vest.
You got it. When every single person is telling you "don't panic" you better be in self-preservation mode. For months they have been telling investors not to sell their stocks and look how much people have lost! When they tell you something, do the opposite.
Gold: futures.tradingcharts....
Silver: futures.tradingcharts....
That would be reckless anytime, but esp. in the current marget. I think there are better short term investments in things that have real intrinsic value.
I also think having some, maybe significant, cash reserve (not in a bank) is prudent. It was interesting to note that the money market funds now cannot maintain par ($1/share) value. I was wondering when they would release that bit of news.
Looking at the 10-year IWM chart and current PEs, I believe stocks have further to fall.
They are down for the week, and cash is still king.
"Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time"
At one time....why is the media suggesting it's $700B, maximum, when the actual wording is thus? This leads us to my Potato Chip Theory....
This is the way they will print the money. Once the bank gets rid of the toxic stuff it will again extend credit to anyone. This in turn will create more toxic crap that will move again to the tax payer repeat to infinity. I don't know about gold since I have the feeling that they will try to manipulate it. I think long oil and shorting US debt has a better chance on not being so easy to manipulate.
a believer,kelly lieberman and bx capricorn...yes there would have been a massive run on banks and investment houses for all funds, and gold would have gone ballistic. the treasury knew it, as did the fed, and that's why they acted. i have never seriously considered precious metals but it's time to reassess my view on that. what equity investments i do have i've hedged with puts. unhedged, long puts on the SPX and XLF or long SDS/SKF might be a better option. we're in exceedingly dark waters and this bailout plan is no panacea. as someone once said "it's the economy, stupid."
I've been saying it for months now: you want to own gold, and you want to be short Treasuries. There's still plenty of time to get in on this trade.
Can't believe what the inflation hawks are saying: that it will go out of control, with no rebuttals. Uh-uh. When inflation went to double digits in the late 70s early 80s, what did the government do? They froze prices and wages, but wages for the masses have already been 'frozen' without government fiat so that part of the equation was taken care of years ago; the broad stock market, thousands of mutual funds, and houses too have gone nowhere in the last 3-10 years) All that remains is to freeze prices and bingo and Voila. What consumer, after being date-raped these last 10 years, by congress interfering in market forces for the sole gain of the privileged few at the top, is going to rail against that when their incomes, retirement and savings and jobs have already been ravaged? Even though freezing did not work, who's willing to bet that in desperate times, which appear to be closing in on us, that they won't say 'it will be different this time'? And more importantly what could possibly happen, what "WHITE SWAN" event could possibly occur that would begin a reversal of this decade long reversal? My imagination cannot manufacture even the slightest positive event that magically or even slowly turn the tide to just hold steady where we are or send up skyward. Anyone? I think the whole thing can be encapsulated in the commercial with Bill Gates and Jerry Seinfeld acting about as stupidly as humanly possible in front of billions of their fellow men epitomizes just some very smart people can create a monumental turkey.
Do you seriously think that they would permit gold to be owned by ordinary individuals at a point of international financial disaster? ALL negotiable assets must be 'fixed' in price including the precious metals until such time as calm is restored. And this time with everyone connected to everyone else, the use of the worldwide web to effect immediate panic decisions at the click of a mouse, based on cold-boned fear, what's to stop the G7 or G12 from going along with it. Or else take advantage of the descent of the United States into 2nd world status with permanent high unemployment, low-to-no growth, or even a decline, or reversal. A world without the voracious consumption of the US citizen and its 'government' would throw the rest of the world into its own decline. Which country who sells to us wouldn't try to prevent that? We stop buying fleeced nummies out of China and Dells out of Indonesia then what do they do with the preparations they have been making, enticing the dirt poor into the cities by the tens of millions who would now have nothing, not even the piece of rice paddy they worked/owned earlier?
The 'government' can do what it wants, no matter how well-meaning or utterly boneheaded. To stand aside and let the markets work means the worst-case scenario: the already poor shooting at themselves and the rest of the world would sense the blood in the water and anarchy begins. Ive been skeptical about the very very few who now own kevlar vests and bubble wrap suits who have seen Armageddon around the bend. But I also once read that a famous music critic thought that the Beatles would last 6 months.
Paulson and Bernanke showed Christopher Dodd and Barney Frank something frightening alright. And you can bet your last Euro it was a blueprint for blood in the streets at a minimum. I'd bet they showed them pictures of government honchos, pictures of their own financial and/or physical demise. Or this is all just a fear-mongering hoax to garner election advantages. I'm betting it's real.
I'm buffing up my WIN button as we 'speak'.
www.youtube.com/watch?...
Reading the posts here, I can take solace that there are among you a bevy of thinkers that if given a chance could repair this devastated country.
Unfortunately, you have no chance! Therefore, you must save yourselves! That's what we all need to think about--SELF PRESERVATION! For you see, nothing else matters. And, should you be astute enough to have gold and silver in your "pocket", then you WILL be all right in the coming times. If not, you will perish to be sure.
The problem which is now at hand is AVAILABILITY of gold and silver. Every day that passes, lessens its availability. Those who believe that the gold/silver mines are "pouring out tons" of product daily are doomed to perish.
Have a great life!
Leading % Gainers
Freddie Mac 6.42% Non Cumulative Perpetual Pref Shs (FRE-T) +744.95%
Freddie Mac 6.02% Non-Cumulative Perpetual Pref Shs (FRE-X) +300.00%
Freddie Mac Variable Rate Non Cumulative Pref Shs (FRE-M) +228.57%
Will the Congress put together a plan that will save the US economy along with the world??? I have to say that I bet they can't do it. Look at their record... look at the fools who got us here... they are the same ones we are hoping will figure it all out.
Just for the record, do not put 100% of your assets in any one investment. If you pull money out of the bank, buy some gold and silver(if you can find it!), purchase food, toiletries, medicine, etc that you know you will use in the next 6-12 months anyway. Buy at todays prices. Buy the tires for your car now, buy a used bike or two etc.. Prepare!!! Look at all the people totally caught off guard with the hurricane. You have some warning here..do what you can.
But it was Bill Clinton who did not veto (the although veto-proof) repeal of Glass-Steagall. G-S repeal was proposed by Gramm, Bliley and Leach, passed the senate by 90 votes, including 44 democrats.
Make it political if you want, but the truth betrays how many on both sides, nearly unanimously, caused this horrendous debacle. I wonder who those brave few were who voted, "NAY"!
Believing that things would have been much different under a democrat are foolish. For the last ten years you can point to those who sponsored and passed the repeal of Glass-Steagall, then the SEC for allowing only 5 investments banks (three of which are now no longer entirely in the hands of the public) to leverage up 40 or more to 1 (who knows how much more, really) with Christopher Cox in charge, and the Community Reinvestment act are the main rapists and in that order.
As for restructuring mortgages (once you find them) 60% OF SUBPRIME BORROWERS NEVER MADE THEIR (low-teaser) FIRST PAYMENT!
What makes you think Paulson won't buy these back at 60%, Then, he sells them to Goldman Sachs @ 33%, that is his plan. He still runs GS, they will transfer this wealth.
This is classic pillaging under the guise of PANIC; CRISIS! It's the continued POWER GRAB, can't you all see that? Call on officials to put the breaks on, we want DISCLOSURE!
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
So, let me get this straight... The Secretary of the Treasury will get almost $1trillion, but nobody has the right to question or review his decision in a court of law. If Congress passes this section of the plan I'm sure Adolf Hitler would have been proud Bush, Barney Frank and Palosi. They hijacked our democracy with the Patriot Act, now they are hijacking our economy... The newest career in the United States will be working on the "collective farm"... We are back in the USSR!
dailykos.com/storyonly...
UPDATE (4): Paul Krugman says No Deal. Writing in part about this bail out:
I hate to say this, but looking at the plan as leaked, I have to say no deal. Not unless Treasury explains, very clearly, why this is supposed to work, other than through having taxpayers pay premium prices for lousy assets.
As I posted earlier today, it seems all too likely that a “fair price” for mortgage-related assets will still leave much of the financial sector in trouble. And there’s nothing at all in the draft that says what happens next; although I do notice that there’s nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away?
dodd.senate.gov/index....
What a dope!
US taxes will double, Dollar falls, the consumer will die, economy will be in depression.
letting wall st fat cats at goldman sachs and morgan lose their jobs and bonuses...
This is a bill – not yet passed – but if it passes, it will become law. Keep this fact in mind. The bill is sold to us as one designed to help the American taxpayer who is losing their home. But, that is not what it does.
Now, read this part of the “bill:”
“Sec. 8. Review: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
>>>>
Take a moment to re-read that. This new LAW would place the Secretary of the Treasury ABOVE THE LAW.
>>>>
So, this bill is being sold to us, the taxpayer, as a design to protect the American public. Ask yourself, if this new law is so helpful to the American taxpayer, why are we not allowed to review the decisions he is making with OUR tax-money? Why aren’t courts or oversight committees allowed to see what exactly it is he will be doing?
Here is what the bill doesn’t do. So far, it doesn’t include anything to actually help those whose homes are in foreclosure, or about to be in foreclosure.
Now, this is what it DOES do:
1) Creates a NEW TAXPAYER FUNDED account, called the “RTC.”
2) In this account, trillions in bad debt is funneled from companies who failed due to irresponsibly risky decisions
3) In this account, billions in loans dumped related to STRESSED COMMERCIAL real estate
4) In this account, financial institutions will compete for how little they will accept for their bad debts
5) With this law, the secretary will decide how much of your money he will pay for bad loans, regardless of the true market value.
To make this crystal clear: this account will be used to take YOUR money and then with that money (taken from you), PURCHASE the very liabilities that Wall Street can’t sell to any other business or country. And why can’t they sell them? It's simple: they are worthless!
We are told that this bill is the lesser of two evils. So, if this is the lesser, what is the greater? The greater “evil” is allowing free markets to work as designed!
In a free market, these companies would fail. They made risky bets that blew-up, and now they are weak. From the ashes, new stronger companies would emerge to fill the void. Yes, it would hurt for a while – but that is the nature of a free-market. This bill spits in the face of the very foundation on which our great country was built. It is designed to bail-out bankrupt institutions that ruined the fiscal health of the country!
Furthermore, after these people – among the richest in the world – get our money, will they pay any additional personal tax to offset the massive burden they are placing on the system? Once again, the "lower classes" will be lining the pockets of the uber class.
What is maddening about this situation is that the U.S.A already had rules and regulations in place – rules created because of the Great Depression – to prevent this from happening again. So why is this happening again?
It’s simple really: it’s because the people you elected turned a blind eye and chose not to enforce the law while everyone was making a killing. As a good example of this, you may have heard recently in the news, is how the SEC is “banning illegal naked short selling” in the market place. Well, here’s a news flash – Naked Short Selling has always been ILLEGAL. Why are you placing a ban on something you are supposed to ARREST people for?
Clearly, these people are not representing your interests. I know, I know, I can practically hear you now, “Since when do they represent my interests?”
That’s right. Since when.
They weren’t thinking about you when they collected $100s of millions from lobbyists.
They weren’t thinking about you while Wall Street speculated with the money you placed in their bank accounts and spun it into trillions.
They weren’t thinking about you when they paid JP Morgan $30 billion (of your money) to buy Bear Sterns, or another $85 billion (of YOUR money) to AIG
They weren’t thinking about you when, all this time, they told you that this problem was contained.
And so, I ask you today – what makes you think that they are thinking about you now?
How does that make you feel?
1) This new Law places Secretary Paulsen above the law; “Decisions… non-reviewable … agency discretion …may NOT be reviewed by ANY COURT OF LAW OR ANY ADMINISTRATIVE AGENCY”
2) Wall Street, where “Greed is Good”, is getting YOUR money, to ensure they keep their 5 mansions, private jets, multi-million dollar yacht, and bonuses: (Goldman Sachs, alone, paid bonuses of 18 billion in 2007 and 16 billion in 2006)
3) The U.S.A – the BASTION of “free market” capitalism – is utterly preventing, in any way it can, to allow the free market to actually WORK. If you think America is a free-market economy, stop that false belief right now. Even SOCIALIST GOVERNMENTS would not embark down this path of socialist “financialism” (www.upi.com/Business_N.......
So, what can we do at this point?
First: Forward this email. No matter how embarrassed or worried you might feel about it, forward it to other red-blooded Americans so they can at least be AWARE this is happening. If they get irritated with you, they are choosing to live in ignorance.
Second: Call your representatives. They are the people who are supposed to do YOUR bidding. Call them, make them justify this new Law. Don't believe them if they tell you, "this is the best we can do."
This law is not good for you, it will not prevent a crash, it will not cause home value to suddenly turn around. It will cause a short term rally in the stock market, it will allow rich bankers to off-load bad debts, and it will allow Wall Street to recover catastrophic stock losses while the big money sells into the rally (while they work hard to convince you to leave your 401K invested).
I can assure you this: if this law passes, America will fundamentally turn its back on the very premise on which our country was founded: Free-Market Capitalism.
The markets will correct themselves regardless of any action the government attempts to make. It is unavoidable. Nothing goes "up" forever, and we all recognize this.
"When the going gets tough, the tough get going."
Well, apparently not in America. In the U.S.A, when the going gets tough, the tough get handouts. For anyone who has money.
Ever wonder why congress and our government makes these panic changes over weekends? Well, I'm not sure about you, but I'm not usually watching the markets or the news right now. I'm usually outside playing with my son or enjoying time with my friends and neighbors. Tomorrow I'll be watching the game. Frankly, I'd rather be at my neighbor's BBQ than sitting here writing this. But this time, there is something more important to do.
Below I've pasted all the names and numbers for every member of the house and senate for your convenience. You can email them, but they appear to be completely ignoring email at present.
BTW, if they refuse to take your calls, make note of it and let me know. This is expressly illegal given the call they answered to represent your interests in the government of the United States of America.
Please consider forwarding this email so that others have an opportunity to take action if they choose to.
God Bless America,
So the US gets a lingering recession plus inflation. Stagflation at worst or an IFM mandated austerity program (tax the US 50% income taxes and forced balanced budgets). Welcome to Argentina with 3 Eva Perone's (Bush, Bernake, Paulson).
BTW Ben Bernake has always been called "Helecopter Ben" because he believes if the fed wanted to they could just print free money and dump it out helecopters. Sadly he is dumping it over the banks and nowhere else.
Face it, all situations are bad. The worst ones hurt the least now and last the longest and the best ones hurt the most now but last the shortest time. I know the US always picks the first.
So the government takes up 700 billion dollars of private industry. What kind of free market is that?
(to the melody of Big Rock Candy Mountain)
Lyrics By WilliamBanzai7
One evening as the DOW went down and the ABX was burning
Down the track came a banker hiking and he said boys I'm not turning
I'm headin for a land that's far away from Wall Street's crystal towers
So come with me we'll go and see the Bernanke's Big Rock Candy Mountains
In Bernanke's Big Rock Candy Mountains there's a land that's fair and bright
Where the handouts grow from the Bush bailout plan and you sleep sound every night
Where the ABS books are all empty and the sun shines every day
On the birds and the bees and the bonus trees
Where the perrier springs where the squawk box sings
In the Bernanke's Big Rock Candy Mountains
In Bernanke's Big Rock Candy Mountains all the regulators have wooden legs
And the shorts all have rubber teeth and the investors lay golden eggs
The traders books are full of fruit and the bankers play all day
Oh, I'm bound to go where there ain't no snow
Where the rain don't fall and the wind don't blow
In Bernanke's Big Rock Candy Mountains
In Bernanke's Big Rock Candy Mountains you never sell your stocks
And the little streams of Interest come a-trickling down the rocks
The enforcers have to tip their hats and the bears and shorts are banned
There's a lake of stew and of champagne too
You can sail all around 'em in your custom yachts
In Bernankies Big Rock Candy Mountains
In the Bernanke's Rock Candy Mountains white collar jails are made of tin
And you can walk right out again as soon as you are in
There ain't no short handled shovels, no axes saws or picks
I'm a goin to stay where you sleep all day
Where they hung that jerk from Berkshire Hathaway
In Bernanke's Big Rock Candy Mountains
I'll see you all this coming fall in Bernanke's Big Rock Candy Mountains
You have a good point, I should have read o before I started griping about Bush haters. I believe your'e right abot the oversight of the bill, but Bush isn't the one that caused this mess. It sure blew in and bit him on the butt though.
All that money saved by buying things made outside the United States all these years has accomplished nothing, merely destroyed the growth of the United States.
Next time you go to Wal-mart (whose stock and options haven't done too badly the last year) or Costco, or anything made outside the United States remember that you are going to pay in taxes some serious multiple of your savings to the Chinese to hold up their purchase of Fannie and Freddie as well as the mortgage furball. Every dime you spend there will cost you likely twice as much.
Gramm was one of five co-sponsors of the Commodity Futures Modernization Act of 2000[3]. One provision of the bill was referred to as the "Enron loophole" because the House Agriculture Committee drafted it and it was later applied to Enron. Some critics blame the provision for permitting the Enron scandal to occur.[4] At the time, Gramm's wife was previously on Enron's board of directors.
Gramm-Leach-Bliley Act in 1999, which modernized Depression-era laws separating banking, insurance and brokerage activitiesThe final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. This veto proof legislation was signed into law by President Bill Clinton on November 12, 1999.
They're already cranked up! Pretty soon, Paulson will be printing only on one side of the bill because they won't have time to print both sides.
Buy, buy, buy...........gold and silver!
The 90 Votes, "AYE", were for THE CONFERENCE REPORT, not the bill itself. The bill was indeed passed along party lines.
U.S. Senate Roll Call Votes 106th Congress - 1st Session
as compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the Senate
Vote Summary
Question: On the Conference Report (S.900 Conference Report )
Vote Number: 354 Vote Date: November 4, 1999, 03:30 PM
Required For Majority: 1/2 Vote Result: Conference Report Agreed to
Measure Number: S. 900
Measure Title: An Act to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, and other financial service providers, and for other purposes.
Vote Counts: YEAs 90
NAYs 8
Present 1
Not Voting 1
HOWEVER, the Gramm-Leach-Bliley Act itself was passed by 54 republicans; 44 Democrats voted No.
U.S. Senate Roll Call Votes 106th Congress - 1st Session
as compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the Senate
Vote Summary
Question: On Passage of the Bill (S.900 as amended )
Vote Number: 105 Vote Date: May 6, 1999, 08:14 PM
Required For Majority: 1/2 Vote Result: Bill Passed
Measure Number: S. 900
Measure Title: An Act to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, and other financial service providers, and for other purposes.
Vote Counts: YEAs 54
NAYs 44
Present 1
Not Voting 1
Ban for shorting expire on October, 2, i.e. JUST AFTER Q3 ENDS. It is quite important. Why?
Trick is that banks are obliged to mark-to-market their assets at the end of each quarter. Revaluation difference (positive or negative) goes directly to Profit and Loss Account.
If markets will not plunge before end of September, market growth will ensure SIGNIFICANT improvement of Q3 banking results comparing to "do nothing" situation.
Bank reporting season is in the second half of October. If better than expected Q3 results will be published, it will again help to markets. So, by this act, they significantly decreased probability of market plunge before US presidential elections.