Senate vote on bailout

[MikeC]

Praise God that 40% of House Democrats voted against the outrageous bailout bill.  Dang, that is real close to one half! I am shocked and dismayed though  that only 60% of Republicans voted against it. Yet, the members of congress who receive funds from the financial industry
intend to bring it back again, pretending to refine the scheme. Clearly, the unending administration hype that "only minor details" remained was intended to demoralize opposition.

And what happened? The Dow dropped over 700 points. The screaming about "the largest point drop since the depression", doesn't tell the whole truth. Actually, Monday's market drop was the 17th largest as a percent. Will you hear that on CNN or Faux News?  And, since there was no larger point drop before the depression, the only purpose in using the word "depression' is to evoke fear of the possibility.  I would say that a financial policy guided by stock prices is senseless.

Now, the day after smacking down this monstrous scheme, the sky is blue, sun is shining and the Dow is UP!  

Now we hear that businesses can't borrow to make payroll, that folks can't get a loan to buy homes.

Borrowing to make payroll?  If a business does that it illustrates a severe problem with the business model, as in it isn't making enough profit to service current levels of expenses.

Banks not making loans? Pure BS.  Why are there radio ads from banks for home loans EVERYDAY? We continue to receive loan offers from financial institutions daily. Is the bank marketing dept not hearing from underwriting?  Why have several (long time on market) homes in our immediate area recently (past two weeks) sprouted SOLD signs?  Where did the loans come from?


There will be a tremendous correction in markets and pricing in the very near future.  It will happen with or without a bailout.  A bailout will only make matters far worse, and cause the situation to last far longer than it otherwise would, just as FDR's foolish experiments extended and exacerbated the Depression.  

This problem was created by easy credit - it CANNOT be cured by more easy credit, or dumping worthless securities on taxpayers.

There is a vote now scheduled in the Senate.  Please, call/email/fax hound your senators (and others if you have the time) to REJECT this scheme outright.

Thanks.

[MikeC]

an addendum (apologies)

IMO, if this fails in the Senate it is dead.  No resurrection. It is very important to let your views be known to Senators (I'm contacting ours, and those of five adjoining states) to slam this down.

NPR (National Propoganda Radio) is spinning the House rejection like crazy, with stories like "who is responsible for this defeat", "markets up on renewed hope of passing", and the perennial favorite "credit freeze deepens". 



Thanks again.

[muldoon]

-- heads up, this post is a doozy.  If your already depressed, skip it, you wont like it.  I hope I'm wrong on this one.  no, I pray I am wrong. 


This bill will pass.  I didnt think so until the last hour or so but now I am sure of it. 
Everyone needs to watch a video tonight. 
http://www.cnbc.com/id/15840232?video=873682522&play=1

..go watch before reading further.. watch it twice if you have time. 

This bailout is not for main street, its not really even for wall street, it is directed mostly at foreign investors.  This is not for Americans, it will not help your mortgage, nor will it resolve any of the problems they are telling you on tv it addresses. 

Our government funds itself through the treasury, and the federal reserve, who sell treasuries to what are called the primary dealers.  These dealers sole job is to make a market for these treasuries and buy them, then sell them to their clients.  Yes, china and others buy our debt ultimately but before that it is purchased by these primary dealers.  Who are they, and where are they located?

http://www.newyorkfed.org/markets/pridealers_current.html

BNP Paribas Securities Corp. France
Banc of America Securities LLC new york city
Barclays Capital Inc. (london, new york, tokyo)
Bear, Stearns & Co., Inc.* new york city
Cantor Fitzgerald & Co. new york
Citigroup Global Markets Inc. new york
Credit Suisse Securities (USA) LLC new york
Daiwa Securities America Inc. subsid in NY, parent in tokyo
Deutsche Bank Securities Inc. subsid in NY, parent in germany
Dresdner Kleinwort Securities LLC germany
Goldman, Sachs & Co. NY
Greenwich Capital Markets, Inc. CT
HSBC Securities (USA) Inc. subsid NY, parent in London
J. P. Morgan Securities Inc.* NY
Merrill Lynch Government Securities Inc. NY
Mizuho Securities USA Inc. NJ, parent in Tokyo
Morgan Stanley & Co. Incorporated NY
UBS Securities LLC. CT, parent in switzerland

...
Who did the federal reserve just flush 630 billion dollars to yesterday? 
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9MTZEgukPLY&refer=home

We gave money to "The European Central Bank, the Bank of England and the Bank of Japan. "
Go back and look at those companies above and note where they are and who we just gave 630 billion dollars to yesterday. 


I have railed against this bill saying that this bailout mentality will affect the ability of the us government's ability to fund itself down the road.  I believe the situation is indeed much more dire than I had thought.  This was no attempt to bailout some traders, this bailout was to help the primary dealers so that the government could fund itself NOW. 

What else could leave congress silenced with mouth open?  What could make a senator facing election in 5 weeks go against 300 to 1 opposition in there constituents?  What else would force congressional martial law overnight? 
---
But the money was indeed spent.  from the same bloomberg article:
"The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. "

I dont think they expected it to fail.  In fact, if the money is already gone - the passage of this bill is a given, come hell or high water.   I wouldnt put it past the senate to simply take a bill that has already received house vote of yes, and stick this bailout right into the middle of it and vote yes and have it be law the same day.  The house's inability to play ball wont stop this. 

How bad is it out there?  How necessary was this? 
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3104666/Banking-crash-hits-Europe-as-ECB-loses-traction.html

""The interbank market has collapsed," said Hans Redeker, currency chief at BNP Paribas. "

"We're now seeing a domino effect as the credit multiplier goes into reverse and forces banks to cut back lending to clients," he said.

"The ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days," he said.

The ecb is the european central bank, or europes version of our federal reserve.  For them to publicly announce this is jaw droppingly amazingly bad. 
--
when they say they were unable to control monetary policy - they are referring to the libor print from last night at 7.  And the fact that the ecb did an overnight loan at 11%.  there is no way to control rates because they are tapped and done.   
--
yes, this bill will pass.  the first installment of money is already on its way.  it wont save our markets.  it wont save our foreclosure game.  the next installment with the next 700 billion will begin clearing their balance sheets of bad paper so they can continue to fund us for whatever brief amount of time we were able to buy ourselves. 

[muldoon]

from the new bill.
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS.

    The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.

[Sassy]

whew! 

[glenn kangiser]

We are being watched on the other side of the world also.

[Sassy]

well, I just called my senators & several representatives & the whitehouse & gave them a piece of my mind    about the yes vote by the senate & those congressmen who voted yes on the house bill for bailout - and strongly advised them to vote "no" ...  all you get to talk to are the office people & it's questionable how much info they relay on to the elected reps...  but when I asked them what the call ins were - one office said 8:1 against the bailout, another office said the no votes were overwhelming & lots of people had called it expressing their outrage...  will they listen?   

[Homegrown Tomatoes]

I called our dstrict's rep this morning...couldn't get through to the DC office, so I called both the local ones and threatened to vote against if she votes yes.  Was so ticke

[Homegrown Tomatoes]

oops, I meant to say, ticked that one of our senators voted FOR it.

[ScottA]

I wonder how hard it is to get in the banking business?    If I opened one real quick maybe I could get bailed out too.

[considerations]

too long to post, but interesting reading:

http://www.cnn.com/2008/POLITICS/10/01/beck.future/index.html?iref=mpstoryview 

[benevolance]

unbelievable...

should we be suprised though?


we should all wear paper bags on our heads living in this country until the Federal Reserve is abolished

[MountainDon]

we should all wear paper bags on our heads living in this country until the Federal Reserve is abolished

  I don't get it.  Someone care to explain?

[benevolance]

in the video link...

It talks about how a major component of the bail out deal would be that paulson and the fed would have more power to spend...And paulson has stated that he will veto any bill that curtails his spending or makes the fed accountable....It also talks about how the bailout will basically allow the investors who fund the federal reserve to purge their bad debts... Paulson can pick and choose who he funds and aides...It is not a systematic thing... he gets to pick and choose and the list of firms that will get bailed out are all on the the investor list for the federal reserve.

Basically the banks that lend money to america...have lent so much that it is a strain...And the debt is bad because america has been printing money that is basically worthless and writing cheques they could never cash for years...And the solution to running out of money has always been to print more as needed...Deflating the value of the dollar for decades.

Well the bailout will basically take all the bad debt off the hands of the investors who fund the federal reserve...So they can lend us even more money...and the taxpayers are going to pay for this...

In any other financial venue the lenders would have to absorb the bad debt deal with the losses liquidate assets and move on...This is using tax payers monies to ensure that the wealthy investment firms cannot possibly ever lose on their investments...This is giving them a guarantee while it gives nothing to americans...

Which is why I said we all need to wear paper bags on our heads...We should all be ashamed of ourselves for letting things like this continue

[MountainDon]

Okay. Now I understand. I couldn't seem to see what it was all about. The video never mentioned anything about bags. I imputed bags of money being given away...

[benevolance]

friend of mine from Canada sent me this great email on the bailout... thought I would share

A very clever observation of a current drama





Are you currently shaking your head wondering what the heck is going on in the US financial markets? Here is a wee story that illustrates it beautifully.



'Once upon a time, in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each.

The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at $20 for a monkey. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each, and the supply of monkeys became so small that it was an effort to even find a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now buy on behalf of him.

In the absence of the man, the assistant told the villagers. 'Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35, and when the man returns from the city, you can sell them to him for $50 each.'

The villagers rounded up all their savings and bought all the monkeys.

They never saw the man nor his assistant again, only monkeys everywhere!

Now you have a better understanding of how the stock market works.

[StinkerBell]

I am NOT a happy camper.

[glenn kangiser]

Seems many of the politicians lied to their constituents and they have vested interests in this bailout, they couldn't hurt themselves.

We knew it was coming, Stink..... we knew we were gonna get it...remember -- these are the biggest crooks in the US we are dealing with.  They understand coercion and threats from above also.  Besides -- we are just trailer trash.  They are the ones who rule.

[Sassy]

You might want to read this article in August Review - they were writing about this last March & have been warning us for years - I've posted several articles over the past 3 yrs on this very thing! 

http://www.augustreview.com/news_commentary/global_banking/globalist_ultimatum%3a_pay_up_or_collapse_2008090998/

Globalist Ultimatum: Pay up or Collapse       Print        E-mail

By Patrick Wood, Editor
September 10, 2008

There's going to be no end of controversy over the bailout of Fannie Mae and Freddie Mac.

On September 9, 2008, CNBC's popular financial show "Squawk Box Europe" interviewed Jim Rogers (CEO of Rogers Holding) on his view of the government takeover of Fannie and Freddie:

    "You can see that this is welfare for the rich. This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters... This is outrageous. Who are these people who are taking our money and doing this and ruining America?"

Who, indeed!

On March 21, 2008, The August Review wrote,

    "As the global financial crisis unfolds, one thing is certain: The major investment and commercial banks who have wrecked our economy and financial system are now successfully sucking unlimited amounts of money from the people's Treasury to bail themselves out."

The August Review has demonstrated repeatedly that the net effect of the New International Economic Order (term coined by the Trilateral Commission in 1973) was to devise new and more effective ways to divert money from the public sector into certain private hands.

[StinkerBell]

You say you want a revolution
Well, you know
We all want to change the world
You tell me that it's evolution
Well, you know
We all want to change the world
But when you talk about destruction
Don't you know that you can count me out
Don't you know it's gonna be all right
all right, all right

You say you got a real solution
Well, you know
We'd all love to see the plan
You ask me for a contribution
Well, you know
We're doing what we can
But when you want money
for people with minds that hate
All I can tell is brother you have to wait
Don't you know it's gonna be all right
all right, all right
Ah

ah, ah, ah, ah, ah...

You say you'll change the constitution
Well, you know
We all want to change your head
You tell me it's the institution
Well, you know
You better free you mind instead
But if you go carrying pictures of chairman Mao
You ain't going to make it with anyone anyhow
Don't you know it's gonna be all right
all right, all right
all right, all right, all right
all right, all right, all right



This song is meaning something a tad different to me now.

[glenn kangiser]

I think im more into Rage Against the Machine, or System of a Down right now, Stink. 

[StinkerBell]

I am working my way up. :

[Sassy]

Enron was the pit canary, but its death went unheeded
History is repeating itself as companies hide debt, blame the market for their failings and expect the taxpayer to pony up

http://www.guardian.co.uk/commentisfree/2008/oct/04/enron.creditcrunch

[StinkerBell]

I like the comparison there, Sassy.

[glenn kangiser]

Here, Stink.

This will make you feel better.

http://www.youtube.com/watch?v=WQeRG72E3OM