I don't know what these guys are smoking, but some sort of magical thinking seems to be at work. Their notion of a "free market" solution, proposed Saturday, was to make banks pay the Treasury for insurance. Brilliant! Let's drain liquidity from the banking system just at the time when it needs more liquidity to survive.
After all is said and done I think more sensible heads will prevail in the House. But it is so sad to see a great political party commit mass suicide.
19 comments:
Republicans didn't have the votes to stop this w/o lots of Dims joining. THE PEOPLE ARE FED UP.
The very people that blew up the GSE's are purporting to be our savior? I know the "fix" to liquidity will benefit the whole, but for goodness sake when will Barney Frank/Maxine Waters et all be held accountable????????????
The video from 2004/2005 is nothing short of astonishing as they deny there is a problem and refuse Bush's call to reign in the GSE's.
The major problem is that this bailout will not solve the problem this bailout is a resoulution...not a solution. If you don't know the difference then this whole mess is beyond your level of understanding. Paulson, Bernanke et al. have been complicit in lying to the American people and the world since last summer. This type of financial crisis does not appear out of the blue...and it will not be solved by the waving of a magic wand. All confidence is being eroded in the leaders of not only the financial companies but of the government as well. Now is not the time to be contrarian...each week a bigger and bigger institution fails and the world keeps spinning. Too many have engaged in the politics of fear...the markets will be OK without this bailout...the country will be OK without this bailout...the Republicans have presided over the biggest expansion of government in US history...I for one am glad to see them not put the icing on this cake.
I love to see the market bounce right when you PANIC Carl! :)
Right on Anon, right on.
Democrats(Dims) vote yes-141 no-94
Republican vote yes-66 no-132
well, the people are going to be more fed up when they see the results of the government doing nothing, of letting the free market work it all out.
Carl, some time ago I asked you about the possibility of a serious financial melt-down occuring, a 30's style depression. You replied and gave that scenario a chance of happening of less than 1 percent. Today it seems that that probability has risen significantly above 1 percent.
Greg
Carl
the Republicans are minority.
The house democrats are the ones to blame.
Thanks for your insightful blog.
I thought the Republicans controlled the Executive branch, the Legislative branch and the Judicial branch of the government from 2000 through 2006 -- so who refused what in 2004/2005?
I'm not from the US, but now, come on folks, do americans really want to commit economic suicide? I mean, how on earth do you plan to save the economy? By leaving it to die? I'm a Fx trader, and let me say that the volatility in FX really knocks you down! I've rarely seen something like this before.
I guess you are democrat! Shame ...
Dojo Bob
92 Democrats voted against this bill. Draw your own conclusions as to who jettisoned this bill.
Carlos
Good point about this being a Democrat controlled Congress. Prior to the House vote, deals were made, votes traded, all in an effort to effect the upcoming elections. Congressmen do not want to be seen as going against the will of the people--especially right before an election. Their jobs are at stake, right? So they will vote to keep their jobs even though that vote likely means that many of their constituents will lose theirs.
It seems that the sliminess of politics has out-trumped the good of the country.
Greg
It will be interesting to learn who voted against the plan. I suspect most did so primarily out of self interest - yielding to popular opinion out of fear they won't be reelected. It's unfortunate that people who will put the good of the country first are so hard to find in politics.
Carl, thanks for all the time you put into your blog. I disagree with your comment regarding the Republicans. This was a very unpopular bill with USA citizens and the Republicans voted accordingly. There are better ways to work out of these problems than buying worthless paper. Nouriel Roubini, Professor of Economics at New York University's Stern School of Business, predicted this mess for a long time. Nouriel was very much against this plan and offers a better solution which can be found on his blog.
MK
Carl, puhleeze. Almost 100 dems voted against this bill. Seems to me Ms Pelosi could've got it passed until she decided to try to have the last, provocative word. If the House dems want to pass a bill, they have the votes to do it, plus the WH. Seems to me Ms Pelosi ought to resign if she can't deliver a bill that had bi-partisan support and no veto threat from the WH,
For a purest chartist such as you, it is surprising that you would say "Republicans tank the market."
Even that should have been, and was in the charts...
Regards.
Tae, I wish I had written you what wrote. You took the words right out of my mouth!! Excellent post.
545 People
by Charlie Reese
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits?
Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?
You and I don't propose a federal budget. The president does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, The Federal Reserve Bank does.
One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of 300+ million - are directly, legally, morally and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority.
They have no ability to coerce a senator, a congressman or a president to do one cotton-picking thing.
I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall.
No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits.
The president can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes.
Who is the speaker of the House? She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300+ million cannot replace 545 people who stand convicted -- by present facts - of incompetence and irresponsibility.
I can't think of a single domestic problem that is not traceable directly to those 545 people.
When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Marines are in IRAQ, it's because they want them in IRAQ.
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power
Above all, do not let them con you into the belief that there exists disembodied mystical forces like 'the economy,' 'inflation' or 'politics' that prevent them from doing what they take an oath to do.
Those 545 people and they alone, are responsible. They and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses - provided the voters have the gumption to manage their own employees.
................................................................................
So the question is....how to resolve the problem....
As I have mentioned before.....The 300 million people will only take control when the current system is eliminated and substituted by another.....
So the question becomes .....to what other system ...
The other system should be one that...
Creates and accomplishes true objectives set by the population....
Elections are no longer necessary, because they serve no purpose.....Elections are just advertising games.....and making the 300 million feel like they are in a Democracy....
The most qualified people for the jobs get the jobs...
Tax money is the name of the game......The IRS has to be eliminated and replaced by a national sales tax....
The sales tax is then divided in proportion to the revenues on a state by state basis.....
Each state becomes an internet government center for its own cities and towns.....
For the national items such as the military....each state contributes prorata....
Internet Government State by State....
The time has come.....
well carl i think there is a couple things to consider
back in 1929 the republicans felt the market would correct itself also so history is repeating itself in some ways also from a democratic point of veiw and a political veiw letting the market fall gives abama a good chance of being elected to add to this the jewish comunity is begining there holiday and weather this effects
what gets done politically as well as how the stock market moves
i think we should leave the market
to prove itself before making anything other then very short term trading . today i exited
my hedge on the nasdaq leaving me with a net gain and several bullish trades now at a 0 cost basis . i did though reposition the hedge and a much reduced cost going further out into the december contracts and also being further out of the money .
the deflatioanry trend is only just begining . a bounce in the stock market when it does come
will only lead to a longer term decline once the bounce completes
this might take months or even years to set itself up yet we are
not in a primary bull market
joe
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