Why You Should Hate the Treasury Bailout Proposal (2 Viewers)

[desertsaintfan]

"I worked at [Wall Street firm you've heard of], but now I handle financial services for [a Congressman], and I was on the conference call that Paulson, Bernanke and the House Democratic Leadership held for all the members yesterday afternoon. It's supposed to be members only, but there's no way to enforce that if it's a conference call, and you may have already heard from other staff who were listening in.

Anyway, I wanted to let you know that, behind closed doors, Paulson describes the plan differently. He explicitly says that it will buy assets at above market prices (although he still claims that they are undervalued) because the holders won't sell at market prices. Anna Eshoo pressed him on how the government can compel the holders to sell, and he basically dodged the question. I think that's because he didn't want to admit that the government would just keep offering more and more.

I don't think that our leadership has been very good during this negotiation (or really, during any showdowns with this administration) at forcing the administration to own their position. If Paulson wants this plan, then he needs to sell it to the public, and if he sells a different plan to the public (the nonsense buying-at-market-price plan) then we should pass that. I'd rather see the government act as a market maker for the assets to get them transferred over to private equity firms and sovereign wealth funds and other willing holders. And if we need to recapitalize these companies, it seems like the cheapest way for the taxpayer is to go in and buy up the distressed debt and then convert that to equity."
http://www.nakedcapitalism.com/2008/09/why-you-should-hate-treasury-bailout.html

 

[blackadder]

"I worked at [Wall Street firm you've heard of], but now I handle financial services for [a Congressman], and I was on the conference call that Paulson, Bernanke and the House Democratic Leadership held for all the members yesterday afternoon. It's supposed to be members only, but there's no way to enforce that if it's a conference call, and you may have already heard from other staff who were listening in.

Anyway, I wanted to let you know that, behind closed doors, Paulson describes the plan differently. He explicitly says that it will buy assets at above market prices (although he still claims that they are undervalued) because the holders won't sell at market prices. Anna Eshoo pressed him on how the government can compel the holders to sell, and he basically dodged the question. I think that's because he didn't want to admit that the government would just keep offering more and more.

I don't think that our leadership has been very good during this negotiation (or really, during any showdowns with this administration) at forcing the administration to own their position. If Paulson wants this plan, then he needs to sell it to the public, and if he sells a different plan to the public (the nonsense buying-at-market-price plan) then we should pass that. I'd rather see the government act as a market maker for the assets to get them transferred over to private equity firms and sovereign wealth funds and other willing holders. And if we need to recapitalize these companies, it seems like the cheapest way for the taxpayer is to go in and buy up the distressed debt and then convert that to equity."
http://www.nakedcapitalism.com/2008/09/why-you-should-hate-treasury-bailout.html

What the general public wants is irrelevant.

Congress is owned. Wall Street will call the tune. Paulson came form Wall Street. Wall Street lobbyists drove de-regulation.

 

[jpcdolphan]

I agree with the people that say that this needed to be done. Unfortunately, they have us by our collective coconuts on this one.

I disagree with them when they say that this is just a loan or even an investment, as opposed to a bailout, however. Anybody that thinks that Uncle Sam has a prayer of getting its original investment back, much less actually making any money on this deal, is seriously deluding themselves.

Of course, if this whole package comes with the "strings" of actual regulation of some of these opaque shadow markets, I'll feel somewhat better about this. I'm not holding my breath, though.

 

[daybreaker]

gee, I wonder why Paulson says it needs to be passed quickly without debate... Maybe he's scared people will actually, yknow, READ it.

 

[varanook]

I still say let the chips fall where they may however hard it is on everyone.

 

[st.tammany]

Paulson brought down Bear because he's an Ex Goldman guy and he hates Bear Stearns.

Or at least that's what some folks are claiming.

 

[Ken-Bob]

I hear complaints all of the time about how people on welfare get to where they expect the government to be there for them so they don't actually have to put forth an effort. Is the same not true for corporate welfare. Since government bailouts have gotten to be the norm, why wouldn't a larger corporation engage in riskier behavior if they feel it's likely the government will cover their *** if it fails?

That's why I hate the bailouts. On the other hand, I don't know as there was any choice. AIG, in particular, would have dragged down a great portion of our economy with it had it completely gone under.

 

[Arc de Triumphe]

Argentina 1991?

 

[City Champ]

anyone watch the george stephanopoulis show (forget the name) with george will and cokie roberts?

They had the sec of treasury on there as well as some folks from the house. This all seems really fishy to me. Why would they rush anything of this size and nature through without being VERY diligent. Something stinks with this whole thing...

 

[gboudx]

I know nothing of the political leanings of this website, but a friend sent me the link. Scary if true.

http://www.huffingtonpost.com/larisa-alexandrovna/welcome-to-the-final-stag_b_127990.html

 

[TPS]

Heard Senator Dodd on NPR this morning (chairman of Senate Banking & Finance Committee) say that "clean" was relative. He didn't believe that taxpayers should foot the bill for things like golden parachutes for executives. I have to agree with that approach. A $700,000,000,000 bailout is kind of scary to begin with. No reason for individuals to get rich on the very face of the bill. At least throw the real taxpayers a bone.

 

[City Champ]

I am starting to think that any bail out is a bad idea. I feel like the administration is pulling a fast one, kinda like the stuff they would do with the emergency threat levels. Maybe I am wrong, but I guess I all that crying wolf stuff may be the culprit for my doubts.

Something just does not seem right with all of this stuff...

 

[bclemms]

I am starting to think that any bail out is a bad idea. I feel like the administration is pulling a fast one, kinda like the stuff they would do with the emergency threat levels. Maybe I am wrong, but I guess I all that crying wolf stuff may be the culprit for my doubts.

Something just does not seem right with all of this stuff...

I'm starting to wonder how anyone could feel any other way.

 

[daybreaker]

It's like they say... fool me once, shame on me... fool me twice...uhh... cant get fooled again.

 

[wamland]

It certainly feels like the same routine that sold the Iraq war. Scare the crap out of everyone and then give away the store.