The real reason for the financial crisis

Watch the video and give us your impression:

http://www.youtube.com/watch?v=H5tZc8oH–o

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Published in: on September 29, 2008 at 8:16 am  Comments (17)  

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  1. Democrats at work!!! Vote McCain!!! We can not have Obama in the white house, we will be doomed. His record shows it..!!
    During the debate at Ole Miss , Obama constantly referred to Sen McCain as JOHN. It thought it was both disrespectful and very demeaning.

  2. And here’s how the bailout will work:

    http://www.breadwithcircus.com/bailout.html

  3. News Bullentin:
    it has broke over the Rush Limbaugh and CBS Radio,that the so call Economic Stabelization Act 08 has failed to pass in the House. As a result of the house votes,the market plummeted.

  4. JP, you are wrong. Today 133 Republicans in the House voted NO to the bailout package presented by the doofus Dubya and 95 Democrats voted NO. All 3 of our Democrat Miss. Congressmen voted NO to this terrible plan with Repuglican Chip Pickering voting YES. There were 140 Democrats voting YES for this turkey and 65 Republicans voting YES. So it was a rollcall defeat of 228 Nay to 205 Yea votes.

    Sad to see that the stock market fell 777 points as a result, but I say let Wall St. bankers and brokers eat crow and not the taxpayers to pay for a “bailout” that seems more like a “stealout”.

    Did you see the pitiful 7 minute address by Bush to the nation last week trying to convince Americans of his wretched bailout plan? Are you aware that Treasury Secretary Hank Paulson already got his Golden Parachute a few years ago when he left Goldman on Wall St. bumping up his personal net worth to $500 million before joining Bush to take this job?

  5. And the big three automakers are in D.C. with their hands out too looking for taxpayer cash. My hat is off to our congressional delegation sans Chip Pickering. I was rather surprised by his vote.

  6. I am not surprised by Chip’s vote of yes. He is on his way out of Congress in a few weeks and could care less what the voters in Mississippi think of his “yes vote” on this smelly and disgusting “Rescue Plan” as he is not up for re-election. He is like his mentor Trent Lott, who resigned abruptly before the Scruggs trial and other scandals dragged him down, leaving Mississippi in the lurch in the Senate, so he could go feather his nest with former Senator John Breaux as a lobbyiest in D.C. I would not be surprised if Chip didn’t join their firm also. Politicians of this ilk are a disgrace and disgust me, and as McCain says are a great part of “special interest groups” and what is wrong with Washington’s “business as usual” these days.

    Sure, the big 3 automakers are now in Washington with their hands out. Ford and GM stocks are now like junk and soon they will ask to be bailed out too. Where oh where will the Fed. Govt. draw the line and stop this madness?

  7. Here’s the message I’m sending my congressmen:

    Dear Congressman_____________:

    The Treasury bailout plan is a disgrace, a financial rescue plan intended for reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially-stressed households, and that will come at a very high cost to the US taxpayer. The plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented alternative plans that are more fair and efficient and less costly ways to resolve the crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. It is a scandal that Congressional Democrats and Republicans have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners. I urge you to once again reject this despicable bailout scheme and seek a better way to return our financial system to firm footing, even if we must endure a painful readjustment.

    Sincerely,

    Bert

  8. Good for you, Bert. I like your well-written letter and I hope your message does not fall on deaf ears as have the messages and better alternative “Rescue Plans” submitted by some great economists to Bush and the Congress. Bush and Company in Congress have been too focused since 2000 on taking care of their fat cat buddies on Wall St. instead of listening to the American people on Main St.

    Tonight on Charlie Rose, which I watch every night at 11 p.m. on PBS, Dr. Feldstein of Harvard…one of America’s most brilliant economists, expressed grave reservations on the bill the Senate expects to vote on tomorrow night as well as the bill rejected yesterday in the House. Charlie Rose will have Warren Buffet as his guest tomorrow night and his take will be very enlightening about this economic Pearl Harbor.

  9. Dave Ramsey’s solution to the crisis:

    Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:

    Common Sense Plan.

    I. INSURANCE

    A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.

    B. In order for a company to accept the government-backed insurance, they must do two things:

    1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
    a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
    b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while
    working with the borrower—again limiting foreclosures and ruined lives.

    2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.

    C. This backstop will cost less than $50 billion—a small fraction of the current proposal.

    II. MARK TO MARKET

    A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.

    B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.

    III. CAPITAL GAINS TAX

    A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.

    B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to
    stand up, speak out, and fix this mess.

  10. Newt Gingrich offers his suggestions for a “workout” rather than a “bailout” here…

    http://www.humanevents.com/article.php?print=yes&id=28818

  11. Another good article on the crisis:

    http://www.lifeaftertheoilcrash.net/Archives2008/WhitneyDetonationSeptember29.html

  12. Here’s the good news: the Democratic video of the Freddie and Frannie Mae hearings are circulating all across the web. I hear this on Hannity and Colmes a few nights ago.

  13. The final roll call vote on HR 1424 on the motion to concur with the Senate Amendments to the Bill called “Emergency Economic Stabilization Act of 2008” revealed the Mississippi Democrat reps Childers, Taylor, and Thompson voted NAY, but the Republican Chip Pickering voted YEA. (I am proud that our Miss. Repub. Senators Cochran and Wicker both voted NAY to this bailout bill Wed. and disappointed with Chip today, but not surprised.) The 263 YEAS to the 171 NAYS thus approved this Bill and it was rushed to the White House where Bush signed it and then flew to Crawford, Texas for the weekend.

    To me this is a dirty Band Aid on the broken shoulder of a train wreck victim, a/k/a the American Taxpayer, and proof that The Federal Govt. has reached a new low today.

  14. You can thank the democrats for this..

  15. California may need a $7 billion emergency loan from the Federal government for day-to-day operations and to pay teachers’ salaries, nursing homes, law enforcement and every other State-funded service this month, Gov. Arnold Schwarzenegger warned in a letter sent Thursday to the U.S. Treasury secretary.

    Breakdown: California

    California may need a $7 billion emergency loan
    Loan is for day-to-day operations; paing teachers, nursing homes, and law enforcement
    California has been locked out of credit markets for the past 10 days.
    California warns that a number of states are facing the same cash flow crunch
    California would attempt to sell “$7 billion in Revenue Anticipation Notes for short term cash

    “The federal rescue package is not a bailout of Wall Street tycoons – it is a lifeboat for millions of Americans whose life savings, businesses, retirement plans and jobs are at stake,” Schwarzenegger said.

    The treasurer of Massachusetts has asked the federal government about lending Massachusetts money under the same favorable terms it has given banks and firms during the financial crisis.

    Breakdown: Massachusetts

    Massachusetts has enough money to cover its expenses for the coming weeks,
    Low-rate loan would ease a cash shortfall if the credit problems persist
    The state’s borrowing problems come as it deals with a $223 million shortfall in projected tax collections

  16. The government has the Fed: which has established the precedence of printing (or extending as the case may be)all the fiat currency the government “needs” for whatever it purposes to do.
    The government is drowning us in a sea of inflation and JP it is not just the Demosocialists who are responsible but the Republofascists as well.

  17. Look and get real mad…

    http://www.thenation.com/doc/20081110/greider2


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