Senate to vote on rescue plan Wednesday

[Care4all]

I loved the winters up north, since winter sports and activities are by far my favorite. I used to get a one-night season pass at a ski area 15 minutes away for $40. I used to nordic ski out my back door and had plans for a rope tow from my barn through two neighbor's properties. I also had a nice flat area out to the barn that I had planned for a skating rink. Load up that wood stove and we were always warm.

The season that sucked was the spring. It took forever for the snow to melt, revealing seas of mud everywhere. And all that dark sand on the sides of the roads. But, like some miracle, it all got green in about 2 weeks. I was always amazed.

MUD SEASON....i know it well! i live on a dirt road, about 400 feet in from a paved road....thank God i do not have carpeting and have wood floors, which are forever dirty with dried mud for at least a three week period!

and YES! It is AMAZING how it goes from brown and muddy to the beauty of the various spring blooms and the various greens and purples of the newly leaved trees...

 

[glockmail]

MUD SEASON....i know it well! i live on a dirt road, about 400 feet in from a paved road....thank God i do not have carpeting and have wood floors, which are forever dirty with dried mud for at least a three week period!

and YES! It is AMAZING how it goes from brown and muddy to the beauty of the various spring blooms and the various greens and purples of the newly leaved trees...

Mine was 250' from the street to the barn. What you need to do is buy a few rolls of landscape fabric, which are about three feet wide, and run them, two rows, centered in the wheel tracks. Then have about 2" of "driveway mix" crushed stone delivered and spread. That fabric will keep the mud from rising up into the stones.

 

[Valerie]

Here we go again.

Another interesting and informative article from cnn.com :

No bailout? Here's Plan B

Much can be done to help credit markets and troubled banks - even if Congress can't agree on bailout.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: October 1, 2008: 5:46 AM ET

What can be done to solve crisis without Congress - Sep. 30, 2008

Kicking the tires on other fixes

The SEC and FDIC changes announced Tuesday are not the only ideas being discussed in Washington and among economists. Some others:

* Change federal requirements that force banks to keep a certain level of cash on hand for every dollar they lend out.
* Give banks the chance to exchange loan notes for FDIC notes, which be more valuable and allowing the banks more flexibility to make loans.
* Purchase on a massive scale mortgage-backed securities issued by finance giants Fannie Mae and Freddie Mac.
* Extend limits on short sales of financial sector stocks.
* Cut the fed funds rate - the Federal Reserve's target for short-term lending - perhaps all the way to zero, or in coordination with rate cuts by other central banks around the globe.

Clearly, the controversial $700 billion bailout package - which would give the Treasury Secretary authority to buy distressed assets - is not the only way to unfreeze troubled credit markets.

But it's also true that none of the proposals is without downsides and dissenters.

Gramley, the former Fed governor, questions the wisdom of getting rid of mark-to-market accounting. He would rather see the FDIC and other regulators relax their rules governing the ratio banks must maintain between capital and loans on their books. Those rules are choking off credit to good customers, he said.

Gramley said he knows of a businessman with strong credit and a $20 million net worth who was rejected for a renewal of a $1.8 million business loan.

"The bank told him, 'Our regulators are requiring us to improve our capital ratios, but we can't raise capital because the market is shot,' " Gramley said.

Former FDIC chairman Isaac argues that changing capital ratio requirements or easing other regulations would only lead to deeper problems down the road. "That simply doesn't play well," he said.

Big bailout still looms

Meanwhile, the Bush administration's push for its big rescue plan continued on Tuesday.

"The alternatives are good - I don't think they do any harm," said Brian Gardner, the Washington analyst for KBW, an investment firm specializing in financial services. "But none of them are as powerful as the rescue package would be."

The Senate plans to vote on the $700 billion bank rescue plan Wednesday evening. Stocks rallied on Tuesday as investors believed that Congress will still approve the bill. Credit markets stayed very tight and banks are still reluctant to lend to one another.

And even advocates of the bailout plan concede that the alternate measures may yet be needed if passage of the bill does not unfreeze credit markets.

"It doesn't fix everything," said Hogan. "It doesn't force the institutions to lend to each other or lend to consumers and businesses. That's why they'll hold onto these alternatives. I think you need to keep dry powder if you have to use them in the future."

What can be done to solve crisis without Congress - Sep. 30, 2008

 

[Bern80]

hahahahahaha, that's a terrible thing to say!


Ohhhhh and i dunno about her judgement on the family budget, lean and mean, not when she feels she needs to spend her family budget on things like tanning beds in her governor's office....


care

I'm sorry, but as one of the red blooded American males that thinks Palin is smokin' hot, I just can't find it in my heart to complain if she spends money keeping herself looking good. That's an expenditure for the people if ever there was one.

 

[KMAN]

The Dow's up again, consumer confidence is up, Asian and Euro markets surviving. We don't need this POS. Let a handful of banks fail, or a few handfuls, and bargain hunters will step in and buy them up, and we'll be back to normal in less than a year.

Amen brother...

 

[KMAN]

At least I have a chance. He could croak off and Palin will take over. I'm sure she knows how to reign in the family budget.

I hear you brother. Maybe Obama will get elected and Palin can fix all of this crap in 4 years.

 

[editec]

I'm sorry, but as one of the red blooded American males that thinks Palin is smokin' hot, I just can't find it in my heart to complain if she spends money keeping herself looking good. That's an expenditure for the people if ever there was one.

Smokin' hot?!

She's okay.

 

[Valerie]

Another interesting and informative article from cnn.com :

No bailout? Here's Plan B

Much can be done to help credit markets and troubled banks - even if Congress can't agree on bailout.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: October 1, 2008: 5:46 AM ET

What can be done to solve crisis without Congress - Sep. 30, 2008

Wednesday, October 1, 2008
Marc Faber Disses the Bailout Plan, Likes the Dollar
Business Intelligence Middle East - bi-me.com - Marc Faber says US bailout won't stop recession, buy gold - News, analysis, reports

Any proposal to rescue the US financial system will fail to avert a recession said Marc Faber, the Swiss fund manager and Gloom Boom & Doom editor and publisher, now based in Thailand.

A stock rally in the event that a package is approved will be temporary and should be used as 'an opportunity' to sell, said Faber.

"The rejection of the package is good because it shows that some people in the US are still sane," Faber said... "A bailout will not buy the US a way out. The government is less powerful than markets in fixing this mess."

I should add that, unlike what Mr. Paulson says, falling house prices are not the problem. It is the huge leverage that is the problem. If your house is 100% self-financed (no mortgage outstanding) a rise or a decline in the value of your house has no direct economic or financial impact. In short, my view is that the bail-out plan is not addressing the cause of the problem, which is excessive leverage. Moreover, it is unlikely to help struggling homeowners but is designed to encourage even more speculation by financial companies. Peter Boockvar of Millar Tabak is furthermore concerned that it will lead to further bailouts.

naked capitalism: Marc Faber Disses the Bailout Plan, Likes the Dollar

the Paulson bailout plan is a government bailout of the previously failed government bailout which was a bailout of the previously failed government bailout etc… Each bailout had its own unintended consequences which the next bailout tried to address. Greenspan bailed out the economy after the stock market bubble popped with 1% interest rates which sowed the seeds for thecredit bubble. In order to bail us out, Bernanke slashed interest rates to 2% and a dramatic rise in commodity prices ensued. When that bailout didn’t work, he instituted a bailout of the investment banks with the initiation of the TSLF and PDCF credit facilities for investment banks. That slowed down the deleveraging process as it gave the investment banks a false sense of security. I highlight Dick Fuld’s comments soon after it began where he said it takes the liquidity issue off the table. The lack of dramatic deleveraging brought us to last week’s panic in GS and MS, a failed LEH and a shotgun wedding for MER which led us to the Paulson bailout. The unintended consequence of this bailout will be a much lower US$ and selloff in the US bond market which will leave us with higher interest rates and higher mortgage rates throw’s the intentions of the Paulson plan out the window. Who will bailout this bailout”?

.....here's a plan for Washington DC, tell the banks to stop paying dividends to their shareholders. I went back and looked at just 20 of the top banks, including GS, MS and MER and saw that they are paying out $40 Billion per year out in dividends. The lending rule of thumb is $1 of capital can service $10 of lending. That is $400 Billion in lending capacity that can get freed up. That is more than half of the Paulson bailout plan and it costs the taxpayer ZERO.

naked capitalism: Marc Faber Disses the Bailout Plan, Likes the Dollar

 

[dilloduck]

Wednesday, October 1, 2008
Marc Faber Disses the Bailout Plan, Likes the Dollar
Business Intelligence Middle East - bi-me.com - Marc Faber says US bailout won't stop recession, buy gold - News, analysis, reports




naked capitalism: Marc Faber Disses the Bailout Plan, Likes the Dollar


naked capitalism: Marc Faber Disses the Bailout Plan, Likes the Dollar

 

[indago]

CNN — LOU DOBBS TONIGHT — Aired September 30, 2008 - 19:00 ET

LOU DOBBS, HOST: Meanwhile, a group of House Democrats today proposing an alternative plan to deal with this financial crisis. Announcing a five-point plan, they call this legislation the no-bailout act. The plan calls for government regulators to step in and regulate the markets rather than a taxpayer bailout of Wall Street. Congressman Peter DeFazio of Oregon and Congresswoman Marcy Kaptur of Ohio leading the new effort, and they join us now. Good to have you both here. What will be the cost of the taxpayer of your new plan, congresswoman?

REP. MARCY KAPTUR (D), OHIO: Our plan doesn't cost anything because we oriented toward the market, not the government. And we follow the plan that was used back in the '80s and late '70s for the Resolution Trust Corporation, with all of the troubles back then, 3,000 bank failures, hundreds of agriculture banks, continental Illinois bank failure, inflation at 21 percent. And over 3,000 banks were resolved. Frankly, all the banks in Texas were closed. But at that time, William Isaac, who was chair of the Federal Deposit Insurance Corporation developed a net worth certificate as well as procedures so that $100 billion worth of resolution was accomplished for $1.8 billion out of the insurance fund of the FDIC.

DOBBS: Congressman, let me ask you here, have you had any reaction from the House leadership at all, the speaker to this plan? Because as Congresswoman Kaptur said, it's reminiscent of the Resolution Trust Corporation. It also sounds like it draws on some of the experience from the early '90s in both Sweden and Finland as suggested by Bill Isaac, former head of the FDIC. Is there any truth to that?

REP. PETER DEFAZIO (D), OREGON: Absolutely. And what we're offering them is something that enjoys broad Republican support, should enjoy broad Democratic support. Let's try the minimalist, regulatory approach. Now, the markets spoke before we voted down that plan yesterday. If you read "The New York Times" today, they say actually liquidity and lending froze up yesterday in anticipation that the Paulson bailout would pass. I think the Paulson bailout is based on a false premise, shoveling this money into bad debt on Wall Street is going to solve this problem.

DOBBS: Can I ask you both something? The head of the Congressional Budget Office said this idiotic bailout of Wall Street was likely, was likely to cause a deeper crisis than the one that we're currently going through. Why isn't anybody paying attention to this in either the White House, the Democratic leadership or the campaign trail? Both Obama and McCain act like they have no knowledge of what the heck is going on here.

KAPTUR: They haven't really identified the basis of the problem. Our banking system is fundamentally sound. This is a credit crunch and a housing foreclosure challenge. They haven't identified the root cause. We can deal with the credit crunch through changes in accounting standards. The Securities and Exchange Commission today, as a result of the work that we've been doing so much over the last week and a half, to try to get them to look at those accounting standards is the reason that our local banks are short on credit to re-evaluate those standards and then to deal with the home foreclosure crisis in a way that it matters on Main Street, locks in on Main Street.

DEFAZIO: Lou, you know, credible economists say to us, look, if you adopt Paulson's plan, you throw this money at the top on Wall Street under the premise it will free up credit among the banks, which many of them question, 400 at least, they say but it definitely doesn't go to the root of the problem in housing. And what do you do when housing values go down and there's another trench of maybe another trillion dollars of bad securities on Wall Street and Paulson comes back for more money or the next treasury secretary? We've got to try something else.

DOBBS: We should point out here, just so everybody keeps it straight, no one has any idea of the so-called toxic securities, no one has any idea how many of these there are in the system, period. We have no idea, nor can the Treasury Department suggest what the number is. Some people have estimates but we know we're being low balled right now, right?

KAPTUR: Lou, we know 75 percent of the sub prime loans are good and performing — 25 percent that may have trouble, we're not sure what the composition of those are, but we should put those into a special housing trust corporation where we can work them out with bank examiners in a way that we did back in the '80s and be very disciplined and prudent about the way we do this.

DOBBS: Two questions and one is sort of a statement as my wont from time to time. One is, there can't be much excitement because you're not calling for taxpayer money in the leadership or the White House. And that will upset Henry Paulson because he won't be able to take care of his buddies on Wall Street. But the second part of this is, will we have public hearings? Will you actually invite the American public to have a voice here? Will you actually put together hearings in which we can hear competing viewpoints on this issue from the world's best — the country's best informed experts?

DEFAZIO: Look at it this way. We got a lot of experts who back this approach, doesn't cost anything. Why not try this and if this works, great. If it doesn't work, that would give us time to go through the regular process with hearings, hearing from the American public, looking at getting at the underpinnings of this crisis. And then if we're going to put taxpayer money on the line, having a much better way of doing it. But maybe we can do it without putting the taxpayers on the line.

KAPTUR: And Lou, among those experts, 9 would like to invite Raymond Stall (ph) from my district in Vermillion, Ohio, who basically says "let all the Wall Street people hurt just like the rest of us normal people do. I don't owe them a living. Corruption and poor management brought on all of this. If these people were to be fired and prosecuted and put into prison, then that might be one thing. But to allow the same people to be in charge makes no sense to me or anyone else."

DOBBS: You know what? I think he sounds like an expert to testify anywhere. I like the sentiment. Is this bailout plan, I mean, the arrogance of the Senate, the arrogance of these two presidential candidates, Obama and McCain, demanding that this legislation be passed, this Wall Street bailout, is this thing going to die tomorrow?

DEFAZIO: I hope so. I hope the Senate has the guts to stand up for the people they represent. I've already talked to a few senators called me today, Maria Cantwell from Washington is very interested in our approach and says she's taking it to Judd Gray (ph).

DOBBS: Good.

KAPTUR: You know what I hope for, Lou? I hope for one courageous senator who will filibuster for the sake of the nation.

DOBBS: You know —

DEFAZIO: Maybe two.

KAPTUR: Maybe two.

DOBBS: So they can stay rested, because they've got a lot of fools to work against in that Senate. I would hope that there's enough courage there. The House proved itself to be filled with men and women who are willing to stand up for what's right and to turn down the special interest and the ignorant, arrogant leadership of your House, the Senate, and of course, the fellow over at 1600 Pennsylvania. Thank you both. It's an exciting proposition. I wish you all the best.

KAPTUR: Oh by the way, have your listeners go to Kaptur, let's play bailout on YouTube. They'll be surprised.

DEFAZIO: Even better, have your listeners post the number for the Capitol switchboard, flood the Capitol switchboard tomorrow and call the Senate.

KAPTUR: That's a good idea.

DOBBS: Now that's a good idea. We're going to help you. We're going to have that and we're going to have — we'll have that on our Web site, LouDobbs.com. We're going to put up that number. Now you want the number for the Capitol or you want the number for the House?

DEFAZIO: For the Capitol. It's the side on the Senate. We got to go for the Senate. We've got to stop the Senate tomorrow just like the House stopped it yesterday.

DOBBS: OK, we're going to have that number up. We're going to put that number up at the end of this — on the other side of this break and ask everybody to do as Congressman DeFazio suggested. Call, e-mail and god speed. Thank you both very much. Congresswoman Kaptur, thank you Congressman DeFazio.

202-224-3121

[ame=http://www.youtube.com/watch?v=S27yitK32ds]KAPTUR/LET'S PLAY BAILOUT[/ame]

 

[indago]

Journalist Louis Uchitelle wrote for the New York Times 1 October 2008:
----------------------------------------------------------------------------
Some small companies say they are no longer able to get loans from newly cautious banks as credit tightens across the country...
----------------------------------------------------------------------------

The United States Congress is responsible for the United States money supply for transactional purposes, and also responsible to promote the general welfare of all of the States in the United States. If a bank is not going to release this medium of exchange for transactional purposes, then the Congress is obligated to inform the bank that their apportioned amount of the US money supply would be removed and placed into a bank that will.

 

[editec]

Change federal requirements that force banks to keep a certain level of cash on hand for every dollar they lend out.

Screw that. Recind their right to loan a dime more than they have.

* Give banks the chance to exchange loan notes for FDIC notes, which be more valuable and allowing the banks more flexibility to make loans

.

That's just a bailout by another name. they exchange their bad paper for the right to loan out more money than they have because the FED recapitalizes them?

* Purchase on a massive scale mortgage-backed securities issued by finance giants Fannie Mae and Freddie Mac.

Inflationary nonsense. We buy their crap paper and give them cash for it?

Fannie and Freddie are PUBLICALLY TRADED PRIVATE CORPORATIONS. We owe them NOTHING.

The bondholders KNEW what they were buying, too. And they KNEW how dubious those loans were.

They bought them because the rate of interest on them seemed like a good return and because they KNEW that they banks would hold us all hostage if we let them fail because of THEIR mistakes..

* Extend limits on short sales of financial sector stocks.

Don't really understand what this actually means. If people cannot short stocks, isn't the SEC artificially shoring up the value of those stocks? I believe they are.

* Cut the fed funds rate - the Federal Reserve's target for short-term lending - perhaps all the way to zero, or in coordination with rate cuts by other central banks around the globe.

Does it get any more inflationary than that?

I'll agree that this is a good idea when I CAN GO TO THAT WINDOW TO BORROW MONEY AT 0% interest, too, and not a second before that.

These forking people want to keep giving this enormous acess to cheap money advantage to the banks who are screwing us all, folks.

These banks are LESS CREDIT WORTHY than I am, for Lord's sakes, and the FED wants to lend them money at NO INTEREST?!?!

If I could go to the FED window and borrow at 0% interest, I coukld pay off my house in 10 years instead of thirty.

Wouldn't that be nice for me?

that's what they're giving the banks....the right to borrow money at NO interest to lend to me a REAL interest so that me (and everyone else who issues a motgage) are SLAVES to the banks.

Nice racket these banks have, eh?