Torn on this one

[RetiredGySgt]

Paulson Plan May Spark Showdown Between Democrats, Republicans - Yahoo! News

If we buy these Companies then I see no reason why we can not set the pay for their employees including CEO's. I do not support though the idea that we should save the people that made bad loans when they should have known better.

I do not like the Government bailing these companies out but see the need to do so.

 

[HoleInTheVoid]

Are their executive officer pay plans mitigated by profitability? Most companies are so structured.

If so you should be able to sleep soundly.

 

[RetiredGySgt]

Are their executive officer pay plans mitigated by profitability? Most companies are so structured.

If so you should be able to sleep soundly.

CEO's routinely get paid huge sums even if their companies are deep in debt.

 

[HoleInTheVoid]

CEO's routinely get paid huge sums even if their companies are deep in debt.

Well, in the case of Mr Raines, it was done fraudulantly; but because it happened in the past does dictate it need happen in this case as your inquiry centers on the rightness or wrongness of a proposed course of action.

As I implied in my first response I am unsure of the pay structure for these rubes. If I were a shareholder...and now it seems as if I am against my wishes and better judgment...I would want those who failed me so catastrophically to pay in the bitterest of terms.

 

[KittenKoder]

Well, in the case of Mr Raines, it was done fraudulantly; but because it happened in the past does dictate it need happen in this case as your inquiry centers on the rightness or wrongness of a proposed course of action.

As I implied in my first response I am unsure of the pay structure for these rubes. If I were a shareholder...and now it seems as if I am against my wishes and better judgment...I would want those who failed me so catastrophically to pay in the bitterest of terms.

I concur, if they screwed up then make them pay, if not then hurry up and fix the problem so we can get our money back as tax-payers. I would rather that money go to helping the country than into a risky stock.

 

[editec]

IF the US taxpayer gets put on the hook for the bad paper that the banks have, THEN the US taxpayer should just BUY those banks outright.

Enough with this bailout shit.

The banks fucked up, the taxpayer is going to have to save them, so the US government should OWN those banks, lock stock and barrel.

Ssrew the investors who didn't put enough pressure on the boards of directors to run a tight ship, and screw the CEOs and top management, too.

You want capitalism? There's how your capitalism is supposed to actually work.

The US Taxpayer is coming up with the capital, ergo the golden rule should be put into effect.

Him what has the gold RULES.

The USA should take over those banks which are failed, simple as that. Not bail them out buy them up for whatever they are really worth TODAY.

Pay for whatever residual market value of those banks is left and not a penny more and the US should OWN the value it puts into the bank according to the current stocks valuation of those banks. (which in many cases is ZERO, I suspect.)

 

[HoleInTheVoid]

Koder,

Alas, the % of this mess that equals CEO pay is miniscule. I'd prefer criminal charges if such can be legally proven.

editec,

I don't want the banks bought. I want the buy them bank and regs tightened to keep the fraud from being repeated.

 

[KittenKoder]

Koder,

Alas, the % of this mess that equals CEO pay is miniscule. I'd prefer criminal charges if such can be legally proven.

editec,

I don't want the banks bought. I want the buy them bank and regs tightened to keep the fraud from being repeated.

That would be nice as well, though at this point it's only a possibility for the near future as we still have to get this current mess straightened out. Throwing money at it wasn't the best solution, but now that it's done and we are being ignored thus far, we can only hope for some kind of a return on the forced 'investment'. Criminal prosecution can be taken as well, but we may have to wait for the next pres and hope they follow our wishes better than the current one.

 

[editec]

Here's the thing...san regulations the MILLIONS of bad decisions made that brought us to this crises were NOT illegal decisions.

The people who caused this mess were just maximizing their profits.

We gave them persmission to speculate and speculate they did.

We also set up the system such that they took the risks, but they who decided to take those risks got paid handsomely for it and then had none of that risk thrust upon them.

Oh sure the banks might go down, but they get to keep their bonuses, and those obscenely fat paychecks they made off their mistakes.

Nice system, eh?

For the masters of the universe it is.

For the rest of us?

We're screwed.

Deregulation was the proble3m.


Find the people who screamed that government was the problem, and there you will find the fathers of this disaster.

this board is rife with people who enabled these idiots.

Some of them are so clueless that they STILL think this disaster is some kind of liberal plot to besmirch the good name of Adam Smith.

The come at economics with less than an 8th graders' understanding of that most complex of all social sciences, and they think because they can quote Ayn Rand or some carefully redacted quotes from Adam Smith (a man who was NOT an economist, BTW) they know what the fuck they're talking about.

They remind me of the liberals who truly believe that a single payer health care insurance sccheme is really going to bring down the cost of health care.

They are ideaogues without a clue.

 

[PeterS]

Are their executive officer pay plans mitigated by profitability?

No, Executive salaries are dictated by scarcity of labor not profits with the bigger bonuses given to get rid of someone then retain them.

 

[Paulie]

Paulson Plan May Spark Showdown Between Democrats, Republicans - Yahoo! News

If we buy these Companies then I see no reason why we can not set the pay for their employees including CEO's. I do not support though the idea that we should save the people that made bad loans when they should have known better.

I do not like the Government bailing these companies out but see the need to do so.

What need?

What is the NEED to bail them out?

Why is passing this mess on to our children better than us handling our own business? Why should our children have to live in a possible hyperinflationary economy because we were too scared to man up to our own mistakes?

I would happily deal with whatever "meltdown" might occur from not taking these measures, and I'm not even part of the credit problem. I have no mortgage, we own our cars, and we have less than $500 in credit card debt. But I would still rather see today's generation weather this storm, than for my kids to have to live in financial ruin because we were too afraid to face it ourselves.

Our children don't deserve it.

 

[Silence]

Koder,

Alas, the % of this mess that equals CEO pay is miniscule. I'd prefer criminal charges if such can be legally proven.

editec,

I don't want the banks bought. I want the buy them bank and regs tightened to keep the fraud from being repeated.

careful hole, you almost sound like a democrat I have a friend who is losing her house because her mortgage payment doubled this year. Her house was overvalued when she bought it by a bank looking to loan more money than the house was actually worth... with a adjustable rate now she's fucked and she works hard, pays her mortgage on time but she can't go from paying $1,500 a month to $3,000 a month and that is what is happening to people.

 

[indago]

Kevin Phillips wrote, in his article Bubble and Bail, 5 May 2008:
--------------------------------------------------------------------------------------
For most of the 20th century, America manufactured things. For the past 30 years, though, it has chiefly manufactured debt. Here's how Wall Street, with the aid of both political parties, gravely damaged the economy. ...We're not just looking at an ordinary recession. Since the 1970s, the United States has redefined itself from a manufacturing nation to a financial economy built on debt, leverage, and a considerable ratio of speculation. Both political parties have been complicit in this, and the downturn now beginning will be unusual and potentially tragic.

...Indeed, the historical precedents are chastening. Both of the last two leading world economic powers — the Dutch from the 17th century into the early 18th and the British from the early 19th century to World War I — did more or less the same thing. After they built their global economic clout they shaded away from making and trading things into a prideful emphasis on financial services and debt, and both ultimately took on international and military commitments they couldn't afford. The lesson is that global economic success breeds hubris and that hauteur breeds over-financialization.

As of spring 2008, these fat golden pheasants have come home to roost. The interaction of reckless finance and failed politics may well be bringing about the great global crisis of American capitalism. Back in the Spring of 2007, preening Wall Street strategists were heard to boast that financial output — principally corporate bonds and structured financial products — could in itself provide a lucrative enough export to offset most of the $800 billion yearly U.S. current account deficit. The latter principally reflected how the United States was obliged to import one-third of the manufactured goods it needed and almost two-thirds of the oil. By early 2008, however, this pretense of an eager world awaiting U.S. financial exports had collapsed alongside the credibility of CDOs and mortgage-backed securities. In 2006, foreign net acquisitions of long-term U.S. stocks and bonds came to $722 billion, but that dropped to $596 billion in 2007, because of plummeting overseas demand after the August credit-market panic. (Asian government funds that seem to be bailing out U.S. banks and investment firms are now insisting on actual ownership percentages, not just the speculative investment products that have put the U.S. financial sector into such disrepute.)

No sane parliament or Congress would ever vote to put the fate of a leading economic power at the top of its global trajectory in the hands of a sector given to manias, bubbles, panics, crashes, incessant speculation, rich-poor polarization, and roller-coaster movements in interest rates and credits. But that may well be what happened over the last quarter-century — creating, however inadvertently, a debt bubble that dwarfs that of the 1920s.

...The Federal Reserve Board's rapid money supply expansion aided and abetted the expansion of private debt, while the government's periodic bailouts — of the Mexican peso in 1994 and Long-Term Capital management in 1998 — minimized Wall Street's casualties. Together, these policies gave dangerous encouragement to the reckless elements of the financial sector. During the 1997-2001 period, this private debt boom nurtured the high-tech bubble along with such malefactors as Enron, WorldCom, and Global Crossing; then, between 2002 and 2006, it fed the malfeasance of mortgage lenders and Wall Street packagers of such exotic instruments as CDOs and deceptive mortgage-backed securities.

Both Democratic and Republican presidents pursued these policies. The Reagan administration and the first Bush administration indulged in deficit-ridden public finance and reckless lending practices in commercial banks and savings and loan institutions alike; the bailouts were notorious. The Clinton administration brought down the federal budget deficit but bailed out Wall Street repeatedly and abetted the private-debt orgy that nurtured the tech bubble. The second Bush administration, together with the Greenspan Fed, encouraged the blowing up of a giant mortgage and housing bubble to replace the stock-market bubble that imploded in 2000-2001. The Republicans may be more to blame over five presidential terms than the Democrats were during just two, but both parties seem to have pursued a common underlying financial mercantilism of bubble and bail.
--------------------------------------------------------------------------------------

ARTICLE

[ame=http://www.youtube.com/watch?v=TIbD3BGoe5g]BAILOUT[/ame]

 

[Paulie]

careful hole, you almost sound like a democrat I have a friend who is losing her house because her mortgage payment doubled this year. Her house was overvalued when she bought it by a bank looking to loan more money than the house was actually worth... with a adjustable rate now she's fucked and she works hard, pays her mortgage on time but she can't go from paying $1,500 a month to $3,000 a month and that is what is happening to people.

Maybe she shouldn't have taken an ARM then, huh?

Maybe she should have realized that the payment she was making from the start was about as high as she could go, and that she probably couldn't afford an increase.

Maybe she should have researched business cycles, and understood how there's no possible way house values can just go on up to infinity, and that eventually there has to be a correction. When there's that much money going to one specific asset, there's no way it can be sustained forever.

Sorry Silence, but your friend deserves responsibility for her actions. Your friend should have been more informed before signing her life away for that much money.

The banks are cock suckers for giving the loan, but your friend was duped when all she needed to do was arm herself with information.

 

[WillowTree]

and it sounds like Chris Dodd just wants to keep buying houses for people who cannot afford them,, we aren't getting anwhere fast.

 

[RetiredGySgt]

careful hole, you almost sound like a democrat I have a friend who is losing her house because her mortgage payment doubled this year. Her house was overvalued when she bought it by a bank looking to loan more money than the house was actually worth... with a adjustable rate now she's fucked and she works hard, pays her mortgage on time but she can't go from paying $1,500 a month to $3,000 a month and that is what is happening to people.

Anyone DUMB enough to take adjustable rates that is not a MILLIONAIRE is, well dumb. And to take adjustable rates on an amount beyond the value of the house? She is part of the problem.

 

[WillowTree]

Anyone DUMB enough to take adjustable rates that is not a MILLIONAIRE is, well dumb. And to take adjustable rates on an amount beyond the value of the house? She is part of the problem.

second that. don't people take the time and the trouble to figure this stuff out before they sign on the dotted line. I betcha when she made that loan and bought that house that it "sounded too good to be true? didn't it?

 

[Paulie]

Anyone who never took the time to at least read up on economics and understand asset valuation, business cycles, etc, should never have signed a mortgage.

You are the last line of defense for yourself. Not the banks, not regulations, not the government. Only YOU care about what happens to you. Only YOU can prevent forest fires.

 

[KittenKoder]

Anyone who never took the time to at least read up on economics and understand asset valuation, business cycles, etc, should never have signed a mortgage.

You are the last line of defense for yourself. Not the banks, not regulations, not the government. Only YOU care about what happens to you. Only YOU can prevent forest fires.

*smirk* That makes me smart as hell, I don't even own a credit card. I am bullet proof. (not really but it sounds cool)

 

[editec]

If you think you'll weather out THIS storm that's brewing, just because you don't have any debt, you're missing the scale of the problem.

Millions of Americans who lived in Hoovervilles in the 1920s didn't have dime in debts, either.

They also, through absolutely no fault of their own, also didn't have jobs.

I do not give a damn how clever you think you are, if this thing unravels like it could unravel, damned few of us will be chatting on these boards a year from now.

Even if YOU can afford your internet connection, hundreds of millions of us won't be able to, and guess what?

The few people left standing won't be enough to make it profitable to keep that internet connection alive.

It's time for an editecian adage about the effect on individual well being concerning macroeconomics:

If your neighbors are getting poorer, you are too.
Your well-being and their well-being are inextricably linked.​