Thread: US Presidential Campaign 2008

Originally Posted by Boon Mee

This election is clearly all about the Democrats; ^ sounds like sour grapes to me

Originally Posted by Hootad Binky

sounds like sour grapes to me

of course it is.

and the best part will be the huge gains the dems pick up the house and senate. the only question is how many seats.

it's time to put the grown ups back in charge of public policy.

^Grownups? I never asked for handouts since I've been a grownup.

Originally Posted by blackgang

Originally Posted by chinthee

Rival Hillary Rodham Clinton called for a new job retraining program to remedy what both candidates derided as Republican indifference to a sputtering economy.

I like that idea, only thing is, what ya gonna train em for??
NAFTA done gave all the jobs away and what didn't go south was shipped away on outsourcing so there is nothing left to retrain em to do except live under a bridge and wipe car windows at stop lights and maybe the driver will toss em a dime..

Sure, just like their liberal buds north of the border in Ontario. The federal govt asked the provincial govt to cut corporate taxes to kickstart the local economy.
The Liberal provincial govt said no. Well, the province has only lost 200,000 mfg jobs since these donkeys have been in office, so the new budget offers no business tax cuts (who wants to open a business and hire people in Ontario, anyway?) and money for the long-term retraining for 20,000 unemployed folks. Lemesee, 200,000 - 20,000 = 180,000. So, um, what are these newly unemployed 180,000 people going to do? Hello, welfare or maybe some will join Wal-Mart. Love them Liberals.

Originally Posted by Jet Gorgon

^Grownups? I never asked for handouts since I've been a grownup

Anything you get from the government is a handout: k-12 education, sanitation, police, government agencies, etc; unless you live in a cave.

Originally Posted by blackgang

NAFTA done gave all the jobs away

NAFTA was a creation of the Canadian Conservative and American Republican administrations (not the "Liberals" )

Originally Posted by Jet Gorgon

^Grownups? I never asked for handouts since I've been a grownup.

first of all, who's talking about you? get over yourself.

secondly, what would you call the fed's bear stearns backstop if not a handout?

^ True, Ray, but if the Fed didn't do it, the market would collapse. Should have been regulating it better before the crash.
Hootad, my taxes and my mom's taxes paid for that. I never asked to go to school.

Originally Posted by Jet Gorgon

but if the Fed didn't do it, the market would collapse.

'but' nothing.
it was a handout, and nothing less. sorry, you can't have it both ways.

btw, a question stock holders of bear should be asking is why didn't the fed offer them the same deal they offered JPM.

^ Oh, so you'd rather have the financial markets collapse? 1929 scenario is preferable for you, eh, Ray? The govt should have been regulating the mortgage lending biz more closely. Took it a few years to pass the Glass-Steagall Act after the big crash back then.
The Fed knew what was going on early in this current crisis and Binky did nothing; as I see it, this a a CMA operation for the Fed.

Originally Posted by Jet Gorgon

The govt should have been regulating the mortgage lending biz more closely

You're in favour of government regulations and bailouts/handouts using tax-payer money when it involves rich bankers but not ordinary people losing their homes, right?

Originally Posted by Jet Gorgon

Took it a few years to pass the Glass-Steagall Act after the big crash back then

Clinton signed into law legislation that repealed Glass-Steagall in 1999. The repeal allowed the rise of universal mega-banks such as Citigroup and Bank of America. These institutions combine commercial banking, investment banking, merchant banking and even insurance under single holding companies, which further concentrates and centralizes finance capital.

This historical process continues on a global scale in the 21st century. The Federal Reserve-arranged takeover of the fifth-largest investment bank, Bear Stearns, by rival JP Morgan Chase is only the most recent example.

Both are international banking giants. JP Morgan Chase represents the merger of the old Morgan and Rockefeller financial groups. Bear Stearns was founded in 1923 and for many years was headed by Salim L. Lewis, who was included by the leading U.S. business magazine Business Week in its "Vulture Hall of Fame" in 2001.

In recent years, the company became one of the biggest players in the mortgage securities business on Wall Street. After more than 80 straight years of profitable operation, that move turned out to be its undoing with the onset of the mortgage crisis.

But before its demise, Bear Stearns paid out billions in bonuses to its employees, with the lion’s share going to its top executives. According to a Bloomberg financial website article, bonuses paid out by the top five brokerage firms in 2006 alone were estimated at $36 billion, a 30 percent jump from the previous year’s record. Bonuses paid out by Bear Stearns for 2006 were estimated to total $2.6 billion.

"Never in the history of Wall Street have so many earned so much in so little time," wrote Christine Harper for Bloomberg.com in 2006.

Bloomberg.com: Opinion

Bear Sterns was always known in the investment banking community as a 'gun-slinger'. Very few people acquainted with the industry would be surprised that they were the first to hit the wall. The fifth biggest US Investment Bank going south might be a blow to confidence, but it is hardly an earth shattering blow to the financial system.

They should have just been allowed to go under, for several reasons-

1- Investment Banks are not commercial banks. They have never been regulated by the Fed, neither was it ever the Feds mandate to act as Lender of Last resort for them. So why now? Why is the Fed spending $30Bn of your money to bail out a bunch of gunslingers it was not even responsible for regulating? Why is it buying (at massively inflated prices) Junk securities it never before bought- these are not government backed securities?

2- The taxpayer has funded a $30 billion purchase of their absolutely most Junk securities. Why? Since when has it been Your responsibility and liability to bail out the rich shareholders of a business that fails?

3- Moral hazard (1)- thus, the basic component of risk has been removed from the financial and business equation. I take money off the investing public, and use it for largely unregulated high risk lending activities. I lose the money. The taxpayer bails me and the other shareholders out. Great stuff, what a Gravy Train! I may as well keep doing it then, it's a no lose game.

4- Moral Hazard (2)- As part of the regulatory shift accompanying this bailout, the US Federal Reserve has had it's powers increased. It's mandate is no longer just money supply and the Commercial banks- it now has been, or is in the process of being granted, sweeping powers over other parts of the financial system including Investment Banks, Financial Advisers and so on. Kind of like the FSA of the UK, but with one important difference- The Fed is NOT a government body- it is a private company. It has NEVER even been audited by the US government. Even it's shareholding structure is opaque. Congratulations America- you've just handed the last shreds of your financial self determination to a bunch of non-government bankers.

Moral Hazard (3)- Well, if we couldn't let Bear Stearns go under, then we can't possibly let Lehmanns go under can we? They're even bigger. Neither Merrill Lynch- they're bigger still. Neither.......[insert next rumour] So who pays for all this? Oh, thats right, the Taxpayer. What was that old saying, 'the business of America is business'. Wrong- this ain't Capitalism, this is Socialism, plain and simple. A new form of Socialism though- Socialism to benefit the Rich at the expense of the Workers. Maybe someone will have to invent a new political term for it- "Corporate Socialism" perhaps.

5- With it's 'Cheap Money' policies, the Fed bears a Lot of the responsibility for this crisis in the first place. Easy money leads to such things as- excessive financial speculation, debasement of the currency, rising commodity prices, real estate bubbles and excessive debt in the monetary system- ring any Bells? So in a classic piece of Bush administration logic, the response is to reward this Private company the Fed with sweeping new powers.

Just out of interest, because I'm sure you don't want to see these poor Wall St banker types suffering now do you? I just thought I might end with something thats bound to give all you Corporate Socialists a warm glow-

In 2007, Bear Sterns paid out US$3.2 billion in bonuses to it's Executives. How sweet life is in The Hamptons.


The Bush administration has unequivocably lost any shred of moral, business, political, foreign policy and social credibility. It has no philosophical credence remaining. All it has left is the size of it's (taxpayer funded) Armed Forces.

Right Wing Conservatives, that was their political mandate to the public. Conservative means- Record government debt, record debt in the economy, record spending on foreign wars, looming recession, US dollar tanked, US economy still running massive trade deficits. Conservative budgeting? Massive tax cuts to the rich.
Conservative business/ Capitalist philosophy? Taxpayer funded bailout of non-regulated financial institutions. No Bid contracts to allies of the government (50 billion for Halliburton alone). And so on.

We'll have to see how the Republican party recovers from the Plane wreck of the Bush administration, given time, but right now it's credibilty and philosophy lie in tatters.

I am not in favor of corporate welfare to the degree that is is currently done. But I wouldn't classify the Bear Stearns deal was corporate welfare - or a bad deal. All the FED did was agree to offer a $29 billion CREDIT LINE to JP Morgan in exchange for collateral of around $30 billion worth of Bear Stearns assets. It's not like they said here's $30 billion tax dollars go buy Bear Stearns and keep the change.

Not something that I would classify as a tax payer funded bail-out or a government backed corporate handout. It is a line of credit that is to not only be paid back (should it be utilized) but also had other benifits to the market in regard to stabilization at the time the move was made.

As for the homeowners - most of these folks should not have been given the loans in the first place. All the market is doing is correcting those earlier mistakes (approving the loans earlier).

Originally Posted by Bugs

$29 billion CREDIT LINE

Wrong I'm afraid- they've baffled you with double speak.
It cannot be described as a credit line, because it is Non Recourse.

That means when the securities default/fail to pay interest (which they most likely will) there is no recourse to either Bear stearns or Morgan. The taxpayer carries the can.

If the Fed sells them back into the market at a Loss (they are not even saleable, but if they ever are their secondary market value will be a fraction of their face value, as priced by the Fed), you guessed it, the taxpayer carries the can.

Some Loan.

Originally Posted by sabang

If the Fed sells them back into the market at a Loss (they are not even saleable, but if they ever are their secondary market value will be a fraction of their face value, as priced by the Fed), you guessed it, the taxpayer carries the can.

Some Loan.

Well if the $29 billion to JP has you bent, the other $200 billion the FED has recently agreed to make available thru the central bank to securities firms must have nearly given you a hart attack.

I think the move in regard to JP and Bear Stearns was the best move for the market, and the US tax payer at the time. I am not however so sure about the additional $200 billion.

Originally Posted by Bugs

All the FED did was agree to offer a $29 billion CREDIT LINE to JP Morgan in exchange for collateral of around $30 billion worth of Bear Stearns assets. It's not like they said here's $30 billion tax dollars go buy Bear Stearns and keep the change.

and where's the fed going to get this $29 billion if need be?

555 ^ Same place it gets the $ for overnight lending.

Originally Posted by raycarey

Originally Posted by Bugs

All the FED did was agree to offer a $29 billion CREDIT LINE to JP Morgan in exchange for collateral of around $30 billion worth of Bear Stearns assets. It's not like they said here's $30 billion tax dollars go buy Bear Stearns and keep the change.

and where's the fed going to get this $29 billion if need be?

They'll have the Bureau of Engraving and Printing print up 29 billion fresh one dollar bills.

^ Which debases the currency.

^Yea, because the dollar is so strong right now anyway?

I thought maybe one would notice the tongue-in-cheek in my earlier post when I indicated they would print the lot in one dollar bills. Maybe we could get them bring back the $10,000 note and print some special editions just for this one job?

I did miss the tongue in cheek actually.

But the debasement of currency is real.
What is happening currently in the states is that more currency (not just M1, M4 etc too) is being issued for a country who's 'net worth' is tangibly less, due to asset price falls and massive debt defaults.
This, of course, debases the currency.

Alan Greenspan is a Goon. Ben Shalom Bernanke, sadly, no better- but he admittedly has limited options.

to paraphrase sen. chris dodd, what this bailout has done is socialized risk and privatized reward.

Heh...it's about time. This Moonbat over at Air America has finaly been run off!

Air America Host Suspended for Clinton Remarks - The Caucus - Politics - New York Times Blog

^ Didn't know you were such a Hilary fan

Randi Rhodes, an afternoon host for the progressive Air America radio network, was suspended Thursday after repeatedly insulting Senator Hillary Rodham Clinton at an event last month.

^
and wasn't boon mee blubbering over imus when he was reprimanded by his station?