Economic Bailout and Impending DOOM!


Chase Tower North View
Originally uploaded by eschipul

Saw this post on twitter of Peter Finch from the Movie Network – "I don’t have to tell you things are bad; everybody knows things are bad..." and that is pretty much how I feel.

The stocks are crushed and the only solution (we are told) is to give 700 Billion to wall street bankers. We have a bailout tracker and npr states.

The Bush economic team has been saying for weeks that the financial
world as we know it would end if a rescue plan was not put in place in
short order.

And after record losses by points on the stock exchange yesterday, today we hear they may have a new plan and stocks are rebounding this morning. Banks are being rescued and purchased.

And while all of this is going on, well, we are getting angry. Really angry. But it is a very hard anger to direct. And for the euphemistically named "main street" where we all live, we don’t quite see the problem yet.

No really, so all of the investment bankers are going broke. OK, so
if we went out of business I’d be broke. Nobody bails me out, and I
don’t even have a home in the Hamptons like they do! What is with the
double standard?

Tightening of the credit markets you say? That we won’t be able to get a home loan or a car loan or a business loan on inventory! Well gee, those are all ASSET BACKED LOANS.
What makes you think banks will stop doing that? And if so, give me a
bill in congress that insures direct to consumer and direct to business
loans.

And lets talk about the lady in this Washington Times article

When Deb Freitag applied for a credit card so she could replace her
roof, her leaky refrigerator and her old dishwasher, she was offered a
$1,000 line of credit, not the $5,000 she needed.

Note
the "$5000 she needed part." Does she really NEED 5k? When I was in
that position, I bought a used washer and dryer for $25
each. They didn’t match. But they worked well after we cleaned them out
with bleach. My point is there are alternatives, unpleasant
alternatives that people don’t want to consider. But alternatives that
were the ONLY option for me at one point in life.

The end of leveraged buyouts? Oh darn. Again – why do we care?

This might be a Texas thing. 8 of the 9 house representatives from the Houston area voted against the bailout. And I don’t blame them because as I said previously, if voted in, this would be a Republican Led 700 Billion Tax Increase
even if payment of taxes is deferred to our kids. And I would
absolutely be sure my representative was painted with that
tax-increase-brush. Call a spade a spade.

In Loren Steffy’s column today he says

We may not have that long.

"Banks are falling right and left," Robert McTeer, former president of
the Federal Reserve Bank of Dallas, told me. "I expect that will
accelerate, and we’ll have more stock market days like today."

That would be Monday, when the Standard & Poor’s 500 Index slid the
most since October 1987 and the Dow Jones industrial average fell the
most points ever, wiping out $1.2 trillion in investor wealth.

Somehow, that makes the $700 billion we would have used for the bailout seem paltry.

Here’s
the thing. This is basically a class war between the haves and have
nots. Yet this may wipe out $1.2 trillion in investor wealth. I get
that. But why should the lower class cover this for the upper class? And the lower class doesn’t have the money anyway so this is just debt to be passed to our children.

I repeat – this is just debt to be passed to our children. Not cool.

It is no accident that the bailout bill failed in the House of Representatives.
They represent the people and the people are MAD. I am sure the Senate
would vote for it. But until someone tells me why I care in plain
English that I can understand, I stand against a bailout for the fat
cats on wall street with their insurance-renamed-something-cool-pretend-markets.

Remember assets folks? Lets look under that rock again. We might find something.

In closing, I realize that real people are hurting. And my 401k,
small that it is, has gone down. But that is better than throwing my
children under the bus. It is better that we weather the storm now, and
perhaps leave something for the future. ~tightens seat belt~