Without substantial regulation of Wall St., the fall 2008 bailout of irresponsible and bankrupt titans of finance amounts to theft from the middle class for the benefit of the rich.
Click image for full Bruce Plante/Tulsa World cartoon.
See Andy Borowitz on important Wall St. liaisons.
Tim Geithner and all the professionals think that they are indispensable, that what they do is too difficult for those of us who are not "masters of the universe."
[T]he Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.I am so sick of taking haircuts for the people who did this, the ones who were once known as the smart money. Yeah, as if.
Risk-taking institutional investors, like hedge funds and private equity funds, have refused to pay more than about 30 cents on the dollar for many bundles of mortgages, even if most of the borrowers are still current. But banks holding those mortgages, not wanting to book huge losses on their holdings, have often refused to sell for less than 60 cents on the dollar.To break that impasse, nationalize the failed banks and lend directly. Let the failures fail without killing the credit markets. No moral hazard. Temporary socialism. Once the markets are healthy again, we can reap any profits for all this risk we're taking on as insurer of last resort.The result has been a paralyzing impasse. Banks, unwilling to sell their loans at fire-sale prices, have had less capital available to make new loans. Mortgage investors, unable to leverage their investments with borrowed money, have been unwilling to pay more than fire-sale prices.
To break that impasse, the government’s crucial subsidy is meant to provide investors with the kind of low-cost financing that has been utterly unavailable in today’s credit markets.
The Republicans have their eyes on the money - billions for their friends and fellow crony capitalists.
"It's just like after September 11. Back then no one wanted to be seen as not patriotic, and now no one wants to be seen as not doing all they can to save the financial system," said Lee A. Sheppard, a tax attorney who is a contributing editor at the trade publication Tax Analysts. "We're left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?"In a just world, Congress would immediately impeach Henry Paulson.
The Bushist Treasury Department wants to prevent additional regulation of the financial markets. This is known as the failure to learn from experience. No surprise there.
[T]hat authority would be limited, doing virtually nothing to regulate the many new financial products whose unwise use has been a culprit in the current financial crisis.In other words, bailouts are fine, but nothing preventive.
In a draft of a speech to be delivered Monday, [Henry Paulson] declares: “I do not believe it is fair or accurate to blame our regulatory structure for the current turmoil.”After all, the regulators all took early retirement. How could they have caused the credit meltdown?
Democrats reacted with some praise. “It’s a recognition, maybe a reluctant one, that you have to enhance regulation,” said Rep. Barney Frank, a Massachusetts Democrat who is chairman of the House Financial Services committee.Do I hear the sound of faint damning?
Hey, the Fed had to intervene in a market run amok to keep the whole financial system from ruin, so the right lesson is to make it easier for the Fed to bail out other disastrous investments. But, noooo, we can't regulate the market; that would glove the invisible hand, and Ayn Rand says ... some obvious bullshit.
Two choices: Either the Bushists are total morons or they think we're total morons.
