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Were you for or against the bailout? Do you consider yourself Independent, Democrat, Republican, anti-party or?
other (please list).
I have yet to meet one actual person (politicians don't count) who favored the bailout. The news seemed to blame one party then the other for its passage but the record is clear: Repubs and Dems in DC are conjoined 535-uplets. (sorry, i only count as far as sextuplets).
The scandals, corruption, disregard for voters' concerns, irresponsible monetary practices and the rest just speak too loudly to ignore.
Have we seen enough to turn our anger from our fellow voter and toward government? As did those Revolutionaries whose resolve burst through a Monarch's forces?
...
I was FOR the ORIGINALLY intended "bailout" against how it turned out.
The nutshell reason.
During the 90's the government started arm-twisting banks to force them to make loans they didn't want to make.
They also used Fannie and Freddie to push bad loans, causing a housing bubble.
Then the government also forced banks to enforce accounting rules called "mark to market"
As a home loan was considered a balance sheet item and it's based on the balance sheet as the value of the home (not the loan being paid back) The banks were forced to mark down all of the mortgages on their balance sheets to the liquidation value of the homes they represented.
As their are other regulations that restrict how much a bank can lend based on their balance sheets, banks were forbidden, by law from lending any money - causing the credit markets to sieze.
The original intent of the original bailout was simply to buy the packaged home mortgages (called traunches) so that banks would have the ability to lend again. The government wouldn't have lost money on that deal, and the banks would have been free to do business again.
But our congress turned it into a gigantic pork-pie, and rearranged everything so that the rules of the road in the economy are random. It's going to take a long time to clean up this particular mess. (It could be done easily and if Reagan were back in office, this would take about ten minutes to repair... Obama's methods will make this problem last until Peru is the world's sole superpower.)
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This entry was posted on Tuesday, January 20th, 2004 at 4:03 am and is filed under Cookies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
