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Bail-Outrage: Misuse of Funds, Lack of Transparency a National Disgrace
Posted Nov 11, 2008 03:37pm EST by Aaron Task in Newsmakers, Recession, Banking
Many Americans are understandably outraged by the bailout fever that has gripped Washington this year. But even those who believe the bailouts are a "necessary evil" would have a hard time defending some of the bailout-related items that have come to light in recent days, including:
* Financial institutions using TARP bailout money to pay executive bonuses. The firms, of course, say it's "different" money and bonuses are key to retaining top employees. But if you need to come to the government for a handout, shouldn't your executives forgo a bonus? Or shouldn't the government make canceling bonuses a condition of getting aid, as is the case in Europe?
* The Fed refusing to reveal who received almost $2 trillion in non-TARP loans, or what collateral it has accepted from "emergency" loans made to struggling firms, as Bloomberg reports.
* The Treasury Department providing a tax break to banks involved in acquisitions that could amount to $140 billion. The Washington Post reveals the change to the tax code was issued on Sept. 30, while Congress was debating the $700 billion TARP bill.
The bailouts are bad enough. But this kind of chicanery and lack of transparency makes me recall a line from another time when fear and deceit dominated Washington:
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Here’s a curious development that may be worth watching: Bloomberg is suing the Federal Reserve.
Last week, we took a look at the Fed’s bulging $2 trillion balance sheet. And if you’re a long-suffering 5 Min. reader, you know our futile recounting of the weekly Fed lending programs… all the abbreviations and acronyms: TAF, TSLF, PDCF, CPFF, TARP, etc.
Well, the folks at Bloomberg dared to do the right thing last week: demand the Fed tell us where this money is going. With few exceptions (namely, the TARP, Fannie, Freddie and AIG), the Fed lends in secrecy. They’ll say how much they dole out each week, but never name names. Nor will the Fed reveal the specific loan collateral they’re now accepting, or their valuations of these toxic assets that no one else will buy.
Bloomberg is tapping the Freedom of Information Act to try to force disclosure. Good luck.
In the meantime, the Fed has given American Express carte blanche access to the array of Fed lending programs. Like Goldman Sachs and Morgan Stanley, the Fed will allow AmEx to call itself a “bank holding company” so it can gain access to both the Treasury’s TARP bailout and the Fed’s lending facilities.
The Fed fast-tracked AmEx’s application after it reported a 24% decline in third-quarter profit and said it will fire 10% of its employees. Hmmmn…
Let’s see, what else is the government doing with your money? Oh, here’s one… Fannie Mae revealed a $29 billion quarterly loss yesterday.
Under the guidance of the government, Fannie lost $9 billion in housing-related losses, and then another $21 billion after the group altered its accounting practices. That must have been some alteration.
Fannie’s new executive team also warned that they will likely tap into the government’s $100 billion backstop next year. But if the company continues on its current trajectory, says CEO Herb Allison, "or to the extent that we experience a liquidity crisis that prevents us from accessing the unsecured debt markets, this commitment may not be sufficient to keep us in solvent condition…”
In other words, as with the restructured loan AIG and the Fed announced yesterday, Allison’s warning $100 billion probably won’t be enough to save Fannie’s bacon.
Are we detecting a pattern here?
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And some people want the government to have a hand in so many other things, health care for starters. 
We don't have to agree with each other, to respect each others opinion.
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First point,, In some cases it's not strictly a Bail out.. in some cases it's that we (the governement and in turn you and me) are buying the assets of these companies and getting partial ownership in them.
In some cases (such as with the Automakers) it's not a bail out either. What they are asking for are loans.
Having said that,, any money that goes to these companies has to be monitored closely or they will take us to the Cleaners.. Money Loaned or money given in exchange for ownership,, doesn't matter.. if we are putting out money, there has to be oversight.
And it has to be STRICT oversight. anything less and it's just like the articles elude to.. a waste.... and a big mistake.
As an example: Taking my money and paying out executive bonues? Get the hell out of dodge.. If I'm the guy they put in charge of watching how that money is spent, that ain't happening.. There isn't an executive at any level in any company we have to help that deserves any bonus at all..... NONE..
I always thought a bonus was something you give someone for a job well done... well,,,, If they did a job "well done" then they wouldn't need my help now would they..
Ahh, I'm getting off my soapbox,,,
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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Paulson says troubled assets will not be purchased
web page
WASHINGTON - Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.
Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.
He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.
Paulson said that 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.
"This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said.
The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was "not the most effective way" to use the $700 billion bailout package, he said.
The announcement marked a major shift for the administration which had talked only about purchasing troubled assets as it lobbied Congress to pass the massive bailout bill.
Paulson said the administration is exploring other options, including injecting more capital into banks on a matching basis, in which government funds would be supplied to banks that were able to raise capital on their own. I'm sooo glad that we rushed headlong into approving this thing, because it is completely obvious that we knew exactly what we were doing... kudos Congress!
Browns is the Browns
... there goes Joe Thomas, the best there ever was in this game.
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I always thought a bonus was something you give someone for a job well done... well,,,, If they did a job "well done" then they wouldn't need my help now would they..
Completely agree, and this is why people hold a distrust for big businesses, they are so far removed from reality, they don't think like the rest of society.
We don't have to agree with each other, to respect each others opinion.
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I always thought a bonus was something you give someone for a job well done... well,,,, If they did a job "well done" then they wouldn't need my help now would they..
Damom that has to be the smartest sentenace I've ever read on this sight, If ya dont watch out were all gonna get together and send you to washington to straighten these guys out. 
you smashed the nail right on the head 
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LOL I can see it now,,, Mr D goes to Washington...LOL If Nominated, I will not run If Elected, I will not serve 
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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I'm sooo glad that we rushed headlong into approving this thing, because it is completely obvious that we knew exactly what we were doing... kudos Congress!
If it wasn't for the obvious that everyone knew that those in charge have no clue, this would be a shocker.
To use some poker lingo, these guys are now pot committed sitting on a busted wheel draw with Ace high and are now looking to call an all-in in hopes of picking off a K-high bluff.
"My signature line goes here."
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LOL I can see it now,,, Mr D goes to Washington...LOL
If Nominated, I will not run
If Elected, I will not serve
Awww common, you'd be able to pass legislature to make sure the Browns & Indians get a little bit of that bail out package & somehow use it on FA & draft picks without it affecting our cap.
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Problem # 1 : We have to get from here to January 20th. before your guy and HIS gang take over .. Problem #2 ( as I see it ) You still have to deal with Numb nuts like Reed / Pelosi / Franks / Waters and the list goes on & on.. Problem #3 ( from where I stand ) One of the worst ways to solve problems is to take money out of your pocket and channel it through DC first.. Talk about throwing good money down the drain. Problem #4 ( as we have witnessed ) Big Biz can't be trusted to handle problems any more ! Bottom line : Folks have very little to no trust in The Feds or American Corps  Wholly sh-t... Batman
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This a simple example of where your Govt. could really help out the average Joe.. But NO !!!!!!!!!!!!
'" Tarmac task force' grants airlines power over stuck air passengers "
................. By Joan Lowy, Associated Press Writer
WASHINGTON — A U.S. government task force approved voluntary guidelines Wednesday for airlines and airports dealing with passengers stranded for hours on the tarmac but produced no fixed limit on how long they can be delayed before being allowed to leave planes.
Passengers who had hoped for stronger protections were left empty-handed by the guidelines.
"You have to admit that the game is still heavily weighted to business as usual," Kate Hanni, a passenger rights advocate, told her fellow task force members before voting against adoption of the report.
Passenger rights advocates said the report of the tarmac task force, as it is informally known, reflected demands by airline members that they have the flexibility to design their own response plans and not be pinned to a time limit for holding passengers on tarmacs.
Task force member Daniel Rutenberg of the International Airline Passengers Association also expressed disappointment at the lack of "time-specific triggers" for allowing passengers to return to gates and appealed to Transportation Sec.
Transportation Department Assistant General Council Sam Podberesky, the task force's chairman, said the department is working separately on a rule that will require airlines and airports to have contingency plans and include a time limit.
Federal rulemaking is a lengthy process, guaranteeing the issue will be among those waiting for the Obama administration.
The report "is a set of best practices, but there's nothing enforceable where a passenger can say, 'I won't be held up for more than three hours or five hours or eight hours, or without a glass of water or a sandwich,"' said Hanni, founder of the Coalition for an Airline Passengers' Bill of Rights.
Task force member Benjamin DeCosta, the aviation general manager of Hartsfield-Jackson Atlanta International Airport, said that he favors time limits but that they need to be tailored to each airline and each airport.
"This problem is so complex that one size doesn't fit all," DeCosta said.
The task force report recommends that:
•Airlines update passengers delayed on tarmacs every 15 minutes even if there is nothing new to report.
•A secure room be provided for passengers from diverted overseas flights so they can avoid having to go through security checks when reboarding an aircraft to their final destination.
•When practical, refreshments and entertainment should be made available to passengers confined aboard aircraft awaiting takeoff.
• Airlines should make reasonable efforts to be keep airplane restrooms usable.
The Transportation Department's inspector general last fall recommended setting a limit for how long airlines can force passengers to wait on planes that have been delayed taking off.
The 36-member task force was created in December by Peters to develop model plans for after several incidents in which passengers were stuck for hours before their flight took off or before they were allowed to get off the plane.
Task force members said it quickly became apparent that the group — dominated by airline industry and airport representatives — would be unable to come up with a model plan acceptable to a majority of members.
"The airlines don't want it, and the airports — several of them major airports — believe they already have plans" to deal with passengers stuck aboard aircraft, said task force member Paul Ruden, a senior vice president at the American Society of Travel Agents.
Ruden said his main objection is that the task force does not ask Peters to require airlines and airports to develop contingency plans
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Problem # 1 : We have to get from here to January 20th. before your guy and HIS gang take over ..
Ahh, unless you wish to denounce your american citizenship,, he's your guy also.. And if you are looking for him to come in on January 20th and with the flick of his pen, fix all that's wrong with the USA,, Then I want some of whatever it is you are smoking
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Problem #2 ( as I see it ) You still have to deal with Numb nuts like Reed / Pelosi / Franks / Waters and the list goes on & on..
it's a catch-22 isn't it.. if we have a Republican President and Democratic Controlled congress,, it's stalmate.. Reverse it and you have the same thing..
One of the reasons I liked Obama over McCain is that it appeared that he would govern from the center out...He said as much the other day again. So that might be a way for the President to stem the tide of all things going one way.....
In the democratic form of government, there will always be disagreements.. the winner in this is the people when the politicians find a way to work together and get stuff done..
I think we have a leader now that has that focus.. time will tell..
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Problem #3 ( from where I stand ) One of the worst ways to solve problems is to take money out of your pocket and channel it through DC first.. Talk about throwing good money down the drain.
I agree except in the case that exists when if you don't spend the money, it destroys the fabric of the nation you are charged with tending to..
In this case, the damage of not helping out ailing industries is worse than the aftermath left behind....
Pick your poison I guess.
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Problem #4 ( as we have witnessed ) Big Biz can't be trusted to handle problems any more !
It's the culture we live in. but it's true. Corporate America is in it for themselves which I could understand completely,, but being in it for yourself doesn't mean you have to do things that destroy the country you live in..
Business managers are under a great deal of pressure to produce from the "playstation" crowd.. They want it now,, they don't want to work hard for it like my dad and his dad had to...
That to me is just unamerican. it's also rather stupid in the long run. It almost always fails in the long term.
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Bottom line : Folks have very little to no trust in The Feds or American Corps Wholly sh-t... Batman
I agree, I have little faith in our elected officials.. But I think that with the recent turnout for the elections, these so called public servants either got the message or better get the message, we are finally watching.
Doesn't matter which side of the debate you came down on.. The fact is, the level of debate has risen in this country to heights I've never witnessed in my 56 years on planet earth...
For once,, it appears people are listening and paying attention..
That's a good thing.. and as someone else said,, when we do pay attention, things get done.. we really are part of an amazing country when you get right down to it.
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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This a simple example of where your Govt. could really help out the average Joe.. But NO !!!!!!!!!!!!
Wait,, are you for or against government interference? I forget now..
This is such a minor issue in the world today.. if we don't fix our economic woes,, nobody will be able to afford to fly thus making this entire situation moot.
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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All Pro
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A direct quote from Paulson: "And to adequately reform our system, we must make sure we fully understand the nature of the problem which will not be possible until we are confident it is behind us,"  link
Thomas - The Tank Engine
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Dawg Talker
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In some cases (such as with the Automakers) it's not a bail out either. What they are asking for are loans
Call it what you want Damanshot. Bailout? Subsidy? Same thing....
Under the bill, the loans will be made at rates close to what the Treasury borrows, with roughly 5% interest, rather than the 15% to 20% rate that automakers and suppliers can get today.
Have you seen General Motors' credit rating lately. The 5% provision is a hand out. Period.
Source
Btw, President Elect Obama ran on reducing / eliminating lobbyist influence (I still have the pdf from his campaign site). Detroit ran their boys hard on this and Obama wanted $50B (twice what was passed). Go figure.
On a slightly different note, but I think it fits this thread.....
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House Democrats Contemplate Abolishing 401(k) Tax Breaks
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.
At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.
Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”
Under the current 401(k) system, investors are charged relatively high retail fees, Ghilarducci said.
“I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted, Ghilarducci said.
She has been in contact with Miller and McDermott about her plan, and they are interested in pursuing it, she said.
“This [plan] certainly is intriguing,” said Mike DeCesare, press secretary for McDermott.
“That is part of the discussion,” he said.
While Miller stopped short of calling for Ghilarducci’s plan at the hearing last week, he was clearly against continuing tax breaks as they currently exist.
Savings rate
“The savings rate isn’t going up for the investment of $80 billion,” he said. “We have to start to think about ... whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”
“From where I sit that’s just crazy,” said John Belluardo, president of Stewardship Financial Services Inc. in Tarrytown, New York. “A lot of people contribute to their 401(k)s because of the match of the employer,” he said. Belluardo’s firm does not manage assets directly.
Higher-income employers provide matching funds to employee plans so that they can qualify for tax benefits for their own defined-contribution plans, he said.
“If the tax deferral goes away, the employers have no reason to do the matches, which primarily help people in the lower income brackets,” Belluardo said.
“This is a battle between liberalism and conservatism,” said Christopher Van Slyke, a partner in the La Jolla, California, advisory firm Trovena, which manages $400 million. “People are afraid because their accounts are seeing some volatility, so Democrats will seize on the opportunity to attack a program where investors control their own destiny,” he said.
The Profit Sharing/401(k) Council of America in Chicago, which represents employers that sponsor defined-contribution plans, is “staunchly committed to keeping the employee benefit system in America voluntary,” said Ed Ferrigno, vice president in the Washington office.
“Some of the tenor [of the hearing last week] that the entire system should be based on the activities of the markets in the last 90 days is not the way to judge the system,” he said.
No legislative proposals have been introduced and Congress is out of session until next year.
However, most political observers believe that Democrats are poised to gain seats in both the House and the Senate, so comments made by the mostly Democratic members who attended the hearing could be a harbinger of things to come.
Source
____________________________________________________________________
The article is nearly a month old and obviously very relevant.
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elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive......I want to stop the federal subsidy of 401(k)
Subsidy? This notion is the idea of Professor Teresa Ghilarducci, but I have no doubt that the likes of McDermott think exactly the same way. What is most intimidating is that the chairman of Ways and Means can push this insane thievery and seems primed to do so, at least in some form.
My God, think of her line of thinking that first starts with the mentality that a retirement plan that defers Federal income taxes is a subsidy. Whether she is speaking to only the tax benefits to an employer for it's matching contribution it matters not, unless of course one believes that all business is an evil entity awash in money that should belong to some one else (namely Washington?).
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new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
obliged = mandated = fleecing
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Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation
All workers = share the wealth. Welcome to "Change". Change is all you will have left if any form of this plan replaces our current 401k.
5% of pay? Is that on top of the nearly 8% that Social Security / Medicaid takes? Look at your paychecks, my friends. Notice how much you are "contributing" each time to the current retirement income supplement (it was created as a supplement, not as one's sole income). Do you think you will get any substantial portion of your Social Security dollars back? I don't. It is failed policy that the actuaries in Washington want to fix by raising the tax and / or the eligible age of when you can collect (think about these same folks managing health care....I mean...THINK).
Gov't bonds at 3% (adjusted for inflation)? I'd much rather take my chances with the market and my 401k and that is after taking the huge hit that so many of us have. All day...every day.....24/7. Why? Because it is my money...MINE!. I do not need any more of my income socialized. I do not need my Federal gov't to be my mommy.
This is nothing but sheer exploitation by some members of Congress (a majority perhaps..*sigh*) that wish to take advantage of the current market situation to convince the electorate that they need protected, or more appropriately, socialized.
Womb to tomb.
We have gone from privatizing Social Security to socializing 401k and votes made this past election day may enable such.
Change that we need? The "village" may be knocking on your door soon and it will not matter if your hand is covering your wallet. The "village" will leave you with the change that you need. Maybe enough for a cup of coffee. 
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Call it what you want Damanshot. Bailout? Subsidy? Same thing....
I never thought of it that way.. I look at a gift as something that is given.. I look at a bail out as a last ditch effort to save something or someone..
I look at a loan as something I intend to collect.
But even in the bailouts,, I have no problem with them if we are getting two things.. A piece of the action.. meaning a dividend and Oversight..
Without those two things.. then I'm not for bailouts..
Loans on the other hand,, I can live with that. especially since the alternative is worse
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Under the bill, the loans will be made at rates close to what the Treasury borrows, with roughly 5% interest, rather than the 15% to 20% rate that automakers and suppliers can get today.
Have you seen General Motors' credit rating lately. The 5% provision is a hand out. Period.
What I can't seem to get anyone to understand is that the alternative to not loaning the money is way worse...
5%, 15% what's the difference.. That number is meaningless if GM goes out of business and puts millions of people out of work
Ask yourself this.. what's it going to cost to pay unemployment to the laid off workers.. then when they can't find jobs, what's the welfare going to cost us.. then what's the health care of these people going to cost us..
Everyone is worried about this 25 or 50 or 100 billion they want to borrow,, but nobody has shown one thing that can be done instead of lending the money..
All some folks are intersted in is placing blame.... at this point,, the horse got out of the barn and is heading for the Glue Factory.. what difference does it make at this exact moment to blame who left the barn door open...
Just get the horse and bring him home already...
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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What I can't seem to get anyone to understand is that the alternative to not loaning the money is way worse...
I'm with ya.....
And your right about the blame thing, It's more important these days to be able to blame someone else than it is to fix the problem.
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When you fly as much as I do " Its a Big Thing " .. When you are responsible for jobs and payroll and tax's in Two Country's ; Shoot , Two Continents its a " Big " Thing .. Shoot no I don't want Big Bro in my life , but if that's the way it is , at least do something productive for a dam change ... There : I got that off my chest
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They'll be plenty of time for the blame game after we get moving on a solution.
Right now we are in crisis mode and all the talk about what the percentage of interest should or should not be is irrelavent.. anyway,, a lower interest rate makes it easier for them to pay us back and the quicker that happenes the quicker the government is out of the car business..
But make no mistake about my thinking... I'm NOT for giving out money without regard to how it's to be used..
Again, if I'm in charge,, these companies would have to account for every dollar they spend and there would be a STOP to all crazy spending like trips for executives or those kinda lame things.. They can rationalize how important those things are to someone who gives a damn.. I wouldn't.
Also, and this is important.. NO BONUS is to be paid to any executive for any reason.. CEO's of these companies MUST take a 50% pay cut or find the door.. Cause I would want them in the fight with me.. I wouldn't let them get rich off my back..no way jose.!
THere was a guy that took over LTV Steel here in Cleveland when it was on it's last legs.. The board of LTV hired this guy and said, save it if you can, if not, liquidate it.. either way, he received a 7 figure bonus.. I never understood and you will never make me understand how that makes any sense whatsoever.
So, NO FREE RIDES... NONE..
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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Legend
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Feel better Water?
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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1st String
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1st String
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Maddog,
I agree with you, that the proposal of this professor is frightening and In no way do I want it passed.
I just don't think that it has a shot in hell of passing. You seem to be assuming that Just because some extremely far left person presents and idea that congress will pass it and Obama will sign it.
This bill is political suicide and it will never get voted for by any sane republican (unless they really don't stand for conservatism anymore) and a majority of democrats.
I honestly don't think that Obama would sign it either, but that is just me.
Having one party in power does not mean that all of their extreme beliefs are going to be passed into law. If that were honestly the case, then in the last 8 years we would have seen Abortion abbolished, homosexuality becoming illegal, and every citizen would have been provided a concealed firearm to carry around for protection.
You can continue to worry like Chicken Little, but I just hope that for your sake it doesn't give you an ulcer or a heart attack.
Bills like this have no chance of passing, and honestly in the grand scheme of things I would think that Republicans would secretly want it to pass, as it would spell the end of the Democratic party. And after they control congress and the white house in four years they could repeal it.
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Hall of Famer
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OP
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Yep , thanks for asking  Hey , I hope I am wrong about the Kids on the block .. I didn't ( and don't ) care for the policy's of either Party or Men running for office.. Have the utmost respect for Both men .. Man anyone who wants to be Pres. right now needs all the respect he ( or she , lol ) can get.. Me , I'm nothing but a simple 2 + 2 = 4 kinda guy ..  Now back to the program !  But never fear, Fannie Mae and Freddie Mac are back, and they’re ready to save the world. Only two days after Fannie revealed a $29 billion quarterly loss, these two government-controlled mortgage enablers — which as late as December 2007 were involved in 90% of all new home loans in the U.S. — announced, umn, an audacious mortgage rescue plan. We’ll give you a few seconds to digest the irony. Here’s the new plan: Fannie and Freddie will modify hundreds of thousands of distressed loans. In order to qualify you must be at least 90 days late on a mortgage payment, owe at least 90% of your home’s value, live in the house with the distressed mortgage and have not filed for bankruptcy. If you fall within this “not a total deadbeat, but still incapable of managing money” sweet spot, congrats! You’ll qualify for a free Fannie/Freddie refi. The companies aim to bring payments down to at least 38% of the monthly household income for at least five years, with interest rates as low as 3%. After five years, the rate will climb 1% annually until it meets the market rate. Preliminary estimates suggest about half a million homeowners will be eligible. If you are one of the millions of homeowners who took out a traditional mortgage on a house you were able to afford… umm… you get… ahhh… nothing. Enjoy watching your home’s price continue to fall while you pay 6%. The naysayers are already complaining that the plan will not reach enough of the folks who are facing foreclosure to matter. About 200,000 homeowners will fall into foreclosure by the end of the year, bringing the yearly total over a million. Plus, Fannie and Freddie only control about 20% of America’s seriously delinquent mortgages.
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Legend
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Quote:
House Democrats Contemplate Abolishing 401(k) Tax Breaks
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.
At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.
Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
Wait a second! I ALREADY pay into Social Security, the same Social Security pool that these knuckleheads in Washington mismanaged and misappropriated the funds of... and now they want to take MORE of my money to put to it just because THEY screwed the pooch on how to manage things?  
Sadly, it is just a recurring theme.... eventually they are going to take everything I have and they'll just say that it is "for my own good" 
Browns is the Browns
... there goes Joe Thomas, the best there ever was in this game.
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Legend
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Quote:
it's a catch-22 isn't it.. if we have a Republican President and Democratic Controlled congress,, it's stalmate.. Reverse it and you have the same thing..
One of the reasons I liked Obama over McCain is that it appeared that he would govern from the center out...
Give me the stalemate any day over all branches being controlled by the same party...
One of the biggest reasons I did NOT like Obama is because he will have no opposition in congress or the senate... and the senate and congressional majorities will have a total advocate in the oval office. When one party controls it all, the people lose... and I don't care which party it is.
yebat' Putin
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Legend
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Quote:
One of the biggest reasons I did NOT like Obama is because he will have no opposition in congress or the senate... and the senate and congressional majorities will have a total advocate in the oval office. When one party controls it all, the people lose... and I don't care which party it is.
That makes sense unless you have someone who says he wants to govern from the center..... To me that means someone that may lean one way, but is willing to go the other if it's more appropriate for the country to do so.
That is why I DID vote for Obama,, I felt that that was a strength that he has.
Truth be told, we all know they all say anything to get elected. Let's see if he actually does what he says he'll do..
DC,, if he doesn't, you and I will then be thinking alike... for the moment, I'll take him at his word...
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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Dawg Talker
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Quote:
What I can't seem to get anyone to understand is that the alternative to not loaning the money is way worse
Dispite the fact that I work for a competitor that will not utiize these low interest loans, I do understand.
I am confident that there are many hard working folks whose job security could be dependent on this or future hand outs. I am just asking to call it what it is.
I do find it interesting that the complete article points out the Chevy Volt as a fuel effeicient example of why General Motors needs this assistance. Thier CEO said on 60 Minutes that thier initial goal to build these for profit is not attainable. He admitted that they will sell these at a loss. This is a company that is already bleeding and their latest plan only continues the trend. I agree with your point about bonuses paid to executives of failing companies and I find it troubling that taxpayer dollars are used towards failing business decisions.
hungryhound....No, the sky is not falling. I will admit that my opinion of that plan was alarmist on purpose and that is because that I have no doubt that there are some members of Congress whose line of think would find such a porposal appealing.
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Legend
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So maddog,, what's the alternative?
Anyone, any suggestions on how to move forward from this point? I mean a suggestion that doesn't involved the government stepping in and saving thier butts?
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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Dawg Talker
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Quote:
So maddog,, what's the alternative?
Anyone, any suggestions on how to move forward from this point? I mean a suggestion that doesn't involved the government stepping in and saving thier butts?
Alternatives? I got nothing. I agree we have no choice but I have big reservations concerning the manufacture of automobiles in this country. The Chinese are coming. Whats going to happen to our existing jobs when they start selling a loaded luxury car for under 10 grand. IMO anybody involved with auto manufacturing in this country Honda and Toyota employees included should be worried. I watched my job disappear when Chinese made stampings showed up here at a price less than we could buy the raw material.Thats right the complete stamping cost less than just the material. No way we compete with that. Companies will ditch the US for lower cost suppliers. What do we do about it? Again I got nothing.
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Legend
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I can't help but sometimes think we have witnessed the greatest robbery ever pulled off.
It wouldn't be very hard to skim off 3-4%......28 billion or so...makes some of those Brinks heists look like small potatoes.
If everybody had like minds, we would never learn. GM Strong ![[Linked Image]](http://www.dawgtalkers.net/uploads/small-gator-chomp.gif)
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Legend
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You aren't the only one..... I'm actually thinking that the whole thing is a robbery.
Browns is the Browns
... there goes Joe Thomas, the best there ever was in this game.
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Peen and Purp,, I agree.. it would be easy to scam a few billion here and a few billion there from that money..
Oversight is the only weapon against it and I don't trust the watchdogs..
But I can't think of one alternative... do either of you have a viable plan that doesn't involve the governement (meaning you and me) helping out?
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.”
Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe."
Damanshot
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Legend
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Quote:
You aren't the only one..... I'm actually thinking that the whole thing is a robbery.
I understand....I figured I would just stick to the 3-4%.
If one puts any credence in to the talk about Trilateral Commissions, NWO, etc...this is how it would have to be done...bankrupt the top banana government.
Once that happens, the fighting begins.
Real fighting...not the bickering we have witnessed the last 30 years.
If everybody had like minds, we would never learn. GM Strong
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Legend
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Oversight is the only weapon against it and I don't trust the watchdogs..
Well, the biggest problem with the bailout is that there are NO watchdogs at all. That money was handed over without question, without firm justification, without a solid plan (that we've since abandoned), without stipulations, requirements and without any oversight or governance.
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But I can't think of one alternative... do either of you have a viable plan that doesn't involve the governement (meaning you and me) helping out?
The gap of difference between what this is and the simpler concept of "the government getting involved"is big enough to hold a couple of galaxies, IMO.
However, for starters, the ONLY thing we should have done to start with was to back what Fannie & Freddie underwrote.... after that, we need programs like we are seeing now that get QUALIFIED people out of their ridiculous balloon mortgages at a reasonable interest rate. That right there puts a floor under the housing market... and that would be where the Gov't should stop and let the free market take over. HOWEVER, if we absolutely HAD to dig into the coffers and prop up some banks and such (which I'm against... I say let them fail, the market will buy them up and things will move on) ... then there sure as hell should have been some deeper thought & planning involved as well as some VERY stringent controls put in place.
Instead of any of that though, we just handed $700 Billion to Paulson and said "do as you see fit".
Browns is the Browns
... there goes Joe Thomas, the best there ever was in this game.
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Legend
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Quote:
5%, 15% what's the difference.. That number is meaningless if GM goes out of business and puts millions of people out of work
Well if GM goes out of business someone will be there to pick up their market share. That means other companies will be selling more cars and will have to hire more people. If they are foriegn manufactures they have as much a chance to build cars here as the American makes, especially since a lot of American cars are made outside the US. I'm sure we will lose jobs, but I don't know that it will be a huge number. The costs to make each car will drop because most (if not all) foriegn companies here are not union. That doesn't mean cars will be cheaper but it does increase the car companies margins and will help keep them solvent.
That is unless Obama and the Dems get their way and do away with secret ballots for unions. If that happens we will see a huge increase in the amount of union jobs IMO. There is no way to be certain but I believe it will cause drastic increases in the costs of goods and services. Unions will once again have a huge advantage over business. I believe that not only will wages increase, but things like medical insurance coverage will increase as well. Productivity will most likely drop because unions will be able to neogotiate more paid days off and better disability plans. Companies will have no where to hide in the US. Unless the government changes trade agreements we will see even more jobs being outsourced.
We do have many industries that are underpaid but the answer isn't as easy as raising things like the minimum wage and giving unions a huge advantage.
#gmstrong
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If GM went under, which I don't think will happen any time soon at least, the foreign makers wouldn't just scoop up workers and fill in the holes. It would take years for them to ramp up production, workforce, and assembly plants to. The hit would be massive on scale.
Now a gradual closing of GM, would be tolerable in the scenario you painted, but I don't see that happening, it would be all or nothing.
We don't have to agree with each other, to respect each others opinion.
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I doubt that they would target ex-GM employees. There also would be many idle plants all around the country. Some may need nothing more then retooling, while others may not be of any use.
It would be a huge blow to the economy in the short term but we will be able to survive it. At least if nothing else doesn't collapse. Bailing out GM might not even keep them in business. It is a risky plan.
What concerns me is that right now our economic system is in disaray. I hve no clue what it will take to fix it.
More regulation and more oversight?
Less regulation with more oversight?
Less unfunded mandates on businesses?
Government stepping in and running businesses?
Government buying huge amount of stocks in banks?
Government throwing huge amounts of money to private sector business and telling them how to spend it ? like the use of unfunded mandates? I guess they could be considered funded in these cases.
Government throwing huge amount of money at business and being hands off?
Raising income taxes on anybody?
Raising taxes on other kinds of income like capital gains and death taxes?
Government taking more control from the private health care system in hopes of insuring more people to free up money?
Bailing out the states who have blown their budgets?
Getting rid of unfunded mandates on the states?
Huge profit taxes?
Giving companies who paid huge profit taxes back when their sector gets hit and they have financial trouble?
These are just some of the different solutions I have heard. Some are proposed in conjuction with others. The last one is what I think will be brought up if those taxes that have been propose pass.
#gmstrong
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Quote:
Bailing out GM might not even keep them in business. It is a risky plan.
Truer words have not been spoken - and it's not just GM - it's all these companies that are getting taxpayer funded bailouts (or may get).
I don't know the answer, but I do know putting millions out of work will more than cripple the economy, but I also know throwing money at a problem does not fix the problem - meaning throwing money to GM so they can continue the current business model is at best high risk, at worst, foolish. Would it only be stalling the inevitable?
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Are we even sure it will be millions? I know GM doesn't have anywhere near that amount of employees in this country. It would create a huge ripple effect because of all the companies that are in business just to serve GM. Some of GM lines might also get bought out. Honda, Toyota or other companies might buyout GM and continue manufacturing some of their lines.
We were told that our whole country would shutdown if we didn't pass the 750 billion dollar bailout bill immediately. Those banks have yet to receive the money. The point was supposably that just knowing help was on the way it would make banks more willing to give loans. I think a just heard banks still aren't willing to give out many loans.
Where we hudwinked?
#gmstrong
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Forums DawgTalk Tailgate Forum Bail-Outrage: Misuse of Funds,
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