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$700 Billion Bailout

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Buffett Buying $5 Billion Stake In Goldman Sachs

 

Warren Buffett's Berkshire Hathaway Inc. is investing at least $5 billion in Goldman Sachs, a huge vote of confidence for one of the survivors of the credit crisis that felled two of its investment banking peers.

 

In addition to buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman's common stock. Goldman also said late Tuesday it would raise another $2.5 billion in its own public stock offering.

 

This is brilliant. Think about it... when this crisis is over, private companies are going to start buying back the paper the government is about to snatch up. And Goldman Sachs will be in IDEAL position to do that as one of the few "solid" companies remaining. In 3-5 years, this could be gold.

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How about this for a compromise?

 

The Congress can force the CEOs of bailout companies to return their huge salaries if the polticians involved return all of the money they accepted from these same companies over the years.

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QUOTE (southsider2k5 @ Sep 24, 2008 -> 12:10 PM)
How about this for a compromise?

 

The Congress can force the CEOs of bailout companies to return their huge salaries if the polticians involved return all of the money they accepted from these same companies over the years.

sounds great to me

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MSNBC just reported that the Bush administration is accepting the "pay limits" on execs as part of the bailout.

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QUOTE (Athomeboy_2000 @ Sep 24, 2008 -> 10:12 AM)
MSNBC just reported that the Bush administration is accepting the "pay limits" on execs as part of the bailout.

Damn.

 

That dramatically increases the chance something will be passed. I hope that report is wrong.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 07:06 PM)
Answering my opinions with your opinions is doing the exact same thing that I am doing. All I did was ask for the same proof that you did. The lack of that pretty much tells me what I need to know. If all conjecture and nothing backing it up is your way, you are awful good at it.

It's my opinion that Gramlich warned against subprime mortgages? It's my opinion that the Comptroller of the Currency exempted national banks from local and state legislation on predatory lending? It's my opinion that the GOP controlled Congress until very recently? Or is it merely my opinion that 2006 (when McCain supported S.190) came after 2001-2003 (when, you say, it was too late for any Dem reaction to be meaningful)?

 

If you want to insult me (and I understand that, as an admin, that's your right, glacial daverfication and all that), at least say something coherent. And since we're sharing what we'd like to see each other do, I'd like to see you make one argument that consists of something more than parroting whatever extreme right-wing talking head you sought out that morning. You don't think my statements contribute anything, that's fine. Believe me, the feeling is mutual.

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QUOTE (jackie hayes @ Sep 24, 2008 -> 02:20 PM)
It's my opinion that Gramlich warned against subprime mortgages? It's my opinion that the Comptroller of the Currency exempted national banks from local and state legislation on predatory lending? It's my opinion that the GOP controlled Congress until very recently? Or is it merely my opinion that 2006 (when McCain supported S.190) came after 2001-2003 (when, you say, it was too late for any Dem reaction to be meaningful)?

 

If you want to insult me (and I understand that, as an admin, that's your right, glacial daverfication and all that), at least say something coherent. And since we're sharing what we'd like to see each other do, I'd like to see you make one argument that consists of something more than parroting whatever extreme right-wing talking head you sought out that morning. You don't think my statements contribute anything, that's fine. Believe me, the feeling is mutual.

 

You kill me. You want statements other than my own and I give you statements from other people, and you say they are still not enough. I ask for you for the exact samething, and you STILL haven't gone out and gotten one statement that isn't your own. Talk about parroting, that's all you have done, except you just keep repeating yourself.

 

If you aren't going to even live up to your own standards, there really isn't a point.

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Chuck Todd on MSNBC is saying that this bailout is being held up because of infighting in the Republican house caucus.

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QUOTE (Athomeboy_2000 @ Sep 24, 2008 -> 01:09 PM)
Chuck Todd on MSNBC is saying that this bailout is being held up because of infighting in the Republican house caucus.

Please HOLD IT UP LONGER.

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QUOTE (Balta1701 @ Sep 24, 2008 -> 05:14 PM)
Please HOLD IT UP LONGER.

 

Rumor is that the Republican congressional caucus has a total of four supporters for Paulson's plan.

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QUOTE (Rex Kicka** @ Sep 24, 2008 -> 02:26 PM)
Rumor is that the Republican congressional caucus has a total of four supporters for Paulson's plan.

At this point, all we have are rumors. There are other rumors saying other things, like there's a plan 98% completed.

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QUOTE (Balta1701 @ Sep 24, 2008 -> 03:37 PM)
At this point, all we have are rumors. There are other rumors saying other things, like there's a plan 98% completed.

Well, i think it's both. The higher ups in congress are the ones who have this at 98%, but they have to convince the rest of the house and senate to support it and THAT is where the problem lies. Remember, this isnt 500+ people all working on this. It's a select few from both sides who then have to sell it. And the GOP is having a hard time selling it.

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Oh Goodie.

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

 

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

 

Everything I've read or heard about this thing since it was proposed is screaming "Horrible idea." Bottom to top.

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QUOTE (Balta1701 @ Sep 24, 2008 -> 06:28 PM)
Oh Goodie.

 

 

Everything I've read or heard about this thing since it was proposed is screaming "Horrible idea." Bottom to top.

 

Of course its fuzzy. If they gave us the real total, people would freak out. I will say it today, before this is all said and done, it costs us over 2 trillion dollars. I said a trillion a couple of months ago, and looking at it, it is way worse.

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QUOTE (southsider2k5 @ Sep 24, 2008 -> 04:00 PM)
Of course its fuzzy. If they gave us the real total, people would freak out. I will say it today, before this is all said and done, it costs us over 2 trillion dollars. I said a trillion a couple of months ago, and looking at it, it is way worse.

I'm willing to believe you're right on that, and still say that the bailout as currently proposed is a horrid idea. First of all, doing it in one gigantic sum is a terrible idea. Secondly, structuring it in ways that we're bailing out foreign banks, we're bailing out banks that aren't in trouble, we're not getting anything in terms of quality assets for it is a terrible idea. Everything about this just stinks to me.

 

I get this feeling from this whole proposal that it's like we've got a couple of bank robbers tearing apart a bank, and suddenly they hear police sirens in the distance so they decide to try to grab everything they can and get out as fast as they can before the cops get there.

 

Congressman "Baghdad is like a Market in Indiana" Pence had another good one.

"I must tell you, there are those in the public debate who have said that we must act now. The last time I heard that, I was on a used-car lot. The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

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QUOTE (Rex Kicka** @ Sep 24, 2008 -> 08:54 PM)
I think Bush calling McCain and Obama in on this is actually a really good move on his part.

So do I.

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QUOTE (Rex Kicka** @ Sep 24, 2008 -> 08:54 PM)
I think Bush calling McCain and Obama in on this is actually a really good move on his part.

 

and helps McCain more than Obama. Partisan. But I like it.

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QUOTE (Texsox @ Sep 24, 2008 -> 10:41 PM)
and helps McCain more than Obama. Partisan. But I like it.

 

I think its the opposite of that. Bush called Obama directly. It's one of the first truly non-partisan things he's done in office.

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QUOTE (Balta1701 @ Sep 24, 2008 -> 09:23 PM)
I'm willing to believe you're right on that, and still say that the bailout as currently proposed is a horrid idea. First of all, doing it in one gigantic sum is a terrible idea. Secondly, structuring it in ways that we're bailing out foreign banks, we're bailing out banks that aren't in trouble, we're not getting anything in terms of quality assets for it is a terrible idea. Everything about this just stinks to me.

 

I get this feeling from this whole proposal that it's like we've got a couple of bank robbers tearing apart a bank, and suddenly they hear police sirens in the distance so they decide to try to grab everything they can and get out as fast as they can before the cops get there.

 

Congressman "Baghdad is like a Market in Indiana" Pence had another good one.

 

That's what happens when members of Congress gets millions and millions of dollars from an industry. Both of these campaigns and Congress are so intertwined into the banking industry its no shock to me that the checkbook is open.

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QUOTE (Balta1701 @ Sep 24, 2008 -> 06:28 PM)
Oh Goodie.

 

 

Everything I've read or heard about this thing since it was proposed is screaming "Horrible idea." Bottom to top.

 

 

I heard someone say that the $700 billion was determined by Bernanke estimating that 5% of mortgages would default.

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QUOTE (jackie hayes @ Sep 23, 2008 -> 10:28 AM)
No, not pedantic at all. There were Dems at the state and local levels passing actual laws, which were preempted by Republicans at the federal level. Gramlich at the Fed, calling for actual regulation. You make the claim that everybody was rah-rah about subprime mortgages, but there were people pushing against them -- all Dems, as far as I can tell.

 

If the Dems were as happy as Repubs about subprime mortgages, why were those state and local laws passed?

 

As for McCain, he did favor some increased regulation for Fannie and Freddie. If you mean that, then blaming Dems is weak. S.190 died in a GOP committee in a GOP Senate (no filibuster). Oxley, a Republican, has explicitly blamed the WH for the failure of the House legislation. If you mean that McCain tried to regulate subprime mortgage lenders but got "shot down by Dems", please provide the details.

 

 

Well the NY Times disagrees with you.

 

 

 

2003, that is, when the New York Times ran this article on proposed reforms to Fannie Mae and Freddy Mac:

 

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

 

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

 

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates. ...

 

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session. ...

 

''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing. ''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies. ...

 

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

 

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

 

 

 

 

Barney Frank is a joke. He was one of the biggest impediments to change at Fannie/Freddie.

 

 

 

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