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September 23, 2008

$700 Billion: Bail-out, Evasion or Trickery?

  Seven hundred billion dollars – that’s ‘11’ zeros.  It’s almost incomprehensible to me.  I had to write it out – $700,000,000,000. This is the amount of money George Dubya wants us to entrust Henry Paulson with.

This so called “bailout” of America’s failed financial institutions seems to me to be the greatest heist in America ever; this will be the greatest highway robbery in broad daylight, in the middle of day with everyone watching with our eyes wide open.

How can anyone with any common sense give $700,000,000,000 of American citizens’ money; of middle class American’s money to ONE person to ‘handle’ with virtually no oversight?

According to a draft of the bailout proposal, all decisions by Treasury Secretary Henry Paulson, “are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” What the heck!!!

I don’t care if anyone tells me that I have to trust the ‘experts’.  This just doesn’t sound right to me.  Not at all.  I don’t trust this solution. Not me, not today, not tomorrow. No way.

One thing that bothers me is that the very executives who destroyed their companies are going to get to put a share of hundreds of billions in their ‘pockets’. Plus they will get this money practically hassle free. Less hassle than it would take for you or me to get an unemployment check after working years and making a contribution to the system. These CEOs get to evade their responsibilities. That just doesn’t sit right with me.  Not at all.

I am one of those people who believe that this ‘bailout’ has to be inspected and dissected with a fine tooth comb with little or no room no trickery and thievery. There is just way too much of your dollars and my dollars at stake. Accountability and oversight has got to be paramount!  The current proposal only requires one oversight report to Congress every 6 months. What kind of crap is that?  This has to be the worst business decision ever…ever!

Dubya Bush is saying, just give us the money and trust us, we’ll handle it. Yeah, right, just like we trusted him with the WMD and the Iraq war. To quote George W. Bush, “There’s an old saying in Tennessee — I know it’s in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can’t get fooled again.”  You get the idea, right?

The Bush administration is urging Congress to quickly stabilize the financial system by temporarily transferring the bad debts of American financial institutions to taxpayers. The proposed plan would give the Treasury Secretary Paulson sole power to manage the funds and the buying and reselling of mortgage debt. “This is something that has to work. I very much believe it will work”, said Paulson.

So we should trust Paulson (who said 2 weeks ago that the economy was strong!) because he simply believes it will work?!  Where are the spreadsheets, economic forecasts, market analyses and scientific formulas?  I want to see credible reports and projections!  I want more than ‘I believe’ from Paulson.

I believe that I am going to come up with one of the most innovative business idea ever and become a billionaire overnight – that’s what I believe.  Will a bank give me a loan based on what I believe???  I think not!



July 6, 2008

Economy: Foreclosures Will Continue Even With New President

    The hopefulness that comes with a new president taking office can’t erase the subprime lending disaster and will not resuscitate homes values overnight — presidents have no direct ability to reduce rising mortgage rates.

Both Senators Barack Obama and John McCain promise help for homeowners facing foreclosure.

Obama calls for a broader role for government than McCain, but both candidates envision the Federal Housing Administration providing new, cheaper mortgages to distressed homeowners who otherwise would have difficulty refinancing into more secure government-insured loans with lower monthly payments.

For the plans to work, lenders would have to be willing to take a substantial loss by reducing the amount owed on the loan. Some lenders would have a powerful incentive to take the losses because a refinancing deal could allow them to recover far more money than they would get from the costly process of foreclosing on the property and trying to resell it.

The FHA piece of the Dodd plan would cost close to $1 billion and would help more people.  The funds would come from diverting money in the early years from an affordable housing fund financed by the profits of mortgage giants Fannie Mae and Freddie Mac.

McCain’s FHA provision is estimated to cost from $3 billion to $10 billion and would help less people.  The funds would come from either cutting government spending elsewhere or having the federal government borrow more.


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