Evening Buzz: "Mother of all Bailouts"
Maureen Miller
AC360° Writer
$700,000,000,000. There's a lot of debate over all those zeros. The Bush administration and congressional leaders are trying to hash out details of the proposed $700 billion bailout for America's financial firms.
"This is the mother of all bailouts", said Senator Richard Shelby, R-Alabama.
Democrats are demanding some changes. They want more government ownership of the companies the government would rescue, more congressional oversight of the Treasury Department and help for Americans facing foreclosure. There's also disagreement between Democrats and the Treasury over so-called "golden parachutes", the fat cat payouts to company executives when they are let go.
There's also this big question: Is the crisis so urgent there is no time to read the fine print?
Tonight, we'll talk in-depth about the proposal.
In the meantime, share your thoughts. Do you think this is the right step?
Tonight, we'll also look at John McCain and Barack Obama's financial ties. Remember Fannie Mae and Freddic Mac? Well, both campaigns have their connections to the mortgage lenders. We're keeping them honest.
And, we'll also give you an up close look at the man of the hour: Treasury Secretary Henry Paulson. He's the one asking all of us to take a tremendous leap of faith and basically trust him and his successors with nearly a trillion dollars in taxpayer money.
All that and more tonight on 360 at 10pm ET.
Hope you can join us.
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Filed under: Maureen Miller • The Buzz |
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Do you realize that if the government took only $350 million of that $700 billion in bail outs and gave $1 million to each home owner that that would almost pay for everyone's mortgage or principle payment in the United States. A point of interest is that not every American owns a home. More over, if the government gave yet again $1 million dollars per person, that would be interest of nearly $50,000 a year per person just from the bank. In this small paragraph, $650 Billion dollars was saved.
Ray
I would like to know why this bailout is not being televised. We should know what is being done with our money. Also, I want to know why more is not being said of President Clinton signing to relax regulations in the 1990. Also Chris Dodd Chairman of banking that hand his hand in the till with Freddie and Fannie. He should be investigated. They should all be investigated for turning a blind eye to their friends on wall street and the banking industry and allowing this to happen. This started with President Clinton but President Bush is getting ALL the blame. I believe it took more than 8 yrs to get to this point.
I am furious over this mess and someone better be prosecuted for this mess
This world’s bailout, if it is so import and urgent, why is it just the American taxpayers doing all the bailing or Footing the bill? Twice I have heard one of the pres. cand. asking for this to be a world problem and calling on the g-20 to help. Why are you not covering, this story? Does it make sense to you to carry a thousand pound bag alone, while ten thousand people are standing right there beside you, going to the same place for the same reason, and you don’t ask them to help! If you don’t ask then who is the fool?
Even with all the criticism from the opposing party, I admired the way Senator Obama stepped back, keeping his cool and not trying to rush in offering a quick fix for the financial crisis in order to gain political points, as did Senator McCain.
This is the show of a man of great character, one not trying take advantage of the situation. It took eight long years to cause this debacle, and I don't believe anyone can solve it in a day or put a Band-Aid on the problem to fix it. It will need careful planning, real team of experts and an appropriate amount of time, to find a long term workable solution.
For as I am concerned I would let those big wheels fall, and put the 700 billion dollars back into the economy. For these big companies never should have been allowed to get so big, that if failed, it would cause a negative effect on the whole economy of this country.
I believe in just rewards:
Give them the bail out with these conditions!
1) At the "high risk" interest rate – that they have set themselves at 29.99% . High risk since they have gotten themselves in to this mess. 2) Since we are saving their jobs – all employees should pay from their own salary 25% monthly (after taxes of course) for incentive to preform their jobs better and with more thought in the future.
3) Absoloutly no bonuses or payouts of any kind during the payback period.
4) All profits to be added to payments.
Until the taxpayers are completly paid back.
Why has CNN failed to prominently feature the enormous implications of Section 8 of the Bush Bailout bill? It gives plenary power to the Treasury Secretary over the use of the $7billion? Section 8 explicitly declares that there will be no right to judicial or legislative review of the Treasury Secretary's decisions. That is a mighty large gift we taxpayers are being asked to give without restriction or oversight. It is a far cry from the REO or the RTC bailouts.
BAILOUT, who, what, where and why are we bailing anybody out?
What's the difference between a bailout of corporate america or the tax cuts this administration wants made permanent? This bailout could be the biggest tax cut ever and trust me it would leave a permanent mark on all of us
If we do any bailing out, why can't it be piecemeal, one company, one situation at a time so the American public can see where their taxpayer dollars are going? Transparancy, Transparancy, Transparancy. Bush pushed through his election, the IRAQ war and now he wants to push this through. The man and his administration can't be trusted!
I say America should bailout of this bailout plan.
Of course Mr. Bush knew this was coming long ago and it was already prepared and timed just right so he could as usual get what he wants. This type of legislation cannot be drafted in a day or two. Also it is time to check out he and Cheney's personal gains since he took office and to ask if they have billions in foreign banks. I smell treason here and no one is asking. This man will get a pension after destroying the country. We cannot hold a president accountable for anything I suppose. We are going into an election where the broken voting system has not even been fixed after 8 years of knowing it was a problem. The people and even you seem powerless. I have never been so fearful for our survival in my lifetime. I could see it all coming since Bush took office. I have a hard time understanding why it was all allowed. I do not feel this is a democracy anymore. Expose them for what they are...someone has to or else we fail as a country. Linda
Paulson sat, did whatever he did, and ignored this growing problem. But what worries me more is that John McCain has already gained a record for money insider behaviour with the Lincoln Savings And Loan fiasco. Remember he was reprimanded?
This gargantuan mess is one made from too little responsible behaviour, too little integrity within the banking and financial system and far too much "me first, to hell with you Jack" thinking.
The current bill has a huge, highly damaging clause, all of 32 words that keeps Paulson from being questioned, any oversight, and if I read it correctly, immunity from any prosecution.
We cannot change the past, but we sure can make sure my granddaughter has at least an opportunity to even get a job, maybe eat enough, and with saving what little she may get after paying taxes, find a home.
I have no faith in George Bush when he is under crisis management, remember the last few events? And Paulson seems to enjoy doing nothing and being well paid for it.
Let me put it this way, the people on Wall Street would never bail me out, so why should I give BILLIONAIRES a helping hand?!!! I don't owe them anything and am appalled that this is even up for consideration!
Looks like we have still not been able to reach the root of the market melt down. I have few questions that are still unanswered.
Q1 How is it possible that these fallen financial institutions did not have internal periodic escalations of deviations and outage
Q1A How is it possible that the precursors to bankruptcy was not tracked for last 52 weeks?
Q2 How is it possible that there were NO circuit breakers in transactions?
Q3 Did all these companies fail simultaneously in the periodic audits?
Q4 Did the audit agencies deviated too?
Q5 Who was tracking the quarterly results and were the share holders kept in dark?
Q6 Isn’t the federal government informed in advance of the financial slippage?
Q7 Who has gained most from the melt down?
Q8 Who will gain most from the recovery and bailout?
Many more …..I believe this melt down if deliberate. If not, then American economy has ended up as single largest casino bet in history.
– Sharad Awasthi
Neenah, Wisconsin
If our government officials were children, I tell them to take their ball and go home. But they're not chidren and if you told them to go home, they'd say in unison, "which one." If we think for a minute that people driven by blind ambition and selfishness, 43 days before the election, suddenly have our interests at heart, then we should go ahead and build that "Bridge to Nowhere." This country went to war on a global sized lie (WMD? where?) and might go down embracing another one. A lie that will hit closer to home, if you still have one. Then we'll live through next four, six or eight years with the same people trying to convince us that they weren't lying. I don't ever want to wakeup, after an election, to headlines from England declaring, "How Can 50 Million Americans be so DUMB." I always thought when you accepted a job, you kept that job based upon good performance. It seems that on Wall Street and in Washington all that matters is poor performance and while your at it pass the money plate that last help' in was OOO, SOO good. I just can't get enough.
A president that has failed the majority of American people continuosly and is leaving office in four months is now telling me I need to give a guy 900 billion dollars that has also failed the American people by telling everyone the economy is fine, when in fact he was aware that it was not fine, with no accountability or disclosure? This does more than just stink.
I don't think that wall streeet or main street should be bailed out. If these supposed experts can't figure out that you shouldn't lend money to people who can't afford to pay it back, they should not be in business anyway.
In addition, if main street doesn't know how to do simple math, they should not own homes. Owning a home is not an entitlement. I have a friend who lost his home to bankruptcy in 2001 and he received no bailout. I say, no bailout.
And one last point, anytime I hear a politician say thay are doing what they do for the good of the American people, I know something really bad is about to happen.
This bailout is complex and needs to be done, but it needs to serve the working class people first, last and through out, not the corporate executives who have put the country into this situation with their total misuse of deregulation, and even regulated structures for the matter by finding every loop hole and manipulating our democracy, and totally abusing most American. Sure, Republicans are to blame as are all the unethical corporations, and John McCain is for the wealthy, that supposed 1% with at least 55% of the wealth, who are usurping the earth practically riding it of the middle class. A social system is obviously where the US is headed just like Europe only if we are lucky. However sadly, it doesn't take a rocket scientist to see that through globalization the big cats don't give a hoot if the US becomes a third world or not; is obviouse the working class will be lucky to have work.
I purchased my home about 4 1/2 years ago when the 3 or 5 year ARM's were a very popular route to take. I am a 24 year old college student finishing my degree. I have made sacrifices necessary to make my mortgage payments. I understand the responsibility I signed up for when I took the loan. I am just wondering if a couple million people are going to get "bailed out" for defaulting on their loan, wouldn't it prove beneficial for me to spend all my cash and default on mine. I would have some serious moral issues with that and God willing it won't happen, but I don't believe the federal government should "bailout" out my "neighbor" and their new car in the driveway. I'm sorry, people made poor decisions and are now at risk of losing their homes, but that is between them and the bank. You can bet the banks don't want the homes, their business is lending money. Try to renegotiate the note. We could all use a little more responsibility for our actions and a bit of accountability. At most the "bailout" should be low rate loans allowing the lend institutions to regain balance and work with their borrowers. I believe the tax payers should get their money back eventually and maybe even get something out of it, after all the banks are.
Bailing out the banks with taxpayer money is like Robin Hood in reverse, steal from the poor to pay the rich.The banking industry should have to provide these troubled morgage payers a lower rate interest to recoupe their principal and accept a loss of total revenue instead of foreclosing.What's next credit card debt??? The government should set maximum rates that banks and cc companys can charge.This bailing out of fannie and freddy and AIG is totally irresposible on our elected officials.Throw all the bums out in November.
1 In 10 Americans have lost or are loosing their homes and nobody has cared, Michigan has been crashing bad for years now and nobody has cared, People all over the country are jobless without hope and nobody has cared. Now the institutions the caused the problem are crashing and all of the sudden the Government cares? A government for the people?
NO WALL STREET BAILOUT!
The panic on Wall Street is a direct result of bad lending practices. The bad lending practices are a direct result of deregulation in the home mortgage market. I'm disgusted by the attitude shown by these Companies top executives. They want quick passage of a 700 billion dollar bailout, paid by the taxpayers. Yet they're not willing to compromise on their own multi billion dollar retirement and severance packages. Even though it was their bad policies that bankrupted their own Companies. They took their Company and shareholders over the edge of a cliff, and now expect to be rewarded for their mismanagement. These top executives knew these loans were extremely risky. But they couldn't resist the temptation of the quick buck to be made. Meanwhile, little, if any, help for homeowners facing foreclosure.
Any taxpayer bailout needs strict oversight and specific terms. Lack of oversight was at the core of what got us into this mess. Congress shouldn't be pressured by the White House to rush a quick, but possibly ineffective fix to this. A few years back it was Enron,..Arthur Andersen.... Now Bears and Stearns,..Fannie Mae,..Freddie Mac,..AIG.... It's like a Corporate crime wave swept across our nation these past seven or eight years. What Company will need to be bailed out next week, or next month? Even the Wall Street analysts don't seem to know where the bottom is here.
I cannot believe that Congress is going to hang the regular tax payer out to dry. I have a mortgage, 2 credit cards, a retirement account, a savings account and a checking account. I have never had a late payment in my adult life and I have successfully paid off two cars. Why? Because I pay for what I can afford to pay for. Are we really going to deal with companies that have borrowed too much money and are now broke by lending them more money? Are you serious? Socialism or not... it isn't poor people or middle class people or rich people that will suffer from this... it is RESPONSIBLE people that will suffer. Give me a break. If you run a company into the ground, then that is where it should stay... in the ground!
So what's the problem??.. Wall Street needs equity/liquidity.. The Government seem to understand that they need it/must have it.. So why doesn't every Wall Street company that needs the equity call for an increase in capital, and issue common shares according to what the potential investors, including the Government are willing to subscribe.. Which allows Washington to decide whether or not to subscribe, and at what price.. It's capitalism at its finest.. Why can't the Government (the taxpayers) participate in the same "free market" game that the anointed have played for centuries??..
The best thing the American public should do right now is use everything in their power to stop this "suicidal" bailout plan that the morons in Washington are scrambling to put together right now, just to hopefully save their postions at the public trough on November 4th.
Then, come November 4th, the citizens can use their collective power,(their vote), to FIRE each and every one of the incumbent senators and congresspersonswho have collectively aided and abbetted the criminals on Wall street, and in Corporate America who have laughed at middle class Americans, while robbing them blind!!!
It's time to "take back the streets" people!!! Thin the heard completely in Washington, and start with a fresh slate of men and women you believe will better serve YOU!
SAVE YOURSELVES, NOT INCOMPETENT POLITICIANS AND CRIMINAL CEO"S
Is this a 1 trillion dollar scam? The invasion of Iraq was a falsely created crisis and this has that same smell.
Now, Congress must rush and hand over the bailout to the group that seems to have no clue how this all happened. This is the Bush team cleaning out the register as they walk out the door. While the problem revolved around 10 million people losing their homes, the government
didn't act,but Wall Street has to be saved under this flawed logic.
This is socialization without representation.
This financial state is a house of cards wanting to fall; wanting to equalize itself to the forces against it. And the proposed bailout is yet again, another effort by the administration to maintain their failed trickle-down policies.
I am terrified for me and my children that the government will actually make things worse than they already are with these bailouts.
At 47, I've been a republican all my life... No more.
700billion!!!! for what ? why should they decide how they spend our tax money. this is a democracy why not let the citizen decide? they should make every U.S citizen 18+ to vote "YES" for bailout or "NO"
As a college freshman intent on majoring in finance I must say I find myself questioning my decision and thus my future. As I am sure thousands of students are in my current situation, can anyone offer an advice to us? Can anyone foresee a need for finance majors in 4 years?
It is not $700 billion; in the fine print the proposel is to raise the national debt by $1.2 Trillion – so the real figure is the low estimate for the propsed looting of the U.S. Treasury/taxpayer dollars is $1.2 Trillion, and we all know how Government estimates tend to be be artificially low.
This bail-out if approved is an abdication of Congresses constitutional duty to the average, middle-class, American voter and essentially confirms an Imperial Presidency that Bush has been striving for.
The blank-check will bankrupt this country, and the value of the dollar will dramatically fall, spelling double digit inflation here at home. As U.S. citizens opt for food and gas, there will even be more foreclosures, unemployment and a deep, deep depression.
Well guys in this economic war I guess Bush got that famous 03:00 call but he did not answer. It was Paulson, Bernanke and New York Fed bank chief.
The rescue has two fundamental problems.
1) It helps the fat cats directly only and very ,very indirectly the Main street and that will take years to filter thru.
2) No oversight whatsoever.
Finally all these CEO's /Directors at Freddie Mac, Fannie May, Lehman, AIG must be penalised for mismanagement by repaying bonuses, cancellation of share options, and certainly any termination golden patrachutes. They have to take some responsibility.
However it must pass now with Dems and Republicans listing concerns and agreeing to debate/ discuss them all later without filibuster, with nominated speakers (3 each) max 1 hour in both House ( and if it passes there) then to the Senate then vote. No pork or earmarks please. Simple majority enough.
Regards,
Hodgson.
We need transparency and a discussion about this...NOW! Televised with a live audience, with members of Congress, and a no-bull questioner....
We are trusting the same idiots we elected who screwed this up to solve it.
We are screwed....
Isn't there a regulatory agency that oversees the mortgage industry? I'm not talking about a government regulatory agency. Wasn't there a limit to the total amount of high risk loans they could issue? There needs to be accountability and ramifications for breach by ANYONE who goes outside a predetermined "safeguard". No more decisions based on personal financial reward!!!
It seems no one in this country gives thought to the "what if" scenarios before moving forward on major decisions and we are suffering catastrophic consequences as a result. Did anyone think about an exit plan before we entered the Iraq war? Apparently not. And no one thought about a "worse case scenario" when they continued to issue high risk loans. It is all about greed!!! Do you think our government is going to make this better? They don't understand what happened anymore than you or I. We need to fix the problem at the source!
Oh I guess have should have told everyone....I am a displaced Automotive factory worker! I lost my job after my company decided to start sending some of our jobs oversea to China!
These companies got themselves into these situations and they should have to figure a way to get themselves out!!! Why should mine or anyones elses tax dollars go to these idiots! Let my mother have control over this situation, she can squeeze two pennies together and make a dollar from. I just don't understand what has happened to this once Great and Powerful nation! Let the rich keep getting richer and the poor keep getting poorer! Before you know it us " lower class citizens" will all be living in cardboard boxes!
How about we ask every member of the Senate, Congress, and any presidential candidates, to defer any decisions on the use of taxpayer dollars until after the election this year. Anything less would be irresponsible. In our recent past, anything that our government has enacted in haste has been a disaster. A fixed period of waiting on Wall Street may allow people to take a deep breath, relax, and not argue that the Depression in right around the corner.
PLEASE let clearer minds prevail!
This bailout situation calls for the skills of experts, not senators or politicians. America is blessed with a few honorable financial wizards. Let our best and brightest work together on a solution. I find it hard to believe that it's$ 700 billion or nothing. If we're going to bail someone out, let's bail out the people who are at risk of losing their homes, not the financial institutions that created the mess.
What happens when these companies rebound and start to sell foreclosed homes or collect outstanding debts? Do they pay the government back?
If the companies pay the government back, will the government pay us back?