my dad used to say (0.00 / 0)

The way to make a small fortune in commodities is to start with a large fortune.

However, my brother has been moving assets out of dollars and into gold for years, and I think he's feeling pretty good about that decision now.

There's so much to read on this bailout, it's hard to keep up. I linked to a bunch of good posts here:

http://www.bleedingheartland.c...

Join the Iowa progressive community at Bleeding Heartland.

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by: desmoinesdem @ Tue Sep 23, 2008 at 11:58:46 AM UTC

Serious? - Then Support a Wealth Tax (4.00 / 3)

If this is really a crisis requiring an immediate $700 billion fix, then Bush, Paulson, Bernanke, and Republican Congresscritters should be willing to go along with a wealth tax to pay for this bailout, right? If they are not willing to pay for this bailout with a wealth tax, then they are not really serious. A one-time wealth tax on those who have a net worth of greater than $10 million could pay much of the bill. Such a tax would reduce rich people's wealth, but probably not below the level of 2001 before the Bush administration allowed this Ponzi scheme to get out of hand.

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by: RandomNonviolence @ Tue Sep 23, 2008 at 12:33:26 PM UTC

I hear Frank wants to roll over for Paulson (0.00 / 0)

Is this just ego?  He just doesn't want to appear to be playing second fiddle to Dodd?  Or is Hoyer pulling his strings?

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by: Taylor @ Tue Sep 23, 2008 at 12:43:34 PM UTC

we're bailing out the WRONG PEOPLE... (4.00 / 1)

(sorry for the repeated post, i had it buried under 25 others in another post but i wanted to see what anybody actually thought about it:)

...700,000,000,000 is a lot of money.
Giving it to the corporations only solves the corporation's problems.  But there are still real people losing thier houses all over the country because of these same corporations.

Why not spread it over every bad mortgage in the country, instead? that way, the debt is NO LONGER BAD, and the companies don't NEED bailing out?

How many homes have this variable rate mortgage that is screwing everyone?  20 million? maybe? i'm being serious--whats the number??

assuming it's 20 million,---

700,000,000,000/20,000,000 = $35,000

If each of the assumed 20 million households suddenly had 35k that they legally could only use (like a gift card that won't work for gas or a transit credit card for train fare only) for paying towards thier house....wouldnt they all suddenly have the leverage they need to re-finance thier mortgages with a lower payment and without the balooning monthly payments?

Somebody smarter than me tell me how many forclosures there really are...i dont see why we can't save the companies from thier bad debt by making it GOOD debt.. wouldnt 35k be enough to get most people over the hump forcing them to forclose? if by recieving it they had to agree to get it refinanced, and that the mortgage companies would agree to this becuase it would mean killing the bad debt, just the same?

why give money to the bad guy instead of the small guy?

Can somebody tell me why this is a bad idea? unless my estimate of 20 million homes is way low, i don't see the downside.  

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by: useruseruser @ Tue Sep 23, 2008 at 12:59:16 PM UTC

Almost guaranteed not to happen (0.00 / 0)

I kinda like this idea, but I'm sure that republicans with no sense of irony would whine about how it was an unfair gift to people who acted irresponsibly and bought houses they couldn't afford and it would never even get off the ground.

Just for the sake of academic exercise, doing some fuzzy math with the numbers on wikipedia (couldn't find the exact numbers needed) might suggest something like 25 million bad mortgages. Calculated a different way with different numbers suggests about $1.1 trillion in bad mortgages.

To solve the problem you'd only need to cover a small percentage of that and then do something about renegotiating a lot of those ARMs and whatnot.

I think I saw this idea suggested on a different blog yesterday and they estimated you could solve the crisis this way for like 10% of the cost of the currently proposed bailout.

My only question about this is whether fixing those mortgages is enough. I think the other problem causing the crisis is that a lot of these banks and firms have assets leveraged up to 30:1. If that's a big part of the problem then giving money to people in foreclosure won't be enough.

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by: morgan @ Tue Sep 23, 2008 at 13:52:17 PM UTC

[ Parent ]

No one knows which mortgages are bad (4.00 / 2)

There are mortgages that are in default, which are a small part of the problem (maybe 2-5% of all mortgages).  There are millions of subprime mortgages which may or may not become bad.  Because the financing devices were so diverse, and the standards lax or not applied at all, analyzing the risk of each mortgage is an impossible task.

These mortgages were bundled together - good and bad - and securities issued backed by the mortgages.  No one knows the value of the securities.

As I understand it - and my knowledge is limited - the issue isn't just bad mortgages, but the impossibility of valuing the securities.  The system is seized up by uncertainty, and now credit is getting unreasonably tight.  If there was a good estimate of the number of bad mortgages, and if there were a way to unravel the good from the bad, we wouldn't have a "crisis" - just a lot of bad debt that the system could address and absorb without freezing.

IF, maybe, we had done the right thing at the outset, and bailed out the homeowners a year ago, then maybe the crisis would have been lessened, because the fear of the bad loans would have been reduced.  

I think the idea is that, if the government buys enough securities the holders think are bad, the market will decide that the remaining securities must be good enough to trade, or that it will have a way to unload the worst of them.  Then credit will flow more freely.  Housing prices will rise and the cycle reverse.  But, if the market is frozen, it will rapidly spiral downward.

It still makes sense to me to hit both ends of the problem - shore up the bad mortgages at the borrowers' end as well as the investment end.  But right now the most dramatic problem is at the investment end.

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by: kanzeon @ Tue Sep 23, 2008 at 14:31:45 PM UTC

[ Parent ]

"student loans won't go through" NOT True (0.00 / 0)

Student Loans for the fall term have already been dispensed.  The threat that they will not be is bogus.  Hope the Dems talk to students or their parents and do not fall for this lie.

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by: eyesonthestreet @ Tue Sep 23, 2008 at 13:58:13 PM UTC

Make any bailout effective Jan. 21 (0.00 / 0)

The markets will know the money is coming so they should calm down. The question for the voter then becomes who do you want choosing how the money gets spent: John McCain and Sarah Palin with the help of folks like Phil Gramm or Barack Obama and Joe Biden with the help of folks like Paul Volker and Robert Rubin....

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by: Jim in Chicago @ Tue Sep 23, 2008 at 17:02:37 PM UTC

Idea (0.00 / 0)

Impose conditions on Wall Street such as those in Senator Dodd's proposal but not give Wall Street any of the money.  

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by: Airpower @ Tue Sep 23, 2008 at 20:12:28 PM UTC