Exasperation

>>Chaos, disaster, shock…that’s playing on Republican home turf!Sure, but what I’m saying is that our team has been shouting ‘impending disaster’ for several years now.

Agreed that something needs to be done, but not “something, anything”. Many of us knew, on a personal level, that it was all going to fall apart, because you can’t sustain an economy based solely on services – there has to be goods manufactured and innovation and infrastructure maintenance. I don’t believe that throwing $700 billion at Wall St. solves the underlying problems with the economy – especially when the Treasury Dep’t admits that they don’t know the amount needed so they picked “a really big number”.Use some of that $700 billion to create real jobs – public works projects for roads, schools, bridges, water systems, installing alternative energy systems in public buildings, etc. Increased employment increases taxes and supports the service and retail industries. Let’s rely less on credit and more on real money.The idea that the people who pushed consumers to take out home equity loans to pay off large credit card debts (equity loans are tax deductible, interest on credit cards is not…) need this huge infusion of cash because people couldn’t pay off their mortgages is slightly illogical. Yes, the credit markets need to be unfrozen but I don’t see how that helps people to pay the mortgages, even if restructured. Joblessness is a big & growing problem and having the gov’t take on a ton of bad debts doesn’t help anyone who needs a job.It appears that whatever they come up with, it’s not going to help people like me …so what’s in it for us, who have already lost their homes, besides saddling our children & their children with the interest on a tremendous debt caused by a plan that no one knows will work?And yes, it’s disingenuous for liberals to suggest that nothing be done. We’re all in this together and having the economy totally collapse is not an option.sorry, for being so long-winded. It’s something I feel passionately about.

Bob, I agree with you 100%. I don’t think anyone in their right mind logically wants taxpayers to bail out the idiots who created this mess in the first place, but unfortunately we are all interconnected with mortgages, credit accounts, mutual funds, 401Ks and on and on. I don’t know if they’ve convinced me, but I believe that to do nothing would be catastrophic. I don’t consider it a bailout as much as a loan, a fucking ginormous loan, but a loan nonetheless, and if safeguards and strict oversight are out in place once a plan is conceived, then I think there isn’t much of a choice. It doesn’t make sense to give the same people who fucked up in the first place another chance to rob us blind without watching the purse strings.

Well, Bob…We keep hearing that the market will correct itself, and we have a presidential candidate that believes in a bottom-up approach. The republicans have just come out with an ideological “solution” involving more deregulation, and more tax incentives – bound to create yet another bubble, and postpone the disaster for about 10 – 20 years if we’re lucky. Where’s our bottom up solution?Democrats are once again reacting instead of acting, and this includes Senator Obama. He’s supposed to be the guy with the ideas. The administration throws a wild punch and the democrats react to correct the course of the punch – with the predictable result of the punch landing solidly in their faces. Very smart (only, not).Meanwhile, Republicans regrouped and came up with an idea true to their principles and completly ignoring the Paulson deal. Why? Because in face of crisis – they decided to be actors. And they are in a fair way of being able to pull public opinion to their side. In a year when Democrats should absolutely win – especially on the economy, Democrats could very well lose.You know anybody who can pull the ears of these folks? Anyone got an in with Senator Obama? One thing is clear – the majority of Americans HATE the idea of this bailout, and those of us who have such high hopes for an Obama presidency are watching our hopes get sucked down the drain. Health care? Gone. $4000 college credit? Gone. Expanded peace corps? Gone. Etc., etc., etc. Darned straight Obama should be coming up with an idea that doesn’t sink his budget before he even gets the nod. At this rate, he may not get it. QT

A couple of proactive suggestions:1. The $700Bln number is artificial. It wouldn’t take a rocket surgeon to figure out what the actual risk is for defaults, based on current stats, which is the core of the value proposition here. Once we know our risk for complete loss, we have something to base the bailout on. Said another way, if we took EVERY homeowner (not speculator, etc) out of default and guaranteed their loan for a year, say, what would that cost? My back of the napkin guess is $200Bln including overhead. Doing that would restore faith in MBS’s (Mortgage Backed Securities). They represent “real” value. Stability in that market would open up liquidity, and we could regulate who gets access to that liquidity so that we’re certain it’s servicing instruments that add to overall economic core growth (goods not services)2. The derivatives market is gonna be the black hole in this whole equation. You can’t have instruments leveraged 30x and expect things not to crater (which, admittedly is a McCain term, but it’s appropriate…and I’m sure he stole it from somebody anyway). Yes, these are tied to a host of other investments that impact consumers, but, it’s the market. People take risks. Maybe there’s a way to demonstrate hardship that could guide a govt buy-back for older folks who were relying on that money to literally survive. No good answer here, unfortunately, which is why the Treasury has chosen (imo) to attempt to keep it on life-support and hope for the best. Honestly, I think this is where the most pain will be felt.(more later)