Who are we really worried about?

Jim Cramer, the bailout’s biggest cheerleader, was on Hardball tonight and Chris Matthews asked him to explain Paulson’s Armageddon scenario. To which Cramer replied that we would see the failure of the nation’s biggest S & L (Washington Mutual) and many smaller banks. SFW! The depositors are all federally insured anyway. And their deposits aren’t close to $700 billion.

Goldman Sachs just got a $5 Billion investment from Warren Buffet. Bank Of America, J P Morgan Chase, Wells Fargo, Citibank are all in fairly good shape even if they do hold some of this toxic stuff. So is this whole $700 billion is to bail out WaMu, some foreign banks and a bunch of small banks that should not be in business? As I said earlier in the week, during the 1989-91 down cycle, 25% of the publicly traded financial companies “went away” either by merger, acquisition or bankruptcy. So far in this cycle that figure is only 8% .

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0 Responses to Who are we really worried about?

  1. len says:

    So if we don’t need $700 billion to bail out the perps, why is the number presented that large?

    How would not doing this affect the people with the bad mortgages?

    I don’t mind seeing the banks belly up. I’d certainly like to see justice for investors in the form of some managers in the pokey or at least, living a life of reduced expectations. I’m concerned about these maps that show entire swaths of major cities foreclosing and putting the current inhabitants on the road to nowhere.

    So what should I be worried about?

  2. len says:

    So if we don’t need $700 billion to bail out the perps, why is the number presented that large?

    How would not doing this affect the people with the bad mortgages?

    I don’t mind seeing the banks belly up. I’d certainly like to see justice for investors in the form of some managers in the pokey or at least, living a life of reduced expectations. I’m concerned about these maps that show entire swaths of major cities foreclosing and putting the current inhabitants on the road to nowhere.

    So what should I be worried about?

  3. museincognito says:

    So part of the moral of this story is to not only have a diversified portfolio, but have a diversified diversified portfolio….

  4. museincognito says:

    So part of the moral of this story is to not only have a diversified portfolio, but have a diversified diversified portfolio….

  5. museincognito says:

    @Len

    Evil of me, but I have little sympathy for most of the people who bought homes knowing full well they where stretching themselves way too thin. Just because you want something doesn’t mean you can have it. Mortgages in affluent suburbs are defaulting. There are, of course many who were not savvy enough to understand the particulars, but they should still keep what they couldn’t/can’t afford? Huh? Entire neighborhoods are going to go under and that’s a shame, but, as is said, that’s the way the ball bounces. One word: rent.

    To put it mildly, the whole credit thing has been completely out of control. (And those in charge have been absolutely cognizant of it while it’s been happening – and profiting.) We haven’t even seen bottom yet. Credit has been extended far beyond just mortgages….

    $700+B into one sector (the creditors/bankers who have knowingly contributed to this crisis), when the big picture has yet to be fully realized, is foolish.

  6. museincognito says:

    @Len

    Evil of me, but I have little sympathy for most of the people who bought homes knowing full well they where stretching themselves way too thin. Just because you want something doesn’t mean you can have it. Mortgages in affluent suburbs are defaulting. There are, of course many who were not savvy enough to understand the particulars, but they should still keep what they couldn’t/can’t afford? Huh? Entire neighborhoods are going to go under and that’s a shame, but, as is said, that’s the way the ball bounces. One word: rent.

    To put it mildly, the whole credit thing has been completely out of control. (And those in charge have been absolutely cognizant of it while it’s been happening – and profiting.) We haven’t even seen bottom yet. Credit has been extended far beyond just mortgages….

    $700+B into one sector (the creditors/bankers who have knowingly contributed to this crisis), when the big picture has yet to be fully realized, is foolish.

  7. Valerie Curl says:

    This is a big deal. Probably larger than the S&L crisis of the ’80s. And it could have been avoided. That is the sad part of this financials meltdown. With proper oversight and transparency and better rules regulating the rating agencies, even the housing values decline might not have brought on this current financials mess.

    Three things need to be taken into consideration:

    1) The mantra of Investment backs is to make as much money as possible for investors. For the last 8 to 10 years, the highest profits were in real estate. Ergo, the money went to real estate. When the housing market slumped, investment banks were left with a huge number of mortgage packages that had lost their value. Not all of the thousands of mortgages that made up these packages are from sub-prime mortgages. Actually, relatively few are sub-prime. Most are current, up to date mortgages. But real estate in toto has decreased in value.

    2) The reason why this matters is because it has led to what is called a credit crunch. Actually, it’s a credit halt. Banks are not lending money. Both individuals and companies rely upon accessible credit. Without credit availability, businesses will have to lay off staff and in many cases go out of business. Unemployment will rise immeasurably. Plus, businesses will not be able to afford to buy inventory without credit lines. Without inventory, businesses will go out of business. For individuals, it means not only the inability to obtain credit to purchase items but will mean much higher rates, if those individuals have spotless, exceptionally high credit ratings. The result is fewer buyers for larger ticket items such as automobiles, houses, and student loans.

    3) If this country doesn’t get it’s market financial house in order, we will fall into a deep recession or perhaps depression. Bernake is a student of the Great Depression and the Japanese recession which lasted over 10 years. He wouldn’t be pushing for this buy out if he didn’t think it necessary. Mind you, the proposal from Treasury is not without a great many flaws which Congress must address.

    And Congress must address the buyout proposal quickly and seriously. Each and every day the market falls. Today it lost 169 points. Yesterday it dropped another triple digit figure. While you may say who cares, I suggest you look at the value of your pension fund or 401k or IRA. Every day the NASHAQ or S&P 500 or DJIA goes down, you loose money.

    If you want to understand the matter better, check out the Charlie Rose Show:
    http://www.charlierose.com/guests/alan-blinder

  8. Valerie Curl says:

    This is a big deal. Probably larger than the S&L crisis of the ’80s. And it could have been avoided. That is the sad part of this financials meltdown. With proper oversight and transparency and better rules regulating the rating agencies, even the housing values decline might not have brought on this current financials mess.

    Three things need to be taken into consideration:

    1) The mantra of Investment backs is to make as much money as possible for investors. For the last 8 to 10 years, the highest profits were in real estate. Ergo, the money went to real estate. When the housing market slumped, investment banks were left with a huge number of mortgage packages that had lost their value. Not all of the thousands of mortgages that made up these packages are from sub-prime mortgages. Actually, relatively few are sub-prime. Most are current, up to date mortgages. But real estate in toto has decreased in value.

    2) The reason why this matters is because it has led to what is called a credit crunch. Actually, it’s a credit halt. Banks are not lending money. Both individuals and companies rely upon accessible credit. Without credit availability, businesses will have to lay off staff and in many cases go out of business. Unemployment will rise immeasurably. Plus, businesses will not be able to afford to buy inventory without credit lines. Without inventory, businesses will go out of business. For individuals, it means not only the inability to obtain credit to purchase items but will mean much higher rates, if those individuals have spotless, exceptionally high credit ratings. The result is fewer buyers for larger ticket items such as automobiles, houses, and student loans.

    3) If this country doesn’t get it’s market financial house in order, we will fall into a deep recession or perhaps depression. Bernake is a student of the Great Depression and the Japanese recession which lasted over 10 years. He wouldn’t be pushing for this buy out if he didn’t think it necessary. Mind you, the proposal from Treasury is not without a great many flaws which Congress must address.

    And Congress must address the buyout proposal quickly and seriously. Each and every day the market falls. Today it lost 169 points. Yesterday it dropped another triple digit figure. While you may say who cares, I suggest you look at the value of your pension fund or 401k or IRA. Every day the NASHAQ or S&P 500 or DJIA goes down, you loose money.

    If you want to understand the matter better, check out the Charlie Rose Show:
    http://www.charlierose.com/guests/alan-blinder

  9. Rick Turner says:

    “The sky is falling; the sky is falling!” Attribution: Chicken Little.

    Cashed in my meager 401k about two months ago; never trusted it anyway.

    Let’s all line up behind Bernake and Paulson because clearly only they are smart enough to get us out of this. Oh…they didn’t notice we were slipping into this? Oh, damn!

    Let me tell you a little tale. Many Thankgivings ago…round about 1980 or so…I sat next to a woman who had been in the Peace Corps during the Iranian Revolution in which the Shah was booted from office and the Ayatollah took over. The woman said that the changes in Tehran and other cities in Iran were huge…but to the average Iranian peasants, it was no more nor less than a year of somewhat below average rain. The poor couldn’t get a hell of a lot poorer, while the rich thought…yes…the sky was falling. The rich have a lot more to lose than the average schmuck on the street, and so you’re looking at a whole bunch of us who think that since the rich brought this upon themselves and it can’t get a hell of a lot worse for the rest of us…I mean even the homeless eat meals…screw ‘em. This might just be the great leveling of the playing field that this country needs. Yes, soup lines, CCC camps, and artists painting murals in post offices. And maybe a few bankers jumping out of windows because their greedy pride is in the way of their hearts. Fuck ‘em. I’m ready to go hobo if that’s what it takes for the revolution.

  10. Rick Turner says:

    “The sky is falling; the sky is falling!” Attribution: Chicken Little.

    Cashed in my meager 401k about two months ago; never trusted it anyway.

    Let’s all line up behind Bernake and Paulson because clearly only they are smart enough to get us out of this. Oh…they didn’t notice we were slipping into this? Oh, damn!

    Let me tell you a little tale. Many Thankgivings ago…round about 1980 or so…I sat next to a woman who had been in the Peace Corps during the Iranian Revolution in which the Shah was booted from office and the Ayatollah took over. The woman said that the changes in Tehran and other cities in Iran were huge…but to the average Iranian peasants, it was no more nor less than a year of somewhat below average rain. The poor couldn’t get a hell of a lot poorer, while the rich thought…yes…the sky was falling. The rich have a lot more to lose than the average schmuck on the street, and so you’re looking at a whole bunch of us who think that since the rich brought this upon themselves and it can’t get a hell of a lot worse for the rest of us…I mean even the homeless eat meals…screw ‘em. This might just be the great leveling of the playing field that this country needs. Yes, soup lines, CCC camps, and artists painting murals in post offices. And maybe a few bankers jumping out of windows because their greedy pride is in the way of their hearts. Fuck ‘em. I’m ready to go hobo if that’s what it takes for the revolution.

  11. Seth says:

    There were 1.1 million mortgages in foreclosure as of a few months ago. 8.8 million homeowners, (10.3% of the single-family housing stock), are expected to have zero or negative equity as of a few months ago, rising potentially to over 20 million if the housing market bottoms at -30%. Compare these numbers to 51 million households with mortgages.

    Mortages and MBS/CDO based on them are now being priced (when there is a bid) on greatly increased “probability of default” plus greatly increased risk aversion.

    What I’m “afraid of” is a domino effect which 1) bankrupts all the banks Cramer mentioned, 2) tightens credit for everybody, 3) reduces economic activity unrelated to mortgages. This is already getting disorderly and chaotic. If it gets too far it may be irreversible without a deep and long-lasting economic contraction.

    Obviously, there should be accountability (starting with no golden parachutes) for the bozos who got us here, bipartisan oversight, etc. Also I think we can afford to let Congress debate this for a while. Part of the needed effect is psychological anyway.

    btw: Thanks, Valerie for the Charlie Rose link, his reporting has been outstanding these past several weeks. Here’s agraphic at the WSJ which confirms your comparison to the S&L bailout. I’ve seen an even better one recently, but can’t locate it at the moment.

  12. Seth says:

    There were 1.1 million mortgages in foreclosure as of a few months ago. 8.8 million homeowners, (10.3% of the single-family housing stock), are expected to have zero or negative equity as of a few months ago, rising potentially to over 20 million if the housing market bottoms at -30%. Compare these numbers to 51 million households with mortgages.

    Mortages and MBS/CDO based on them are now being priced (when there is a bid) on greatly increased “probability of default” plus greatly increased risk aversion.

    What I’m “afraid of” is a domino effect which 1) bankrupts all the banks Cramer mentioned, 2) tightens credit for everybody, 3) reduces economic activity unrelated to mortgages. This is already getting disorderly and chaotic. If it gets too far it may be irreversible without a deep and long-lasting economic contraction.

    Obviously, there should be accountability (starting with no golden parachutes) for the bozos who got us here, bipartisan oversight, etc. Also I think we can afford to let Congress debate this for a while. Part of the needed effect is psychological anyway.

    btw: Thanks, Valerie for the Charlie Rose link, his reporting has been outstanding these past several weeks. Here’s agraphic at the WSJ which confirms your comparison to the S&L bailout. I’ve seen an even better one recently, but can’t locate it at the moment.

  13. Greg G says:

    This may be completely off the wall, and completely without economic theory (or maybe even intelligence)… but could Warren Buffet be sending us all a message? Like aliens trying to communicate with us that “it’s OK, hang on there little people, it’s a crock, GS ain’t goin’ nowhere anytime soon, be brave…”

  14. Greg G says:

    This may be completely off the wall, and completely without economic theory (or maybe even intelligence)… but could Warren Buffet be sending us all a message? Like aliens trying to communicate with us that “it’s OK, hang on there little people, it’s a crock, GS ain’t goin’ nowhere anytime soon, be brave…”

  15. Fentex says:

    Claims that the sky is falling but it can be propped up again by a government bailout seem odd to me.

    If the unsupported liabilities are so great the U.S (and aligned) economies will fail under them how does shifting numbers on the balance sheet from private to public columns make a difference?

    All it would appear to do is shift harm slightly and allow certain private investments to rescue some wealth for themself.

    I don’t understand where the benefit to the taxpayer could be.

    Jon appears to be asking for some hope of an benefit by making the bailout a secured loan (although I question the value of the stocks used as security), but isn’t this just perpetuating the original mistake by someone else yet again buying bad debt for worthless security?

  16. Fentex says:

    Claims that the sky is falling but it can be propped up again by a government bailout seem odd to me.

    If the unsupported liabilities are so great the U.S (and aligned) economies will fail under them how does shifting numbers on the balance sheet from private to public columns make a difference?

    All it would appear to do is shift harm slightly and allow certain private investments to rescue some wealth for themself.

    I don’t understand where the benefit to the taxpayer could be.

    Jon appears to be asking for some hope of an benefit by making the bailout a secured loan (although I question the value of the stocks used as security), but isn’t this just perpetuating the original mistake by someone else yet again buying bad debt for worthless security?

  17. Fentex says:

    Claims that the sky is falling but it can be propped up again by a government bailout seem odd to me.

    If the unsupported liabilities are so great the U.S (and aligned) economies will fail under them how does shifting numbers on the balance sheet from private to public columns make a difference?

    All it would appear to do is shift harm slightly and allow certain private investments to rescue some wealth for themself.

    I don’t understand where the benefit to the taxpayer could be.

    Jon appears to be asking for some hope of an benefit by making the bailout a secured loan (although I question the value of the stocks used as security), but isn’t this just perpetuating the original mistake by someone else yet again buying bad debt for worthless security?

  18. Rick Turner says:

    What this is is this…(partial faux pallindrome…):

    Anyone want to buy a used bubble?

    Oh, it popped…

  19. Rick Turner says:

    What this is is this…(partial faux pallindrome…):

    Anyone want to buy a used bubble?

    Oh, it popped…

  20. Ken Ballweg says:

    Actually, Valerie, this country needs a massive dose of economic correction as happened in Japan, for exactly the same reason. We are so over extended on credit from top to bottom, there will be a price eventually. If not now, then later at a larger price. The notion that more credit is the fix, is suggesting the cure for an addiction is more of the substance being abused. That’s simply unsustainable.

    A 700 billion bailout smacks of the final BushCo looting of the treasury before the perps blow town. Seriously. This is the most corrupt, and incompetent administration ever. Makes the robber barons look like amateurs.

    What is being looked for here is the next Ponzie scheme, this time with taxpayers being the bottom of the pyramid. It delays the inevitable. If the rich suffer, well consider it comeuppance for being so damn greedy in the first place. If the poor suffer, as Rick didn’t realize he was saying, “The peasants can pay now or pay later.” but they will pay.

    Japan survived the deep recession they got into over a real estate bubble that had to be corrected, and, having recently been there, I can testify they are doing fine. Britain post Thatcher had a hell of a hole to climb out of, and while not doing fine, they have not collapsed. Sweden did a massive bailout, but made damn good and sure the only people to really profit was the commonweal.

    Here’s my take. Let it all go down. Has to sooner or later, and this is nothing but the current admins desperation to make sure it happens on the next pres’s watch.

    Bail if need be, but only by buying at a reduced (i.e. distress sale) price, and hang on to the assets until after the recovery, just like Buffett is going to do.

    For people that got screwed by boards and execs the stockholders who took the bath need to join in a class action suit that will bugger the bastards. If the rational for the past years of greed was the lawyers saying that boards and execs had a due diligence requirement to maximize profits, and they didn’t have any choice but to be piratical profiteers, the law made them do it. Well, they created that law, now use it against them, because having your stock value be wiped out by stupidity certainly indicates a lack of due diligence.

    I’m deadly serious about this, and any associate of a law firm that wants to take it on, my wife is ready to join the class against the Fammie/ Freddie management.

    I think a lot of us here understand only too well Valerie, We or our kids are going to lose, and unless the bailout is structured as a straight nationalization (oh the irony of BushCo being responsible for that), investors need to live by their mantra of the market is self correcting and the weak get culled.

    The wealthy, their apologists (like you) and the panicked need to understand the level of anger and distrust in this county. As Jon says, we cannot trust the current admin to give us an assessment of the consequences, and as I say, the hit is going to come sooner or later. You invest in junk, you loose your money. End of sgtory. How does billions in tax payer money change the worthlessness of the JUNK, except by creating an artificial bubble in order to help the monied class sustain the myth that it is all sustainable.

    I already have a war in Iraq to pay for, complete with billions in fraud going unpunished, and an inflated bill from mercenaries being used at a premium price to avoid having to bring back the draft. Let trickle down economics have its day, it created it. It needs to suffer it. And the public needs to suffer enough to never trust the lying bastards that got us here again.

    Seriously: class action suit against the management of failed publicly traded entities. If you were a stock holder, don’t get mad, get even.

  21. Ken Ballweg says:

    Actually, Valerie, this country needs a massive dose of economic correction as happened in Japan, for exactly the same reason. We are so over extended on credit from top to bottom, there will be a price eventually. If not now, then later at a larger price. The notion that more credit is the fix, is suggesting the cure for an addiction is more of the substance being abused. That’s simply unsustainable.

    A 700 billion bailout smacks of the final BushCo looting of the treasury before the perps blow town. Seriously. This is the most corrupt, and incompetent administration ever. Makes the robber barons look like amateurs.

    What is being looked for here is the next Ponzie scheme, this time with taxpayers being the bottom of the pyramid. It delays the inevitable. If the rich suffer, well consider it comeuppance for being so damn greedy in the first place. If the poor suffer, as Rick didn’t realize he was saying, “The peasants can pay now or pay later.” but they will pay.

    Japan survived the deep recession they got into over a real estate bubble that had to be corrected, and, having recently been there, I can testify they are doing fine. Britain post Thatcher had a hell of a hole to climb out of, and while not doing fine, they have not collapsed. Sweden did a massive bailout, but made damn good and sure the only people to really profit was the commonweal.

    Here’s my take. Let it all go down. Has to sooner or later, and this is nothing but the current admins desperation to make sure it happens on the next pres’s watch.

    Bail if need be, but only by buying at a reduced (i.e. distress sale) price, and hang on to the assets until after the recovery, just like Buffett is going to do.

    For people that got screwed by boards and execs the stockholders who took the bath need to join in a class action suit that will bugger the bastards. If the rational for the past years of greed was the lawyers saying that boards and execs had a due diligence requirement to maximize profits, and they didn’t have any choice but to be piratical profiteers, the law made them do it. Well, they created that law, now use it against them, because having your stock value be wiped out by stupidity certainly indicates a lack of due diligence.

    I’m deadly serious about this, and any associate of a law firm that wants to take it on, my wife is ready to join the class against the Fammie/ Freddie management.

    I think a lot of us here understand only too well Valerie, We or our kids are going to lose, and unless the bailout is structured as a straight nationalization (oh the irony of BushCo being responsible for that), investors need to live by their mantra of the market is self correcting and the weak get culled.

    The wealthy, their apologists (like you) and the panicked need to understand the level of anger and distrust in this county. As Jon says, we cannot trust the current admin to give us an assessment of the consequences, and as I say, the hit is going to come sooner or later. You invest in junk, you loose your money. End of sgtory. How does billions in tax payer money change the worthlessness of the JUNK, except by creating an artificial bubble in order to help the monied class sustain the myth that it is all sustainable.

    I already have a war in Iraq to pay for, complete with billions in fraud going unpunished, and an inflated bill from mercenaries being used at a premium price to avoid having to bring back the draft. Let trickle down economics have its day, it created it. It needs to suffer it. And the public needs to suffer enough to never trust the lying bastards that got us here again.

    Seriously: class action suit against the management of failed publicly traded entities. If you were a stock holder, don’t get mad, get even.

  22. Seth says:

    The fact that Cramer can’t explain it on Hardball proves very little.

    The threat is the domino effect — good companies taken down with the bad, productive employment taken down with the unproductive. I hope everybody here has read JK Galbraith’s classic “The Great Crash” … it’s the definitive account of the way deleveraging creates havoc.

    I liked Chuck Schumer’s question: why not $150B now and reevaluate in January?

  23. Seth says:

    The fact that Cramer can’t explain it on Hardball proves very little.

    The threat is the domino effect — good companies taken down with the bad, productive employment taken down with the unproductive. I hope everybody here has read JK Galbraith’s classic “The Great Crash” … it’s the definitive account of the way deleveraging creates havoc.

    I liked Chuck Schumer’s question: why not $150B now and reevaluate in January?

  24. woodnsoul says:

    I think the issue is comparable to having a leech on you. Do you get rid of the leech or get a blood transfusion?

    My vote is to get rid of the leech and let the body get well and whole again.

    It might be tough, but it will never be cheaper or easier than now.

  25. woodnsoul says:

    I think the issue is comparable to having a leech on you. Do you get rid of the leech or get a blood transfusion?

    My vote is to get rid of the leech and let the body get well and whole again.

    It might be tough, but it will never be cheaper or easier than now.

  26. Alex Bowles says:

    I think I know what people wedded to the last few years are scared of, but David Brooks has other ideas.

    Take a look at this, Jon.

    http://www.nytimes.com/2008/09/23/opinion/23brooks.html?em

    I think you, of all people, will really appreciate it.

    Cheers.

  27. Alex Bowles says:

    I think I know what people wedded to the last few years are scared of, but David Brooks has other ideas.

    Take a look at this, Jon.

    http://www.nytimes.com/2008/09/23/opinion/23brooks.html?em

    I think you, of all people, will really appreciate it.

    Cheers.

  28. Jon Taplin says:

    I think Warren Buffet was signaling in his own way that there are some very solid banks and they are worth investing in at today’s prices. In other words maybe we should not be panicking.

  29. Jon Taplin says:

    I think Warren Buffet was signaling in his own way that there are some very solid banks and they are worth investing in at today’s prices. In other words maybe we should not be panicking.

  30. Jon Taplin says:

    AB- Iread the Brooks piece this morning and smiled. I like that term Progressive Capitalism.

  31. Jon Taplin says:

    AB- Iread the Brooks piece this morning and smiled. I like that term Progressive Capitalism.

  32. Jon Taplin says:

    AB- Iread the Brooks piece this morning and smiled. I like that term Progressive Capitalism.

  33. Jon Taplin says:

    Seth- You may have a good point. Commit $100 billion and see if they can develop a “system” for buying at the best price, which after all is just a floor to the market.

  34. Jon Taplin says:

    Seth- You may have a good point. Commit $100 billion and see if they can develop a “system” for buying at the best price, which after all is just a floor to the market.

  35. Valerie Curl says:

    Ken, I’m not saying Bush and gang didn’t create this mess. They did. Trickle down economics had three chances to work. It failed each time. Deregulating the financial industry was an absolutely sure way to create a financial mess. More greed and selfishness occurs in financial sectors than anywhere else. More good companies have been bought, split up and sold off–with accompanying employee layoffs–than most people can imagine just so extraordinarily high profits can be made by the few.

    GWB and the Republicans brought on this mess and deserve to be wiped off the political map.

    But we have to deal with the mess. Your life and mine depend upon getting the credit market back up and working again. I assume you want to keep you job?

    Until stability in the financial market returns, credit will remain frozen. If that occurs, we are looking at a major recession. I’ve been through a few of them…I’d rather not go through another. Nevertheless, the Paulson plan needs a lot of work. It’s another GWB unworkable plan in it’s current form.

    But Congress must be diligent, show seriousness of purpose, and work quickly, or we’ll be bankrupt.

  36. Valerie Curl says:

    Ken, I’m not saying Bush and gang didn’t create this mess. They did. Trickle down economics had three chances to work. It failed each time. Deregulating the financial industry was an absolutely sure way to create a financial mess. More greed and selfishness occurs in financial sectors than anywhere else. More good companies have been bought, split up and sold off–with accompanying employee layoffs–than most people can imagine just so extraordinarily high profits can be made by the few.

    GWB and the Republicans brought on this mess and deserve to be wiped off the political map.

    But we have to deal with the mess. Your life and mine depend upon getting the credit market back up and working again. I assume you want to keep you job?

    Until stability in the financial market returns, credit will remain frozen. If that occurs, we are looking at a major recession. I’ve been through a few of them…I’d rather not go through another. Nevertheless, the Paulson plan needs a lot of work. It’s another GWB unworkable plan in it’s current form.

    But Congress must be diligent, show seriousness of purpose, and work quickly, or we’ll be bankrupt.

  37. Valerie Curl says:

    Ken, I’m not saying Bush and gang didn’t create this mess. They did. Trickle down economics had three chances to work. It failed each time. Deregulating the financial industry was an absolutely sure way to create a financial mess. More greed and selfishness occurs in financial sectors than anywhere else. More good companies have been bought, split up and sold off–with accompanying employee layoffs–than most people can imagine just so extraordinarily high profits can be made by the few.

    GWB and the Republicans brought on this mess and deserve to be wiped off the political map.

    But we have to deal with the mess. Your life and mine depend upon getting the credit market back up and working again. I assume you want to keep you job?

    Until stability in the financial market returns, credit will remain frozen. If that occurs, we are looking at a major recession. I’ve been through a few of them…I’d rather not go through another. Nevertheless, the Paulson plan needs a lot of work. It’s another GWB unworkable plan in it’s current form.

    But Congress must be diligent, show seriousness of purpose, and work quickly, or we’ll be bankrupt.

  38. Kitty says:

    Great joke on Leno tonight:

    So this is a correction? Maybe we should take everyone that caused it and put them in a correctional institution!

  39. Kitty says:

    Great joke on Leno tonight:

    So this is a correction? Maybe we should take everyone that caused it and put them in a correctional institution!

  40. museincognito says:

    Thanks AB. I like it, I like it.

    Where’d I put my “Anatomy of a Business Plan”….

  41. museincognito says:

    Thanks AB. I like it, I like it.

    Where’d I put my “Anatomy of a Business Plan”….

  42. Rachel says:

    FBI Probing Fannie, Freddie, AIG, Lehman in Subprime Collapse
    By Robert Schmidt

    Sept. 24 (Bloomberg) — The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and American International Group Inc. in its probe of the collapse of the subprime-mortgage market, according to a senior law-enforcement official.

    Those companies are among 26 being reviewed by the Federal Bureau of Investigation for possible accounting misstatements, said the official, who asked to remain unidentified. The investigations are preliminary, the official said late yesterday.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a_oZZHsX.QIM&refer=home

    Considering this has happened just after the last government bailout, at a guess I’d say it looks like the chances of Paulson’s bailout happening just went to close to zero.

  43. Rachel says:

    FBI Probing Fannie, Freddie, AIG, Lehman in Subprime Collapse
    By Robert Schmidt

    Sept. 24 (Bloomberg) — The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and American International Group Inc. in its probe of the collapse of the subprime-mortgage market, according to a senior law-enforcement official.

    Those companies are among 26 being reviewed by the Federal Bureau of Investigation for possible accounting misstatements, said the official, who asked to remain unidentified. The investigations are preliminary, the official said late yesterday.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a_oZZHsX.QIM&refer=home

    Considering this has happened just after the last government bailout, at a guess I’d say it looks like the chances of Paulson’s bailout happening just went to close to zero.

  44. Rachel says:

    FBI Probing Fannie, Freddie, AIG, Lehman in Subprime Collapse
    By Robert Schmidt

    Sept. 24 (Bloomberg) — The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and American International Group Inc. in its probe of the collapse of the subprime-mortgage market, according to a senior law-enforcement official.

    Those companies are among 26 being reviewed by the Federal Bureau of Investigation for possible accounting misstatements, said the official, who asked to remain unidentified. The investigations are preliminary, the official said late yesterday.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a_oZZHsX.QIM&refer=home

    Considering this has happened just after the last government bailout, at a guess I’d say it looks like the chances of Paulson’s bailout happening just went to close to zero.

  45. Jon Taplin says:

    Rachel- That’s quite a bombshell.

  46. Jon Taplin says:

    Rachel- That’s quite a bombshell.

  47. Seth says:

    I wonder if the FBI are taking a look at this fishy transfer from Lehman UK to Lehman US.

  48. Seth says:

    I wonder if the FBI are taking a look at this fishy transfer from Lehman UK to Lehman US.

  49. Seth says:

    Here’s an interesting case study in the way Credit Default Swaps were used in the alchemy of “credit enhancement”. When the “gold” turned back into lead, the CDS resulted in an interesting lawsuit.

    Read the comments, too. Often the best part, as we all know ;)

  50. Seth says:

    Here’s an interesting case study in the way Credit Default Swaps were used in the alchemy of “credit enhancement”. When the “gold” turned back into lead, the CDS resulted in an interesting lawsuit.

    Read the comments, too. Often the best part, as we all know ;)

  51. Seth says:

    One last thing — that lawsuit involves UBS.

    Guess who both ensured that CDS were unregulated and shortly thereafter went to work for UBS?

    Phil Gramm.

  52. Seth says:

    One last thing — that lawsuit involves UBS.

    Guess who both ensured that CDS were unregulated and shortly thereafter went to work for UBS?

    Phil Gramm.

  53. douglas newhouse says:

    Buffet must think that we are at or near the bottom–this is probably a good time to but stocks for those with courage–

  54. douglas newhouse says:

    Buffet must think that we are at or near the bottom–this is probably a good time to but stocks for those with courage–

  55. douglas newhouse says:

    Buffet must think that we are at or near the bottom–this is probably a good time to but stocks for those with courage–

  56. len bullard says:

    @museincognito:

    “Entire neighborhoods are going to go under and that’s a shame, but, as is said, that’s the way the ball bounces.”

    Ok. May having be as good as wanting.

    You seem to think this is entire neighborhoods of the well-off. It’s not. These are swaths of Detroit and other rust belt cities as well as downtown Atlanta. Perhaps as during the rust bowl, they will head out to the city of light on the hill that is California. Keep in mind, subprimes went to the people who WERE paying rent.

    “Rubber ball come a’ bouncin’ back to you”

  57. len bullard says:

    @museincognito:

    “Entire neighborhoods are going to go under and that’s a shame, but, as is said, that’s the way the ball bounces.”

    Ok. May having be as good as wanting.

    You seem to think this is entire neighborhoods of the well-off. It’s not. These are swaths of Detroit and other rust belt cities as well as downtown Atlanta. Perhaps as during the rust bowl, they will head out to the city of light on the hill that is California. Keep in mind, subprimes went to the people who WERE paying rent.

    “Rubber ball come a’ bouncin’ back to you”

  58. len bullard says:

    @museincognito:

    “Entire neighborhoods are going to go under and that’s a shame, but, as is said, that’s the way the ball bounces.”

    Ok. May having be as good as wanting.

    You seem to think this is entire neighborhoods of the well-off. It’s not. These are swaths of Detroit and other rust belt cities as well as downtown Atlanta. Perhaps as during the rust bowl, they will head out to the city of light on the hill that is California. Keep in mind, subprimes went to the people who WERE paying rent.

    “Rubber ball come a’ bouncin’ back to you”

  59. Rick Turner says:

    Mortgage holders are going to realize pretty quickly that unoccupied housed deteriorate rapidly and are targets for vandals and thieves stealing items like copper wire and plumbing. They’d better think in terms of keeping humans living in those houses or be ready to watch their toxic investments become worth even less.

  60. Rick Turner says:

    Mortgage holders are going to realize pretty quickly that unoccupied housed deteriorate rapidly and are targets for vandals and thieves stealing items like copper wire and plumbing. They’d better think in terms of keeping humans living in those houses or be ready to watch their toxic investments become worth even less.

  61. Kevin says:

    “Evil of me, but I have little sympathy for most of the people who bought homes knowing full well they where stretching themselves way too thin.”

    I’m not sure all the bad mortgages were the fault of the borrower. Banks typically have better info on the financial status of a borrower than the borrower does. The borrower will typically have a rosier outlook of their own situation, the bank should bring reality to the table.

    Robert X. Cringely is a tech columnist but talks about his own mortgage experience where the loan company doubled the income on his application because “that was the ratio needed to get the amount he applied for.”

    http://www.pbs.org/cringely/pulpit/2008/pulpit_20080704_005191.html

    Blame the borrowers isn’t exactly right when lenders were trying to shovel as much money as possible into people’s hands. Borrowers didn’t force banks to leverage at 30:1 or 40:1.

  62. Kevin says:

    “Evil of me, but I have little sympathy for most of the people who bought homes knowing full well they where stretching themselves way too thin.”

    I’m not sure all the bad mortgages were the fault of the borrower. Banks typically have better info on the financial status of a borrower than the borrower does. The borrower will typically have a rosier outlook of their own situation, the bank should bring reality to the table.

    Robert X. Cringely is a tech columnist but talks about his own mortgage experience where the loan company doubled the income on his application because “that was the ratio needed to get the amount he applied for.”

    http://www.pbs.org/cringely/pulpit/2008/pulpit_20080704_005191.html

    Blame the borrowers isn’t exactly right when lenders were trying to shovel as much money as possible into people’s hands. Borrowers didn’t force banks to leverage at 30:1 or 40:1.

  63. len bullard says:

    That’s is why downtown Atlanta is now a copper mine, Rick. Air conditioners, wiring, stoves, microwaves, you name it, if it has resale value, it gets plundered. Capitalism being ever adaptive, industries emerged to seal up the doors and windows with devices resembling steroid-inflicted Tupperware.

    A little tale from the Model Cities days: when they emptied the downtown and moved them into the homes being repossessed by and financed by the then new HUD, home values went south and never came up to the same level again. White flight followed and the money followed them.

    Those who can afford it get to move up. Those who can’t afford to move down, fall anyway. Sort of an equalization effect.

    Once on the move, hungry people go where the jobs are. Analysts are right that beneath all the paper and angst is a soggy job market and that is hard to fix during a credit crunch.

  64. len bullard says:

    That’s is why downtown Atlanta is now a copper mine, Rick. Air conditioners, wiring, stoves, microwaves, you name it, if it has resale value, it gets plundered. Capitalism being ever adaptive, industries emerged to seal up the doors and windows with devices resembling steroid-inflicted Tupperware.

    A little tale from the Model Cities days: when they emptied the downtown and moved them into the homes being repossessed by and financed by the then new HUD, home values went south and never came up to the same level again. White flight followed and the money followed them.

    Those who can afford it get to move up. Those who can’t afford to move down, fall anyway. Sort of an equalization effect.

    Once on the move, hungry people go where the jobs are. Analysts are right that beneath all the paper and angst is a soggy job market and that is hard to fix during a credit crunch.

  65. Ken Ballweg says:

    Len B, there isn’t a lot going into this plan that is going to help the black and mixed neighborhoods that have already been decimated, especially in Cleveland. Even if some lower level of mortgage relief finds its way into the final plan those folks are now like the Katrina victims: the ’08 version of the Grapes of Wrath. But helping that would require a bleeding heart social program, and we can’t afford to do social welfare… Oh wait, this just in, “social welfare fine if you are rich,since there is not enough to go around, no impoverished need apply.”

    This is blatantly an attempt to save hard core free market predatory capitalist from the consequences of their beliefs and behavior.

  66. Ken Ballweg says:

    Len B, there isn’t a lot going into this plan that is going to help the black and mixed neighborhoods that have already been decimated, especially in Cleveland. Even if some lower level of mortgage relief finds its way into the final plan those folks are now like the Katrina victims: the ’08 version of the Grapes of Wrath. But helping that would require a bleeding heart social program, and we can’t afford to do social welfare… Oh wait, this just in, “social welfare fine if you are rich,since there is not enough to go around, no impoverished need apply.”

    This is blatantly an attempt to save hard core free market predatory capitalist from the consequences of their beliefs and behavior.

  67. len bullard says:

    Yes, Ken. We are about to pay Peter for robbing Paul and investing in ship ballast by selling the ship’s cargo to the quarrymen.

  68. len bullard says:

    Yes, Ken. We are about to pay Peter for robbing Paul and investing in ship ballast by selling the ship’s cargo to the quarrymen.

  69. Ken Ballweg says:

    And Kevin’s right, there were a whole lot of middlemen in housing finance who were fed the ultimate ponzie incentive to push paper: “No worries, mate, housing values will increase forever and be able to cover this crazy looking commitment.” They bought and resold it in good faith. They didn’t really create it, but they should have questioned it. The smartest banker in New Jersey did and he is just fine right now thank you.

    One has to remember that the majority of the folks in finance (the WSJ crowd) believe their own BS and don’t have a clue that their assumptions about unlimited growth and trickle down, and free and unfettered markets are all saved from reality by the S&K bailout, the various credit bubbles, the deferred maintenance on infrastructure investment, the inequities of the tax system, the fear tactics of “government regulation and taxes = socialism” and all the smoke an mirrors they have used since Reagan to sustain this grand illusion.

    Unfettered capitalism shares more qualities with unfettered communist “socialism”, than we like to admit: it just kills out of sight and with an advertising sign hiding the damage. Inner cities, streets of homeless & mentally ill, labor camps of illegals, public schools in the deep south and inner city north, and trailer parks of sub living wage single parents, those are our gulags. Not as extreme as the peasant collectives yet or as genocidal, but if you checked in with those who have to live it you would find a misery index that is extreme and growing.

    But we HAVE to be able to afford such blatant social welfare to the rich or it all will collapse. Well, by it’s own logic it should collapse or else it lives to die another day with even more damage.

    The right disparages Obama’s stint as a community organizer, I see that and his pragmatism as his major assets.

  70. Ken Ballweg says:

    And Kevin’s right, there were a whole lot of middlemen in housing finance who were fed the ultimate ponzie incentive to push paper: “No worries, mate, housing values will increase forever and be able to cover this crazy looking commitment.” They bought and resold it in good faith. They didn’t really create it, but they should have questioned it. The smartest banker in New Jersey did and he is just fine right now thank you.

    One has to remember that the majority of the folks in finance (the WSJ crowd) believe their own BS and don’t have a clue that their assumptions about unlimited growth and trickle down, and free and unfettered markets are all saved from reality by the S&K bailout, the various credit bubbles, the deferred maintenance on infrastructure investment, the inequities of the tax system, the fear tactics of “government regulation and taxes = socialism” and all the smoke an mirrors they have used since Reagan to sustain this grand illusion.

    Unfettered capitalism shares more qualities with unfettered communist “socialism”, than we like to admit: it just kills out of sight and with an advertising sign hiding the damage. Inner cities, streets of homeless & mentally ill, labor camps of illegals, public schools in the deep south and inner city north, and trailer parks of sub living wage single parents, those are our gulags. Not as extreme as the peasant collectives yet or as genocidal, but if you checked in with those who have to live it you would find a misery index that is extreme and growing.

    But we HAVE to be able to afford such blatant social welfare to the rich or it all will collapse. Well, by it’s own logic it should collapse or else it lives to die another day with even more damage.

    The right disparages Obama’s stint as a community organizer, I see that and his pragmatism as his major assets.

  71. BobbyG says:

    I am a “Talebist.”

    Read his take on this shit:

    http://www.edge.org/3rd_culture/taleb08/taleb08_index.html

    He’s right.

  72. BobbyG says:

    I am a “Talebist.”

    Read his take on this shit:

    http://www.edge.org/3rd_culture/taleb08/taleb08_index.html

    He’s right.

  73. BobbyG says:

    I am a “Talebist.”

    Read his take on this shit:

    http://www.edge.org/3rd_culture/taleb08/taleb08_index.html

    He’s right.

  74. len bullard says:

    “The right disparages Obama’s stint as a community organizer, I see that and his pragmatism as his major assets.”

    I read the indictments against ACORN and see that as the hint that maybe he doesn’t meet specifications. I don’t disparage community organizers, but I do want to know what they are being organized to do.

    Let me be as clear as I can. I’m tweaking Taplin a bit because both sides of this have to be illuminated or we will once again believe we have won only to have consigned ourselves to moral failure.

    Looking at Obama’s background and associations, it appears that he is always willing to compromise values to win ever higher office. He then lies about that. To me, that is a failure of character so glaring that it cannot be ignored.

    Now we face a time of hard choices and diminishing expectations. So it will come down to who do you love when having to choose. Obama has consistently avoided those choices preferring to let others fight until there is a winner, then siding with the winner. He seems to have no center or is hollow.

    McCain for all the faults of his party, and those are undeniable, is at least a man with a center. He will and has made hard choices. He will do the right thing even if it stings if by that one means vote his values. He is reasonably consistent there.

    So once again, we are choosing the lesser of evils and I can’t for the life of me figure out which is less this time. There is so much fog on the ground, friendly fire is taking down more voters than I’ve seen since 72. With McCain, I know what I’m getting. I’m not totally convinced it is what I want but I understand him. The record is there. The actions are there. He’s predictable.

    Obama is what he said he is: a blank slate and everyone sees what they want to see. But behind that is a record of associations with people and events that are to any rational way of thinking, corrupt and self-serving. He may not be guilty by association, but then how can we credit him by deed if there are none?

    It goes to character and judgement. No these are not Republican talking points. I am not a Republican. I was a Democrat until this election. So yes, I am telling you what it looks like from here for me through the fog.

  75. len bullard says:

    “The right disparages Obama’s stint as a community organizer, I see that and his pragmatism as his major assets.”

    I read the indictments against ACORN and see that as the hint that maybe he doesn’t meet specifications. I don’t disparage community organizers, but I do want to know what they are being organized to do.

    Let me be as clear as I can. I’m tweaking Taplin a bit because both sides of this have to be illuminated or we will once again believe we have won only to have consigned ourselves to moral failure.

    Looking at Obama’s background and associations, it appears that he is always willing to compromise values to win ever higher office. He then lies about that. To me, that is a failure of character so glaring that it cannot be ignored.

    Now we face a time of hard choices and diminishing expectations. So it will come down to who do you love when having to choose. Obama has consistently avoided those choices preferring to let others fight until there is a winner, then siding with the winner. He seems to have no center or is hollow.

    McCain for all the faults of his party, and those are undeniable, is at least a man with a center. He will and has made hard choices. He will do the right thing even if it stings if by that one means vote his values. He is reasonably consistent there.

    So once again, we are choosing the lesser of evils and I can’t for the life of me figure out which is less this time. There is so much fog on the ground, friendly fire is taking down more voters than I’ve seen since 72. With McCain, I know what I’m getting. I’m not totally convinced it is what I want but I understand him. The record is there. The actions are there. He’s predictable.

    Obama is what he said he is: a blank slate and everyone sees what they want to see. But behind that is a record of associations with people and events that are to any rational way of thinking, corrupt and self-serving. He may not be guilty by association, but then how can we credit him by deed if there are none?

    It goes to character and judgement. No these are not Republican talking points. I am not a Republican. I was a Democrat until this election. So yes, I am telling you what it looks like from here for me through the fog.

  76. len bullard says:

    “The right disparages Obama’s stint as a community organizer, I see that and his pragmatism as his major assets.”

    I read the indictments against ACORN and see that as the hint that maybe he doesn’t meet specifications. I don’t disparage community organizers, but I do want to know what they are being organized to do.

    Let me be as clear as I can. I’m tweaking Taplin a bit because both sides of this have to be illuminated or we will once again believe we have won only to have consigned ourselves to moral failure.

    Looking at Obama’s background and associations, it appears that he is always willing to compromise values to win ever higher office. He then lies about that. To me, that is a failure of character so glaring that it cannot be ignored.

    Now we face a time of hard choices and diminishing expectations. So it will come down to who do you love when having to choose. Obama has consistently avoided those choices preferring to let others fight until there is a winner, then siding with the winner. He seems to have no center or is hollow.

    McCain for all the faults of his party, and those are undeniable, is at least a man with a center. He will and has made hard choices. He will do the right thing even if it stings if by that one means vote his values. He is reasonably consistent there.

    So once again, we are choosing the lesser of evils and I can’t for the life of me figure out which is less this time. There is so much fog on the ground, friendly fire is taking down more voters than I’ve seen since 72. With McCain, I know what I’m getting. I’m not totally convinced it is what I want but I understand him. The record is there. The actions are there. He’s predictable.

    Obama is what he said he is: a blank slate and everyone sees what they want to see. But behind that is a record of associations with people and events that are to any rational way of thinking, corrupt and self-serving. He may not be guilty by association, but then how can we credit him by deed if there are none?

    It goes to character and judgement. No these are not Republican talking points. I am not a Republican. I was a Democrat until this election. So yes, I am telling you what it looks like from here for me through the fog.

  77. Ken Ballweg says:

    You can say McCain has a consistent core he adheres to and be serious? That Obama is the one flapping in the wind? What is your source of news friend?

  78. Ken Ballweg says:

    You can say McCain has a consistent core he adheres to and be serious? That Obama is the one flapping in the wind? What is your source of news friend?

  79. museincognito says:

    LB,
    Make no mistake, I’m in a very urban environment (just that side of gentrification, happily juxtaposed as conscientious objector) where there have been more and more vacancies. It isn’t pretty, in some cases. I’m well aware of what’s to come and who will be hurt the most.

    I’m willing to guess that most people in my neighborhood are likely to have not known exactly what they were getting themselves into, but, not matter what any broker told them, they knew in their heart of hearts that they couldn’t really afford what they were buying. Hope springs eternal, but ultimately doesn’t pay the bills. I’m also well aware of the fact that everyone has been living well beyond their means. Everywhere. The “latte factor” or the “I just have to have the new IPhone and cable tv.”

    Let the banks fall. Someone like Buffet will be there to invest. Someone will see the financial opportunity and step in to help. Credit will be had, though in a much, much stricter fashion.

    The talk of a bubble bursting has been going around for years now. People haven’t been paying close attention if they are surprised at how serious our current situation really is. The kids in charge most certainly were aware and are now trying to delay the inevitable and skim an enormous amount of cash off the top on their way out. I love how they are now willing to concede to oversight and such. As if. Make it look like we’re getting things out of the deal…. lol!

    The reality check is here. It’s late, as far as I’m concerned. We’re going to need that serious chock o’ change to get the masses back on their feet and, at the same time, change our collective priorities. (And a really good Organizer to help make it happen.)

  80. museincognito says:

    LB,
    Make no mistake, I’m in a very urban environment (just that side of gentrification, happily juxtaposed as conscientious objector) where there have been more and more vacancies. It isn’t pretty, in some cases. I’m well aware of what’s to come and who will be hurt the most.

    I’m willing to guess that most people in my neighborhood are likely to have not known exactly what they were getting themselves into, but, not matter what any broker told them, they knew in their heart of hearts that they couldn’t really afford what they were buying. Hope springs eternal, but ultimately doesn’t pay the bills. I’m also well aware of the fact that everyone has been living well beyond their means. Everywhere. The “latte factor” or the “I just have to have the new IPhone and cable tv.”

    Let the banks fall. Someone like Buffet will be there to invest. Someone will see the financial opportunity and step in to help. Credit will be had, though in a much, much stricter fashion.

    The talk of a bubble bursting has been going around for years now. People haven’t been paying close attention if they are surprised at how serious our current situation really is. The kids in charge most certainly were aware and are now trying to delay the inevitable and skim an enormous amount of cash off the top on their way out. I love how they are now willing to concede to oversight and such. As if. Make it look like we’re getting things out of the deal…. lol!

    The reality check is here. It’s late, as far as I’m concerned. We’re going to need that serious chock o’ change to get the masses back on their feet and, at the same time, change our collective priorities. (And a really good Organizer to help make it happen.)

  81. len bullard says:

    I live in a neighborhood designed for those who refused to move in with the latte set where people come round with rulers to measure the height of lawns on the weekend. Every man/woman contracted to build their own house. That kept costs transparent and those that overbuilt found out fast as the requests to put more money in to the contractor’s account rolled in.

    Also, the majority of contractors in this neighborhood were Church of the Holiness, a Christian sect where they don’t marry outside the church, and practice asceticism of lifestyle (some are snake handlers but they are rare). Locally, they are just called “The Bunheads” because the women don’t wear makeup, make their own clothes, and wear their hair up which they let grow as long as possible.

    The beauty of these people as contractors is they also pretty much only hire within their church and they strictly enforce their own rules on the building site. So I never had a problem with coming to inspect and finding liquor bottles or men cursing in front of the my kids. It’s somewhat like having the Amish build your house. Pleasant and honest.

    At the acceptance inspection, my contractor handed my wife a check for funds left over that they had not used. Boy were we surprised!

    So some parts of this needed change really are cultural and are already in place as long as you accept the culture providing them has their own beliefs as well, and you can manage a contractor.

    This doesn’t have to be some wrenching cultural change led by a Presidential guru. It has to come from our own willingness to accept responsibility and measure our needs twice and cut once.

  82. len bullard says:

    I live in a neighborhood designed for those who refused to move in with the latte set where people come round with rulers to measure the height of lawns on the weekend. Every man/woman contracted to build their own house. That kept costs transparent and those that overbuilt found out fast as the requests to put more money in to the contractor’s account rolled in.

    Also, the majority of contractors in this neighborhood were Church of the Holiness, a Christian sect where they don’t marry outside the church, and practice asceticism of lifestyle (some are snake handlers but they are rare). Locally, they are just called “The Bunheads” because the women don’t wear makeup, make their own clothes, and wear their hair up which they let grow as long as possible.

    The beauty of these people as contractors is they also pretty much only hire within their church and they strictly enforce their own rules on the building site. So I never had a problem with coming to inspect and finding liquor bottles or men cursing in front of the my kids. It’s somewhat like having the Amish build your house. Pleasant and honest.

    At the acceptance inspection, my contractor handed my wife a check for funds left over that they had not used. Boy were we surprised!

    So some parts of this needed change really are cultural and are already in place as long as you accept the culture providing them has their own beliefs as well, and you can manage a contractor.

    This doesn’t have to be some wrenching cultural change led by a Presidential guru. It has to come from our own willingness to accept responsibility and measure our needs twice and cut once.

  83. len bullard says:

    I live in a neighborhood designed for those who refused to move in with the latte set where people come round with rulers to measure the height of lawns on the weekend. Every man/woman contracted to build their own house. That kept costs transparent and those that overbuilt found out fast as the requests to put more money in to the contractor’s account rolled in.

    Also, the majority of contractors in this neighborhood were Church of the Holiness, a Christian sect where they don’t marry outside the church, and practice asceticism of lifestyle (some are snake handlers but they are rare). Locally, they are just called “The Bunheads” because the women don’t wear makeup, make their own clothes, and wear their hair up which they let grow as long as possible.

    The beauty of these people as contractors is they also pretty much only hire within their church and they strictly enforce their own rules on the building site. So I never had a problem with coming to inspect and finding liquor bottles or men cursing in front of the my kids. It’s somewhat like having the Amish build your house. Pleasant and honest.

    At the acceptance inspection, my contractor handed my wife a check for funds left over that they had not used. Boy were we surprised!

    So some parts of this needed change really are cultural and are already in place as long as you accept the culture providing them has their own beliefs as well, and you can manage a contractor.

    This doesn’t have to be some wrenching cultural change led by a Presidential guru. It has to come from our own willingness to accept responsibility and measure our needs twice and cut once.

  84. Ken Ballweg says:

    From this morning’s inbox:

    Something that makes good sense:

    I’m against the $85,000,000,000.00 bailout of AIG. Instead, I’m in favor of giving $85,000,000,000 to America in a We Deserve It Dividend. To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.. So divide 200 million adults 18+ into $85 billon that equals $425,000.00. My plan is to give $425,000 to every person 18+ as a
    We Deserve It Dividend.

    Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00. What would you do with $297,500.00 to $595,000.00 in your family?

    Pay off your mortgage – housing crisis solved.
    Repay college loans – what a great boost to new grads
    Put away money for college – it’ll be there
    Save in a bank – create money to loan to entrepreneurs.
    Buy a new car – create jobs
    Invest in the market – capital drives growth
    Pay for your parent’s medical insurance – health care improves
    Enable Deadbeat Dads to come clean – or else

    Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehmann Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.
    If we’re going to re-distribute wealth let’s really do it…instead of trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.

    If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+! As for AIG – liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here’s my rationale. We deserve it and AIG doesn’t.

    Sure it’s a crazy idea that can “never work.” But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC . And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

    Ahhh…I feel so much better getting that off my chest.

    Kindest personal regards,
    Birk
    T. J. Birkenmeier, A Creative Guy & Citizen
    PS: Feel free to pass this along to your pals as it’s either good for a laugh or a tear or a very sobering thought on how to best use $85 Billion!!

  85. Ken Ballweg says:

    From this morning’s inbox:

    Something that makes good sense:

    I’m against the $85,000,000,000.00 bailout of AIG. Instead, I’m in favor of giving $85,000,000,000 to America in a We Deserve It Dividend. To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.. So divide 200 million adults 18+ into $85 billon that equals $425,000.00. My plan is to give $425,000 to every person 18+ as a
    We Deserve It Dividend.

    Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00. What would you do with $297,500.00 to $595,000.00 in your family?

    Pay off your mortgage – housing crisis solved.
    Repay college loans – what a great boost to new grads
    Put away money for college – it’ll be there
    Save in a bank – create money to loan to entrepreneurs.
    Buy a new car – create jobs
    Invest in the market – capital drives growth
    Pay for your parent’s medical insurance – health care improves
    Enable Deadbeat Dads to come clean – or else

    Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehmann Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.
    If we’re going to re-distribute wealth let’s really do it…instead of trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.

    If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+! As for AIG – liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here’s my rationale. We deserve it and AIG doesn’t.

    Sure it’s a crazy idea that can “never work.” But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC . And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

    Ahhh…I feel so much better getting that off my chest.

    Kindest personal regards,
    Birk
    T. J. Birkenmeier, A Creative Guy & Citizen
    PS: Feel free to pass this along to your pals as it’s either good for a laugh or a tear or a very sobering thought on how to best use $85 Billion!!

  86. len bullard says:

    I like it. Waiting for my check. Wondering if any bank will be able to cash it.

  87. len bullard says:

    I like it. Waiting for my check. Wondering if any bank will be able to cash it.

  88. RyanMcN says:

    Ken:
    Mr. Birkenmeier ought to get a refund on that calculator of his… $85B divided by 200M comes out to 425$. I thought his result looked odd when the two numbers only had 3 figures difference… =)

    Apparently he forgot that the ‘stimulus cheques’ cost $120B…

  89. RyanMcN says:

    Ken:
    Mr. Birkenmeier ought to get a refund on that calculator of his… $85B divided by 200M comes out to 425$. I thought his result looked odd when the two numbers only had 3 figures difference… =)

    Apparently he forgot that the ‘stimulus cheques’ cost $120B…

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