Let Wall Street wither
Kelly Ann Thomas is raging mad at PNC wealth management
, and with good reason
I'm going to write more here about the Paulson bank bailout but I need to take a long walk, first, to calm down. Peonage
: A lot of things went through my head, but the 1300 people commenting on the proposed act covered all that and more
, with considerably more venom. Go read that, not me.
Oh, I did write a few choice phrases like:Bin Laden must be laughing in his cave
...I proudly welcome our new Chinese overlords
...700 Billion over a weekend? Now that's a coke binge!
And noted some great quotes from that post above:
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. - Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)
and had a long talk with a friend about it all...
(10:50:08 PM) He: I feel like I ought to be pissed, but after all the crimes of the past eight years I just can't get worked up over a little thing like stealing a trillion dollars.
(10:50:10 PM) Me: you are giving wall street 10k this week, without any chance of return. If I had a trillion dollars, well, on the plus side, there was some major industry investment in nanosolar fairly recently.
(10:50:32 PM) He: you know the BNL song, right?
(10:50:41 PM) Me: that is the song I have been trying to alter for months
(10:51:42 PM) He: "we wouldn't have to walk to the store / we'd take a limousine 'cause it costs more / we wouldn't have to eat Kraft dinner / (but we would eat Kraft dinner, we'd just eat more)"
(10:52:49 PM) Me: I'm still drawing a blank on rational comparisons. I mean... NASA's budget is 18B
. For the size of the bailout we could fly a dozen men to mars and back - or a dozen families, to stay. Have you considered the idea that perhaps both of the major political parties are competing now to lose? It explains Palin...
(10:55:52 PM) He: that only explains it on the R side
(10:56:04 PM) He: is NASA really only $18B?
(10:56:20 PM) Me: well, 18B if you discount the "black" side. I would argue that another 20B is defense spending related
and still sorta part of NASA
(10:57:50 PM) He: my problem with this is... okay, let's say there's $700B of bad debt that can't be valued, people who can't make the adjusted payments on ARMs they should never have been approved for in the first place. and investment banks and insurance companies and so forth have all made bets on this money and if people default on those mortgages (which they will) it's going to cause devastation through every sector of the economy. so something needs to be done at taxpayer expense because the alternative is worse. I'm willing to buy that.
(11:00:35 PM) Me: cool, go right ahead. Perhaps they will securitize it so you
can buy in willingly. Do your patriotic duty and volunteer to piss away your own money. Problem is the bailout is not voluntary. There's a gun to your head to save to the street! Me, I say let wall street go to hell. Let the influence of these major centralized businesses wane. Wall Street isn't all of America.
(11:01:02 PM) He: Now, here's some options. we give $700 trillion to the institutions that made the stupid loans in the first place, and let them live to make more bad investments with no market punishment whatsoever. this is the bush plan. (or, you know, the guy-bush-appointed plan. Bush himself is nowhere to be seen.)
(11:02:31 PM) He: Option two: we put $700 billion (excuse the trillion earlier, I was thinking "almost a trillion" and mashed the two concepts together) into a fund like the one that was used in the S&L crisis, to buy up bankrupt institutions and sell off their assets. that way the companies do not live to make further bad investment. market death penalty. bush's people: not considering this, apparently.
(11:03:02 PM) Me: I note that the stock market *rallied* - at the size of the proposed bailout. Odd way to make a profit, that. That rally came at your and my expense.
(11:04:05 PM) Me: spending 700 b over a weekend. Now that's a coke binge!
(11:04:13 PM) He: option three: we put the $700 billion into a program, perhaps a refundable tax credit, enabling people who are underwater with ARMs to make their payments. this a) costs the same; b) makes it so the banks don't die, so it's effectively the same as option one in effect; c) puts more money in the pockets of consumers, thus stimulating other sectors of the economy.
(11:04:24 PM) He: nobody is even thinking about that option
(11:04:47 PM) Me: well, at least one. :)
(11:05:45 PM) He: it's moral hazard up the wazoo and probably stupid and wrong, but it actually does help ordinary people... and it's no more stupid and wrong than what we're doing
(11:05:49 PM) He: but it doesn't even occur to anyone
(11:06:02 PM) Me: in the business owned press, anyway, but read the comments sections.. I am shocked that we have seen so little from the "sane consumer" perspective.
(11:06:29 PM) He: gosh, whatever are we to do about this financial meltdown? sigh, I guess we'll just to have to hold our nose and give a trillion dollars to some rich people.
(11:06:40 PM) Me: You mean: print a trillion and I think housing has another 20% left to fall
(11:07:00 PM) Me: 1) interest rates HAVE to go up, particularly on the bad debt packages
(11:07:26 PM) Me: 2) they can't because that would trigger far more debt
(11:08:06 PM) Me: related to that - australia - aside from housing which is otherwise fairly sane about their currency and economy - has banks offering 8% interest on 10k cds
(11:10:46 PM) Me: I mean, how many people in the ministry of truth have to be employed merely to figure out who to give 700 b to in any of your models?
(11:15:21 PM) Me: wow, this is the home I grew up in
. Still can't go home anymore:
(11:23:15 PM) He: the house my family lived in when I was born: $1.07 million. zillow's not very trustworthy though
(11:23:21 PM) Me: And why should the people that don't own homes bail out the people that do?.
(11:23:51 PM) Me: I am not shocked at the figure for my ex-home, and think that demand is still there for good locations. My old house in OC is a great house....
(11:24:02 PM) Me: Loved seeing the google view of it just now. Nice pool.
(11:24:26 PM) He: huh. house in SF where i grew up, only $745k. I expected 7 figures.
(11:25:09 PM) He: why should the people who aren't investment bankers bail out the people who are?
(11:25:22 PM) Me: bingo
(11:25:50 PM) He: there's a lot more people who "own homes" than "are investment bankers", so if you're going to pick a set to unfairly benefit, might as well pick the bigger set
(11:25:56 PM) Me: double bingo
(11:26:09 PM) Me: and screw the minority of people that don't own
(11:26:18 PM) He: might be a majority. dunno.
(11:26:37 PM) Me: http://www.lewrockwell.com/blog/lewrw/archives/022930.html
(11:27:25 PM) Me: http://en.wikipedia.org/wiki/Homeownership_in_the_United_States
(11:28:04 PM) Me: what I've been trying to find is data on how many mortgages are in that total
(11:28:21 PM) He: the thing is, I'm willing to believe that if something isn't done, it's going to cause cascading failures that will lead to a total collapse of the economy, people sleeping on grates, resorting to cannibalism, and eventually, thunderdome.
(11:28:38 PM) He: I'm just a whole lot of unconvinced that this is the appropriate solution.
(11:28:48 PM) Me: bring it on! Paulson Vs Palin! With jello!
(11:28:52 PM) He: haha
(11:29:07 PM) He: two assholes enter! one asshole leaves!
(11:29:19 PM) Me: 20 years of that should thin out the industry some! Bust a deal face the wheel!
Labels: banking, sarcasm