Update
Looks like the only holdouts on the bailout bill are a group of conservative House Republicans. I actually kind of agree with them insofar as they are trying to keep tax payer money out of the pockets of Wall Street.
I am not sure that Wall Street institutions are deserving of the helping hand in this instance and I would much rather see direct aid to middle America. The capitalist in me says that the government need not assist a private entity whose only problem is greed and who doled out $62 million in bonuses last year.
Also, I am not sure that capitalism will grind to a halt if we lose a couple i-banks and some bigger players. If lending is what you are worried about, there are plenty of regional banks, credit unions and S&Ls who are in pretty good shape. The fed could pump some cash into them (probably less than $700 billion) and relieve any lending pressure.
As to our foreign bond holders, we would be sending the message that we are clearing the brush and what will remain is viable and unencumbered. (This is exactly the type of Chicago School shock capitalism we forced on much of the Third World and Latin America via the World Bank and IMF. Geese and ganders.)
As to foreclosures, put a moratorium on them and then have the Fed or OTC or HUD issue mandatory workout guidelines. At the end of six months all you will have is the loans that are in the worst shape.
I have a sinking suspicion that one root of this crisis was too many players, chasing too few dollars, who invented some complicated vehicles that allowed the same dollar to go into two pockets. If I am right, a reduction in the number of players is going to have to happen.
The news is doubly bad for McCain. Not only did he not play a role in the deal, its his party who now refuses to cooperate. Even if he can get them in line, it appears that they are not needed to do this deal.
UPDATE 9/26: According to a columnist in Slate, the Republican bailout plan required holdres of toxic mortgage backed securities to buy insurance against them. The columnist raised two good points: 1) who would insure anything that is virtually guaranteed to default and 2) isn't that what sunk AIG?
I am not sure that Wall Street institutions are deserving of the helping hand in this instance and I would much rather see direct aid to middle America. The capitalist in me says that the government need not assist a private entity whose only problem is greed and who doled out $62 million in bonuses last year.
Also, I am not sure that capitalism will grind to a halt if we lose a couple i-banks and some bigger players. If lending is what you are worried about, there are plenty of regional banks, credit unions and S&Ls who are in pretty good shape. The fed could pump some cash into them (probably less than $700 billion) and relieve any lending pressure.
As to our foreign bond holders, we would be sending the message that we are clearing the brush and what will remain is viable and unencumbered. (This is exactly the type of Chicago School shock capitalism we forced on much of the Third World and Latin America via the World Bank and IMF. Geese and ganders.)
As to foreclosures, put a moratorium on them and then have the Fed or OTC or HUD issue mandatory workout guidelines. At the end of six months all you will have is the loans that are in the worst shape.
I have a sinking suspicion that one root of this crisis was too many players, chasing too few dollars, who invented some complicated vehicles that allowed the same dollar to go into two pockets. If I am right, a reduction in the number of players is going to have to happen.
The news is doubly bad for McCain. Not only did he not play a role in the deal, its his party who now refuses to cooperate. Even if he can get them in line, it appears that they are not needed to do this deal.
UPDATE 9/26: According to a columnist in Slate, the Republican bailout plan required holdres of toxic mortgage backed securities to buy insurance against them. The columnist raised two good points: 1) who would insure anything that is virtually guaranteed to default and 2) isn't that what sunk AIG?
posted by Jack Reed at 3:40 PM
0 Comments:
Post a Comment
<< Home