With just 34 days until Election Day, one would think the presidential election would be ruling most headlines. But that’s not the case right now, as financial news dominates American – and world – media.
As Congress rejected legislation designed to shore up the U.S. financial system, a Washington Post poll shows that Americans are very concerned about their current economic situation. Nine out of 10 said they were concerned the bill’s failure could lead to more economic troubles. With so many Americans paying attention to financial news, it is no surprise that the candidates are focusing heavily on the economy.
“The bill rejected yesterday was a marked improvement over the original blank check proposed by the Bush administration. … One step we could take to potentially broaden support for the legislation and shore up our economy would be to expand federal deposit insurance for families and small businesses across America who have invested their money in our banks,” Democrat Barack Obama said in a statement.
The Illinois senator said he would talk to members of Congress about proposing legislation that would raise the limit of protection on Americans’ federally insured accounts to $250,000, up from the current $100,000 limit. Americans can learn more about Obama’s proposal by viewing Obama’s two-minute ad that outlines his economic plan.
In a television interview September 30, Republican John McCain said he also supports increasing federally insured accounts to $250,000. He also called on the Treasury Department to use its existing funds to begin buying bad mortgages in hopes of stabilizing the financial system.
McCain, who like Obama is a U.S. senator, had taken time off the campaign trail to work with Congressional leaders on the bill. “I’ve talked to the president. I know that we have to act. Even though we failed yesterday, even though I went back [to Washington] and was able to get more Republicans on board [to vote for the bill]. … I will be engaged always where I think America needs engagement,” McCain said in the interview.
Comments (6)
WJCoville
1 October 2008 at 13:19 EDT
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I must admit that this delay in passing the passage of the “Bailout” bill has caused me to wonder if maybe there isn’t a better solution.
Suggestion:
How about if we review all the foreclosures-re-evaluate the properties to market prices and extend new mortgages to the owners (original) based on their ability to qualify. If they cannot financially qualify for the new level of mortgage, then they would lose the property and it would be offered to a new buyer at some future date. The funds generated by the mortgage would be returned to the bank holding the paper. The difference between the original value of the mortgage and the new value would be a loss to the institution which made initial loan. Those losses would be set up in a reserve (loss) account and the bank would be allowed to disregard the loss from it’s balance sheet for a period of time (5 to 10 years). This negative balance could be worked off by applying new loan profits against it.
This is an over simplification of the process, but a start toward not just bailing out Wall street, but bailing out Main Street as well. It would ease up the credit market and help to stablize the housing market. It is just one step toward solving our economic problems.
Why don’t some of our lawmakers think of something along this line?
Kelly Ng
1 October 2008 at 22:07 EDT
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FOX IN THE HENHOUSE
“Having a former chairman of Goldman Sachs preside over disbursing hundreds of billions of dollars to Wall Street is a terrible concept and inevitably will lead to crony capitalism and the appearance of — if not the actual existence of — corruption.”
Brilliant quote from Newt Gingrich.
The bill sets up an oversight board, which is directed to “ensure that the policies implemented” by Mr. Paulson are proper.
Mr. Paulson is to be one of the five members of the board watching over his own actions.
He is joined by the chairman of the Federal Reserve, the chairman of the Securities and Exchange Commission, the Housing Secretary and the director of the Federal Home Finance Agency.
The proposed toothless oversight board does anything but potentially waste more taxpayer money.
Feed the hand that bites.
In school - such performance grades would have gotten you expelled - but in wall street, govt and politics - they come back for more.
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A collation of burning questions left unanswered from frustrated folks, many of them very bright folks I came across and still piling:
*The US government will own every house that is foreclosed on as well as those where people simply decide to walk away.
(1) Exactly what will the Government do with those houses?
(2) What will the losses be?
(3) How much would it cost to prevent foreclosures?
(4) What about walk-aways?
(5) The two gentlemen (Bernanke and Paulson) have been wrong about the Housing crisis, missed the leverage problem, and understated the derivative issue. Recall the overuse of the word “Contained.” Indeed, the two have been wrong about nearly everything financially related since this crisis began years ago.
Question: Why should we trust their judgment on the largest bailout in American history?
(6) How is the govt pricing the purchase of these damaged assets? Is the taxpayer paying 22 cents on the dollar? 5.5 cents? If there is no market price for this junk paper, how are you going to determine a purchase price?
(7) Biggest mkt short sellers are the Goldman Sachs, JP Citis et al when markets on a gravy train. Now that they’re in difficulties - you cry uncle and ban shorts on them.
What does this mean to our concept of free trading markets?
(8) In the nationalization of AIG, the US taxpayer received 80% of the company. What is the taxpayer getting for their money in this $700B bailout?
(9) You have said that “The Housing correction is the root cause of market stability.” What about leverage — how significant was that as a root cause?
(10) Your initial estimates for the cost of this were $700 billion dollars. Yet you also asked for a blank check, an unlimited ability to spend more “as needed.” What is your worst case scenario for the total costs of this bailout?
(11) The original version of this bailout package requested no judicial, administrative, or budgetary review of the spending of this bailout, What was the thought process behind that extraordinary, extra-constitutional request?
(12) In 2004, your former firm, Goldman Sachs, along with 4 other brokers, received a waiver of the net capitalization rules, allowing these firms to dramatically exceed the 12-to-1 leverage rules. How much was this waiver responsible for the current situation?
(13) Its just cost the taxpayer $50 billion to bail out money market funds, which are clearly non-insured, risk instruments. Why did we do that?
(14) The Securities and Exchange Commission has been AWOL during much of the problems we now face. What do you think is the proper role for the SEC in terms of supervising or regulating securities markets? Doesn’t your plan usurp SEC authority and move it to the Treasury?
(15) How significant are derivatives and credit default swaps to the current crisis? Why weren’t they regulated the way other insurance products are?
(16) The current proposal has the US bailing out foreign banks. Has the USA become the insurer of the worlds financial assets?
(17) What other financial firms and funds are likely to need a bailout in the near future? Are there other banks, brokers, insures that are at risk?
(18) If you make this inordinate grant of unlimited cash, how can you rein in the budget in the future? How can you as a Congress say no to expensive budget items such as Nationalized Health Care, or Infrastructure repair programs or fill in the blank on the grounds they are “too expensive?”
Questions like these above, are possibly why Treasury Secretary Paulson and Chairman Ben Bernanke want Americans to rush passage of this bill.
Both want Americans to pass Paulson’s bill before all have time to think.
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Beloved Americans, I am writing not as an American but as a Singaporean, thousands of miles from America - intertwined as intimately in today’s globalised community:
Please stop and think about the ramifications of quickly passing this bill. If we do, we will quickly see that $700 billion is a mere down payment on problems down the road.
I honestly state: if we are thinking, we will not let this bill pass.
As Barack himself always said - there’s no red or blue states but the United States..I’ll take one step further - the United States of the World, not just America - we are too close to be apathethic - as there is only this one place we call home - Earth!
Good luck and best wishes!
Charles Mlanga
2 October 2008 at 02:34 EDT
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Barak Obama is the man who would change Amerca for the better. He is inteligent and has good judgement.
Teddy Osagie
2 October 2008 at 11:03 EDT
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Time for all Americans to push the sweet old talkers to their final retirement. A change in Washington is a change for a new world order. No more old wine in NEW bottle political gimmick.The America people
are wiser now. President Bush and his Republican friend Senator McCain, must recognize that their political tactics and event manipulations for selfish political games is OVER.
Wall street is no more,this the final testimony of President BUSH legacy.Another 4 years with Republican McCain is an extenssion of another economic stress.
And i believe Sen. Obama will do a better job than McCain, because he (Obama) will bring fresh ideas into the white house.
m.p.kurtkoti
15 October 2008 at 09:27 EDT
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sir,
i like obema as young and dinamic, in the world all are thinking that india is a largest democratic nation , but if we see from the background and detaills we got 5000 years back the democracy, jusy see we are having so many gods, godesses,
mr obema intension that he wanted to take all the people ,hindus, muslims. christians, parsis, gurkas etc……..
till date we are having 3 to 4 ex primiministers is living in india ,it shows that how much democracy working here
one thing i would like to tell americans that they should chang thing way as indians are thinking
we are always thinking about peace
still i am blaming existing gournment taken step about regarding iraq,afganistan,pakistan, resuslting in american economical problrlem as well as the nation depend upon the doller export
i hope next president will take for the nation of america and lead the other nations
thanking u,
kurtkoti from india
joe
11 February 2009 at 01:12 EST
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please, my is a question.what are obama’s policies on purchasing?