Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Sunday, September 28, 2008

Bailout = Private Profits, Socialized Losses.

"A month of historic government interventions shows signs of triggering a political version of climate change - unleashing a new era of class fury that could hurt U.S. companies, business leaders, and wealthy investors for years."

"Resentment toward financial profiteers is reaching a fever pitch. Leave aside for a moment the fact that homeowners living beyond their means - not just greedy Wall Streeters - contributed to the economic crisis. And Hank Paulson can talk all he wants about his program to help millions of struggling mortgage holders move into comfortable payment schedules."

That will only fuel more resentment and backlash.

"Compared to this, Enron was a warm-up exercise. "

"Even before this populist eruption over the Wall Street rescue, Middle America was souring on the privileged class. There has been a growing sense in the U.S. that a stagnant tide has kept the 80-foot yachts afloat while beaching the family outboard."

"There's much evidence to support the contention that Americans are disgusted with government officials as much as they are with business leaders."


"Only last November, Dick Cheney told Fortune his main concern about the mortgage crisis was an overreaction by the government. "The fact is, the markets work, and they are working," he said. "We have to be careful not to have this set of developments lead us to significantly expand the role of government in ways that may do damage long-term for the economy."

"Ten months later the Vice President was forced to peddle the biggest government bailout in history to conservative friends on Capitol Hill."

"AFL-CIO's John Sweeney suddenly sound as if they're in the mainstream of public opinion with statements like this: "One thing is certain. No one - no politician, no investment banker, no television commentator, no economist - should be able to say again with a straight face that here in the United States we just let markets do whatever markets do and everything works out for the best."

"Washington hath no fury like Middle America scorned - and there's reason to think it will only get uglier."

From Roubini's site...

"...the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer - the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy."

"So this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the financial firms (not just banks but also other non bank financial institutions); with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession."

"...the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented - many on the RGE Monitor Finance blog forum - alternative plans that were more fair and efficient and less costly ways to resolve this crisis."

"This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners."


At 9/28/2008 07:24:00 PM , Anonymous Anonymous said...

Anyone want to split a pallet load of vaseline at costco? looking for no more than a 3 way split.

At 9/28/2008 09:09:00 PM , Blogger Athena said...

Does make you wonder about our political system doesn't it? To whom are they really accountable?

next post title..."your democracy is an illusion."


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