Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Friday, October 03, 2008

Your Democracry is an Illusion




Update: The House has now passed a revised version of the bailout bill weighed down under 400+ pages of pork.

Your Democracy really is just an Illusion.



Earlier this week: House Rejected Wall St. Bailout Bill

Vote: 205 Yes 228 No

Vote was open for nearly 40 minutes

95 Democrats voted no

133 Republicans voted no

140 Democrats voted yes

65 Republicans voted yes

Vote Tally Here see how Congressional Reps voted

Congressional Representative for Sonoma County ~ Mike Thompson voted No

send him a little thank you note

remind him of what is important to you.

Congressional Representative ~ Lynn Woolsey also voted NO

send her a little thank you note

Thank you to all of you who took the time and energy to speak out and defeat this horrendous theft of the american public that amounted to rewarding the very people who caused this problem. This was an enormous victory for the power of participation.

The treasury secretary, the president, the speaker, and the chairman of the senate finance committee all supported the bill. This bill went down only because of a popular uprising.

There will be no Re-vote today. But there is talk about revising the bill again and putting it to another vote soon.

Please continue to check here, Stop The Bailout and Mish's site for updates, letters to reps etc.

Draft Version of the Bill (pdf warning)

Key elements of the plan follow:


- The $700 billion in buying power would be doled out by Congress in stages. After the first $250 billion is authorized, the President could request another $100 billion. The final $350 billion could be cleared by a further act of Congress.


- Eligible assets include residential or commercial mortgages and related instruments which were originated or issued on or before March 14, 2008. Other financial instruments can be included in consultation with the Federal Reserve if Congress is notified.

- Treasury secretary given broad discretion to determine the methods for buying assets.

- Foreign central banks, or institutions owned by a foreign government, cannot take part.

- The government will take a stake in companies that tap federal aid so that taxpayers can share in the profits if those companies get back on their feet. An exception applies to financial firms that offload less than $100 million of soured investments.

- A new congressional panel would have oversight power and the Treasury secretary would report regularly to lawmakers in two elements of a multi-level oversight apparatus.

- If the Treasury takes a stake in a company, the top five executives would be subject to limits on their compensation. Why only the top 5? Think of all the bonuses paid out to the investment bankers and traders selling toxic MBS and CDOs. Think of all the hairdressers and UPS clerks turned mortgage brokers... WTF? Only the top 5? ALL OF THEM NEED COMP LIMITS!

And... is it just me...? But shouldn't they be going after the assets and recouping the bonuses paid to the guys who ran these companies in the ground? THESE companies failed due to the actions of their employees and executives. Those very same people should be coughing up any bonuses or executive compensation they received while their companies melted down. They should be going after NAR and every realtor and mortgage broker that gave a loan, sold a house to anyone for over 4X their household income.

- Executives hired after a financial company offloads more than $300 million in assets via auction to the government will not be eligible for "golden parachutes."

This is beyond lame. It does nothing to hold those who committed this fraud and corporate irresponsibility accountable. There should be NO golden parachutes for ANY current or recent employee with the companies that have failed

- Would permit the Federal Reserve to begin paying interest on bank reserves from October 1, giving it another tool for easing credit strains.

- Mandates a study on the impact of mark-to-market accounting standards, that critics blame for a downward spiral in the valuation of assets on corporate balance sheets.

- The federal government may stall foreclosure proceedings on home loans purchased under the plan.

There should be NO stalling of foreclosure for anyone who has a loan on a house that does not conform to traditional income to debt ratio. Nobody who took out a mortgage for more than 4X their income (and this is being generous as I think it should be no more than 3X) should receive ANY kind of assistance.


- Alongside the plan to buy securities outright, the Treasury Department will conceive an alternative insurance program that would underwrite troubled loans and would be paid for by participating companies.


- If the government has taken losses five years into the program, the Treasury Department will draft a plan to tax the companies that took part to recoup taxpayer losses.

Congressional Budget Office's Review of the Emergency Economic Stabilization Act of 2008

Please continue to email, fax and call Congress.

(new letter - reposted from Mish's site)

Bailout Bill Is A Disgrace

Dear senator/congressional rep,

Nancy Pelosi and Barney Frank have agreed to the most preposterous taxpaper bailout in history. It is loaded with toothless provisions that are not worth a plug nickel when it comes to protecting the taxpayer.

Fox Oversees Henhouse

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.

This is supposed to be an oversight committee?

New Proposal Cedes Congressional Authority To The Administration

Paulson, or whoever the next Treasury Secretary is, can buy whatever he wants, at whatever price he wants. Why should Congress give such authority to anyone at any time? Note that the next Treasury Secretary is not even a known quantity!

The limit on any bailout should be no more than $250 billion flat out with no automatic escalations. If Congress thinks more money is needed it can vote to provide more money later. Ceding blank check power to the president and requiring super majorities to override would set a dangerous precedent.I am appalled that the administration would ask for such power and I am even more appalled that Congress would be willing to structure a bill this way.

No Insurance

Ceding power to the treasury on how to best implement the insurance provision is also a terrible idea. Congress, not the Treasury should stipulate how insurance should work. Leaving insurance to the discretion of the Treasury is tantamount to agreeing there should not be insurance.Broad New Powers For The SECA provision of the bill gives the S.E.C. permission to suspend the rule for any individual company if it thinks that is in the public’s interest. It is absurd that the SEC should be allowed to wave whatever rules it wants.

We got into trouble in the first place because of poor accounting principles!

Administrative Costs

Where are administrative costs hidden?

Recoupment mechanism

The recoupment mechanism does nothing except to require the President submit a proposal to offset such costs after five years.

How could this be so poorly worded?

Why should Congress require the president to submit a bill, any bill?

Bill Is A Disgrace

This bill is so full of holes and toothless provisions it is a disgrace to suggest it is close to being ready for a vote. Most importantly, the bill will not create a single job, nor will it solve the underlying economic problems. Over 190 major economists agree.

If you vote for this Bailout Bill I will vote against you. I will do more than that, I will work actively for your opponent, no matter who that person is, doing everything in my power to contribute to your defeat.If you vote for this bill I will contribute my time, energy and money to your opponent, whoever that may be.I will talk to my friends, my family and my co-workers and urge them to do the same. I have already contacted many friends and have asked them to do the same.

Phone Numbers

Rep. Nancy Pelosi (D)(202) 225-4965

Rep. Barney Frank (D)(202) 225-5931

Sen. Dianne Feinstein (D) (202) 224-3841

Sen. Richard Shelby (R) (202) 224-5744

Sen. Harry Reid (D) 202-224-3542Sen.

Jim DeMint (R) 202-224-6121

Sen. John Ensign (R) (202) 224-6244

Sen. Jim Bunning (R) 202.224.4343

Sen. Chuck Grassley (R) (202) 224-3744

Sen. John McCain (R) 202-224-2235Sen.

Barack Obama (D) (202) 224-2854

Call them with this simple message "I have seen the revised bill, you will lose my vote if it passes".

Please fax everyone on this list.

Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (try both not sure which is correct)

Sen. Harry Reid (D) 202-224-7327

Sen. Jim DeMint (R) 202-228-5143

Sen. John Ensign (R) 202-228-2193

Sen. Jim Bunning (R) 202-228-1373

Sen. Chuck Grassley (R) 202-224-6020

Sen John McCain (R) 202-228-2862

Sen. Barack Obama 202-228-4260

Sen. John D. Rockefeller 202-224-7665

Sen. Dianne Feinstein 202-228-3954

Sen. Ron Wyden 202-228-2717

Sen. Evan Bayh 202-228-1377

Sen. Barbara Mikulski 202-224-8858

Sen. Bill Nelson 202-228-2183

Sen. John Kerry 202-224-8525

Sen. Daniel Inouye 202-224-6747

Sen. Hillary Clinton 202-228-0282

Rep. Barney Frank 202-225-0182

Rep. Nancy Pelosi 202-225-4188

21 Comments:

At 9/29/2008 11:37:00 AM , Blogger Athena said...

By the way... Republican Minority Whip is now claiming the "Rush" to get this passed was due to the Jewish Holidays this week. :-/ something stinks I think.

Also... fyi... the House.gov was all over this site this morning and the last few days.

 
At 9/29/2008 01:29:00 PM , Blogger marin_explorer said...

What's with the title of this bill?

"To amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes"

"Other purposes"--what might that be? And Congress wants more transparency from Paulson? Oh, the irony...

 
At 9/29/2008 01:44:00 PM , Blogger moonvalley said...

How about bringing back glass-steigel?

 
At 9/29/2008 01:46:00 PM , Blogger moonvalley said...

well, as you know I haven't participated in this cluster****, however I am freaking out as to what is going to happen to my stuff if there is no bailout, or if there is one. Which is worse?

 
At 9/29/2008 01:47:00 PM , Blogger Athena said...

No kidding! I thought it was the wrong vote count and hesitated to post it... but double and triple checked and it was the real vote count.

Why does Paulso have a job or any credibility at all?

These scumbags have been claimingn all is well for the last several years, yet they are supposedly smart enough to have watchdog top U.S. economic policy jobs? They let this happen. Get them out.

Prosecute for gross negligence, incompetence and failure to perform fiduciary responsibility. Then seize all the assets acquired and bonuses paid out, and 1/3 of the commissions from all NAR members, mortgage brokers and any bank that lent money to anyone who was given a loan for more than 4X income.


As for our reps... House.gov and Senate.gov has been reading this site since I started it- since we are not even the biggest site out there I imagine they have read others. They knew this was happening. They knew it was going to end up like this. Not a voice was heard when it counted, and they all act shocked. It is just an act.

 
At 9/29/2008 02:08:00 PM , Blogger Athena said...

MV- ask congress to make sure to reimburse taxpayers for losses out of assets and compensation seized by those that were grossly negligent in this debacle. Employees and executives in the companies that have failed. 1/3 the commissions from NAR. 1/3rd the commissions from lending institutions. 1/3rd commissions from mortgage brokers. seize all golden parachutes and give it to the taxpayers. Since they are in a financial redistribution and wealth transfer mindset- then let's go ahead and socialize all the profits that were made. They were ill-gotten gains.

They seize assets from people if their assets are suspected of being linked to drugs in some way shape or form... it ought to be a no-brainer to seize assets from well documented gross financial negligence and incompetence.

 
At 9/29/2008 02:19:00 PM , Blogger marin_explorer said...

I see that Woolsey was one of the reps who voted against--but many others--Eshoo, Honda, Lofgren, Pelosi, were for it. I hope they feel the heat.

 
At 9/29/2008 02:56:00 PM , Blogger Athena said...

I think we shouldn't let up on them. Say thank you to the ones that voted against, but keep reminding them we are not going to foot the bill for those responsible for this mess. When they start holding those offenders responsible then they will enjoy public support.

since they are so into redistributing wealth- let's see some redistribution of the profits made by all the bozos part of this mess!!!

We will see big public support for a RobinHood Congress I would bet.

 
At 9/29/2008 03:07:00 PM , Blogger moonvalley said...

I just had dental implant surgery last Friday si I am watching all of this through a semi pain pill clouded haze, believe me it doesn't make it look any better.

 
At 9/29/2008 06:26:00 PM , Blogger Athena said...

ME- I think I just figured out what is with the title of this bill... note it is to AMEND an existing bill- rather than a new bill...

Article 1. Section 7. All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

If this is an amendment to an existing bill they are completely rewriting to suit their purposes it allows the Senate to end run the dissenting congress...? Is this correct?

Is this why there are some hinting that the Senate might take direct action to get this thing passed?

 
At 9/30/2008 06:52:00 AM , Blogger tom12008 said...

The title of your post is an appropriate one. I guess this was a republic that is still one formally, but has become increasingly oligarchical (or, as some say, "oiligarchical"). I think that the new term "kleptocracy" deserves greater currency, given the upwards distribution of wealth.
Athena, thank you for mentioning Glass-Steigel. I agree, why not bring it back. Oh, that's right, it doesn't fit into well with the latest kleptocratic paradigm.
Thank you for all the the Great Depression references you have used on this blog, especially the visuals.
I don't see this bailout being the last, but you know that already on this blog. Wait until the next round of Option-ARM resets.
These are such interesting times; I can't wait for life to be "fucking boring" again.

 
At 9/30/2008 07:50:00 AM , Anonymous Anonymous said...

What a crazy point in history. I am neither an economist or politician but something does not smell right with this entire situation. Big $$$ being thrown around as if our country and government had it to spare.

On a positive note - we made an offer for a REO house in Petaluma and the bank accepted! I'd guess the market turmoil helped us out a bit. They seemed very eager even though we offered a 2001 price.

 
At 9/30/2008 08:51:00 AM , Blogger Athena said...

Did you see this today?

"Mr. Bush said Tuesday that the economy is depending on "decisive action on the part of our government."

He said he wanted to "assure our citizens and citizens around the world that this is not the end of the legislative process."

He also said "it matters little what path a bill takes to become law. What matters is that we get a law. We're at a critical moment in our economy."


Is he threatening to get this passed without following a path subject to public outrage?

Has he confused himself with being a dictator?

 
At 9/30/2008 05:47:00 PM , Blogger marin_explorer said...

"...without following a path subject to public outrage?"

--too late! Everyone has this in their sights now...there's no return to complacency, and in fact I expect much more outrage to surface over the coming months. Think about it...people have been simmering for years on various neglected issues, and they're just beginning to re-direct once sublimated anger openly. So once the credit cookie jar is taken away, the anxiety that was poured into a consumerist soma for decades will now be directed at the scapegoats of their unhappiness. It will be an ugly transformation of American society.

 
At 9/30/2008 05:50:00 PM , Blogger Athena said...

Did you see that the Senate is planning on voting on this tomorrow? WTF?

 
At 10/01/2008 08:25:00 PM , Anonymous Tom Stone said...

This has not been a good week for me,my computer crashed monday at 6 am,and I have been trying to follow this on TV which may have caused permanent brain damage.Freaking Teletubbies are better educated and more intelligent than the media people.The House will vote friday,and may well pass this bill.Call your Representatives!This bill is a worse idea than invading Iraq was and passage will kill any trust in our financial system and guarantees a greater depression.I only wish I had a limo service in DC,with 30,000 Lobbyists they are moving thousands of Hookers,literal tons of cash and Coke in ten pound lots to pass this abomination.Weimar anyone?

 
At 10/02/2008 06:44:00 AM , Anonymous Tom Stone said...

I called all of them this morning.All of the Mailboxes were full.I called Woolsey and Thompson at their DC offices and got humans.Call THEM!"Naked Capitalism" has some excellent coverage on the problems with this bill which i recommend highly to anyone who wishes to further inform themselves.Hyper Inflation anyone?and it was Glass-Steagall fyi.

 
At 10/03/2008 12:03:00 PM , Blogger marin_explorer said...

On another note, did anyone catch Warren Buffet on Charlie Rose (PBS) yesterday? To paraphrase, when Charlie asked Buffet if Wall Street was "broken", WB danced around the subject and said Wall st. worked well. Riiiight--it made a few people very rich, but at what cost to society? I suppose that's immaterial to these great financial minds.

So why are these ruthless guys held in such high esteem--simply for their $$$$? Our society has made the accumulation of wealth the highest criteria for "success"--which might explain why so many--from J6P to execs have become remorseless grifters to whatever available scam. If this trend continues, the cost could be society's inevitable self-destruction.

 
At 10/05/2008 10:41:00 PM , Anonymous Anonymous said...

"I only wish I had a limo service in DC,with 30,000 Lobbyists they are moving thousands of Hookers,literal tons of cash and Coke in ten pound lots"

Nice mental image... sounds like a typical Friday night in Vegas but the dirty old men are in suits.

 
At 2/04/2009 10:16:00 AM , Blogger HHB said...

Athena,
You should do a post to kick off 2009 updating the current value of the price reductions you've posted on over the years.

Your "buyers revolution prices" might actually have been too high :).

 
At 2/04/2009 10:59:00 AM , Blogger Athena said...

HHB- you are SO right! I will get on it today. And... I am happy to be WRONG about the buyer's revolution prices and thrilled that the prices should be even lower. My buyer's revolution price was allowing for 5% increase for each year since 1999 and I didn't like that- but it was what was being recommended by people smarter than me. I am happy to be wrong about this as the prices will end up even lower. Good for buyers, good for the market, good for all!

 

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