The Financial Crisis Continues

So this financial crisis in the country continues to go in new and unanticipated directions. The latest of course is Mr. President going on tv this week to try to scare the crap out of the American people and get us all to freak out, call our Congress-person and try to compel them to support signing this socialist bullshit bailout bill right away. I still can't believe the scare tactics from that speech the other day.

Several years ago this guy told America and Americans that it was an abject emergency, we absolutely had to invade Iraq immediately or risk imminent threat to the safety of Americans and the rest of the free* world. We believed him, being the President and all, and we committed a "mere" few hundred billions dollars, several thousand American lives lost, and for what? Turns out Bushie Boy was lying through his fucking teeth. No WMDs, no real emergency, no reason for all the deaths of American men and women.

Some months ago we were told by a pleading George W. that we absolutely, positively had to send these ludicrous rebate checks -- up to $600 or more per family as I understand it -- to people for doing nothing, just to help stimulate the economy. Bushie assured us that this unprecedented move was absolutely necessary to avoid the economy slipping into the depths, and that the checks would do just that: stimulate spending and keep us from the abyss of financial crisis. Hmmmmmmmmmm. Guess that was $120 billion down the drain, huh? More bullshit, fear tactics to trick Americans into doing what he wants because he thinks it will make people like him and his beloved party.

Well now here we are again, some $500 billion later, and this time here comes Bushie again taking up prime time television time to scare the fudge out of all of us, talking about economic and financial crisis, that we are on the brink of a "severe downturn" in the economy that will have dire consequences, etc. and that we have to approve this $700 billion expenditure because (1) it will work, and (2) if we don't, the shit is all going to crumble around us.

Well you know what, Mr. Bush? This time, I'm calling bullshit. We've all read the story of the boy who cried wolf. Bush has made a habit over his glorious 8 years as president of lying to the American people whenever it suits him, or claiming he knows things he doesn't, whatever you want to call it. He has spent $500 billion on his fake "emergencies" and "urgent situations" which he has gotten by nothing other than outright lying to the people, to the government, to whomever he has to to get what he wants. I mean, this is a Republican for crying out loud, and he's spending like this! It is unheard of. Which is why there was so much uproar against his little bailout bill in Congress this week, and why as of Friday morning, the thing is at a standstill. His own fucking party is stalling out this bill. And for once -- and you won't hear me say this very often -- I'm actually proud of the Republicans. Good on them for standing up to this spendaholic liar idiot. He's already shown that he will happily spend hundreds of billions and throw thousands of American lives away based on nothing but pure lies. Now we're supposed to give him another $700 billion just because he once again says we "need" it? I don't think so.

Now fear not, all you secret socialists out there. A bailout bill of some kind is basically a done deal at this point. Sure, they can say it's stalled out today, but give it another day or so and something will be signed. Bushie will get some more money from us victimized taxpayers and throw it at the banks that contributed greatly to all this mess in the first place. All the pussies in Congress are far too scared of the wrath of their consistuencies if the economy does continue turning south -- which is basically a guarantee at this point, bailout or no bailout, mind you -- to not vote for a bailout at this point. But you know what, thank god for the Republicans pushing back on their leader who has so turned his back on most of the principles that his party (and good, sound judgment) would support. If they can get this thing limited or at least clarified wherever they can, at least for starters, then we're all in much better shape.

Maybe they can get this thing knocked down to throwing a mere $200 billion at this problem first, and see how that works, and consider giving more if needed. Me having to chip in my taxes towards "only" $200 billion to help the banks get out of the mess they created on their own accord, at this point that sounds an awful lot like I just saved 500 billion dollars, sadly enough.

Maybe we can get some of the absolutist, authoritarian powers given to the Treasury by this bill taken away, or at least institute some solid checks and balances there. Because this bill as originally proposed this week basically hands over seven hundred thousand piles of a million dollars each in cash to Treasury Secretary Hank Paulson, former co-CEO of Goldman Sachs, for him to spend as he sees fit on troubled assets of financial institutions. No one else to answer to, no rules or guidelines for him to stay within, just nothing. So if we can get that ridiculous situation toned down and controlled better, then once again, that is awesome compared to the current bill as proposed.

Maybe they can ensure that the government doesn't overpay for these distressed assets they're going to buy from the banks, which would be a huge coup. As of now, Paulson and Bernanke have been very clear, even over Congressional objections, that they don't plan to buy the banks' shitty mortgages at their current market value, which Paulson insists are "firesale" prices. So if they're selling for 35 cents on the dollar now, Bernanke and Paulson want the government to pay the banks 70 cents on the dollar for the assets. Why? To help the fucking banks, of course! There are so many problems with this approach it is hard to begin. Let's just say in a nutshell that if the taxpayers want any chance of this bailout not costing us the full $700 billion, then the government needs to pay fair market value for these assets now, so that when the market for mortgages recovers in god knows how long, we can sell them back to the market at that 70 cents on the dollar level and actually make a profit on the deal. No I highly doubt we'll get those profits back in the form of rebate checks, but if taxes get lowered, or at least don't have to get raised (sorry, Barack) in the future because of that profit, then awesome. If we get more services, or pay down the deficit with those profits, then, again, awesome.

But the biggest clusterfuck of all about the Paulson-Bernanke-Bush plan is that they want to pay more than the current market value for these loans, which in itself is an abomination. Look at billionaire investor Warren Buffett -- just the other day he announced an investment of at least $5 billion in shares of large investment bank Goldman Sachs. I say "at least", because not only did Buffet get preferred shares that pay a 10% dividend per year, but he also purchased warrants, or the right to buy up to another $5 billion of Goldman stock anytime in the next five years for $115 a share. This, with the stock sitting at around $128 a share on the night he announced his deal. See what he just did there? Even though a year ago Goldman shares traded as high as $250 a share, Buffett didn't just pay the current market value for them, he is paying less than the current market value. That right there is called a good investment, something which Paulson and Bernanke and Bush obviously know nothing about. They want to do the equivalent of paying the $250, because that's a lot closer to what the banks' books say these troubled mortgage assets are worth. Even though this will clearly mean a far less chance of the government actually getting a good deal or making a good investment with our $700 billion. And even though the loans have a value in the market right now of the 35 cents on the dollar. If you or I wanted to buy some of these troubled mortgages, we would have to pay 35 cents on the dollar. So why would the government pay 70 cents again? With our money! How asinine. And scary.

Warren Buffett, who staunchly supports the bailout btw, has been very clear that paying anything other then the current market price for these assets is insane and reckless. The government in this country needs to turn to a real-life capitalist -- an ever-shrinking breed by the day in this country nowadays -- and take a cue from his advice on how to work the bailout that the administration claims is such a necessary thing right now. That's the way this should work, if they insist on doing it at all. It's a shame, because I don't have any problem per se with the government helping the economy when needed -- that is part of why we have a government to begin with, to protect us, to help us, to act on interest rates and liquidity when needed, etc. and I have no problem at all with that. But the way the administration is trying to go about this particular intrusion intervention is truly scary, especially this administration with this track record of spending big on bullshit items that end up doing nothing but costing Americans money and, in many cases, American lives.

As far as I'm concerned, this election and the swearing-in of a new president cannot come fast enough. What a horrible thing to have a major financial crisis occur just months before this clown gets out of office. Talk about the bad beat of the century.