Paulson's Panic

Well, I only wish we had the ability to review this economic train wreck in retrospect, in a history book 20 years from now. Sure would make decision making a lot easier. This, by all accounts, is an economic crisis like none we've seen since the Great Depression.... some say worse.
I think we should go with the bailout, impose all the restrictions suggested, including the government getting equity in companies that go with the bail out, and allowing judges to help fix mortgages that are leading families into foreclosure.
Then, get probably the most savvy investor in this country, Warren Buffett, to manage the purchases of debt at the lowest possible price, and manage the resale of these securities. In an interview I listened to earlier today, he has the notion of how to repackage this debt and make money reselling it. Sure, give Warren a piece of the action for doing so. Once this is accomplished, regulate that industry as we do others, since those CEO's have demonstrated their inability to be trusted.
Then, 20 years or so from now, history will tell us if what was done was a good thing or not.

I'm not sure what the current plan is, or even if it's a plan at all. The way I see it, the "smart" institutions will still have liquidity for lending. I'm all for the "stupid" institutions going out of business. With the real estate market at a low point, the going rate is about 6% for 30 yr fixed, but the qualifications for risk-based lending are more stringent, as they always should have been. Institutional short-term deposit rates are 4% to 4.6% so I'm not seeing where this liquidity crunch is as far as consumer loans go. The problem, as I see it, a lot of this incurred debt was used for speculation, not for productivity. I stil believe there is enough for productive liquidity, and my speculation is as good as anybody's, because nobody knows. This panic to not miss the boat and fill it full of money before it sails does not pass the laugh test.

It's completely off topic, but I am proud to have served my country under both Republican & Democrat administrations and while I certainly do not desire or want my children (3) to die, I would be proud if they did so in the service of this country, even if it is to protect the right of narrow minded people such as AndreaD who blame all the ills of the world on one person or group of people.

As for our current crisis, anyone who actually cares enough to research it will discover that it is the action & inaction of several administrations both Republican & Democrat that got us where we are today. I for one will be voting for real change by voting Libertarian. Anyone who truely cares for their individual rights or their childrens future will do the same.

India disposal of a CEO may be beginning of a worldwide trend.

speed kills ....

speed kills....

We are constantly lecturing other countries on the benefits of free market economics. Republicans like Phil Gramm question our mental capacities when we little guys get screwed. They say it is all in our minds and that the game is not rigged and it is just market economics but when the big players screw up due to their own bad decisions they cry like babies and get bailed out with our money. Where is your "ownership society" Bush.?

Anyone out there who has any money in any account in any bank needs to pay close attention to the reality of the current crisis. The institutions that hold our money, turn around and lend it every day to other institutions, large and small. Sometimes they lend our money to big, safe companies and sometimes they lend our money to a little guy's company. Regradless, without that lending, both the big guy and the little guy would be out of business. Well guess what? Last week, the banks said no more lending and the banking system froze. If not for some immediate, albeit temporary action by the Federal Reserve, the system would have collapsed and just try to imagine what the impact would have been. So forget the complacency, forget who is at fault, and most of all, forget whether we have the ultimate plan. Just get behind the current plan because it is the only plan that will work in the short run to address the urgency of a crisis situation. Afterwards, you can debate and argue about all the other issues while you're having lunch or dinner. However, if we miss the boat here folks, we're all going to have a tough time buying lunch and dinner in the not too distant future.

I'm not even going to read this. Someone says "up" so naturally someone else has to say "down". They (Government) do something or they don't do something. Either way things are terrible. I love how the real choices are flavor of really bad A or flavor of really bad B. I have complete media fatigue from both this and the campaign. Thanks the Heavens above prime time TV is finally back in swing.

I'm not even going to read this. Someone says "up" so naturally someone else has to say "down". They (Government) do something or they don't do something. Either way things are terrible. I love how the real choices are flavor of really bad A or flavor of really bad B. I have complete media fatigue from both this and the campaign. Thanks the Heavens above prime time TV is finally back in swing.

This is like watching Nero fiddle while Rome burns. Anyone who knows anything about the way our banking system works, knows that last week we were on the verge of ushering in the Great Depression of the 21st century. We can all lament the idiocy that got us here and we can debate the whys and wherefores until the cows come home, but while we and Congress are fiddling, the markets are close to giving up and burning to the ground. When the banking system shuts down and lending ceases, it will not reopen any time soon. The impact will make our hurricane problems look like a sun-shower. Companies will go bankrupt faster than a speeding bullet, pension funds and 401k plans will be halved one day and halved again the next day, and bank accounts will go poof in the night. This isn't play time folks and magazine articles that warn against panic are whistling through the graveyard. Now is the time for Congress to act, panicky or not, because in just a few days there won't be a second chance.

I think your (author's) choice of words is unfortunate, i.e., ???PANIC???, because it is highly inflammatory, when it does not need to be and probably is not accurate about Paulson, as you say it is. This is a case where you, the media, say "the glass is half empty" instead of "the glass is half full" out of habit, but end up inciting the very state of panic in which you accuse Paulson of being, because the anxious public is highly volatile, i.e., panics very easily.

There is a big difference between panic and doing what absolutely must be done. The degree of urgency expressed by Paulson and Bernanke and other authorities, e.g., Warren Buffet, Hillary Clinton, etc, is appropriate. That doesn't make it panic.

Let me give an example: Suppose someone in a crowded public place smells smoke and begins calmly telling everyone who can hear that they should RETIRE quickly, but orderly from the building. You mishear what they said, thinking they said FIRE, so you cry out loudly "FIRE FIRE FIRE". You have caused the panic that is likely to ensue.

While I don't think you did this intentionally, this is what the tradeoff is between responsible journalism versus sensational journalism.

In any case, I applaud Paulson and Bernanke for having the expertise and the moxy to step up to the plate on this. I don't give a damn whether they are part of the Bush Administration or whether they are Democrat or Republican. I only care that they are doing what needs to be done now...the right thing and I applaud them for doing it.

Thanks.

(I posted this earlier, but it didn't get into the conversation for some reason, so I am posting it again. My apologies if it ends up duplicating).

I think your (author's) choice of words is unfortunate, i.e., ???PANIC???, because it is highly inflammatory, when it does not need to be and probably is not accurate about Paulson, as you say it is. This is a case where you, the media, say "the glass is half empty" instead of "the glass is half full" out of habit, but end up inciting the very panic in which you accuse Paulson of being, because the anxious public is highly volatile, i.e., panics easily.

There is a big difference between panic and doing what absolutely must be done. The degree of urgency expressed by Paulson and Bernanke and other authorities, e.g., Warren Buffet, Hillary Clinton, etc, is appropriate. That doesn't make it panic.

Let me give an example: Suppose someone in a crowded public place smells smoke and begins calmly telling everyone who can hear that they should RETIRE quickly, but orderly from the building. You mishear what they said, thinking they said FIRE, so you cry out loudly "FIRE FIRE FIRE". You have caused the panic that is likely to ensue.

While I don't think you did this intentionally, this is what the tradeoff is between responsible journalism versus sensational journalism.

In any case, I applaud Paulson and Bernanke for having the expertise and the moxy to step up to the plate on this. I don't give a damn whether they are part of the Bush Administration or whether they are Democrat or Republican. I only care that they are doing what needs to be done now...the right thing and I applaud them for doing it.

Thanks.

Here are a few proprosals:
1) For all execs of every bankrupt or bailed out company, tax their options ad/or golden parachutes at 100%. Thus, they will get nothing for ruining their companies!
2) Paulson wants immunity for handing this mess. Why does he need immunity if he knows what he's doing? If he doesn't know, why is he handling it? Why does he want no oversight? This souonds like a huge scam being run just before the democrats take over the white house.
3) The AIG aid was OK because we (taxpayers) now own 80% of it, and we'll make money on it! Something similar should happen with any bank bailouts.