The government has officially announced that they will not be buying troubled mortgage assets -- the original point of the so-called Trouble Asset Relief Program, and will instead be offering the bailout money to financial firms that are getting hit with a wave of defaults in credit cards and car loans. [CNNMoney]
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Those lobbyists sure are earning their special places in hell.
Sure, that makes sense. Instead of helping the people who are losing their homes, let's help the people who, for the most part, screwed them in the first place.
Yaaaaaaaaaay.... boooooooo.
HA! Take that AMEX! You went through all the trouble to become a real bank in something like record time and you didn't even have to! Hope it was worth the $3.5billion you got from us.
Oh, it was worth it...well damn.
Love it. Absolutely love it.
Let's all blame Bush.
No wait, let's blame the Democrats.
No, let's blame the idiots who borrowed money because it was there and now have to lose their home.
Screw. Screw. Screw.
Private gains, socialized loses.
What the hell happened to this country?
This sure seems like quite the preplanned scam, doesn't it?
How is the wonderful bailout bill you and your friends voted for going, Mr. Politician? Oh, banks aren't really using the money to make loans, but instead using it to buy up failing banks? There must have been stipulations on how the money was to be spent in the bill? Weren't there? Oh, you were told time was critical so we didn't have time for stipulations. You had time to put in over 300 pages of pork, but no stipulations. Well, the bailout bill must have been forward thinking enough to include other huge American companies that are well known risks to go out of business? Oh, just banks huh? Nothing for the automakers who have been screaming for months about lack of cash and going out of business? And this is my problem, the bailout was not thought out well enough to be effective. The politicians bought the 'buy it now or we'll be out of business when you come back' line, just like a customer getting abused at a used car lot. Anyone who voted for that monstrosity needs to resign from congress and do some hands on research with Seppuku.
clap clap clap. I was reading an article about lobbyists this morning in the Times. Man are they frickin' persistent. A special circle in hell has just been made for them, as well as those d-bags who love to profit from catastrophes.
@johnva: Indeed it does. I'm starting to feel like the gubment wants one or two humongous banks to rape and pillage everyone not rich enough to avoid it. What happened to capitalism and competition?
PLEASE... STOP... THE... INSANITY...
Can someone please, for the love of God, kick out Paulson now?
Hooray for fraud!
@Angryrider: Healthcare lobbyists from various groups (insurance industry, pharmaceutical companies, doctors, hospitals, etc) are among the worst. They are pretty much singlehandedly responsible for the sorry state our healthcare system is in right now. LBJ wanted to fix it permanently in the 60's, but had to scale his plans back to just Medicare for the elderly and Medicaid for the extremely poor thanks to the efforts of lobbyists. Then they scuttled another reform plan during Clinton's Administration. Now they are helping to steal trillions of dollars from the taxpayers. This is getting ridiculous. These people are a cancer on our Republic, and now pose an existential threat to our nation.
@savvy9999: Two more months...
Sadly, I think the Bush Administration can still do a LOT of damage in the time they have left. I'm really worried Bush is going to issue some sort of blanket pardon to ensure that none of these people are ever prosecuted for their crimes against our country.
@ThickSkinned: This message was brought to you by the National Sarcasm Socetey. Our motto: Yeah like we need your support
Man, I hope the kids are enjoying their expensive wooden arrows and Puerto Rican rum.
Bait and switch, is right. Can we just have a nice recession now and get it over with, WITHOUT devaluing our currency into oblivion first?
Since our tax dollars are paying for credit card defaults, does that mean I can stop paying on my credit cards?
I worked for Citi before moving to a smaller, regional investment company and my biggest problem with this is that I'm having to compete with federally-funded companies.
Since the company i work for managed its risk and thought about the future, we are in no trouble and don't need any federal money, but the big banks, who compete for my clients got bailed out and suffer no consequences.
I agree (to an extent) that these banks can't just fall apart, but I think as long as people's assets remain intact, there is no need to retain any actual companies that were bailed out. Big banks will fall and small banks will buy up the pieces... That's capitalism.
I'm glad we're not buying the toxic assets, because I wouldn't want them as they are essentially worthless. However, I don't want to just give money to the banks/financial institutions without getting something in return, so hopefully the government is buying preferred stock in the companies, or at least corporate bonds, that way we have some hope of getting the money back.
@Crabby Cakes is SOLID AS BARACK!: I don't think that there is such a thing as a coincidence when we're talking about these vast sums of money. Probably they knew that bailing out credit card companies would be insanely unpopular, so they waited to reveal that part of it. It was just insane to give Paulson such sweeping powers to distribute so much money as he sees fit. That's like letting the fox guard the henhouse, given his past position in industry.
Let Them Eat A.R.M.'s!
Oh wait wrong country ..
Yes of course put the money in the middle of the mortgage chain to fix the banks and let the people fall off and choke the systems with their battered finances even more.
@wdcr0ck: I think it would be better if the government would instead just give us all some sort of refundable tax credit to be used in repaying whatever debt we want. That would help individuals while still injecting a lot of money into the banks, and it could be used for mortgages, credit cards, student loans, medical bills, etc. $700 billion certainly wouldn't even come close to paying off everyone's debt, but it would help, a lot. Basically, if the taxpayers are going to give out this kind of money, I want there to be something in it for me.
@Imakeholesinu: I smell far worse than that whole debacle. This is why I would STILL support impeachment of the lame duck president and vice president. It would prevent them from issuing pardons, and now that the election is past the motivation would be seen as not so much political as restoring the rule of law.
I said this whole think stunk when they proposed it. There was this whole air of urgency combined with secrecy. "OMG everything is going to fall apart if you don't give me all your money RIGHT NOW but if I tell you any details it will be even worse so just trust me".
Smelled just like Iraq and the song and dance mushroom cloud BS they used to sell us that albatross.
In a way I am glad they are not just buying up these worthless debts, that would have solved nothing. But Paulson has been doing what? It sounds like he is just handing out the treasury to the banks with no plan.
If they are so worried about credit card debts, let the consumer file to get their debt paid by the gubmint. The gubmint pays the debt, the bank has the money and the consumer is either off the hook or now has a deal with the fed. The current way saves everyone BUT the consumer.
Screw it. Impeach Bush and the entire lot of them right now. Let Pelosi run things til January.
Is anyone else feeling like organizing a mass march on the White House and Congress buildings for this kind of bullshit? You think if everyone in America flocked to Washington DC that they'd listen to their constituents?
No? Oh...well, let's do it anyway.
I hope nobody expected anything different.
The sad thing is, I saw this coming from a miles away. The entire "rush" mentality is what screwed us in Iraq and now it's fracked our banks.
/Surprised? I think not.
@ThickSkinned: Aw, did someone else watch the special on Samurai the other night on the History Channel, too? (It was awesome, wasn't it?)
Fantastic comment!
How is it that American Express, who is generally the most exclusive of the CC companies, needs $3.5 billion?
Also, I'm wary of claims that say loans are harder to get overall. I've recently been extended credit and offered an auto loan with no trouble. Maybe it is harder for people with less than stellar credit or without the income level to support it. But, if that's true, maybe they shouldn't be applying for the loan in the first place.
I'm in a fair amount of CC debt from my divorce, I could use a handout. Money please!!
*facepalm*
@B:
Oh, these are toxic!
No matter how devalued the securitized mortgages are now, they're ultimately backed by real property, so there is some value there.
Credit cards are backed by NOTHING. If economic times get tougher (and you tell me if they will), then credit card defaults will skyrocket. Those securitized assets will be worthless.
Only, instead of being backed by real property that could eventually be sold, they're backed by nothing at all. Nothing to sell eventually other than the TRUST that once the economy rebounds people will pay down their charged off credit card debt.
They'd better hope the economy turns around before various statutes of limitation on that defaulted on consumer debt expires and they become legally uncollectable.
@moonjest:
I think American Express is trying to hedge itself against what it sees as a huge onslaught of defaults. I can't blame them for grabbing for taxpayer cash if it's being handed out like candy. I do blame the ones handing it out like it's candy.
As for credit, you're right. My credit is far from perfect, and I've had no problem getting the cards I want, and I've even gotten limit increases of about 40% in the past month.
Where's Tyler Durden when we need him?
I've thought of that several times during this whole mess. Unfortunately, it's not so easy to "wipe the slate clean".
Screw Congress.
@savvy9999: I find Paulson simultaneously fascinating and disgusting. Rather than the typical fast-talking, indolent sharpie, Bush et. al. present us with Mr. Magoo.
Not just incompetent, Paulson's public statements are incoherent, literally missing subject, verb, or object. Packaged in a bumbling, stumbling manner, drawing embarrassment for him from empathic listeners, and almost drawing sympathy, right down to the bent-up little finger of his left hand, sticking out at that odd angle as he gestures. The whole gestalt diverts your attention. Until you find out what he's been doing to you with that finger for the last month...
It's the old shill game wrapped in an odd, disconcerting presentation intended to mesmerize and obfuscate. And so far, it's working just fine. Which, if I know anything about the current administration, will embolden them to go for the whole fist. Soon.
So did they actually buy any bad assets or did they just give money to banks?
So it was just a $700 billion blank check that Congress and Shrub signed. Sigh.
@Secret Agent Man: There was a great article today - I wish I could find it - that said, basically, the reason Goldman is looking for a buyer or enough capital to buy themselves back, is because they are losing and will continue to lose market share to competitors who were (A) worse off than them, and (B) took some of the bail out.
The problem is exactly what you said - now the stand-alone, we-won't-take-any-bailout firms are at a competitive disadvantage to the firms that have been bailed out. Now these reasonably solid firms have to consider selling out to bigger companies in order to survive (or take themselves private, as might be the case with Goldman.)
Interesting that this was announced right *after* the elections.
Whatever, screw us one more time Dubya. You're outta here. And I ain't going to visit your stupid library.
@johnva: That's $2,324.50 for each man, woman, and child in the nation (based on this population estimate). Sounds fair to me. Married couples would get almost $5K, families with two kids would get almost $9300. Imagine putting that into paying back all your credit card debt, student loans, car, catching up on your mortgage payment, or if you're so on top of things, either throw it in your retirement/brokerage account, have the big extravagant Christmas vacation of your dreams, or build that home theater you've always wanted. Either way--money flows into the banks so they don't go out of business and can make more loans, and this way a lot of it would also end up going to retailers and automakers that are hurting a lot too.
Bush had the right idea with stimulus checks.
Maybe a bailout is the wrong way to go, and maybe it's right. All I know is i'd like the plan I just detailed a lot more than I like the real bailout plan for banks.
Bait and switch. Awesome.