First the articel

http://www.washingtonpost.com/wp-dyn/co ... id=topnews


-Ok I understand that government and FED payed a lot of money to make the current crash not that brutal and crashing the system completely. More a move to cool entirely economy down from its overheated level.
-Investing in those things Obama wants is wise

but

-why in such huge amounts? From the stuff going on now shouldnt the next decade be one of saving money and making smaller steps (though I agree in the direction Obama wants)?
-It looks like the amount pumped in is to get as fast back to the old (unhealthy) level?

-Its not only an US-Problem. Overhere its also that a lot of politicians I guess didnt get yet that the next decade cant be one of big expensive projects. I mean so much debt is gonna be made until 2011...do they really want to pump up the next monster bubble that might destroy money stability?

Discuss.

Rolling Stone have a brilliant (and long) new article about the crisis and the subsequent bail out:

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

Pretty infuriating and terrifying in equal measures.

From what I have seen about this on tv and the computer, Wall Street and the Banks love this plan BUT ECONOMISTS THINK IT IS HORRIBLE!

As one guy said, these are toxic assets, most don't expect them to return to value, unlike what the adm is saying, so the taxpayer is expected to get screwed big-time on this???

???????

Treasury plans to clear out $1 trillion in toxic assets

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) - After months of delay, the Treasury Department detailed a plan Monday to clear out as much as $1 trillion in so-called toxic assets from the financial sector in an effort to strengthen the banks enough to get them to lend again.

The public-private plan would have private investors and the Treasury put in equal amounts of money that would then be backed by a loan guarantee from the Federal Deposit Insurance Corp. to buy loans and mortgage-backed securities from the banks.

Both the taxpayers and the private investors would gain from any profits if the assets eventually gain value. The taxpayer would take most of the downside risk.

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The taxpayer has no out, the money the are putting up is 100% gone.

Oh, so that's the new party line? How about we finally start holding the parties who miscalculated risk accountable instead of bailing them out?

Accountability? Surely you jest. Hell, I'd be happy if we just stopped REWARDING their failure with huge salaries and bonuses.

Legislating salaries and bonuses is not the answer, though. All it does is make people suspicious of the government (and rightly so). What needs to happen, however, is for the government to stop bailing out the counterparties. Why should Goldman be rewarded for not thinking through their exposure to AIG? What's stopping Goldman from insuring their exposure to market risk again and expecting the government bail out the insurer?

I'm using GS as an example here, because they're the most infuriating example, but the entire financial industry needed to be brought down a notch for what they did with leverage.

Not so suspicious that they're NOT taking their hundreds of billions in bailout money. These guys understand the government more than anyone. That's how they're gaming the system.

JP Morgan Chase, who got TARP money last year, are expanding their call centers in India by 25% to $400 million. That's our tax dollars being used to put Indians to work overseas. If these guys are going to insist that this stuff is necessary and turn around and pull this kind of crap, then I'm all for regulating the shit out of these funds.



100% agreed.



I'm hoping, probably naively, that there will be a cultural shift borne out of this in which Wall Street isn't a game for the rich, in which people on Wall Street stop making money by risking our collective futures, and in which publicly-held corporations make money through products and profits, not just endless growth and stocks that encourage exactly the kind of recklessness that helped create this mess.

It's not a party line, it's just the facts. Though when I say that I'm referring to the toxic asset buyback, NOT the entire financial bailout where the US will get money back.

As for accountability, I blame Clinton and Bush mostly, but in reality there is no easily culpable party here. The utter lack of regulation allowed the problem, but the greed on wall street created it.

http://www.nytimes.com/1999/11/05/busin ... 1&emc=eta1



This was a bill written by Republicans and signed into law by Bill Clinton in 1999.

You can't simply point to the repeal of the second Glass-Steagall Act as the cause of this mess, it played a role, but that is a horribly simplistic and inaccurate way of looking at it.

The real issue wasn't allowing banks into new sectors, as the repeal did, it was the fact that there was no regulation! Regulation, regulation, regulation, it all comes back to regulation and the lack there of. Many of the banks who have survived this mess are the ones who responsibly diversified via Glass-Steagall, while many that failed did so because they hadn't diversified at all.

Glass-Steagall is a scapegoat to the real issue, regulation. Contrary to popular belief, there was no deregulatory legislation in Glass-Steagall, it actually created a new regulatory agency in the Federal Reserve. This is why, as I said above, I hold Bush's administration and the Clinton/Bush congresses responsible in part because they never fixed the damn regulatory loopholes that allowed this mess.

Greed, ignorance, and a sprinkling of stupidity, with some from every party. And it all leads back to what I said: There is no easily culpable party. You can't singularly blame Republicans, Democrats, Clinton, Bush, Kerry, Obama, Gramm or anyone else. This was a failing by both parties and multiple branches of government for over a decade.

Gramm himself described the bill as deregulation. And while Dems certainly share in some of the blame, the fact is that the GOP is the party of deregulation, deregulation, deregulation. Basically, where the Dems failed is letting the GOP get their way on these issues. Congressional Dems were spineless and weak then, all during the Bush years, and pretty much still are.



If you're going to blame a lack of regulation, then surely the culpability falls mostly on conservatives like Gramm, who have always opposed regulation of the financial industry. I blame Clinton for signing the law, but this was authored and pushed by Republicans.

You can't just say Gramm said this, provide a quote please. Like this one, where Gramm said: "Moreover, GLB didn't deregulate anything. It established the Federal Reserve as a superregulator, overseeing all Financial Services Holding Companies. All activities of financial institutions continued to be regulated on a functional basis by the regulators that had regulated those activities prior to GLB." See, that he actually did say.



... and voted for by the vast majority of Democrats. The Republicans certainly deserve their share of the blame, but you're lying to yourself if you think that Democrats aren't lying in the same bed. Furthermore, there is good regulation and good deregulation, and their are instances and situations for both. Clearly, there was a lack of regulation here, but my point is, you can't point just to the Glass-Steagall Act and call it a day, because that act, while playing a role, is not the cause of this mess.

That's why I said this: "Basically, where the Dems failed is letting the GOP get their way on these issues. Congressional Dems were spineless and weak then, all during the Bush years, and pretty much still are."

But you know as well as I do that deregulation is a GOP mantra. You're the one lying to yourself by denying what you know to be true of Republicans and their platform. Dems are to blame for rolling over, but these are REPUBLICAN ideas in action.



Yes, but in the same way that Republicans are always for tax cuts no matter what, they fought constantly for deregulation throughout the 90's, and Phil Gramm was one of the biggest advocates, deregulating the banks as well as energy deregulation that led to the Enron debacle.

Yeah, the Commodity Futures Modernization Act which Snrub referred to above pretty much opened the door for Enron.

http://www.boingboing.net/2009/03/24/de ... h-dak.html

"'I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010. I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness,"

- Senator Byron L. Dorgan, Democrat of North Dakota, November 5, 1999.

well Obama is getting ripped on the news about the G20 and his stance.

According to tv, other leaders are like you caused the problems, go figure it out for yourself and leave us alone. Don't tell us what we need to do/do with our money!!!!!!

???????? guess I need Eagle to confirm whether Obama is clueless or he really knows what he is doing?

The situation isn't now, and never will be, as black and white as clueless or not. There are shades of grey, and no guarentee of a perfect path, no matter what decisions you make.