Stephanopoulos: Will the Bailout Pass the House?

Wow…did they just erase all that was posted on this blog entry?
I agree 1percenter except that anger can be directed in a very positive way if channeled correctly.
Here is quick short term idea to calm things on a temp basis so that REAL diligent deliberations on a REAL plan (that might actually work) can take place.
From my friend TNT:
“1. A federal moratorium prohibiting the redemption of the toilet paper sold by Wall Street as investment grade debt for 90 days. An interest rate equal to the inflation rate at implementation of the plan can be applied to sovereigns and mutual fund holders to compensate for the liquidity freeze. This buys our leaders 90 days to find a way out of this mess with some degree of decorum and should soothe the frayed nerves of many of the larger holders of the trash foisted upon them. Cost: Roughly $26 billion.
2. Fire the rascals. Every single one. No severance. No lay off slip. No golden parachute. Void the employment contracts by executive order in the interest of national security and send the bums packing. This mess was created by selling the same asset over and over and over, last time I looked this was still fraud. Once the bums can no longer harm our national financial interests, let the FBI have a field day. Cost: I don’t know. How much does it cost to write an executive order and send a Marshall out to plant a boot in some over dressed backside?
3. Do a forensic accounting of the evolution of the sub-prime waste paper. Track it from origination to current holder. Evaluate the collateral for each loan and roll back the value to the appraised value at origination. Cancel out any amount over appraisal. This is a loss to the originator (the bank) , call it a stupid tax. This revalues the underlying asset to a more realistic level. Cost: Maybe $100 million. Benefit: A real world assessment of the true depth of the problem, and a drastic reduction in the face value of the CDO’s.
4. Evaluate each mortgage under realistic terms. If the mortgage was originated under NINJA terms and the mortgagee has not improved his circumstance enough to afford the debt without federal or state assistance, remove it from the CDO pool. This is a loss to the originator. Call it a stupid tax. Re-write the terms for the mortgages that are current to current market value on a fixed 30 year and give those people a chance. They’ve been busting their butt to have the dream and have done so in the face of a deliberate corporate attempt to make them fail. God bless them all. The NINJA loans that are 90 days or more behind, foreclose and liquidate. Cost: Maybe $50 billion, probably less. Benefit : Actual equity in the CDO pool, and a societal benefit of rewarding those that pull themselves up by the bootstraps and a putting on notice of those that suck at the teat of nanny government. The salad days of Uncle Sugar are over.
5. Congress, you now have 90 days. You have a handle on the scope of the problem. The problem has been reduced to a real world valuation. Now deal with it. It will not be easy, there are no quick fixes to a problem that was years in the making. But we are Americans, as a nation we have faced and defeated adversity every time we tried. Solving this one will take time, effort, thought, and yes, lots of money. In the end though, our economic pillars will be stronger, our noses will be more attuned to sniffing out bull from our corporate and regulatory leaders, and our standing as the global driver of the money boat will be restored.”
Ive got to go make a few calls (again) to my reps to make sure they HEAR their constituents. Then Ive got to go be a bit productive at work in order to be better prepared to donate to the one federal agency that I was really hoping would become much more powerful over the next decade, the IRS.

(Sent)
25 September 2008
Senator:
As a former Marine, American citizen, father, husband and homeowner, it is my hope this approach/proposal outlined below will be digested and considered for action.
I have prepared a draft proposal that will:
Flat line the mortgage industry
Reset credit and lending opportunities
Inject economic adrenalin unlike that seen in the history of the United States
Restore confidence in the American Dream
This plan is called “The Chuck Plan.”
Please bear with me and digest the information before discounting it. There is critical need for radical decision-making that will salvage hope. I will refrain from getting into golden parachute discussions, or who will make money because of the meltdown, and will instead attempt to briefly outline The Chuck Plan.
You know…this might just work.
This caveat: Homeownership is the backbone of the American Dream, and that backbone is broken. It must be reset with haste and with precision. A band aid of new rule-making is a mask for indecision and profound action. This therefore calls for unprecedented thinking and behavior.
1. All homeowners who have mortgages stop paying their mortgage and are given their properties outright and permanently, and under the protection of the Federal government. This in turn will allow the mortgage industry to flat line. All mortgage payments that would have been paid now become available for immediate reinvestment, bank deposits, purchases for goods and services and educational payments, job creation, and many others.
2. Once all the mortgages are cleared off the books, all the revenues will immediately shift and be leveraged back into the economy and the American consumer would be adding rocket fuel to the economy because of the profound availability of cash that would flow through the marketplace..
3. The banking industry will immediately have available substantial money that has been produced and can be shifted under “new” ethical, oversight for mortgage reconstruction.
Scenario: If on average each of the 100,000,000 homeowners in America were no longer required to make a mortgage payment of (on average) $4,000 per month, and they owned their properties now outright, free and clear, then that monthly $4,000 would immediately be placed in banking and put to work reinvigorating the economy through purchasing power. Banks would succeed immediately, investment in stock would succeed immediately, confidence would be at an all-time high. Homeowners would still be required to carry insurance and pay assessed value taxes on their now free and clear property. The mortgage industry would collapse, yes, but the reset would invigorate the economy to such substantial degree that the wave of optimism would be incalculable.
3a. The immediate availability of cash that would flood the market outside the now flat-lined mortgage industry would jump-start the economy because of the trillions in cash that would be available immediately. The banking industry would then be healthier than ever before historically.
3b. Rough estimates: Monthly, across the nation, there are $364 billion in mortgage payments that would be forgiven/existing homeownership be made permanent with no further mortgage payments due/purchases on the market would sky-rocket/foreclosures would be forgiven and cease/the American Dream would be attainable.
3c. Rough estimate (2): Annually, across the nation, $5 trillion would be immediately available for reinvestment; consumer purchasing power would be astronomically enhanced. The economy would flourish.
4. Once the mortgage industry has flat lined, it can be reset with appropriate, ethical oversight in constructing valid policies and procedures.
5. The Federal government would now have time to investigate the mortgage collapse in its professional entirety. In this interim (I propose 12 months to develop and launch a new mortgage system); all home sales will be frozen. This may cause some to complain, but at the end of 12 months, the mortgage industry would be reset.
There are many other extremely beneficial components of “The Chuck Plan.” This is just a start.
I ask you to consider this plan and would be available to discuss with you an immediate way ahead.
Who Loses:
1. The mortgage industry collapses, but the revenues made available because mortgage payments are forgiven for existing homeowners and the subsequent availability of cash propels the economy into new heights, and is represented by cash purchases, new job starts, educational payments, etc.
2. Mortgage companies who have been exercising ethical loan practices will unfortunately be part of the reset.
Who Wins:
1. The American homeowner
2. The American economy
Extreme situations require extreme action.
Regarding the $700 billion bailout option: NO.
You know…The Chuck Plan just might work.

CL: Yeah – looks like all the posts got wiped.
How do we fire folks at these companies without taking them over?

Golden, I’m not sure where you got your facts about the average mortgage payment in the US, but it’s not $4,000 per month. It’s closer to $1,700.

I’ve got a note to the congressmen that’s simple enough that even they’ll understand:
Vote yes on the bailout, and I’ll be voting no to their reelection in November.
Now do your jobs and work on some legislation that protects the American people from this happening again, you crooked bums!!

Wow. The Chuck plan is communism defined. Sorry, but the people who should be crashing and burning are those who took out more mortgage than they could afford. Why in the world should they get to keep those homes when they can’t live up to the agreements they signed? Why are we trying to bail out Wall Street? Investment = Risk. Risk means sometimes you lose, and you can’t make it work any other way.

FEEDING THE BEAST
our leaders are acting out of panic and fear and injecting that into the public just like they did when they reacted to condi rice’ mushroom cloud moment in the lead up to war.
pet projects were added to the senate bill at a time when we have millions of foreclosures, and unemployment is on the rise.

It is hard to imagine 75% of our Senate voted to open the check book yet again without first providing a better accounting to their constituencies for the mess, particularly the $18 million bonus to the WaMu CEO for his 18 days of work(?), or the generous bonus packages granted Freddie Mac and Fannie Mae executives while the company was failing on their watch, or how the House Finance Committee (Barney Frank)failed to heed the Regulator warnings of pending doom at Fannie & Freddie.
In November, voters will have the opportunity to give pink slips to some House and Senate members like we on Main Street would have received if we had performed like those being bailed out.
I have a feeling there is more to this mess than we (on Main Street) are being told. Looks like a case of the wolves being sent to guard the hen house.

Yes they removed all the previous comments on this blog site. What a pity. The people were voting 100% against the foreign-bankers bailout.

People make good points here. People on Wall Street and the CEOs of these big companies usually draw down mad money. Along with the posibility of making big money goes the risk of losing big. Those who choose that lifestyle should not feel as if they are entitled to a safety net on the downside. That’s part of the game they play.

I’ve got a theory – the politicians who are pushing hardest for the bill are the ones who are most personally responsible for the situation:
- Bush
- Pelosi
- Barney Frank
Seems to me there are some alterior motives here. Looks like the American people’s interest are put last again..

When gov’t stimulus checks were distributed, Bush & Co. urged Americans to spend their money to keep companies thriving, even though Americans now have more debt than savings on average, for the first time in history.
Then, when the people’s personal finances ran out, resulting in loan defaults and forclosures, the gov’t now goes to the people’s treasury money to prop up wall street’s insatiable greed (20 Mil for 18 days of work for WaMu’s exec, over 500 Mil collected by Henry Paulson as chief of Goldman-Sachs). The bailout will happen, but another collapse is imminent.

This bail out will not work. Even top economists have said so. Rushing into something in just a few days is not the answer. It took quite a while to get to this point. Hastily spending $800 Billion Dollars on a shaky plan is WRONG!

WHAT EVER HAPPENED TO BUYING WHAT YOU CAN AFFORD—–OR PERHAPS SAVE A LITTLE——OH I FORGOT PEOPLE CANNOT SAVE –BUT THEY CAN PAY BACK DOUBLE WITH INTEREST. WE HAVE BECOME A COUNTRY OF FREAKING NUTS.–JUST UNEDUCATED.INSTEAD OF ASKING IF YOU ARE BETTER OFF TODAY—ASK IF YOUR EDUCATION IS BETTER TODAY.
N-O——–B-A-I-L-O-U-T—-

—–Simon’s Rescue Plan—
We should nationalize 50% of the rich people assets. The money that we got should be enough to bailout all homeowners, national debt, and wall street.
The rest of the money from the nationalization should be also enough to give each of the American citizens a nice car as a Christmas gift.

Simon,
Nice plan – it’s socialism, but then again so is the bailout. Socialism that takes from the rich and gives to the poor is still better than socialism that takes from the poor to give to the rich.

LET YOUR BUSINESS DUE TO YOUR INCOMPETENCE AND SEE WHO BAILS YOU OUT——WHAT A FREAKING JOKE——TOLD MY LOCAL CONGRESSMAN IF HE VOTES IN FAVOR I WILL DO ALL IN MY POWER TO GET HIM OUT NEXT ELECTON

Monger, Don’t you see the change of words they have been changing on this bailout ?
Bailout ——-> Rescue——> profitable taxpayer investment plan.
There is no bailout now. There is only a profitable taxpayer investment plan. Those guys are really genius.

I have emailed my Congressman and told him NO to this Bailout! Get a common sense plan together but not this. I only wish I would have had known I needed to contact my Senators before they voted yes to such an expensive plan that puts me last. Congress it is time to wake up and really take the time to fix this right.

The emails are down… KEEP CALLING!!! Hell NO to bailing out billionaires with OUR MONEY!!!

An easy prediction to show just how ignorant our citizens in this country are. The VP debate will get more viewers than the vote in the House tomorrow. Shocker? Unfortunately, not one bit.
CL

Obviously, there is a disengagement or disconnection between 2 sides, the representatives and their constituents, with respect to the bailout plan. It seems that in the House side, the leaders can “whip” the bill by singling out those who oppose the bill, and either coerce or sweeten them to get their votes. However, in the people side, WHAT CAN THEY DO??? Is this democracy???

Its okay Sutter, you may disagree but that won’t change a painfully obvious generalization regarding the American public…they, we, have been ignorant for years. Moreover, our suffrage pales in comparison with the rest of the world.
As far as tonights debate, meaningless, just like the Presidential one. However, for comic relief purposes, I suppose there is some value. Personally, I get more comic relief from listening to people try and convince eachother which one the four clowns is better or worse than the other.
Have fun tonight.
Good luck.

VOTE YES FOR THIS BILL! I can’t believe all the purist platonist idealists who don’t live in a real world. THIS BILL HAS TO GO THROUGH. It won’t just affect the wealthy if we don’t. It will buckle our economy. YES changes need made to the system. Let’s do that after we stop the major spurts of economic blood draining the entire world economy.

This bill should pass. Anyone who thinks it shouldn’t has their head stuck up places it shouldn’t be stuck. You can hold to your free market idealism all you want. But historically this country in this kind of economic crisis has only come out through intervention. JPMorgan knew that quite some time ago. Buffet knows it now. And a lot of economists who have theory awards but little if any practical know how are opposing it. LISTEN TO THOSE WHO ACTUALLY UNDERSTAND MONEY!!! Not those who sit in tiny offices filled with dusty books and make less than the average salary. This bill HAS TO PASS

YES I AGREE CLAEN HOUSE VOTE OUT THE CROOKS ALL OF THEM.BUT REMEMBER WE HAVE TO TAKE ALL RETIRE MENT PLANS,ALL INSURANCE,ALL SECERT SERVICE.I MEAN EVERYTHING THAT POLITIONS HAVE GIVEN THEM SELVES.WE THE PEOPLE HAVE TO MAKE A LESSON OUT OF THEIR INCOMPATANCE,AND LIES.FOR FUTURE OF OUR GRANDCHILDRENS LIVES.OTHER WISE THEY JUST LAUGH ALL THE WAY TO THE BANK.THEY CAN NOT BE ALLWOED TO LEAVE OFFICE WITH POCKETS FULL .WE NEED TO FORCE LAWS THAT HOLE THE POLITION RESPONSABLE. FOR ALL LAWS THAT OUR OK.AND FORCE LAWS THAT PAY POLITIONS ONLY BY WANT THEY DO,AND EVERY DAY NOT WORKING NO PAY .AND IF THEY RAMROD LAWS WITHOUT OUR OK THEN POLITIONS ARE PERSONALY ,FINICALY RESPONSABLE.

UNITE…..UNITE……UNITE…..UNITE….UNITE…..UNITE UNITE UNITE….THIS IS THE REAL SOLUTION IS IT NOT.RIGHT NOW ,NOW IS REALY THE TIME TO REMEMBER.DEVIDE ON SMALL THINGS IS HOW THE POLITIONS KEEP GETTING RICH OFF OF.WE ALL KNOW THAT THESE PEOPLE THREW GOD OUT OF OUR SCHOOLS,AND OUT OF GOVERNMENT.WE ALL CAN AGREE THAT POLITIONS MADE LAWS TO FILL THEIR POCKETS.(WE LOST JOBS) TELL THEM TO GIVE OUT OF THEIR POCKETS IF THEY FEEL THIS IS THAT IMPORTANT SHOW THEIR IMPORTANT.PROVE THAT THIS WILL WORK FIRST.THEN IF THIS DONT WORK THE MAJORTY WILL NOT LOSE.JUST POLITIONS.IS THIS NOT BETTER FOR THE COUNTRY AS A HOLE.LETS START MAKING THEM PROVE THESE GAMES WILL WORK BEFORE WE GIVE.AFTER ALL THE POLITIONS WILL BE MAKING THE LAWS THAT ARE SUPPOSED TO FIX,RIGHT IS THIS NOT WHAT THEY WANT US TO BELEAVE.HA HA. PROVE IT WORKS FOR 20 YEARS FIRST..WITH YOUR RICHES POLITIONS….THIS IS THE BEST WAY FOR THE COUNTRY…POLITIONS PROVE FIRST. THEN WE WILL THINK ABOUT. YOU PAY FOR MY HOME THE FIRST TIME. BECAUSE THE CONSUMER NEVER PAY 2 X ON THE SAME PRODUCT.

Just a comment from a not uninvolved European:
I understand the unease of taxpayers regarding such a bailout package, but remember:
- Americans lived on easy credit for years and (overall) consumed much more than they could afford
- This was financed by low interest rates (Greenspan), which only enabled the banks to give mortgages at such rediculously low terms
- taxpayers profited from the taxes earned on this financed consumption for more than 10 years (also billions of USD)
- now the party is over and your banks are going bust. this means no easy credit, no consumption,(as we see starting this week) the rows of jobless people will become much, much longer and your pensions will go down the drain as well.
- living in Europe I could be relaxed. I dont care if your pensions collapse and you are jobless, but unfortunately your banks draw our banks and pensions down the drain as well (WE DID NOT CONSUME TOO MUCH OVER YEARS)
The US claimed for many years a leading role in the world. Politically, it has ruined its reputation in the rest of the world with the Irak war. Now, it is on the way to do so economically as well.
I hope very much congressmen have just a little more economic knowledge than the average american posting in this blog, then they will hopefully understand that THERE IS NO WAY AROUND THIS BAILOUT PACKAGE. Costs doing nothing are by far larger – not only for the Americans, but unfortunately for all other countries as well.
AMERICANS – YOU NEED TO PAY THE BILL FOR YOUR GOLDEN YEARS AND DONT STEAL AWAY LIKE THIEVES !

@ Maxify55
A apologize for the emotional and a bit drastic last sentence in my post (I like you, Americans), but on your side, please recognize that the old socialist/ capitalist scheme does not work any more in this century.
The division of the world in socialist = bad Europeans and fee market = good Americans is completely outdated. (We see how pure free market ideology is just on its way to fall apart)
So put away your ideological sunglasses for one moment and have a clear look at economic realities… (BTW – I am economist by profession and owner of a small company – so no ‘socialist’ in your scheme)
Give the arguments a thought !
PS BTW – just a little remark – you mentioned Stalin and the Messiah in one sentence – I am not sure if you really stick to this if you would know how many people Stalin killed…. ;o)

European,
The idea that we have had a free market in America is one of the biggest misconceptions out there.
You speak of how Allen Greenspan’s low interest rates contributed to this mess. That’s because they are artificially manipulated. You can’t have it both ways. You can’t blame artificially low interest rates and then say that the free market does not work. Government intervention helped get us into this mess, and monetary policy contributed greatly. We don’t have a free market here in America…we have not had one in many years.
And we have a corrupt government on both sides of the aisle. Very corrupt. Criminally corrupt. And the majority of the people in this country simply allow it.
After all, as long as American Idol is on, what difference does it make, all is well.
Embarrassing.
Good luck.

there go the some of the comments again..wonder who owns ABC ha