WWTBAM Bored

President Bush readied a prime time speech to the nation and Treasury Secretary Henry Paulson accepted a major change in legislation for a $700 billion bailout of the financial industry on Wednesday as the administration scrambled to prevent further deterioration in the economy.

Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout. They spoke on condition of anonymity because Paulson’s decision had not been formally announced.

White House officials said Bush’s speech would dwell on the financial crisis.

http://www.msnbc.msn.com/id/26871338/

The article doesn't say what time the address will be!

MarleysGh0st wrote:The article doesn't say what time the address will be!

9 PM EDT.

He should do it on 'pay per view'.

Bob Juch wrote:Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout.

There should be no discussion on pay packages, just jail terms.

BackInTex wrote:

Bob Juch wrote:Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout.

There should be no discussion on pay packages, just jail terms.

The sky must be falling. I agree.

BackInTex wrote:

Bob Juch wrote:Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout.

There should be no discussion on pay packages, just jail terms.

Lord knows I'm no fan of overpaid executives, but what crime do you think they committed? --Bob

Bob78164 wrote:

BackInTex wrote:

Bob Juch wrote:Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout.

There should be no discussion on pay packages, just jail terms.

Lord knows I'm no fan of overpaid executives, but what crime do you think they committed? --Bob

Hmm.... fraud, for one.

Aren't these public companies? What sort of guidance did they give in their last few conference calls?

The BODs and th execs of these 'banks' should be fully investigated. And everyone of them should be broken financially.

I am stunned that bush is driving the country into the ground.

dint see that coming

Bob Juch wrote:President Bush readied a prime time speech to the nation and Treasury Secretary Henry Paulson accepted a major change in legislation for a $700 billion bailout of the financial industry on Wednesday as the administration scrambled to prevent further deterioration in the economy.

Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout. They spoke on condition of anonymity because Paulson’s decision had not been formally announced.

White House officials said Bush’s speech would dwell on the financial crisis.

http://www.msnbc.msn.com/id/26871338/

Bush is bailing out? A little late, isn't it

BackInTex wrote:

Bob78164 wrote:

BackInTex wrote: There should be no discussion on pay packages, just jail terms.

Lord knows I'm no fan of overpaid executives, but what crime do you think they committed? --Bob

Hmm.... fraud, for one.

Aren't these public companies? What sort of guidance did they give in their last few conference calls?

The BODs and th execs of these 'banks' should be fully investigated. And everyone of them should be broken financially.

Malfeasance for another. Boards of directors and corporate officers have a fiduciary responsibility to act in the best interests of the stakeholders. They weren't doing it. To a large extent, many were making these shaky investments in mortgage-backed commodities just because others were doing it and making money from it. It was profitable, so pay no attention to the man behind the curtain. Even those companies which saw this meltdown coming kept up their behavior, because backing off would have lowered their earnings and stock prices, and they made their decisions with the standard Wall Street short-term thinking.

Punish the truly fraudulent with jail time. Fine the individuals who didn't perform their corporate duties by taking away their high pay, obscene bonuses, golden parachutes (lead would be more appropriate) and comfortable pensions. Have the feds take major equity interests in all the firms they now are bailing out. You took on all this risk and thought you wouldn't get hurt when it failed? Guess again.

Ya think Congress and this Administration will actually do any of the above? In an election year? Ya think they'll create or put back regulations which would prevent a recurrence of this or similar situations with equally risky investment creations? What kind of odds would you give me?

BigDrawMan wrote:I am stunned that bush is driving the country into the ground.

dint see that coming

You been walking around without your contacts in?

Newt Gingrich, Mike Huckabee and others have outlined an alternative plan that is not getting many headlines, but that I hope is being considered:

Gingrich's four-point plan includes: (1) suspending immediately mark to market provisions (the accounting practice of valuing a financial position in an investment at its current market price) in the hopes of stopping the downward spiral in asset values and eventually replacing it with a three year rolling average; (2) repealing immediately Sarbanes-Oxley, the 2002 accounting law Gingrich described as "an enormous drag on small business"; (3) setting the capital gains tax rate at zero "matching the Chinese and Singapore" (to encourage private capital to flood into the market picking up properties without the taxpayers being at risk); and (4) passing an "extraordinarily powerful" energy bill ("to return $500 billion a year to the American economy that are currently going overseas").

Anything that involves repealing a messy, complicated beaurocratic law is automatically appealing to me.

flockofseagulls104 wrote:Newt Gingrich, Mike Huckabee and others have outlined an alternative plan that is not getting many headlines, but that I hope is being considered:

Gingrich's four-point plan includes: (1) suspending immediately mark to market provisions (the accounting practice of valuing a financial position in an investment at its current market price) in the hopes of stopping the downward spiral in asset values and eventually replacing it with a three year rolling average; (2) repealing immediately Sarbanes-Oxley, the 2002 accounting law Gingrich described as "an enormous drag on small business"; (3) setting the capital gains tax rate at zero "matching the Chinese and Singapore" (to encourage private capital to flood into the market picking up properties without the taxpayers being at risk); and (4) passing an "extraordinarily powerful" energy bill ("to return $500 billion a year to the American economy that are currently going overseas").

Anything that involves repealing a messy, complicated beaurocratic law is automatically appealing to me.

As a corporate fianance manager and CPA the first two ideas are horrible, to be polite.

The purpose of financial reporting, especially the balance sheet is to give investors a view of the value of what they are investing in. If a company owns securities that are impaired or worthless, the investors should know that. They shold know the value of what they are buying.

I would like to buy gasoline at the three year average, but not a company who's investment portfolio is 80% AIG.

SOX is only required for publicly traded companies. They have already extended the implementation deadlines for small public companies. SOX and its requirements were overblown by the 'consulting' business to rake in billions of dollars in fees. At its core, SOX is good. I see nothing burdensome on a comapny for the CEO and CFO to certify that the numbers they are using to sell their stock are accurate and that they certify that their internal controls are effective so that they can rely on what they are being given.

If congress wants to repeal something truly burdensome on small business they can start with the ADA.

BackInTex wrote:

flockofseagulls104 wrote:Newt Gingrich, Mike Huckabee and others have outlined an alternative plan that is not getting many headlines, but that I hope is being considered:

Gingrich's four-point plan includes: (1) suspending immediately mark to market provisions (the accounting practice of valuing a financial position in an investment at its current market price) in the hopes of stopping the downward spiral in asset values and eventually replacing it with a three year rolling average; (2) repealing immediately Sarbanes-Oxley, the 2002 accounting law Gingrich described as "an enormous drag on small business"; (3) setting the capital gains tax rate at zero "matching the Chinese and Singapore" (to encourage private capital to flood into the market picking up properties without the taxpayers being at risk); and (4) passing an "extraordinarily powerful" energy bill ("to return $500 billion a year to the American economy that are currently going overseas").

Anything that involves repealing a messy, complicated beaurocratic law is automatically appealing to me.

As a corporate fianance manager and CPA the first two ideas are horrible, to be polite.

The purpose of financial reporting, especially the balance sheet is to give investors a view of the value of what they are investing in. If a company owns securities that are impaired or worthless, the investors should know that. They shold know the value of what they are buying.

I would like to buy gasoline at the three year average, but not a company who's investment portfolio is 80% AIG.

SOX is only required for publicly traded companies. They have already extended the implementation deadlines for small public companies. SOX and its requirements were overblown by the 'consulting' business to rake in billions of dollars in fees. At its core, SOX is good. I see nothing burdensome on a comapny for the CEO and CFO to certify that the numbers they are using to sell their stock are accurate and that they certify that their internal controls are effective so that they can rely on what they are being given.

If congress wants to repeal something truly burdensome on small business they can start with the ADA.

Thanks for your analysis. I guess there's no easy answer to this. I just don't like the government taking charge of anything. We are going to take over 700 billion in mortgage debt and have a government agency in charge of recovering it? Sounds like a recipe for even more disaster to me.

flockofseagulls104 wrote: We are going to take over 700 billion in mortgage debt and have a government agency in charge of recovering it? Sounds like a recipe for even more disaster to me.

We are not really taking over $700 billion in mortgage debt as we are taking possesion of $500 billion in homes and losing the other $200 billion.

How about this for an idea. We put those homes into the GI Bill 2009 inventory. After 10 years of service in the military, or on a combat medical discharge, the vet gets a 30 year zero % loan to buy one of the homes. After living in the home for 15 years and making all payments, the rest of the mortgage is written off.

Its not well thought through, but the core of the idea is that the government (we) own the titles now. Lets give them to someone who we owe a debt to.

Brother Bush, Can you spare a Dime?

BackInTex wrote:

flockofseagulls104 wrote: We are going to take over 700 billion in mortgage debt and have a government agency in charge of recovering it? Sounds like a recipe for even more disaster to me.

We are not really taking over $700 billion in mortgage debt as we are taking possesion of $500 billion in homes and losing the other $200 billion.

How about this for an idea. We put those homes into the GI Bill 2009 inventory. After 10 years of service in the military, or on a combat medical discharge, the vet gets a 30 year zero % loan to buy one of the homes. After living in the home for 15 years and making all payments, the rest of the mortgage is written off.

Its not well thought through, but the core of the idea is that the government (we) own the titles now. Lets give them to someone who we owe a debt to.

And what are you going to do with the people who are living in them now?

dodgersteve182 wrote:Brother Bush, Can you spare a Dime?

Bush bashes in any situation are always funny, helpful, unexpected and so original.

May I add that a well placed Bush bash also indicates a level of intelligence, a thorough understanding of the situation addressed and a level of moral superiority far above the average person.

Thank you for your concise and helpful comment.

flockofseagulls104 wrote:

dodgersteve182 wrote:Brother Bush, Can you spare a Dime?

Bush bashes in any situation are always funny, helpful, unexpected and so original.

May I add that a well placed Bush bash also indicates a level of intelligence, a thorough understanding of the situation addressed and a level of moral superiority far above the average person.

Thank you for your concise and helpful comment.

We aims to please.

Bob Juch wrote:And what are you going to do with the people who are living in them now?

They can go back to paying rent and living in apartments, like they did before, and should have continued to do. They can't afford a house, and under most circumstances don't deserve to have one given to them.

BackInTex wrote:

Bob Juch wrote:And what are you going to do with the people who are living in them now?

They can go back to paying rent and living in apartments, like they did before, and should have continued to do. They can't afford a house, and under most circumstances don't deserve to have one given to them.

Never mind that giving bureaucrats the power to decide who qualifies for these various gov't bailouts is extremely unjust and unconstitutional; as is giving judges the power to rewrite contracts.

We're one congressional vote away from becoming a state-controlled economy.

Thousandaire wrote: We're one congressional vote away from becoming a state-controlled economy.

Best reason I've heard for voting for Obama.

BackInTex wrote:

Bob Juch wrote:And what are you going to do with the people who are living in them now?

They can go back to paying rent and living in apartments, like they did before, and should have continued to do. They can't afford a house, and under most circumstances don't deserve to have one given to them.

They couldn't afford to make payments on a house under the conditions which those ridiculous ARM's required. That doesn't mean that they can't afford to make payments if the loans are restructured in a way that makes sense.

Businesses walk away from contracts all the time if they decide it's in their best interest to do so. If I have a long term lease and someone else offers me a better deal (even factoring in any damages or penalties for breaching the lease), then it's good business sense to take the better deal. My reputation may suffer and others may not want to deal with me in the future, so I have to take that into consideration, but if on balance I decide it's better to terminate the lease, that's a business decision.

At that point, the original landlord may well come back and offer me a better deal for me to stay, figuring it's in his best interests to take less money than to have the property sit vacant. There's nothing illegal in what I've done; whether it's immoral or unethical depends on your definition of morals and ethics.

So what is the difference between a business making an economic decision to terminate an unfavorable lease and accept the economic damages that result and a homeowner doing the same thing? These idiot lenders structured these deals to get people in overpriced homes so they could get a large number of mortgages on the books that they could package and palm off to other idiots who looked at the interest rates being offered and completely ignored the risk factor.

At this point, in a lot of cases, it makes better economic sense in a lot of cases to restructure these mortgages and keep people in these homes than let them abandon them and lose a ton of money trying to market foreclosed properties.

The securities that the government will be backing in this bailout for the most part aren't worthless, but they are difficult to quantify in value. If a panic ensues then they will essentially be worthless because they will be unloaded to speculators at firesale prices. The bailout will prevent this from happening and will serve to give the markets enough breathing time to stabilize.

Should CEO buyouts be limited? Yes. Should there be some protection for homeowners? Yes (makes good economic sense as well as PR sense). Should there be oversight of those doing the regulating? Yes.

But the idea of letting all our financial markets flounder in what could be a domino effect that dries up all forms of credit is a disaster.

There doesn't need to be a Friday or Sunday "deadline" to this, but Congress needs to resolve something before they adjourn or the panic will set in. Bush and Paulson's artificial time limit has exacerbated the problem but there's no way this could have been left to hang until after the election or the next session of Congress.