House GOP Balks at Bailout

A note about the alleged difference between a 'bailout' and a 'rescue plan'.

Yes, in theory, IF, as claimed in one of the posts, 'the vast majority of homeowners' repay their loans the mortgage backed securities (MBS) backed by those loans will regain value.

But that argument seems to ignore the fact that these securities became worthless because it 'suddenly' became clear to the market that borrowers will, in practically most scenarios, NEVER be able to repay their loans unless they are somehow restructured and/or interest rates are kept artificially low by the Federal Reserve Bank.

Now why are there so many such bad loans 'out there'? Well, this is where it gets really interesting. The reason is very simple: GREED. During the boom years of the housing market, banks, to make an easy and quick buck, have lowered their credit standards to the point where everybody and his brother was getting a mortgage loan. This was the era of 'NINJA' loans (No Income, No Job, No Assets). Things went great for a while and then the market went South, as it always does when the bubble bursts.

Now, have those people vanished? Have they been kidnapped by aliens, never to be seen again? Have those loans vanished? No, I don't think so. What miracle is going to turn those bad loans into good ones? As I said earlier, the 'miracle' is either a restructuring of those loans to enable those people to pay their debt off or low interest rates to make monthly payments affordable or a combination of both.

You see, politicians will not tell you is that (1) we are in this mess BECAUSE of the banks' greed and (2) there is absolutely NO GUARANTEE that those loans will ever be worth something, in which case it IS a BAILOUT of the banks and NOT a 'rescue plan'.

In fact, the REAL purpose of the so-called ‘rescue plan’ is not to make those MBS valuable again by making the borrowers solvent. Neither the Federal Reserve Bank nor the Treasury can really do anything in that area, other than keeping rates low and forcing the banks to restructure those loans.

The real purpose is to unblock credit markets. Banks have become so fearful to lend money to each other that credit markets have become paralyzed. The $700 billion ‘facility’ is meant to be a pool of money available to the Treasury to come to the rescue of any bank that is endangered by current market conditions. The goal is to restore confidence and induce banks to lend to each other again on the inter-bank market, so that economic activity can resume.

Sounds like Obama voted "PRESENT" for the umpteenth time! But he was out in front of the cameras with his usual BS and manufactured facts and storylines...and McCain bashing. At least McCain IS in town as a maverick and IS looking out for the average taxpayer.

NOW YOU SEE WHY THEY NEEDED MCCAIN IN WA. THE GOP COULD WALK OUT OF THIS BILL AND EVERYTHING WOULD COLLAPSE. CONSIDERING THE ATTITUDE OF REID AND DODD TODAY, I WOULD WALK OUT ON THE ENTIRE BS AND LET THEM SEE WHY MCCAIN IS THE THINKER.. HE CALLED OFF THE CONVENTION FOR THE HURRICANE.. AND HE STOPPED HIS CAMPAIGN FOR SPOMETHING THIS URGENT.. INSTEAD DEMOCRATS ARE OUT THERE SAYING HE DID IT FOR POLITICAL EXPEDIENCY.. IF I WERE MCCCIAN I WOULD WALK OUT.. IT IS THE RESPONSIBILITY OF THE HOUSE AND BUSH TO FIX THIS. AND DEMOCRATS ARE RESPONSIBLE FOR THE MESS..INCLUDING OBAMA.
IT TAKES MCCAIN TO PERSUADE REPUBS TO GO ALONG..
OBAMA WANTS TO SPILL HIS GUTS ON WHAT HE HAS BEEN CVRAMMING ON FOREIGN POLICY INSTEAD..
THE SITUATION IS CRITICAL.

TO ME THERE ARE NO SURPRISES. MCCAIN WENT TO WASH. BECAUSE HE KNEW THE SUCCESS OF THE PLAN WOULD HAVE AREAS HE COULD IMPROVE ON. AS IT TURNED OUT THAT IS THE CASE. THIS IS TOO IMPORTANT FOR THE AMERICAN PEOPLE TO HAVE AN ANYTING GOES ATTITUDE. IT APPEARS TO ME THAT OBAMA IS MORE INTERESTED IN RUSHING OUT OF THE WHITE HOUSE AND DEBATE. THE DEBATE CAN WAIT THIS IS MORE IMPORTANT AND DOING THIS RIGHT IS OF MOST IMPORTANCE. MCCAIN/PALIN 08

McCain has contributed nothing positive. He has simply sat for photo-ops. Neither McCain or Obama have actually been in DC to cast votes for months. McCain, of the two, has been the most absent. The suspension of his campaign is a hoax; ads keep running, he keeps speaking (e.g., Clinton Initiative in NY this AM), and fundraising continues ... which is as it should be. A President needs to be able to address more than one issue at a time. What next? We postpone the Presidential election indefinitely ... that would please the neo-cons immensely. Ultimately, McCain is using this crisis for his own political gain.

With the election looming, the Republicans in House and Senate can no longer risk acting like a lap dog to the White House. President Bush no longer has the clout to jam through his deal and many Republican's are facing tough elections.

In this current crisis all have to have an agreement that they can sell to the voters and Senator Mc Cain's seal of approval is not good enough for the voters who at best are wary of his grasp of matters or his ability to lead.

It was dumb on Senator Mc Cain's part to think he could play the role of White Knight absent the less than full support of his own party, much less the Dem's who clearly are not driven to prop up either the President or Senator Mc Cain.

Senator Obama is playing this smart by stepping back and letting the House and Senate work through the issues.

On this score I give the governing points to Senator Obama. If I were President Bush I would just finish packing and Senator Mc Cain should fire his advisors and seek the sage advice of former President Bush.

I would lose Karl Rove's phone number and finally distance himself from the current President. If he were to do that he might be able to swing the more conservative Dem's in the battle ground states, the Red States are going to remain so regardless.

What to do with that now albatross Governor Palin is a problem with less than 50 days to go. Her 15 minutes of fame is fading fast and while perhaps she has excited the Republican base, she has already lost her appeal to independent women who find her an empty suit and a sexists selection rather than a qualified candidate who is also a woman.

Dumb move Senator Mc Cain, her selection on top of your missteps is likely going to cost you the election, which was yours to lose and you now will

not all human are created equal - in usa the blacks are more equal than the red, brown, yellow, and especially much more than the whites. blacks are more equal than everybody else. they are forever entitled. get welfare, jobs, harvard all because of their skin color. look, no slave ever went through what mccain did - slaves have to work so they can't solitary confine them or lockup, torture, broken, starved, left to die for 51/2 yrs. why they say obama is entitled the white house for slave suffering. first no slave suffer like mccain. second obama is 50%white, 44% arab, 6%african (not slave not black but slave trader - by the way a lot of fred american slaves owned slaves themselves after fred - joseph cinque exonerated by us supreme court is one) -which slave is still slave? mccain's suffering is with him today and will continue till he breathe his last. MCCAIN IS ENTITLED TO THE WHITE HOUSE. AMERICA OWE MCCAIN, USA OWE MCCAIN. WE DON'T OWE THE SLAVES - WE PAID FOR THEM - THE ARABS OWE THE SLAVES. mccain mcsaint mchero mctophuman for 2008-2024

For TRUE change let's get rid of Christopher Dodd and Barney Frank (no relation)...lol...----Greg------http://us.imdb.com/name/nm2734923/

Barack Obama needs to off get his ethnically diverse a@@ and help solve the financial crisis this country faces. He is a phony, period!

Senator Obama has a very thin resume. His supporters recoil when the Senator is described as a smiling, articulate “empty suit.” But the fact is, Senator Obama has very little experience as anything but a celebrity politician.

Barack Obama is touted by supporters and by the press as the first African-American Presidential nominee. Even that most basic claim is only half true. Obama’s mother was white. His supporters scream "racism" when anyone dares to question his “roots”, but Obama plays the race card when he says "I have a funny name. I don't look like the other Presidents on a dollar bill"

The liberal, mainstream press delights in the thought of helping a member of a minority race to become President, regardless of qualifications. After all, this is history in the making. One well known reporter said he gets tingles down his leg when Obama speaks.

If Senator Obama was a white American of Irish ancestry, named Barry O’Bannan, he would have been laughed off the political stage, months ago. Barry O’Bannan would have been dismissed as overconfident and under qualified. His phony Presidential Seal, phony Greek pillars, and his “citizen of the world” speech in a foreign country would have finished his political career.

So, why is Barack different? Well, a great story sells in Hollywood, and, his is the perfect story for progressive (liberal) Hollywood. The media play no small role in attempting to shape public opinion. When the story exceeds reality, Hollywood and the mainstream press choose fantasy, every time.

So exactly what has McCain done to help the process? Secondly, I thought he was suspending his campaign? His ads are still running in my state. I'm not naive enough to think that McCain some how caused the whole thing to fall apart. However, I think McCain assumed a compromise would be much cleaner. Now it's messy. If he sides with the conservatives in the house, he won't look like the "reaching across the isle maverick." Further, the longer it goes on, the longer he puts off the debates. Meanwhile, Obama gets a free 90 minute infomercial tomorrow night. I think McCain took a huge risk. Granted there is an upside, but another day like today, he's going to look like he'e in the way rather than helping the negotiations. I think he's painted himself into a corner and is now looking for a way to get to the debate with out looking like he blinked.

and one more thing...
The house republicans may be doing the right thing here - I don't know. Is there plan better than the revised Bush plan the dems offered up? Maybe it is. I just don't see how this whole episode helps McCain. The perception that McCain rolled up his sleeves and went to work while Obama sits around doesn't wash. I think McCain under estimated the cynicism of the American people.

Why should the tax payer bail out these private business's. It's just a rip off. These CEO's should be arrested and put in jail, not handed 700 BILLION dollars for doing a dumb job. We are the dumb one's if let these clowns in Congress get away with this outrage. Just vote against anyone that vote's for this bail out. Write your congressmen and Senator's and tell them they are getting the boot if they vote for this give away.

AT WHITE HOUSE, MCCAIN PLAYS BAILOUT SPOILER

UPDATE: CBS News reports that McCain's alternative proposal includes "fewer regulations and corporate tax breaks":

http://www.huffingtonpost.com/



What Suspension? McCain Campaign Still Active Across The Country...

http://www.huffingtonpost.com/

Could someone please explain how the Chrysler "bailout" worked 30 years ago? I think they "loaned" Chrysler a billion or so (granted - not 700 B) and they were able to repay the Govt and stay in business for 30 years....

I believe Chrysler's CEO, Lee Iacoca,. worked for $1 annual salary, and there were hourly and salary concessions to keep things going.

WHere are the CEO's of these financial companies? Why aren't they stepping up to the plate...COUNTRY FIRST. Let's go CEO's.

And BTW - we here on Main Street Are Not BLAMELESS. How many of us set at the kitchen table and discussed how STUPID it is these banks are loaning people money for houses with no down payment? A big part of the problem in the housing market is people signing up for ARM's, and buying houses they could NOT afford... a huge financial gamble. How many of us accepted Credit Card loans for 0% for x years or months and said, "how can they do this? this is crazy?"

No, we on Main Street are NOT Blameless. So let's suck it up and do what has to be done, but let's not jump in with our eyes closed.

McCains actions these last 48 hours have been brilliant. He has proven to the entire world that he is a leader!

McCain 08!

Jim Zac12:04AMSep 26th 2008

Barack Obama needs to off get his ethnically diverse a@@ and help solve the financial crisis this country faces. He is a phony, period!


You said it perfectly!

The news media makes me sick... they will not stop talking negative about McCain and Obama continues to get this free ride but watch out you media freaks because McCain /Palin 08!

Geek ....

Geek

Good summary of the situation, I think

Mark Imp. You are ignorant of the whole situation. You TWIST things around and around so people know NOT what you are saying and they DUHHH believe you know what you are talking about. You need to get a CLUE from someone whi IS informed Try herewww.tomdegan.blogspot.com