Tuesday, September 23, 2008

A better Plan to save Wall Street and the taxpayers" money.

A better plan to stabilize the financial markets is to simply let the Federal Deposit Insurance Corporation take over the insolvent companies and form a holding company and reopen as one large institution. Just as when the FDIC takes over smaller banks the same rules should apply here. The new holding company can then operate the new banks keeping the good accounts and spinning the bad ones to a second operating company to work through them eventually restoring some of them and liquidating the rest. If any legitimate debt holders are established then stock could be issued to these legitimate debt holders ( likely bond holders). After a period of time this new company could do a stock offer selling the entire company back into the private sector. Problems solved, seven hundred billion of tax payers money would be saved. The cost of the new company would be returned back to the taxpayers from proceeds of the sell of the stock at the return to the private sector from government operation. The fat cats on Wall Street could be returned to work for the new company but like all reorganizations at a lower cost to the new company allowing it to return to health much faster.

Both Wachovia and Washington Mutual as well as all the community and regional banks that are or become distressed should be included in the new Holding Company thus making a network of bank outlets available to allow loans between banks to be unfrozen and allow the system to do a restart with these outlets being secure and adding the desperately needed stability to the entire banking system. If a bank becomes weak it needs to be added very quickly keeping the system calm.

The changeover could be done over a weekend without any disruption of any kind. Each of the banks taken over would continue to operate under it's present name and corporate structure except that the boards would become advisory only with the final authority being held with the new holding company. Over time most of the banks could be either spun off or several combined under a new corporate configuration and then spun off or sold. The stability of the entire banking system would be the most important goal.

The Federal Reserve System looks at all the deposits at all the banks as one total, so this new bank would not alter the loan patterns from what it would be with if all these various banks that would be part of the new holding company were operating separately. All the bad things being claimed by Mr. Paulson would be avoided with this plan and the best part of this plan are NO TAXPAYER costs beyond the administrative cost of the new bank holding company.

This plan takes a second look at the way the taxpayer’s money is used and avoids benefitting those that caused the problem to begin with. They took unnecessary risk and have lost so the bailout should take the control of the future out of these either corrupt or incompetent executives hands and allow a time out for our banking system to stabilize and get back on track.

The one caveat I have for the new Holding Company, which plans to put these bad debt mortgages in, is that a provision in the restructuring should provide a way for people that are in these mortgages to be able to stay in the home. One idea would be to renegotiate the value of the property back to an equity position with the caveat that they could not sell their home, for eight to ten years or some other appropriate time frame. The reason that I would like to see this put into the terms for use of this agency to stabilize the mortgage market is that if something isn’t done the power structure that will be controlling this new agency will likely sell off these homes at a larger loss than leaving people in the homes or working out something for them. If this doesn’t happen many insiders, the money crowd, Wall Street types you know the folks that got us in this mess to start with will come in and buy these properties up for pennies to the dollar at leaving the homeowner homeless the taxpayer on the hook for the costs and the rest us no better off than we are now. There could be a deed restriction on these homes that required them to pay the proceeds of the write-down out of the home or of the equity of the home as a penalty for moving too fast. The whole idea for this bailout is to stabilize the mortgage market, financial market, and the economy.

Monday, September 22, 2008

The Wall Street BAILOUT and FreeTrade

Just watched a movie called Bordentown. It was about hundreds of Young Mexican women that are raped and murdered in a factory town there. The story was set with an American reporter from a large city newspaper covering the story. When she had finished the story the paper then refused to print the story because of a new NAFTA type deal coming up for Central America and the corporate owners did not want the bad publicity. They said in the movie the wage was $5.00 per day 12 hour day. The newspaper boss reminded the reporter that the news was Freetrade, Globalization and Entertainment. Fits does it not?

When will you Conservatives get it? Bush is not a Conservative he is a NEOCON, "NEW WORLD ORDER" GLOBALIST. The rest of the world defines that as a NEOLIBERAL, which means using the power of government to affect social and political change.

The damage to our nation being done now with this "no strings" bailout of the Wall Street to protect the base of the Republican party from the risk they should have to absorb is just amazing. It is still more amazing the refusal of otherwise conservative folks, to not see through this scam.

These folks paid taxes at a reduced rate (15 percent tops ) because they were supposedly exposed to risk. Now the crony companies are lining up to get these properties at fire sale prices. So here we go taxpayers buy the stuff and bail them out only to sell the same stuff to crony companies to resale at huge profits. Perfect plan for Wall Street bad for the rest of us.

I know I sometimes offend folks that believe themselves to be conservatives yet I believe them to be neocons. I have a hard time with unnecessary wars, trade deals that don’t protect our workers, and the often seemingly stacking of the deck against middle class , working class folks.

Saturday, September 20, 2008

The Truth About Abortion and PRO-Life and Change ?

This article is only another example of the struggle we face as a nation. The two parties will exploit anything they can to try and get that small group that will in the end settle elections. People of FAITH can be a strong group that a minority desiring control can use to build towards a small majority. Christians today have been found as necessary for the otherwise smaller Republican party. There is not likely any way the small number of wall street high income folks and corporate people could win elections with out adding other groups . They have learned to attach people of FAITH to them by using their platform as the draw. Also noone desires to pay taxes so another group can be added.

The abortion issue is a difficult problem for Christians to deal with. I am PRO-LIFE in every situation except when medically both mother and child will die anyway if the baby remains, and even then every attempt to save the child when delivered (in what ever way it can be delivered) should be done. The truth of the abortion issue is that the Republican establishment will never let it go away. If abortion was outlawed, the most faithful supporters of their party might then look elsewhere at other issues as to who to vote for. If you faithfully vote Republican now because of their pro-life platform they will never allow that to change. Unfortunately abortion is too good politically to lose as an issue. Once again the sheep are being sheered. Things being what they are I think improving the lives of women to the point none would ever want an abortion might be the best hope we may have to stop abortions from happening.

This business about which party will bring the most change kind of brings to mind the book "Animal Farm,” where all the barnyard animals want to get their freedom from the human farmer. The farmer somehow was removed and they were working (so they believed) for the benefit of themselves collectively. Before long, the story was about the Pig then living in the house and getting most of the benefits from the collective efforts of all the animals on the farm. The Christians that have become for the most part Republicans are like the animals in the barnyard believing voting Republican will help stop abortion, make the country more moral and create a better world to raise their children. The sad truth is like the Pig in Animal Farm the benefits go mostly to high income folks on Wall Street and International Corporations that move the very livelihoods these grass roots families need disparately to be able to provide for their children.