Saturday, October 4, 2008

Is the Paulson bailout itself a bigger fraud than the leveraged subprime mortgages?

Why Paulson’s Plan is a Fraud (Bail Out the Homeowners!)

As one reader put it,“We have debt at three different levels: personal household debt, financial sector debt and public debt. The first has swamped the second and now the second is being made to swamp the third. The attitude of our leaders is to do nothing about the first level of debt and to pretend that the third level of debt doesn’t matter at all.”

Posted by planning4acrash @ 08:17 AM (694 views)
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6 thoughts on “Is the Paulson bailout itself a bigger fraud than the leveraged subprime mortgages?

  • “The bailout should indemnify defaulting homeowners and pay off the delinquent mortgages. As Koppell and Goetzmann point out, the financial instruments are troubled because of mortgage defaults. Stopping the problem at its origin would restore the value of the mortgage-based derivatives and put an end to the crisis.”

    It’s an interesting ‘what if’ question for me. Let’s suppose that we adopted the same solution in the UK (fat chance).

    How would you feel about that?

    Prudent savers standing by and watch the reckless being bailed out?

    Would my jealousy and anger at this spectacle be so great that I’d rather see a major recession and all the reposession misery that goes with it?

    Perhaps.

    Or if it wasn’t too late, I’d run out and get the biggest most unaffordable mortgage I possibly could so as not to miss my ‘share’ of the gravy.

    All that this article does is highlight the absurdity of bailouts per se.

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  • Robbing Peter to pay Paulson……

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  • Everyone I speak to (even those who have just about realized what’s happening) has an opinion regards the bail-out. This in it’s self is good news. Change of consciousness ? Not quite,more of a return to a set of principles that a generation has simply not experienced. Come what may peoples attitudes towards money and in particular housing will change. What concerns me is most people (who have expressed an opinion) seem to believe the bail-out is the only option. I personally read as much as time permits on the subject but still my mind is unsure. The media along with peoples deep and dark fears seem to have allowed little or no debate in the US and virtually none here (Northern Rock). Events appear to have been triggered,one after the other,to perhaps install the mind-set that “something has to be done”. All we’re told is that we (they) have to act or things will get worse. How much worse than printing money we haven’t earned yet and giving it to the people who phucked it all up in the first place can it get ? I’m just saying that people shouldn’t be so sure,I’m not.

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  • Rotten Tomato says:

    “The bailout should indemnify defaulting homeowners and pay off the delinquent mortgages. As Koppell and Goetzmann point out, the financial instruments are troubled because of mortgage defaults. Stopping the problem at its origin would restore the value of the mortgage-based derivatives and put an end to the crisis.”

    Utter nonsense! The mortgage defaults are not the cause of the problems in the financial and economic world. They are the symptom of the problem, and the problem is derivatives, futures and other sorts of gambling. The instruments of casino gambling on the stock exchanges require more and more leverage, and also more and more money put down as guarantee for those positions taken. This has been a self feeding vortex since deregulation 30 years back or so. And this vortex, in order to keep going has required exponentially increasing amounts of money (real or imagined) fed into it. The whole house of cards would have collapsed after the 2001 dot com bubble burst, but for Greenspan inflating another even bigger bubble: the housing bubble.

    The issue requires the solution outlined by Larouche here (a long but informative read):

    http://www.larouchepac.com/news/2008/10/02/larouche-webcast-now-more-ever-big-four-transcript.html (also available in its audio/video format, just browse around the site http://www.larouchepac.com )

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  • No to be tedious, but pay I put post this again please, further up the blog as it went off the page immediately in response to the 700 billion bail – I think it was worth noting —-

    Just had a thought re: Hank Paulsen. He’s out in January. He’s got his 700 billion, but can’t keep it, because he’ll be replaced on 20/01/09. So, what’s the gag here?

    I was once a primary executive in a company where the board of directors removed the managing director and replaced him due to his age. The old guy was canny and, on the way out the door, took on projects for the coming year we couldn’t possibly handle. But we were locked in. It sank the budget, the whole place went into turmoil. The workload was impossible and key people left. The entire company was mortgaged, every asset. On looking back I had to laugh. They thought the man they’d removed was an incompetent elder statesman, but he sure had the last word and left us with utter destruction. Is this the legacy of George Bush, Dick Cheny, the neo-cons, since they’re now officially out of time? Is it literally designed to throw the place into chaos? I wouldn’t put it past them. Look at the legacy so far: War, poverty, homelessness, inhuman lack of response to natural disasters, lack of freedom and due process, about as close to martial law as possible without announcing it. Then what?

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  • A further note, we can’t possibly pretend that the USA is operating like a world power anymore, and that the “bailout” is in response to anything the public cares about. The southern area of Texas had two hurricanes, one behind the other. There are still over 300 people missing in Galveston and nobody has been searching the rubble for them for more than two weeks after the fact. There are rotted cow carcasses polluting the place and alligators in charge everywhere. The place is decimated and the people allowed to “go home” are funding what remains of their homes buried under thick mud. People I know there say there is no petrol at all in major towns of the Southeast, they can’t drive a car at the moment. The USA is stretched beyond the limits of credibility. And the problems on Wall Street don’t even begin to describe what is happening over there.

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