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Make the Banks Pay the Government Back or Foreclose on Them


Business  (tags: Banks, Economy, Financial Crisis, Loans, Paulson, Troubled Assets, Wall St. Crisis, Wall Street, Republicans, Neocons, PNAC, illegal wars, bank failures, gas prices, mortgage crisis, BIG OIL, BIG PHARMA, corruption, lies, Business News )

Blue
- 2257 days ago - huffingtonpost.com
If the problem, as "Hank" Paulson repeated Sunday, is that there was no way to value the "troubled" assets, the price is obviously going to be arbitrary. So, why don't we consider it a loan? Banks wouldn't give YOU an extra day/week/month to pay bills...



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Comments

Blue Bunting (855)
Tuesday September 23, 2008, 3:55 am
Among the many details, actually more like major foundational points than details, that have not been disclosed in the huge socialism for the banks program is the price that the government is going to pay for the "troubled' assets that these Einsteins bought.

If the problem, as "Hank" Paulson repeated all over the Sunday morning shows, is that there was no way to value the assets, the price is obviously going to be arbitrary. So, why don't we consider it a loan?

Whatever the banks get now is a provisional advance against the collateral of the assets. If the government can sell them for the price it paid, then all is square, except the banks should pay some interest on the money they are using. How about 2% for the first year and then, oh, LIBOR plus 5% after that.

If the assets are not worth what the government paid, then the banks should pay the difference, over time, with more interest. If the banks cannot pay it, then the government forecloses on the banks. No bonuses either.

Sauce for the goose.

 

Blue Bunting (855)
Tuesday September 23, 2008, 3:57 am
Couldn't agree more. It just burns me up to think how fast the entire government jumped to action when the big, banks and wealthy people therein are in trouble, but not so much as a flinch in these years that the American people have been losing their homes, and watching their jobs go overseas with the help of our government in the form of tax cuts to those companies. I'd go a step further and insist on dividends to the American people (who are putting up the money) when these banks start raking in the bucks again..just like with any other stock. Bet that don't happen either.
 

Blue Bunting (855)
Tuesday September 23, 2008, 3:59 am
The facts show that the problem was caused by allowing the market to operate without regulation. So logically, Paulson's solution is to allow him to make thing right by not regulating his actions. Only in Alice's Wonderland would anyone suggest such an idea.

Make certain that oversight is accomplished by a majority of non politicians. Let's include 1 Republican, 1 Democrat and 3 others. The other three will have to be agreed upon by both parties. Guys like Buffett would do nicely.

Finally, and most importantly, drop the word bailout. Change it to loan. All of us know that when we go to the market for money, it's always expected we will repay the loan. Whether that is in the shape of ownership or preferred stock, we must insist on being made even. Make certain that bankruptcy won't avoid repayment. Insist that executives pledge their company stock and pension guarantees to insure the debt is repaid. Bottom line. This isn't a bailout. It's a loan. Limit executive compensation until the loan is repaid. We'll be told that's unfair by some. Tell them to go somewhere else for a loan then.

This is a defining period for America. We must adhere to the American principals that business understands. There is no free ride. Take it or leave it.
 

Richelle R. (61)
Tuesday September 23, 2008, 4:32 pm
The current government doesn't know how to fix anything. They only know how to break things. I still wonder if my friends, family & I should be worried - our bank is going under too.
 

Carol W. (119)
Tuesday September 23, 2008, 4:50 pm
By Orion Daley
Dear Congress People:
As an alternative to the US Government having to absorb up to $1 Trillion in questionable bad paper from Wall Street, I ask you to consider what I see as a viable alternative.
This will, more than likely, than otherwsie, prevent the American Tax Payer from having to absorb this debt, and obviate the need to write callable bonds to foreign investors for it. In the mean time, it allows institutions on Wall Street a liquid path for addressing their liabilities.
Please consider the following: It is about a straw man for an investment vehicle. It is intended for any institution in question that could affect the over all fabric with its counter parties from its own exposure.
Although the US Treasury is not willing to lend a hand in such cases, I believe a workable solution can help off set liabilities to improve the bottom line of the firm, and if needed, for potential buyers .
As every transaction is taxed, netting is used as a means to average these obligations on a daily bases. This is for billions of US dollars in our banking systems.
Consider , that for a period of time, with government consent, if taxes which are to be paid quarterly to the federal and state governments, are to be invested instead in a non taxable capital markets fund that are managed by the institution. Payment into this fund is to be based on the daily netting amount.
Over time, the non taxable investment fund will build on its own due to its profits in addition to a quarterly based payment by the institution.
When the fund investment reaches 4 times is original starting value, or the average quarterly netted taxes, then 25% of this will be applied to taxes and 75% maintained in the original fund for capital market management.
At this point, those profits that are made on the fund are to remain in it, and the quarterly tax on the following quarter, for the previous one are to be applied to actual quarterly tax.
Hence, for a period of time, this is in effect, having the government making a non interest based loan for taxes owed while the institution can put the money to work.
The Treasury is not lending tax payer dollars for a bailout , but is allowing the firm latitude for building assets to balance its liabilities.
As this 75% grows it is to replenish the 25% periodically. When the 25% actually exceeds the normal quarterly tax, this overflow can be applied toward firm liabilities, and the original 25% applied toward quarterly tax.
At this point, in switching 180 degress, the 75% can then be considered an invenstment on behalf of the government which it can borrow against as is needed.
Respectfully,
Orion Karl Daley
Presidential Candidate for 2008
Author - The New Deal ISBN: 1419670948
for the Strategic Future of our nation
Balanced Party http://unity2008.org
New York, NY, USA -
 

Carol W. (119)
Tuesday September 23, 2008, 4:55 pm
Please use the letter above if you like and send/email your Represenatives and Senators.

Based on this insightful email:

My Fellow Citizens:

I write you as Congress convenes on a momentous decision to Supposedly save Wall Street.  I know and believe that you know, that like in declaring war, this decision affects each one of our lives for many years to come! - How - you taxes, that is how !

Directed by the sitting president, where differences in the Republicans and Democrats is window dressing, the decision is to have the Federal Government absorb upwards of $1 Trillion of bad debt so as to enable Wall Street to function once again. 

I can only agree that it is necessary to have Wall Street function in order to retain what economy we have left in our nation. But I contend that there is a better way. 

I ask you, should it not be the responsibility of Wall Street to correct this major  problem of $1 trillion bad debt, or is yours ?

The Government, in absorbing this debt is you absorbing it. They  will try to sell it as bonds to investors with your tax dollars to pay it off.

But this will be through high risk junk bonds!  This is unusual to be issued by our government. But they must assume that it is easier this way just to hand the American tax payer the bill.

This means that for an investor , such as China, Kuwait, Dubai, or Saudi Arabia to invest in these junk bonds,  that they would probably expect for every  dollar , to have a return of at least 3 to 4 times.  After all, would you buy such bad debt with out good reason ?

This makes this not a $1 trillion, but a $4 trillion liability that each of us will shoulder. Further, to invest in such risk, a foreign investor should also expect these bonds to be callable. This means that they can be fully redeemed upon demand before their maturity. 

There is no way that these junk bonds can be fully redeemed. The Fed cannot just print more money, and this can only jeopardize what economic solvency we might have some day. This solvency is what true national security is about: the health , safety and welfare of our families.

The guarantee of this debt is to be on the American tax payer: This means you!  Already, our nation has the most unprecedented debt of $15 trillion that we have ever had in history; and we are already as tax payers, expected to pay this off. But now it will be $19 trillion if we let Congress have their way!

Already, over 500,000,00 homes have been lost to foreclosures, where some citizens have now learned what soup kitchens and shelters are.  Since year 2,000 over 2.4 million union jobs have been lost,  and there is no horizon for relief in our economy. 

Yet , it is the American citizen that is expected to bear this crippling burden.  It is expected that our children and then theirs are to as well.  Which comes first, your family or taxes.  How do you think the government will see it ?

This is not necessary, and I ask you to help me tell Congress that there is a better way! I have always contended that we are not a nation of surfs that serve modern day feudal lords, and we do not serve Wall Street!

It is capitalism that is to serve us, and not that we are to serve it. It is Wall Street that should be serving the American Citizen and not the other way.

Given guidance, Wall Street can bail it self outwith out the American tax payer having to absorb the bill.  They can build liquid capital, meaning true money in investments. This can be accomplished through ethical means, where there is no swindle, not a game, and not a hustle. 

By the government allowing Wall Street to temporarily reinvest what they normally would pay in quarterly taxes, Wall Street in a matter of a short time can earn actual money to back what was their trillion dollars of bad paper.

If the government does so choose to sell junk bonds, it is Wall Street that can back them in a meaningful way.

I ask you to help me tell Congress.  The pen is mightier than the sword, and our email and phone calls to Congress are mightier than any lobbyist. I have a letter which I sent to Congress, and I ask you to read it carefully.

You might ask, well did Congress already think of this? But consider, that you are actually promised some tax cut by a presidential candidate. Okay - then how ?

Did you also realize that the economic stimulus package just a few months ago was money borrowed from foreign lenders? It was not a tax cut that you received, but instead, another reason to tax you more later.

My letter to Congress demonstrates the means in how Wall Street, given our government's consent can ethically bail itself out.  I ask you to send this letter or one like it to Congress.

For your State, you have two Senators where you can send them such a letter by web mail. This is by you point and clicking your mouse to their specific  web sites from http://senate.gov.  For your community, you also have a member in the  House of Representatives: http://house.gov .  They too have a means to get web mail from you.

You can sit back where only a point and click is truly what is only required.  But consider, how many family, friends and neighbors do you have that can do this too - and imagine if they too sent an web mail to congress telling them of the better way? 

As I send this to just 100, who also send it to another 100 people they know - then you have helped mobilize 10,000 emails to to the Senate and the House.  But then just imagine if that 10,000 told another  100, there would be  1,000,000 people  would be telling Congress that there is a better way.

That is what your point and click using just your index finger is worth my fellow citizens: in other words, what it is worth today.  

Respectfully Yours,


Orion Karl Daley
Presidential Candidate
for 2008 for the Strategic Future of our nation
Author - The New Deal ISBN: 1419670948
Balanced Party http://unity2008.org
New York, NY, USA -
 


 

Blue Bunting (855)
Wednesday September 24, 2008, 6:23 pm
Why did Paul$on'$ firm: Goldman $ach$ survive???

The Long and Short of It at Goldman Sachs

Goldman Sachs sold hundreds of Billions in subprime/CDO's and shorted them at the same time.


A new analysis by Goldman Sachs Group, Inc. finds that “Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed.”

The degradation of accounting The folly of fair value accounting, which helped to drive up executive bonuses based on illusory values, is increasingly exposed by the US financial crisis. Goldman Sachs now has "assets" for which no market exists valued at twice the firm's capital. That route leads to insolvency.

 

Blue Bunting (855)
Wednesday September 24, 2008, 6:59 pm
There is no doubt in my mind, where Paulson´s loyalties lie. He is
pushing for the plan as Bush was pushing for the Iraq war. By using
politics of fear the ultimate scare tactics they always use. And in my mind there is no doubt about his loyalties either. He needs a job come January and where would that be for a banker?
The price tag for his plans? Much, much more than $700 Billion.
 

Blue Bunting (855)
Wednesday September 24, 2008, 10:53 pm
Timing ...

naked capitalism: On the dishonest sale of the bailout plan

Yes ... the Bu$hie$ were sitting on this plan; waiting for the right opportunity ... 41 days before ELECTION DAY.
 

Blue Bunting (855)
Sunday September 28, 2008, 1:17 pm
Once again, EVERYONE on this thread needs to read the following two pieces.


http://www.huffingtonpost.com/leah-mcelrath-renna/is-bush-profiting-from-th_b_120205.html


http://www.bloomberg.com/apps/news?pid=20601087&sid=av8fOkC1HHEc&refer=home

Goldman Sachs, Hank Paulson's "former" employer and the Booosh family stand to make billions off this "bail out". Of particular interest to me is the timing of the GS purchase of Litton, a "loan servicing" firm based in (surprise, surprise) Texas.
 

Carol W. (119)
Sunday September 28, 2008, 7:44 pm

Geeeeeezzzzzzze. What an update.
 
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