All Posts Tagged With: "Economy"

Burning Down The [US] House

Talking Heads:

No visible means of support and you have not seen nuthin yet

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The House of Representatives today passed the Senate version of the $700 Billion Bail-out.  For now, it’s over.  Bush signed the bill shortly after the vote, and we have not seen nuthin yet.

In case you haven’t noticed yet, the market is not exactly tripping over itself to show its appreciation.  After the announcement of the bill passage, the Dow lost all of the 200 or so points it had gained today, and then some. 

I haven’t even had time to read the bill yet, but have heard so far that there’s some pork.  It shouldn’t surprise me that our Congress, while debating the bill most …


The Senate Strikes Back

Our US Senators have approved a version of the $700 Billion Bail-out Bill that provides some new features:

  • New tax breaks for businesses
  • Raising the FDIC deposit insurance limit from $100,000 to $250,000

Normally, I am all about tax breaks for businesses.  I think that is one of the best ways to stimulate growth.

And without a doubt, raising the FDIC limit will help so many… almost rich people.  Okay, pretty much just really rich people.  I don’t even know anyone that has close to the $100,000 limit in a protected bank instrument, so I’m having a hard time understanding who benefits from this.  Maybe someone like Warren Buffet or Dan Rather, but not anyone I know.  I take that back, Buffet would have that …


Economic Healing

Today’s Wall Street Journal contains an op/ed by Brian Wesbury, one of the more level-headed and highly respected economists in the country.  His recommendation is that Congress suspend mark-to-market accounting rules, because investors refuse to put money into companies that may not be around because of phantom valuations of their securities portfolios.

He’s right, and this is an easy and less-costly fix than the one presently being floated around Capitol Hill.  However, since it’s both easy and cheaper and will actually solve the crisis, I guarantee you that Congress will not propose the obvious.

In fact, over the last two weeks I have never seen so much pomposity, arrogance, narrow-mindedness and lack of common sense in Washington.  Senator Chris Dodd (I nearly mis-typed his name–Dodo!) …


The Economy Today

My cohort DJ is going to disagree with me.  Just you wait and see.

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Today did not scare me.  It did surprise me, because I didn’t think that Congress had the ability to face down the President, Treasury Secretary and their own part leaders all at the same time.  (For the votes of the Representatives from Iowa, see below, or this link for the roll call vote).

I am so proud of them!  From the above Reuter’s article:

“This isn’t legislation. This is extortion,” said Florida Republican Rep. Ginny Brown-Waite. “This is so embarrassing it turns the stomach of most Americans.”

That pretty much sums up my thinking on this.

As I mentioned yesterday, I think we should seriously …


Congress May Have A Deal For Bailout

From the New York Times late last night:

WASHINGTON — Congressional leaders and the Bush administration reached a tentative agreement early Sunday on what may become the largest financial bailout in American history, authorizing the Treasury to purchase $700 billion in troubled debt from ailing firms in an extraordinary intervention to prevent widespread economic collapse.

Officials said that Congressional staff members would work through the night to finalize the language of the agreement and draft a bill, and that the bill would be brought to the House floor for a vote on Monday.

The bill includes pay limits for some executives whose firms seek help, aides said. And it requires the government to use its new role as owner of distressed mortgage-backed securities to make


Barack Obama: Follower

Does it not bother anyone that Senator Obama’s response to the biggest financial crisis in the world in nearly 80 years is to say “If I can be helpful, I’m available”???  Is that what someone who wants to be the leader of the free world should be saying?

Barack’s still has a responsibility as a Senator from Illinois.  And yet, he thinks that his “skills” will be identified and requested if needed (which may explain all of those “Present” votes).  As President, one cannot sit back and wait for others to say “Hey, Prez, can you come over here and help us figure out how to stop World War III?”.  As a Senator, this is Obama’s golden opportunity to demonstrate the length and breadth of …


Is The Crisis Abated?

On Sunday I shared some initial thoughts about the Fed take-over of Fannie Mae and Freddie Mac. If you read it, you know I’m not exactly happy about the outcome.  My friend Bithead shared some great thoughts Monday, and I don’t disagree that something needed to be done.   He and I both agree dumping the CEOs was necessary.

And on Monday the Stock Market reacted very favorably to the news, with a huge rise in the Dow (500 points, settling up 289), with a strong positive impact to the banking industry.

But I’m still convinced that the solution divides the interests of those in the government now set to manage the affairs of these companies.  Everyone who looks at this right now is breathing …


Government Mortages: The New Balancing Act

Today US Treasury Secretary Henry Paulson announced plans for the new Federal Housing Finance Agency (FHFA) to take Freddie Mac and Fannie Mae into conservatorship.   The power to do this was provided in HR 3221 which was passed in July.

The move includes replacement of the CEO of both organizations, and an infusion of about $200 billion.  In return, the Treasury gets $1 billion in preferred stock from each company without providing the cash for it up front (I’m assuming this will work like a stock option).

From the Wall Street Journal:

It is unclear how much the government’s intervention will ultimately cost taxpayers. In exchange for agreeing to provide as much capital as needed to the companies as they cope with heavy losses on


Iowa Smoking Ban In Court

Bar owners got their first shot in court to get a stay ordered on the 2008 Iowa Smoking Ban.  Some bar owners say they are losing business, some preparing to shut down for good.  Although one admitted that gasoline prices and other economic issues may be impacting business as well, there should be no doubt that some patrons who enjoy smoking and drinking with their pals probably figure they can spend less buying their own six-pack and drink at home where they can at least smoke (as long they they don’t have a daycare business operating out of the home).

George Eichhorn, fresh off of a Republican primary loss for the honor of running against Democrat Tom Harkin, is representing the group members of the …


Follow-up On The Housing Bill

In reference to my post on Saturday regarding HR 3221, the “Housing and Economic Recovery Act of 2008″, I discovered a site where there is a copy of the Congressional Budget Office Cost Estimate for HR 3221. Over the next ten years, according to the estimate, this bill will create a nearly $25 Billion deficit.

Another blogger, John D. Thornton, has some interesting insights regarding the OFHEO.

I’ve been getting some hits on Saturday’s post that are searches like this “explain the $7500 tax credit on the new housing bill that was just passed“.   I’m glad to see there are people wanting to understand it better.  This could be achille’s heel of the bill.

There is additional information available (this is …


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