You said 700 BILLION?
An alien observing this whole financial mess from orbit would find it all very interesting.
I do as well, on one level. Fascinating stuff. Learning more and more about the innards of the US financial system.
On another level, it terrifies the crap out of me. Someone’s writing a check in MY name to the tune of $10k or so to cover this ($700 billion total)? WHAT?
I’ve got a kid on the way and am scrimping and saving. I turned off cable TV! Hell, I started drinking the crappy free coffee at work instead of buying good stuff, and starting bringing peanut butter sandwiches for lunch. I’m saving my ass off and some pin striped suit wearing sonofabitch is sticking his hands out to the tune of 700 BILLION DOLLARS?
Screw that noise, let them die! Let every bank fail; fuck ’em. So my next mortgage will be drawn against a Chinese bank? Fine. They probably at least know what they’re doing better than the US bankers.
The Infamous Brad has a good point about when it will end… as of December 31, 2009, 97% of all of the teaser rate mortgages will have reset… so the dipshits who bought a house way bigger they could afford will have been foreclosed upon, and the banks holding those mortgage securities will stop seeing losses on them.
How Did We Get Here?
And as to how this all happened, I’ve not seen an explanation from the asshats on Wall Street and the SEC and the Fed. They just want our money.
However, the Good Math, Bad Math guy has a series of articles that sum it up pretty well:
Economic Disasters and Stupid Evil People
How "safe" was a lie
How it turned into a trillion dollar disaster
So that’s how we got here. Right now as I write this Congress is arguing about what in the hell to do about it. And for you partisans, just put a sock in it. Plenty of blame to go around for the deregulation to allow this… a Republican Congress got it signed by a Democratic President.
The Freakonomics guys have blogged a bit about this, too.
A guest blogger justifies the bailout of Bear Stearns and AIG. I guess I don’t have a huge problem with those. At least they let Lehman Brothers fail appropriately.
A response came saying Paulson is wrong about this… essentially it means that the profits are private (them Wall Street types were rolling in it the past decade), but when it comes time for the losses, somehow that gets socialized.
Or Else… What?
I’m a bit more concerned about this $700 billion dollar war chest they’re asking for. To my understanding, this is the issue:
– Credit is the lifeblood of the financial system.
– The system is chock full of bad mortgage-backed securities (see the Good Math Bad Math links above on this).
– Banks won’t lend to each other because they KNOW they all have bad debt and don’t believe they’ll get paid if they do give credit.
This is all very esoteric from my perspective. I’ve got car repair bills (my wife crashed her car). I’ve got a mortgage to pay (fixed rate, dammit!), and mouths to feed. I need to pay for gas, and food, and my health care costs just DOUBLED. I don’t give a flying fuck if UBS can’t get a loan from Citibank.
I want someone to tell me… WHY DO I CARE?
Why can’t we just wait for the dust to settle? Okay, for a while the credit market will dry up, many investors will be screwed over as stock drops… but then, after a while, the bad debt will be excised from the books, and we’re all good again, right?
It apparently would be pretty dire… but what would such a situation actually look like on the ground if we just allow the failing institutions to fail?
Isn’t that supposed to be how the free market works? If a bunch of idiots bet a bunch of money on stupid investments, they should LOSE THEIR MONEY, not take MINE.
So anyway, all of these articles say that the credit market has to stay liquid, OR ELSE.
Well, can someone please explain the "or else" part?
If not, then let’s please just let them die.
Also, if anyone henceforth explains to me that they are an investment banker, derivatives broker, or Wall Street executive, I am going to put my foot so far up their ass that my toes are going to come out of their face. Then I’m going to drive off in their Mercedes.
Not that I didn’t hate this type of weasel before… but now there’s no jury in the country that would convict me for doing bodily harm!
The above section is hyperbole, and is no way intended to actually constitute a threat, no matter how expensive the asshat’s suit.
My letter to Congress