Defeated!
September 29th, 2008. Published under General. No Comments.
“House Votes Down Massive Bailout Measure - 228-205″
Um, guys…that should tell you that you shouldn’t RUSH THE DAMN THING. There needs to be funding and protection for regular Americans - not just for Wall Street with the “hope” that any profits/fairy dust generated by these companies will find it’s way down to Middle America.
Bull.
I’m both glad and anxious by this result. But there are increasing numbers of experts are saying we don’t need to do this. A quote from the linked story:
Institutional Risk Analytics: So you oppose the idea of the government putting preferred equity into solvent but troubled banks that cannot raise capital on reasonable terms?
Bert Ely: Yes, it is not necessary, even now. There is absolutely no need for the Treasury to have the authority, as you suggested, to “inject capital into solvent banks that are temporarily unable to raise new capital.” If a bank truly is solvent, it can raise additional capital or sell itself, if its present owners are realistic about what their bank is worth. The reason solvent banks have a problem raising capital, or selling themselves to a stronger bank, is that they set their price too high, as did AIG. As an aside, I am glad to see AIG’s shareholders getting whacked by the warrants associated with the Fed’s taxpayer’s loan to AIG. There is absolutely no need for the taxpayer to subsidize banks so they can stay independent, provided no barriers are erected to prevent new entrants into bank or specific banking markets.
Bingo.
Again, if a bank is TRULY solvent, it can raise additional capital or sell itself, if its present owners are realistic about what their bank is worth.
So why are we trying to shore up banks that would’ve failed anyway?
That’s why Congress should take their time and make sure we don’t screw this up if it’s TRULY needed.
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