First, I have been listening to CNBC, as Wall Sreet puts on a full court press (propaganda ad lies on a scale beyond belief--every minute I can stand to listen I get more angry as these idiots talk about how people like me--and you?--do not "understand" that this is not a bailout of Wall Street).
If this is not a bailout of Wall Street, why is Wall Street putting out all of this propaganda blackmail. This is a flat lie. Wall Street, along with politicians like Chirs Dodd and Barney Frank, has lied to us all along. It is continuing to lie. And the mainstream media is supporting the lies with a full court propaganda push of its own, its own blackmail and extortion, and its own lies. Then there are the establishment politicians, joining in the same propaganda campaign of fear and lies.
Let us go to the first lie. That is the assertion that this bill is necessary and sufficient for ordinary people to get credit. That is the whole way this disgraceful bill is being sold, isn't it? Do you know that passage of this bill will not directly result in one single loan being made. Not one.
Remember what this bill fundamentally does, if you strip out the bells and whistles added by Congress, which merely complicate the bill. This bill provides for a taxpayer purchase of "distressed" mortgages, and other bad paper, from Wall Street and banks. How does that provide one single loan? It doesn't. And if you listen carefully, no one is saying it does.
In a rare departure from the propaganda assertion that this bill is "necessary" to "free up" credit, I actually heard one explanation of how this is supposed to work. Believe it or not (you leftists out there who have criticized this very idea for years), it is the "trickle down" theory. The idea is that clearing away bad assets from the balance sheets of banks and other lenders will give these people money to lend (by bailing them out). Problem: They don't have to give a single loan. In other words, there is no reason this bill relieves the "credit crunch" at all. In fact, the Federal Reserve is already pumping money into the system so that banks have money to lend, if they want. Banks are, in fact, lending, but only to people with really good credit. How does the bailout bill change that? It does not.
Bank of America bought Merrill Lynch. Bank of America bough Countrywide. J. P.Morgan Chase bought Bear Stearns (with some taxpayer help). Goldman Sachs raised 10 billion dollars--5 billion from Warren Buffet alone--why not ask the "rich" to step in and provide equity). Other banks are trading on Wall Street at neew highs. Citigroup just just bought most of the assets of Wachovia. How can you say those banks don't have money to lend.
The housing assistance bill passed in July just wen into effect allowing FHA to help both distressed homeowners and lenders willing to do "work outs". Fannie Mae and Freddie Mac are now owned by the U.S. Government, which can set the terms by which it will fund mortgages. What does the bailout bill have to do with any of this? Nothing This bailout bill is for Wall Street, devised by Wall Street (Paulson coming directly from Goldman Sachs).
That brings me to El Paso. Last week, news outlets in El Paso reported that there is no credit crunch here. Loans are available--especially for housing. I can confirm that from my own knowledge. My only real woman friend (platonic--most people are surprised I have one). She makes somewhere between $50,000 and $60,000.00 a year. No credit? Sylvia is off on a trip to Hong Kong right now (horrible economy?). However, before she left she contracted to buy a house for $120,000. She has essentially no savings. She already had a loan commitment from a local credit union before she made the contract--a loan commitment for teh full price of the house. That's right. Sylivia is buying a house with a loan from a financial institution in El Paso for no money down. And she got that loan right in the middle of this "credit crunch."
Yes, Sylvia has good credit. But she can barely afford the house, with her income. Yet, she can get a no money down loan. That means that almost anyone with good credit can get a loan now. People with less good credit cannot get a loan. Even commercially, banks like Wells Fargo, Bank of America, etc. have money to lend. Again, maybe credit standards have tightened. But credit standards were going to tighten anyway, and this bill does nothing to loosen them. Nor should it do anything directly to require loans to people with less desirable credit. We got in this mess with unsound loans. Why should we force financial institutions to make more unsound loans. And how does bailing Wall Street and banks out change that? It does not.
Is CNBC or Wall Street (same thing--CNBC views itself as a propaganda outlet for Democrats on Wall Street) saying anything that contradicts the above. Nope. They are simply lying. They talk about "credit spreads", which may have something to do with the health of Wall Street, and financial institutions, but has nothing to do with consumer or commercial loans. Banks can get short term (like 2 year) money at ridiculously low cost. That means bank margins on loans have increased. These credit spreads that are supposedly a problem for lenders may have to do with interbank transactions, and transactions involving securities sales. They have little to do with what used to be the only type of loan made (bank loans its money obtained at a low cost for a higher interest rate).
Nope. This is all a fraud--an attempt to claim a Wall Street bailout is not a Wall Street/bank bailout Wells Fargo has money. Bank of America has money. El Paso financial institutions have money. These disruptions in Wall Street traded instruments is not a main street problem.
I actually heard someone on CNBC say that this "credit" crunch was going to raise housing interest rates to the highest since the 1980's. That is a flat out lie. The market does work on loans. If banks and mortgage companies have money, they can only make money by loaning that money. If there are few loans being made , and a lesser demand (as is happening, as not so many qualify for loans), then the "price" (interest rate) needs to go down to help loans be made. No bailout quickly means lower interest rates, even if loans are restricted to people with good credit.
What happens with a bailout? We are printing money to finance the bailout. We will create what amounts to a false demand. That means higher interest rates, and eventual inflation.
There is no excuse for this bailout. It is a short term bailout of Wall Street and banks at long term cost (maybe extreme long term coust) to the taxpayer. That cost is not only the 700 billion It is the precedent, the inflation, and all of the other costs of printing 700 billion daollars--costs that can never be "repaid" to the taxpayers. Any "repaid" money is likely to be with inflated funds.
Listen to CNBC both threaten and beg for Wall Street with all of the lies and propaganda--fear mongering. Get angry and call your Congressman. This bill should not pass.
I repeat what I have said previously: Everyone needs to vote against every single lawmaker who votes for this bill--not only in this election but for the rest of your, and their, lifetimes. Further, you need to vote against all of these people for any postion--not just their present one You need to remember what they did, and not the results of what they do. Do not forget.
I follow what I preach. I will not vote for McCain. I will not vote for anyone in Texas (as to whom I have a vote) who votes for this bill. I will follow through on this promise for the rest of my life. It is a vow I will keep. You should make a similar vow, and keep it.
P.S. El Paso is one of the poorest cities in the country. If there is money available here, there is money available anywhere. AGain, this bailout bill does nothing to help people with less than really good credit get loans. That is what Democrats did before with housing loans, and that is what got us in this mess.