This is the text of emails sent today to our US Senators and a version was also sent to our Representative.
"My spouse and I am opposed to the Federal bailout of Wall Street, HR3997 and the Senate version. I believe the plans are seriously flawed.
I have read the House version and first, I do not think taxpayer funds should be allocated for the purpose of purchasing the assets of “any” financial institution, and specifically “foreign authorities and central banks.”
Second, I do not think that funds should be used for the purpose of hiring firms to help manage the assets of companies the government basically nationalizes. This has the potential of providing federal funds to the firms that contributed to, profited from or participated in the failure.
Finally, I think the primary purpose of the plan should be to address the problems of the taxpayers who are being asked to pay for this plan. I do understand there is more than enough blame to go around, and that many people were stupid or at the very least ignorant, and possibly millions participated in some form of fraud. However, this is a reward to the people who promoted and profited from this situation.
We are homeowners who purchased below our means and are practicing a philosophy of living below our means. We are saving for our retirement and have invested in bank funds such as CDs and we also have 401(k), 403(b) and Roth-IRAs which we have used to invest in American companies. We are feeling the pain of the current financial situation and while I am “entitled” to retire with social security benefits, I am in fact working and paying taxes. Frankly, my financial future is in jeopardy.
We are registered voters and my spouse and I will be thinking long and hard about the forthcoming election and we will be voting our conscience in this matter. "
Showing posts with label Capitalism?. Show all posts
Showing posts with label Capitalism?. Show all posts
Wednesday, October 1, 2008
Friday, September 19, 2008
More on the Lehman Brothers Company Failure
Lehman Brothers who described themselves this way on their website, was allowed to fail, as in, no bailout by the Federal Reserve:
“Our Firm
Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. We maintain leadership positions in equity and fixed income sales, trading and research, investment banking and investment management.”
It has been reported in the WSJ and elsewhere that Treasury Secretary Paulson did not come to the rescue of Lehman because, other “Wall Street executives” were negotiating to purchase the firm, thereby saving it from possible collapse. But there was a price. The Federal Reserve was to give these firms the same deal extended to JPMorgan Chase. That is, they, too, were to get the same benefits of the Bear Stearns deal. In that “deal”, the Federal Reserve backed the offer of JPMorgan Chase (another financial firm) to acquire Bear Stearns at the fire sale price of about $2 per share. The Federal Reserve agreed to fund $30 billion of Bear Stearns assets that would be difficult for JPMorgan Chase to sell quickly. This money puts taxpayers on the hook for the bailout.
So these “innovative” capitalists are willing to spend some of their ill-gotten gains from designing, promoting and passing along the methods for sub-prime notes, but only if we, the taxpayer protected them from “risk”! Of course, if the deals work well, these same companies stand to make $billions as they are purchasing companies for pennies on the dollar. For example, Bear Stearns at a purchase price of $2 per share, was down about 93% from its value a week before and in June 2007 was valued at about $145 per share. As far as I know, Bear Stearns had assets around the world, and so JPMorgan Chase got a really sweet deal. It was reported in the Associated Press that the "total initial costs" were about $3.44 billion, with costs of combining the two companies were expected to reach $6 billion over the next year. As I said, a really good deal. No wonder the rest of the capitalist "pigs" were lining up at the trough! I suppose I should not be surprised that these capitalists on Wall Street would attempt to put the government against the wall and make a few quick bucks at the price of someone else. That is the very nature of the blood that runs in their veins.
Today it was reported that Freddie Mac issued a securities filing yesterday in which it stated that Lehman had missed a repayment of short-term loans of $1.2 billion “plus interest”. Management control of Freddie Mac was taken over by the Federal Housing Finance Agency. Of course, with the government backing of Freddie Mac, we the taxpayer are on the hook for these loans. If you are not quite certain who exactly "Freddie Mac" is, then read the "business summary" on this website. You will then get the irony of the missed repayment and the guarantees to JPMorgan Chase:
http://finance.yahoo.com/q/pr?s=FRE
Were there not impassioned arguments, just a few short months ago, by these same brokerage houses, that "hedge funds" should be unregulated. In fact, hasn't it been the position of these same banks and brokerages that regulation is "bad"? Wasn't it their argument that these entities should be left unfettered so they could go about the business of "free trade" or something to that effect? Well, chumlies, you are "free" so go to it and save yourselves! Of course, now we'll hear a lot of dribble about how the ban on "short selling" is bad (that ban was put in place this morning by the SEC). Yep, another restriction of the broker's freedom to make lots of money at someone else's expense!
It seems "we the taxpayer" are expected to bail out New York City’s financial district to keep that town rolling but never get in the way of their opportunity to make a profit! That’s supposedly a good thing, because Wall Street and New York City, as the saying goes “are too big to fail”. Then there are the people who got loans with interest rates below market and now are supposed to be bailed out, also. I guess they are "too small" to fail! As for the rest of us, in the middle class, we can fail because we simply don't fit the politicians profile of those who matter in this country. So the rest of us can just pony up and send money in those directions.
Tell it to the people of the city of New Orleans and let’s see what they have to say about this turn of events. Believe me, I wouldn’t wish misfortune upon anyone, but I find this to be unbelievable! Wall Street lining up to get even more of our money!
“Our Firm
Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. We maintain leadership positions in equity and fixed income sales, trading and research, investment banking and investment management.”
It has been reported in the WSJ and elsewhere that Treasury Secretary Paulson did not come to the rescue of Lehman because, other “Wall Street executives” were negotiating to purchase the firm, thereby saving it from possible collapse. But there was a price. The Federal Reserve was to give these firms the same deal extended to JPMorgan Chase. That is, they, too, were to get the same benefits of the Bear Stearns deal. In that “deal”, the Federal Reserve backed the offer of JPMorgan Chase (another financial firm) to acquire Bear Stearns at the fire sale price of about $2 per share. The Federal Reserve agreed to fund $30 billion of Bear Stearns assets that would be difficult for JPMorgan Chase to sell quickly. This money puts taxpayers on the hook for the bailout.
So these “innovative” capitalists are willing to spend some of their ill-gotten gains from designing, promoting and passing along the methods for sub-prime notes, but only if we, the taxpayer protected them from “risk”! Of course, if the deals work well, these same companies stand to make $billions as they are purchasing companies for pennies on the dollar. For example, Bear Stearns at a purchase price of $2 per share, was down about 93% from its value a week before and in June 2007 was valued at about $145 per share. As far as I know, Bear Stearns had assets around the world, and so JPMorgan Chase got a really sweet deal. It was reported in the Associated Press that the "total initial costs" were about $3.44 billion, with costs of combining the two companies were expected to reach $6 billion over the next year. As I said, a really good deal. No wonder the rest of the capitalist "pigs" were lining up at the trough! I suppose I should not be surprised that these capitalists on Wall Street would attempt to put the government against the wall and make a few quick bucks at the price of someone else. That is the very nature of the blood that runs in their veins.
Today it was reported that Freddie Mac issued a securities filing yesterday in which it stated that Lehman had missed a repayment of short-term loans of $1.2 billion “plus interest”. Management control of Freddie Mac was taken over by the Federal Housing Finance Agency. Of course, with the government backing of Freddie Mac, we the taxpayer are on the hook for these loans. If you are not quite certain who exactly "Freddie Mac" is, then read the "business summary" on this website. You will then get the irony of the missed repayment and the guarantees to JPMorgan Chase:
http://finance.yahoo.com/q/pr?s=FRE
Were there not impassioned arguments, just a few short months ago, by these same brokerage houses, that "hedge funds" should be unregulated. In fact, hasn't it been the position of these same banks and brokerages that regulation is "bad"? Wasn't it their argument that these entities should be left unfettered so they could go about the business of "free trade" or something to that effect? Well, chumlies, you are "free" so go to it and save yourselves! Of course, now we'll hear a lot of dribble about how the ban on "short selling" is bad (that ban was put in place this morning by the SEC). Yep, another restriction of the broker's freedom to make lots of money at someone else's expense!
It seems "we the taxpayer" are expected to bail out New York City’s financial district to keep that town rolling but never get in the way of their opportunity to make a profit! That’s supposedly a good thing, because Wall Street and New York City, as the saying goes “are too big to fail”. Then there are the people who got loans with interest rates below market and now are supposed to be bailed out, also. I guess they are "too small" to fail! As for the rest of us, in the middle class, we can fail because we simply don't fit the politicians profile of those who matter in this country. So the rest of us can just pony up and send money in those directions.
Tell it to the people of the city of New Orleans and let’s see what they have to say about this turn of events. Believe me, I wouldn’t wish misfortune upon anyone, but I find this to be unbelievable! Wall Street lining up to get even more of our money!
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