Tag Archives: banking crisis

Episode 18 – Shoe-a-cide Watch


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An Iraqi reporter hurled a shoe at George Bush in a fit of frustration, while Jeff and Glenn hurl all they’ve got at the Washington Elite in the 18th Episode of PoliTalk. Unlike the Iraqi, however, the PoliTalk guys hit their mark this week: Illinois Governor Rod Blagojevich for his outlandish fraud; Caroline Kennedy for her lack of credentials (does it really matter); the “Big 3” car companies for ponying up to the trough, and the politicians for filling it; Bernie Maddoff for his unbelievable, unscrupulous $50 billion ponzi scheme that hurt countless innocent people, and the makers of really bad television for leaving Glenn and Jeff off the political talk circuit for yet another week.  Get your real political analysis here at PoliTalk.

Listen to the current installment of PoliTalk and get yourself informed, inspired, entertained and ready for the day… spread the word… tell two friends, and so on and so on…

You can get the PoliTalk Podcast from Podcast.com and iTunes.

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Episode 17 – Survival of the Weakest


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Elected officials again show profiles in political weakness by buckling to pressure to bailout the big 3 auto manufacturers. As if the lessons of the financial bailout weren’t disastrous enough (fool me once, shame on you, fool me twice, shame on me…). As if caught in a web of bizarre reverse Darwinism, only the weak shall survive. If you’re strong enough to run your business well, you only have to worry about banks freezing credit, the economy crippling your business and making ends meet. But if you fail spectacularly, I mean really, really badly, well, then you are rewarded. John Thain, CEO of Merrill Lynch, is reportedly seeking at $10 million bonus this year.

The car makers, who have essentially run their dinosaur-of-a-business into the ground, are now seeking $35 billion in federal money to prop them up.  AIG… well, we know the story there. So the lesson to all you kids out there: don’t work too hard, take your private jets whenever possible, seek out-of-this-world compensation for something you really haven’t done, and if you fail, don’t worry, the federal government will be there to bail you out. But if you’re one of those who live lives of quiet desperation, who live a decent, unremarkable life, but maybe you’re on the brink of financial disaster — you get screwed. Welcome to the new world economy. We’re mad as hell, in a funny, intellectually, riotous, quirky, lovable kind of way. You’ll laugh, you’ll cry, you’ll ask for more. Catch the latest episode of PoliTalk: where politics and policy meet real people.

Listen to the current installment of PoliTalk and get yourself informed, inspired, entertained and ready for the day… spread the word… tell two friends, and so on and so on…

You can get the PoliTalk Podcast from Podcast.com and iTunes.

Financial Bailout Bill Passes House


In a vote of 263 for and 171 against, The US House of Representatives passed the updated Financial Bailout Bill that was passed yesterday by the US Senate. The Bill now moves to the President, where it is expected to be signed into law without delay.

Washington Mutual Gets Bought… The World Still Turns


ABC News Photo

Source: ABC News Photo

Yesterday, without much fanfare, the largest bank failure took place in the history of the world. Washington Mutual failed yesterday and was taken over by Federal regulators. Within the same day, the Federal regulators sold the assets to JP Morgan for $1.9 billion. The Mercury News reports:

The Federal Deposit Insurance Company (FDIC), insures Americans’ bank deposits of up to $100,000. But it says because of the deal it will not have to use its assets to cover Washington Mutual’s deposits.

So here is my question to Congress and the President – If we are on impending gloom and doom and will experience massive bank failures, how come the Washington Mutual failue was resolved with the kind of outcome that is Main Street friendly without spending $1 of taxpayer money?

In one day, the existing Federal authorities and the market resolved the largest S&L collapse with a result that seems to be exactly what is good for all of us taxpayers. That said, there were winners and loosers:

Winners:

  • The depositors. Their money is safe and covered by JP Morgan.
  • The FDIC. No funds will be needed to cover deposits.
  • The taxpayer. No taxpayer will have to assume the losses of this failure.

Losers:

  • The Washington Mutual Executives. Presumably, JP Morgan will no longer need their services.
  • The Washington Mutual Shareholders. Shareholder took a risk in this company and lost.

Isn’t this the kind of result that Congress and the Administration is trying to get to? So help me understand this — why do we need to spend $700 billion to fix this problem? – Glenn

Lessons for Congress from George Bailey


James Stewart in Frank Capra's It's a Wonderful Life

Growing up, part of the annual holiday tradition was watching the classic Frank Capra film, It’s a Wonderful Life. I can’t help but pause for a moment now to wonder how George Bailey would counsel us in how to get out of this financial conundrum we find ourselves in. Allow me to speculate on what good ol’ George might say to Congress if asked:

  1. Do the right thing for the people, after all it is their money that you are dealing with.
  2. Know the people who you are giving a mortgages to. At the Bailey Building & Loan, we know everyone we make a loan to. That is how we can minimize risk. I look across the table and ask them how they plan to pay the loan back.
  3. Don’t give in to the Mr. Potters of the world. They are out there and they will do whatever and say whatever to take advantage of someone when they are down. They are roaming the halls here in Congress like flies on sh&t. Shoo them away or swat ’em.
  4. The bank examiner is one of the good people. He is my way of checking to see that my business is healthy and I have enough assets to cover my liabilities. We all make mistakes, like the time my Uncle Billy lost $8,000 dollars, but knowing that the bank examiner was coming kept me focused on doing the right thing for my business.
  5. Bankers have a sacred trust with the community. They enable the local economy to thrive and grow. It seems that they forgot that the only way they can make money and sustain it, is by helping the community grow and sustain. Selling mortgages to people that can not pay it off in the long run doesn’t help either party.
  6. Keep it local and simple. I make loans to people I know. They pay me back. What has happened here is that the owner of the loan is now so disconnected from the borrower that neither could ever know if the other was in trouble until it is too late. In my business, if someone doesn’t make their payment, I go to their house and talk about it over coffee.

Congress should keep these words of wisdom from George Bailey in mind as they start to dole out $1 trillion of taxpayer money that we don’t have. Maybe, and just maybe, if they do, we may all find a way to have our own wonderful lives again. – Glenn

Focus on Main St. not just Wall St


There’s no doubt action must be taken to deal with this banking crisis, as we talked about in our last two episodes. But what do you tell the factory worker or nurse or carpenter barely making ends meet who is struggling to pay the mortgage? Wall St. gets a bailout, but you have to keep making that mortgage payment or this whole house of cards comes falling down…

And if I hear John McCain blame this on Barack Obama and his advisers one more time I’m going to puke. What about Rick Davis, his campaign manager, who received $20,000 per month, yes, that’s right, $20,000 per month, to lobby for Fannie and Freddie?

Whoever is our next Commander in Chief, don’t forget those of us on Main Street — Jeff