December 19, 2007

I'll take "Why government idiots shouldn't bail out failing banks" for $110 Billion Alex


The UK taxpayer has been raped by the incompetent stooges running their government, who have now bailed out failed bank Northern Rock for £55 billion and counting, even though the taxpayer never had a say in this slippery slope disaster. Yes, that's £55 billion and counting. That's more than the annual education budget for the nation. And it didn't have to be.

When a bank makes stupid decisions, the bank should fail. Period. When depositors deposit more than the protected amount in a bank, and the bank goes tits up, the depositor should lose his money. The rules going into the game were clear. When the government changes the rules mid-game, credibility dies and moral hazard skyrockets. And that's where we are now, since we're run by monkeys, and it's just gonna get worse.

Meanwhile, the US taxpayer in on the hook now for hundreds of billions at the FHLB, an institution with an implicit taxpayer guarantee who's pissing money away to the likes of soon-to-go-bankrupt WaMu and Countrywide at an alarming rate, and the taxpayer will end up bailing out all of 'em.

And then there's Fannie and Freddie, who stand to lose TRILLIONS before the smoke clears. And again, even though there's no law that says we have to, the US taxpayer will end up paying.

There should be outrage. There should be investigations. There should be a media storm. There should be PANIC.

(sound of crickets chirping)

At least you know what's happening HP'ers, and what's going to happen. Lot of good that'll do you, but at least you know.


At the stroke of a pen, the Government has again weighed into the catastrophe at Northern Rock.

In its latest move, it is offering banks who lend to the beleaguered mortgage lender in the wholesale market an open-ended guarantee that they will not lose any money.

This extraordinary action, which makes the rescue of Northern Rock the most expensive in financial history, came on the day that the Bank of England made it clear that the £55 billion-plus bail-out is part of something much worse.

41 comments:

Anonymous said...

I'll take assasinatons for $100 Alex...

Anonymous said...

.


This is enough to give Trebek a Stroke!

What?

Oh, sorry.

.

Ed said...

You voted for socialists in the UK for the last 10 years. Don't be surprised when they act like socialists.

tater said...

BRING BACK THE GUILLOTINE!!!

bank dick said...

These pols feel our pain, and collectively we will all pay for the mess they and irresponsible fools created. It is after all the elagitarian and "fair" thing to do for our fellow man, right?

Now sing along with me, from the EU anthem:

Joy, thou beauteous godly lightning,
Daughter of Elysium,
Fire drunken we are ent'ring
Heavenly, thy holy home!
Thy enchantments bind together,
What did custom's sword divide,
Beggars are a prince's brother,
Where thy gentle wings abide.


Beggars are a Prince's brother -- LOL!

Anonymous said...

While a taxpayer bailout is the biggest mistake govt can make, changing short sale tax laws so the forgiven debt isn't taxable income is a close second.

I believe a tidal wave of short sales are coming. Letting the homedebtor walk away scot free with credit intact (no foreclosure) is a big mistake. On the other hand, having the IRS on your rear for the taxes on a $150,000 forgiven debt may actually teach these people a lesson. The IRS doesn't play by the same rules as other creditors.

Anonynurse said...

I make $40/hour as a RN. I am taxed nearly $1000 each pay period. If I work over-time...it mostly goes to taxes. I'm so happy that my money is going to be pissed away like this. Even happier than when I'm wiping the rear-end of a demanding pt. on welfare who I could not please even if I danced around in circles like a circus clown. I can hardly wait for socialized medicine and the tax bill and mess that it will bring. You think health care is in a crisis now...just wait until Uncle Sam takes over.

serindippity said...

Socialism? Socialism?

Ain't the no actual socialism here.

This is socialism for the rich!

What do you think a Jacobin or Karl Marx would say about a king who uses public money to keep alive a bank which failed due to its own incompetence and greed?

OFF WITH HIS HEAD!

Here is what responsible government actually looks like:

The Federal Reserve, acknowledging that home mortgage lenders aggressively sold deceptive loans to borrowers who had little chance of repaying them, proposed a broad set of restrictions Tuesday on exotic mortgages and high-cost loans for people with weak credit.
The new rules would force mortgage companies to show that customers can realistically afford their mortgages. They would also require lenders to disclose the hidden sales fees often rolled into interest payments, and they would prohibit certain types of advertising.

The proposed changes, which do not apply to standard mortgages for borrowers with good credit, stopped short of banning all heavily criticized practices in subprime lending and did not go as far as many consumer groups had sought. But they won praise as worthwhile steps from some industry critics who had long complained that the Federal Reserve under its former chairman, Alan Greenspan, persistently ignored signs of trouble.

“Reading these proposals today is almost painful,” said Dean Baker, co-director of the Center for Economic Policy Research, a liberal research group in Washington. “These are all just simple, common sense regulation. Why couldn’t Greenspan have done this seven years ago?”


I.e. this is what the sensible normal activities of government looked like, before the "movement conservatives" took over.

When the USA was based on normal facts and knowledge about the real world, not some debate-team nerd's fantasyland.

Yes, Virginia, many people and many banks ARE too greedy and too stupid to be left to their own glandular urges.

The primary point of this regulation of course is to keep the banks out of the government's pockets, by stopping them before they hit themselves one more time.

It's too late now for this time, but let's remember for the next.

Like how people in 1933 remembered how things really went down tback then and not the revisionist delusions proffered by the crazy rightists today.

Someone had a great description of Alan Greenspan over the last 7 years: "Greenspan watching the housing bubble is like a squirrel watching a bank robbery. He saw everything, and understood nothing."

Kenduffelsniffenspotzen said...

I guess the idiots are running things in the UK, not just the USA.

westwest888 said...

Oh Freddie Mac. Put it on the Ritz!

http://tinyurl.com/2wzyny

Anonymous said...

Kill 'em ALL !

keith said...

The government here spent 2000 pounds per taxpayer stupidly bailing out Northern Rock (so far), and the Labour party has never been more unpopular - in part because of this stupid move.

Now think if they DIDN'T bail out Northern Rock and instead sent everyone 2000 pounds in the mail.

They'd be the most popular political party of all time.

People are that stupid. But so is the government.

NO TAXPAYER BANK BAILOUTS!!!

Anonymous said...

anonynurse:

I hear you. My wife was considering going back to work recently. She got a job making $35K a year. But when you add it fed, state and fica taxes, that $35K would be only $20,500 take home. That is since we file jointly, her entire income would be taxed at my top marginal rate of 34% and fica of 7.45%. Add in the cost of gas she would use getting to and from work and it's under $20K a year which works out to $10 an hour.

She decided not to do it and I was in agreement. To all you idiot liberals out there who think high taxes work, here is one example of how high taxes discourage work.

Keep increasing taxes and soon enough nobody will be working. Why bother when you can just sit at home and wait for that gubermint check to show up in the mail.

GT said...

'(sound of crickets chirping)'
wow that was funny!
more like the sound of sheep ba-baaaaa-ing

Anonymous said...

Now think if they DIDN'T bail out Northern Rock and instead sent everyone 2000 pounds in the mail.

----

That's what Hitlery wants to do with a $5K baby bonus and which you opposed.

Anonymous said...

To begin with:

How about a grassy knoll?

A concept whose time is overdue.

Anonymous said...

"I make $40/hour as a RN."

Socialized medicine will bring competition to your field and drive down earning to the 20s/hour you spoiled brat.

concerned said...

Depositers should be backed from the government Keith.....no doubt about it. It is not their fault that the goverment can't regulate the lending practices of the banks.

When you deposit money in a bank, you are not knowingly taking any risks.

Otherwise let's all buy goverment bonds.

keith said...

"Depositers should be backed from the government Keith"

Wrong.

I've known since I was five years old that depositing money in the bank would not be a sure thing if it wasn't for the FDIC.

The FDIC sticker is on every bank's front door. Only a fool would not know about the FDIC (in the US).

Other countries have other regulations and protections that differ by country, so if you're from outside the US please fill us in. If you invest more than the government protects, then you're on your own. Do your research just like investing in a company. And if you don't? Your problem, not the taxpayers'. It's not government's role to bail people out for bad decisions.

Examples: Building homes in flood plains (or hurrican zones). Losing money at craps. Buying pets.com stock. Or depositing more than the FDIC limits at Countrywide.

Anonymous said...

I think i'll quit my job now, ask for a bailout for my mortgage, wait for Hillary to become president, then i'll shit out another baby every year for a 5K bonus each time. Hey i have a novel idea, lets give illegals more benefits for having more babies, it's not like they have enough already.

Merciless Ming said...

Absolutely no bail out money should come from taxpayers. I've long believed that the whole show is being run by a plutocracy of moneyed "elites". Let these bastards pay the tab for failed policies and entities they encouraged, directed or tolerated.
Monstrosities such as Fannie Mai and Freddie Mac along with many of our largest banks seem to have been designed to fail due to idiotic loan standards.
It should have been obvious to any thinking adult that the insane "creative" loan policies of recent years would blow up in the faces of those making the loans. I must conclude that the people running this show are at least as smart as I am, hence things are probably happening as designed.
The real question is how does this bad drama end? I don't think the final act will be pleasant to watch.

Anonymous said...

There will be plenty of outrage and investigations and nothing will come of it.

Anonymous said...

Socialized medicine will bring competition

Idiot liberal, where will the competition come from? Other countries? Socialized means that the government controls it and there is no competition. If you get bad service at a hospital, too bad. There's nowhere else to go. Write a letter to your congressman. That means lazy union workers with big fat pensions when they're 50 years old. That means bureaucrats who need to have you die so costs come down. That means it will take 7 years to fire incompetent hospital workers. That means no lawsuits for medical malpractice.

Uncle Buck said...

"To all you idiot liberals out there who think high taxes work, here is one example of how high taxes discourage work."

Huh? Why blame liberals. That's quite a blanket statement don't you think? You don't think you're paying higher taxes now? Maybe not directly but have you filled up your tank at the pump in the last 7 years. It's call funding the war my fellow American!

Liberals want to raise taxes for sure but not for the likes of you. How bout raising them for the top 1% for starters and just cause we're so "liberal" let's just cut your wife's tax rate to 0%, and while we're at it if you've got kids or are planning to have em - let's give you a liberal 5 K per child for the first 3 years and if you or your wife wants to take 18 months off and be the stay at home "mom" then by all means, we'll make sure you can come back to your job without any fear of losing it.

That is what a liberal is ok. Why do righties always use the word liberal like it was an STD??

That and more you could do if you taxed the 1% that make the most money.

Now if you want a clean, bright shiny new USA with the best technology and no dependence on foreign oil, cheap crap from China or other slave nations. Just roll all that funny money from the pentagon and military industrial complex into a new infrastructure plan. All those great minds working away planning wars of the future when they could be solving real problems.

Oh I forgot, we have to protect ourselves from box cutters and enemies made of sand!

Uncle Buck said...

"To all you idiot liberals out there who think high taxes work, here is one example of how high taxes discourage work."

Huh? Why blame liberals. That's quite a blanket statement don't you think? You don't think you're paying higher taxes now? Maybe not directly but have you filled up your tank at the pump in the last 7 years. It's call funding the war my fellow American!

Liberals want to raise taxes for sure but not for the likes of you. How bout raising them for the top 1% for starters and just cause we're so "liberal" let's just cut your wife's tax rate to 0%, and while we're at it if you've got kids or are planning to have em - let's give you a liberal 5 K per child for the first 3 years and if you or your wife wants to take 18 months off and be the stay at home "mom" then by all means, we'll make sure you can come back to your job without any fear of losing it.

That is what a liberal is ok. Why do righties always use the word liberal like it was an STD??

That and more you could do if you taxed the 1% that make the most money.

Now if you want a clean, bright shiny new USA with the best technology and no dependence on foreign oil, cheap crap from China or other slave nations. Just roll all that funny money from the pentagon and military industrial complex into a new infrastructure plan. All those great minds working away planning wars of the future when they could be solving real problems.

Oh I forgot, we have to protect ourselves from box cutters and enemies made of sand!

FICO score 750 said...

anon said:
"I believe a tidal wave of short sales are coming. Letting the homedebtor walk away scot free with credit intact (no foreclosure) is a big mistake."

yes a tidal wave of short sales are coming, but they won't walk away with credit intact. While the laws vary a bit state to state, generally, you short sale, and your FICO score takes at least a 100 point hit. Forclosure and its over 200 points. And thats for 5 to 10 years.
Housing gamblers with low FICO scores used to get around this by piggyback loans but its going to be much harder for them to do so from now on.

Yes, these morons will live to see another day, but don't believe their credit won't be ruined for a very long time.

Anonymous said...

Keith, you are too hard on the banks. They are suffering enough as it is:

Firm Average pay
---- -----------
Goldman Sachs $661,490
Morgan Stanley $343,004
Lehman Brothers Holdings $332,470

Princess Mononoke said...

Merciless Ming said...
>>>The real question is how does this bad drama end? I don't think the final act will be pleasant to watch.
December 19, 2007 8:24 PM

It will end... a la climactic operatic style.

Anonymous said...

uncle buck you are an idiot. you propose taxing those who make money so everyone else can take 3 years off and pop out kids.

all you socialists should ask youself a simple question next time you have the urge to tax "the rich"....have you ever worked for a poor man? do you know anyone who works for a poor man?

making rich people poor has never and never will make poor people rich. 70 years of communism in the USSR and 50 in cuba prove that. i wish you tools would clue in to reality and shut the fuck up

Anonymous said...

She decided not to do it and I was in agreement. To all you idiot liberals out there who think high taxes work, here is one example of how high taxes discourage work.

Keep increasing taxes and soon enough nobody will be working. Why bother when you can just sit at home and wait for that gubermint check to show up in the mail.

December 19, 2007 6:53 PM
-------------------

Some M-Fers already figured this shizzle out: Stay at home get free housing (altho they burn them down on their own with space heaters), have many times the kids working people can beacuse the baby sitting checks come every month, free education that the kids don't want anyway, free health care when you get shot or stabbed by your sister figting over the last french fry, then do some hussling on the side so you can still have all the bling and Cadillacs you could want!

America, aint it great?!?!

coveredwagon said...

should read "the government has WADED into..." as a duck wades into water. Common error. No need to post the comment. Great post, as always!

Uncle Buck said...

"making rich people poor has never and never will make poor people rich. 70 years of communism in the USSR and 50 in cuba prove that. i wish you tools would clue in to reality and shut the fuck up"

Thanks for demonstrating my point.

That's the classic rightie response "STFU"

Criticise Bush "STFU"
Ask for more fairness i.e. maybe taxing the top 1% "STFU"

Protest an illegal war "STFU"

Support a strong middle class "STFU"

Why do you hate America so much sir?

So you don't want America's children to have the best:

Education
Healthcare
Infrastructure
Opportunities

and be respected throughout the world?

You'd rather continue believing in the illusion that anybody can get rich if they work hard enough and believe solely in capitalism. If you do, then why are you not up in arms about the current bailout of the socialist bankers Hmm? Don't mind bailing out the rich but oh heaven forbid they acutally have to pay their FAIR share of taxes and us in the middle are suddenly accused of being communist: In your eyes there is only the rich and the poor. According to you if we tax the rich, they will suddenly become poor and the poor will only poop out more babies. You must be wearing some pretty thick glasses cause all you see are immigrants and the ultra wealthy.

Why do you hate the middle class so much. We're the backbone, biceps and now unfortunately the liver and colon of American and we're being run down by slash and burn corporate socialism. There is not true capitalism here or anywhere else. Please click your heels together and come back to the real America!

I used to believe that too until I found out that it's us hard-working Amerians who are getting screwed the most. Corporate bailouts and wars that line the pockets of the richest top 1% of the world's population are what is killing this country. Not Uncle Buck asking for a strong middle class.

Call Uncle Buck what you will but you don't sound like you're in the top 1% so why are you so against your own interests. You continue to support that idiodic notion that "Someday I'm gonna win the lottery or be rich and then I don't want the gubermit taxin me".

Your a real card Sir. A a card-carrying corporate socialist!


Vote Uncle Buck - Uncle Sam's wiser brother!

Rusted out Chrysler LeBaron said...

"all you socialists should ask youself a simple question next time you have the urge to tax "the rich"....have you ever worked for a poor man? do you know anyone who works for a poor man?"

It sure beats working for the rich man let me tell you that. The poor man has a deep understanding of what hard work means and yet he still tries his best to grow his business (where we disagree is what constitutes poor: you falling more on the side of deadbeat baby making machine and me being more in favor of supporting poor or newly poor middle class families who have a work ethic).

The rich man by comparison profits enormously from the thousands his company pays: intellectual patents, manufacturing labor, corporate welfare handouts, monopolistic global power, direct line of influence to politicians, pundits.

The poor man has none of these save the socalled representatives who are less than willing to rock the boat.

Since you are posting here, I highly doubt that you are part of the rich who wouldn't bother to spend minute one here.

Go ahead and counter about how rich you are. List all your assets, your retierment savings, stocks, property, businesses you own etc. You probably look like a middle class man to the truly rich. i.e. if you are not talking billions here then you are not part of that 1%.

If you are, then I stand corrected and will lay down and pray at your feet as you are truly worthy of my worship!

Waiting patiently for your response.

Anonymous said...

Our Masters continue to feed off of us.

The Constitution allows only gold and silver because the founders new that fiat money was a tool of corrupt lecherous courts and despots.

Princess Mononoke said...

I VOTE UNCLE BUCK!

Princess Mononoke said...

This was a great thread to read...

Jim said...

Uncle Frank,

While I agree with you on the distaste for the wasteful wars, I find some of your statist proposals quite objectionable. There is no free lunch. War, welfare/tax-collection, and mandates are all things that have be forced onto people. That means, another layer of bureacrats have to be paid for. Why don't we mandate that mothers have to be guaranteed to return to their jobs 18 _years_ after giving child birth? What do you think potential employers would do when it comes to hiring woman? Oh, sure, enforcement, who do you think will pay for the enforcer? and the watchers over the enforcers who might take bribes? and wathcer over watchers who might take bribes?

Forcing people into doing things that they do not want to do on their own volition is cost-ineffective. That's why the smallest government is the best government.

Jim said...

Rusted Chrysler Lebaron,

The division between rich and poor is silly. Does a family making $350k a year (the cut-off line for top 1% income filers) develop alcoholism and drink themselves into poverty suddenly qualify your hardworking ethics standards? Conversely, does a family that work hard and pull themselves above the $65k a year line (IRS number for top 20% filer) suddenly incurr your wrath for being rich and lazy?

In a free market place, a person's wealth should be mostly influenced by the economic decisions that person makes (either through working hard or through working smart). Government intervention gets in the way of that social mobility. By now, everyone should more or less know that the rich has more money to buy off politicians than the poor do, so guess what government intervention accomplishes? keeping the rich rich at the expense of keeping the poor poor . . . while taking a big slice out of both the rich and the poor for the pliticians and bureacrats themselves.

Jim said...

Uncle Buck,

What makes anyone think that government is the best agency to provide: Education, Healthcare, Infrastructure, Opportunities?

Mexico and Cuba both have universal education, universal healthcare, and universal infrastructure . . . yet, both Mexicans and Cubans are rushing to the US for opportunity, including better education, better healthcare, and better infrastructure.

Government is a monopoly. Monopolies are inherently inefficient because there is no competitive pressure to deliver better services. Government is not a blackbox deity that have magical solutions to all problems. Sure, government can outlaw illiteracy, or even pass a law to outlaw disease itself! Yet, does either illiteracy or disease go away after the law is passed? Real-life educators and real-life doctors have to do the real work to reduce the afflictions. That's why a market place is crucial in deciding the wage levels at which talented people might be enticed into becoming educators and doctors. The last sort of people we need for both professions are un-motivated sinecure seekers, which are exactly what nationalised education and healthcare would bring.

There is no free lunch. If the law mandates something has to be done; it means something else has to be given up to fund the legal mandate. When tax and inflation are used to fund public education and public healthcare, it means people will have less resources left to fund education and healthcare on their own initiative.

Uncle Buck said...

Hi Jim,

Uncle Buck here again.

You have given me pause to consider what I have stated and I agree

You are right!

There is indeed no free lunch. The wars that are being waged in the name of empire are very costly, very costly to say the least. No free lunch there. We all have to pay for those.

But my meager proposals pale in comparison to what these nation building adventures are costing us right now. They cannot even be compared in terms of death, ruined lives and cost! The money used for those adventures should be invested in the country we have right here!

That classic argument against social programs always includes mention of their inherent cost, the layers of bureacracy involved and an exagerrated example of why they will not work because those lowest on the social ladder are more than content to live off the government "tit". And yet it does nothing to address the problem.

Funding public education has never and will never cost this country more than the tragic wars our governing elite are always so eagar to fight. It would be impossible to spend that much money on education -- you couldn't do it!!

As far as bureaucratic monstrosities go, take a look at the pentagon: no auditing, no public records of where all the money goes!

Regarding what I call a "pro family" policy: 18 months time (not years) is in my opinion a reasonable period of time for a woman to nurture a newborn and then return to her job should she choose to. If a working couple decides that the other spouse should be the stay-at-home "mom", then so be it, but part of what makes our American society a great one has a lot to do with how we value what a family is and how we treat those of us on the bottom. At the same time, however, I also deeply respect the uniquely American "pull yourself up by your bootstraps" idealism. These two principles often collide.

Make this country great by providing "basic entitlements" for the common welfare:

the right to a good education
the opportunity for good work for the middle class to allow them to raise a family and prosper
fair business and tax policies for all willing to participate in the American way of life

(this also means that if you are making 10 or 20 million a year, then you ought to be able help by giving a good amount back to fellow Americans who helped you get there so that the country as a whole can prosper)

If some choose not to participate even after having access to these entitlements, then society has done everything it can and these "players" are on their own i.e. your no free lunches.

Other countries provide for this kind of "pro-family" support. Just because it doesn't work in Mexico and Cuba -- two countries that I hardly see fit to use as comparisons to the USA -- does not mean that it won't be successful here. Look at Germany, which in it's current form owes a great deal to the USA. It seems to be working well there for the time being.

In my opinion, providing for affordable education and a "pro-family" policy are not at the root of our problems. They are the start of a solution!

Sincerely,
Uncle Buck

jim said...

Uncle Buck,

I agree with you 100% on the wasteful foreign wars, and that they should stop.

Where we disagree is my belief that our overseas empire building is a natural extension of the domestic empire building. Sending bureacrats, who are obviously backed up by the armed police power, into domestic communities to right whatever wrong that politicians perceive from afar in DC is going to run into the same problems of corruption and inefficiencies that our bureacrats and soldiers are facing in bringing heaven on earth to Iraq. The old joke being, government budget is always spent on the cousins and pet projects first, leaving education, police and fire department last so as to leave an excuse for raising more taxes :-)

Glad you mentioned the Germans. They were actually the pioneers of social welfare state, long before the US got on the bandwagon. In fact, the early writings advocating public education in the US, back in the late 19th century, routinely cited German success as samples. Obviously, we later learned just exactly all that indoctrination of "national spirit" really led to. Germany was also the pioneer in national healthcare. They had universal healthcare in the mid-1930's; the rest of western Europe did not have it until they were conqured by the Germans in the 1940's. Witholding healthcare was actually a common tool used against political opponents of the German government. German government of the 1930's also handed out bonuses to new mothers for giving child births.

All that government intervention unavoidably gummed up the Germany economy in the long run. They eventually resorted to war and plundering as a way to solve their economic problems, with predicable results, just like FDR did after 1937 when his New Deal programs clearly proved failures. War is a gamble that politicians can have the public underwrite the cost while reap the benefit of loot themselves. Much of our current war in the middleast follow the same logic: after our own economy is gummed up by decades of big government and heavy taxation (both explicit taxation and hidden taxation through inflation), the neocons thought we could avoid the inflationary spiral by invading and controlling Iraq and holding oil price down. That gamble didn't work simply because economics is not about playing with toy soldiers in a nutcracker set. Individual human beings are usually quite clever at deciding what's good for himself or herself. They do not follow government orders willingly. The monetary cost of having our watchers on the spot to ensure that cheap oil keep coming out of the ground and piped directly to us is no less than having a local tinpot dictatorship doing it for us . . . actually more. It's all a matter of how much money we print and how little they can fetch in return.

Government intervention is the original sin. When such intervention leads to economic dislocation, more intervention is usually called for. . . until the government is in everything . . . then the domestic economy grinds to a halt . . . at that point, waging a war of plunder overseas looks mighty appetizing . . . once again a mirage, in reality.