Can You Say Taxpayer Bailout?

Well the votes are in and most experts in the field of finance agree that the neither the Fed nor the US Treasury can find their collective fannies with both hands. Or is it all four hands?
The Treasury's plan to create a superSIVsaver fund tanked when it was revealed that not only couldn't they put together a $100 billion bailout fund, they couldn't even organize a $20 billion one.

The collapse of the plan to create a $100billion "superfund" was embarrassing to the US Treasury which backed the scheme. The idea - to create a fund to support liquidity in the market for housing-related securities - was killed off late on Friday when the banks behind the scheme abandoned it after little interest from other financial institutions.

The former dynamic duo from Goldman Sachs, Hank Paulson, the Treasury secretary, and Robert Steel, the undersecretary for domestic finance, helped to broker the original agreement to create a massive fund to buy housing-related securities. The obvious problem was that the Fund would have wanted to purchase no "bad" paper and that was exactly the kind that banks needed to get rid of and were going to attempt to sell to it. The Fund would have only agreed to purchase "good" paper, and that was exactly the kind the banks would want to keep. Duh...

As for the Fed, Ben Bernanke, facing his first major test as Fed chairman, is getting mixed reviews. The Fed was embarrassed when the credit crisis hit in August. That happened only two days after the central bank had decided to keep interest rates unchanged and declared that inflation was a bigger risk than weak economic growth...maybe, or not. They have no idea.

Circulating among all these embarrassed banking gurus is rumor of a scheme that's gaining some currency, here's where your money comes into play. The plan would let the government buy most of these bad mortgage based securities, as much as $200billion worth, or maybe more. They have no idea.
In any case the plan would have the government holding the "bad" paper for a few years and then when the housing market rises from the grave, lo and behold, the fed could sell it all for a profit. Just like the Resolution Trust Corp. of the S&L days, and we all know how well that worked out for taxpayers. Some estimates put the taxpayers bill for the S&L debacle at $500billion. In the early 1990's Congress was still debating which taxes to raise to pay for the 1980's mess. One can only imagine how much this current mess will cost.

The CBO says $9,000,000,000 a month for Bush's war! That is 9 billion dollars wasted monthly.

9 billion dollars this month, next month and next and next...apparently until we send this clueless, MBA back to Texas. Money that could be used to guarantee all Americans access to quality health care regardless of where you live or work. Money to better education. Money to repair roads and bridges. Money for America. Where are our priorities? Have we lost our collective minds? It is your tax dollar and our children's futures being squandered. Better use could lower the current cost of insurance for the family lucky enough to have it. That cost is $1200 a month for Mom, Dad and 2 children. 9 billion dollars a month could lower that amount substantially. All of our politicians have SOCIALIZED MEDICINE. That's right, the very same type of insurance that half of them would have you believe is bad and evil...for you, but not for them. Who do they think is paying for their families and themselves to have full coverage? The government is paying, that's you and me as taxpayers and that's socialized medicine and they are not inviting us to participate.

Think about it, your health care should not be a commodity bought, sold and traded on Wall St. like oil or gold. Medicines should not be treated like strawberries in the marketplace. Oh my, too expensive to afford this month. American families should never be in the position of having to forgo medicine because of cost.

Forget about being a Republican or a Democrat for a few minutes, we can argue about gun control, abortion, illegal immigration or whatever later. Right now we need to agree on something pretty basic, everybody gets older and everyone gets sick and everybody needs help with their health care costs. It should be apparent that even the very rich cannot afford to pay for their health costs when those costs rise into the millions of dollars in a year. It happens all the time. Ask the Vice President.

If you are lucky enough to have a good health insurance policy it is probably capped at around a million dollars. That amount is unchanged since the 60's and it puts your personal wealth at risk because hospital costs rise above that maximum limit of one million dollars regularly. Actually the capped amount should be about 6 million in today's dollars. Of course the insurance industry won't hear of it and since they are one of the biggest contributors to political campaigns it's not surprising that their desires are foremost in politician's minds.

So what does all this have to do with the VP's health insurance? If you think the Vice President of the United States or for that matter any other member of Congress or any government employee is more entitled to comprehensive health care than you are simply because they are employed by Uncle Sam, than you need to reappraise why you are apparently willing to accept second rate status in your own very rich country.

That's right you must believe that someone being wealthier or more important or simply having taken the taxpayers money as salary for 30 years entitles them to better health care than you. Would you sit still if the government built better and safer roads and bridges for the wealthy or only for the use of retired government employees? Suppose only the rich or current and retired government employees could use the elevators in all the tall buildings in America. Think of your health as your personal infrastructure. Health care, the roads and bridges and elevators to you and your family's safety and well being. Demand your fair share of the $9,000,000,000.
Tell your elected officials that you won't take the gravel road or cross the rickety bridge or climb the stairs anymore. Tell them you want what your tax money entitles you to. Health care not warfare!

The mortgage zombies arise!

For the life of me I don't know what is keeping this market from totally swooning. It seems to keep wanting to rise from the grave like some kind of financial zombie.
It takes a licking and keeps on ticking. Could it be that the fundamentals are actually rooted in bedrock rather than sand? Could it be that the worst is over and the resurrection is only a Sunday away? Don't think so!

One reason for a pessimistic view is the cobbled together plan to keep the suckers paying for another year or so, (the Teaser Freezer plan) being touted by the administration's version of "Our Gang" Treasury Secretary "Spanky Paulson" who is pushing the idea that if we can just keep the suckers from defaulting this year who knows what might be possible next year. The mortgagee dead will arise and walk the earth once again, checkbooks in hand, clamoring to continue to pay their now inflated mortgages on their now deflated in value homes.

More specifically the the plan works like this. The doomed are divided into 3 groups. (1)Those that can pay their mortgage even after it resets at a higher rate. Tough luck suckers. (2)Those that can't pay their mortgage under any circumstances. Tough luck suckers! And (3)those that supposedly CAN pay their mortgage if it stays at the "Teaser rate" for the next few years. Uncle Sam wants you! This third group is now being touted as the saviors of the system. These unfortunate home owners are being singled out for special treatment by the system. They are going to be allowed to continue to pay their bogus mortgages with the idea that this will give the system time to recover from its deluded venture into the nether world of sub prime paper.

That's right, the plan is simple, just keep this group paying for a while longer while the financial pharisees dance around the stone idols of Ayn Rand and Gorden Gecko chanting "Greed is Good." Actually the whole purpose of the latest chapter in this monumental Ponzi scheme is to try to keep this economy afloat long enough for the morons in charge to retire to their respective homes in Texas and Wyoming next year.