Mad as Hell

Hat Tip ~ American Infidel & Q-Burn

"Mad as Hell" scene from "Network"
mixed with speech by
Marcy Kaptur - (D) Ohio
On "The Bailout"

Keep an eye on what feral economist Nouriel ("Dr. Doom") Roubini has to say. He was the only major economist who saw this crisis coming, he warned of it early and often, hence the nickname.

Now, he says the danger of global financial meltdown is real, but that buying toxic assets per the $700 billion bailout is a "completely flawed" approach and may actually make things worse. He thinks it's a good thing the House rejected the bailout. He's calling for the Fed to temporarily insure all bank deposits, to stop a "silent run" on the banks.

[SNIP]

Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer - the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy.

So this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the financial firms (not just banks but also other non bank financial institutions); with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money....

Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented - many on the RGE Monitor Finance blog forum - alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.

[SNIP]