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airplanedad
Posts:131
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| 09/30/2008 9:01 PM |
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"It's a Bonus: Not a Bailout" - from the Arizona Republic, some "comic" relief:
Washington lawmakers and the White House need a real-life Don Draper to help enact a plan to stabilize the nation's economy.
Draper is the fictional executive from AMC's Mad Men, who comes up with wildly successful campaigns to sell anything from airlines to bras.
From the onset, the plan that failed on Monday had major marketing problems.
"Treasury Secretary Paulson came out of the gate, hysterical, with a flimsy two-page proposal asking for $700 billion, no questions asked, like some kind of bank robber 2.0," wrote New York magazine's Daily Intel blog.
Americans have been baptized in expensive bailouts this year, and it's made them furious. There's nothing like the phrase "$700 billion bailout" to conjure up an image of Wall Street gamblers getting a pass.
When Paulson met with GOP senators last week, they lectured him not to use the term (bailout), reported congressional newspaper, The Hill. "The senators were "hearing an earful from constituents back home who don't understand the complexities of the plan. What they do understand is the word 'bailout.' "
The White House has indicated it likes the descriptor "an effort to fix the problem of a frozen asset class."
Like we said, Madison Avenue could help.
To be clear, The Buzz is not advocating that taxpayers be spun by advertising in order to support a government economic plan.
But "from the start, the Bush administration did not do enough to emphasize the point that taxpayers would get at least get some of the money back," wrote Ben Pershing in the Washington Post.
Screams of "bailout" drowned out that the plan's financing came in stages with an initial approval $350 billion. Congress would then decide if it needed the rest.
Without any plan, taxpayers and companies face an even tougher time getting credit and greater possibility of recession.
As lawmakers hustled on Tuesday to revamp the plan, The Buzz asked Phoenix advertising agency Moses Anshell for suggestions on what to name it. Their ideas:
• The Equity Plan For America Act
• The SecureEASE Act ( Securing Equity in America Sensibly)
• RestoreEASE or (Restoring Equity in America Sensibly)
• SAFE (Saving America's Financial Equity)
The agency also had humorous ideas:
• Approve before Monday and we'll throw in a basket of puppies.
• $700 Billion Economic Stimulation Plan: If it raises the economy for more than four hours, call a doctor immediately.
• $700 Billion Do you really want our banks to mismanage another $700 billion? Plan.
"Heck, we would gladly have taken this on for a mere 1 percent commission - or $7 billion," Vice President David Leibowitz said.
"Seriously, though, if ever a plan could have used better marketing, this is it. (There's) nothing like using the metaphor of a sinking ship to ensure failure."
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TotoMMB66
Posts:98
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| 10/01/2008 1:59 AM |
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Thanks for the update airplanedad. Here's a few names they missed:
* Restore Our Banks (the) Taxpayers (ROB. the Taxpayers)
* Restore Inefficient Cash Heroes - Create Efficient Opportunities (RICH CEO)
* Bank Efficiency Nightmare - Instant Success - Broad and Dominant (BEN IS BAD)
* Helping Every Neighbor Rise Yonder, the Bank Uprising Movement (HENRY the BUM)
I could go on forever. I think round 2 (being voted on today) will get shot down as well. The powers that be already fired off all of their "knee-jerk" bullets with AIG, Fannie and Freddie, Bear and "Wamuchovia". In fact, Wamu and Wachovia illustrated that other market workings can happen, instead of simply handing George Bu$h a blank check. It's going to be painful, no matter what happens, but I think the appropriately named "bailout" cannot just be thrown together. |
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jpinpb
Posts:1450
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| 10/01/2008 6:51 AM |
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| airplanedad and Toto - Thanks for making my morning. LOL. |
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jpinpb
Posts:1450
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| 10/01/2008 7:00 AM |
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Okay. I don't know if this has been done already in other posts. I've been gone for 3 weeks and I didn't go through all the past posts - and probably won't.
According to the U.S. Census, our population is 305,307,033. Now, if we take 700 BILLION and divide that by each person living in the U.S. - well, my math is rusty here. Someone help me out. |
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jpinpb
Posts:1450
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BigTrace
Posts:194
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| 10/01/2008 7:34 AM |
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Posted By jpinpb on 10/01/2008 7:00 AM
Okay. I don't know if this has been done already in other posts. I've been gone for 3 weeks and I didn't go through all the past posts - and probably won't.
According to the U.S. Census, our population is 305,307,033. Now, if we take 700 BILLION and divide that by each person living in the U.S. - well, my math is rusty here. Someone help me out.
About $2300 |
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BigTrace
Posts:194
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| 10/01/2008 7:52 AM |
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To me, I think the gov't thinks we're stupid and we don't know the big picture, so they have to "do what's in our best interest". I think the real fear from the White House is that our population is growing and in order for us to sustain job growth, we need to manufacture jobs by having businesses and people borrow more. No credit, no borrowing and business continues on the way it is but stays stagnant. People start to live within their means or go bankrupt. Small business will be hurt as many rely on credit to survive. Inflation rates will go up as well as unemployment as the population continues to increase and more and more people enter the workforce, nevermind the baby boomers who will all be retiring in the next few years that the work force needs to support.
I get it.
But that doesn't mean the way to stimulate credit is to give moeny to banks and have them write off their bad debt on the backs of the taxpayer. Once ridden of their bad debt, their isn't 1 guarantee that the banks will once again, start lending money. They just got burned for BILLIONS and now that the gov't wants to put a band aid on what they think is a skinned knee cause by falling off your bike. What they doesn't get is that the "skinned knee" was a much more serious injury, more like falling out of a plane and surviving the hit to the ground. The banks aren't going to want to go skydiving again. Credit will still be tight allthough the banks will be made whole again. The winner will be those that have bank stocks.
Personally, I've lost $150k in the last 10 days. Some here have probably lost more. I could make it all back with the passing of this thing because my worst positions are in bank stocks. I would rather see it go away than pass this crap onto my children and my grand children. |
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TotoMMB66
Posts:98
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| 10/01/2008 7:56 AM |
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| Back in the day when the $700B figure first came up, I think the slice was also noted at $6K per taxpayer. Or something to that effect. Or maybe it was family ($2,300 x 2.5 ppl). Who knows. I will have to say, after reading about "Bailout ver. 2.0". they're going in the right direction. But I'm still not a fan. |
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artist
Posts:81
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| 10/01/2008 8:47 AM |
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The asswipes are working on it again today. This is unbelievable given that they are receiving e-mails and phone calls almost 90% against the bailout. Talk about them being out of touch with the people.
I nominate George Bush as the worse president ever. |
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BigTrace
Posts:194
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| 10/01/2008 9:04 AM |
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Posted By artist on 10/01/2008 8:47 AM
The asswipes are working on it again today. This is unbelievable given that they are receiving e-mails and phone calls almost 90% against the bailout. Talk about them being out of touch with the people.
I nominate George Bush as the worse president ever.
Artist, I agree with you, but you really need to look at this as 535 congress people + VP and Pres. I'm not a Bush bandwagoner, but this thing is spread to ALL of congress and if we're going to point fingers, every one of those a-holes deserves the heat. |
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BigTrace
Posts:194
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| 10/01/2008 9:17 AM |
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Raising the FDIC limit to $250k will do some good and calm people down a bit I think. Good place to start at least.
One of the biggest problems is that ALL of the major institutions ate the posion pills (mortgage backed securities) as a hedge against their already crappy and highly risky stock portfolios they own. This is Worldwide were talkin.. so when the cards start to fall, 401k's, IRA and other pension funds will get hit hard which is going to cause a panic amongst the baby boomers and current retiree's. The initial fallout will be bad, but similar to yesterday, their will be a rebound as fundamentals kick in and start to isolate the bad sectors, namely financials. Companies like Walmart will be fine since they cater to lower cost shopping for the budget concious. It's going to be a wild ride. |
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tpc
Posts:498
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| 10/01/2008 11:12 AM |
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[quote] The initial fallout will be bad, but similar to yesterday, their will be a rebound as fundamentals kick in and start to isolate the bad sectors, namely financials[/quote]
Big-Bill Clinton pointed out that the 3 largest factors that propped up the economy after the high-tech melt down was the construction industry, easy credit and huge consumer spending based on the wealth effect (i don't need to save because look how much the value of my house has gone up,home equity loans, etc).
What is going to fuel the economy now that all of the above have been undermined????? The middle class is being whittled down in size as many of the high paying manufacturing jobs are leaving america.
Fuel price increases have hit this economy big time because it wiped out the discretionary spending for people at the low end. Slowed down fast food and starbuck sales. $100pb oil looks like it is here to stay.
The biggest savior for the econ would be building infrastructure for power-T Boone Pickens is right.
The next 3-5 years aren't going to be pretty. |
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airplanedad
Posts:131
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| 10/01/2008 11:13 AM |
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Big Trace: Thanks for your last few posts: Opinions well expressed.
Here is one thing I can't seem to understand: Even "if" the finance system gets back on track and liquidity is restored, just who are banks going to lend to? Collectively, we have been on a spending binge for almost a decade and many, many households are drowning in debt-- and not just mortgage debt: there is huge consumer debt from buying cars, electronics, clothes, $10 cocktails, etc. To add to that, we already know that wages have been stagnant and our economy is overwhelming based on serving each other, instead of based on something where there is true value added.
Come on: We need to admit the emperor has no clothes! So, for example, if banks extend credit lines to car dealers, OK, but that doesn't address the elephant in the room--the elephant is the fact that a good many people CANNOT afford a new car even if they CAN get financing. People are going to HAVE to live with ugly cars, home cooked food, last season's dresses (gasp!!! how third world) for a few years I will bet.
The homes of many american's are like giant Costco's: Many of us have years' supply of just about everything (including body mass). Really, many of us have No Need to consume more. It's already sitting in our 4 car garage. We are dying under our own weight--literally. That fact in an of itself is going to hurt our consumer oriented economy.
In a nutshell, I argue that for the better half of the last decade, we over consumed to the point of being huge gluttons: All that junk we all already bought is going to have to tide us over until it is all paid off. I think that means the our service-based economy Must contract. I argue it has become a mathematical certainty. Sure--loosen the purse strings but most of us seriously need to go on a consumption diet and that necessity has been looming over us for a Loooong time. This will be extremely painful for our service based economy, but I fail to see that there is ANY other option. |
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jpinpb
Posts:1450
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| 10/01/2008 11:47 AM |
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Forgive my stupidity. How will raising the FDIC help us? Isn't it a government agency? Haven't government agencies failed? Doesn't that mean if it fails - the taxpayers get stuck with the bill?
Big - There is no guarantee that the banks will lend again. BUT since the government came to the rescue, it's like a broken leg that the doctor replaced with a new one. You can go running again. As good as new. The only "inconvenience" is you had surgery. You didn't even pay the bill. The taxpayers take care of it for you.
The greater issue is debt mismanagement got us here. Why the hell would we want to make the banks whole again so they can even have the opportunity to start giving away money w/impunity? We need to get people off debt/drugs.
There are banks that are still lending, but only to those w/good credit who can prove they can make the payments. As it should be. |
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TotoMMB66
Posts:98
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| 10/01/2008 11:58 AM |
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Big Trace, good points, well said.
"apdad", I think new services will pop up. I also think cities will contract and people will move back towards city centers. Driving the Expedition 60 miles to work one way will no longer happen. People will shop and work closer to their homes. I think Wal-mart will actually get hit, as big box stores will not maintain the volume they're used to. Besides, people aren't running around with "free money", regardless of how inexpensive (or cheap) the products are. "Local" will be the new buzz word. Business will sprout up to "clean up" the housing mess (physically, not financially). People will begin rehabbing houses or destroying them altogether. Not for flipping for 100% profit, but to maintain neighborhoods. As "apdad" mentioned, their a lot of material "junk" that has to go somewhere...like the businesses that turn shipping containers into houses, look for recycling or rebuilding of products.
Like drug abuse or alcoholism, our "credit abuse" needs to hit rock bottom. Begin saving. More cash, less credit (but not "no credit"). People will continue to buy houses, cars, business supplies. But the excess needs to be wrung out of the system. Finance 101 needs to be taught in high school...credit, investing, debt, commodities, and other issues need to be ingrained in young people's minds.
Like the "bailoutiticians" have cried, this problem didn't sprout up overnight, and neither should the remedy. But everyone also needs to be working on changing the M.O. instead of continually bouncing back and forth between excessive practices and bailing out of whomever needs it at the time (homeowners, S&Ls, automakers, banks, municipalities, anyone). |
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Brian
Posts:2210
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| 10/01/2008 1:22 PM |
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Toto, I don't think the city core is coming back as fast as you think. Perhaps in your group of friends, people may want to be closer to the city core (I would be one). But that's just wishful thinking.
http://weekendamerica.publicradio.org/display/web/2008/09/27/suburbia/
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To find out where the suburbs stand today, host John Moe spoke with Dolores Hayden, a professor of Architecture, Urbanism and American Studies at Yale University who's written extensively about suburbia.
Hayden: For the last 30 years I've heard people say that surely, surely people are coming back to the city. They have seen some of the difficulties of suburban life, and they're coming back to the city. And every 10 years, it proves not to be true. You know, some of the fastest-growing places in America are on the suburban fringes. So while you may know people who choose to live in the city, that's not the predominant trend. |
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TotoMMB66
Posts:98
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| 10/01/2008 2:36 PM |
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| Brian, I'm not saying we're all going to be concentrated in downtown SD. But I think the Eastlakes and 4S Ranches of the county are in for a shock. Go north to Temecula, I'm guessing the same thing. Lots of big, master-planned communitities have sprouted up in the past few years. When a good number of folks moved in above their financial comfort zones, there's going to be a contraction there. As newer developments stagnate or begin to empty, the volume will not maintain the business levels once enjoyed. I can't imagine the numerous Starbucks in Eastlake are booming. They've already closed stores (we've even posted on it here). As businesses start underperforming, they will pack up, leave town and stick with the more established stores (which are in communities with a more established populace). I drive by Eureka Springs in Escondido every day and have to imagine those are struggling big time. Even at $400K, those seem eerily quiet. Or nearby at Windstone Glen. A lot of $575K homes for sale. I don't imagine they'll fill up any time soon. Looking at ESC East closings, in fact, there's not a whole lot above $300K-$350K. |
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Eugene
Posts:258
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| 10/01/2008 3:37 PM |
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I don't expect Windstone Glen to sell for 575K, either. But look 2 miles south and you'll see 2542 Royal View Rd that sold for 985k in August, or 20615 Viento Valle that sold for 800k.
Eureka Springs and Windstone Glen are struggling because they are built in a bad location and they share schools with a low-income neighborhood and two big trailer parks next door. Not because people are packing up and leaving new developments indiscriminately. It was a big mistake for the builders to build without coordinating with the school district. (It was audacious to build there at all, but what's done is done)
Especially now that El Norte Parkway is finished, they should redraw boundaries, assign Eureka Springs, Chaparral Ridge, all other new developments to one elementary school, and make it K-8. Assign trailer parks to the other. That would go a long way towards stabilizing that part of the city.
We're not in danger of running out of people any time soon. We'll increasingly start seeing a phenomenon of multiple families packing into single-family houses in suburbs. |
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BigTrace
Posts:194
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| 10/01/2008 3:43 PM |
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Posted By jpinpb on 10/01/2008 11:47 AM
Forgive my stupidity. How will raising the FDIC help us? Isn't it a government agency? Haven't government agencies failed? Doesn't that mean if it fails - the taxpayers get stuck with the bill?
Big - There is no guarantee that the banks will lend again. [b]BUT[/b] since the government came to the rescue, it's like a broken leg that the doctor replaced with a new one. You can go running again. As good as new. The only "inconvenience" is you had surgery. You didn't even pay the bill. The taxpayers take care of it for you.
The greater issue is debt mismanagement got us here. Why the hell would we want to make the banks whole again so they can even have the opportunity to start giving away money w/impunity? We need to get people off debt/drugs.
There are banks that are still lending, but only to those w/good credit who can prove they can make the payments. As it should be.
JP - The only reason increasing the FDIC upwards is a "good" thing is the perception that peoples money is "safe". It's just paper because you and I both know that the gov't would step in to pay whatever FDIC didn't for the mostpart in the first place. It will just give people a better sense of security and cost the people basically nothing. The banks, on the other hand, may have to increase their contributions to the system which may have a slight adverse affect on deposit rates, but it should be negligable.
If you loaned money, a LOT of money to someone and they went BK or just didn't pay you, would you re-loan that person money again at the same terms/rates that you did before even if someone else paid you back?? I wouldn't.
Other than that, I agree with you wholeheartedly.. |
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jpinpb
Posts:1450
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| 10/01/2008 4:14 PM |
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| Big - Of course you and I would not loan money to someone who went BK. But I dare say you and I would not be stupid - negligent - enough to blindly loan money to people w/no jobs or job income to support that loan. They did. That's why there's nothing to say they won't again once they are made whole. They have lost nothing if they are saved. Remember, these people defaulting will only have a mark for so many years and they're good to get loans again. Your comment makes common sense, but common sense was not used by lenders. |
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