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Monday, September 29, 2008

Iceberg! Right Ahead!

Update: This post is a follow-up to yesterday's post: The US Economic Situation for the Complete Idiot.

In the post below, I advocated that the bailout bill contain a provision for punishing those responsible for the current financial meltdown. Commenters Ilya and Eric pointed out that this is not a good idea, and they are correct. Further expansion of my thoughts, and theirs can be found in the comments section.

My proposal for a long term, permanent fix can be found here.

- Jim

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In April of 1912 the largest passenger steamship then in the world, RMS Titanic, set sail from Southampton, England for New York.

You've seen the movies, you've heard the tale, and you all know what happened, right?

On the night of Sunday, April 14th, moving at full speed she struck an iceberg off Grand Banks, Newfoundland, gashed a 300 foot hole in her bow, and sank two and a half hours later with a massive loss of life.

Why did it happen?

Well, historians talk about rivets and brittle steel in cold water, calm seas and icebergs and excessive speed, a rudder too small for the vessel's size and a resulting lack of maneuverability at speed, watertight bulkheads that weren't actually water tight enough, the distribution of flooded compartments, buoyancy, the lack of lifeboats, and the state of the art in shipbuilding and iceberg predication and communications and etc. Wrong. All wrong. While it can be demonstrated that all of those things exacerbated the disaster once Titanic was set on her course with destiny, not one of those things was the underlying reason for the sinking.

So what was?

Having been a Sailor most of my life, and as an experienced bridge officer myself, I can say with complete confidence that Titanic sank for one reason and one reason only:

Hubris.

Hubris: overbearing pride and/or presumption; utter and abject arrogance.

Hubris, the belief that a ship sailing full speed ahead in dark and deadly waters without the ability to see the known dangers, without adequate safety equipment, will somehow make port safely simply because you so will it.

Hubris, the enthusiastic willingness to gamble with other people's lives and livelihoods, and the willingness to dismiss the warning signs of impending disaster or wrong doing with the belief that you will beat the odds where all others throughout history have not.

Hubris, the belief that it is perfectly acceptable to play God, to risk a disaster on a grand scale, far beyond your own personal concerns in order to advance your own wealth and pride and self worth, and the belief that those who are cast off in the disaster you created are lesser men who somehow deserve their fate in the frigid waters.

Hubris, the belief that great men dare greatly, and that should disaster fall, those great men should be rescued at the expense of others, set back on their feet, and allowed to try again.

And Hubris, my friends, is exactly what brings us to the current disaster unfolding in the United States financial sector today.

Just like with the Titanic, prideful greedy men set on us a course for disaster. Those captains of Wall Street, in their pride and arrogance, deliberately ignored the lessons of history, 1929, the S&L crash of the 70's, the Dot Com bust of the 90's, and all the rest of it. They ordered the boilers lit and the throttles pushed hard to the stops, in order to line their own pockets and to advance their own hubris, and they took all of us down here in steerage along for the ride.

And when we slammed head on at full speed into the iceberg, those arrogant bastards were the first ones to the lifeboats, - or the golden parachutes, choose your own analogy here - demanding safe passage from the crew, or in this case, the government, as they believe is their right.

And, just exactly like the pride of White Star Lines, there's not enough lifeboats to go around, and a lot of us are going to be left to sink or swim in the icy wine dark water.

OK, I've pushed the Titanic analogy to the breaking point - but the comparison is apt.

We seemed to have settled on the term "Meltdown" to describe the current financial crisis in the combined mortgage, S&L, and Investment financial services industry, and so that's the term I'll use here.

This meltdown was the result of hubris both large and small. As I described in the previous post, the meltdown is the result of a rather large number of prideful idiots:

- Those who failed to read the fine print on those interest only mortgages or utterly failed to see the implication of the conditions of the loan - or did, but thought, somehow, some way, that they would be able to refinance before the first balloon payment came due, despite the fact that instead of saving and working to build some kind of equity and collateral for that refinanced loan, they just kept spending and borrowing their way further into massive debt - in some cases you had couples with a combined income in the $100,000 range with debts totaling well over a million dollars, they couldn't pay the interest, let alone the principle. That, my friends, is the height of stupid greedy pride. These are the same clueless dolts who thought they would be able to sell those houses at a profit in time to stave off impending financial ruin, while driving past thousands of new construction sites and thousands more homes for sale, as everybody else jumped on the snake-oil mortgage bandwagon. On the Titanic, these are the people kicking around blocks of ice on mid-deck and having a jolly old snowball fight.

- Those greedy, dishonest bastards in the S&L business, who not satisfied with the pile of dough they were already sitting on, found a way to turn worthless loans into the largest bait and switch scam in history. These bastards, more than anybody else are responsible for the disaster, they dreamed it up and they deliberately hoodwinked as many suckers as they could find. In the Titanic analogy, these people are personified by J. Bruce Ismay, who placed profit and pride above safety.

- Those in the rating agencies, who gave those worthless bonds AAA ratings, who allowed themselves to be deceived, who bowed to pressure from the S&L's and from Wall Street Investment firms instead of actually doing their jobs. These people were the enablers, they didn't just let it happen, they actively encouraged it. On Titanic? Well, that would be Captain E. J. Smith himself, now wouldn't it? Savvy, experienced, who knew the danger and knew his responsibility to his ship and passengers and still ordered the last four boilers lit and the ship ahead at her maximum speed in utter disregard for good seamanship. And then went to bed.

- Those on Wall Street who jumped at the chance to build a house of cards on top of those worthless bonds, and then borrowed their way beyond any kind of rational sense when it all began to come apart - and still kept paying their departing executives astronomical bonuses for their brilliant leadership. These would be the White Star shareholders who cared little for the danger, as long as they got a dividend check each quarter.

- And finally those in government agencies and in Congress whose job it was to oversee and regulate the industry - and didn't. And here, the we don't need an analogy, because the government's role is this disaster is exactly the same as in the Titanic sinking. Exactly.

And so, now here we are. Today, Congress will vote on a bailout package, in fact has just voted it down as I type this - and "bailout" is exactly the right term here. If you're a fighter jock and you've been pulling some unauthorized stunts with your tax-payer owned, multi-million dollar aircraft and you screw the pooch and flame out, well, you pull the handle and punch the hell out of the cockpit. And that's exactly what's going on here, Wall Street Executives are pulling the ejection handle to the tune of $700,000,000,000 and leaving us with a giant smoking crater for our money.

Now, show of hands, how many of you think that we're going to get out of the current financial market meltdown for a mere $700,000,000,000?

If you do, you really haven't been paying attention. $700,000,000,000 has about as much chance of pulling us out of this tailspin, as Bush's tax refund did of stimulating the economy.

$700,000,000,000 is just the tip of the iceberg - and yes, I'm back to Titanic metaphors again. See, just like when that ship went down, some of the crew responsible for the disaster ended up in the lifeboats. They had to be there, because those boats needed experienced and trained crew to man them in order to save what passengers who were lucky and/or ruthless enough to find a seat onboard. Same here, we're going to have to save some of the institutions responsible for the meltdown, for the benefit of the rest of us - no matter how galling that may be. As satisfying as it would be to let Wall Street go down with the ship, all of us will suffer unless we save a few of those greedy bastards.

Don't get me wrong here, while I think that circumstances dictate that we must bail out Wall Street, and the Federal Government is the only entity large enough to do so, I don't think that they should in any way get off Scot-free. (and for the record, Scot-free is precisely the correct term, as it's etymology descends from the old English term Sceot, or tax. Those who didn't pay taxes were referred as getting off Scot-free or without payment or without punishment).

There are many, many problems, however, with performing a bailout of the financial industry.

- First and foremost, the process simply perpetuates the original reasons for the meltdown. Investment firms borrowed trillions to prop up their pyramid scheme. The federal government will have to borrow nearly a trillion, or more, themselves when all is said and done to fix the mess. We're in debt up to our children's eyeballs now, with the war and energy and inflation - tacking another trillion on top of that isn't going to improve the dollar's value against foreign currency at all. We will all pay for this, and so will our children, and maybe their children too.

- Second, a bailout rewards those responsible for the meltdown. Those who lost their homes (foolish though they may have been for getting themselves into ridiculous mortgage terms) lost everything, nobody bailed them out. Like the steerage passengers on Titanic, they've been left to the flood. Why should the S&L's and Investment Firm execs be any different? A bailout sends a very clear message that no matter how negligent they have been in their duties, no matter how blinded by greed and speed, there will always be room in the lifeboat for them, at the expense of those they climbed over to get there. The bailout simply reinforces the hubris they already believe themselves entitled to.

- Third, a bailout sets a precedent, or in this case perpetuates one. It says very clearly, just as it did the last time, that no matter what happens, those that control the financial heart of this country may act without regard for anything other than their own greed and avarice, despite the fact that their irresponsible actions affect all of us.

- And finally, the bailout bill, as currently drafted will nationalize a large part of the financial industry. If there is one thing we know about the free market, no matter how poorly greedy executives manage the market and industry, the government is far, far worse at it. And once the government is directly involved, it is absolutely impossible to get them out of it. I see a lot of calls this morning for nationalization of the banking industry - and this is just as shortsighted and idiotic as the decisions that led directly to the current mess. Seriously, folks, do you really want the same incompetent jackasses who brought you the War on [Drugs, Terrorism, Poverty, etc et al] running Wall Street? Really?

So, what do we do about it?

Well, I don't know. I'm certainly no expert on the economy. I can say few things with confidence when it comes to fixing the current situation - and I strongly suspect that nobody else can either, especially the 'experts' who aimed us square at the iceberg.

I will say a couple of things though:

- While there is a pressing to need to get a fix implemented, sooner rather than later, we need to proceed with common sense and an eye on the implications of whenever solutions are approved. It took a decade of mistakes to get us into this mess, and I seriously doubt that a bill slapped together by Congress at the eleventh hour is going to fix the problem or do anything but get us further into the hole. We need to take whatever time is necessary and find real solutions and long term corrections, rather than just throw money we don't have at Wall Street.

- I think that any presidential candidate who attempts to turn this mess to his own political gain in order to score points with the voters should be run out of town on a rusty rail - and I am looking directly at you, John McCain. So far, McCain's only concrete response to the crisis is to blame Barrack Obama, and for that if for nothing else he will not now, or ever, get my vote. Period. Now, I don't think Obama's response has been particularly exemplary either, but McCain has cast himself in the same foul cloth of the Bush Administration and frankly from where I sit I can no longer tell the two apart. If he truly thinks at this point that as a Senator his duty is to the country, then honor demands he perform that duty without regard for his own ambition. The mere fact that he can't shows exactly how far behind he's left his training as a Naval Officer, and exactly how similar his own hubris is to those who got us into this mess in the first place.

- And speaking of those who got us into this mess, I won't support any bail-out bill that does not directly punish, and severely, those arrogant greedy bastards. The executives of every S&L and investment firm involved in this process should be bankrupted, their personal assets seized and liquidated to help pay the trillion dollar debt they've levied on us without our consent or approval. I'm talking every penny, every stitch of clothing, every house, car, boat, bank account and bonus - and then dump them on the street in front of a homeless shelter. Fuck 'em, hard.

They're lowering the lifeboats half full of smug arrogant bastards in top hats and frock coats, and a chill wind is blowing. Many of my fellow passengers are going to end up in the water and there is neither room in the boats, or rescue on the horizon. The Captain of this disaster is still standing on the bridge, hopelessly twisting the wheel back and forth instead of out on deck taking charge, rallying the crew and passengers and saving what he can.

And meanwhile, in Congress, the band plays on - unfortunately, the tune they've chosen is Send in the Clowns.

21 comments:

  1. I've got some thing to say, but I need to think this out for a post of my own. But I will say the Titanic analogy is a good one.

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  2. Jim,

    IIRC, J. Bruce Ismay survived the sinking by covering himself in a woman's coat and sneaking aboard one of the lifeboats.

    Hopefully, if/when a second round of lifeboat filling comes thru for our currently listing ship of state, its my fervent desire to see the J. Bruce Ismay's end up in the drink. And if they float long enough without freezing to death, then they can join the survivors. But most certainly, neither in the lifeboats nor in their shiny G-V's fleeing to that nice beachside home in the Caymans or Rio.

    SP

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  3. And that's exactly why I used Ismay as an example, instead of the other board members of WSL

    Excellent catch, sp

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  4. Of course the Titanic disaster gave us the modern United States Coast Guard, in part to ensure that someone was looking out for those damned pesky sneaky icebergs.

    Wish the analogy went on to having the bastards go down with the ship...

    Dr. Phil

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  5. And as the S&Ls are swirling along toward the drain, let us pause and see what they are clinging to. A future of unemployment below double digits. A housing industry that is going to keep pace with real needs and back off of the $300K plus plush bells and whistle clad monstrosities that everyone must have. Basic needs met for the middle class who are now struggling to hold on to the American Dream which has now been watered down to three hots and a cot and maybe a job to go back to tomorrow. Oh there is more to come and it ain't gonna be pretty.

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  6. One of my fantasies is to sell everything and move aboard a sailboat. (and I get seasick and am barely able to sail, so this is in the realm of TRUE pipe dream)

    Still, it'd be great to have absolutely no debt, no encumbrances, just a small amount of stuff and my boat. No more mini-McMansion! I could conceivably live aboard at a marina part of the year and hold down contract work - in order to wander the rest of the year.

    I guess what Beastly is doing now is the land version of that - but for some reason I find the water-based version more appealing, maybe because I can't drive a big ol' RV through any kind of traffic and I find commercial campgrounds appalling.

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  7. You know, a lot of this whole things smacks of a lack of due process (oversight, regulation ect. ect.), maybe some of that should be injected into it, I like the idea of bankrupting the jerks who propagated the whole mess, give them a trial, if you can convince 12 people who cant finagle their way out of jury duty that some greedy bastard is a greedy bastard, leave the greedy bastard destitute.

    On a second note, I just bought my first house about one month ago, I told the bank here is my 20%, I want 30 years, fixed interest. They STILL tried to push some of that exotic loan product crap on me (get a builders loan {interest only} and remodel it, then refinance it) (you know, you can afford a lot more house than what you are buying “yes, but I can still make this payment on unemployment if I had too, and with luck, ill have it paid off in 10-12 years”). WTF.

    I so wish you could beat sense into people, preferable with a stick. I know of a lot of people around this mess who really need a good whacking. (FYI, I’d have myself whacked once a week, whether I needed it or not).

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  8. I am disappointed, Jim. I thought you had a better solution, but it turns out you are behind the idea of "continuing to look for solutions", whatever that means.

    The meltdown affects everybody already. I lose money on my investments in otherwise solid companies, you will feel a pinch with reduced interest in your production, a video editor in North Carolina will see the demand for his services decreasing, a florist in New York will not be able to sell her stock, and so on. During the Great Depression, the unemployment rate rose to 25% and the domestic output contracted by some 40%. We are nowhere even close to those levels, but we are sliding in that direction. While we continue to pretend that we can take our sweet time to look for other ways out of the mess because we want to make sure that the rotten perpetrators are punished.

    FDIC estimated $500Bln of residential mortgages seriously delinquent at present (the figure will rise, of course), which makes $700Bln rather sufficient to deal with buying all of those "troubled assets" that these mortgages are packaged into. So, yes, I, for one, raise my hand to say that the number should be sufficient to stabilize.

    The recovery from the Great Depression began in 1933 with the Reconstruction Finance Corporation and the Home Owner's Loan Corporation federal cash infusions. In the early 90's, the Resolution Trust Corporation was instrumental in dealing with S&L failures of the earlier decade (it was created a few years later, but it was essentially playing the same role as the currently proposed TARP). We already have a template, which proved to be reasonably successful. I see no reason not to use it right now.

    Punishing those at fault is not a good imperative for directing your efforts during a crisis. I'm sure that in your career you encountered more crises than I can imagine - and I can't fathom that in those situations you'd choose "whom can we blame for this?" over "how can we fix it?" The Congress so far decided to give in to the sentiment that "the fat cats don't deserve to be saved", disregarding the notion that everyone in the world will be worse off for that. I find that - and your argument in support of that course of action - rather sad.

    But I have to give you props for presenting your argument more eloquently and forcefully than anything that I can write. My disagreement with you does not diminish my admiration for the way you express yourself.

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  9. Ilya,

    Leaving aside the points I made at my place, I'd like to point out that Congress jumping when the Bush administration told them to led to the Patriot Act.

    It took years to create this crisis. The Bush administration has consistently denied we were even in a crisis until they had their noses rubbed in it.

    This is not a group I trust to create a sound plan for getting us out of crisis--especially when their continued pushing of deregulation helped get us into this mess.

    Plus all that other stuff I said. :)

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  10. I've done a lot of research, and put up a couple of posts on this already. Browse over and take a look. And there'll be more to come.

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  11. Michelle, it makes me awfully concerned about our collective ability to judge anything when the source of the proposal becomes a more important factor in your eyes than its merits.

    Incidentally, I happen to trust Messrs. Bernanke and Paulson quite a lot, despite their unfortunate affiliation with such a derogatory term as "Bush administration".

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  12. Ilya, let me quote an article from the February from the International Herald Tribune.

    "Bernanke said the economy would grow slowly but pick up speed later in response to both the Fed's lower interest rates and the $168 billion economic stimulus package that President George W. Bush signed Wednesday.

    "At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year," he told lawmakers. But in cautioning that his outlook could turn out to be wrong, the Fed chairman left the door open to additional rate reductions.

    Paulson tried to sound less downbeat. "I believe we are going to continue to grow, albeit at a slower rate," he told the Banking Committee, insisting that the plunge in housing and credit markets was a correction rather than a crisis."

    These men either failed to see the coming crisis--despite continued warnings from all over--or saw the coming crisis and refused to plan.

    Neither options encourages me to place trust in them.

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  13. Ilya,

    I understand your point of view. I do.

    However I stand by my opinion. Here's why:

    1. Time. I'm not advocating that we delay for the purpose of delay, but I am advocating that we proceed deliberately and not make either hasty decisions so as to appear effective (and thus score political points) or hasty decisions out of panic. We're in an election year, there is a significant amount of grandstanding going on and a real push to appear to be doing something, especially to be the first to appear to be doing something. There is also a high degree of panic in D.C. at the moment. Neither of these conditions are conducive to good decision making. This will be a bill, signed into law, and we'll have to live with it. Now, with that said, I fully appreciate your desire for urgency, I understand that people are losing their homes, I understand that the dollar is slipping and that those invested in the market are losing money - but a few extra moments here, while we find a real solution vice something that appears to be a solution, will save us great deal of grief down the road.

    2. Punishment. It may appear that I desire revenge, and there is some small degree of that certainly. However, in this case I want those responsible punished publicly and harshly. I want a clear message sent to everybody in the financial industry that those who engage in actions harmful to the rest of us will face serious consequences, that greed and avarice at the expense of others will not be tolerated when it directly effects others. Ilya, thousands suffered in the Enron collapse, thousands more in the Dot Com bust, and etc - it is unacceptable that these people play God with their neighbor's savings, college funds, and retirements. And I want the next batch to think twice about taking such ill-advised risks. Ilya, take a look around, now you're in London and maybe you're not seeing it there, but here - companies like Ditech are still offering interest-only, balloon payment loans. I saw an add for one last night during prime time TV. These people are still at it, and they'll stay at it until a strong enough example is made.


    You're right in that I faced a rather large number of crises in my career. However, those officers that get their men home alive, are the ones that take an extra second, even under fire, to make the right decision - vice just a decision - and the ones who hold their men and themselves accountable for their actions.

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  14. Look at the GDP numbers, Michelle, and you will see that the economy did grow slowly in the first half of the year. Predictions are a fickle business, even for a man as smart as Bernanke.

    Basically, when you perceive a person being wrong once, you are unwilling to consider that [s]he might be right at other times. I suppose you'd be more receptive if the exactly same proposal came from someone you trust?

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  15. I'm coming around to Ilya's position--first with his comments at Giant Midgets, then his comments at Reality, and now the ones here at Stonekettle.

    One of the major rationales I keep seeing for rejecting a bailout is the punishment rationale. I understand the appeal--it's got a visceral grip on, me, too. But when I think about it, and factor in what I know, it seems pretty self-evident to me that punishment is unlikely whether there's a bailout or not. The responsible parties are already protected and/or proofed--they have their millions secured, and many of them will get millions more in "compensation" when their companies are bought out. Sure, some of them will also lose millions on paper--but they're not going to lose their homes or cars over it; they will still be rich.

    Unless some case can be made against any of these individuals for some sort of fraud or criminal malfeasance, I don't see any of them being held civilly or criminally responsible. And let's face it: it's not going to happen. There may be a few guys you can put on probation or send to prison for lying on a mortgage application, but you're not going to prove the investor or CEO wasn't "a good man whose only crime was naively trusting the reports of those to whom he delegated the daily functions of the business, blah blah blah." It warms the heart's cockles to think of justice being meted out, but give it up--it ain't gonna happen any more than Santy is going to show up on your hearth with a sack of magic weapons, a neato horn and a bottomless healing potion. (Thinking about that: your time would be more productively spent looking for snowy forests in your closets and cupboards than waiting for justice. Sorry to break the bad news.)

    If we're talking about not doing a bailout to try to punish the rich people who are already and will remain rich, and if the only people who will suffer are consumers, low-level industry employees, and other businesess, then what we're really talking about is cutting off our own noses to spite our faces. There may be other reasons not to do a bailout, but I don't see how punishment can be one of them under those circumstances.

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  16. Ah hell, Eric, I don't actually disagree with Ilya either.

    I do think that holding up the bailout bill in order to punish those responsible is stupid and contains a major degree of nose cutting. Hell, I'll even go further and say that my desire to take away wealth from the these arrogant rich bastards and put it into the taxpayer's pocket is less like Robin Hood and more like Marxism. And you are absolutely right, many of these people didn't break the law as it exists and there is no justifiable legal reason to take away their personal wealth.

    However (and you knew I'd have a 'however,' right?) they can't be allowed to get off Scot-free, at least not all of them. And I think we do have indications of criminal wrongdoing both in the S&L industry, who deliberately miss represented the value of those bonds, and in Rating Agencies who gave those bonds AAA ratings - and I think this needs to be pursued (not as part and parcel of the bailout, but certainly the House and Senate Banking Committees need to hold hearings down the line, and I'm sure they will).

    However, again, I agree that it is stupid to hold up - or even include it in - the bailout bill in order to punish those responsible. The bailout and the the long term fix are two separate things, and should be pursued as such.

    Get the bailout hammered out and passed, get Wall Street stimulated and the mortgage industry stabilized.

    At the same time examine the changes necessary to prevent this type of situation in the future - such as Fed oversight of Bond Rating for example, and a return to firm separation between S&L's and Investment Banking - and this bill could include severe penalties for future violations or malfeasance.

    I will also say that while I understand the need for some nationalization of the financial sector in the immediate future, I think long term government ownership of US financial assets is a major mistake and and one that directly transfers the risk onto the taxpayer. This is unacceptable to me, the risk should be on the risk takers not on the general public.

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  17. While I spent the last couple of hours working for my financial company overlords, Jim and Eric basically concluded the discussion. Looks like we are largely on the same page and maybe differ just on the question of urgency. I'm biased in that regard, I admit freely. :(

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  18. Ilya, I don't know that this conversation will be concluded for a long, long time. And thanks, by the way, for making me think a bit harder about my position.

    Financial company overlords? So, you're responsible! I always knew you were up to something. :)

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  20. Ilya,

    The brief uptick seemed to be in response to the economic stimulus checks--it was never going to be a long term solution.

    Additionally, I don't accept that companies deserve bail-outs when these same individuals allowed homeowners to twist in the wind. If bailouts are deserved, they should have started from the bottom up, not from the top down. Back when mortgages started to tank is when action should have been taken. Instead they left homeowners to go into bankruptcy while continuing to allow the financial mismanagement at the heads of the companies that spawned these mortgages.

    Yes, caveat emptor and all that, but the same should be said of the giant companies and not just consumers. They work in a risky business, and are educated individuals taking known risks.

    That these risk-takers then presented their risky schemes as safe to uneducated consumers... Yes, individual consumers should take some responsibility for their actions, but that same standard should be held for the companies, and that is not happening what is happening here.

    Why, if these loans and mortgages are at such terrible risk, can we not work from the bottom up.

    Other Fed agencies have faced this situation by placing a hold on all bankruptcy proceedings and then working with consumers to keep them in their houses and paying their mortgages.

    Why is that solution--that bottom up solution--not acceptable while asking the US tax payer to burden the debt taken on my the double handful of risk takers at the top a good solution?

    As far as trusting Paulson and Bernake, I've been watching this develop for over two years. (Watching the foreclosure crisis hit homeowners, not what was happening at the top of the food chain) I won't say that I expected this crisis, but I was mightly unsurprised by it.

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  21. Jim, thanks for this clearly written post. The Titanic analogy resonated.

    [complaint] I do understand that something needs to be done, because a repeat of the Great Depression is definitely Not Desired. But I can't help feeling very resentful about the whole situation. I won't say that I'm particularly frugal (my husband would fall on the floor in hysterics if I tried), but even I found the whole concept of 5-year ARMS and balloon payments and interest-only mortgages unpalatable. We bought a house that we could afford. When we had to do some needed renovations, we refinanced for just what we needed and (almost) stayed within budget. I didn't buy a new car or take a trip with that money. I hung up on the telemarketers who offered me great mortgage rates. Emails saying same were consigned to the same place that I put emails from Nigeria.

    But it just grates on me that we all have to mortgage our future and our kids' futures to prop up the current credit market. And know that while the "fat cats" perhaps won't have as much money, they will still have more than I will see in my lifetime. [/complaint]

    Not that I have any useful suggestions or any wisdom to share, mind you. I am just grumpy.

    Natalie

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