Unbelievable.
Today is simply one of those days, that I thought would never happen.
I thought the markets were going to rise today, given that the news of an agreement on the bailout had been accomplished. I was in and out of various meetings and conference calls today, but every time I came back to a TV , I saw the news was worse and worse.
Because the bill went down to defeat in the House. Because both Nancy Pelosi and the House Republicans are stupid.
Now mind you, I’ve had mixed feelings about the bill and the process. On the one hand, I’m not thrilled about seeing my mutual funds incinerate themselves. On the other, it seems to my uneducated mind that the bailout was a case of solving the immediate problem today-and kicking the long term problem down the road. So I can understand the “just let the market” prevail theory.
For me, there are several warning flags that make me suspicious of the latter theory however:
1) Newt Gingrich likes it. That should make the hair on the back of your neck stand up. Gingrich has never been in favor of anything that benefits the average working man or woman. He’s too wedded to the ideological purity of his ideas.
2) The “House Republicans” are opposed to it. Who the hell are these guys? The same bunch who have voted against legislation that has meaning to me. And in the aggregate-are in general obscenely rich. A guy who went to college with me is one of those “House Republicans” now. He’s an OK guy but his track record as a committee head-on veterans affairs- leaves a lot to be desired. He drank the Dr Chu Koolaid……….
3) The unseemly way John McCain dragged it into Presidential politics. He suspended his campaign? To defend the bozos listed above? If anything his intervention created this 770 point drop in the market? Thanks asshole-thanks a lot. Will McCain share in the blame since he wanted to share in the credit?
4) Thanks to the abdication of responsibilities by corporations over the years and the encouragement of those same conservatives-we are all stock investors now-whether we know it or not. So to sell Wall Street down the river is to sell ourselves down the river. It is not just stocks either-wait till the banks stop giving mortgages and cut all of our credit card limits. Laugh now-but a lot of people won’t be laughing then.
However-I still want to know how the government is supposed to make money here on these mortgages. What if, what if, houses as a whole are overvalued to begin with?
I mean the house we bought is pretty nice-but I’ll be damned if I know how its worth the money we paid for it. I had a better house in the 90’s for half the money. In California, people are driving 75-100 mile commutes because they cannot get anything affordable inside that radius. A 2000 sq foot house is worth 500,000 dollars? A working couple can afford a 3000 dollar a month house payment? Salaries have not tripled over the last 10 years.
So the thought of the government becoming a guarantor of even more mortgages than it already is-is more than a little scary.
The problem is though is that these same individuals created a world where the market represents the only way to get decent returns on your money. Interest rates are low, bonds are not hacking it, and besides saving rates are low in the US anyway. These same folks who say they are standing on principle- are the ones who empowered us to become stock market investors by pulling us into the market via 401K’s. Pensions were a thing of the past and Social Security was for poor people. Got to control all that “entitlement spending”. ( You are goddamn right I’m entitled-F**K you! Pay me!).
Plus, thanks to globalization-the same panacea Mr Gingrich sold us-we all get sick when one gets sick.
Which in the end is why these assholes in Congress need to pass this bill. It is kind of like Iraq-a war we supposedly must support, even though the people we are supporting are not really worthy of that support. I’m told over and over again that just letting them fail is not an option.
Oh and by the way-if we did end the war in Iraq, it would probably free up money for the bailout.
Bottom line-this is like hard medicine. No says taking it is easy. But it has to be done if we want to survive. There will be plenty of time for jail sentences for all the villains later. Including those living and working on Capital Hill and 1600 PA avenue.
I am still left with more than a couple of questions though:
a) We took a bank holiday once, why can’t we take a “Stock Market” holiday-say for about ten days or so. Freeze stock prices where they were, ( Would that had been done on Friday), take the pressure off and come up with a better solution. Seems to me the stock market news creates problems of its own-that without the news of falling stock prices and plummeting 401K’s would allow saner voices to prevail. Why can’t the President of the US do that? Or Congress?
2) Would this be such a big deal, if corporations still had defined pension and annuity plans? So that investors in the market were really just speculators-who deserved whatever came to them? Remember-the radical change in retirement systems and the advent of the IRA helped include us all in the problem-and the good times that went before it?
3) Why is it, that Nancy Pelosi always has to fuck things up? This trend was in place long before she became speaker. Until the Democrats can produce better we are in big trouble. Bitch.
4) I’ve already said my piece to my Congressman-and told him via e-mail to get off his ass and pass the bill. What is amazing is the Alfred E. Newman reactions of so many people who think that they can just say to hell with it and they won’t get burned. Today was Wall Streets reaction by telling you all to go drop dead. Enjoy working for many more years than you should have to.
5) I wonder if I could take my remaining money and buy a very small apartment in Thailand, live frugally, and enjoy the pleasures of another kind of investing?
Oh and Newt? Bite me!
Skipper,
Thanks for the insightful and articulate response to what has been bothering me for years.
I suppose the only good thing to come out of this debacle is that all the talk of putting the Social Security Trust Fund into the Stock Market is SILENT! That was a stupid idea in the first place. Now it seems downright suicidal.
Jim Marshall (D from Georgia’s 8th District) has an interesting discussion of his vote for the plan on CNN.com.
I’m truly tired of the type of political leadership which asks the question, “which way did the people go so that I may lead them?” True leadership ended seems to have ended with LBJ. The type of leadership which does the right thing regardless of the consequences. The type of leadership they teach at the Citadel, VMI, the Service Acadamies, and NCO schools. The type of leadership which says my troops come first and what happens to me is secondary. Senator McCain has forgotten, it seems, those lessons (assuming he learned them in the first place, which I’m willing to give him the benefit of the doubt about). After all, his only command experience was a training squadron and his sole claim to fame about that command was that he increased efficiency.
So what are the rest of us to do? Hope. That’s all that’s left even in the face of hopelessness, rising unemployment, companies not paying their bills, and leaders who have no understanding of the word leadership.
I say, God save us.
Respects
OAM