Why?

Why don’t those companies in “financial crisis” have to file Bankruptcy first? I don’t get why we think that “bad” behavior will be “rewarded.”

Chapter 11 should be required first. If Chapter 11 won’t fix everything, the government can step in to “help.”

Chapter 11 would at least make sure the company in question, the creditors, the shareholders, and the executives paid MORE than the rest of us that had nothing to do with the “financial” crisis.

Yet, I have heard only one journalist (on NPR surprisingly) who said the “free market” has a way to deal with “financially-troubled” firms–Bankruptcy.

Read a nice post here http://wordpress.pocosin.com/?p=776

My Senator, Barbara Boxer, responded to an email asking her not to vote for the bailout plan without considering more options. She said the primary reason she voted YES was because she heard from California the news that without the bailout California would not be able to ‘sell voter-approved highway, school, and water bonds.’

Congress simply does not get that they not only have to do something, they have to do it right. What if there is a way to make everyone a winner?

Unfortuntely, I am old enough to recall previous decades. One recollection is of a time when all gasoline taxes went to the department of highways, both state and Federal. Before Congress moved these taxes to the general fund, my memory is we had little problems paying for infrastructure in our country. We were the world leader in expanding and improving roads. It makes me wonder why now we can’t keep California highways ahead of growth even with selling bonds.

Another memory is from the same era: when taxes collected for Social Security were earmarked only for Social Security, again, before Congress moved this money to the general fund. By correlating average U.S. salaries, cost of living, annual interest earned and cost of administration over the last thirty years, it is very clear that had Social Security money been kept out of the general fund it would today be, at worst, solvent and able to bear the increased demands placed on it by Baby Boomers. At best, assuming an investment return of 2% over prime, it would currently have an enormous surplus — enough to get us past the Baby Boomer demographic. It might be interesting for you to have someone run the numbers.

One of the reasons so many people opposed the bailout has to do with Congress, the institution. We may still have faith in our individual elected officials but Congress as a whole has provided so many examples of short sighted thinking, graft and corruption, and lack of intelligent thinking in the bills passed in teh last thirty years that the majority of Americans have a difficult time trusting the collective members currently sitting Washington.

Why not place $2,000 in every American citizen’s Social Security account (roughly $700 billion) and then loan the money to the financial institutions in trouble. Think about it.

Good luck, God bless,

Steve Peek

http://www.politico.com/pdf/PPM111_080922_treas_grim.pdf

Hank needs to move fast on buying the ‘worst’ assets to lessen market risk. The he should act just as fast to sell them. In order for confidence to be restored, the public needs to see action (quick wins) then the market will begin to pick up the slack. Any more delay could negate the reason for pursuing the BailOut to begin with.

The only major problem I see with the BailOut bill is that the FSOB can ask the President to request the other $350B from Congress at anytime. Neither Bush, McCain or Obama has the financial capacity to authorize such a distribution. So he will ultimately rely on the FSOB to make the decision for him. This is why I insist on a truly independent party to sit on the board. But who am I?

Corporate Governance 2.0, needs to take affect immediately as these bank executives that mucked everything up, will now have more money to muck it up again. They need to start with SarBox b/c it is already in place. If Congress can improve it, they can avoid creating another regulatory obstacle for people to complain about and speed the time to marketplace.

This might offend some people but some of these smaller banks need to fail. There are now more bank branches on corners than McDonalds. (please check) Everyone and their mother started a bank during the go-go 90s and now they want to be bailed out. FDIC says that 113+ banks were in trouble in the 3Q/08 and it’s probably around 200 now. Hank needs to realistically look at 1) What the FDIC can bear then 2) Decide who fails and who survives. Save the Main Street vs. Wall Street vs. US Govt for less popular blogs. The financial industry is a tough, cut-throat business and if they could not stand the heat then they should have never entered the kitchen. Main street investors/depositors would be much better off in the long-term if they were with a larger bank. If you were a patient, would you rather 1) Get cut deep once or 2) Get slashed multiple times over the next 10 years?