A tough day all around. It was tough watching Wall Street drop and retirement funds and stock portfolios decrease in value. It was tough on Capitol Hill. The mood here is very somber.
Even though I voted against today's bill, I remain optimistic that Congress will act and help fix the problems that are ailing Wall Street. Congress needs to do something, but today's bill wasn't it. It was too quick, too big, and did too little to permanently fix what is currently wrong with Wall Street.
Congress reconvenes Thursday. I am confident in a matter of days, perhaps weeks, we'll be able to consider a bill that corrects some of the issues related to risky sub-prime mortgages, helps protect our community banks, helps protect the taxpayer, and helps ensure a long term fix for Wall Street.
Your thoughts?
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4 comments:
Hon. Cathy McMorris Rodgers:
Solid vote against yesterday...I applaud your courage and decision to continue crafting and insisting upon a final bail out version which best serves the citizens, economy and situation. Thank you!
* Credit freeze...we must relieve this log jam so consumers continue spending and purchasing and to keep the business and job sector vital. Consumer demands and purchases must keep streaming.
* This whole dilemna is a perfect storm.
* Any bail out congessional bill should be a help up and not a bail out. The government deserves and must structure this so the capital "loaned" or "insured" (like the FDIC) is returned with equity and/or profit from the entities where this money is distributed. Prime the pump of the economy and get things on track again. Equity share and return on investment (ROI) must exist for Uncle Sam in the future as this bail out bill has its beneficial impact and influences. Let's not nationalize this debt, nor have the taxpayer pick up the tab. No corporate welfare hand-outs or pork in this bill...period. It's not "the" economy...it is "our" economy.
* Play favorites...make sure that our anchor businesses and core companies get taken care of primarily and survive this time of crises...let's sustain General Motors, Boeing, Utility and Energy companies which are American owned, IT and micro industries, etc. We must declare and direct these bail out funds to specific entities, and side step the greedy and influential corporate grubbers from mis-directing any of these funds.
* Let the chips fall in certain aspects of the economy...let the stronger business interests overtake and/or buy up weaker ones...i.e., JPMorgan bought WA MU...the problem gets managed by the business community and without government intervention.
* OK...so the stock market fell over 700 points...new record in a day. This is of grave concern. Let's think it through...700 points decline on a maket at 10,000 or 12,000 is not really huge in percentage thoughts...it is 5-8% and will recover at some point. Let this not put fear into our decision process and direction. It actually is a good time for making investments since many advantageous prices exist and will prove out longer term. So there is some sunshine between these financial clouds.
* Let's be alert and adroit that foreign investors not enter in to buy up fledgling major companies and thereby gain stockholder and control of our major industries and companies and services. There should be a minority share limit to the percentage of control that outside interests and foreign money can have within our ownership structure.
* Let's patiently and effectively work to create the thoughtful, solid and detailed bill and then pass it...and then do as Congresswoman McMorris-Rodgers states: "Let's get to work" as a nation and individuals in step with the business community and governmental support. No improprieties anywhere in the legislation or subsequent process of implementation and action.
* Do not immunize those who acted in criminal ways in the Freddie and Fannie programs and roles. Just as ENRON and Martha Stewart individuals were investigated and prosecuted, so should we closely scrutinize the actions and selfish motives with personal gains - i.e., Franklin Raines, Barney Franks,
* Can we unwrap and re-do the AIG bail-out maybe...to gain back that money committed and structure it better and consistent with the conditions of the new bail out legislation?
* Taxes modifications...cut capital gains tax to further stimulate business to make profits and assure jobs and economic health and wealth. Have a holiday on repatriation. Change market to market activities. We can't tax our way back to vital economy; we must stimulate, unlock and assure favorable business climate and conditions again.
* Keep us small businesses solvent and able to survive; we'll keep our labor force and things are less de-stabilized. They remain as consumers and use credit more wisely but as still needed. We climb back up.
Respectfully,
doc G
Hon. Cathy McMorris Rodgers:
Solid vote against yesterday...I applaud your courage and decision to continue crafting and insisting upon a final bail out version which best serves the citizens, economy and situation. Thank you!
* Credit freeze...we must relieve this log jam so consumers continue spending and purchasing and to keep the business and job sector vital. Consumer demands and purchases must keep streaming.
* This whole dilemna is a perfect storm.
* Any bail out congessional bill should be a help up and not a bail out. The government deserves and must structure this so the capital "loaned" or "insured" (like the FDIC) is returned with equity and/or profit from the entities where this money is distributed. Prime the pump of the economy and get things on track again. Equity share and return on investment (ROI) must exist for Uncle Sam in the future as this bail out bill has its beneficial impact and influences. Let's not nationalize this debt, nor have the taxpayer pick up the tab. No corporate welfare hand-outs or pork in this bill...period. It's not "the" economy...it is "our" economy.
* Play favorites...make sure that our anchor businesses and core companies get taken care of primarily and survive this time of crises...let's sustain General Motors, Boeing, Utility and Energy companies which are American owned, IT and micro industries, etc. We must declare and direct these bail out funds to specific entities, and side step the greedy and influential corporate grubbers from mis-directing any of these funds.
* Let the chips fall in certain aspects of the economy...let the stronger business interests overtake and/or buy up weaker ones...i.e., JPMorgan bought WA MU...the problem gets managed by the business community and without government intervention.
* OK...so the stock market fell over 700 points...new record in a day. This is of grave concern. Let's think it through...700 points decline on a maket at 10,000 or 12,000 is not really huge in percentage thoughts...it is 5-8% and will recover at some point. Let this not put fear into our decision process and direction. It actually is a good time for making investments since many advantageous prices exist and will prove out longer term. So there is some sunshine between these financial clouds.
* Let's be alert and adroit that foreign investors not enter in to buy up fledgling major companies and thereby gain stockholder and control of our major industries and companies and services. There should be a minority share limit to the percentage of control that outside interests and foreign money can have within our ownership structure.
* Let's patiently and effectively work to create the thoughtful, solid and detailed bill and then pass it...and then do as Congresswoman McMorris-Rodgers states: "Let's get to work" as a nation and individuals in step with the business community and governmental support. No improprieties anywhere in the legislation or subsequent process of implementation and action.
* Do not immunize those who acted in criminal ways in the Freddie and Fannie programs and roles. Just as ENRON and Martha Stewart individuals were investigated and prosecuted, so should we closely scrutinize the actions and selfish motives with personal gains - i.e., Franklin Raines, Barney Franks,
* Can we unwrap and re-do the AIG bail-out maybe...to gain back that money committed and structure it better and consistent with the conditions of the new bail out legislation?
* Taxes modifications...cut capital gains tax to further stimulate business to make profits and assure jobs and economic health and wealth. Have a holiday on repatriation. Change market to market activities. We can't tax our way back to vital economy; we must stimulate, unlock and assure favorable business climate and conditions again.
* Keep us small businesses solvent and able to survive; we'll keep our labor force and things are less de-stabilized. They remain as consumers and use credit more wisely but as still needed. We climb back up.
Respectfully,
doc G
PS: Let's remember some of the origons for today's economic consequences and challenges:
As published in the New York Times
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
I am outraged at this bail out proposal! This is downright criminal. Why should we the tax payers rescue this mess? This is grand theft of taxpayer’s money.
Lock up the suit clothed thieves not bail them out. This is a shame. Vote NO take a stand and hold your ground. Ask Pelosi to resign! Fire Paulson too.
The push to get something passed is intense. It looks as if the media for the most part are "in the tank" on this. Stop hammering the mantra "it's not a bailout" and trying to shame anyone that is contacting their members of Congress
Its actually refreshing to see Representatives REPRESENT their constituents for a change.
Make those socialist democrats in government who made this all possible repay all monies they received from the FM/FM, insurance and banking companies to the federal treasury. Then kick their butts out with no retirement packages as they did not earn them because of their efforts to destroy the financial markets just for greed.
The socialist democrats are now saying it is the republicans fault because they wanted deregulation when socialist democrats wanted more regulations. This in it's self is a whopper of a lie because socialist democrats are the ones who blocked all attempts by republicans to reinforce outdated regulations that allowed all of this to come about in the first place.
"People do not get the best government they can conceive...They get the worst government they will tolerate."
Diane Christian Spokane Valley
Thank you Cathy, I certainly understand your concern as you most certainly had a terrific battle within, in your decision to vote against the bail out. It has been difficult for me to make the same decision as a private citizen. Your courage is an ispiration to many. Thanks again and by the way I certainly enjoyed the speaker who brought his son to a little golf tournament my church sponsored.
Respectfully
John Haley
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