The Bail-Out of Wall Street Will Not Bail-Out Main Street!

The claims by Bernanke (Fed) and Paulson (Treasury) that the best way to open-up the credit markets is to recapitalize financial institutions through buying-up their toxic waste has absolutely no basis in fact.

This method of recapitalization is a total rip-off of Americans ... pure and simple! All this plan does is to provide a massive bail-out of the common and preferred shareholders and unsecured creditors of banks and other financial institutions and will do very little to open credit markets. Because at the end of the day, even assuming that all of the toxic waste has been snapped-up by your tax dollars, a large number of banks will still remain under capitalized, as they have been since 2007.

Also, it does nothing to resolve the severe stress in money markets and interbank markets which are now on the edge of a systematic meltdown. It does little to resolve the debt burden of millions of distressed homeowners, and the cost of borrowing $700billion to Americans will go right through the roof.

Paulson's Plan is a total and unmitigated disgrace. If its intent was to Bail-Out Main Street instead of the gypsies, tramps and thieves on Wall Street, then why have we not seen simple, yet cost-effective strategies, such as;

• public injection of preferred shares into distressed financial institutions.
• the mandated matching of capital by current shareholders to ensure that shareholders take the first loss. Why should non-investors be on the hook for reckless behaviour. They haven't speculated nor invested money so why should they now have to cover investor losses. Doesn't sound like a free market economy to me.
• suspension of all dividend payments.
• conversion of some of the unsecured debt into equity via a debt for equity swap.

In this way shareholders and creditors are forced to contribute to the recapitalization of affected financial institutions, and now, the $700billion bailout becomes a $350billion taxpayer bailout with only 50% used to buy toxic assets with the other 50% taking the form of public capital injection.

It is absolutely pathetic that the only financial strategy which Congress is looking at is Paulson's and Bernanke's Plan. Unless both are the world's foremost financial minds, Congress should also be seeking the advice of world-class economists and financial experts on behalf of the American people, to evaluate alternative plans which could possibly be more efficient and less costly in resolving this huge crisis.

In my opinion, the bottom-line on the bail-out package, as it currently stands, will privilege the gains and socialize the losses!

Caught between a Rock and a Hard Place of their Own Making.

This is where the U.S. government sits tonight. Whichever way Congress moves on the bail-out or as the spinmeisters are now labeling it ...the rescue package ... the fools on capitol hill will be facing their constituents in a no-win situation.

If they adopt the bail-out package, Congress will be accused of bailing out the Wall street psychopaths and sociopaths while sticking the American public with yet another Ponzi-scheme from the bankers.

If they don't adopt the plan and the credit markets freeze, sending the U.S. economy down the tubes, they will be blamed for that as well.

The fact of the matter is that Congress deserves its ultimate destiny. These pompous, self-serving, do-nothing, fat-cats sat on their collective butts and allowed this financial mess to happen. All of this mess could have been so easily avoided if THEY HAD DONE THEIR JOBS. If they had actually cared one iota about the American public whom they were elected to serve and not destroy!

Even the slightest amount of regulation and oversight could have prevented all of this. But no, the cowboys on the Hill completely and effectively deregulated Wall street allowing all of the corporate gypsies, tramps and thieves to excess America to death.

Tonight the Congress, Bush, Bernanke, Paulson, et al; continue their charades and theatrics. On the one hand Bush, Bernanke and Paulson are stating that a financial Armageddon will happen if the bail-out isn't approved.

On the other hand Congress appears to be balking. They claim that they need more time to deliberate the the implications and ponder alternative plans and modify the current proposal to make it more palatable to voters.

Forget about making your "solutions" more palatable to American's!!!!

Grow a back-bone and do what's right!!!! Quit rolling-over like little puppies every time some financial scum-bag or lobbyist offers you a bone!

If American's are left "holding the bag" for a mess which they didn't create, then every incumbant in Washington should be fired (voted out of office) because they did not do their job and as a result placed every single American in harms way.

Obama and McCain are right. Washington does need a change ... and that change should begin by giving every single politician their walking papers.

Jan.21/08 - Black Monday Meltdown - Here are the Stats.

A worldwide sell-off today sent stocks into a nose dive with a global meltdown in markets from Hong Kong to Europe. Today was the single largest one-day loss since 9/11. Here are the numbers.

• In Japan the Nikkei Index was down 535.35 points ending at 13,325.94
• The Hang Seng Index in Hong Kong plunged 1,838.01 points (5.49%) to 23,818.86
• The Chinese Shanghai Composite Index fell 5.1%
• The Bombay Exchange in India lost 7.41%
• Germany's DAX 30 tumbled 7.2%
• France's CAC-40 was down by 6.8%
• Britain's FTSE-100 lost 323.5 points closing at 5,578.2 representing a loss of nearly 60 million pounds in share values on the exchange.

In today's worldwide market plunge, equity investors lost hundreds of billions of dollars.

It's obvious that today's meltdown clearly demonstrates that investors are deeply concerned about the U.S. economy and its housing and credit crisis. Investors have rejected President Bush's economic stimulus plan for $145 billion worth of tax relef to encourage consumer spending, as they have also rejected Treasury Secretary Henry Paulson's totally lame argument that equity strength in global markets would be sufficient to withstand a downturn in U.S. equities experienced by the bursting real estate bubble.

How naively arrogant on the part of Secretary Paulson.

It's also painfully apparent that the investors have given a thumbs-down to Federal Reserve Chairman Ben Bernanke's assurances that the U.S. central bank will repond with a big interest rate cut.

Fasten your seat belts! We're about to go for a ride on a rollercoaster that we shouldn't even have to be on in the first place.