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Stock Ideas Investors Daily Edge Debating The $ 700 Billion Bailout
Stock Ideas Investors Daily Edge Debating The $ 700 Billion Bailout 
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| Debating The $ 700 Billion Bailout |
| Sunday, 28 September 2008 | ||||||||
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“A top aide to GOP Rep. John Boehner said it was Democrats who had done the political posturing. The aide, Kevin Smith, said Republicans revolted because they were chafing at what they saw as an attempt by Democrats to jam through an agreement on the bailout early Thursday and deny Mr. McCain an opportunity to participate in the agreement.” – AP By now, this morning, we will know whether or not Sen. John McCain was able to tie up the US financial sector’s bailout long enough to throw a wrench in plans for last night’s presidential debate. According to a very good source of mine, in Washington DC, the purpose behind scuttling last night’s event in Oxford, Miss., and moving it to St. Louis next Friday, was to do away with the vice presidential debate. It is set for Friday in St. Louis. If Sen. McCain successfully lobbied his pals on Capital Hill to pee in the bailout soup, it’ll be a short delay. It may be one your portfolio or 401K won’t enjoy, but you can expect a deal to get done early Monday or Tuesday. In fact, the bailout deal was done when Sen. McCain landed in Washington just after noon on Thursday. It’ll be the dame deal. Guess we’ll never get an apology out of Sen. McCain, the four-term Washington insider, for the part he played in making this mess… I mean the overall banking mess, not last week’s shenanigans. There was nothing to apologize for there. That was just a hardball political game at your expense. By the way, I got a lot of mail last week after I wondered why Sen. McCain never apologized for the big part he played in leading the US to its current state… and for noting that his personal life should, ahem, be a template that reminds him of the power of human nature.
Of the nearly 200 responses to that piece, only 15 thought I was an idiot. And, there was only one death threat, so I must be slipping. The other thing that was amazing is that the critics never disagreed with the piece. Instead, they suggested that I too have been overcome by human nature’s powerful urges during the years of my current (and only) marriage. Because of that, I am unqualified to judge Sen. McCain. To them I would note that I waited until I was 38 to get married. The reason – well, while I certainly enjoyed the pleasurable aspects of Washington, DC, bachelorhood, in the Joe Namath sense, but relationships were just too high-maintenance for me. I suffered a particular problem. Just about every woman I met looked at me the way city folk look at old farmhouses… great bones but in need of a serious renovation. Yikes! But I did get lucky. I married the first low-maintenance woman who’d have me… and trust me… I can be a total a**hole, but I would never jeopardize my great marriage. So nice try guys… but you were way wrong. The rest of the other critics took an interesting tack, too. In one form or another, they told me that it is only he that is without sin that can cast the first stone. As in, “hey loser, like you’ve never made a mistake before?” Well, of course I have. But, I do it in a way that regular Joes do. I inflict pain one person at a time. Senator McCain and his pals do it 300 million at a time, which kinda makes Wilt Chamberlain’s feat seem rather paltry. The other complaints were that I was good at pointing out the problem but I should offer a solution, as well. As if calling 911 isn’t enough, you have to do surgery on the victim, too. But, what the heck, I have a plan. Like every other bailout plan, it will have its critics. I offer it to you because I want to match up responses to it with the respondents who sniffed I was playing unfair because I was only an observer. So, I’ll do what they want just so they can tell me how dumb I am. It’s a simple plan. One that assumes that the bailout’s final number is actually $700 billion – as if! Anyway, under my plan I simply give away $300 billion to big banks saddled with the debt of whackos who either wrote or bought risky mortgages. After all, fair is fair. The US has spent at least $275 billion in Iraq. It will pay $25 billion to bailout GM, Ford and Chrysler in a deal that is getting done this weekend, though news of it has been lost amid other headlines. By the way, the automaker bailout is unique (and really weird) because it aids privately held Chrysler. It also came complete with the numbskull quote of the week. Here’s what US Sen. Debbie Stabenow, a Michigan Democrat, said about it on Thursday. “It seemed like a lot when we first started pushing this. Suddenly, it seems so small” So, you throw in that small change with the big money in Iraq and you get $300 million, free and easy to domestic banking scoundrels. After that, my plan would force commercial and investment banks to write down their losses. They wouldn’t get a dime until they came clean. Then, and only then, would the government consider helping recapitalize banks. But, in return for access to the other $400 billion in cash, the government would receive shares or warrants equal to its investment. And, if any banks assets, distressed or not, are sold at a profit, the cash could be returned to taxpayers in the form of rebates or stimulus checks. That way, for every dime they put into a bank, taxpayers would gain some influence. And, there’s nothing wrong with this. The government already nationalized Fannie Mae, Freddy Mac and AIG with little hope of breaking even, let alone scoring a profit. Any other solution to this current crisis is just short sighted and it’s also welfare. If we’re opposed to giving poor people welfare (even if most welfare recipients are Caucasian) we should be doubly opposed to granting welfare to rich boy screwups. Because, the argument should be the same whether the recipient is poor or rich. Free money steals their motivation to get a job, or do a good job. Now, I gotta figure out how I am going to spend my big dividend check when the government turns a profit on its big investment into the banking sector. Have a great weekend. Andy P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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