January 28th, 2009

The lead

When I was young, common knowledge was: get a right wing administration if the going gets tough and money needs to be preserved, vote left to spend the accumulated money. That notion is clearly down the drain. I find it more than interesting that in several parts of the world, people have consciously voted more leftish and leave it to that part of the spectrum to help clean up the mess. Now one could argue: “yeah right, clean up, by spending billions of taxpayers money, d’uhhh”, but I don’t think that is fair, especially as so much money is actually poored into banks and to some extend industries. I will leave the rant on spendings by bailed banks and car makers to others btw. This is now even happening in Iceland. The people of Iceland protested after the insane banking crisis on and on and on until the administration gave in. The new administration is left-leaning. Oh, and the new prime minister is a woman. Oh, and she’s homosexual. Both do not mean ANYTHING as far as suited for the job goes, but in my opinion it illustrates the above: people are ready for change and despite all the fear mongering, the world is slowly changing for the better. Slowly.

October 20th, 2008

The bank bailout revisited

ING staock

ING stock

As Citykid wrote: “I do not believe in Socialism for the Banks and Capitalism for the rest of us”. So true. But it can be handled differently too. Now, for those of you who read this blog now and then and see me trying to connect some dots between my tiny country and the US, those tries probably look a bit “mouse and elephant walk over bridge-mouse says: oh my how we stomp!” like, and actually, I agree. Still, Dutch ING bank (who some of you might know as ING-direct in the US and the UK) is the one but largest consumer bank and one of the top 20 financial institutions in the world. It’s core tier one ration dropped below the minimum requirements and they knocked on this tiny countries door. Here is the deal that came out of it:

  • The state will inject 10 bln Euro’s in ING ($13.5 bln).
  • The state will get two board seats, having veto rights on important issues such as divident, board salaries and acquisitions.
  • The board members will not get any bonuses (and you and I know these bonuses are far far bigger than regular salaries).
  • The board members will get severely limited step down packages (maxed to one year salary).
  • The bank needs to repay this with an 8.5% interest rate, where the state acquires this money through secure and now very wanted state loans paying out 4%.

Most people seem to think this is a pretty good deal for the taxpayer. What do you think, especially when compared with the Paulson’s bailout plan?

What’s kinda funny is that the state has now a serious stake in two competing bank and insurance heavyweights.

October 15th, 2008

Is Ralph Nader a kook?

“The United States effectively has a one-party system, the business party, with two factions, Republicans and Democrats.” – Noam Chomsky

Both Republicans and Democrats over the years have been critical of Nader. Of late some Democrats, who would proudly wear the badge “liberal,” have directed their anger at Nader in the form of derogatory comments that would do Rush Limbaugh and others of his ilk proud. Just how nutty and arrogant is Nader, you tell me? Seems to me that Nader’s suggestions on how to handle our financial crisis is better informed and thought out than those of candidates Obama or McCain. Ralph was on PBS last night, “The News Hour,” and you can listen to the audio here (link is an MP3 and runs about 10 minutes):

“Presidential candidate Ralph Nader speaks with the NewsHour’s Ray Suarez about his latest bid for the White House and discusses his platform on the critical issues facing the country this election year.”

FWIW The News Hour also ran a story about the corporate party candidates last night, it is available here (MP3 link) and if you listen closely you might just hear the ticker-tape in the background. I think it provides an interesting contrast to Suarez’s interview with Nader:

“Kwame Holman reports on the latest news from the campaign trail”

October 8th, 2008

Senator Ted Stevens response to the bank “bailout”

On the eve of the Senate vote to allocate $780 BILLION to assist in bailing out banks and investment firms, after similar legislation was voted down in the House of Representatives I sent both Senator Stevens and Senator Murkowski emails (via their websites) urging them to vote “no” on the legislation. Both Stevens and Murkowski voted “yeh.” Senator Stevens sent a response, I have yet to hear from Senator Murkowski. I note that Senator Stevens reply came from “donotreply@stevens.senate.gov” so I guess he does not want to discuss this matter further. I have included my response to Senator Stevens following his email.

Not one penny of our money should be given over to the banking or the insurance industry to cover their mistakes. I do not believe in Socialism for the Banks and Capitalism for the rest of us. To assist the banks now would make any arguments for a “free market” all that much more a farce. The administration of our President has already interfered with the market by restricting “short sellers.” As I’m sure you are aware short sellers play a vital roll in the market by devaluing overpriced stocks. The administration has “artificially,” in a way tjat would do the former USSR proud, by forcing market prices up without the checks provided by the short sellers.

I would urge you to vote “NO” on any authorization to assist the banking or the investment industries with Federal dollars in order to cover the losses that they themselves have incurred. There are a variety of solutions that the banks themselves could exercise if they really had to.

–>

Dear xxxx [CityKid]:

Thanks for contacting me about your concerns for the Treasury proposal. The Emergency Economic Stabilization Act (H.R. 1424) – the result of negotiations between Congressional leaders, the President and members of his Administration – was passed by the Senate on a bipartisan basis and with my support by a vote of 74-25 on October 1st. The House of Representatives passed this bill by a vote of 263-171, and the President has signed it into law.

There was a great deal of misinformation about this legislation.

The Congress needed to take action to prevent this financial crisis from spreading throughout our economy, further threatening retirement accounts, saving plans for college educations, and a widespread freeze on the ability of individual Americans to obtain credit.

I am told that on September 29th, our Permanent Fund lost over a billion dollars. Without action our nation faced a further credit meltdown, which would mean Alaskans would be unable to borrow to finance a home, a car, or withdraw funds from savings accounts. Our seniors would lose the retirement income they rely on to pay monthly bills and retirement accounts for future retirees would plummet in value. In fact, I heard from several Alaskan seniors that they have already suffered substantial losses in retirement savings, and one who lost $40,000 after the House of Representatives failed to pass economic recovery legislation on September 29th.

Because I shared many of the concerns and misgivings expressed to me by Alaskans, I personally asked Senators negotiating this legislation to include provisions to limit executive compensation and bonuses in this stabilization bill. The bill we passed also requires increased review of the Troubled Asset Relief Program (new oversight), taxpayer protections, foreclosure prevention, and requires that every dollar repaid to the Treasury for assistance under the new law must be used by the Treasury to reduce the federal debt. The Senate also included provisions to temporarily increase the amount of Federal Deposit Insurance – the money in your bank account guaranteed by the government – from $100,000 to $250,000. (The $100,000 level was established in 1980. This is the equivalent of approximately $266,000 now.)

Attached are summaries of the Emergency Economic Stabilization bill prepared by the Senate Banking and Senate Budget Committees that explain these and other provisions in this legislation.

In addition, the bill contains several provisions that many Alaskans asked me to secure, and that had previously passed the Senate, but were defeated in the House. These include a provision that Alaskans receiving payments related to the Exxon Valdez Oil Spill may treat the money as having been received over three years; an extension of the Secure Rural Schools Act, which funds rural schools and communities which were dependent on revenue from timber sales no longer available because of reduced opportunities to harvest timber from Federal forests; and, an extension of renewable energy tax credits. Also, the legislation provides a fix for middle-income Americans who would otherwise be subject to the Alternative Minimum Tax (AMT), a tax originally designed to affect only the wealthiest Americans.

Voting for this legislation was not an easy decision, but, in the final analysis I decided these provisions were important and passage of this bill was necessary to prevent the hardships that would otherwise have seriously affected Alaskans, our small businesses, and our nation’s and our State’s economic growth.

With best wishes,

Cordially,

TED STEVENS
U.S. Senator

Please Note: Do not reply to this email. If you would like to contact the Senator in reference to this or any other issue, please use our website’s contact form at http://stevens.senate.gov/contact.

Dear Senator Stevens,

Thank you for getting back to me. In all honesty, I am very sorry that both you and Sen. Murkowski chose to get behind this legislation. While you posit that credit for citizens might be threatened if you did not vote to spend $700 billion dollars of money that rightfully belongs to the citizens of the country (an amount nearly equal to recent DOD budgets) that is, quite simply, BUNK; reality lies elsewhere and I think you know that. It is the bank to bank credit markets that are in trouble and the legislation that you voted for will do little, if anything, to fix the problems at hand (a very “un-Alaskan” solution I think.) Quite simply, until the “banks” are forced to adopt accounting measures that reveal their true worth, our nations financial crisis, and indeed that of the world, will continue.

I am truly sorry that you chose to support this legislation. I don’t think most of your constituents have the same take on the crisis we now face as you do.

October 2nd, 2008

SCUM 74, US 25.

Good morning all. Sports scores are in (I’m backing the Cubs this year). It’s been a while since I’ve written anything here.

SCUM 74, US (as in you and me) 25.

Throwing money at the rich as the U.S. Senate is hoping to do with their 74 to 25 vote in favor of giving private investors that dorked up $$$$$ (I think Michael Moore called it ‘stealing the silverware on the way out.’) will NOT fix the financial sectors problems. The problem of confidence is between the banks; especially in overnight lending. Simple fix – PASS LEGISLATION which makes the banks accountable for what’s on their books (audit required). Once that is done lending will resume since Bank A will be confident that bank B will still be there in the morning. It’s a f__k of a lot cheaper for us, and would be far more effective. Granted the FDIC will have to cover the losses of some depositors who are using banks that hold more trash than cash, but it would not cost the $700 billion (and probably more dollars) the “crisis” bailout bill demands. I am truly amazed at the propaganda currently being generated by the corporate press – they are not covering the issue; they are just, it seems to me, trying to confuse us.

Of course there are host of other solutions available – stop limiting the short sellers, since shorts keep stocks from being over valued (ooops, the free market folks in The Bush Administration have already put their finger on the scales by limiting which companies can be traded “short” [about 900 of them] and forced the value of stocks up beyond what they are worth – Free Market my ….). Help the citizens (tax payers) with health care and education costs. After all, the number one reason for mortgage defaults is unpaid medical bills. Wake up “America.”

Have a nice day (and call your Congressional Representative NOW).

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