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US Senate violates the constitution
Former Member
Posts: 1,876,323 The Mix Honorary Guru
So the $700bn bailout bill that was rejected by the House a few days ago is likely to be passed later this evening by the Senate, in direct violation of the US constitution that mandates all spending bills must go through the House. They are sneaking this in through the back door by tacking it onto an existing AMT bill, but it is essentially the same bill that was just rejected.
This is not being done to save the American taxpayer or the US economy. In fact Bush and Paulson have threatened to veto the proposal if it does not include the provision to buy back mortgage debt from foreign entities. Think about that for a minute. Essentially what this bill does is offload debt from the primary dealer banks that are currently insolvent, and allows them to keep buying US Treasuries to finance the huge budget deficit for the next fiscal year, and keep the whole ponzi scheme going. The truth is $700bn is not nearly enough and will not stop what is coming.
In the last few weeks we've seen Lehman Bros, Merrill Lynch, AIG, Wachovia, Washington Mutual, Fortis, and Dexia amongst others effectively go bust. These are some of the largest financial institutions in the world and they are being swept under the carpet through nationalisation and consolidation into the remaining banks, avoiding a mark to market and taking a hit on distressed assets. Rolling this debt into a few large institutions like JP Morgan and Citigroup does not make the problem go away or restore confidence to the credit markets, it just makes the eventual dislocation more violent. That is why they are desperate for this bailout to offload the debt to the US Treasury and free up capital. Instead of throwing $700bn good money after bad, they should be using this money to help prepare the american taxpayer for what is coming. Unfortunately for them the US has the best government money can buy.
This is not being done to save the American taxpayer or the US economy. In fact Bush and Paulson have threatened to veto the proposal if it does not include the provision to buy back mortgage debt from foreign entities. Think about that for a minute. Essentially what this bill does is offload debt from the primary dealer banks that are currently insolvent, and allows them to keep buying US Treasuries to finance the huge budget deficit for the next fiscal year, and keep the whole ponzi scheme going. The truth is $700bn is not nearly enough and will not stop what is coming.
In the last few weeks we've seen Lehman Bros, Merrill Lynch, AIG, Wachovia, Washington Mutual, Fortis, and Dexia amongst others effectively go bust. These are some of the largest financial institutions in the world and they are being swept under the carpet through nationalisation and consolidation into the remaining banks, avoiding a mark to market and taking a hit on distressed assets. Rolling this debt into a few large institutions like JP Morgan and Citigroup does not make the problem go away or restore confidence to the credit markets, it just makes the eventual dislocation more violent. That is why they are desperate for this bailout to offload the debt to the US Treasury and free up capital. Instead of throwing $700bn good money after bad, they should be using this money to help prepare the american taxpayer for what is coming. Unfortunately for them the US has the best government money can buy.
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Comments
The war in Iraq for example has been a fantastic deal for numerous companies very closely linked to the Bush government.
It might be the reverse, the bill is not at all popular with the voters.
Probably it would...
Its also being pushed by Obama. Frankly it seems like a big chunk of the voters in the US have already made up their mind, it is a deeply divided country.
They used to calculate worth of a financial company, if they assumed that all of their customers (they loaned the money to) would pay it back, and they would get all the interest etc, basically if everything played out to the end.
These days the value of the financial bank is calculated by how much money they would have if they sold all their debt and assests right now at current prices, which wouldnt get much, effectively rendering many institutions worthless and bust. Where as if they waited (on the old rules) and weatehred the storm, they may well be perfectly fine in a couple of years, but get bought up anyway.
i'm positively optimistic compared to mr roubini, but he has some good points. most obvious is that the $700bn bailout is not just to save the US financial system...Ireland have effectively nationalised all of their big banks, Greece, Italy and Netherlands all indicating the same. looks like the beginning of the end for the euro...where to hide?
They went one stage further than that, there were literally only a few copies of the actual document available, so even if they wanted to read it they couldnt.
One of the very few who voted against it told TV cameras later that it was purely because he doesnt vote for something he hasnt read. Others apparently didnt have that much backbone, the name Patriot Act was chosen for a reason.