Thursday, September 25, 2008

Let A Judge Set the Bail, Not the Congress

  Congress continues to debate how to bail out the speculators on Wall Street.   What's the problem?  Usually the judge sets the bail, and the family raises the money.  Why are we, the American people, involved?

  There are goat herders and taxi drivers who have been sitting in Guantanamo Bay for over seven years, with no bail set yet, let alone a trial date.  And surely not a one of them has caused as much destruction as the Masters of Wall Street, so far.   The only one at Guantanamo who did get a trial was tried on a crime that was made illegal two years after he'd been imprisoned. (This is a variation on the theme of this Congress, who made George W. Bush's felony of spying on the American people legal-seven years later).   Surely, if they can't come up with a crime that these titans have committed, they can retroactively make one that fits.

  The massive speculation that has been going on for the last few years has all kinds of names that I don't understand, like credit derivatives and such, but I can certainly understand what has happened.  It's a Ponzi scheme, gone wild.  And I can understand that Ponzi schemes are illegal and doomed to collapse.   (Follow the link I provided to get the official US government SEC statement on that).

   But the last ones to invest in a Ponzi scheme are the ones who are ripped off the most.  And that's why Henry Paulson is threatening Congress.  He wants the American people to be left holding the bag.

  And here's the thing.  Congress is going along with it!   Democrats posture by claiming to put restrictions on it.  Like limiting the salaries of the crooks to $73 million a year!  Are they joking?  Sadly, no.

  Some are sternly demanding "shares" for our money that we've invested.   "Shares" are pretty pieces of paper that corporations used to give out when people invested in them.  My mom showed me some that her father had bought.

  This shouldn't be that hard to understand.   Now they're working a shell game on us to get us to invest in the Ponzi scheme.

   Follow the pea.   This speculation was all based on MORTGAGE-BACKED securities.  These MORTGAGE-BACKED securities were repackaged and sold, again and again until the amount they were being sold for had absolutely no bearing on the value of the actual MORTGAGES that were supposedly BACKING them.  That's how AIG got involved.  Remember the insurance company that we bailed out last week?   They were insuring the worthless MORTGAGE BACKED securities. 

   These are the same MORTGAGES that are now coming due, and that Henry Paulson says are worthless, so the families that have been paying into them should be thrown out onto the street.    

    So the MORTGAGES that are so worthless that families deserve to become homeless are the same MORTGAGES that the American people are being forced into buying, (marked up trillions of dollars) from the investment speculators, because they are too big to fail.  

     No, they're not.  Some of them have already failed.   Some have already written off billions of dollars.   Henry Paulson is trying to save his old employer, Goldman Sachs, by putting one more layer of suckers into the scheme.   And he's probably got a back-up place on an island somewhere for when the American dollar fails.

     Lehman Brothers sold its mortgages for pennies on the dollar when it went under.   Let the others fail.  That's what a "free market" is.  But sell the mortgages back to the homeowners at reduced prices as part of the restructuring deal, whether a solvent bank or the government takes them over.

      That way people can stay in their homes.   Whoever buys the mortgages will have them paid off.   We won't have to deal with millions of homeless and hundreds of thousands of vacant houses in America.

     And we can throw the bums in jail and let their families bail them out!



Dave said...

Here’s your ex post facto (and unconstitutional, but who cares?) law. Happy bail-setting!



1) Smarmy banksters are a threat to the economic stability of the United States;

2) Fascist collusion between government “regulators” and opportunistic parasites represents a threat to freedom in the United States;

3) A vaporizing dollar, thanks to the amazing lithographic skills of the esteemed central bank, is a threat to the standard of living of the people of the United States;

4) Manipulation of all financial markets by all too clever plunge protectors is a threat to any semblance of free markets in the United States;

5) Creative financial instruments are akin to weapons of financial mass destruction;

It is hereby decreed that all banksters on Wall Street, all members of Congress, all members of the Executive branch report immediately to be sized for orange jumpsuits.

Anonymous said...

I feel so stupid. I never really thought of the true meaning of "bail" regarding our casino economy. Excellent post.

Flimsy Sanity

ryk said...

But sell the mortgages back to the homeowners at reduced prices as part of the restructuring deal, whether a solvent bank or the government takes them over.

This is such a good and simple idea that the Republicans immediately declared it a non-starter. I'm with Dave, orange jumpsuits for everyone involved.

Nader Enthusiast said...

I once knew a con man who sold misrepresented grade coins and he used to say, "they can get their money back if they hang on to them for awhile" and then he'd laugh and say "in about a hundred years."

Everyone who borrowed against their houses, speculated on houses, overbuilt, whatever just have to hang on for a hundred years.

billmo said...
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