Green Retirement Blog

No Wall Street Bailout, without re-regulation, it is not a matter of justice but of confidence.  If the U.S. Government bails out their Wall Street buddies, without re-instituting the market regulations that have been stripped away by both Democrats and Republicans, American and International investors will not have the confidence to invest in the United States economy.  Without regulations, what is to prevent the credit crisis from recurring, and will anyone want to take that risk?A Wall Street bail out without re-regulation,  will cause the dollar to dive, and interest rates to shoot up, as investors demand a higher premium to cover the risk of investing in the United States.It is worth a couple of bad days in the stock market, to get re-regulation into the bail-out package, than panic and risk economic chaos.  As was seen the previous weekend, when Lehman Bros. was allowed to collapse, decisive and corrective action by the U.S. Government will restore confidence and the return of investors. The stock market rallied after the Lehman Bros. collapse.The White House is asking for a blank check from Congress, and Congress knowing where their campaign contributions come from, will once again be willing to give away the store.   Call your congress person this weekend and demand no bail-out without re-regulation.

Please feel free to copy and email this article to your Representative and Senator.

Update: Monday, September 22, 2008.
The Democrats are providing cover for the bailout, by using the Red Herrings of executive compensation and foreclosure relief, in an attempt to protect their own political back sides.  Don’t let them get away with it, demand re-regulation of the markets before passage of the bail-out, the Democrats are just as guilty as the Republicans.  Executive compensation and foreclosure relief, are insignificant feel good measures, that don’t solve the underlying problems.

Foreign investors, need re-regulation of the U.S. economy, in order to have the confidence to re-invest in our economy.  The reason foreign markets are rising, is because the bailout using your tax dollars, will cover the bad U.S. debt that foreigners are holding.  This is a temporary rise, without re-regulation, no one will want to invest in the U.S. and the economy will eventually (quickly) collapse.

9:00 a.m pst:  Senator Dodd, and the Democrats want to put the fox in charge of the hen house, don’t let him - he represents the banks in congress.

The Democrats also want to set up an oversight board that would include the chairmen of the Federal Reserve, Federal Deposit Insurance Corp and Securities and Exchange Commission to limit the Treasury’s otherwise largely unfettered powers, according to a legislative proposal released by the office of U.S. Sen. Christopher Dodd, D-Connecticut, chairman of the Senate Banking Committee.

6:30pm: The decision by Goldman Sachs and Morgan Stanley to change their business  model, from investment banks into regular bank holding companies, coming right after the Treasury announced their bailout, smells fishier than Sarah Palin’s  boat.  It looks to this non-investigative reporter, as though Goldman and Morgan were about to collapse, and the Bailout is a rescue of the two politically well connected companies.  Both candidates, Barack Obama and John McCain, are neck deep in multi-million dollar contributions and influence from Goldman Sachs in particular.

As Goldman Sachs and Morgan Stanley, are the only two remaining American investment banks left in the United States, this $1 Trillion Wall Street bailout will  go mainly to these two firms.  If Barack Obama has any sense, or if Robert Rubin has any honor, he will take his millions and leave.  Same applies to McCain and Phil Gramm.

Update September 23, 2008
7:45 am
My suspicions over the motives of the Bailout, that former Goldman Sachs CEO and current head of the Treasury Hank Paulson, in an attempt to rescue his former company are starting to be confirmed.  Here is a report by Bloomberg regarding Paulson’s conflict of interest.  The Bailout is starting to look more and more like a simple case of fraud.

Even Congress is beginning to smell the rotten fish they are being asked to buy, this from an article on the Huffingtonpost.com,  “On Monday, Oregon Democratic Rep. Peter DeFazio put a voice to this concern, warning House colleagues against being “rolled by a Wall Street executive who is masquerading as the secretary of the Treasury.”

Update: Wednesday, September 24, 2008
This brings to an end my coverage of the Wall Street Bailout fiasco.  It began last Saturday morning, the morning after the Friday evening Treasury announcement that they needed $700 billion by Sunday morning, or the world was going to end.  I took a look around the web, noticed that there was no one voicing opposition to the plan, and did a modern day Paul Revere.  I began this post, and started hitting the blogs, posting desperate comments for people to contact their congressperson and stop the bailout.

Thankfully, I was not the only person to understand the implications of the bailout, and the internet mobilized to put an end to this theft.  Now that so many people have responded, and their is such strong opposition to the plan, I can return to focusing on retirement.  Of course, the Wall Street Bailout will have an impact on retirement, and I will cover that in future posts.

Update: September 26, 2008
After President Bush and Treasury Secretary Paulson created a false panic, in an attempt to ram through their $700 billion Wall Street give away, the Democrats delayed the Bush proposal and quickly put in place the safeguards that are necessary to protect the constitution, the people, and the markets.   Now, conservative Republicans have revolted against President Bush, and the Bailout plan  is in jeopardy of completely collapsing.

I agree with Republican Senator Shelby, that the Bailout plan may not be necessary, or that there may better options.  Unfortunately, his Party’s leader, has created a false sense of urgency, and a self-fulfilling prophecy of economic doom if some form of Bailout plan is not passed.  President Bush had a full year, to try and fix the system, and as usual has failed.

What the economy needs, what the American people need, what foreign investors need, is confidence.   The economy and stock markets operate on confidence.  People invest in the American economy and Stock market, because they have confidence, that they will not be ripped off, that their investments will grow.  President Bush, Democrats and Republicans, have destroyed confidence.

The current Democrat plan, though not perfect, will restore enough confidence in the economy to get it going again.  Last week, President Bush put a gun to the head of the economy, and demanded a $700 billion ransom, threatening that if he didn’t get the money, he would kill the economy.  The Democrats responded with a reasonable plan, the Republicans including McCain, are refusing to pay any ransom at all.  In fact, they are demanding to make the situation even worse, by asking for even further de-regulation and corporate tax breaks.  The stage is set for collapse.  Let us hope, in this critical moment, that wisdom and pragmatism prevail.

Update October 3rd, 2008
Well, the bailout passed rather easily in Congress today, I would like to thank Representatives Marcy Kaptur, Brad Sherman, and Dennis Kucinich, for their courageous effort in trying to defeat the bailout bill.  They correctly point out that half of the $700 billion will go to foreign banks, their is no guarantee that the money will improve anything, and that the bill does not significantly reform Wall Street.

Back in July, foreigners placed a margin call on the U.S. economy, they lost faith in the over leveraged U.S. and started demanding their principle back.  Since the credit crisis began in August 2007 the Bush administration and Wall Street had been robbing foreigners.  We depend on foreign money to pay for our budget, without that money, the U.S. government would not be able to function.  This bailout bill, payed for by American taxpayers, is meant to reassure and encourage foreign investors that the United States will cover it’s debt.

The open question is will foreigners trust the U.S. enough to begin investing again?

Read Fannie Freddie and You to learn how the credit crisis started.

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