Tuesday, September 30, 2008

Half of the Money Came Back; Where is the Crisis?


We got half of India back today. Yesterday we had a 777 point decline in the DOW and the naysayers said we lost the amount of weatlh equivalent to the entire GNP of India. That was all because the House of Representatives voted down the outrageous bailout plan proposed by the Sec. Paulson at the US Treasury, Sen. Dodd of D-CN and Rep. Frank, D-MD.

Stocks staged a broad recovery on Tuesday after Monday’s big sell-off. The Dow Jones industrials gained 485.21 points or 4.68 percent, to 10,850.66, halving the 777-point decline on Monday. New York Times, Sept. 30, 2008.

You will not hear a peep that half of the GNP of the nation of India rolled back on to accounting ledgers today. Yep, ½ a Trillion Dollars back in the bank. If it keeps coming back, soon it might add up to real money.

This Blog is designed to follow this elephantine change in real estate mortgage law and not merely track the polarization of the Wall Street Bailout. However, the entire world was silent today on real estate developments. Perhaps it’s Rosh Hashanah; perhaps it’s a slow news day.
It appears that the Democrats and the Republicans are back in the workshop crafting new bills to submit to Congress. I don’t have a crystal ball (well, not in politics), but my guess is the Administration and the Democrats (hard to believe the White House and Rep. Pelosi are on the same page) will not be able to turn the House Republicans. They probably can turn the defecting House Democrats with enough sugar in a new bill. My guess is that that new incentive will be: 1) allow some % of the profit off the bailout (when the toxic assets are sold at a profit) to be funneled back into affordable housing (originally set at 20%), 2) grant Bankruptcy Judges the right to modify (smash: rewrite) terms of mortgages as they see fit, and 3) allow court review of the Secretary of the Treasury’s actions. Court review was lacking in the Administration’s proposal. Imagine that.

It’s a fair bet something will happen. Whatever comes out of Congress should please our long lost friend, Marx. The Fifth Plank of a small Manifesto he wrote in 1848 demands: “Centralization of credit in the hands of the State.” Go for it Karl, you are almost there.


Hugh Wood, Atlanta, Georgia



PostScript: After this was written, the Administration proposed the following “additions,” to the Bill to be introduced into the Senate. “It included AMT relief, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana, and some $78 billion in renewable energy incentives and extensions of expiring tax breaks. In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.” AP September 30, 2008.

1 comment:

Hugh Wood said...

"This is not a bailout for Wall Street. It's a bailout for our country." Senate Majority Leader Harry Reid D-NV. October 1, 2008. Isn’t this the same guy who said 2 weeks ago that he had “no idea” what to do about the mess on Wall Street. What’s his motto? “ Plead, Follow or Get in the Way.” Come on, ya have to love these guys. They are our leaders.