Cash for Clunkers ???

Ok, the government wants you to get rid your old car and wants you to get a new more fuel efficient new car. Ok, skipping the fuel costs in building and transporting a new car, how much is saved.

Say you have two cars, one getting 18 mpg and the other 12 mpg. And you buy a new car with 22 mpg.

At 4 mpg savings, the new car will use 101.01 gallons less per 10,000 miles. At 10 mpg savings, the new car will use 379.78 gallons less per 10,000 miles. If the old car would have lasted 10K miles, it would have cost the taxpayers, $34.65 per gallon saved at 4 mpg, or $11.88 at 10 mpg more efficient. If the old car had stay on the road for 100K miles, at 4 mpg less efficient it would have used 1010 more gallons of gas or $3.465 cost per gallon for the taxpayers, or 3787 gallons saved at a cost of $1.188 per gallon saved at 10 mpg efficiency.

Best case: Currently getting 10 mpg, buy a car with 45 mpg. That would by save 777.77 gallons by 10K miles. Or costing the taxpayer $5.78 per gallon at 10K, or $0.58 per gallon for 100K miles.

If it is a clunker, how many more miles would you get? How much is this worth?

Democrats Pass the Buck on the Auto Industry

Democrats ask auto industry leaders to come back with a plan by December 2. Congress may come back into session December 8 if they like the plan.

AIG executives spend $86,000 on a partridge hunt.

Link

Media Bias - NBC

The skit on Saturday Night Live with Barney Frank on the bailout bill has been edited on the online version.

Must-Not See TV

"The brutally wicked sketch must have caused tremors in left-wing circles. The Sandlers and Mr. Soros have all been prime financial backers of independent political groups that have secured huge influence in the Democratic Party and helped fuel the rise of Barack Obama."

Edited SNL subprime video also happens to excise Barney Frank's involvement


"What also was excised was any mention of the involvement of Massachusetts' Rep. Frank in the Sandler subprime mess."

"In the original skit Sandler addresses Frank, saying, "And thank you, Congressman Frank, as well as many Republicans for helping block Congressional oversight of our corrupt activities."

To which Frank replies enthusiastically, "Not at all!""

NBC Edits 'Saturday Night Live' Sketch

US government now owns 79.9% of AIG

Fed announces new 37.8-bln-dlr cash infusion for AIG

"The New York Fed will borrow up to 37.8 billion dollars in investment-grade, fixed-income securities from AIG in return for cash collateral," a statement from the Federal Reserve said."

New bailout Proposal

New Bailout Proposal

Take a look at this bill and you can understand why no one reads them.

an example
"(a) Extension.—Paragraph (1) of section 179C(c) (relating to qualified refinery property) is amended—

(1) by striking “January 1, 2012” in subparagraph (B) and inserting “January 1, 2014”, and"

There may be thousands of such refrences where they strike and insert.

Or
“(C) $150 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.0 modified energy factor and does not exceed a 6.0 water consumption factor, and"

You may have to search possiblly hunderds of laws to find the full impact of the changes.

New Additions to Bailout Bill

Increase in FDIC deposit insurance to $250K. Why is this important? Because small business who might have over $100,000 in the bank (to pay bill, payroll, etc.) would not have pull their accounts from small banks that might face a bank run..

Extension of the federal tax credit on renewable energy.

Raising the level of the alternative minimum tax.

AIG Rescue - Paulson and Goldman Sachs

Did Paulson save AIG because Goldman Sachs have an interest?

According to Steve Forbes, the government made a very good deal on its $85 billion dollar loan.

"AIG's rescue calls for the U.S. Federal Reserve to lend up to $85 billion to AIG for two years in exchange for a 79.9 percent equity stake. It comes just two days after U.S. authorities refused to bail out investment bank Lehman Brothers Holdings Inc (LEH.N), forcing it into bankruptcy court despite pleas from Wall Street's chiefs.

AIG will pay interest at a steep 8.5 percentage points above the three-month London Interbank Offered Rate, making the current rate equal to about 11.4 percent. That gives AIG a big incentive to embark on a massive asset sale program to pay back the loan quickly."

Link

But according to Reuters, "Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) had as much as $20 billion at risk had the insurer American International Group Inc "

"The Wall Street bank told the newspaper that it was never imperiled by AIG's troubles. Spokesman Lucas van Praag also disputed the $20 billion figure, saying it did not account for collateral and hedges that Goldman employed to reduce risk."

link

Either way, this information should have been disclosed.

Democrat's partisanship kills the bailout bill.

Although no one liked the necessity of the bill, the Democrats have sabotaged it. First they call on McCain to come to Washington to save the bill. When McCain obliges, they rush out saying they have a bill when they didn't just so McCain wouldn't look like a leader. Then Obama comes to the White House meeting and attacks the House Republican's proposals. Senator Dodd added provisions to give 20% of the revenue to organizations like ACORN and La Rasa. Negotiations with Republicans eliminated Dodd's largess and they develop a bill that enough Republicans could sign on. The Democrats, despite have a majority of members, could not get any members in difficult races to support the bill. Then Pelosiattacks the Republicans on the floor of the House just before the vote.




"$700 billion. A staggering number, but only a part of the cost of the failed Bush economic policies to our country. Policies that were built on budget recklessness when Pres. Bush took office, he inherited Pres. Clinton’s surpluses - four years in a row budget surpluses on a trajectory of $5.6 trillion in surplus. And with his reckless economic policies, within two years, he had turned it around. And now 8 years later, the foundation of that fiscal irresponsibility, combined with an “anything goes” economic policy, has taken us to where we are today.

They claim to be free-market advocates, when it’s really an anything goes mentality. No regulation, no supervision, no discipline. And if you fail, you will have a golden parachute and the taxpayer will bail you out.

Those days are over. The party is over in that respect."

Bailout Fails in the House

Democrats, who control the House, could not get enough of their own members to pass the bill. The situation was made worse by Pelosi partisan attack on the Republicans just before the vote.

If I was part of the Republican house membership, I would demand the resignation of Barney Frank and Rangel before passing the bill.

Update:
95 Democrats voted against the bill. All supposedly in tight races.
140 Democrats voted for it,
Republicans 65 Yea, 133 Nay, 1 NV (205-228-1)

Bailout to fund ACORN

Senator Dodd proposes to take "profits" (at least 20%) from the bailout and give it to ACORN. Obama was a lawyer for ACORN. link

ACORN provides the "shock troops" for the Democratic party and is linked to voter fraud.

"James Terry, Chief Public Advocate, Consumers Rights League:
"ACORN routinely says it will clean up its act. Yet, given its decade-long history of voter fraud, embezzlement, and misuses of taxpayer funds, ACORN's pattern of fraud can no longer be dismissed as a series of 'unfortunate events.' "The problem of voter registration fraud raises serious questions for this committee, and the Consumers Rights League appreciates that the right questions are being asked."
link

Bailout - more democrats involved.

Countrywide Financial, which sold it loans to Fannie Mae, gave:

Fannie Vice Chairman Jamie Gorelick (of 9/11 fame) at 10 year loan at 5% for $960,149.
Frank Raines (Fannie Mae CEO) 10 year, 5.125%, $982,253.
Senator Dodd 5 year, 4.25%, $506,000.
Fannie CEO James Johnson, 5 year, 3.875%, $971,650.
also
Fannie COO Daniel Mudd, 7 year, 4.250%, $2,965,000.

"The borrowers all say they weren't aware of getting special treatment."

Newt Gingrich on the bailout

Bachmann: How Did We Get Into This Mess?

Nice clip of Barney Frank.

Accounting rule may have caused crisis.

The Mark-to-Market Melee
Is an obscure accounting rule to blame for the credit market meltdown?
By Daniel Gross
Posted Tuesday, April 1, 2008, at 5:53 PM ET

Basically, say the bank has a mortgage worth $100,000 yesterday. Nothing has changed (house is still worth the same, owner is still paying the bills, etc.) but in the crisis no one else is willing to accept the risk. The mortgage can only be sold for $50,0000 today. So the bank, even if it didn't want to sell, has to value the mortgage at $50,000. So the bank has on paper less assets, and thus less money to loan. And if the current assets value is less than its obligations, it becomes bankrupt.

Baliout - Executive Pay

I guess I am not alone in thinking executives should not be overly compensated.

Link
from:
A Fine Mess
By WILLIAM KRISTOL
Published: September 21, 2008

"Comments by McCain on Sunday suggest he might propose an amendment along the lines of one I received in an e-mail message from a fellow semi-populist conservative: “Any institution selling securities under this legislation to the Treasury Department shall not be allowed to compensate any officer or employee with a higher salary next year than that paid the president of the United States.” This would punish overpaid WallStreeters and, more important, limit participation in the bailout to institutions really in trouble."

My Prposal

Glass-Steagall Act and the Home Loan Crisis

Link

Some are trying to blame the repeal of the Glass-Steagall Act on the Republicans. A little history. Leach, one of the sponsors, (Gramm-Leach-Bliley Act) recently spoke at the Democratic convention. President Clinton signed the bill in 1999. "The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15".

In addition, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee pushed lenders to give loans to people who did not qualify. "He encouraged the companies to guarantee more "affordable" mortgages, thus abetting their disastrous plungeintosubprime and Alt-A loans. He also pushed for, and got, an increase in the conforming-loan limits to allow Fan and Fred to securitize and guarantee larger mortgages. And he pressured regulators to ease up on their capital requirements -- which now means taxpayers will have to make up that capital shortfall." - WSJ

McCain's ad on Jim Johnson

McCain's Ad on Franklin Raines

Bailout Proposal - An Addendum

The government proposes to take all the bad loans and hold them til they become valuable again. I suppose this is needed to free up the financial markets. Banks are now buying short term treasuries at 0.02% interest because they are safe, not even loaning money to other banks.

But here is my proposal.This proposal will affect all executives of any firm that "sells" it's loans to the government. Since Obama thinks 250K is rich, I propose that all salaries, bonuses, pensions, golden parachutes, etc. for executives of above that amount be placed in a special account until the government rids itself of all the loans from that firm. Money from that fund could be used to pay taxes. It could also be used to pay existing obligations, like mortgage payments, provided that those assets are pledged as collateral. These monies would be invested in U.S. treasuries. Upon completion of the sale of the loans, any losses would by made up by these funds, the rest returned to the executives.