I'm Not Sure What To Think
But I do know that I'm pissed off at how this has been handled from the start up to right now. WaMu's failure has convinced me that they're not kidding or exaggerating -- we're on the verge of a devastating credit crunch spiral. (I'll confess to being happy WaMu's stupid commercials will end.)
I'm also convinced that I have John McCain to thank and/or blame for torpedoing the deal that was worked out in principle yesterday. If he had cracked the whip on Boehner rather than saying, effectively "that sounds like an interesting idea, John!", odds are good that House Republicans would have fallen in line. Assuming we quickly get a better deal -- i.e. one where there's less risk of the US Treasury becoming the largest bank owner in what was once a free market -- then McCain gets a lot of credit from me. But if this causes negotiations to break down long enough that serious harm is done to our financial system before a compromise can be reached and/or we wind up with the same deal (or a worse one!) passed without Republican support, McCain takes a lot of the blame. The rest of the blame goes to Bush, who was frankly idiotic in thinking that inviting presidential candidates into sensitive negotiations was going to somehow improve things.
He's a maverick, a gambler, Sarah Palin proved it again, yadda yadda yadda. I just wish I had any confidence whatsoever that he fully understands the underlying issues and isn't just seeing this as the next "game changer" that he needs. Well, I guess we'll see. But the feeling of helplessness is really, really pissing me off.
posted by QueensGuy @ 6:27 AM
7 Comments:
I'd be shocked, absolutely shocked, to find that politics played a role in the bailout negotiations but there is something a little convenient about the timing of the WaMu failure. I saw some of the regulatory-induced NE bank failures of the early 90s (though I tend to believe the Banks did this all to themselves this time), and there is not necessarily a magic moment when the deal has to go down.
Presumably , they could have done WaMu last week or next week. However, doing right after the rescue deal falls apart tends to focus people as QueensGuy wholly reasonable reaction to WaMu shows.
Okay, this is really weird. Just a few minutes ago I phoned WaMu and told them I wanted to close my account. The guy on the phone explained how to do it. I expected he'd do the customer service thing of "Why are you closing your account? Can we keep you as a customer?" but he didn't.
Now I read your blog and find that WaMu, today, has been taken over and that there was a run on the bank. That must be why the guy didn't bother to ask me.
The funny thing: I had no idea. I was just closing my account because I recently moved to the East Coast and they don't have Washington Mutuals out here.
I'm shocked that New England Guy has turned into a conspiracy theorist. I don't consider the timing of any of the whole series of big financial institutions that are failing to be anything close to "convenient."
I bank at WaMu, too. Maybe I should go down there today and watch the action.
I was reacting to "WaMu's failure has convinced me that they're not kidding or exaggerating"
Up until WaMu, apparently several bloggers and real people alike thought the bailout was not necessary- "let the market work it out" or "its just an excuse to save rich bankers"
Call it a conspiracy if you like, maybe its just good politics, but announcing the failure after the Republican party falls apart and commits sappuku and throws the whole idea of a bailout into question, changes minds. Henry Paulson may be right or wrong on policy but he's not stupid.
WaMu deposits are protected as part of the deal but the stock holders and bondholders are to be wiped out.
I have friends on the right and left who saw Clinton or Karl Rove or whomever behind every hiccup in the news. It doesn't matter when it happens, since the timing is always right, because something is always happening.
Right now we're going through a series of major banks and others going under, which is why there's talk of a bailout. That the troubles would continue during the talks is to be expected.
Here's why it feels like a conspiracy. "Don't worry. Fundamentals strong. No problems. We'll pay out annual bonuses worth more than most people make in a lifetime." Repeat as often as necessary. Then, suddenly, 2 months before the election, "Worry! Be scared! Out of control! Pass this bill! Save your economy! Give us money! No time to think! Just act! Link govenment and finance in an unprecedented manner! Adopt socialist schemes and call it capitalist! Worry! Be scared! Act now!"
I don't understand who you're claiming is behind the conspiracy, or even who stands to gain. Neither what was said earlier, or what's being said now, requires any special explanation--it's politics as usual, no conspiracy necessary.
As to things happening two months before the election, my earlier point was stuff is always happening, so why treat what happens before an election like it's been specially conjured up?
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