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Posts Tagged ‘bailout’

…On Banking News!

Posted by Steve on October 4, 2008

My employer is a company. This company uses Wachovia for the majority of its banking. So, last week, my employer issued a statement to all employees regarding the announced sale of Wachovia’s banking elements to Citigroup and specifying the expected impact on things like our payroll and retirement and ability to pay our subs and where the clients need to mail the checks when the pay us and etc. Whether or not any impacts are predicted to exist, and if there are any what they are, is not an appropriate topic for this blog and I’m not going to talk about them. I mention that my company took steps to answer our curiosity about that sale’s impact on us only because I expect they’ll send around a new version of the statement next week, in light of the announced sale of Wachovia’s entirety to Wells Fargo. I’ve got to say, I like that Wells Fargo stepped in and did this, since the Citigroup sale would’ve included payments by the FDIC, and this apparently doesn’t. That’s a good thing. On the other hand, knowing as little as I know about the conditions and state of Wells Fargo, Wachovia, and Citigroup, I don’t know if this is a risky investment by Wells Fargo or not. I do know it’ll make them much more of a nation-wide bank, as right now, for instance, there are 0 Wells Fargo branches anywhere in Georgia, the Carolinas, Virginia, and Tennessee, while Wachovia’s got plenty of branches in those states. I also know that a recent IRS action, which I think is REG-102822-08 (but I’m not certain of that, and won’t be until I can confirm it with my dad, who’s a CPA that specializes in tax stuff), may make a loss on this still into a good move for Wells Fargo and its shareholders and depositors. I assume either move’s good for Wachovia employees and shareholders, and unlikely to impact Wachovia depositors much. I know this is terrible news for Citigroup, on the other hand, and they’ve made it pretty clear they aint gonna step aside all quiet-like. I smell litigation! Which, most likely, isn’t good for anybody involved.

Also, I wonder how much this was spurred by that financial-sector bailout bill, which passed after the House changed its mind. My praise for the House for rejecting that is now rescinded. Downside of trying to blog about current events, I guess: the damned things keep changing on you. Although, since I don’t often have any reason to praise her, (since I disagree with her positions on a great many issues), let me give my congratulations to my House member, Thelma Drake, for voting against the financial-sector bailout and thereby casting her vote in a manner I approve of. Now if only she’d voted against the domestic automaker bailout, too.


Posted in Economic Activities, From the News | Tagged: , , , , , , | 1 Comment »

…On the Redemption of Congress.

Posted by Steve on September 29, 2008

Thanks to the House of Representatives, I forgive the United States Congress for the Senate’s willingness to make a horrible decision. Although, I’m still angry about Division A, Section 129 of Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009. Only 12 Senators voted against that legislation (though 8, including Obama and McCain, didn’t vote and 1, Burr, voted “Present” ): 11 Republicans and 1 Democrat – Russ Feingold, the best of them. He’s got some flaws in his positions, primarily that he could stand to be a little stronger on support for private weapons ownership and his stance on capitol and corporal punishment is as wrong as it’s possible to be, but on a great many more issues his stance is far and away the rightest of anyone in the Senate. Had he run for president, I would have voted for him in the primary. Assuming, of course, he hadn’t dropped out by the time my state got to vote – and that’s something that really irks me, candidates dropping out before all the primaries have happened. Either impose a “no dropping out” rule on the candidates or have all the primaries and caucuses on the same day, I say.

Posted in From the News, Here be Politics! | Tagged: , , , | 1 Comment »

On an All-Bad Decision by Congress

Posted by Steve on September 28, 2008

The “Emergency Economic Stabilization Act of 2008” appears likely to pass, and that is a very, very, bad thing. The people of America are being put close to $700 billion further in debt in order to bail out elements of the financial sector that should instead have been hung out to die. Mark my words: there is nothing good about any bailout, including this one. “If you fuck up, you die,” is supposed to be the one iron-clad rule of life: that there is never a second chance, that there is never a margin for error, and if you can’t live your life flawlessly you suffer because any and every mistake you make can mean your ruin. Apparently, that’s not the case if you’re part of Wall Street. Thing is too, there’s no benefit from this. Catastrophic collapse of the financial sector (which isn’t happening – regional banks and financial institutions, which made sound lending decisions, are going gangbusters) is a good thing. The markets are friction loss in the engine of the economy: they drain a resource (money) without doing any productive work. Look at commodities markets: you’ve got oil well people and oil refinery people involved, who have a tie to the procurement, distribution, and use of the oil and thus a legitimate reason for being involved, and then you’ve got commodities investors who have no tie to the procurement, distribution, and use of oil, and thus no legitimate reason for being involved in the market. But they are, anyway, investing in oil futures. They’re nothing but middle-men, driving up the price without producing value. Cut them out of the process and they’re ruined, yes, but things improve for everyone else.

Hell, the touted “limits on executive compensation” don’t actually strip away golden parachutes or institute a salary cap on executives. They’re a sham, a facade of meaningful legislation. Full of sound and fury, signifying nothing.

There is nothing good about this legislation. It is all costs and no benefits, and it is likely going to pass.

Posted in Economic Activities, From the News, Here be Politics! | Tagged: , , , | 1 Comment »