What's the main difference between this bill and the one that was rejected last week? Is it just the pork offerings including a tax credit for racetrack owners and makers of wooden toy arrows?
In 2004 there was a small $0.39 excise tax levied on weapons. Unfortunately, $0.30 target arrows are considered weapons under the law so they got a 130% tax accidentally levied on them.
Any politician or journalist that grouses about arrow makers getting special handouts is either uninformed or attempting to deceive you. I recommend you ignore them as a source of future information.
thank you, Sunlight Foundation.
And, BTW, it's open source, so, if you want to play with it, you can.
They are not attempting to deceive anybody. The issue is the bank bailout, not arrows, not AMT, not anything else stuck in there to sweeten the pot. The fact that people are pointing out how much CRAP has to go into a bill to get it passed into law is germane and important to know.
That changed over the last week, as articles like this one came out:
http://www.bizjournals.com/twincities/stories/2008/09/29/dai...
So there's been another week to form the consensus: The bill sucks, but the problem is real, and there's no clearly differentiated, politically viable, non-sucky alternative that will arrive in time.
The moral of this story, as with so many stories, is that the right way to deal with dire emergencies is to avoid causing them in the first place.
Further, the FDIC is already running low on funds, we should be slow to make new promises when we are already uncertain with regard to meeting present obligations. Additionally, raising the limit on FDIC insurance will make it harder to determine when a bank is in trouble. Now I am not naive, I am sure that was the idea behind raising the limit in the first place. But the less educated among us actually believe this was done to protect their money.
Lastly, $150 billion in tax cuts? These people really need to get some cost accountants.
The FDIC is indeed running low on funds and raising the limit at this point in time is a bad idea. However, the FDIC limit does not hide the financial health of a bank or have any direct impact on it for that matter. The limit governs what happens to customer deposits after the bank fails. Having a higher limit may indirectly help troubled banks by placating their depositors and convincing said depositors that their money is safer.
About the tax cuts. The $150 billion is a drop in the bucket. If you really want to bring costs in line, take a very hard look at Social Security, Medicaid, Medicare, and Defense spending. Everything else (except now this bailout) is a rounding error compared to those.
Early indications that a bank needs to be looked at comes to the FDIC because people with more than $100000 start moving excess money to different banks. FDIC starts to look at them, and that is where the lowest form of all quants comes in. The "shorter". They get wind. I don't know how, but you and I both know it always happens, and the bank's stock starts a death spiral. Putting more pressure on their capital ratios, which have to factor in cheap stock now. Also, in fractional reserve banking, the fees charged by the FDIC to the banks SHOULD depend on the amount that the FDIC is insuring accounts for. There is NOTHING in the bill about raising fees. I'm sure we can all imagine that fees will probably not be raised, as the idea is to help with liquidity, not hinder it. So right there the banks just got something for nothing in terms of insurance. Helping their financial position appear safer.
Maybe we are talking about two different things. Could you please explain why you believe this does not help the banks to appear financially healthy longer?
If you consider $150 billion a 'drop in the bucket' then salud! I think $150 billion here, $150 billion there, and pretty soon you are talking about real money. Consider the possibility that you believe it to be a small amount because you agree with this bill. What if we gave $150 billion to fund welfare? How about we give $150 billion to fund the salaries of H1B workers? Or we blow $150 billion on 2 toilets for stealth bombers? Is it still a drop in the bucket?
Right. So why bother with accounting standards at all? They're just going to break the rules anyway....
From his appearance on CNN's crossfire: http://www.youtube.com/watch?v=vmj6JADOZ-8
http://www.govtrack.us/special/econstimbill/changes.xpd?id=4
I know [who he is] and besides this he is almost a financial saint. Still, he backs this bailout and will make huge profit on it. Oh, and the bailout favors his other investments.
Being foreign, the bailout favors me as it helps my savings indirectly. But it is the largest scam in history.
I don't know anything about his involvement with Goldman, but maybe he realized the government will do the wrong thing anyway so he might as well profit from it.
Buffet has gone on record multiple times (cnn, print interviews) saying he would be the person who buys the mortgages from the banks and resales them later if he could get a 700 billion dollar or comparable loan.
The mortgages are current artificially low because everyone is scared. If you can buy them low and sell them once the fear is gone, you could make a ton of money.
People will make money on this situation, the government will completely mess up some aspects of this, articles will be written 'exposing' all the problems.