I wonder if he brought his shotgun

Morgan Stanley and Goldman Sachs are "successful" banks, yet Morgan Stanley's stock lost 50% of its market value on the same day it announced earnings that beat street estimates. I'm not going to claim to be an expert on their balance sheets but what I hear from people more in the know than I am is that they don't have near the problems that Bear Stearns, Merrill or Lehman had. If they are truly sound, why do they need help? is a good question. They sure look like they are very troubled though from a market reaction perspective. At least part of the problem here is that no one really has a handle on what these mortgage securities on their balance sheet are worth and in a panic situation, everyone assumes the worst. I still haven't decided exactly what i think of this bailout.

I don't really get the CEO compensation issue though. For the most part, CEOs are going to make a lot more money when their firms are successful. The bigger issue is in how traders are compensated based on volume without regard to the risks that they are taking on for their firms. When their firms get in trouble, they aren't giving back any bonuses received. The CEO's options and stock sure drop in value though. To me, that issue is a big red herring meant to score political points more than fix anything.

funny your should say that because apparently some fox news guys were saying they hoped he was bringing his rifle because he's "going before the firing squad".

I didn't mean to ignore your question tanner. I'm not sure exactly how to answer in part because my memory of hobbes and this book are a little vague.

I'm sure he's grabbing the term Leviathan from Hobbes with the same meaning of a enormous government entity with many powers. He argues that government has grown through a series of crisis (whether financial or military) when the people ceded more power to the government. When the crisis is averted the power ceded never completely goes away. Its in line with hobbes in that he recognizes that the power is granted by social contract. I don't remember enough about hobbes to know whether he was as bothered by the growth as Higgs is, but its seems in line with Higgs explanation for how the US government has grown in size and power over our history.

I read this in college so my memory is very vague. He might even talk about Hobbes but I don't recall. I repurchased it a few years ago with the intention to re-read it in light of how I think we've lost a lot of liberties after 9/11 but I haven't gotten around to doing so.

Thanks Billy. If I get some spare time, I want to read it.

As a warning, I remember it being very dry. I think my tolerance for that was probably much less in college than it is now.

F that. Frank and Dodd are not going to allow such nonsense.

let's hope not. this whole "you have 7 days to give it the thumbs up or thumbs down" line is total b.s. same shit they did with the patriot act. . . they should turn it around on bush by adding what they feel are the necessary additions and pressure *him* to sign it. then if he vetoes it they can say "george, why do you hate america?"

that's awesome

bwahhaaah...i love that.

Can someone explain the details of this plan to me? It sounds like the plan is to have the government buy the bad debt from the banks. Doesn't this mean that the government would own these bad mortgages? And doesn't that mean that the government will eventually be foreclosing on defaulter's homes?

That doesn't sound very good at all. I don't wanna be the president when THAT happens.

How the hell is this thing really supposed to work?

I understand a few things about politics, but I've never understood a single thing about economics or how it works. Therefore, I'm going to keep pretending like everything is fine until someone comes out and says what the problem is and how it changes my life.

If you continue to shit in a hole, the hole will eventually fill up. Question is, how big are your bowels.

Something...yes. Just not even close to what Bush, Paulson and Bernake are trying to strong arm down the American public's throat.

Guys, we need this bailout. Suck it up and take it like men.

I don't know that I do. Someone's gotta be willing to hold my 30-year fixed, and my industry is pretty much recession-proof. Sing the song, boys!

So you're never gonna buy another house or car again ever? Did you get everybody on your street a 30 year fixed mortgage and job's in "recession proof industry's as well? What if your company wants/needs to expand but can't get the capital to do so?

Congrats Crack, you've got it all before your 35th birthday: The world is your oyster.

hey man I have a shitty job that'll be outsourced before ten/five years is up, but people need some harsh lessons about "Their Means" and what lies within that.

I like how the supposed root of this mess is defined as "bad investments" and the fix is for the gov't to simply buy the bad investments. But isn't what really makes these investments bad is that they're made up of mortgages that people can't afford to pay? What if the gov't just guaranteed those mortgages?

no more unpaid mortgages = no more bad investments that need to be unloaded?

Now, I realize that guaranteeing thousands (millions?) of bad mortgages is could be twice as unwieldy as buying bad investments, but wouldn't it also provide a fix that not only helps the banks, but also immensely helps regular Americans?

Oh wait, that's too socialist, right? Un-American? And the gov't shouldn't bail out people who make bad decisions. No way.

Principals are great, aren't they?

What would be the incentive for anyone to pay their mortgages? I'm a little confused at your plan.

Gov't could make partial payments, based on income, family size, amount of monthly payments, etc. There could be penalties for people who don't pay their share. I don't think it'd be that hard to provide incentives. it's not like financial people can't be creative.

Another bailout alternative would be to come up with a way for people to re-fi or some other kind of redo of their current unpayable mortgages. Kinda like the half-assed plan passed a few months ago. Just make way more people eligible.

The whole thing is a fucking shuck. The rich will get richer, the poor will get shit on, the rest of us will be just like we are: working for bad pay to buy shit we don't need, just so our kids can speak Chinese in 2050.

So you're going to fine people who are already having a hard time paying their mortgage if they don't pay their "share"?

What happens if people don't pay at all and don't pay their fines? The govenrment buys the debt and forecloses? Seems like you're right back to the Paulson plan with a bunch of added stuff.