Bailout Rejected: An “Expert” Reacts

If you’re like me, you’re aware of this monumental financial crisis that we’re in the middle of, and even probably understand the magnitude of the peril that we’re in, but don’t really have any idea how to discuss the situation without sounding like a damn fool.  So, in light of the bailout proposal being rejected by the House a couple of hours ago, I decided it was time to take matters into my own hands and do some investigative research.  Fortunately for me, in the age of the Modern Jackass, enlightenment is just a GChat away.  I approached one of my esteemed GMail buddies, an accomplished associate at a private equity firm (read: an Indian dude), and asked him for his reaction to the most recent developments in Washington, in the hopes of shedding some light on exactly how totally fucked we actually are.  After the jump, his expert analysis on just that:

me: yo meng
MoneyGuru: sup
me: so, i have a question for you
or, rather, several questions
i’m thinking about doing a piece on the economy for mojama
and i was wondering if you wanted to be my financial expert
MoneyGuru: sure
but i’m hardly an expert
me: that’s fine, it’s modern jackass
the piece will basically be this gchat
MoneyGuru: haha
me: cool?
MoneyGuru: aight
me: alright
sweet
MoneyGuru: names changed to protect the not so innocent?
me: but of course
MoneyGuru: aight, lets do this
me: cool man
so
the bailout proposal was rejected a little while ago in the house
and, consequently, stocks have plunged
let’s start with the basics
why did this happen?
and, further
what exactly does the dow measure?
and how far can it fall
before we all have to fight over road kill in the streets?
MoneyGuru: it all has to do with perception
investors viewed a rejected bill as negative for the economy in general
so they started a fire sale
its all optics
me: ok, so the market’s reaction is all symbolic?
MoneyGuru: not necessarily symbolic, it just shows how fickle investors are
me: what do you think about
Rep. Jeb Hansarling’s (R- Texas) statement that passing the bailout would put
the nation on a “slippery slope to socialism”
MoneyGuru: eh
i’m tired of hearing this united states of france bullshit
or how Bradford and Bingely was purchased “nationalized” in the UK
the government will be getting equity warrants
they aren’t straight up buying banks a la mitterand
me: ok, so what are they doing?
and also
equity warrants?
what on earth are those?
MoneyGuru: options
to buy stock at a later time
i dont know the details but presumably the US Government (aka the tax payers)
will have the option to buy equity stakes in some of these companies
if they do, there are limits on executive compensation etc
the tax payers (aka the US Government) can go and sell those at a later date
me: to the american people?
MoneyGuru: presumably for a profit
to whomever; i.e. global investors
me: ok
so now that the bailout’s been rejected
and, assuming that it doesn’t get passed with a second vote
what happens next?
MoneyGuru: good question
either they go back to the drawing board
or those opposed to it should damn well propose something they like better
the bail out is not ideal
smarter regulations a few years ago would have prevented that
something needs to be done or else the stock market will continue to fall
and these “toxic” mortgages will cause more institutions to lose money
me: do you put the bush administration at fault?
MoneyGuru: yes and no
its more complex than that
his whole house ownership policy
not sure of the exact name
me: don’t worry about it
it’s not important
MoneyGuru: but that was just misguided
me: ok
so
how do we avoid becoming an international financial disaster?
can the dollar bounce back?
and
more importantly
how long will it be before i can travel abroad and not get fucked in the ass
on my salary?
MoneyGuru: the american people took out far too much money
and saved not nearly enough
alan greenspan did very little to curb this as well
the dollar will bounce back
all these other economies are hurting as well
some sort of action, call it a bail out or a rescue or whatever, needs to be had
the perception that the economy is doing well is very important right now
the dollar is backed by faith
that people will pay their loans
that the US government will pay its interest on treasury notes that China owns
there is no more gold standard
just faith
there was a good article in the nytimes last week on that
me: you got a link for the readers here at modern jackass?

MoneyGuru: http://www.nytimes.com/2008/09/24/opinion/24grant.html

me: how much do you think the election will impact international perception of
the US economy and its ability to bounce back?
MoneyGuru: people said obama was acting too presidential by going to europe
and speaking
but it seems like obama in the white house would bolster europe’s perception of
the US governement as well as our economy
me: amen, son
i feel that
MoneyGuru: regardless of what you believe, the last 8 years have in part led to
this
mccain hasn’t proved to me to change all that much
so why take that risk?
me: damn right
well, kind sir, thank you for your candor
MoneyGuru: anytime
me: you’ve been an invaluable help to the cause
godspeed

Well, there you have it, folks.  Personally, I feel like I’ve learned a lot here today.  Just another brutally honest exposé from the news team you shouldn’t trust at all.  Our most sincere thanks go out to our financial expert, who has asked that his name be omitted to avoid any association with this shoddy-ass operation we’ve got going here.  But we are grateful nonetheless.  Until next time, be well, and be frugal.

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One Response to Bailout Rejected: An “Expert” Reacts

  1. Money Guru. I get it. Cause he’s Indian. But how much of this is Washington’s fault? Representatives voted the way they did because, overwhelmingly, the “Bail Out” is not popular among the constituents of their states. How are Obama AND McPalin helping things when they continue to insist that there is a division between “Wall Street” and “Main Street.” Mutual funds falling because of the Dow’s decrease and paychecks not going out because of stalled credit markets seems to affect Middle America as much as it does ass hole investors in New York.

    Furthermore, I think it’s less the prospect of a Mitterandization of the American financial system that opponents of the Bail Out are worried about. A more poignant concern is the amount of tax payer money going toward the rescue of foreign banks. Now, in this age of economic dependency as the salve to all woes, I think the Money Macaca will agree with me that foreign banks suffering from bad American debts deserve to be compensated for the risk they took on behalf of bad loans packaged and traded by firms such as Lehman Brothers.

    Obama may inspire confidence in America and the dollar abroad, but does he inspire confidence in America when he witholds his view on the Bail Out bill until after it’s failed in Congress? Does he serve the world when he chooses a faux populist tone about the welfare of the middle class instead of openly admitting America is internationally implicated in a global financial web and that US taxpayer dollars must be used to save foreign banks?

    I’m not saying it’s a Democratic or Republican thing. I’m saying the blame game can be played all day long, and that perhaps by putting its foot down on the reckless use of taxpayer money to increase the national debt Congress, in effect, voted against this measure and in favor of an American future of solvency.

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