Hard as it may be for Plainfielders to believe it, sometimes -- just sometimes -- things happen outside our parochial purview that require notice.
As in the state of the country's financial system, which has been laid low by the dirty deeds done in the name of the subprime mortgage scam and other financial finaglings and those caught holding the -- now nearly worthless -- goods as a result.
But bear with me a moment.
As is my usual routine after posting the blogs, yesterday I got on the Stairmaster for a workout and turned on CNBC and watched the performances of Bernanke, Paulson et al before the Senate Banking Committee.
Talk about lipstick on pigs!
We were treated to a college professor who acknowledges he has no Wall Street experience and who for months has told the country that 'everything is under control', now coming to claim that the world as we know it is on the verge of collapse -- unless Congress does what it is told.
And the Wall Street pro who said all along we should let the markets take care of themselves and now has the chutzpah to demand not only $700 billion, but that Congress should be glad to give it to him without the right of the courts or any agency to inquire or challenge what is done with it.
Members of my generation, the first to be 401k-ized, are NOT amused. In fact, thanks to these gents dawdling at the levers of the economy, the bitter joke making the rounds is that our 401k's have become 101k's.
So the scepticism of Senators of both rightish and leftish persuasion was welcome.
Perhaps the classiest was the way Sen. Richard Shelby (R-Alabama) set a trap for Bernanke and crew. By posing a bland statement that surely they must have considered several options before settling on the one they brought to Congress, and forcing them to verbally acknowledge same, he set the spring. (What, after all, would they look like if they told the Senators and the world that no other options had been considered?)
Then, smiling slightly as he inserted the shiv, the Senator asked if they would please outline for us those other plans considered and the reasons for which they were rejected.
Snap!
It was good political theater.
But the jaw-dropper was when I heard Bernanke say, in response to a question, that the intention was to use some of the money to buy 'secondary liens'.
Secondary liens? You mean, all the crap piled on top of the mortgages when this whole thing was flying high?
Immediately, I thought of the $300,000 house on Berkeley Avenue that was foreclosed on a few months ago -- with an upset price of $960,000. Meaning that on top of the basic mortgage, more than $600,000 in cash had been extracted, for which the secondary lienholders were left holding the bag.
So, the bailout will benefit people who should have known better than to lend such sums in the first place?
You're damned right there are questions that need to be answered before Congress goes for it.
And I hope they are.
Plainfielders should hope so, too.
- "Experts: There are less risky, more effective alternatives"
- "New details emerge on how bailout would work"
- "Hostile Congress likely to revise Wall Street bailout plan"
-- Dan Damon
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