Bailout Vote Fails House!

And now for some brilliant political commentary:

I feel so strongly against the bailout that I've written my Congressman Ted Poe and the two Texas U.S. Senators and told them not to vote for the proposal. That the proposal will do nothing but reward Wall Street fat cats for failed greedy policies and put the expense of those mistakes on the taxpayer's accounts.

I even told Ted Poe that based on his vote against the bailout that I'm voting for him this fall. I've expressed the same sentiment to Senator John Cornyn that if he does vote for the proposal I will not vote for him come this fall. I didn't let him know that I don't plan on voting for him this fall anyway.

Major props to the Congressmen and women who voted against the proposal.

More on Goverment Intervention in the Financial Crisis

I definitely don't claim to be a financial genius or know exactly how economics works. However by reading knowledgeable writers and looking at numbers I can sometimes figure out how things may turn out.

I figured that the housing bubble would eventually burst, values would fall some and then stabilize. I had no clue about the fall out of the subprime market. It's just amazing how greedy and incredibly stupid lenders were now that the numbers are coming to light.

From this email from John Mauldin's weekly e-letter, it only gets uglier. Besides the subprime lending practices, there was a practice called Alt-A mortgages. These were mortgages made for borrowers who either couldn't document their income or for some reason chose not to. How bad are these mortgages? To quote Mauldin's e-letter directly:

"Around 3 million US borrowers have Alt-A mortgages totaling $1 trillion, compared with $855 billion of subprime loans outstanding. $400 billion of that was sold in 2006. Almost 16% of securitized Alt-A loans issued since January 2006 are at least 60 days late."

It's mind boggling. Bankers and lenders were willing to loan out $1 trillion without any clue of the borrower's income or if the loan could ever be repaid. I just don't understand the thinking. How do you gamble a major portion of your business without having any clue if the client will ever be able to pay for the product?

This reminds me of a story. My best friend's brother asked me if he could borrow my credit card. He'd give me a security deposit if I allowed him to use it. I said no right off the bat. I would be crazy to lend anyone my credit card but even nuttier for lending it to my friend's brother. He had a low paying job, a history of quitting jobs abruptly and I suspect a drug habit. This is definitely not someone to lend money to and ever expect to see it back. I view the lending practices of the financial institutions along the same lines. They lent money to my best friend's brother and now he's unable to repay. They didn't bother checking his job history or his current income. They just said,"Sure, how much do you need? Okay, sign here and you are good to go."

The worse part is that the government is stepping in and starting to save some of the bad loans and bad businesses. Now we the taxpayer are on the hook for these bad practices.

I hate for anyone to lose their house or job but on the other hand I don't want to be on hook for their bad decisions. Some lied about income, some chose not to disclose income and some were never asked about their income. They got in way over their heads and now can't get out of debt. I'm sorry but I nor should any taxpayer be expected to bail them out.

The same applies to the lenders. The didn't enquire about income nor did they stick to previous criteria for creating mortgages. They just went with the flow and sign off on just about anyone who walked into the door. Now they will likely never see the money they lent out and now again us taxpayers are on the hook for some of these decisions.

I honestly think that the whole thing should be allowed to collapse and wash out all the bad decisions. Will the economy suffer? You damned right it will but that's the nature of the capital markets. Will the economy collapse? No. The American economy is strong enough to withstand such a shock to the system. The economy is diversified enough to pass through this eventually. Enough damage will be done though to make financial institutions think twice about ever doing these bad practices again.

As a free market capitalist, I hate any type of government intervention in the markets. I definitely don't like the government putting taxpayer money on the line to bail out bad decisions. Unfortunately I think Congress will need to enact laws and regulations limiting or defining how financial institutions make their mortgage decisions. They also need to put some teeth behind such legislation. Making corporate executives criminally liable for encourage or ignoring such practices might go a long way in ever creating another fiasco such as the one we face today.

Financial Bail Out

Unbelievable. The government is bailing out banks and financial institutions that made bad business decisions and bad lending practices. For all those bad practices, we the taxpayers are put on the hook for it.

Lehman Brothers and Merill Lynch fell and AIG needed an $85 billion government bail out to keep from going under.

What would happen if all the bad banks would go under? Probably the worse financial crisis since the Great Depression. I honestly doubt it. Our economy is much more diverse and stronger than back then. Sure the economy wild be shaken to its foundations but we'd survive. Plus all the deadwood banks and mortgages would be washed out of the system.

Instead, Uncle Sam extends a hand and puts the taxpayer to foot the bill. Now all those bad business practices will payoff. Banks that made bad decisions will survive. They will probably do it again in the future. Why? Cause Uncle Sam will get them out of trouble again.

So what should be the solution? I'm not sure except for one thing. Such actions should be criminalized. If a bank knowingly takes certain actions and makes certain decisions that pad the books that undermine the financial integrity of the institution then those actions should be subject to criminal prosecution.

I'll give an example. I work in the petrochemical industry. We have contracts with the government to supply jet fuel to the U.S. military. If someone falsifies data or neglects to fulfill parts of the contract, that person is criminally liable for those actions. Furthermore, if management becomes aware of a problem and neglects to take action, those in management become criminally liable.

Ah ha, you say, but that's because you are dealing with the federal government. Well, I say, banks are no different. They too are regulated by the federal government. Regardless, the government can enact laws banning certain practices and make those who break the law personally liable. In my example, not only are violators personally liable but the company is also subject to criminal prosecution and civil lawsuits by the feds.

I'd like nothing more that to have the government's hands off our financial markets. I'd like even further if banks, financial institutions and the people who run them not get greedy and not practice horrible decisions to achieve profitability. However, we don't live in a fantasy world and those ideal conditions won't ever exist. Instead, I prefer the government enact laws and regulations to curb these practices and not put the burden of the mistakes on the taxpayer.

Ike Passes & Aftermath

Riding Out the Storm
Power went out shortly after my last post. At about 4:30 a.m. I was officially in the full force of the storm.

Located on the 14th floor of Hotel Dietrich, I rode out the storm. Initially I wasn't to worried. The wind was howling and rattling the windows. The rain was swirling and coming down in sheets. I really wasn't rattled until the building shook. A gust of wind hit hard and I wasn't sure if I felt the building move or if it was my over active imagination. A few more gusts shook the windows and the building definitely shook. That rattled my nerves. From there on out it was trying to sleep while hoping for the best.

The hotel bistro was closed so they had buffets set up for guests. I slept through breakfast but made the lunch buffet. I should taken the clue when after I asked about dinner buffet I was told that lunch was the only meal they could prepare. Sure enough about an hour later the hotel announced that there was no water or power. The generator was running on low so all guests had to leave by 5:00 p.m.

I had a couple of places to go. Or so I thought. I first called a friend but he didn't answer. I called another friend be she didn't answer. I left my room at 4:00 p.m. thinking that someone would call me back soon. Nothing. I finally got a hold of the first friend. He was stuck at work and couldn't come get me. He told me to call his nephew to come and pick me up. No luck. I ended up having to call his sister. She and her husband picked me up a little bit after 6:00 p.m.

There was no power at their house. No surprise since 96% or more of the area was without power. I ended up staying two nights before I returned home. We had moved my car there Friday night to get it away from the flood zone that is my parking lot. It almost got taken out by a tree.

Before I came home we stopped at Kroger to get some canned goods and ice. There was an ambulance passing out some MREs so I picked up five and my friend's nephew picked up four for me.

There was no power when I got home. We had opened up the freezer to put the bags of ice in there. Bad idea. Everything had started to rot and stank to high heaven. After my friend's left I took a nice cold show, lit up the oil lamps and found my battery powered lantern. I started cleaning out the fridge by lantern light. Right as I took the last load out of the fridge the lights powered on. I was relieved but worried that they might not stay on. Thank God they are still functioning.

So aside from losing about two to three weeks of food and a tree almost smashing my car up, I came out of the storm unscathed. To top it off my supervisor just called and said I don't have to report to work this week. I go back in Monday morning.

Aaah, time to tackle some of the those projects I had time to do during my sabbatical.

Hope everything turns out well for all those affected by the storm.

Have a good one,
Unkle Monkee

Ike Hits Galleria Full Force

I am definitely getting full force winds now. The rain is coming down in sheets and the wind is pounding the windows. I can't see outside except for the few lighted areas left.

It's a little unnerving to hear the windows rattle and shake with the wind. I had intended to keep the two heavy shades and drapes open. The hotel memo recommended closing them. I'm not sure what protection they provide if any. I decided to close them just in case.

Well I think that's it from me tonight. I'm getting sleepy and no point staying up any longer.

Goodnight

Power Outages Through Out Metro Area

Over one million customers now without electric service and the worst part of the storm hasn't hit Houston yet. The news showed footage of transformers blowing out. It looked like a street level fireworks show. It also explains the odd colored lightning I saw earlier. Turns out that the odd colors were the transformer blowouts.

The rain is really coming down now and the winds are picking up. It's a little harder to judge how hard the wind is blowing since the street lights are and I can't see which directions the rain is blowing.

Local emergency services are still functioning. Unfortunately there is an ambulance in front of the hotel on the other side of the Loop. I also saw two cop cars with lights going west on Westhiemer.

The massive freeway light outside my window has just come back on. The rain is definitely coming down harder now. The light pole is swaying around in the wind.

A massive gust of wind just made my hotel windows make a loud rattle. There it goes again. This time I felt it as it hit the building. My area is getting tropical storm winds with the hurricane force winds coming within the next two hours or so.

The heaviest part of the rain just might miss where I'm at. It's hard to tell by the weather map. According to the latest projection of the spiral, the Galleria area might just get the tail end of the heaviest part of the latest storm spiral. Still a lot of rain though.

Downtown sensors are reporting over 69 mph gusts, Hobby Airport is reporting 83 mph gusts and Intercontinental is reporting over 60 mph gusts. Sensors in Galveston aren't reporting anymore. The Galveston tides are all over ten feet.

I just took my meds so I may be done for the night.

Making Landfall

The storm has made landfall in Galveston. The reporters are outside and making observations as the eye passes over.

Where I'm at the wind is starting to gust. The rain is swirling and the wind is whipping the rain occasionally against my window.

For the first time I look outside and don't see any cars on the road. Only car I saw is the security car driving around in the Galleria parking lot. I just saw a tank truck drive by. He's headed the south down the loop. I presume by that direction he's headed south to be ready to unload fuel.

The storm should be out of the metro area by my estimate at around 7 or 8 a.m. Not that I know what I'm talking about. Looking at the weather report, where I'm at still hasn't got hit with the worst. However the wind is picking up and the rain has gone from blowing diagonal to horizontal.

I don't know how much longer I'm going to be up. I may sleep through the eye and just read the reports in the morning.

The news just showed Clear Lake and it's taking a beating. Nothing like what is going on here in the Galleria. But that part of the storm is headed this way. Laporte is reporting 90 mph gusts. Nice. Just depends where next spiral is when it passes through my area.

I may post one more before I zonk out.

Quick Update

The reason rain isn't so bad yet is cause the first band that passed us wasn't that strong but the next one should be stronger. The worse part of it might miss where I'm at. It just depends on where the band is and how the storm has rotated as it passes my area.

One Hour to Landfall

725,000 customers without power now according to Floyd LeBlanc of CenterPoint Energy on local channel 11. He said that 750,000 was the power outage total for Hurricane Rita. They are expecting over 1 million in this storm.

The power surges and outages have stopped here at my hotel.

The rain has started coming down. Still it's not as strong as anticipated. The eye is about only an hour from Galveston. The rain is coming down in sheets and blowing diagonally.

The streets are empty now. I see an occasional car go by but now it's mostly emergency vehicles. The cop that was in the Zone D'erotica parking lot left. He was out there for at least six hours. Either that or they put a car there just for looks.

From my room it's pretty hard to judge how hard the wind really is blowing. I was expecting blinding rain and a heavy down pour. Instead it's a steady rain and lots of wind but not bad. I've been in thunderstorms that were a lot worse. I thought about going downstairs and looking outside see if I can get a better feel for the storm but I've decided to stay put.

A Galveston official was on TV saying that calls are calling in for rescue. The answer is no. They were told to leave because the entire island was going to be under water. There is no way they can get to them. People just are to freaking stupid and stubborn. They are the first to cry to when the you know what hits the fan.

I'm probably going to stay up for a few more hours and see how things progress. I don't think it's going to get any worse than lots of wind and rain. Of course, there is still the danger of tornadoes.

I'll probably post one more before I go to sleep.

One hour to go

According to the news it will be another hour before the area I'm at will start to get rain. They cut away to Baytown and it's getting hit hard. The reporter was at a hotel right down the street from where I live. I know where I'm at will get hit just as hard but I just feel better where I'm at. At the very least there are people around and if we have to hunker down in the ballroom it won't be lonely. I can't imagine sitting through this in my apartment alone. I wonder if power is out.

I unplugged everything at home to prevent any power surges from burning up.

The count down continues. Galleria area gets hit in 45 minutes. It's two minutes until 11:00 p.m.

Ike's Getting Closer

It's starting to lightning. Still no rain. Odd since Galveston is already getting pounded. The news showed the reporting just getting pelted.

Looking out my window I see exactly six cars driving around. When was the last time Westheimer was that empty? I see plenty of cops driving around. One has been sitting in the same spot in the Zone D'erotica parking lot. I thought maybe someone was riding the storm out there since a car was in the lot for hours. I saw a tow trucking hauling it off and the cop has been parked there ever since.

CVS was going to stay open through the store. The only ones they were going to close were the ones in the evacuated areas. I guess they changed their minds since the one across the street is closed.

In some weird twisted way this is exciting. I know how dangerous the storm is and how much damage it's going to cause but I'm getting some kind of cheap thrill sitting through it.

Just in: 315,000 homes without electricity according to CenterPoint Energy.

I expect the hotel power will go out soon. We keep getting brief outages. A memo was passed out saying if power goes out they have emergency power but it will be minimal power. Rooms will be in the dark and the air conditioning will be out. Power will only light the hallways and operate one elevator. They are also setting up one of the meeting rooms as a "shelter in place" in case people have problems with their rooms.

If power is still on later I'll post more.

I just had dinner in one of the hotel ballrooms. Sat with three couples. The elderly couple that sat with us was from Baytown. Just my luck I come into Houston and I meet people from Baytown. The man was telling us about his previous hurricane experiences. We told us the worse one was in the 1930s back before they used to name storms. The next was Carla in 1961. It was nice to meet a World War II veteran. He served in the navy during the war.

Even though the storm hasn't hit places are already starting to lose power. The Houston Chronicle is reporting up to 160,000 homes are out of electricity. My hotel had a brief outage.

These are my last pictures for the night. It looks more like someone nuked Katy but it's the sunset. Amazing since it's been cloudy all day.

I like Ike

No, I really don't like Ike. He screwed up my weekend plans. It was all football weekend starting with Houston Cougars vs. Air Force and then Houston Texans vs. Baltimore Ravens. The college game moved to Dallas and the Texans game will be played Monday evening. I hope to still go to the Texans game if I don't have to report back to work.

As far as the weather, it is getting cloudy and the wind has definitely kicked up. I was just outside and I can feel the wind but looking out my window I don't see the tree swaying. Strange. I'm also surprised it still hasn't rained. Landfall is less than eight hours out.

People I can tell are getting restless already. I went downstairs and the lobby was full. People were just sitting around talking and reading. The bar was full. They closed the hotel restaurant but they will be serving a buffet from 7-9 p.m. Good. I have supplies to get me through the weekend but you can't beat a good solid hot meal.

The latest pictures from my window:

Blogging Hurrican Ike

Hello all out there. I'm here holed up in the luxurious Hotel Detriech.

Right now is the calm before the storm. The first clouds are coming in right on time like predicted. I'll give the weathermen credit for getting it right.

Things are pretty quiet now that folks have either evacuated or holed in. Of course there are several idiots that are going to try and ride out the storm surge predicted at up to 20 feet.

These pictures are the view from my hotel room. They were taken about 12:30 p.m. Be safe and I'll post more later.

Good-bye Amy Winehouse

Sometimes is just best to let someone go down the path of destruction they've chosen. I'm all for giving second, third and fourth chances. As long as a person is making a genuine effort to turn things around I have no problem helping him out. When that person repeatedly continues to behave in a self destructive way and each episode is worse than the last, it is time to let go. In my opinion Amy Winehouse has reached that point. It's not really the amount of times she's drugged up and overdose that would turn me away from her if she were a friend or relative. It's actual amount of drugs and the increasing amount that she's allegedly taking. The latest news reports indicate that Winehouse went on a 36 hour marijuana binge.

Reports state that as a result of her latest binge she may have brain damage. Allegedly she's had two overdoses in the last year. Judging from the reports it appears that her problems are only getting worse and her attempts fail.

I know each case is different but the effort just doesn't seem to be there. Winehouse doesn't appear to be making any effort to try and rehab and stay sober. Of course, if the reports are true that she's brain damaged then it may be too late regardless of her efforts. She just might not be in her right mind to make the decisions to stay clean anymore. No matter what effort she puts in the capacity to think straight and make rational decisions may be gone.

What's a friend or relative do? It must be hard and heart breaking to see someone so close and that is loved to destroy herself like this. Evidently her father has put in a herculean effort to help her but so far all for naught. I have to wonder if there will be a point where raises his hands and gives up. I sincerely doubt it. The only way I see him giving up is if she is beyond reach mentally. I think she'd have to reach a near vegetative state for him to give up. And judging from reports, she just may be there now or very close.

It's sad to see someone with such talent waste away. I personally don't like her music.

I ask myself what would I do if I had a friend or relative in her shoes? I think at this point I'd have to let them go down their chosen path. If repeated efforts fail miserably and the amounts of drugs or alcohol are increasing, I'd just have to walk away. It would break my heart to do it but sometimes the effort isn't there or the desire to remain sober lacks. Why put myself through the emotional and physical exertion if the person isn't willing to help herself? All I would do is point them to a hospital or rehab center and go my own way. I would turn my back not out of lack of caring but because I care. If I put in all my time and effort to help someone and they can't put in the effort it would eventually take a toll on me. It would wear me down. It would make no sense for me to keep hitting my head against the wall. Also it would bring me down emotionally and I just couldn't bear to watch someone I love destroy themselves. It would be a defense mechanism to walk away. The addiction cuts both ways. It hurts the user and those around them. I just would have to protect myself and my well being by going in a different direction than the addict. It's sad but it's the truth.