Email from my U.S. Congressman

[whandley]

I recently sent off a communication to my congressman. I received this response today. You'll also be able to view my continuing communication this evening.

---- Original Message -----
From: Congressman John Campbell
To: willhandley@cox.net
Sent: Friday, October 03, 2008 2:55 PM
Subject: Reply from Congressman John Campbell

Reply below....


October 3, 2008

Mr. WIll Handley
Laguna Niguel, CA 92677-2399

Dear Mr. Handley:

You are one of many people who called, wrote, or e-mailed my office with questions or opinions about the Emergency Economic Stabilization Act of 2008. As you probably know, the bill was passed by both houses of Congress, signed by the president, and is now law. The vote in the Senate was 74-25 and included yes votes from a wide range of the political spectrum including both Senators Obama and McCain, both California Senators, and the most conservative member of the Senate, Tom Coburn (R-OK). It then passed the House by a vote of 263-171 which included yes votes from The Speaker, Majority Leader and Minority Leader.

I didn't vote for any of the politicians listed above, however I did vote for you!

As you may also know, I voted in favor of the bill and was a strong advocate of it. I hope you will take the time to read on so I can explain why I feel so strongly about this legislation.

I also feel strongly, against government social and financial engineering at my expense. I won't be voting for you again....

First of all, if you are personally opposed to the bill it is probably because you are against a $700 billion bail out of Wall Street. You should be against that. I am too. But that media term for the bill is a complete mischaracterization of what the bill does. It will not cost $700 billion and it is not a bail out of anyone. Let me explain:

Of course its a bail out of wall street. It's also not $700B its $847B. You've socialized the housing market and will now have the federal government providing "Ownership" housing as an entitlement to millions of legal and illegal property owners who were not supposed to be in possession of a property to begin with. The congress's involvement through the likes of Fannie, Freddie and Acorn have caused the problem and you will now pass the expense of this continuing saga along to me.

$700 Billion: This amount will not be spent. It is being invested in hard assets (mortgages secured by homes) which will have an expected cash flow in excess of the purchase price. So the taxpayers should get all their money back that way. But if that doesn't work, taxpayers will also get warrants (stock options) in the companies from which these assets are purchased. So, if those companies recover, taxpayers get part of profits. And if both of those don't get the whole $700 billion back, whoever is president in 5 years is required to submit to Congress a proposal to get any loss back from the companies who sold the government the assets. That's 3 different ways to be sure the taxpayer is made whole and maybe makes a profit. This bill may wind up costing less than one year's worth of earmarks.

Let's start with option #3 first. You expect Senator Obama to come up with a plan as President to get as much as $700B back from the financial entities around the world who hold the paper on these, in many cases worthless homes? Options #1 and #2 both involve getting "MONEY" back from the financial entities you so neglegently gave my tax dollars to for this bail out. If any of these options comes to fruition, it will involve more government taxes or the financial entities simply raising all the fees to its customer base to recover same.

Bail Out: The assets will be bought from companies at probably 30%-60% of what they paid just a year or two ago. If I offered to buy your house that you bought 2 years ago for half what you paid for it, would I be bailing you out? I don't think you would look at it that way. These companies will lose lots of money. Fine. They made an investment that went bad and they have to live with it. But they will not be bailed out. Many companies and a number of banks will still fail even with this bill. The purpose of the purchase is to cut out the cancer that is clogging the world's financial arteries so that credit and loans and cash can flow again. No one is being bailed out.

The free capital market will decide that question. There are millions of properties currently in foreclosure and or already in bank REO inventory. They're available in the current housing market at 50% off now and the inventory is still growing as a result of the slow sales environment. Let's review, the government will end up owning maybe 3-4 million homes and be involved in up to 50% of the total mortgages across the country. You've stopped self employed stated income borrowing. You've hopefully stopped giving zero down or 125% loan to value programs to people who can't afford to rent, much less own and maintain a home. You're going to continue to grow the blight conditions in many areas as a result of neglegent homeowner ship, which by the way may spread to other areas causing good homeowners to experience additional value depreciation of their properties.

Wall Street: If we do nothing, expect to see many days on the stock market like Monday, September 29th when the stock market suffered its biggest one day point drop ever. That will devastate the retirement plans of millions of everyday people. All forms of credit have already dried up. If they dry up more, companies small and large will not be able to get standard short term loans to buy inventory and make payroll. That means lots of job losses and layoffs. And people with money market funds and bank accounts may not be able to get their money, even with FDIC Insurance because these entities have to sell a loan to get you cash. And no one is buying the loans.

That is total speculation! Rather than letting the market seek its own water level, we'll let congress continue to jack up one side of the pool, trying desperately to re-engineer the system just a little bit more. Since I own stock in my IRA, have money in multiple banks and own multiple properties I have a very good idea what the bail out will accomplish. Rather than have a free market adjustment in my stock portfolio, which would lower the cost of everything, not just my stock value, you'll continued to bleed me and the general population dry through a series of pork barrel spending programs, increased taxation and devaluation of what little money we have left. What a concept!

Many different proposals were looked at and discussed. I was actually part of a working group appointed by the Republican Leader to develop an alternative plan, which, in fact, developed several provisions that were included in the final bill. Our goal was to develop a virtually cost-free plan to stabilize the global financial markets and save every American's savings and investments, not a bail out. I believe that the final bill meets these criteria. There is no guarantee that this bill will work. But I have not seen an alternate plan that I thought had a better chance to both work and pass both houses of Congress.

Are you serious? Cost free and the govenment is a contradiction in terminology! I believe Ronald Reagan said, "Government is not the solution, it's the problem"... As of today, that appears to be the biggest understatement in the history or our country.

If the bill works, some banks will still fail and some companies will still not make it. But it will be far, far fewer than would have otherwise occurred. Some of you have asked me why a believer in free markets would support this bill. I have done so because I believe this is a solution to preserve free markets, not replace them. In some ways, this bill is more of a free market solution than other actions that have been taken. The government will not take over any companies here. Even the warrants will be non-voting. No one will be compelled to sell the government their assets if they don't want to. Even the "reverse auction" process of establishing pricing for the assets, where sellers submit bids to one buyer rather than the other way around, is a market based pricing method.

If the bill works? You're not sure? More banks will still fail? With the FDIC spending more of the publics money? You mean the $847B you approved today isn't going to cover your science experiment?

No one wanted this bill. No one wished for this crisis to occur. But it is here. This is a worldwide problem and not just an American one. And we had to act. My vote was carefully considered, but made without reservation. I applaud my colleagues, both Republican and Democrat, who joined me in doing so.

The biggest financial disaster in American History. Not a single government official, employee, political oversight position or person responsible for keeping an eye on the peoples money has been fired, terminated or resigned. Congressman you are very fortunate to be an elected official on the taxpayers payroll, if you worked anywhere else, you and most of your esteemed colleagues would be unemployed. Justifibly so I might add...

I appreciate the great honor you have given me by allowing me to represent you in the United States Congress.

I remain respectfully,

JOHN CAMPBELL
Member of Congress


Sincerely,

Will Handley
Laguna Niguel, CA
Taxpayer

[Brian E. Kelly]

Wow the govt will be involvedin 50% of the housing market Will? How do you make this crap up? You Palin could use another speech writer.

[whandley]

Originally Posted by bkelly2

Wow the govt will be involvedin 50% of the housing market Will? How do you make this crap up? You Palin could use another speech writer.

Do you know who currently owns and operates Fannie and Freddie? Do you have any idea what % of the nationwide mortgage portfolio they control?

I thought not...

Paragraph #3
http://news.bbc.co.uk/1/hi/business/7505152.stm

And you Sir would be perfect for Obama....

[Brian E. Kelly]

So the more than 50% of loans that fannie and freddy own are ALL IN DEFAULT? Oh my.

And of those mortgages that are truly in default, the property tied to those notes have NO VALUE WHATSOEVER? Really?????

What did we lose in the last week or two with the stock market dive? More than 700 billion perhaps?

After years of Govt inaction and Lehman, Aig, etc going hell bent for leather buying up all the bad paper something had to be done.

[whandley]

We'll never know the true value as the Government just bought up all the trash. Here's an example that I ran into this week:

Rural property in Temecula, CA. Bought 3 years ago for $795K, its been completed stripped and trashed and sold to my client for $125K which is basically the dirt value. Do you think the Fed is going to get a $670K discount on a property like that from any bank or lending institution when they buy bulk REO portfolios?

I'm guessing you don't deal in bulk REO portfolios. No one looks at these packages, that's how all the institutional investors got screwed. They're supposed to have a balance of good, moderate and poor rated loans and properties within each portfolio. A balanced package of risk so to speak. To bad it doesn't work that way. The lenders package as much crap into the portfolio as possible. The Fed will be even less attentive than the corporate financial investors.

We the people, with the exception of you of course, are going to get screwed, again and again and again.....

[Brian E. Kelly]

Originally Posted by whandley

We the people, with the exception of you of course, are going to get screwed, again and again and again.....

I know Will, not much different here. Dammed if we do dammed if we don't.

Not to mention what is left of my 401

My last wife was a Mortgage Banker and I have an inkling as to how the paper gets bundled and sold, and how mortgage sellers made serious dough. Can you say Yield Spread Premium?????????

[whandley]

Just before the congressional vote today, the market was up about 250 pts... The bail out passed and the market went south over 500 pts...

Hmm, don't worry if the first $847B doesn't fix it, we'll have some more meetings and political speak on how Bush and the Republicans totally screwed up the bail out. Only to find out it wasn't big enough to jump start the economy and what was really needed was another trillion or so....

You dems won't be able to blame this on the GOP for ever. You're soon to be in charge of most state governments, both houses of congress and have a full blown socialist in the white house. It's going to be an interesting next eight years....

[Brian E. Kelly]

Originally Posted by whandley

Just before the congressional vote today, the market was up about 250 pts... The bail out passed and the market went south over 500 pts...

Hmm, don't worry if the first $847B doesn't fix it, we'll have some more meetings and political speak on how Bush and the Republicans totally screwed up the bail out. Only to find out it wasn't big enough to jump start the economy and what was really needed was another trillion or so....

You dems won't be able to blame this on the GOP for ever. You're soon to be in charge of most state governments, both houses of congress and have a full blown socialist in the white house. It's going to be an interesting next eight years....

Will, I believe there is enough bipartisan blame to go around, it is shame we are in this mess.

[Jae Williams]

[quote=whandley;420360]Just before the congressional vote today, the market was up about 250 pts... The bail out passed and the market went south over 500 pts...

It's going to be an interesting next eight years....[/quote]

Last Monday there was talk of a bailout--the stock market took the biggest hit (points, not %) ever. The house turn down the bill and the market started climbing.

Then Wednesday the Senate passed their vote and the market went into hiding again. But Thursday, there were rumblings that the House was going to say no again--and the market went up.

"Just before the congressional vote today, the market was up about 250 pts... The bail out passed and the market went south over 500 pts... "

Yep..."It's going to be an interesting next eight years..."

It's going to be interesting Monday.

The good thing is I have the rest of my life to make up the loss...the bad thing is I'm over 70 years old--I should live so long...

[whandley]

Here's an email I received today from Barbara. I don't think she's heard the bad news today about California being broke and needing to borrow $7B from the feds just make monthly expenses..

As you can see from her email, we should all thank the lord for the US Congress. With out them we just couldn't function...


Dear Mr. Handley:

Thank you for contacting me regarding the financial rescue legislation (H.R.1424). I appreciate hearing from you on this critical issue.

The fundamentals of our economy have been shaken, and Americans are deeply concerned. When Secretary Paulson and Chairman Bernanke placed an urgent phone call a few weeks ago to Congress to say we needed emergency action to prevent a major financial meltdown, I expected they would come forward with a plan that was targeted and reasonable, with appropriate oversight and taxpayer protections.

Unfortunately, what they brought us was a $700 billion blank check, which they asked us to sign with no questions asked. This plan contained no oversight, no taxpayer equity, and no control over CEO pay. I strongly opposed this proposal - and thanks to your phone calls, e-mails, and letters, Congress stopped it in its tracks.

The Senate made major improvements designed to strengthen our economy and protect our taxpayers. Instead of a blank check, the Senate plan included significant Congressional oversight, equity for taxpayers, curbs on executive compensation, an increase in FDIC insurance protection for bank depositors, middle-class tax relief, and job-creating tax incentives for renewable energy. The bill passed the Senate by an overwhelmingly bipartisan vote of 74-25 and the House by a vote of 263-171.

These were very important changes. But let me be honest: There were still aspects of this package that I didn't like. I preferred the government acquiring more equity instead of toxic assets. I wanted the package to be put forward in smaller installments and to include more checks and balances to make sure it would work.

For me, the deciding factor in my Yes vote was information I received from the State of California. I was told by the Treasurer's office that without access to credit, which is the goal of this legislation, California wouldn't be able to sell voter-approved highway, school, and water bonds that are desperately needed for our economy and the creation of good-paying new jobs. In addition, I was told by the Governor's office, that without action, our state might be forced to withhold funds for law enforcement, schools, and other needed services. This would bring our state to its knees and many middle-class families would be in deep trouble. Small businesses are beginning to tell me they cannot get lines of credit to meet payroll, as well.

Rest assured, I will continue to speak out forcefully about the failures that led us to this place and keep working with my colleagues to strengthen confidence in our markets, protect the American taxpayers, and enact regulatory reform to ensure that we don't end up in this mess again.

Again, thank you for writing to me about this very important matter. Even though you may feel frustrated with the outcome of the legislation that passed, your voice absolutely resulted in the enactment of a better bill. Feel free to contact me again about any issue of importance to you.


Barbara Boxer
United States Senator

Please visit my website at http://boxer.senate.gov

[Michael Larson]

Will, I guess your cards, letters and phone calls where only good to stop the first attempt.

She didn't mention the overwhelming opposition for the second attempt.

Hope everything works out in CA but I'm sorry this bill won't help.

Kick them all out.

[Joseph Burkeson, CMI]

Any given Sunday, err I mean Sundae.