Do you know enough about the pros and cons of the $700 Billion Dollar bail out to have an informed opinion? (2010, percentage)

[Refugee56]

I doubt many people in the media, in Congress or the general public know enough about banking, finance, economics and our financial system to really have an informed opinion. So why bother to discuss?

[Wild Style]

Originally Posted by Refugee56

I doubt many people in the media, in Congress or the general public know enough about banking, finance, economics and our financial system to really have an informed opinion. So why bother to discuss?

I have a degree in economics. Feel fairly confident about understanding the issues. So do MANY people on this board (hat tip to tallrick, bay, heydade, micea and MANY others).

It isn't that complex, let me illustrate.

Bank is in trouble. Fed buddies bails them out. U.S. prints money to cover this via debt creation (thats how our money supply grows). This moves stops some bleeding for a bit and helps save SOME jobs. Inflation kicks in (thats what happens when you devalue money via the printing presses). Cost for goods go up, and on and on and on. Outcome = not so good.

Thats the short version, we can have a long version talk if you like.

A lot of people on these boards are JUST getting started in understanding economics. Many get confused between short term and long term trends (long term is what matters). But hey, you gotta start some where. Those that get stuck in their misunderstandings will never get it. They can just be observers as history unfolds. Then there are those who will learn and grow with every misunderstanding they have. someone will point out those misunderstandings, they will hit the books. Research more, get richer from the knowledge and be able to make informed decessions based on that.

I just hope many more get it than not and soon. November is critical, we all have to understand the ends and outs of this thing of ours. We also have to understand the domino effects of all this. That is going to be key to truly understanding economics and all this mess. How does x effect y and then lead to z.

[hello13685]

My big question that seems to have gone unaddressed by the media is this: Will banks repeat/continue their shady lending practices, therefore keeping housing prices high. Paulson and Bernanke have made no secret of the fact that keeping housing prices high is one of their primary objectives.

[HappyTexan]

And what happens to all the new resets next year that may go bad ?
Is this an open ended bailout ?

[BigJon3475]

Originally Posted by HappyTexan

And what happens to all the new resets next year that may go bad ?
Is this an open ended bailout ?

If approved 2010 for up to $700 billion....If more is needed I think the next president will have to ask for it.

[hello13685]

Yeah, so it seems that it will take care of resets. It's ongoing.

[Grizzmeister]

I understand in broad terms what the bailout entails but as they say, the devil is in the details and those haven’t been thoroughly worked out yet.

It must be understood, however, that this situation did not occurred because of incompetence but because of greed and corruption. Any plan that does not provide for oversight by an ethics committee with legal accountability may very well end up costing us taxpayers even larger amounts of money.

This economic disaster clearly demonstrates what can happen when logic is discarded in favor of blind faith that reality and associated consequences can be averted. When house prices were increasing at double digit percentages regulators with ethics should have intervened. Does this foreshadow how this bailout will be handled? I suspect it might if we don’t stay informed and demand accountability from our leaders.

[Nor'Eastah]

YES we should continue to discuss regardless of knowledge level. Everyone has something to share; everyone has something to learn. The dissemination of information is essential to the "great conversation" that needs to take place regarding all of this. If you are a citizen, you need to be as well-informed as possible.

This situation will not improve until more and more of the citizenry can make informed decisions regarding economics. With the elections coming up (for Congress, not just the presidency), it is imperative that we get as many folks as possible up to speed.

There is no excuse for ignorance!

[KarlaT2]

Originally Posted by Wild Style

I have a degree in economics. Feel fairly confident about understanding the issues. So do MANY people on this board (hat tip to tallrick, bay, heydade, micea and MANY others).

It isn't that complex, let me illustrate.

Bank is in trouble. Fed buddies bails them out. U.S. prints money to cover this via debt creation (thats how our money supply grows). This moves stops some bleeding for a bit and helps save SOME jobs. Inflation kicks in (thats what happens when you devalue money via the printing presses). Cost for goods go up, and on and on and on. Outcome = not so good.

Thats the short version, we can have a long version talk if you like.

A lot of people on these boards are JUST getting started in understanding economics. Many get confused between short term and long term trends (long term is what matters). But hey, you gotta start some where. Those that get stuck in their misunderstandings will never get it. They can just be observers as history unfolds. Then there are those who will learn and grow with every misunderstanding they have. someone will point out those misunderstandings, they will hit the books. Research more, get richer from the knowledge and be able to make informed decessions based on that.

I just hope many more get it than not and soon. November is critical, we all have to understand the ends and outs of this thing of ours. We also have to understand the domino effects of all this. That is going to be key to truly understanding economics and all this mess. How does x effect y and then lead to z.

Ah, an economist. I have questions! Do you not think there was some danger of all the banks melting down, not just the ones being bailed out this week? I had heard that some money market funds were down to .97 cents on the dollar on Friday. It sounded like a potential ripple effect that could have impacted everyone. Do you not agree?
Maybe you or someone can tell me why the short sellers that were not able to do any short selling yesterday were saying the prices were inflated since they couldn't short the stock? People can still sell a stock if they own it. I don't understand why short selling is allowed, and how it can even be beneficial? Can anyone explain that to me?

[Gematria]

Originally Posted by Grizzmeister

I understand in broad terms what the bailout entails but as they say, the devil is in the details and those haven’t been thoroughly worked out yet.

It must be understood, however, that this situation did not occurred because of incompetence but because of greed and corruption. Any plan that does not provide for oversight by an ethics committee with legal accountability may very well end up costing us taxpayers even larger amounts of money.

This economic disaster clearly demonstrates what can happen when logic is discarded in favor of blind faith that reality and associated consequences can be averted. When house prices were increasing at double digit percentages regulators with ethics should have intervened. Does this foreshadow how this bailout will be handled? I suspect it might if we don’t stay informed and demand accountability from our leaders.

Well said.