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Old 03-18-2011, 05:57 AM
 
Location: Los Angeles area
14,017 posts, read 19,617,185 times
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Short article in yesterday's Los Angeles Times business section entitled "Six more banks repay U.S. bailouts". Here is the first sentence: "Six banks are repaying their government bailouts, bringing the bank capital program close to 99% recovery."

So while I agree that the idea of government bailing out banks with taxpayer money is disgusting on its face, the fact that the bailouts have been almost entirely repaid seems to get lost in the general complaining. I am suggesting that maybe the whole bailout thing was smarter than we realize; suppose it had not been done and the mega banks had gone under. This would have swamped the FDIC and people would not have been able to get their money out, so the bailouts may have saved the assets of everyone, including lots of average Joe's. A generalized collapse of our entire economy, i.e., a full and severe depression, may have been averted. The people who made the decision to bailout banks were not necessarily operating in bad faith, although we should always remain suspicious of the motivations of the high and the mighty.
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Old 03-18-2011, 08:18 AM
 
Location: western East Roman Empire
8,690 posts, read 12,711,794 times
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US credit and housing policy was like a person getting shot in the foot, the bail-out was like amputating it to save his life while the perpetrators and witch doctors get away.

Yeah, so it seems to have worked, but now the country sort of hobbles on one foot, while the ones who pulled the trigger get away, that's what was disgusting about it: Mr Paulson said to the nation, on behalf of his bankster friends, "I inflicted injury to your foot. Now, either you pay me to amputate it, or I'll kill you."

I do not perceive that, as a result of its recent credit and housing policy, the US has more intelligent housing, more beneficial domestic transport policy, or more intelligent and beneficial use of space, zoning, and energy. Nor does it have more intelligent and beneficial demographic and education policies.

I perceive that banksters and oilmen continue to make outsized profits, like monsters with overgrown heads, hardly well-balanced, sort of hobbling on one foot, in at least relative decline.

That is the USA today, both domestically and on the international stage.

Last edited by bale002; 03-18-2011 at 08:45 AM..
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Old 03-20-2011, 08:43 AM
 
12,521 posts, read 11,818,663 times
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Quote:
So while I agree that the idea of government bailing out banks with taxpayer money is disgusting on its face, the fact that the bailouts have been almost entirely repaid seems to get lost in the general complaining. I am suggesting that maybe the whole bailout thing was smarter than we realize; suppose it had not been done and the mega banks had gone under. This would have swamped the FDIC and people would not have been able to get their money out, so the bailouts may have saved the assets of everyone, including lots of average Joe's. A generalized collapse of our entire economy, i.e., a full and severe depression, may have been averted. The people who made the decision to bailout banks were not necessarily operating in bad faith, although we should always remain suspicious of the motivations of the high and the mighty.
I don't think most people had any idea what they were looking at if George W. Bush had not made the original decision to set up TARP and extend loans to banks that were at risk. We take the ease and convenience in our lives for granted and sometimes cannot imagine a world that would be infinitely much more difficult.

Since none of these things came to pass, it can be hard to get people to use their imagination, but without the "bailout" as its commonly called we would have seen the following:

1. You drive up to a gas pump to insert your credit card or debit card and pay for gas only to learn that VISA, MASTERCARD, and DISCOVERCARD have shut down their operations and you can't get gas.

2. Imagine the same scenario with every business in this country. People on vacation are stranded because their credit cards and debit cards no longer work. People can't get food at the grocery store, people can't shop for clothing, and essentially can't conduct any business transaction where they don't have cash in their hand.

3. Businesses cannot meet payroll because they can't borrow to get them through tough periods. It doesn't matter anyway, because they have no customers who can purchase anything from them.

When the "bailout" took place in 2008, most people have no clue just how bad things had gotten. Mitt Romney believed that the whole financial system in this country was on the verge of collapsing--not in days--but literally in hours.

Many people do not realize that programs like TARP ("bailouts") are not new. The United States participated in previous presidential administrations in bailouts of countries like Indonesia, Malaysia, and Mexico. It would indeed be ironic to bail out foreign countries, but refuse that same help to Americans and American institutions. Each of the above-mentioned countries has gotten back on its feet since this occurred. What makes bailouts necessary is the unpredictable severity of the "business cycle". Business cycles or recessions and even depressions are a feature of capitalism. Business cycles can't be eliminated, but governmental policy can make such cycles shorter and less severe through prompt action.

I agree the bailout has worked even if the economic recovery in this country is just beginning after 2 and 1/2 years. Naysayers will continue to criticize the recovery and talk about how weak it is. What they will refuse to acknowledge is the out-and-out economic depression that would have occurred if government had stood by and done nothing as many in the Tea Party seem to advocate.
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Old 03-20-2011, 09:03 AM
 
Location: Maine
3,175 posts, read 2,289,126 times
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The Bailouts should have included a large monetary penalty, to teach the banksters a lesson in risky behavior.
The only thing they have learnied is to bet big the tax payers got there back!

Here's an example:
Lets say I cash in my 401k, empty my bank account, take a second mortgage on my home go to Vegas and bet everything on black 23, If I lose I then lose everything, my Home, probably my job, retirement, etc. Why should i not do this? because the chance of loss is too great. But if I know my rich uncle Sam will bail me out, and if I lose I can just pay him back and do the same thing again a few years later, Why not!

I think the bailout's should have come with x2 the payback amount and strick 10 year limits on executive pay and bonuses.


bill
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Old 03-20-2011, 09:15 AM
 
Location: Warwick, RI
4,140 posts, read 4,929,242 times
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Quote:
The Bailouts should have included a large monetary penalty, to teach the banksters a lesson in risky behavior.
Had they done that, they never would have been able to get the larger banks who didn't need bailouts, namely JP Morgan and Goldman Sachs, to go along with the program.


Quote:
I think the bailout's should have come with x2 the payback amount
It pretty much did, when you consider the dividends that the banks were forced to pay the Treasury Dept, and the fact that each bank that accepted the bailout funds also issued the Treasury Dept millions of stock warrants at market low prices.
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Old 03-20-2011, 09:17 AM
 
Location: Warwick, RI
4,140 posts, read 4,929,242 times
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Quote:
the fact that the bailouts have been almost entirely repaid seems to get lost in the general complaining.
That's because the general complaining has now been toned WAAAAY down over the lst two years, because the folks who started all the class warfare outrage in the media won their election bid and now have to actually work with Wall Street instead of demonizing them to win the votes of the uneducated masses.
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Old 03-20-2011, 12:25 PM
 
8,265 posts, read 11,540,612 times
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Quote:
Originally Posted by roadrat View Post
Lets say I cash in my 401k, empty my bank account, take a second mortgage on my home go to Vegas and bet everything on black 23, If I lose I then lose everything, my Home, probably my job, retirement, etc. Why should i not do this? because the chance of loss is too great. But if I know my rich uncle Sam will bail me out, and if I lose I can just pay him back and do the same thing again a few years later, Why not!
You losing everything mainly affects you, most of the large banks in the U.S. failing would have been economic catastrophe for everyone.
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Old 03-20-2011, 12:31 PM
 
28,900 posts, read 50,767,796 times
Reputation: 46374
Quote:
Originally Posted by Escort Rider View Post
Short article in yesterday's Los Angeles Times business section entitled "Six more banks repay U.S. bailouts". Here is the first sentence: "Six banks are repaying their government bailouts, bringing the bank capital program close to 99% recovery."

So while I agree that the idea of government bailing out banks with taxpayer money is disgusting on its face, the fact that the bailouts have been almost entirely repaid seems to get lost in the general complaining. I am suggesting that maybe the whole bailout thing was smarter than we realize; suppose it had not been done and the mega banks had gone under. This would have swamped the FDIC and people would not have been able to get their money out, so the bailouts may have saved the assets of everyone, including lots of average Joe's. A generalized collapse of our entire economy, i.e., a full and severe depression, may have been averted. The people who made the decision to bailout banks were not necessarily operating in bad faith, although we should always remain suspicious of the motivations of the high and the mighty.
Actually, that article you quote contains a big fat hairy lie. Last year, the government rejiggered their definition of 'paying back' as a way of disguising how much bad paper has either been written off or been taken on by the American taxpayer. If I had time, I'd dig out the article, but it's just a terrible fraud.
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Old 03-21-2011, 08:47 AM
 
22,769 posts, read 28,809,827 times
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Originally Posted by markg91359 View Post
I don't think most people had any idea what they were looking at if George W. Bush had not made the original decision to set up TARP and extend loans to banks that were at risk.

--snip--


I agree the bailout has worked even if the economic recovery in this country is just beginning after 2 and 1/2 years. Naysayers will continue to criticize the recovery and talk about how weak it is. What they will refuse to acknowledge is the out-and-out economic depression that would have occurred if government had stood by and done nothing as many in the Tea Party seem to advocate.

You may believe that VISA would have failed, and gas stations would have dried up, and grocery stores would closed down, etc., if Citi and AIG and Goldman Sachs had not been given trillions of dollars...

but personally I think you were just sold a big load of manure. I see no reason that saving the banking system necessitated saving certain failed firms.
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Old 03-21-2011, 08:49 AM
 
22,769 posts, read 28,809,827 times
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Quote:
Originally Posted by Escort Rider View Post
So while I agree that the idea of government bailing out banks with taxpayer money is disgusting on its face, the fact that the bailouts have been almost entirely repaid seems to get lost in the general complaining.
If you think the "bailouts" have been repaid, then you don't understand what the bailouts were in the first place. TARP is only one of the "bailouts." Don't forget TSLF, PDCF, TOP, AMLF, CPFF, MMIFF, TALF, TPP, QE, Maiden Lane I, II, and III, FASB rule 157, and the whole litany of stuff that they didn't even bother giving a name. The more complicated they make it, the less you know where taxpayer money is going.

You know, I'd sure like to be able to borrow a few billion dollars from the treasury, at basically no interest, and then turn around and lend it to somebody else at a higher rate. And I could just keep doing that over, and over, and over. That'd be really neat. I'd also like to have some government sponsored entities to back my risk, while I get all the upside.

OH, and I'd like to pretend that my Toyota pickup truck is an asset worth $100 million dollars. On the basis of that, I oughta be able to find some government entity to lend me about $3 billion, with which I will make some bets in the stock market.

Last edited by le roi; 03-21-2011 at 09:53 AM..
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