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Old 09-19-2008, 06:00 AM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 22,485,552 times
Reputation: 3587

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They are going to set up a resolution trust to pay off the all the bad debt banks are holding and get the weight out of the economy. Apparently Wall St loves it- the market was up over 400 points yesterday and futures this morning are the highest on record (up 350) which means we are looking at another block buster rally today.
The question I have is this- when they talk in "trillions" of dollars, that seems like a lot of money to me. I mean, I know a "billion" is chump change to the government but a "trillion" seems like it would be serious money even to the government. So what I wonder is where this will come from in the end and who is going to pay for it. Will they borrow it from China? Will they print it up? What is the danger of inflation? A tax increase? A loss of the AAA rating on government debt?
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Old 09-19-2008, 11:02 AM
 
Location: Assisi, Italy
1,845 posts, read 3,995,372 times
Reputation: 354
Quote:
Originally Posted by KevK View Post
They are going to set up a resolution trust to pay off the all the bad debt banks are holding and get the weight out of the economy. Apparently Wall St loves it- the market was up over 400 points yesterday and futures this morning are the highest on record (up 350) which means we are looking at another block buster rally today.
The question I have is this- when they talk in "trillions" of dollars, that seems like a lot of money to me. I mean, I know a "billion" is chump change to the government but a "trillion" seems like it would be serious money even to the government. So what I wonder is where this will come from in the end and who is going to pay for it. Will they borrow it from China? Will they print it up? What is the danger of inflation? A tax increase? A loss of the AAA rating on government debt?
I don't think that this is accurate.
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Old 09-19-2008, 11:07 AM
 
3,763 posts, read 11,371,965 times
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WASHINGTON — An enormous, taxpayer-financed program to buy up bad mortgages and other distressed debt is necessary to protect the savings and aspirations of millions of Americans, Treasury Secretary Henry M. Paulson Jr. said on Friday.

From the nY Times article this morning.

Maybe not all of banks bad debt, but certainly a huge sector of it.
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Old 09-19-2008, 11:10 AM
 
Location: Fort Myers Fl
2,305 posts, read 2,806,639 times
Reputation: 920
I think they are just trying to get sovereign wealth funds to come back to the US. As far as who pays for it. I believe Joe taxpayer is going to get a chance to contribute.
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Old 09-19-2008, 11:15 AM
 
Location: Broward County
2,517 posts, read 10,291,346 times
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my friend who is going through a foreclosure just wanted to say thank you to everyone on City-Data.com forums for buying his home from him. He appreciates it !
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Old 09-19-2008, 11:19 AM
 
Location: Wherabouts Unknown!
7,805 posts, read 17,600,773 times
Reputation: 9435
thebigr wrote:
I think they are just trying to get sovereign wealth funds to come back to the US. As far as who pays for it. I believe Joe taxpayer is going to get a chance to contribute.
Don't ya just love it when the government gives us yet another opportunity to contribute?
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Old 09-19-2008, 12:12 PM
 
Location: Beautiful Upstate NY!
13,818 posts, read 26,237,763 times
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A little levity and humor in the situation...

Uncle Sam wants to own your bank and house - Top Stocks Blog - MSN Money
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Old 09-19-2008, 12:40 PM
 
Location: Great State of Texas
86,068 posts, read 76,971,871 times
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Quote:
Originally Posted by heydade View Post
my friend who is going through a foreclosure just wanted to say thank you to everyone on City-Data.com forums for buying his home from him. He appreciates it !
Tell him "you're welcome" but we're still gonna foreclose on his house !
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Old 09-19-2008, 04:31 PM
 
Location: Great State of Texas
86,068 posts, read 76,971,871 times
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I'm confused on something. I read that this new plan of taking these bad mortgages will cost about $2-300 billion. Yet the bad debt they are taking over is around $2-3 trillion from other articles.

And before this plan they injected almost $1 trillion via bailouts and loans.

This doesn't add up.
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Old 09-19-2008, 04:32 PM
 
Location: San Diego California
6,797 posts, read 6,651,031 times
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If you only knew how much this was going to cost you, you would be really really depressed.
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