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I'm just concerned that taking the course as you suggest would damage the entire economy and I don't want to lose my job because banks couldn't loan my company money.
And I don't want to see China or Saudi Arabia buying up American real estate at discounted prices.
What do you not understand about elevated prices? I don't think the House of Saad or China want overvalued real estate. Our economy is and has been damaged. What you are stating is you want to keep the Status Quo instead of fixing the economy.
People don't get that we have had bear markets and bank failures for 4,000 plus years and it is not going to stop now. Companies that make bad decisions that threaten their existence need to FAIL to teach everyone the correct lesson. Instead people on this board seem to advocate giving these companies our money via corporate welfare. If we have all our major banks fail do you think other banks will not open and have learned an important lesson so they don't have this happen again? EVERYONE TRY AND READ SOME FINANCIAL HISTORY AND QUITE GIVING IGNORANT COMMENTS TO SUPPORT A FLAWED SYSTEM. This of course is not towards people who support letting the free market do what it does best, set proper price levels and expunge excesses. If you only want things to go up and never down then you should move to a socialist country were they take care of you and tax you so everything is always ok. The is America, land of the hardworking and a place where you can build something from nothing and not have it taken from you unless you break the laws.
Of course people aren't ignorant as long as they agree with you right? I don't mean to be disrespectful but that's how it reads to me....No room for any other opinion? It's letting the market run itself that got us here to begin with IMO.
Of course people aren't ignorant as long as they agree with you right? I don't mean to be disrespectful but that's how it reads to me....No room for any other opinion? It's letting the market run itself that got us here to begin with IMO.
Please give a real opinion that gives a real alternative. So far I keep reading comments that are all in support of a flawed plan. Its not just my opinion but a theory called the free market. The free market did not get us here but no regulation of complex insurance products and excessive leverage because of extremely low interest rates did. Lets call a spade a spade. Your right about name calling, I apologize for that and I see how you could come to that conclusion on my tone.
There'll definitely be regulatory oversight on the financial sector. But I don't know what the specifics are either. Kinda to early to tell.
The plan was posted to many financial sites. There are no regulations specified. Congress is currently arguing for CEO/CFO salary limits and oversight.
The Fed wants complete control of the financial system with no oversight and nothing they do can be overturned by anyone, not even the Supreme Court.
Location: Sitting on a bar stool. Guinness in hand.
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Originally Posted by DCNative
By selling the assets over time during the economy's recovery, and profiting on them. If this works, taxes won't be raised too much on the middle class in subsequent years.
There is no guarantee that this will happen.
Look 700 billion is a drop in the bucket to what it would really take money wise to pay for a bailout that would work. It would probably take close to 2 - 3 TRILLION dollar range to settle up. Now if we decided to actually do that and run our printing press to that number.............well our dollar would become so diluted that it would be practically worthless. And talk about inflation. Whoa mama! Be prepared to pay a lot more for everything for a long time.
The plan was posted to many financial sites. There are no regulations specified. Congress is currently arguing for CEO/CFO salary limits and oversight.
The Fed wants complete control of the financial system with no oversight and nothing they do can be overturned by anyone, not even the Supreme Court.
And the Congress pushed back on the section 8 power grab. if we're gonna have a bailout, I want one with more regulations and oversight, rather than a blatant power grab by the Fed.
Don't get me wrong, I am HOPPING MAD about all of this, and I wish we hadn't gotten into this mess. I share your anger about the bailout. Its a horrible idea. But at the same time, I am concerned that doing nothing would be WORSE than horrible.
By the way, regarding inflation diluting the value of the dollar... Its gonna happen anyway, with or without the bailout. Its already happening, seeing that the dollar already lost almost half of its value in the last 2-3 years.
And the Congress pushed back on the section 8 power grab. if we're gonna have a bailout, I want one with more regulations and oversight, rather than a blatant power grab by the Fed.
Don't get me wrong, I am HOPPING MAD about all of this, and I wish we hadn't gotten into this mess. I share your anger about the bailout. Its a horrible idea. But at the same time, I am concerned that doing nothing would be WORSE than horrible.
By the way, regarding inflation diluting the value of the dollar... Its gonna happen anyway, with or without the bailout. Its already happening, seeing that the dollar already lost almost half of its value in the last 2-3 years.
Yes with other unfunded liabilities and fractional reserve banking we will see the devaluation of the dollar but this will make it happened much faster and it also sets the wrong precedent. Doing nothing will let the market cleanse itself and get trust back into the system. This bailout will not bring that back from foreign investors when they know this will not solve the others problems coming around the corner. Even if they did buy these bad assets, who would want to take a loan on when asset prices are still falling and energy costs soaring?
By selling the assets over time during the economy's recovery, and profiting on them. If this works, taxes won't be raised too much on the middle class in subsequent years.
Yes, we'll get screwed on inflation regardless, but we'll still keep our jobs and be able to buy homes if we have good credit.
Without the bailout, banks won't lend to the companies we work at, and that may mean job losses. Not trying to scare yall, but I'm trying to keep a cool head and be realistic.
Follow the money...
Yes follow the money indeed. It goes from the treasury to wall street and back to political parties via campaign contributions.
Remember the Savings and Loan scandal of the late 80's? The taxpayers paid for that one and we did not make any money. This current "crisis" (more like a panic to squeeze the taxpayers) is along the same lines, but of greater magnitude.
Those mortgage backed securities where so sliced and diced, rolled into mixed packages and sold to so many "institutions" that I doubt very much that there is a single person out there who knows who's got what or what the heck is going on.
Throwing a trillion dollars on Wall Street, without any oversight, regulations or plain knowledge of what the hell is out there is the stupidest thing anyone could do (no wonder it's Bush's plan). Giving taxpayers money to the thieves that got us into this mess in the first place is beyond stupid--it's thievery. Why else does the Bush proposal call for the Secretary of the Treasury to be shielded from the law? Because they know they're stealing, that's why.
Let the "free market" sort things out. It'll be brutal, but it'll be more efficient and cheaper in the long run. Back in 1929, rich men and the government tried to prop up the market too and it did not work. It won't work now either. Dig up your history books.
For starters, they need to reinstate the Glass Steagall Act that Phil Gramm got repealed in 1999.
The crooks at the investment houses (Lehman, Bear Sterns, Merrill Lynch, etc), the mortgage lenders (countrywide, WaMu, etc), and the credit agencies that grade stocks need to be investigated, prosecuted and have the RICO laws thrown at them. Getting rid of these racketeers will restore faith in the market.
If the bailout doesn't work, then that would be bad. I still think its worth a try for two reasons.
1. We need to shake things up and this is an opportunity to put regulations on the lending industry so that credit won't be as easy and the lenders must lend responsibly. No more resetting ARM ticking time bombs.
2. The government buying troubled mortgage assets would free up the banks to lend responsibly (under the new regulations). No one else in our country wants these assets. Homeowners don't want them. Banks don't want them. However, foreign interests (think Asia and Middle East) with plenty of money in currencies gaining strength against the US dollar would love to buy these assets. They want lots of pieces of our American soil/real estate at a very cheap price. And if they get it, that would not be good for us, trust me. It would become a national security issue. I rather have our own government (and taxpayers) buy up these assets before the banks sell them to foreign interests.
You present interesting and rational points. Many people are so upset with the massiveness of the bail out that the consequences of not doing so becomes irrelevant for some reason. I am more concerned of what will happen if we don't do anything. Essentially, our entire economy is deeply entrenched in credit and the stability of financial institutions. If too many financial institutions fail WE fail. Check out economic circular models and financial institutions are right in the center amongst household/businesses/corporations, etc. Serious financial collapse is not supposed to happen to a country whose economy is resilient like ours, but that doesn't mean that it can never happen. We don't know the extent of the damage that a financial collapse could cause but we can at least slow it down before it hits the floor. I believe we are still strong yet vulnerable and financial institutions is our Achilles heel.
I'm p*ssed that our country is in this situation and that we - the American people - are the one's who will pay for the stupidity and greed of a few. But what's the alternative? Why would Bernanke (a Great Depression expert btw), in addition to the economic experts, be for a bail out if it didn't significantly help the situation? Whether some of us like it or not, a bail out of some sort is going to happen because it has to... hopefully it will have a positive effect.
DCNative, I'm going to give you reps for looking at it from a different angle and digging past the surface. Many people are looking at this from an emotional/political stand point and not from an economic/business standpoint. Good job.
1. We need to shake things up and this is an opportunity to put regulations on the lending industry so that credit won't be as easy and the lenders must lend responsibly. No more resetting ARM ticking time bombs.
Yes, bailing out the people who behaved irresponsibly with teach them to be responsible.
Next giving fat people with no discipline cake will help them diet.
Credit should not be easy. The govt forced it to be easy.
Last edited by bxlefty23; 09-26-2008 at 01:22 AM..
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