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Old 10-03-2008, 05:36 PM
 
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Define "Bailout"

Who are they bailing out?

if the subprimes are in the trillions, how is 700 billion gonna help?

What is it suppose to do for Wall Street?

Last edited by NJ Chutzpah; 10-03-2008 at 06:31 PM..
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Old 10-03-2008, 06:03 PM
 
12,869 posts, read 13,712,054 times
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there are no answers here because it will actually not do anything except maybe devalue our currency and put us further into debt. on the upside, some people are going to be very rich because there is so much money involved!
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Old 10-03-2008, 06:26 PM
 
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wait what is the "bailout money" being specifically used for

If those banks literally have no money because they actually owe it, then will this money be used to pay their employees?
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Old 10-03-2008, 06:31 PM
 
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Borrowing got us into this mess, and, by golly, borrowing will get us back out.
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Old 10-03-2008, 07:52 PM
 
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Banks need to get bad loans off their books so they can make new loans.
As they write down the assets to market value it is destroying the capital level of the banks.

The government will hold the assets in a "bad bank" scenario that will wait until assets values recover if ever.

The concept is actually good for the current situation. However, the government is not capable of managing this properly and it will turn out to be a black hole.

Because we are already insolvent as a nation, it will only serve to debase the dollar and spur inflation.

Sad day for america and no leadership in Washington. And the best we can offer up is Obama or McCain. In a country filled with great people, this is the real tragedy.
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Old 10-03-2008, 08:14 PM
 
2,197 posts, read 6,930,563 times
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Quote:
Originally Posted by NJ Chutzpah View Post
Define "Bailout"

Who are they bailing out?

if the subprimes are in the trillions, how is 700 billion gonna help?

What is it suppose to do for Wall Street?
Nobody knows! That's why it took 'em all week to pass it. They finally just said, "what the hey, it's only money."

Of course, the major selling point was that it would calm the markets. Yeah, that worked well.
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Old 10-03-2008, 08:48 PM
 
Location: Some place very cold
5,500 posts, read 20,987,468 times
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Quote:
Originally Posted by NJ Chutzpah View Post
wait what is the "bailout money" being specifically used for

If those banks literally have no money because they actually owe it, then will this money be used to pay their employees?
It's being used to throw parties, apparently.
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Old 10-03-2008, 09:22 PM
 
2,541 posts, read 10,681,990 times
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Quote:
Originally Posted by jimmyP View Post
Banks need to get bad loans off their books so they can make new loans.
As they write down the assets to market value it is destroying the capital level of the banks.

The government will hold the assets in a "bad bank" scenario that will wait until assets values recover if ever.

The concept is actually good for the current situation. However, the government is not capable of managing this properly and it will turn out to be a black hole.

Because we are already insolvent as a nation, it will only serve to debase the dollar and spur inflation.

Sad day for america and no leadership in Washington. And the best we can offer up is Obama or McCain. In a country filled with great people, this is the real tragedy.
So the Gov't will create an entity to buy all the bad loans?

Is $700 billion enough to buy up the bad loans?

but does the Gov't actually have that money on hand or did they just print it out?

And I have not heard of massive bank runs anywhere, so as long as the banks have peoples' money in accounts why can't they continue to make small loans for cars and such? (do the banks use checking account money to make loans or just savings)

But shouldnt the companies' capital level be equal to the market value of its assets?
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Old 10-03-2008, 11:50 PM
 
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The real problem is that none of the banks will loan money to each other because they don't know how much bad paper the other is holding. This is supposed to get rid of the bad paper if they can ever figureout what the paper is worh in the first place. No one right now really knows.
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Old 10-04-2008, 12:19 AM
 
Location: Great State of Texas
86,068 posts, read 76,887,418 times
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It's to bail out the shadow banking system. See..they don't have any insurance to cover losses so we had to step in and "fix it" for them.

RGE - The Shadow Banking System is Unravelling: Roubini Column in the Financial Times. Such demise confirmed by Morgan and Goldman now being converted into banks
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