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I’ve heard 3 different news reports today that credit citizen outcry for the failure of the bail-out for the walls street gluttons. And the market has actually made a small recovery in spite of it not passing (sorry Barney Frank – no Armageddon yet). The reports said so many citizens have over whelmed their congressional reps with phone calls that the reps in the House have been voting no to snatching tax payers’ dollars to aid irresponsible institutions.
Nice to know the common citizens’ voice still matters!
I’ve heard 3 different news reports today that credit citizen outcry for the failure of the bail-out for the walls street gluttons. And the market has actually made a small recovery in spite of it not passing (sorry Barney Frank – no Armageddon yet). The reports said so many citizens have over whelmed their congressional reps with phone calls that the reps in the House have been voting no to snatching tax payers’ dollars to aid irresponsible institutions.
Nice to know the common citizens’ voice still matters!
Indeed, suspend the capital gains tax, stand back and watch the market fix itself!
I’ve heard 3 different news reports today that credit citizen outcry for the failure of the bail-out for the walls street gluttons. And the market has actually made a small recovery in spite of it not passing (sorry Barney Frank – no Armageddon yet). The reports said so many citizens have over whelmed their congressional reps with phone calls that the reps in the House have been voting no to snatching tax payers’ dollars to aid irresponsible institutions.
Nice to know the common citizens’ voice still matters!
What's happening in the stock market is only a small part of the much bigger equation. How are the credit markets doing? Has the liquidity crisis relented at all? Those are the questions that matter.
What concerns me is that this citizen outcry is based on trying to make the "Wall Street fat cats" feel pain. What they don't understand is that Wall Street's pain will trickle down and become THEIR pain, via unemployment, dried up 401(k)s, difficulty getting credit, etc. If some sort of bailout is not passed, we will all feel the pain.
What's happening in the stock market is only a small part of the much bigger equation. How are the credit markets doing? Has the liquidity crisis relented at all? Those are the questions that matter.
What concerns me is that this citizen outcry is based on trying to make the "Wall Street fat cats" feel pain. What they don't understand is that Wall Street's pain will trickle down and become THEIR pain, via unemployment, dried up 401(k)s, difficulty getting credit, etc. If some sort of bailout is not passed, we will all feel the pain.
It isn't clear at all this huge give-away to the fat cats will solve anything. It doesn't address the core problems and does nothing to address the credit crunch. Yes, this does trickle down and affect all of us, but this so-called "remedy" is not going to do much but give Wall St a temporary reprieve. If the core economic problems and corruption are not addressed and fixed, we will be right back here again in just a few months. Only then, the treasury will be in much deeper debt and the only winners will be the Wall St fat cats.
That's why there is a public outcry. No one has given us any clear path that will solve the problems and the middle class is tired of seeing our wealth erode while the robber barons get fatter. The news just said there are 200 economists who signed onto a protest of this remedy as it not having any chance of actually working. These economists are on all sides of the political spectrum.
The better question is why are we being stampeded (again!) into something shortsighted and stupid?
But what if the bail-out still doesn't work? So we throw more money at a problem that at it's core is a systemic and ethical issue, and it still doesn't work? The investors that caused this problem should be forced to halt all forclosures and work with the people that they put into these homes so that the mortgages are affordable. Instead of correcting their error they get a bail-out? If I have to choose between bailing out the Wall Street institutions that made fortunes during the peak of the housing market off of illicit practices or the home owners who got conned into living in more house than they could afford, I'll opt with helping the home owners. Understand, I am not saying that NOTHING should be done, but I think the lenders, the investors and the homeowners need to work this mess out amongst themselves instead of tax payers being fleeced of $700 B to "reward" corrupt investment practices.
But what if the bail-out still doesn't work? So we throw more money at a problem that at it's core is a systemic and ethical issue, and it still doesn't work? The investors that caused this problem should be forced to halt all forclosures and work with the people that they put into these homes so that the mortgages are affordable. Instead of correcting their error they get a bail-out? If I have to choose between bailing out the Wall Street institutions that made fortunes during the peak of the housing market off of illicit practices or the home owners who got conned into living in more house than they could afford, I'll opt with helping the home owners. Understand, I am not saying that NOTHING should be done, but I think the lenders, the investors and the homeowners need to work this mess out amongst themselves instead of tax payers being fleeced of $700 B to "reward" corrupt investment practices.
It's not as simple as Bank A "conned" Joe Blow so let's punish Bank A. Bank A likely isn't even in the equation anymore. Joe Blow's mortgage was likely packaged with a bunch of others, securitized, rated investment-grade, and sold to multiple investors, some in the financial industry, some not. Where were the "illicit practices" there? What's wrong with investing in AAA-rated securities, particularly those guaranteed by Freddie and Fannie? To put it simply, the irresponsible credit risk created in the initial lending transaction has long since been passed on from the lending banks and mixed into the broader credit market via MBS, CDO, and swaps. But these downstream investors didn't know these securities were high risk because they weren't rated as such. So now we get defaults and foreclosures. Values of investments drop, those unrealized losses have to flow through earnings due to mark-to-market accounting rules, corporations see profits drop, credit and liquidity dry up, consumers can't get loans, businesses can't liquify their investments, businesses fail, etc. This thing is enormous and certainly not restricted to some Wall Street CEOs.
It's not as simple as Bank A "conned" Joe Blow so let's punish Bank A. Bank A likely isn't even in the equation anymore. Joe Blow's mortgage was likely packaged with a bunch of others, securitized, rated investment-grade, and sold to multiple investors, some in the financial industry, some not. Where were the "illicit practices" there? What's wrong with investing in AAA-rated securities, particularly those guaranteed by Freddie and Fannie? To put it simply, the irresponsible credit risk created in the initial lending transaction has long since been passed on from the lending banks and mixed into the broader credit market via MBS, CDO, and swaps. But these downstream investors didn't know these securities were high risk because they weren't rated as such. So now we get defaults and foreclosures. Values of investments drop, those unrealized losses have to flow through earnings due to mark-to-market accounting rules, corporations see profits drop, credit and liquidity dry up, consumers can't get loans, businesses can't liquify their investments, businesses fail, etc. This thing is enormous and certainly not restricted to some Wall Street CEOs.
so why the rush to bailout? let's try to fix the problem in increments instead of demanding huge amounts of money from the taxpayers. maybe congress could stop their own spending agenda while they tell us that the economy is about to fail.
so why the rush to bailout? let's try to fix the problem in increments instead of demanding huge amounts of money from the taxpayers. maybe congress could stop their own spending agenda while they tell us that the economy is about to fail.
Why the rush to bailout??? We're in the middle of a credit and liquidity crisis!!! What don't you understand?
let's say the bailout goes through. the US doesn't have $700 billion laying around in a bank somewhere. you know what that means, they have to get that money on credit by issuing bonds, or worse just having the treasury print it. if i'm not mistaken, credit issues are what got us in this problem to begin with, it doesn't make sense to me how you can use credit to fix a credit problem. anyways, $700 billion appears out of nowhere to fix the lending institutions of America. now what? banks can now lend eachother money and keep the economy afloat. however, $700 billion is a lot of money to infuse into the system, inflation will eventually rear its ugle head and the price for a gallon of milk or gas is going to start to go up pretty quickly. we've already seen what happens when gas prices go up, people stop buying nonessential items. when people stop buying nonessential items, the economy takes a hit. my belief is that our economy is headed from point a to point b. regardless of whether the bailout passes, we are going to get to the same point b. the question is, do we want a quick and easy death or do we want a long drawn out torture session before we die? i'll take a bullet to the head.
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