Bush's $700,000,000,000 Bailout!!!

[runningman]

Re: Bush's $700,000,000,000 Bailout!!!

Exactly how can you decide to give away $700 Billion to your best friends with no inquiry and then have this big investigation on Roger Clemens over steroid use. Just goes to show how lost the US really is.

It was funny today watching Paulson and Bernake try to persuade the Congress to sign the blank check. How after a weekend can you figure out what to do with $700 billion??

Oh ya and Miro I'm smarter then you.. and that's all I have to say.

[Miroslav]

Re: Bush's $700,000,000,000 Bailout!!!

Oh ya and Miro I'm smarter then you.. and that's all I have to say.

Ok. You can keep telling yourself whatever you want. It really makes no difference to me.

[88Mariner]

Re: Bush's $700,000,000,000 Bailout!!!

Ok. The evidence I have seen doesn't seem to support your assertion....because some of your actual reasoning is incoherent and/or in contradiction to widely accepted academic principles.

his logic is way over your head man. what you think is incoherent is pure genius. obviously this is case in point.

[Miroslav]

Re: Bush's $700,000,000,000 Bailout!!!

^^ I see you caught my earlier edit. I deleted it because I've already let this devolve far too much into a pissing contest.

I present my case forcefully, but I strive to focus on the perceived merit of opinions and supporting evidence, and not to stoop to the level of personal attacks. My apologies to all if I got too heated and fell short of that expectation in some of my comments here.

I've said just about all I have to say on this topic, so I'll take a break and go elsewhere now for a while. The last thing I would leave with is:

It's ironic that government intervention seems to be our only hope now, because in some sense it was government intervention that originally got us into this mess. Fannie Mae and Freddie Mac should never have been allowed to grow into the monopolies they were. Monetary policy should not have been as loose during Greenspan's years. With less government meddling originally, we might not have had the housing bubble and the severe consequenes that we're now dealing with. And with or without the bailout, we'll be in for a very rough ride. Supply and demand simply need to adjust and America needs to de-leverage itself, and it will take some time and pain.

[Lorn]

Re: Bush's $700,000,000,000 Bailout!!!

It's ironic that government intervention seems to be our only hope now, because in some sense it was government intervention that originally got us into this mess. Fannie Mae and Freddie Mac should never have been allowed to grow into the monopolies they were. Monetary policy should not have been as loose during Greenspan's years. With less government meddling originally, we might not have had the housing bubble and the severe consequenes that we're now dealing with. And with or without the bailout, we'll be in for a very rough ride. Supply and demand simply need to adjust and America needs to de-leverage itself, and it will take some time and pain.

Absolutely. And this is the very reason the bailout, as it is right now, is not what the doctor ordered.

The fact is we as a nation have had an oversupply of housing at absurd pricing and on top of that, its all been leveraged beyond anyone can possibly afford. This fact is still in force, too many houses out there, prices are still high relative to the historical mean and leverage is enforce enmasse.

Everyone is also at the moment, focused on housing still. The leverage is everywhere and the consumer and business simply cannot service this debt now or for very much longer.

So to have the government step in and buy this leverage, when no one can afford it to begin with, will allow only one thing......more leverage to ensue and on top of that, people will feel emboldened for the casual reference to the government is now guaranteeing everyone.

None of this even begins to touch on how the government itself is the most leveraged entity out there.

Its sad to acknowledge that election time is just around the corner and we all know that at the end of the day a politician will do above all else, anything to get re-elected. So these clowns will most likely pass this bafoonery, not because they think its the right thing to do, probably they have no idea what to do, but just so it looks like they did something and if, this doesn't work they can say to us, well we tried, its not our fault.

I believe everyone must take blame for this historic credit contraction. There are some who are more to blame then others, but its been an historic ride up this bubble, maybe it has some years to go, who knows, but it will burst and this will be the biggest bubble of the modern era.

The argument that this is a liquidity issue is one I don't go along with. Its a sound argument and most people i think belive it. This is a solvency issue. Totally different beast.


PS...Something I forgot to add....Fractional Reserves. This is why these Banks are just piles of drell. Banks have not been required to have any reserves for years, its all lent out and leveraged further to lend again. A vicious circle that is coming home to roost. Paulson and his buddies are doing everything to save their sorry asses.

[CactusBeats]

Re: Bush's $700,000,000,000 Bailout!!!

Why aren't we as Americans demanding there be hearings before this bloated government "solution" is adopted?

There were hearings today. Chris Dodd, head of the Senate Banking Committee said he could not support the plan that Bush sent him. Not sure what or how many changes would make a difference, but I think that CEO pay and bonus limitations need to be part of it. You can either turn on C-Span or watch it anytime streaming on the web at http://www.c-span.org/ Here is the link for the video of the hearing :
rtsp://video1.c-span.org/project/eco...308_banking.rm

Bush also met with congressional Republicans who said they could not vote for such a bill to try to change their minds.

I for one am hoping this thing never sees the President's desk. This administration barters and preys on fear. If you got fear, you are in Bush's crosshairs and may submit to his agenda. I am less fearfull of us taking our freeking medicine collectively than signing a check over to these guys so they can make their stupid yacht payments and cover a bunch of bad paper. We need a good recession to learn from this. In my view, it's either a recession now, or a depression just a little bit later (when the bailout fails and there's no money left). How many here can remember the Great Depression?? Not I.

Take our lumps I say... It would be tough, but it might bring Americans together again. Can that be so bad? Money comes, money goes. There is more to life than money. When was the last time anyone used the word "thrift?" Tough times define one's character. We in the US are just all too soft to take collective responsibility for the mess that collective greed got us into.

Sad...

[88Mariner]

Re: Bush's $700,000,000,000 Bailout!!!

"We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself," - Republican Party Platform, 2008.

[CactusBeats]

Re: Bush's $700,000,000,000 Bailout!!!

"We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself," - Republican Party Platform, 2008.

HA!!
Hypocrites. They went back on that before the ink dried

I agree that this absolutely has the capacity to dwarf 9/11 as a crisis. We really don't need to worry about Al-Quaida as an enemy when compared to our own actions which endanger our way of life the most. Who is our own worst enemy? Look in the mirror.

[Lorn]

Re: Bush's $700,000,000,000 Bailout!!!

http://sanders.senate.gov/petitions/?petition=financial_crisis_1

Well, I don't much agree with the proposals in this petition but at least its a senator trying to do something different. Take a look and make up your own mind.

[runningman]

Re: Bush's $700,000,000,000 Bailout!!!

people are protesting everywhere right now.. nobody wants the bailout. here is a great article about Bush and his failure as a leader. All that Bush ever has to offer is fear. The US is supposed to be the home of the brave. I hate Bush so much... Bush is trying to wreck the USA in my opinion.

http://www.nytimes.com/2008/09/25/opinion/25thu1.html?_r=2&oref=slogin&partner=MYWAY&pagewanted=print&oref=slogin

[ddr]

Re: Bush's $700,000,000,000 Bailout!!!

i dont know if this has been posted before but whatever..

one thing from Bush's little speech that i feel is horrible.

this bailout may fix things for the immediate future but down the road things will only get worse....

once the government buys up all of the worthless options or whatever, they are making the ASSUMPTION that these options will be worth something in the future.

once thing i learned is that you NEVER assume anything.

what if these options or whatever they are buying up, never do go back to normal and not be worth something in the future?

[superdave]

Re: Bush's $700,000,000,000 Bailout!!!

i dont know if this has been posted before but whatever..

one thing from Bush's little speech that i feel is horrible.

this bailout may fix things for the immediate future but down the road things will only get worse....

once the government buys up all of the worthless options or whatever, they are making the ASSUMPTION that these options will be worth something in the future.

once thing i learned is that you NEVER assume anything.

what if these options or whatever they are buying up, never do go back to normal and not be worth something in the future?

Exactly and Bush said in his speech that we would get the $700 billion back over time. These are like investments that will pay off over time. The government will wait out being paid off.

Sounds familiar and like those promises that the Iraq war would pay for itself with the low gas prices and oil from Iraq.

[Miroslav]

Re: Bush's $700,000,000,000 Bailout!!!

OK, back from my break...

The more I've learned about the specifics of the plan, the less I like it. While I do think that intervention may be necessary, I don't think it necessarily has to be in the form of a barely regulated $700b. One of my primary concerns is that certain entities should be allowed to fail - in fact, we should allow as much to fail as possible without threatening the fundamental viability of the entire financial system. I'm for a plan to ensure that the system doesn't summarily flop, but I think this one goes too far.

once the government buys up all of the worthless options or whatever, they are making the ASSUMPTION that these options will be worth something in the future.

once thing i learned is that you NEVER assume anything.

what if these options or whatever they are buying up, never do go back to normal and not be worth something in the future?

My interpretation is that the government isn't really contemplating taking these actions with the vision that they will be worth anything... All they are really focused on doing right now is simply to remove losses and funnel cash into the financial system to keep banks from failing - right or wrong. And that cash comes from you and me.

If the economy would theoretically recover over some period of time, then yes in that sense we'll "get it back"...

[bobjuice]

Re: Bush's $700,000,000,000 Bailout!!!

http://www.independent.co.uk/opinion/commentators/fisk/robert-fisks-world-bush-rescues-wall-street-but-leaves-his-soldiers-to-die-in-iraq-944071.html

[88Mariner]

Re: Bush's $700,000,000,000 Bailout!!!

I think I've changed my mind on this. I'm still against it, but the utility that passing this bill provides is so much greater for me and mainstreet than whatever tax dollars that have already been taken away from me and will be taken away from me.

And that utility is time.


I'm almost certain at this point that if this bill doesn't get passed by monday, we've got about a week before it starts collapsing in on itself. The baillout buys us time, time to restructure debts, time for the financial industry (the real backbone of our economy) to get thier stuff sorted out. Looking at what happened to Bear Stearns and Lehman and AIG and so on and so on, thier problems had become way worse quicker than they were able to cope with it, where even drastic measures could not help. I look at it as the difference between a high speed car-crash (this week) and a car-crash in slow-mo (Over the next year or so) The difference will be the psychology and its' affect on people (irrational actors as most of us here know), thier response, the response of the financial sector, and about everyone else. If the economy tanks in the week, everything falls apart. shipping and transportation shops. massive layoffs ('m predicting 20% unemployment) occur almost simultaneously.

And ALL of this before an election: Bush would CERTAINLY put together executive orders for you know what. I did write a thread on this saying just the opposite, that Bush is doing things to push his executive power further, quicker. But I've re-read his speaches and he's actually against all of this, but says we've got to do something, much like a surgeon who's facing a patient that is getting worse and worse. The surgeon can't say 'fuck it, let it die, things will come back". He's the president of the united states, he's gotta do something. And my gut tells me his advisors have already discussed the utility of time at this point. I don't think the democrats understand this utility whatsoever, and I don't think they understand the effects they will cause; but intentions, motives, intelligence, and education aside, the outcome is what matters the most.

In turn, as far as foreign policy goes, things get blearker. Russia would, as I think they will, invade into georgia and other dictators and terrorists groups will take advantage of the situation. The fact is, such a quick snap of the economy at breakneck speeds completely destroys our global security structure. It would be neutralized. I really can't even begin to discuss what will happen, and I don't even want to speculate on the stuff that might happen, which is exponentially worse.

You all here know that I've been against this bailout. I'm still against it, but goddamnit, the time that it buys us, and everyone else dependant upon our financial system, economy, and security, need it too. It gives people time to shift thier portfolios into commodities (my suggestion). I really can't underscore the psychological impact enough.

To quote barack obama out of context, "preparation is key". And getting extra time is crucial to all of this. It's the most limited resource we have, and the most important one to have at dispossal.

I can't say I've seen this discussion on the utility of time talked about anywhere else. It hit me hard this afternoon after I heard a Bank CEO commit suicide this afternoon, and it dawned upon me the instant shock that would paralyze almost everything and almost everyone.