maverick4

First of all, why are officials trying to force the bailout so much?
Second of all, even with this bailout, you are only delaying the inevitable, and by delaying it you are only going to make it worse.
Third, when are Republicans and the Fed going to stop fudging numbers and acknowledge the economy is not just in recession but ready to go into Super Depression?
Fourth, did anyone else catch the bailout on the US auto industry?

Bailout failure 'will cause US crash' - Telegraph

[One Republican said that the message from government officials is that “the economy is dropping into the john.” He added: “We could see falls of 3,000 or 4,000 points on the Dow [the New York market that currently trades at around 11,000]. That could happen in just a couple of days.

“What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.” ]

MrBigglesWorth

this is what occurs:

the bailout happens. the rich get their money from this bailout and move it quickly to euros or foreign markets and in the meantimes those who have no money or money markets still in the US Stock market have just been hit with inflation(after and during the crash)

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PatsFanInVa

Oh yeah. We have the new 5+ trillion in debt over 8 years, then we add up to 700 billion in re-securitizing bad debt? You bet. We get to see the market value of our market, if you will, with no extent bubble to inflate its evident value.

Oh hell yeah we'll have inflation. And no matter what our stake is supposed to be in the future earnings, no, we do not get back everything. The whole point is to make bad loans go away, so the corporate world has money to oil the machinery with.

Do I like this? No, but if you look too close, you end up not liking capitalism as a system at all. Don't get me wrong, I don't -- except as compared with any other economic system that's been tried.

But given that world, I suppose in a pragmatic way it is best to say that I do like capitalism, but think that it needs to be strictly regulated. I doubt very seriously we've learned the lesson.

But for the time being there's nothing but pain coming as firms attempt to pare down their liabilities... all firms, not just the financial sector.

It's stagflation on steroids, folks. We will still have growing unemployment in concert with rising inflation. And yeah, someone will still be richer than you anyway, as much as that pisses us all off given what we've just seen.

PFnV

MrSparkle

Well, my understanding is that they don't get all the money right away. It's more like a promise. The first round is $250b. Next would be $100b by Signature of the President. Then a final lump sum of $350. It is also my understanding that the money does not go out till they start to go through the loans.

If a crash were to occur over the next few days I'm not sure how much of it would have been payed out.

I'm with most people, I am not for this bailout. I'm not sure what the answer is, if any.

Please, correct me if I'm wrong with my interpretations.

BelichickFan

Why put a title like that when the premise if "if the bailout doesn't happen" when the bailout is basically guaranteed.

We've argued about the bailout ad nauseum and maybe it is gonna make things worse longterm. But as the premise to this article isn't going to happen, the title is misleading at best.

PatriotsReign

I made a post last week about how congress snuck through a $28 billion loan to the auto industry. What a bunch of snakes for doing it when we were all paying attention to other things!

PatsFanInVa

Well, I have to learn all about this added tier regarding the "insurance" we're talking about.

The Paulson and Son-of-Paulson plans worked by paying companies for bad paper and sitting on it until it is good, thereby giving away a "cheeseburger today for five dollars tuesday," as that Popeye character would put it.

Some of that paper would become good, some would exceed the value we paid (in theory, in time, even adjusting for inflation,) we hoped. Worst case scenario, all 700 billion dollars is used, and none of the paper it is used on is worth anything. In that case, it is a giveaway of 700B to corporations.

Hence, the government would be incentivized to judiciously relieve the underlying conditions and forestall some of the foreclosures we'd see.

I don't know how far we've gone from Paulson to the present. I doubt it's far. I think it's about the same deal with bells and whistles which can be sold as "important new changes."

I'm sure we'll all study up on THOSE now LOL.

PFnV

reflexblue

Do I like this? No, but if you look too close, you end up not liking capitalism as a system at all. Don't get me wrong, I don't -- except as compared with any other economic system that's been tried.

But given that world, I suppose in a pragmatic way it is best to say that I do like capitalism, but think that it needs to be strictly regulated. I doubt very seriously we've learned the lesson."

PFnV
[/QUOTE]Capitalism can be compared to communism in this way imo. Both are fine in their "CONCEPT",but as we've seen with communism if there becomes a ruling class at the top, the system is corrupted. They same can be said for Capitalism. If GREED takes hold and a small group of people gains enough wealth they can corrupt the system. Not only cause the system of capitalism to collapse,but control or come close to controlling the government.

Total power unchecked or regulated corrupts totally in both systems.

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PatriotsReign

What is baffling me the most is the talk about how the democrats wanted to have provisions included that would help the root cause of this crisis...the real estate market. So they're talking about re-working some of the mortgages in danger of forclosure (which I don't like). What I don't get is how this will help stop real estate from declining.

From where I sit, I see mortgage rates going higher and definately mortgage standards getting tougher. So how are more homes going to SELL. After all, stopping home values from declining can only be done by people actually buying more homes and increasing the number of potential home buyers.

Any thoughts...anyone?

reflexblue

I agree with you about not re-working the mortgages. Let the toxic wast reveal itself. A lot of these bad mortgages were rolled with good money into bonds,now every bond is eyed with suspicion as not being woth what its suppose to be. IMO re-working the mortgages is just political window dressing,its not going to help the real estate market rebound. The only way for that to happen is through financial Darwinism the weak (those who were given loans when they shouldn't have) get forclosed,and their houses go up for sale, and the strong (obviously those with good credit) buy them. But as you say there is going to be a backlash at least for a while,its going to be very hard to get a loan. Until things start to losen up a bit again

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