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Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Market.

Discussion in 'Political Discussion' started by weswelker#83, Sep 18, 2008.

  1. weswelker#83

    weswelker#83 Rookie

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  2. BelichickFan

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    #24 Jersey

    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    I don't think any of us are happy about this in general but without this, the whole economy could be bogged down for a long time. I'm a Republican, I'm not for big government. But I think we need to get this thing behind us and try to get the economy moving again. I hope they get it done, it should help the economy get going in a variety of ways and there's probably retirees who should have gotten their money out of the market but didn't. While I am for it, a lot of people, from top execs to retirees had better have learned their lessons.
  3. weswelker#83

    weswelker#83 Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    I think the FED understands they are trying to fend off a great depression.........but they think asset deflation caused the great depression.

    Unfortunately they don't seem to understand that it was the build up of non-productive debt to unsustainable debt service levels that caused the asset deflation and the depression.
  4. PatriotsReign

    PatriotsReign Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    Look, as long as the government is extremely prudent in who gets funds, I can understand any effort to keep the financial markets from collapsing. But lets not just pummel the market with funds to any company that is in trouble. Preventing the financial markets from crashing is ok, but it is NOT ok to use trillions just to keep us out of a recession... THAT WOULD BE UTTER BULL SH1T.

    So let's be sure Paulson sticks to his goal which is singular...to prevent collapse. He has no authority to affect economic trends outside of that one responsiblity.

    And the main thing that funds can NOT be used for is to bail out mortgage holders. The housing markets must be left alone to bottom out...there is no two ways about that. What also concerns me greatly is that this effort could keep the stock markets in artificially high levels...which is just another way of inflating the bubble....let the damn thing deflate.

    So does that mean there will be more bad debt coming in the months ahead? absolutely! And that's what needs to happen. The thing our government fails to recognize is that THEY created several bubbles over the past 15 years. We can no longer tolerate bubbles and what we really need is for our government to undo everthing they have done over these 15 years and bring the markets back to their natural state.

    Otherwise, we will enter a new era in which our government is constantly trying to manipulate the economy...which is EXACTLY what got us in this mess in the first place!

    Oh, and BTW...of course action such as this tells us the economy REALLY isn't that bad :rolleyes:
    Last edited: Sep 19, 2008
  5. mcgraw_wv

    mcgraw_wv Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    I was just thinking about this topic this morning...

    Since it is our money that is going to cover the bad debt... Why doesn't the government ( The People ) buy that bad debt, and actually reduce people's mortgages?

    Thats where the pai is coming from, not banks having no cash, but becuase people can't afford their mortgages... so if our tax money is going to buy worthless debt, why not put it to good use and free up the hand cuffs that our middle class is faced with?

    BAsically, if you buy 85 BILLION in bad debt from a bank, that should easily be
    425,000 - 200,000k mortgages... So why don't they as an economic stimulus package, reduce 25,000.00 off 4 million mortgages...

    If we the People paying for it... Then lets see some real value for it...


    OR BETTER YET, Stop Taxing us and let us use that money to Pay what so many Americans are having a hard time paying for...

    It's nuts that the status qou is to take all our money, and then buy Bad debt ( which is our's int he first place ) yet see no benifit from it, other than the company being bailed out doesn't close up shop....

    So the end result is, Private Corporation is saved, we still have to pay, and our Dollar is worth less, and we as a people are farther in the hole...

    This is Wealth Redistribution of the worst kind, this is Reverse Robin Hood distribution... STEAL FROM POOR, give to the Rich...
  6. mcgraw_wv

    mcgraw_wv Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    I also think it should become law that Mortgages ( people homes ) can not be resold as a commodity. By LAw, you lend someone money, they only have to pay you... not someone else.

    If that bank fails, surprise "A bank error in your favor, get a free house"...

    Stopping the reselling of mortgages would prevent a worthless and un-needed bubble of MBS ( Mortgage Backed Securities ) Which would not have cause banks to push loans as they did...

    People want to blame clinton by "forcing" banks to loan to unqualified people, but the real blame goes to the bank managers who sent out marching orders to get as many loans as possible so they can be wrapped up into Mortgage Backed Securities and sold to the Market...
  7. weswelker#83

    weswelker#83 Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    Anyone want to bet that their plundering friends won't be brought to justice or have to give back a penny ?
  8. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    No thanks. It this totally unusual situation we need to keep the system working as normal as possible. That means people paying off their mortgages - and if they don't they walk and get the bad credit associated with that action so they don't get a loan again any time soon.
    Last edited: Sep 19, 2008
  9. BelichickFan

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    #24 Jersey

    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    And to the borrowers for getting loans they couldn't possibly afford. Bottom line, there were ****ups everywhere; I'm excited we MAY move past it and will be able to look at what went wrong and hopefully fix it. Everyone should note that the "American Dream" isn't going to be reality for everyone and we need to stop trying to make it so.
  10. PatriotsReign

    PatriotsReign Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    So you're saying we reward the financial institutions with this $1 Trillion program to keep them solvent, but homeowners who do EXACTLY the same thing as these corporations aren't to be kept solvent?

    Please explain how equally irresponsible behavior can be rewarded on one hand and penalized on the other...for the identical action!
  11. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    We aren't rewarding financial institutions as much as getting the country going again. We need banks and the flow of money for everything; mortgages, business loans, etc.
  12. PatriotsReign

    PatriotsReign Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    Let us also remind ourselves that keeping the stock markets booming is not a major goal of economic policy. As a matter of fact, it's not even important. Our economy does not depend upon growth in the investment markets. It is actually the reverse...growth in the stock markets are entirely dependent upon sustained economic growth.

    Let's use the Dow as an example. If it did go down to say 8,500 by next year. That would be irrelevant to the health of economy moving forward from there. The health of our economy is based purely and solely upon stabilty of the markets, balance between household income and GDP growth. REAL & sustained growth in GDP is dependent upon REAL income growth. And with real growth in GDP comes stock market growth.

    Our economy could very likely be HEALTHIER if the Dow were allowed to decline to 8,500 than if were 12,500 sometime next year.

    Fact: It is not the responsibility of the federal government to "get the economy going again" but to rebuild a sound economy that is sustainable. The last thing we want is another economic bubble initiated by government policy.
    Last edited: Sep 19, 2008
  13. PatriotsReign

    PatriotsReign Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    But we need to be careful not to interfere with the laws of a capitalist society. Either you are a true capitalist BF or your not. You can't beef about government intervention on one hand and support it on the other.

    And we absolutely do not bail out ALL bad debt. Some of these companies NEED to fail.

    But aside from this federal action, we still have hope as long as mortgage holders aren't bailed out! See, I actually agree with you on this. I just see the hypocracy of the current bailouts more than you do. But as long as the housing market is allowed to continue to decline significantly, we can start fresh from a solid foundation.

    If Barney (the ashole) Frank get his mortgage bailout bill passed, all bets are off!
    Last edited: Sep 19, 2008
  14. weswelker#83

    weswelker#83 Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    Any company which becomes too big to fail must be split in two. This scam has to stop.
  15. mcgraw_wv

    mcgraw_wv Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    What a better way to make the banks solvent by paying on the bills that are making the banks insolvent...

    This way we help 2 sides of the story, not just the Rich elite side... If you pay on a mortgage that money goes towards the bank, but it also reduces the people levarge on thieir home.

    So if I'm going to pay ( with my taxes and loss of value in my dollar ) for a bank to have money, why not clear the bad debt with paying on some bad mortgages. Then the people have to pay less, gives them the ability to refinance into better loans, and the bank gets their money... It our money anyways... the only difference is that we are taking our money to benefit a company with no benefit to the people.
  16. PatsFanInVa

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    Because you and I, my friend, are "small enough to fail."

    I like the idea of simply forbidding the resale of loans. It's a great start. But OHMYGOD it's regulation.

    Of course the downside is, by making a bank responsible for its own loans, you make credit scarce because they can't take the chance on a bad loan. And that's what Fannie and Freddie were supposed to be for - to fill a gap and back a loan that otherwise would not be affordable. But they were structured to make a profit as well, and as poor loans started to be resellable and bundled in opaque little timebombs via CDOs, F & F, like everybody else, saw the possibility of profit (until of course the music stopped.)

    We've lurched from bubble to bubble for decades. The watchword once was that the manufacuring sector would be replaced by something called "services", of which the financial sector was a big part. But with derivatives and CDOs, there was no value other than paper value being produced... unless you count the debt created as a "product."

    "Post-industrial" was how we talked about the US economy some years ago. You may well ask, "well, who will buy all these services?" And well you may ask. The answer is we're busy trying to "create wealth" to consume all these new "services," not to mention the actual goods so often produced elsewhere these days, and to "create wealth" what we actually do is "create bubbles." All we've created is debt. So here we are, everybody has a home, or a speedboat they bought borrowing against their home, but it turns out that home didn't really intrinsically get twice as good over 5 years. It just got twice as hot, in the psychology of an aging company chasing bigger returns to guarantee retirement security -- or just to "get rich." Then the music stopped, as it always does.

    What's next? We find some accomodation... we feel the fallout... and then, barring a '29-style bankrun, we get high unemployment at least, for a period of years.

    And we get right-wingers INSISTING that we have too high taxes and too many services for the poor and the middle class, while the rich and the corporations are bailed out, so that the wheels can keep turning.

    Okay, keep the wheels turning. But remember your largesse to Corporate America the next time someone has the timerity to want children to be able to read, or the next time someone wants Americans' tax burdens to more closely resemble those of other industrialized nations.

    Now, regarding the price tag: It is uncertain, people. What the US Government has that individual companies don't have, is the luxury of time. Of course, when the Gov. makes a loan, it pays in spades for the money to make that loan, and we have to borrow it from abroad. That's the mechanism.

    BUT if these loans are structured to be collectible at interest, it is possible we get out the other side of this less than pummeled.

    Still, understand -- this is the outcome from getting a free ride on a bubble for years and years.

    This whole situation is an obvious object lesson in deregulation. What is the alternative? Lack of humongous wealth for a few. I can take that downside risk.

    And you're all skating on taxes. Someone, some day, needs to get this part clear. We're not paying our way... this is just a preview if we continue to live beyond our means in that regard.

    Gottta get driving North if I'm to get to mom's today, then MA. on Sat. night, then the Razah Sunday.

    PFnV
  17. PatriotsReign

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    No offense mcgraw, but I don't want my tax dollars bailing out unqualified owners. How does that benefit us? We're all better off if the housing market is allowed to continue to bottom-out and correct itself.

    Home values MUST reflect income levels. Entry level homes must be affordable to the average Joe and they aren't. Bailing out mortgage holders would keep the market from bottoming out. So although that may mean you lose more value in your home, your home never should have increased in value the way it did.
  18. PatriotsReign

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    Great points PFiVA! and although I agree with the majority of what you wrote, I don't agree with a bailout of ALL bad mortgage debt. I believe only the vital corporations need to be bailed out. some companies need to fall. They shouldn't all get a free pass on their mistakes. Just as the mortgage holders won't get a free pass.
  19. mcgraw_wv

    mcgraw_wv Rookie

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    I agree with you...

    However, if we are faced with the option of HAVING to bail out these banks, then I think the appropriate course of action should be to bail the banks of via paying down the mortgages of the holders of bad debt.

    I rather reduce the peoples liability and therefore give them the chance to produce more wealth and spend more money in the economy rather than simply ensure a company does not fold. Making sure a bank does not fold only protects the people who work their and that have over 100k in deposit.

    I think NO ONE should be bailed out, but its obvious to me that we are headed down a Nationalistic government and since we are now in the business of bailing out failed entities, then the Bail out should happen for the individuals, the base, the foundations that support these banks...

    Therse corporations exist soley becuase the people need their services... Bailing out these banks only floats them, as the people are out of money and value and will not be moving, selling, or borrowing anything, and these bank in 5 years will be faced with the same situation... If you help the people, in 5 years, they may have their mortgage refinanced into a solid loan they can afford, at a reduced rate, with less principled owed, the Bank gets their money and clears bad debt, becuase its been paid, and the system in 5 years is heathier becuase the middle class is healthier...
  20. Real World

    Real World Moderator Staff Member

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    Re: Dear Taxpayers, Congratulations on absorbing all the bad debt in the Finance Mark

    It's simple. AIG, Fannie, etc. are all going to pay back the money that they're recieving. A guy who's making $40k, and has a $500,000 mortgage, will never be able to pay his debt in full. Furthermore, Bob Smith losing his home has very little, if any, residual effect on pension funds, money markets, credit availability, jobs, other people, etc. like AIG, Fannie, etc. do. This is a global liquidity problem.

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