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Joined: 07/29/2008
Posts: 723
No deal on 700 Billion

Whatever happened to the magic of the market and letting capitalism run it's course? 700 Billion ends up being $2333 for every man woman and child in the US.

Text of Proposal
http://www.nytimes.com/2008/09/21/business/21draftcnd.html?ref=business

The price of the assets we are supposed to buy is left up to the discretion of Secretary Paulson (George Bush) I thought the deal is we get to take over the places going in the tank and sell the assets, I don't want to just give a bunch of rich wall street firms money, no strings attached.

And why exactly is this supposed to work other than stopping panic? Putting 85 Billion into AIG did nothing.

That small portion of my investments left in the market has only a fraction in the banking sector anyway. Let all those brokers go get a real job. Who has shares in these big banks? They wanted deregulation, they got it. Meanwhile all the CEOs are going to walk with thier mulit million dollar severence contracts just like whatshername from HP.

Sorry, no deal.

bitmasher's picture
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Location: Colorado
Joined: 02/27/2002
Posts: 2974
No deal on 700 Billion

Presumably you weren't in favor of the fed take over of Frannie/Freddie or the Bear Stearns take over either. If you don't agree with these maneuvers what do you think should be done? (P.S. Vote for Obama doesn't count)

I'm of the opinion we are in the midst of the worst financial crisis in the last two-three generations. The fact that it has not spilled out in to the general economy as a depression has been largely because of federal maneuvering. However these maneuvers are not without risk and the downside is yet to be seen. These maneuvers have everything to do with keeping the banks liquid (and thus able to lend) and very little to do with the financial institutions stock price.

The economy may have worked itself (no Bush didn't do it) into a catch-22. We very well may be screwed if the fed does something (too much or too little) and we probably are screwed if the fed does nothing.

Moving on... since we are all about capitalism and laissez-faire can we talk about escalating tax scales and everyone pulling their fair share too? I mean come on its not very capitalistic to take a greater percentage in tax from one guy then less of a percent in tax from another guy just because the second guy made less....

CVC
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Grand Slam Challenge Winner!
Location: Kansas
Joined: 03/04/2006
Posts: 3579
No deal on 700 Billion

I don't like the idea of the buyout with tax dollars either, but what is the alternative - let the financial sector collaspe?

I really don't know what the right thing to do is. I hate the idea of tax dollars being used to bail out these companies, but I don't have a better idea.

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Location: Florida,USA
Joined: 08/21/2003
Posts: 1585
No deal on 700 Billion

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is mostly to blame for this. It required Fannie and Freddie to eliminate "Redlining" by developing programs that guarantee loans to folks that could not afford them, IE: ARMs.
Add that to the Over Valued Real Estate and you end up with this mess.
Loan folks money that they can not afford to pay back by qualifying them by using an ARM while keeping interest rates down(knowing they'll go up), use Over Valued Real Estate as collateral, that when taken back after the mortgagee has defaulted is worth less that the loan principle to begin with. The Bank looses money, and the Insurer that insured the Loan looses money. Times that by millions and ...well the results were predictable.
As bad as it sounds they should let the market handle it. As it stands with the bail out, you still end up with Over Valued Real Estate that has been paid for with Tax-payer money...a guaranteed loss.

Interestingly enough, The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 Section 1302(4) (12 U.S.C. 4501(4)) specifically provides that “neither the enterprises . . . nor any
securities or obligations issued by the enterprises . . . are backed by the full faith and credit of the
United States . . . .” http://www.gao.gov/archive/1995/gg95123.pdf
enterprises referred to are Freddie Mac and Fannie Mae.

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Joined: 07/31/2007
Posts: 632
No deal on 700 Billion

What's going to happen when the government bellies up? They have to borrow the money in order to lend it. Societies go through major financial melt-downs. They survive and bounce back. It's easier for an individual to eventually gain ground, then it is for an entire crowd to gain sustained momentum. This is a bad situation that our nation TODAY has gotten into. Should we offer ourselves TODAY the chance to get out of a whole WE dug, that generations to come with have to pay TOMORROW, and probably still be paying for after some of us today have gone? What needs to be done is people need to drink water and suck it up. Work harder. Help your neighbor out, and keep plowing the fields until we can harvest again. We'll get through this, we just need to keep one another motivated to keep working forward. Our forefathers did it, so can we. We just need to find it in ourselves.

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