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Sadly, he's the only one who actually UNDERSTANDS the problem and the true implications of the bailout. I'm not saying that we'll be burning money in the streets like Germany in the early 30s, but there is going to be a lot of inflation.
Sadly, he's the only one who actually UNDERSTANDS the problem and the true implications of the bailout. I'm not saying that we'll be burning money in the streets like Germany in the early 30s, but there is going to be a lot of inflation.
Were the Germans of the 30s even remotely near the level of consumerism present today in America? Even Americans of the Great Depression were nowhere near what Americans are today. I'd say a good minority of people in this country would starve to death if left in a room to die with nothing to eat or drink except a live pig and a small knife....and thats pathetic, but telling about Americans in general, IMO.
I dont pretend to know what this all means, admittedly, my dance with this has been quite revealing to how much I dont know (but then again, Ive never pretended to know everything anyway).
In my opinion, I dont think your typical American can handle hyperinflation. Our entire class-system is based around what you have. Your iPhone, your Blackberry, your car, your house, your clothes, your jewelry, your money clip, your traveling, etc.
I suspect the number of Americans who will seriously consider suicide, with some small percentage of that actually completing the task, is relative to the number of paid subscriptions to People magazine, US Weekly and the National Enquirer.
The culling of the herd doesnt sound so bad.
nevermind. anti-hero figured it out. problem solved.
I agree with Ron Paul on this. The government needs to stop meddling and let this thing works itself out.
By bailing these companies out, isn't the government just delaying the inevitable?
It sounds as though some companies will fall apart even if they are saved in the meantime.
If that's the case, we bail them out, they fail, and we have major debt on our hands that could have been better spent elsewhere.
Perhaps someone better versed in this area could explain this to me.
the government is loaning money to distressed financial ins utions. The reason for the distress is because of the market to market valuations of the sub-prime mortgages. what that means is what are those mortgages worth if sold today? right now the values are running at about .20 cents on the dollar. Common sense will tell you that the loans weren't issued at no 20% Loan to value. In time financial ins utions can unwind the toxic assets(sub-prime) and most importantly take on new good loans and recover. However, without the US loaning money there would be a total collapse of the financial industry and capital would completely dry up. The dominoe effect that this would cause would lead us to another GREAT DEPRESSION with 25% unemployment and soup lines.
That makes sense, I think.
But what if those ins utions can't "unwind the toxic assets?"
Isn't that a possibility?
I don't think anyone is arguing that goverment should not step in at all. IMO what most opponents of the plan are arguing is that it needs to be more carefully crafted and detailed, and have some kind of guarantee of success or partial success.
Always a possibility, and judging by their previous decisions in financial management, I am sure we should all just trust the companies in need of bail-outs to recover on their own after we the taxpayers foot their first bill of incompetence.
The cycle has just started, IMO.
good question, but remember the toxic assets (sub-prime mortgages) are supported by real estate. Unless real estate goes to Zero it's hard to see a scenario where the Feds don't recover some if not more than their original investment. The unwinding phase is getting past the refinancing of ARMS, the liquidation of foreclosed homes, and the stabilization of mortgage pools which only time will do (5yrs or so).
However, financial ins utions must add good debts and earn profits from the debts in order to offset the losses. Liquidity is desperately needed.
Solution= Collateral. When loaning at only 20cents on the dollar, the feds should have plently of collateral.
Call Paulsen's bluff, it was only his opening negotiating position.
Give him a bailout but with strings attached and limiting his authority in scope and time. But it looks like the Dems are caving.
Like the pitbull , it's ALL a bluff, a con job, blackmail by the kleptocratic plutocracy to ripoff citizens' money and destroy govt, which has been the neo-c*nts wet dream for decades.
Sorry 2cents but have to disagree with you on this one...if the gov't hadn't stepped in after the crash of '29 there wouldn't have been a depression. It would only have been a recession lasting 2-3 yrs and not the depression that lasted 10 yrs.
Are the Dems really caving? Or are they just betting that 4 months from now Obama will be calling the shots? With Obama getting to choose who runs the show, and no real congressional oversight, the Dems would be able to hand out all the free money as they see fit and republicans would have no say in the matter.
It's a no brainer they have to bail Fannie Mae and Freddie Mac out as those are quasi government agencies to begin with...they began as purely governmental agencies.
As long as it's transparent, and as long as it's not permanent....
apples and oranges.
The HUGE question is at what prices, how many pennies on the $, will the crap paper be purchased for.
Ya gotta figure conflict-of-interest/investment banker/Wall St Old Boy Paulsen is gonna pay "top penny" to his accomplices in the financial industry.
"if the gov't hadn't stepped in after the crash of '29 there wouldn't have been a depression"
neo-c*nt revisionism.
it better be no better than what Merrill got.
Huh? Exactly why would a Congress put all their chips on the table in the hopes that Obama wins come November?
You think is some sort of Reagan-Carter hostage situation all over again?
This entire scenario goes way beyond party lines. This is systemic.
Pete makes great points in this thread. Boutons even makes a good point about how much we'll be buying those assets for.
Just because the problem is systematic doesn't mean the proposed solution being negotiated isn't partisan. Once the government starts handing out money everyone is going to be lining up to get a share of it. No matter how much money we give out there's going to be someone else next in line wanting more.
Someone is going to get to decide who gets to dump their garbage on the taxpayers lawn and who has to hang on to theirs. Whoever gets to "play God" and make that decision is going to have a lot of power. I don't think it's unreasonable to assume the worst out of our two political parties in that they would try to manipulate that situation. Maybe the Dems are that confident that Obama's going to win, maybe they simply are just caving. Maybe Bush, Bernake & Paulson really do believe this needs to get passed in a hurry, maybe they just want to make sure they get to give away all the money before the next guy takes over.
republicans and democrats hate americans.
.........but love money.
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