Should the Federal Govt. Spend $1 Trillion Bailing Out US Financial Institutions?
- Thread starter bionicarm
- Start date
lovethesea
Active Member
coral keeper
Active Member
lovethesea
Active Member
M
markeo99
Guest
dogfaceman
Member
Ok, the US government spends trillions of our tax money for this bailout without asking anybody, and the "experts" are "optimistic" that it will work.
How about you, are you "optimistic"?
At its best, this bailout is thought to be the lesser or two evils. At its worse, we will be paying for this for generations to come, and the lesson is: "Go ahead and act irresponsibility and line your pockets. The government will bail you out." The sad part is, that all of us are suffering because of it. Its not just the bad mortgages anymore, or lower income people buying half a million dollar homes. Now, its your retirement plans, your investments, on and on.
Here is an example of why some degree of regulation is needed. Government's task is to protect its citizens.
How about you, are you "optimistic"?
At its best, this bailout is thought to be the lesser or two evils. At its worse, we will be paying for this for generations to come, and the lesson is: "Go ahead and act irresponsibility and line your pockets. The government will bail you out." The sad part is, that all of us are suffering because of it. Its not just the bad mortgages anymore, or lower income people buying half a million dollar homes. Now, its your retirement plans, your investments, on and on.
Here is an example of why some degree of regulation is needed. Government's task is to protect its citizens.
socal57che
Active Member
Originally Posted by Beth
http:///forum/post/2763965
lower income people buying half a million dollar homes.
Hey...I resemble that remark...
You're right, Beth. Where does it end?
http:///forum/post/2763965
lower income people buying half a million dollar homes.
Hey...I resemble that remark...
You're right, Beth. Where does it end?
acrylics
Member
The bailout may turn out to be a fairly decent investment over time. Ie., not all sub-prime mortgages will default - only a small percentage. I don't know what they are going to pay for them but I'm guessing $.30 on the dollar or so, but again just a guess. Once the housing market stabilizes, these will become liquid again and the treasury can sell them back to banks and other investment houses. If it's at a profit - it was a good investment. If it's at a slight loss, better than the alternative. Worst case scenario is that they are still backed by real estate so not a total loss in any event. The net asset value (NAV) of the dollar fell below a buck last Tuesday night which could have literally caused the dollar to collapse under it's own weight without this bailout. So while we may not like it, IMO it was absolutely necessary.
I don't know if this was to include credit default swaps (CDS) which actually concern me more than subprimes.
I don't know if this was to include credit default swaps (CDS) which actually concern me more than subprimes.
rylan1
Active Member
This is not over.... the next crisis will be the Alt A mortages... are economy is in bad shape... the reason why we are in this mess is because of deregulation and lack of oversight.
Can you imagine if Social Security was privatized into these institutions that some were calling for? Not only would your 401k be at risk... your social security would also be at risk.
Can you imagine if Social Security was privatized into these institutions that some were calling for? Not only would your 401k be at risk... your social security would also be at risk.
reefraff
Active Member
Originally Posted by Rylan1
http:///forum/post/2765328
This is not over.... the next crisis will be the Alt A mortages... are economy is in bad shape... the reason why we are in this mess is because of deregulation and lack of oversight.
Can you imagine if Social Security was privatized into these institutions that some were calling for? Not only would your 401k be at risk... your social security would also be at risk.
Social Security IS in this big a mess. One of the driving forces behind the whole subprime debacle was the government pushing for lenders to give mortgages to low income people who couldn't afford them.
http:///forum/post/2765328
This is not over.... the next crisis will be the Alt A mortages... are economy is in bad shape... the reason why we are in this mess is because of deregulation and lack of oversight.
Can you imagine if Social Security was privatized into these institutions that some were calling for? Not only would your 401k be at risk... your social security would also be at risk.
Social Security IS in this big a mess. One of the driving forces behind the whole subprime debacle was the government pushing for lenders to give mortgages to low income people who couldn't afford them.
lovethesea
Active Member
does anyone know anything about a 2 billion yes BILLION dollar slush type fund that Lehman has that will be going to bonuses??
stdreb27
Active Member
The banks were required to lend money to the "affordable housing" crowd. Then the lenders in turn were required to bump up otherwise declined clients. They turned around and sold the morggages (sorry I know I just misspelled something to avoid the filter) to fanny and freddy. Which turned around and accounted them as assets, sold them as securities, then borrowed more money on top of that. So when these morggages started defaulting they not only lost money on the loan but were unable to pay back the money they borrowed to buy more bad morggages. This isn't lack of oversight problem, this is bad legislation, requiring more legislation to allow the bad legislation to survive. And it bringing down major companies in the process.
acrylics
Member
Originally Posted by Rylan1
http:///forum/post/2765328
This is not over.... the next crisis will be the Alt A mortages... are economy is in bad shape... the reason why we are in this mess is because of deregulation and lack of oversight.
There is quite a bit more to it that that but as previously stated - some bad legislation *coupled* with deregulation, many years of low interest rates, a consumer that can't live within their means and a gov't that doesn't provide a good example for them, falling housing market as well as a few otherr factors, all thrown in with some leveraged derivatives. A perfect storm, so to speak.
Can you imagine if Social Security was privatized into these institutions that some were calling for? Not only would your 401k be at risk... your social security would also be at risk.
Philosophically speaking, I'd say good, let SS go, I don't believe in it nor 98% of all gov't programs. But from a practical perspective, you're right. OTOH, no investment has done better over time than the market, even with all the downs, still better. FWIW, SSA is in a much much bigger mess over the next couple of generations. I don't worry about it though, I have absolutely no confidence that I'll ever see a dime of SS so I've written it off in my own mind and am taking care of it myself. I would suggest same to anyone so if you ever do get SS, it will be a bonus retirement SUPPLEMENT as it was intended.
Problem with raising taxes is it could very well stifle the economy even more, thus lowering net revenue. What we should be doing is slowly raising taxes when the economy is going well, then lowering them slowly when the economy slows, much as we *theoretically* do with interest rates.
I'm afraid we are just going to have to wait this one out, could take a few years to be honest. I don't see any "fix" for this other than time to work through it. I could definitely see some legislation passed or repealed to help keep it from happening again but no quick fix.
JMO, YMMV
http:///forum/post/2765328
This is not over.... the next crisis will be the Alt A mortages... are economy is in bad shape... the reason why we are in this mess is because of deregulation and lack of oversight.
There is quite a bit more to it that that but as previously stated - some bad legislation *coupled* with deregulation, many years of low interest rates, a consumer that can't live within their means and a gov't that doesn't provide a good example for them, falling housing market as well as a few otherr factors, all thrown in with some leveraged derivatives. A perfect storm, so to speak.
Can you imagine if Social Security was privatized into these institutions that some were calling for? Not only would your 401k be at risk... your social security would also be at risk.
Philosophically speaking, I'd say good, let SS go, I don't believe in it nor 98% of all gov't programs. But from a practical perspective, you're right. OTOH, no investment has done better over time than the market, even with all the downs, still better. FWIW, SSA is in a much much bigger mess over the next couple of generations. I don't worry about it though, I have absolutely no confidence that I'll ever see a dime of SS so I've written it off in my own mind and am taking care of it myself. I would suggest same to anyone so if you ever do get SS, it will be a bonus retirement SUPPLEMENT as it was intended.
Problem with raising taxes is it could very well stifle the economy even more, thus lowering net revenue. What we should be doing is slowly raising taxes when the economy is going well, then lowering them slowly when the economy slows, much as we *theoretically* do with interest rates.
I'm afraid we are just going to have to wait this one out, could take a few years to be honest. I don't see any "fix" for this other than time to work through it. I could definitely see some legislation passed or repealed to help keep it from happening again but no quick fix.
JMO, YMMV
darthtang aw
Active Member
You know, I see no difference from this mortgag-e crisis (which was brought about by the policies of the current administartion) as when the tech buble burst at the end of the clinton administration. Both administrations and the population put to many eggs in one basket, eventually the basket gets to heavy for all the eggs.
a lot of people used the mot-gage industry as their own personal stock market. I never understood when people whined they lost money in the stock market yet don't complain about the millions of people that daily lose millions in casinos. It is no different. You gamble you have a risk of loss.
Let the companies fold. Sure we may have a depression or recession but these short term fixes only stave off the inevitable a little bit and costs the country far more over all in the long run. Let people learn the hard way. If we keep holding hands they never learn.
a lot of people used the mot-gage industry as their own personal stock market. I never understood when people whined they lost money in the stock market yet don't complain about the millions of people that daily lose millions in casinos. It is no different. You gamble you have a risk of loss.
Let the companies fold. Sure we may have a depression or recession but these short term fixes only stave off the inevitable a little bit and costs the country far more over all in the long run. Let people learn the hard way. If we keep holding hands they never learn.
darthtang aw
Active Member
Originally Posted by Rylan1
http:///forum/post/2765328
This is not over.... the next crisis will be the Alt A mort-ages... are economy is in bad shape... the reason why we are in this mess is because of deregulation and lack of oversight.
No, the reason we are in this mess is people are stupid. Point blank. from the people signing the deeds, to the people giving the loans. Many people in fore-closures right now "own" 2-4 houses. Why? Because housing was rising faster than anything but gold so the saw it as an investment. The others, sign loans they could not afford and didn't care. now they are crying.
Let me ask you this, would you hand over a home worth 175,000 dollars to a person making 30,000 a year? this is typical of what happenned. also typical was handing over loans like this 4 times to someone making under 100,000 a year. This has nothing to do with no oversight and everything to do with absolute and complete stupidity. Now my children will have to pay and bail out the stupid people when it comes to pay the piper. This will happen again in 20 years minimum in another industry and the cycle will continue until we realize stupidity should not be bailed out but left alone to teach a lesson.
If you put your hand in the fire and don't get burned are you going to stop putting your hand in the fire? even if you know it might be a bad idea?
http:///forum/post/2765328
This is not over.... the next crisis will be the Alt A mort-ages... are economy is in bad shape... the reason why we are in this mess is because of deregulation and lack of oversight.
No, the reason we are in this mess is people are stupid. Point blank. from the people signing the deeds, to the people giving the loans. Many people in fore-closures right now "own" 2-4 houses. Why? Because housing was rising faster than anything but gold so the saw it as an investment. The others, sign loans they could not afford and didn't care. now they are crying.
Let me ask you this, would you hand over a home worth 175,000 dollars to a person making 30,000 a year? this is typical of what happenned. also typical was handing over loans like this 4 times to someone making under 100,000 a year. This has nothing to do with no oversight and everything to do with absolute and complete stupidity. Now my children will have to pay and bail out the stupid people when it comes to pay the piper. This will happen again in 20 years minimum in another industry and the cycle will continue until we realize stupidity should not be bailed out but left alone to teach a lesson.
If you put your hand in the fire and don't get burned are you going to stop putting your hand in the fire? even if you know it might be a bad idea?
nano reefer
Active Member
of course not! where are they going to get all this 1 trillion dollars? taxes, you say? they already spent all that! so we will borrow it from countries like CHINA, BRASIL, and MEXICO. and do you think we will ever pay off that 1 trillion? hell no! so just add another trillion to foreign debt and prolong our inevitable national bankruptcy.
If Reagan did'nt take down the orders of congress set forth by FDR that made banks behave in a certain way, we wouldn't have this problem. Put those plans back into action!
If Reagan did'nt take down the orders of congress set forth by FDR that made banks behave in a certain way, we wouldn't have this problem. Put those plans back into action!