No, the cause is pretty much universally agreed to. Lack of liquidity. Now, what lead to that is debatable, and what happened after, is also.
No, the cause is pretty much universally agreed to. Lack of liquidity. Now, what lead to that is debatable, and what happened after, is also.
Brovane
Diamond Member
- Dec 18, 2001
- 6,255
- 2,485
- 136
If I remember the Federal Government just sat by and let it happen and just thought the markets will sort themselves out in 1929.
I am certainly not a Economic expert but judging by History spending 700 Billion now (It might not even by 700 Billion), will save us money in the long run. By just sitting back and saying F@%K U to Wall Street we stand to loose a lot more than 700Billion Dollars in tax revenue alone.
It seems we are F@%K ourselves at the same time as we spiral down this rabbit hole. IMHO what we are doing now is "Cutting off Our Nose to Spite our face". I am very pissed at Wall Street and all the crap that has been pulled but unfortunately all of our collective Asses (Families, jobs etc. ) are on the line here. Think 6-8% unemployment is bad try 25%. I think everyone needs to take a deep breath and swallow there egos and work on getting us out of this mess.
Michael
Elite member
- Nov 19, 1999
- 5,435
- 234
- 106
I continue the believe that the bail out as proposed is too flawed to be passed.
It is giving too much power to the Treasury Department which is too tied to Wall Street to be unbiased. There is nothing but a hope that this will make the situation any better and the original proposal of giving a blank cheque to Paulson was laughable.
This is the same guy that propped up AIG (reasonable basis to believe that the main reason was to help investment banks that were counter parties to insuranc issued by AIG, including his former employer).
I do not see why the Government buying these assets is such a great deal. If there was such a high chance of it being profitable, private equity already would be buying.
I support proper government regulation of the markets but government buying out the market is not something I can support.
If it worked, the same instituations and people that caused the problem will still be in charge and the lesson will be once again that it is important to be too big to fail.
I also reject the fear mongering being done. I understand that people working in the banking industry are very scared about their jobs, but they'll have to feel the same pain of failing in business as normal business people do every day. They have nothing but theories on what will happen and these are the same people whose theories got us into this mess to begin with.
Michael
It is giving too much power to the Treasury Department which is too tied to Wall Street to be unbiased. There is nothing but a hope that this will make the situation any better and the original proposal of giving a blank cheque to Paulson was laughable.
This is the same guy that propped up AIG (reasonable basis to believe that the main reason was to help investment banks that were counter parties to insuranc issued by AIG, including his former employer).
I do not see why the Government buying these assets is such a great deal. If there was such a high chance of it being profitable, private equity already would be buying.
I support proper government regulation of the markets but government buying out the market is not something I can support.
If it worked, the same instituations and people that caused the problem will still be in charge and the lesson will be once again that it is important to be too big to fail.
I also reject the fear mongering being done. I understand that people working in the banking industry are very scared about their jobs, but they'll have to feel the same pain of failing in business as normal business people do every day. They have nothing but theories on what will happen and these are the same people whose theories got us into this mess to begin with.
Michael
It's pretty much exactly what the US Government did. What's funny is that they didn't realize it was a shitty policy until AFTER the system collapsed. Only then did they say "ohhh shit, we gotta fix this", by then, it was too late. Now, many criticize those actions as having prolonged the problem. They don't realize that it wasn't the action that *might* have prolonged the problem, but when it occurred.
I don't think people put this into the correct perspective. If GDP contracts 10%, then that is 1.4TR, annually, until it has recovered. We may lose 175BN on this, at worst. Seems to me a pretty fucking good idea. Not to mention the millions of jobs saved, tax revenues maintained, services maintained, and livelihoods maintained.
But fuck all of that. Who needs retirement plans anyway? Moreover, who needs jobs?
I am going to hate being right about this, but trust me, I am going to rub the shit out of this in the faces of the pricks who caused it.
First
Lifer
- Jun 3, 2002
- 10,518
- 271
- 136
I don't know, I'm not an expert.
But seriously, that's pretty difficult to tell without knowing two things; 1) what the terms of the bailout currently in committee will be and 2) when/how/under what conditions it's released (i.e. will other banks fail at home or abroad, etc.).
Btw, I don't think it's at all likely that there will be a global depression (a global recession, though, there's surely a good chance). I said there was a risk of a global depression if nothing was done. I honestly doubt Congress will sit by and watch the Dow go below 10,000, which is very likely to happen without a bailout. That said, it's very difficult to predict.
I agree 100% with you here. I look at this turmoil and have concluded that a lot of it was improper investigation/regulation by these firms (many in derivatives investment); basically akin to someone issuing what is in actuality a C-rated bond telling their lender that it's rated AAA.
I had to work, so essentially yes.
If I lose my job, I don't care. I'll find another. However, if 25% of the working population loses their jobs, then I care. That's tens of millions of families affected.
It is already happening.
You do realize that more than $1.2TR of wealth was eliminated today, all because people bitched about spending $700BN. Sounds pretty fucking retarded.
Ohh, and New Jersey is already cutting $500MM from their budgets, due to decreased tax revenue. How many services will be eliminated? How many jobs eliminated?
Nobody thinks about that.
Not surprising, considering your lack of anything remotely resembling financial or economic education or knowledge. Libertopian beliefs FTL.
Michael
Elite member
- Nov 19, 1999
- 5,435
- 234
- 106
When I want to purchase something, I save for it. I adjust my spending to be in line with my personal reality. I had a nice options payout when I left my last job and I paid my mortgage off even though most financial experts would say that is not the best use of money.
Same goes for state services. You provide what you can afford.
Jobs are created and lost all the time. You can only guess that this will be a "25%" unemployment situation. It could just as easily be a normal 10% downturn. Usually more gets done during painful periods like that.
I think there are many more safety nets and protections today than in 1929. So saying this is like 1929 is really stretching the point. One thing that is like 1929 is that the lax margin rules applied to the investment banks and they margined themselves up way more than an individual would be able to. They enjoyed high returns for a while, but now the other side of it - the risk part of the risk/reward equation - is here.
So, like I said in a previous thread, you keep tossing out job losses. Those happen in any downturn. What makes you so certain that it'll be that much worse this time?
Michael
So I guess you would vote for it without reading the legislation? That's what happened whether you knew it or not. Back door meetings in the dead of night , spring it on the unsuspecting taxpayer as fast as possible. Maybe we will be lucky this time and allow Congress to read the entire bill and disclose it to the public.
Since you didn't know, Congress was under "Martial Law" in which they were forced to vote on the bailout before the details were read/disclosed.
http://forums.anandtech.com/me...=2232845&enterthread=y
bamacre
Lifer
- Jul 1, 2004
- 21,029
- 2
- 61
Well, that depends on what you're right about.
I don't think anyone believes that not passing a bailout will result in the economy being strong in the short run, i.e., 12 to 24 months or so.
Anyone who gets to say "I told you so," has a long time to wait for it.
Nevertheless, I still say we will see a bailout pass.
Cogman
Lifer
- Sep 19, 2000
- 10,284
- 138
- 106
I don't know where I stand on this issue. But somehow I don't think throwing money at the problem would have fixed it. If the current managers misappropriated their funds to the point where they got into this mess in the first place, what is to say they wont do it again? In essence wouldn't the bail out delay the inevitable rather then save us all?
Not only that, but the government has dug itself into a big hole of debt. With 9 trillion dollars of debt, how could another trillion help us?
On the other hand. I do see that the economy tanking now would cause a lot of problems for everyone, possibly for 10+ years resulting in hard times for almost everyone where as a bail out would at least give us a couple of more years to think about a solution or potentially fix the problem.
Either way, it has been shot down now.
Not only that, but the government has dug itself into a big hole of debt. With 9 trillion dollars of debt, how could another trillion help us?
On the other hand. I do see that the economy tanking now would cause a lot of problems for everyone, possibly for 10+ years resulting in hard times for almost everyone where as a bail out would at least give us a couple of more years to think about a solution or potentially fix the problem.
Either way, it has been shot down now.
Sounds like a great thing, the way Corzine is taxing us into oblivion. NYC is doing something similar I hear.
To answer your question, they pulled the number out of their asses. Or more precisely:
http://www.forbes.com/home/200...jz_bw_0923bailout.html
http://www.forbes.com/home/200...jz_bw_0923bailout.html
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