Why give Wall Street or Banks one penny?

[thestain]

Consider how banks and Wall Street treat us:

1) They make our savings so insecure so that they pay us very low interest rates

2) If a Money Market fund like the Reserve has problems.. more than likely they caused the problems and.. your hard earned assets will be frozen and you will rely upon them to get anything back. Think Lehman brothers 785 Million that it borrowed from Reserve Fund.. oops.

3) No one is protecting savers!

4) All the talk in rescue package is to save the Banks and Wall Street and indirectly the economy, but.. no one talks about how the Banks and Wall Street have directly hurt the economy and continue to do so.

Yes.. it looks like money is needed to save the crisis, but.. our representatives need to know the real crisis is not lenders, not borrowers, but how terrible savers have been treated. Years ago, the FDIC was formed to protect savers. Current protection is inadequate. While borrowers and lenders could and should get some help do to seriousness of the problem, it is just wrong not to include saver rights, to protect depositors and money market fund investors against the abuse that has kept rates lower than they should be for the benefit of the lenders and borrowers at the savers expense and really hammered these rates again due to the risk of having any savings at all.

Thoughts?

 

[GTKeeper]

The only logical course of action here is this...



Pass the bailout, with the contingency that within the next year, we examine our existing regulatory instruments and FIX them, so that we are not put into this position again.


I am honestly so tired of all these 'free market' guys out there that tout the free market as the nectar of the gods or something.

A purely free market DOES NOT WORK, its a utopian fairy tale myth. I don't know how much more plainly to explain that to the folks who just don't listen.




I mean if I am a big time VP for Lehman 3 years ago, and I know that what I am about to do is VERY risky but it will pay me a big ass bonus that I will get NOW, how is the free market preventing me from screwing people over?

 

[sandorski]

Everyone needs to go find out what the plan is about and quit calling it a "Bailout". Seems like there's a huge misunderstanding on how it's supposed to work.

 

[LegendKiller]

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

 

[halik]

are you being sarcastic?

 

[ElFenix]

1) They make our savings so insecure so that they pay us very low interest rates

if you're getting low rates on a risky investment you're doing something wrong.

 

[Arkaign]

^^ In a nutshell, yes. It's proven that profit is more important than any other aspect of life, and that if risk can be put off to tomorrow, next week, next year, that people will generally do *ANY*thing for money today. There is no long-term planning, no honor or stabilizing philosophy, just gimme more more more now now now and fuck everyone else.

 

[sportage]

You're right on the banks! And you have not began to cover the issue.

Remember these:

Banks got 80% on foreclosures from fannie and freddie for each and every
foreclosed home. PLUS whatever the home owner had paid until they stopped.
THAT is EXACYLY why they NEVER wanted to work with the home owner to
avoid foreclosure. They wanted that guaranteed 80%. Screw the owner.

Banks at one time tried to close down PAY DAY LOAN companies
through congress with lobbyist, suggesting
these loan companies charged outrageous payback rates.
When all the time the banks were charging $30+ for a bounced check,
and now most banks have their own PAY DAY LOAN options built into
their direct deposit checking accounts.
Look at your bank account online, there will most likely be a PAY DAY LOAN
option available thru the bank. Rates just like the PAY DAY LOAN stores.

Yes, the banks are VERY greedy. Not to mention their CEO compensations.

 

[sportage]

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

 

[eleison]

Originally posted by: sportage

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

makes no sense... so banks want the penny that I have so that banks can pay me back my penny which I may or may not have?

Actually, this isn't about just one penny, its about 700 billion * 100 pennies. They want to take a ton of pennies from the us citizens and give them back their own pennies which the american people, may or may not have? Its raining pennies from heaven!!! ohh noes!!!

 

[LegendKiller]

Originally posted by: eleison

Originally posted by: sportage

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

makes no sense... so banks want the penny that I have so that banks can pay me back my penny which I may or may not have?

Actually, this isn't about just one penny, its about 700 billion * 100 pennies. They want to take a ton of pennies from the us citizens and give them back their own pennies which the american people, may or may not have? Its raining pennies from heaven!!! ohh noes!!!

Do you understand how the capital markets work?

In order to lend money, banks have to have money. Nobody has money they are willing to lend, even if they have it. The rescue plan is an attempt to allow them to lend money again.

Without freeing up money, it'll be stuck. Liquidity is equivalent to oil in an engine. Without it, the engine seizes up. Putting a drop of oil (a penny) gets the system going again, producing many more pennies (power).

I am starting to think it'll be too late for people to realize this.

They should start reading up on 1929.

 

[sandorski]

Originally posted by: eleison

Originally posted by: sportage

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

makes no sense... so banks want the penny that I have so that banks can pay me back my penny which I may or may not have?

Actually, this isn't about just one penny, its about 700 billion * 100 pennies. They want to take a ton of pennies from the us citizens and give them back their own pennies which the american people, may or may not have? Its raining pennies from heaven!!! ohh noes!!!

Rainfall that undoubtedly sounds like a THUD.

 

[ChronoReverse]

700B in the face of trillions gone into vapor is really nothing at all. What the bailout really would've possible done is given confidence to the said lenders.

 

[GTKeeper]

Originally posted by: LegendKiller

Originally posted by: eleison

Originally posted by: sportage

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

makes no sense... so banks want the penny that I have so that banks can pay me back my penny which I may or may not have?

Actually, this isn't about just one penny, its about 700 billion * 100 pennies. They want to take a ton of pennies from the us citizens and give them back their own pennies which the american people, may or may not have? Its raining pennies from heaven!!! ohh noes!!!

Do you understand how the capital markets work?

In order to lend money, banks have to have money. Nobody has money they are willing to lend, even if they have it. The rescue plan is an attempt to allow them to lend money again.

Without freeing up money, it'll be stuck. Liquidity is equivalent to oil in an engine. Without it, the engine seizes up. Putting a drop of oil (a penny) gets the system going again, producing many more pennies (power).

I am starting to think it'll be too late for people to realize this.

They should start reading up on 1929.

Its ironic that people don't realize that the Great Depression was triggered by a sudden siezing of credit and a mass panic. In addition to massive government debt.

This is exactly the same situation we are in now.

 

[BeauJangles]

Originally posted by: thestain
Consider how banks and Wall Street treat us:

1) They make our savings so insecure so that they pay us very low interest rates

2) If a Money Market fund like the Reserve has problems.. more than likely they caused the problems and.. your hard earned assets will be frozen and you will rely upon them to get anything back. Think Lehman brothers 785 Million that it borrowed from Reserve Fund.. oops.

3) No one is protecting savers!

4) All the talk in rescue package is to save the Banks and Wall Street and indirectly the economy, but.. no one talks about how the Banks and Wall Street have directly hurt the economy and continue to do so.

Yes.. it looks like money is needed to save the crisis, but.. our representatives need to know the real crisis is not lenders, not borrowers, but how terrible savers have been treated. Years ago, the FDIC was formed to protect savers. Current protection is inadequate. While borrowers and lenders could and should get some help do to seriousness of the problem, it is just wrong not to include saver rights, to protect depositors and money market fund investors against the abuse that has kept rates lower than they should be for the benefit of the lenders and borrowers at the savers expense and really hammered these rates again due to the risk of having any savings at all.

Thoughts?

You realize that if no money is found, there will be no credit.

Kiss your high-limit credit card goodbye.

Your daughter wants student loans for college? Good luck!

Want a mortgage? That'll be fun.

The point is that the current crisis effects the entire economy, from top to bottom. By injecting capital into these banks, we might be able to prevent them from failing, which would SAVE us taxpayers billions (if not trillions) of dollars.

 

[yuppiejr]

If we must have a bailout why not dump the $700 million into the FDIC to protect the "main street" Americans and let these banks fail and wash the bad debt out of the system? Why would we reward the institutions that took predictable risks banking on a bailout to rescue them if their risky lending practices bit them in the ass? We only promote continued irresponsibility if we let this pattern continue - better to teach a lesson by allowing the consequences to hammer these banks.

On the topic of bailouts, what's with handing GM a few billion dollars? I didn't realize if was the US Government's job to use my tax dollars to insure US businesses that make foolish decisions so they continue doing business in an unsustainable way. God forbid they force themselves to consolidate some of their less popular and redundant brands to reduce their size and operating expenses...

 

[TheDoc9]

Why not create 10 trillion? Give money to everyone.

BeauJangles, GTkeeper, LegendKiller, you guys have been lied to. Sorry.

 

[LegendKiller]

Originally posted by: TheDoc9
Why not create 10 trillion? Give money to everyone.

BeauJangles, GTkeeper, LegendKiller, you guys have been lied to. Sorry.

lol. Yeah, that's it. We were "lied to". By whom exactly? There aren't more than 5 people on here that know as much as I do about this problem, yet, somehow, you know so much more and can gauge whether I have been lied to?

I wasn't lied to, but sure as hell you've got no clue.

 

[Pens1566]

Originally posted by: LegendKiller

Originally posted by: eleison

Originally posted by: sportage

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

makes no sense... so banks want the penny that I have so that banks can pay me back my penny which I may or may not have?

Actually, this isn't about just one penny, its about 700 billion * 100 pennies. They want to take a ton of pennies from the us citizens and give them back their own pennies which the american people, may or may not have? Its raining pennies from heaven!!! ohh noes!!!

Do you understand how the capital markets work?

In order to lend money, banks have to have money. Nobody has money they are willing to lend, even if they have it. The rescue plan is an attempt to allow them to lend money again.

Without freeing up money, it'll be stuck. Liquidity is equivalent to oil in an engine. Without it, the engine seizes up. Putting a drop of oil (a penny) gets the system going again, producing many more pennies (power).

I am starting to think it'll be too late for people to realize this.

They should start reading up on 1929.

You're wasting your breath. Some people won't get it until they, or people close to them, are unemployed. Even then, I'm not sure they'll understand.

 

[eleison]

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: eleison

Originally posted by: sportage

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

makes no sense... so banks want the penny that I have so that banks can pay me back my penny which I may or may not have?

Actually, this isn't about just one penny, its about 700 billion * 100 pennies. They want to take a ton of pennies from the us citizens and give them back their own pennies which the american people, may or may not have? Its raining pennies from heaven!!! ohh noes!!!

Do you understand how the capital markets work?

In order to lend money, banks have to have money. Nobody has money they are willing to lend, even if they have it. The rescue plan is an attempt to allow them to lend money again.

Without freeing up money, it'll be stuck. Liquidity is equivalent to oil in an engine. Without it, the engine seizes up. Putting a drop of oil (a penny) gets the system going again, producing many more pennies (power).

I am starting to think it'll be too late for people to realize this.

They should start reading up on 1929.

Its ironic that people don't realize that the Great Depression was triggered by a sudden siezing of credit and a mass panic. In addition to massive government debt.

This is exactly the same situation we are in now.

If its truly about the sudden "seizing of credit". Why not let these bad banks fail, and pump money into the economy by providing funds to banks that are doing well? I'm sure the US government can also find other ways of pumping money into the US economy OTHER than a bailout of financial firms. What I see here is not the "helping of the US economy" to avoid a recession/depression. What I see here is the pleas of wall street trying to save its money, lousy investments and its high paiding jobs by fear mongering.

If it is truly about trying to get more money into the system, let the government do it. It can lower the rate in which it lends money to financial institutions -- the financial institutions that have keep "their noses clean".

 

[LegendKiller]

Originally posted by: eleison

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: eleison

Originally posted by: sportage

Why give them one penny?

Because when you need it, they have you one penny. When they can't give you one penny, because you refused to help them, then you don't get one penny either.

WHAT??? :laugh: :laugh: :laugh:

makes no sense... so banks want the penny that I have so that banks can pay me back my penny which I may or may not have?

Actually, this isn't about just one penny, its about 700 billion * 100 pennies. They want to take a ton of pennies from the us citizens and give them back their own pennies which the american people, may or may not have? Its raining pennies from heaven!!! ohh noes!!!

Do you understand how the capital markets work?

In order to lend money, banks have to have money. Nobody has money they are willing to lend, even if they have it. The rescue plan is an attempt to allow them to lend money again.

Without freeing up money, it'll be stuck. Liquidity is equivalent to oil in an engine. Without it, the engine seizes up. Putting a drop of oil (a penny) gets the system going again, producing many more pennies (power).

I am starting to think it'll be too late for people to realize this.

They should start reading up on 1929.

Its ironic that people don't realize that the Great Depression was triggered by a sudden siezing of credit and a mass panic. In addition to massive government debt.

This is exactly the same situation we are in now.

If its truly about the sudden "seizing of credit". Why not let these bad banks fail, and pump money into the economy by providing funds to banks that are doing well? I'm sure the US government can also find other ways of pumping money into the US economy OTHER than a bailout of financial firms.

Letting the banks fail will cause even more problems. The people who had funding at those banks (or deposits) will go running to them, inundating their systems of lending, or borrowing.

The US Government let hundreds of banks fail in 1929+, the same thought occured to them. What they didn't realize is that in the enusing chaos bred more chaos, completely disrupting the system. Before anybody could figure out which banks were more solid, they were all shaky. At that point nobody trusted any banks and no banks trusted depositors or borrowers.

People think that this system can just fail and then pick itself back up in a few months. It doesn't work like that. It is a very complex system that has a very simple premise. Order creates calm which creates liquidity. With a lack of order and calm, the system rips itself apart.

All the government would be doing is creating calm by letting the banks recapitalize over time. The assets they have aren't truly worth .20 on the dollar, but are worth more, but the current chaos is valuing them at that much. As a result, the banks' capital position was destroyed from the marks to market. As mark to market destroyed capital it created more chaos, which resulted in more write-downs. It was a vicious circle that depleated capital for no good reason.

If the government were to step in and calm the markets by recapitalizing the banks, the markets would start working far better than they are now.

That is in *everybody's* best interest.

 

[Robor]

Originally posted by: yuppiejr
If we must have a bailout why not dump the $700 million into the FDIC to protect the "main street" Americans and let these banks fail and wash the bad debt out of the system? Why would we reward the institutions that took predictable risks banking on a bailout to rescue them if their risky lending practices bit them in the ass? We only promote continued irresponsibility if we let this pattern continue - better to teach a lesson by allowing the consequences to hammer these banks.

On the topic of bailouts, what's with handing GM a few billion dollars? I didn't realize if was the US Government's job to use my tax dollars to insure US businesses that make foolish decisions so they continue doing business in an unsustainable way. God forbid they force themselves to consolidate some of their less popular and redundant brands to reduce their size and operating expenses...

I'll freely admit I don't know enough about economics to say if the first part would work or not. Even if it would, I seriously doubt those in office would allow it to happen - or be allowed to allow it to happen. (money talks)

I completely agree on the 2nd part. I'm against handing GM or any other US auto maker cash without strings - no wires - attached.

 

[Eeezee]

Originally posted by: sandorski
Everyone needs to go find out what the plan is about and quit calling it a "Bailout". Seems like there's a huge misunderstanding on how it's supposed to work.

We're going to purchase a bunch of shit at a premium price and get back at most 5% of our 700 billion so that creditors will be willing to pass credit around again. Sounds like a bailout to me.

And then since the creditors will have confidence that the government will bail them out again should they continue to screw up, their risk will remain at 0 and they'll continue to make decisions that screw taxpayers. Yay!

 

[sandorski]

Originally posted by: Eeezee

Originally posted by: sandorski
Everyone needs to go find out what the plan is about and quit calling it a "Bailout". Seems like there's a huge misunderstanding on how it's supposed to work.

We're going to purchase a bunch of shit at a premium price and get back at most 5% of our 700 billion so that creditors will be willing to pass credit around again. Sounds like a bailout to me.

And then since the creditors will have confidence that the government will bail them out again should they continue to screw up, their risk will remain at 0 and they'll continue to make decisions that screw taxpayers. Yay!

No. It is very possible Profit will actually be made.

 

[GTKeeper]

Originally posted by: TheDoc9
Why not create 10 trillion? Give money to everyone.

BeauJangles, GTkeeper, LegendKiller, you guys have been lied to. Sorry.

When 20-30% of all capital projects STOP in the U.S what do you think that does to the economy?


I have tried to explain ad nauseum how this will be the biggest ass kicking the 'Main Street' guy has seen in his/her lifetime unless they were actually here in 1929, but who knows this could be worse.


The last time we let this happen in 1929, it took a solid 8-12 years before the system was back up and running.

Why are people assuming that if we let all these banks fail that enough of the good ones will survive to keep everyone happy.....

BTW, in case you guys dont know. Wachovia went down fairly quickly. I am waiting on the citibank north america collapse any time now. Wachovia had a 78% exposure to derivates (% of risk-based capital) citi is at 279%.