Why the bailout will be a disaster

[chess9]

Originally posted by: Michael
I agree that the the analysis in the OP is too simple, but the people dismissing it are also over simplifying. The government is not buying plain vanilla mortgages, they are buying derivitives. Because of the leverage in the derivitives, a 20% decline in the underlying asset values could easily wipe out the entire instrument.

Part of the reason that the market is "illiquid" is that there are few institutions that can analyze and buy those types of instruments and many of the ones that can have failed or are in dire straits.

Michael

YESSSSSSSSSS!!

Thank you Michael!!

Someone else GETS it.

Derivatives probably have NO value because there is no market for them. The Treasury is going to try to create a market for them. LOL. Few real mortgages will be purchased by Treasury, which is why Treasury didn't want the obligations to be purchased specifically named. They are under no obligation to buy a SINGLE MORTGAGE. Good bloody luck with that!!

I posted the entire bill in another thread, and I read all of it. If you think any of the things the mainstream media said were going to happen WILL happen, I have land for you in Florida! No CEO will lose much, if any, compensation, and this bill will do nothing but put a bandaid on the finger of a lung cancer patient.

-Robert

 

[bozack]

Originally posted by: Drift3r

That's because he is being obtuse and doesn't care to be honest. He could care less that the banking industry itself created the situation by pushing for the removal of banking regulations which setup this perfect storm of failure. He much rather blame the little guy because it requires less work to do so then to actually figure out how the banking industry fleeced the US tax payer.

Nice try but you fail,

As always, no one had a gun to these peoples heads and forced them to sign, they did so of their own volition, sure the lenders made the plans seem pretty attractive and pushed them over more traditional options but ultimately it was the peoples own stupidity that caused them to sign and take on debt they couldn't pay back.

 

[jackace]

Originally posted by: bozack

Originally posted by: Drift3r

That's because he is being obtuse and doesn't care to be honest. He could care less that the banking industry itself created the situation by pushing for the removal of banking regulations which setup this perfect storm of failure. He much rather blame the little guy because it requires less work to do so then to actually figure out how the banking industry fleeced the US tax payer.

Nice try but you fail,

As always, no one had a gun to these peoples heads and forced them to sign, they did so of their own volition, sure the lenders made the plans seem pretty attractive and pushed them over more traditional options but ultimately it was the peoples own stupidity that caused them to sign and take on debt they couldn't pay back.

No one says the people taking the loans didn't screw up, but people are responsible for themselves and their credit. If they want to screw it up let them go ahead. The problem is these banks have the responsibility to investors (and as we have seen the entire economy) to not take on overly risky loans. Both failed, but banks did more than just fail themselves they failed their investors and our entire economy.

 

[Craig234]

Originally posted by: Evan Lieb
Your comments just don't make any sense and you simply cannot explain otherwise.

They do, but you are welcome to your opinion. I'm still looking for the Wall Street people who defend the Paulson bailout to explain why none of the alternatives are better.

 

[chess9]

http://www.vanityfair.com/poli...2008/11/stiglitz200811

Stieglitz! Read it and weep! This is YOUR America. These are the Republicans YOU voted for and who RUINED our country.

"Virtually all the indicators look grim. Inflation is running at an annual rate of nearly 6 percent, its highest level in 17 years. Unemployment stands at 6 percent; there has been no net job growth in the private sector for almost a year. Housing prices have fallen faster than at any time in memory?in Florida and California, by 30 percent or more. Banks are reporting record losses, only months after their executives walked off with record bonuses as their reward. President Bush inherited a $128 billion budget surplus from Bill Clinton; this year the federal government announced the second-largest budget deficit ever reported. During the eight years of the Bush administration, the national debt has increased by more than 65 percent, to nearly $10 trillion (to which the debts of Freddie Mac and Fannie Mae should now be added, according to the Congressional Budget Office). Meanwhile, we are saddled with the cost of two wars. The price tag for the one in Iraq alone will, by my estimate, ultimately exceed $3 trillion. "

"But there are ways of thoughtfully shaping policy that can walk a fine line and help us get out of our current predicament. Spending money on needed investments?infrastructure, education, technology?will yield double dividends. It will increase incomes today while laying the foundations for future employment and economic growth. Investments in energy efficiency will pay triple dividends?yielding environmental benefits in addition to the short- and long-run economic benefits.
The federal government needs to give a hand to states and localities?their tax revenues are plummeting, and without help they will face costly cutbacks in investment and in basic human services. The poor will suffer today, and growth will suffer tomorrow. The big advantage of a program to make up for the shortfall in the revenues of states and localities is that it would provide money in the amounts needed: if the economy recovers quickly, the shortfall will be small; if the downturn is long, as I fear will be the case, the shortfall will be large. "


-Robert

 

[BoberFett]

Originally posted by: chess9
Stieglitz! Read it and weep! This is YOUR America. These are the Republicans YOU voted for and who RUINED our country.

And the Democrats who sat idly by and watched it happen, or in many cases helped.

 

[chess9]

Originally posted by: BoberFett

Originally posted by: chess9
Stieglitz! Read it and weep! This is YOUR America. These are the Republicans YOU voted for and who RUINED our country.

And the Democrats who sat idly by and watched it happen, or in many cases helped.

True in some cases.

Notice that Stieglitz is no supporter of the bailout bill? And many more Dems than Republicans voted for it, but both Republicans and Democrats who voted for and against the bill did so mainly for WRONG REASONS. When NO ONE in Congress has a clue, it's time to replace them with people who will stop, think, discuss solutions, THEN ACT. They are all bloody idiots in my book.

But, you are ignoring Bush's de-regulation of the economy. That allowed most of this to happen. Read the article!

-Robert

 

[SP33Demon]

Originally posted by: Craig234

Originally posted by: Evan Lieb
Your comments just don't make any sense and you simply cannot explain otherwise.

They do, but you are welcome to your opinion. I'm still looking for the Wall Street people who defend the Paulson bailout to explain why none of the alternatives are better.

Link to alternative plans so we can make an assessment?

 

[eleison]

Originally posted by: BoberFett

Originally posted by: chess9
Stieglitz! Read it and weep! This is YOUR America. These are the Republicans YOU voted for and who RUINED our country.

And the Democrats who sat idly by and watched it happen, or in many cases helped.

http://www.youtube.com/watch?v=NU6fuFrdCJY

http://www.youtube.com/watch?v=_MGT_cSi7Rs

More free money to people who cannot afford it.

 

[chess9]

Originally posted by: eleison

Originally posted by: BoberFett

Originally posted by: chess9
Stieglitz! Read it and weep! This is YOUR America. These are the Republicans YOU voted for and who RUINED our country.

And the Democrats who sat idly by and watched it happen, or in many cases helped.

http://www.youtube.com/watch?v=NU6fuFrdCJY

http://www.youtube.com/watch?v=_MGT_cSi7Rs

More free money to people who cannot afford it.

We've been over that here already. Not true. I've debunked that stuff in another thread. <Yawn> NEXT!

-Robert

 

[eleison]

Originally posted by: chess9

Originally posted by: eleison

Originally posted by: BoberFett

Originally posted by: chess9
Stieglitz! Read it and weep! This is YOUR America. These are the Republicans YOU voted for and who RUINED our country.

And the Democrats who sat idly by and watched it happen, or in many cases helped.

http://www.youtube.com/watch?v=NU6fuFrdCJY

http://www.youtube.com/watch?v=_MGT_cSi7Rs

More free money to people who cannot afford it.

We've been over that here already. Not true. I've debunked that stuff in another thread. <Yawn> NEXT!

-Robert

Just because you "debunked it" in your "mind" doesn't mean its not true. In any case, I agree, "NEXT!"

More free money to people who cannot afford it...

 

[First]

Originally posted by: Craig234

Originally posted by: Evan Lieb
Your comments just don't make any sense and you simply cannot explain otherwise.

They do, but you are welcome to your opinion. I'm still looking for the Wall Street people who defend the Paulson bailout to explain why none of the alternatives are better.

It was already explained to you, you just don't understand it.

 

[Craig234]

Originally posted by: Evan Lieb

Originally posted by: Craig234

Originally posted by: Evan Lieb
Your comments just don't make any sense and you simply cannot explain otherwise.

They do, but you are welcome to your opinion. I'm still looking for the Wall Street people who defend the Paulson bailout to explain why none of the alternatives are better.

It was already explained to you, you just don't understand it.

You're the one who clearly doesn't understand. You 'explained' a fallacy based on your lack of reading comprehension.

I tried to diplommatically post an 'agree to disagree' post to end the pointless exchange with you with a minimum of criticism, but you keep yapping. Drop it.

My question isn't for you, it's for informed people who can discuss the Paulson plan vs. the alternatives that you are ignorant of.

 

[First]

Originally posted by: Craig234

Originally posted by: Evan Lieb

Originally posted by: Craig234

Originally posted by: Evan Lieb
Your comments just don't make any sense and you simply cannot explain otherwise.

They do, but you are welcome to your opinion. I'm still looking for the Wall Street people who defend the Paulson bailout to explain why none of the alternatives are better.

It was already explained to you, you just don't understand it.

You're the one who clearly doesn't understand. You 'explained' a fallacy based on your lack of reading comprehension.

I tried to diplommatically post an 'agree to disagree' post to end the pointless exchange with you with a minimum of criticism, but you keep yapping. Drop it.

My question isn't for you, it's for informed people who can discuss the Paulson plan vs. the alternatives that you are ignorant of.

I'm plenty informed on this and you still haven't come up with a single alternative that actually makes any sense, nor do you understand the differences to differentiate for yourself what is a superior alternative and what isn't, so your point from the beginning has been utterly moot.

 

[Craig234]

Originally posted by: SP33Demon

Originally posted by: Craig234

Originally posted by: Evan Lieb
Your comments just don't make any sense and you simply cannot explain otherwise.

They do, but you are welcome to your opinion. I'm still looking for the Wall Street people who defend the Paulson bailout to explain why none of the alternatives are better.

Link to alternative plans so we can make an assessment?

Out of a combination of laziness, not wanting to limit the alternatives discussed, and wnating to get responses from people who are informed enough they are already familiar with the alternaives suggested, I didn't list the specific plans I've run across. But as your post follows a mention of Stieglitz, here is a link to some alternative suggestions by him as *one example*.

It's not the only alternative, but it includes ideas like a 'financial industry tax' to help fund the bailout that have reportedly often beeen used well in the past.

Discussing his proposal would be one of the alternatives I think would be useful.

 

[Craig234]

nm.

 

[First]

deleted for Craig