The $700 Billion Bailout Package

But...it all started with the CRA.

Lenders so an opportunity to turn a fast dollar, buyers also saw the same opportunity.

Fannie and Freddie insured and ensured that this could go own for quite some time, until now.

This mess rests squarely on the CRA and the idiot Dem commies.

There's this great mortgage product that's been out there for many years called a "30-year fixed rate mortgage." It's so cool. The same interest rate applies for the entire term of the mortgage. On day 1 the borrower knows exactly what his monthly payment is for all 30 years. The homeowners that are in trouble now could have just gotten a mortgage like that and they wouldn't be in this mess. Also, people like me who acted responsibly wouldn't be having my tax dollars used to bail them out.

I agree with photofinish -- dumb people don't need to own property.

I’m fascinated by this $700 billion bail-out.

Where’s the money coming from?

We’re told - the American taxpayer.

But the total tax revenue right now doesn’t begin to finance US government expenditure.

And in a recession, the tax revenue goes down anyway.

So the government will have to go back to the begging bowl to borrow even more - or maybe just print more dollars.

As the US is trillions of dollars in debt right now and has already has to rely on foreigners to keep the economy afloat - just how your future generations are going to pay for all this is a mystery.

And if the bail-out doesn’t succeed?

President Roosevelt had War Bonds to help pay for WWII. President Obama should have Crusader Bonds to help pay for the occupations of Iraq, Afghanistan, and Palestine, that way people who love imperialism and militarism can put their money where they mouth is.

The same idea would be good for Katrina, Ike, AIG, NASA, Fannie Mae, Bullet Train, Freddie Mac, etc. Let the public decide what they support by allowing them to buy bonds to fund the activity. This would be the ultimate democracy.

A valiant effort, but probably too little too late. Money market funds shrunk by over $500 billion in the last three days of last week.

http://www.foxbusiness.com/pdfs/rescuebill_First%20Draft.pdf

Dow down 664.

Dow down 777 at the close now. If this package doesn't pass, we will see Dow at 7000 before long. If it does pass, we will see it at 8500.

All we should expect taxpayers to fund are Wall St relief and not a bailout. Washington can deploy National Guard troops to prevent rioting, looting, homicides and general chaos in Manhattan as firms go belly up. The State of New York can organize fleets of tow trucks to efficiently reposess the cars on Wall St and pre-position moving vans, mobile homes, and social workers for the many home foreclosures in areas where Wall St workers reside. That's about all any person can expect. Wall St can't expect a bailout. It's not fair when Katrina, Ike, Detroit, Walmart/Nike, 9-11, etc. victims have to start again from scratch. Wall St should be treated in the same manner. If you are a Wall St worker, we won't let anyone down. You'll be fed, housed, and taken care of, by Uncle Sam. No worries.

This is just more scare tactics by Bush. Remember all the scare stories he floated about Iraq in order to justify his moronic war? This is more of the same. Some banks and businesses should fail. Thats part of Bush's beloved capitalism. Now he gets a taste of his own medicine. A little bit of real capitalism for the rich is good for a change.

gringo wrote:

Dow down 777 at the close now. If this package doesn't pass, we will see Dow at 7000 before long. If it does pass, we will see it at 8500.

Amusing. But you have your scenarios reversed.

777?

Even god hates America.

Well, the bill did not pass the house, and you saw what happened today. Big institutions were dumping massive amounts of financial shares. Since shorting is not allowed, you saw long-term holders unloading by the truckload.

It is unfortunate that most of the citizens (and many in Congress) do not grasp the gravity of this situation. They are stuck on the 1st, most rudimentary, level of thinking (call it the "Keith Stone" level), which says that "Hell no, I'm not bailing out them Wall Streeters! Screw 'em! Let 'em suffer!" And that is as far as the thinking goes. What they are missing is that taxpayers are going to be hurt WAY worse than $700 billion if nothing is done. There are dynamics between firms that form a complex web that are unknown to 98% of Americans. This has been explained earlier on this thread, but most have not understood it and therefore ignored it.

I think the understanding will come when Ford, GM, Chrysler, General Electric, American Express, and a few dozen others all file for bankruptcy within two months of each other. You think they are immune to this? You are wrong. They aren't Wall Street firms, but that won't matter. When the FDIC fund has been depleted, and people are racing each other to pull money out of the bank, then maybe the understanding will sink in. Why do you think Paulson is screaming into the TV to get the bill passed? Nobody likes it, especially me. Paulson doesn't even like it. But he is out of ammo. Some sort of bailout is preferable to 30% unemployment and starvation. The masses will wish they had coughed up $700 billion then.

I'm not trying to be an alarmist, but I can see where this is going. If you think it stops at Wall Street, look around you. It has already spread far beyond that.

I completely agree with you Carnivore.

This is what happens when the future of our economy is decided by the democratic process.

HEYYO wrote:

I completely agree with you Carnivore.

This is what happens when the future of our economy is decided by the democratic process.

I've said it before and I'll say it again: democracy simply doesn't work.

"Seems like it is mostly the materialist Laguna Beach"

You would not be correct. The beach areas in California are still very very expensive. Sales have slowed but haven't gone down much. It is the inland areas that have been crushed - San Berdino and Riverside. People buying multi-million dollar homes aren't buying them using sub-prime mortgages.

An ocean front lot (no house on it) just sold for 12.5 million in Dana Point, which is right next to Laguna Beach. There are 48 lots for sale in that development but not all of them are oceanfront.

Well that's a surprise.

When you discover that you've invested in a company run by fools, the best thing to do is sell...

Isn't that the way we treat deadbeats in this country? When private citizens can't pay their loans-- even if it is due to medical expenses-- do we help them?

Thank you so very much for taking the time to explain it to us ignorant fools. Maybe you can throw some more pearls before us swine so that we can understand that complex web...

Please explain how the executives who've managed to ruin the financial system need to be paid more than the president? Please explain how the taxpayers in this country should get worse deals than those gotten by the citizens whose countries run SWF's?

Once again, you present this as an either-or. There are never only two choices. Don't you think that there are other options for the unwashed masses?

I don't understand all this, but I do know this:

In 1975 my father bought his first house for $49,000. His annual income that year was $40K. So, he borrowed about what he was earning after a downpayment.

In 2006 my brother was earning about $75K a year and was carrying about $40K in credit card debt. Yet, he qualified for an $800,000 home loan!!

There is something fundamentally screwed up about that. I'm sure there is plenty of blame to go around - lack of government oversight, greedy mortage brokes left to run amok, etc... But the bottom line is that someone with my brother's specs should not be able to borrow that much money, period.

Carnivore 69 wrote:

Well, the bill did not pass the house, and you saw what happened today. Big institutions were dumping massive amounts of financial shares. Since shorting is not allowed, you saw long-term holders unloading by the truckload.

Give up on the fake alarmist talk. Let's see, a bunch of rectal protectors run around screaming DOOMSDAY if you don't bail us out. Congress doesn't take the bait and and the doom-sayers exact swift retribution against themselves to try to up the anty.

There are plenty of options on the table to right the economy once the CEO protection plan is off the table. Let Wall St self-flagellate for a while and they're figure out soon enough that the sky isn't falling, deals are still happening, and once they dump the beemer to get some capital they can participate in the market again.

Did you see what happened to the market yesterday? That doesn't worry you?

Have you been paying attention to the job report numbers for the last few months?

Fear has spread from the credit market to the stock market. People realize that without people's ability to get a car loan or mortgage and business not being able to get a loan to expand unempolyment will increase. With less confidence consumer spending decreases and consumer spending is responsible for about 2/3 of the economy's growth. Something needs to be done to restore confidence in the markets. Doing nothing doesn't instill confidence.

Do you realize the proposal had a provision against golden parachutes?