700 Billion
- Thread starter RonC
- Start date
Am I wrong for thinking this but why would we give this money to the same bankers that got us into this shit to begin with? Even if the Bailout is passed and the money introduced into the system, it will be too little too late to get us back to normal anytime soon. The people who run Banks will treat their banking assets much like they treat their personal assets. They will hoard. Yes, they will make some loans where they need to make their best customers happy and to keep their biggest customers afloat, but I doubt that much of that money will be loaned to MainStreet. Why ? Because of uncertainty. The bankers who got us into this mess, those that still have jobs and those who used to work at Investment Banking Companies and took over or became banks, will be afraid to loan out much money for fear of running into liquidity problems again. They dont want to go through this again anymore than you or I do. One of my favorite sayings is that when you sit at the table to do a business deal, you look for the sucker. If you dont see the sucker, its you. Well there is a new sucker at the business table, The US Government. There will be an untold number of vulture deals put together to leverage the anxiety of politicians who want to prove the Bailout can make a profit and quickly get taxpayer money back. Dont be shocked to see the XY Morgan BailOut Opportunity Fund being sold in commercials on CNBC and Fox Business Network.
/steps back off the soapbox
You may return to whatever you were doing.
/steps back off the soapbox
You may return to whatever you were doing.
I don't think the government is using the money to bail the banks out, I just don't think they want to tell us that Dr. Evil has his laser beam focused on the USA and will fire unless he gets 700 beeeellion dollars. :tazerblas
Where are you Austin Powers???
Where are you Austin Powers???
1. This money won't help a lick on foreign oil dependence. In fact, the US will now owe foreign countries even more money.
2. Actually, I wouldn't mind this as most of my investments have been out of the market all year. Best time to get back in is when stocks are way down.
3. Home value depends on many factors including condition, location, local economy, etc. I can't control most of these factors, so I don't worry about it much. Besides, it's only paper value until I sell ... which won't happen for several more years. Also, I doubt any of this bailout money will affect any homeowners directly.
We cannot blame Wall Street and the Bankers. If we must place blame lets look at the underlying cause of all of this, the peole who aren't paying thier mortgages. The Bankers we just providing a service that the people wanted. This is a problem of greed and it started with all of us. People wanted too much house, too many cars, too much in general. How did they get it? They charged it. Heaven forbid anyone save anything. This seems to happen every 20 or 30 years. I guess we will never learn.
I agree that Main St won't see any of this money; otherwise it would be called econmic stimulous package #2. I don't think the intent is to bail out the home owners who overspent, or took out too much credit. The problem with people taking out too much credit was a result of the banks allowing them to take out too much credit and the banks were almost forced to allow them to do it under legislation passed and pushed by both democrats and republicans. Or at least that's my understanding.
I also understand the "bailout" is trying to get these lending agencies and the investros of those lending agencies back on their feet, and to do that, the lendors must conintue to provide loans to the many businesses and small businesses that rely on credit to creat cash flow to pay employees, debts, accounts, etc. Basic day to day operations. Fortunately my company always has and always will deal in cash. We don't use credit. But that's another story.
The "bailout" will allow those businesses to continue day to day operations. These are businesses that range all across the board that affect our daily lives whether we know it or not.
Imagine this, the regrigerated trucking company that delivers milk to your local grocer does business on a credit system; i.e. they daily cash flow is generated by a revoling loan from a bank. That bank is refusing to give the trucking co that monthly loan they need to pay for fuel, payroll, etc. Now your milk is no longer able to be delivered because the trucking co. can't get the everyday business loan it needs to operate becasue the banks are in shut down mode becasue they've got no backing from the investors that back the bank and it's loans.
Imagine that scenario played out in nearly every facet of the things you need on a daily basis.
But again, that's my understanding of it. There's more to it than that obviously, but i'm not knowledgeable enough to elaborate on it coherently.
Just my .02
I also understand the "bailout" is trying to get these lending agencies and the investros of those lending agencies back on their feet, and to do that, the lendors must conintue to provide loans to the many businesses and small businesses that rely on credit to creat cash flow to pay employees, debts, accounts, etc. Basic day to day operations. Fortunately my company always has and always will deal in cash. We don't use credit. But that's another story.
The "bailout" will allow those businesses to continue day to day operations. These are businesses that range all across the board that affect our daily lives whether we know it or not.
Imagine this, the regrigerated trucking company that delivers milk to your local grocer does business on a credit system; i.e. they daily cash flow is generated by a revoling loan from a bank. That bank is refusing to give the trucking co that monthly loan they need to pay for fuel, payroll, etc. Now your milk is no longer able to be delivered because the trucking co. can't get the everyday business loan it needs to operate becasue the banks are in shut down mode becasue they've got no backing from the investors that back the bank and it's loans.
Imagine that scenario played out in nearly every facet of the things you need on a daily basis.
But again, that's my understanding of it. There's more to it than that obviously, but i'm not knowledgeable enough to elaborate on it coherently.
Just my .02
Broadway Joe
Formerly Havana Joe
Regardless now, the House killed it! Apparently, the majority of it's opposers were Republicans. Meaning, Bush's own party can't even stand behind him anymore!
Now and the in the near future is gonna be a great time to be buying. the only trick will be figuring out which ones are gonna make it. but then again, that's always the case. Of course, if they all drop, even the consistent performers will go up again at some point.
There's money to be made in this snafu.
There's money to be made in this snafu.
cvm4
BoM - July '05 & Dec. '10
Something needs to be done. Here's my take on the situation and how I understand/comprehend it.
IMO, it's not a bailout of any means. These assets they'll buy will have incoming cash flows attached to them. Once the Treasury sets a price for them, the market will follow in valuing them that way. We need to get these illiquid assets off the books of the finance companies that hold them.
A mortgage is originated by a bank (think Freddie/Fannie, CountryWide, etc.) and is bundled in with other mortgages and sold off. This is mainly so these firms can free up money to do more mortgages. Then, the banks that bought them or originated them (think investment banks and huge mortgage banks) take these bundled mortgages and create quasi-bonds out of them. It was great when the people in the house were paying the mortgage. But, when they stopped paying, the cash flows quit coming in for certain bonds (subprime, Alt-A, etc). As it worsened, the securities began to be devalued and consequently became illiquid. No one wanted them.
And, firms used these assets (among other things) as collateral to get cash to meet their short term needs. This was the downfall of Lehman and Bears, also being highly leveraged (35:1) doesn't help either.
IMO, it's not a bailout of any means. These assets they'll buy will have incoming cash flows attached to them. Once the Treasury sets a price for them, the market will follow in valuing them that way. We need to get these illiquid assets off the books of the finance companies that hold them.
A mortgage is originated by a bank (think Freddie/Fannie, CountryWide, etc.) and is bundled in with other mortgages and sold off. This is mainly so these firms can free up money to do more mortgages. Then, the banks that bought them or originated them (think investment banks and huge mortgage banks) take these bundled mortgages and create quasi-bonds out of them. It was great when the people in the house were paying the mortgage. But, when they stopped paying, the cash flows quit coming in for certain bonds (subprime, Alt-A, etc). As it worsened, the securities began to be devalued and consequently became illiquid. No one wanted them.
And, firms used these assets (among other things) as collateral to get cash to meet their short term needs. This was the downfall of Lehman and Bears, also being highly leveraged (35:1) doesn't help either.
cvm4
BoM - July '05 & Dec. '10
I'd avoid financials for the future.
I wouldn't hesitate to look at big, multinational companies.
You have to start thinking about what people WILL need, versus what they WANT.
The companies that fit that criteria will prosper.
Broadway Joe
Formerly Havana Joe
A glass 1/2 full view would be that all the bros that are still contributing to their 401Ks, IRAs, etc..Our dollar is going further as the market continues its plunge. I.E. stocks are cheaper therefore we can buy more w/out changing our out-of-pocket contributions!
I heard that today, so I tought I would share it....
I heard that today, so I tought I would share it....
Cigary43
Just Another Ashhole
I have a bad feeling this isn't the last we have seen. By the time they think of a way to try and fix things they need to scare the crap outta everyone first and then deplete the markets of any bounce back and then create a panic among investors to sell their stocks that are almost worth 50% of what they once were. I esp. love the part where 6-8% on a home loan is not enough to keep the banks floating after all when you pay $200K for a house on a 30 year loan and the bank ends up reaping about $450K for the term of the loan how do we expect the banks to make a buck, the poor boobies? Even better is the 29% interest on credit cards and we talk about loan sharks being evil? There is so much to bitch about that I just reach for another cigar and torch it. Being cynical isn't as much fun as it used to be.
Cigary43
Just Another Ashhole
I'm thinking that a loss is still a loss and it counts as a loss on the books regardless of what future stocks will or might be. That is assuming the future stock that you buy will even be worth what you paid for them so how does one benefit unless the stock goes up regardless if you're contributions to your 401K are still buying stocks? I understand the theory behind buying stocks at a low and selling at a premium and waiting for the turnaround but that is like playing Vegas with the double down theory. As long as you have money to double down you are fine but at some point you go broke and the smart guy is the one who knows when to hold and most people do not know the difference. :sadpace:
I keep replaying the big crash and all those smart investment people who took a dive out their window thinking that maybe they were only on the first floor. I think they all knew that they were going to faceplant themselves and this was the better choice rather than staying in the market and buy up future shares of stock at an incredibly low price? I'm thinking mattresses or coffee cans in the back yard like my grandparents did and when they needed some money during low points and times they knew exactly where to get their money and not from the investment banks that went down the tubes or the banks that are going out of business. I knew I should have paid more attention to my grandparents on how to hunt, fish, make your own stuff and how to survive in the event that things went bad.
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Draconian Banker here. I love this. The greedy bankers. Making all that money on interest. WHo do you think owns the banks friends? Stockholders! WHo are the stockholders? Mutual funds, individuals, pension funds. Who screams when a stock doesnt climb/ The greedy banker? No. The stockholders. Who is screwed when the banks close/ Everyone. Yes there is greed but it is greed all around. People who threw it all into the mill because real estate always goes up right? Greedy mortgage companies that figured they could keep selling crap and get away with it.
We want cheap products. we want low interest rates. We want the american dream. Can any of us can look in the mirror and say, "it was not me, I am innocent". I don't think so. We all listened to the music and now we pay the piper. Greedy bankers. Wow.
I'm done now. Sorry for the rant.
We want cheap products. we want low interest rates. We want the american dream. Can any of us can look in the mirror and say, "it was not me, I am innocent". I don't think so. We all listened to the music and now we pay the piper. Greedy bankers. Wow.
I'm done now. Sorry for the rant.
Dont you dare apologize for ranting! This is serious shit here and we all need to be concerned as hell!
Youre totally correct!
Now, heres something that scares the living hell out of me. The companies making all the banking acquisitions, JP Morgan and CItibank and Bank of America, they are basing the quality of these acquisitions on their ability to project failure rates and home prices. Literally, how well they predict the future of these markets has more impact on the future of our financial systems than anything happening in the Bill. The FDIC is trying to use private money to minimize the public exposure to bank failures. That could be a very good thing, but they are making JP Morgan, Citi and B of A SO BIG that, after the Bail Out, if any of the 3 are wrong in their projections, we could create a far greater problem than the FDIC is trying to solve. Someone has to be proactive in managing these mega banks. All surprises regarding the liquidity of these banks are bad surprises and we need to have in place dramatic means of monitoring them.
Youre totally correct!
It sort of reminds me of the old saying when Momma aint happy, nobodies happy! When did industry start being run by the people that buy their stock? Well it wasnt in the last 10 years, it was way before that. Im in the Auto industry and Ive seen long term growth scrapped for short term profits for 30 years. So investors call the shots through fear and intimidation driving the CEOs to abandon reason to maintain their positions. Well for Christs sake! At what point do you say either let me run this thing or dont hire me to do it! I know, it doesnt work that way and youre naïve if you thing it does but Damnit! Its the right thing to do and if the CEOs would grow some balls and lead rather than being lead then wed be in a lot better shape.
Now, heres something that scares the living hell out of me. The companies making all the banking acquisitions, JP Morgan and CItibank and Bank of America, they are basing the quality of these acquisitions on their ability to project failure rates and home prices. Literally, how well they predict the future of these markets has more impact on the future of our financial systems than anything happening in the Bill. The FDIC is trying to use private money to minimize the public exposure to bank failures. That could be a very good thing, but they are making JP Morgan, Citi and B of A SO BIG that, after the Bail Out, if any of the 3 are wrong in their projections, we could create a far greater problem than the FDIC is trying to solve. Someone has to be proactive in managing these mega banks. All surprises regarding the liquidity of these banks are bad surprises and we need to have in place dramatic means of monitoring them.