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CaP'N GRuNGe

The Bailout

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Watching CNN and they were talking about the bailout. John Fund from the Wall Street Journal was of the view that he wished we didn't do this, but we'll get through it if we handle it like the S&L crisis was handled. He said Wall Street obviously responded well to the bailout so far.

 

A Ron Paul advisor by the name of Peter Schiff was very negative about the whole situation and said this bailout will absolutely destroy the value of the dollar and advised people to pull money out of banks and invest in things like gold. I've heard this guy before I think on the radio and he is always bearish about the dollar and the US market.

 

So, what do you think will happen? Will the bailout help avert a hard recession? Or will it actually spur huge inflation and further cripple the economy.

 

:wacko:

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I won't pretend to be an expert, but I think it will help the overall economy enormously. I think perhaps they finally got a clamp on the severed artery that has been at the heart of all the bad chit.

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I won't pretend to be an expert, but I think it will help the overall economy enormously. I think perhaps they finally got a clamp on the severed artery that has been at the heart of all the bad chit.

 

I hope you're right. What concerns me (and I saw someone echo it a bit ago on TV) is that they are rushing to put something together. I hope it's a smart bill.

Edited by CaP'N GRuNGe

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I hope you're right. What concerns me (and I saw someone echo it a bit ago on TV) is that they are rushing to put something together. I hope it's a smart bill.

 

+1 I'm not to thrilled about this. I think these institutions to some extent made their own bed. While I can see a possible overall economic improvement for the country in doing this, it flies in the face of just about everything I believe in, like personal responsibility. Hopefully when this package finally is put together, it just addresses the main issue, and doesn't turn into an election year hand out with a bunch of pork added to it.

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I won't pretend to be an expert, but I think it will help the overall economy enormously. I think perhaps they finally got a clamp on the severed artery that has been at the heart of all the bad chit.

 

Saw some econ people discussing this last night on TV and they claimed that it at least temporarily averted disaster but didn't solve the major problem of a weakened US dollar and struggling economy.

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Schiff is an alaramist, but he's also been right about a lot of what's happening right now.

 

Schumer pointed out in that article that credit is the "life blood" of Americans and our economic system. That's a pretty serious problem in and of itself. The Fed has made borrowing money so cheap for so long, we've lost the "pay your own way" social ethic that once made us strong.

 

This may be deemed necessary by the masses, but I think we'll live to regret it. FDRs actions in the '30s are still hotly debated as to whether they helped or hindered the recovery from the great depression.

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I think doing this prolongs the problem.

 

At some point, banks and large institutions need to realize that there are long term consequences to some short term gains. Those institutions should pay the price, not the taxpayers.

 

And if their collapse would negatively affect innocent customers, then bail out the customers... not the people who screwed up and got rich doing it.

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I think doing this prolongs the problem.

 

At some point, banks and large institutions need to realize that there are long term consequences to some short term gains. Those institutions should pay the price, not the taxpayers.

 

And if their collapse would negatively affect innocent customers, then bail out the customers... not the people who screwed up and got rich doing it.

 

I disagree. The government, the customers, and the companies are ALL at fault. The Government helped create this problem in fact they are the ones who are primarily to blame for initating this mess. The Customer with our never ending love of credit and beating the Jones. I do realize in todays world personal responsibility does not exist. I feel the Customer is most to blame. Some Companies just made poor fina decisions, and very very few of the top executives left with a big wallets of money....but when they do they sure do make the headlines.

 

innocent customers is laughable.

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I disagree. The government, the customers, and the companies are ALL at fault. The Government helped create this problem in fact they are the ones who are primarily to blame for initating this mess. The Customer with our never ending love of credit and beating the Jones. I do realize in todays world personal responsibility does not exist. I feel the Customer is most to blame. Some Companies just made poor fina decisions, and very very few of the top executives left with a big wallets of money....but when they do they sure do make the headlines.

 

innocent customers is laughable.

 

I have no debt, and I didn't elect this government... and I'm paying the price as much as everyone else. I'm responsible for this? BS.

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This bailout plan is starting to worry me a little bit. It actually contains a provision that reads:

 

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

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I have no debt, and I didn't elect this government... and I'm paying the price as much as everyone else. I'm responsible for this? BS.

You aren't the customer. The other 90% not in your situation are. And yes, they share responsibility.

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This bailout plan is starting to worry me a little bit. It actually contains a provision that reads:

 

Awesome. Who wrote this? Alberto Gonzales?

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I have no debt, and I didn't elect this government... and I'm paying the price as much as everyone else. I'm responsible for this? BS.

 

No you are not...at all, but you said the "innocent" customer need a bail out. This whole mess started with congress and the bush admin trying to increase home ownership for minorities.

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This is a hughly complex issue and speculating about its impact before it takes its final form is a little (but only a little) premature, only because there are soooooo many ways this could end up getting enacted.

 

On the way in, I heard a journalist / analyst from the UK comment that it would take $1-2 T (at a minimum), globally, to put this in the rearviewmirror (globally).

Edited by muck

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its very simple, buy what you can afford. greedy people from all sides caused this. greedy bankers and greedy comsumers.

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I would much rather see the U.S. spend the hundreds of billions on this than on a war in Iraq, Too bad it's too late to actually make that choice. Looks like we're spending it on both. What a waste.

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its very simple, buy what you can afford. greedy people from all sides caused this. greedy bankers and greedy comsumers.

 

I can agree to a point. However, when you are seeking advice from a professional on how to buy real estate...Home or Etc...and that advice is based upon new theories and it is sold as pie in the sky...then I say it is 75% - 25% fault. There is a reason why they call the Series 63 test the "Blue Sky" test. It is so a financial rep cannot sell pie in the sky because the consumer is generally ignorant...this is the case for most financial decisions so the onus should fall more so on the professionals than the lay consumer.

 

I think there is a fine line here between bailing out business and consumers. Consumers who were preyed upon should be first...but how do you then determine that...that could take forever! There is really no good solution. This is the messy part of capitalism. The consumers lose twice....one the foreclosure then the bill to save the banks....and the CEO's lose once...lose their job but keep their millions for performing absolutely lousy.

 

As we speak, speculators are driving oil up 20 bucks a barrel. When you let speculation set the price on such a vital commodity to our nation, then the law of supply and demand is useless. Our economy is so f'd up it needs to be changed. Calls and puts should never be allowed on commodities vital to our nations consumers....oil, natural gas..etc. If you want to bet on Sears...more power to yeah...but why should your bet affect how much I pay for gas....answer is it shouldn't but it does.

 

As an aside....demand for gasoline has went way down...but prices are still high...why...refineries have cut production to artificially create a simulation of short supply. With all the tax giveaways to these yahoos, they should have to produce at max capacity to eventually give us a break at the pump. All of this crap is insane and I have been saying it for months.

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I can agree to a point. However, when you are seeking advice from a professional on how to buy real estate...Home or Etc...and that advice is based upon new theories and it is sold as pie in the sky...then I say it is 75% - 25% fault. There is a reason why they call the Series 63 test the "Blue Sky" test. It is so a financial rep cannot sell pie in the sky because the consumer is generally ignorant...this is the case for most financial decisions so the onus should fall more so on the professionals than the lay consumer.

 

I think there is a fine line here between bailing out business and consumers. Consumers who were preyed upon should be first...but how do you then determine that...that could take forever! There is really no good solution. This is the messy part of capitalism. The consumers lose twice....one the foreclosure then the bill to save the banks....and the CEO's lose once...lose their job but keep their millions for performing absolutely lousy.

 

As we speak, speculators are driving oil up 20 bucks a barrel. When you let speculation set the price on such a vital commodity to our nation, then the law of supply and demand is useless. Our economy is so f'd up it needs to be changed. Calls and puts should never be allowed on commodities vital to our nations consumers....oil, natural gas..etc. If you want to bet on Sears...more power to yeah...but why should your bet affect how much I pay for gas....answer is it shouldn't but it does.

 

As an aside....demand for gasoline has went way down...but prices are still high...why...refineries have cut production to artificially create a simulation of short supply. With all the tax giveaways to these yahoos, they should have to produce at max capacity to eventually give us a break at the pump. All of this crap is insane and I have been saying it for months.

 

 

i agree that some got bamboozled by the con-men. but i have no pity for the aholes that bought the 500k houses with no reserve funds in the bank for a rainy day. the same ones that have leased an suv and european sports car. and there are plenty of those out there as well.

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This bailout plan is starting to worry me a little bit. It actually contains a provision that reads:

 

Yeah. There are other provisions that have the traditional banking industry freaking.

An email my wife (a bank manager) got this morning:

As early as next Tuesday congress will act on a massive plan to bring stability to the financial markets. Hidden in this plan is a proposal that could devastate the banking industry. The proposal would provide a guarantee similar to FDIC insurance for money market funds which are inherently much riskier than traditional bank deposits. Banks have paid billions of dollars over many years and are subject to the highest level of regulation in order to establish the FDIC fund. This guarantee on money market funds is a free ride paid for by taxpayers and will make it nearly impossible for banks to attract deposits.

 

Not sure what this means in the global financial context, but Id doubt it's a good thing.

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Yeah. There are other provisions that have the traditional banking industry freaking.

An email my wife (a bank manager) got this morning:

 

 

Not sure what this means in the global financial context, but Id doubt it's a good thing.

that is an interesting thing to consider

 

(so interesting that I actually got up out of my chair and walked over to talk with the chair of our finance department about it (his specialty is banking). Alas, he is talking to someone else right now about stupid MBA requirements.)

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that is an interesting thing to consider

 

(so interesting that I actually got up out of my chair and walked over to talk with the chair of our finance department about it (his specialty is banking). Alas, he is talking to someone else right now about stupid MBA requirements.)

 

Please share his opinion if you get it.

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Please share his opinion if you get it.

we talked about it a little bit and it's not clear what the end result might be. CD's might still pay a higher return that money market mutual funds, in which case, banks might still be ok.

 

There is a LOT to think about with this whole thing though.

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I was reading somewhere else online that the Bailout Bill in Section 8 says that no court can overrule as decision made by the secretary.

 

Sec. 8. Review.

 

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

 

 

 

http://www.nytimes.com/2008/09/21/business...amp;oref=slogin

Edited by WaterMan

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we talked about it a little bit and it's not clear what the end result might be. CD's might still pay a higher return that money market mutual funds, in which case, banks might still be ok.

 

There is a LOT to think about with this whole thing though.

 

I think things would have to change rather significantly for CDs to yield a higher return than money market accounts.

 

More and more people are rethinking this after all the Rah! Rah! crap over the weekend. If anyone gets the feeling we're being bamboozled, I think you're right.

 

Phoning and emailing my Hill reps now...

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