Lhman Bros file for Bankruptcy

[Jimmy Neutron]

Feds to buy up toxic debts?

 

 

 

Are you kidding me? What message does this send to the incompetent morans in the financial markets?

 

It's just all just nucking futz. Does anybody else even noticing that these serious issues are not even being addressed by a congress or Bush? The fact that the Fed is making these decisions seemingly autonomously should scare the hell out of people. Yes, they've been illegal and running amok for decades, but this is completely new ground.

 

There comes a time when you stop propping up bad business and let the chips fall where they may. Futher devaluing our currency is not going to solve this issue in the long run. We're effectively giving corrupt CEOs, congress and the Bush administration a free pass on this while the Fed enduntures our children's children.

 

I can't believe we're doing this as a nation and people are cheering because the Dow is up over the last few days. Talk about short-sighted.

[Jimmy Neutron]

I can't believe this thread is not on fire with the bigger and greater bailout^TM news today. Does anybody even care?

[Perchoutofwater]

It's just all just nucking futz. Does anybody else even noticing that these serious issues are not even being addressed by a congress or Bush? The fact that the Fed is making these decisions seemingly autonomously should scare the hell out of people. Yes, they've been illegal and running amok for decades, but this is completely new ground.

 

There comes a time when you stop propping up bad business and let the chips fall where they may. Futher devaluing our currency is not going to solve this issue in the long run. We're effectively giving corrupt CEOs, congress and the Bush administration a free pass on this while the Fed enduntures our children's children.

 

I can't believe we're doing this as a nation and people are cheering because the Dow is up over the last few days. Talk about short-sighted.

 

 

I can't believe this thread is not on fire with the bigger and greater bailout^TM news today. Does anybody even care?

 

Based on the government's connections with Freddie and Fanny, we really didn't have a choice there. The AIG thing if I understand it correctly I actually like. AIG failing would kill the economy, not just ours but the world economy, plus if I understand the deal there, worst case the government will get it's money back off the sale, and best case it could make a fortune of the interrest which in my view is a win/win. On a philisophical level I have a problem with all of it, but on a practical level in these cases I think it had to be done, and in the long run will be a good thing.

 

With regard to the latest bail-outs, I'm not sure. Again, philisophically I'm opposed to it, but if the FED gets the same deal with them as it did with AIG, then I might not have such a large problem with it, provided it ends making the country's debt shrink. Does that make sense?

[Jimmy Neutron]

Based on the government's connections with Freddie and Fanny, we really didn't have a choice there. The AIG thing if I understand it correctly I actually like. AIG failing would kill the economy, not just ours but the world economy, plus if I understand the deal there, worst case the government will get it's money back off the sale, and best case it could make a fortune of the interrest which in my view is a win/win. On a philisophical level I have a problem with all of it, but on a practical level in these cases I think it had to be done, and in the long run will be a good thing.

 

With regard to the latest bail-outs, I'm not sure. Again, philisophically I'm opposed to it, but if the FED gets the same deal with them as it did with AIG, then I might not have such a large problem with it, provided it ends making the country's debt shrink. Does that make sense?

 

I agree with the part about Freddie/Fannie. Taxpayers were on the hook there from the get-go. I am torn on the AIG deal (still leaning against it despite the considerable pain the alternative would cause) and completely against any further bailouts for a number of reasons.

 

These are stop gap measures to make things better in the short term. I have no degree of confidence the government will recoup these funds and use them for the good of taxpayers - debt reduction, MC/SS funding, etc. We're propping up bad businesses with $1.5T and very vague ideas about how we'll change the system that got us here. That leaves our national "debt" at over $10T and our "obligatory debt" at over $54T over the next 30 years. That is if we maintain our good credit rating with foreign banks.

 

We joke around a lot about accounting practices in the company I work for, but we also have a institutional saying that keeps us flying straight as individuals, "I don't look good in an orange jump suit." People should go to prison for this, including a number of jackasses on the Hill.

[wiegie]

I know people want to throw people in jail for what is happening, but I'm not really sure that there is fraud in this whole mess (with the exception of the tens of thousands of cases of fraud when people (either home-buyers or mortgage brokers) lied on mortgage applications).

 

Mostly what seems to have happened is that there is just a huge information problem that the market failed to fix--in large part because everybody just got comfortable with the idea that somebody else had already done all the proper information-gathering and assessing, when in fact, nobody really had.

[Azazello1313]

well....the good thing about this newest bailout is it goes straight to the heart of the problem. rather than trying to extinguish the flare-ups that occur at the periphery, this one actually squarely targets the fundamental problem. the other good thing is that by the government buying these assets, the assets actually may become worth something again (as the housing market solidifies, etc.). the downside is, well, pretty obvious. the extent depends on details I don't really know at this point. like what kind of price are we getting on this debt?

 

from the snips I heard on the news, it sounds like obama, pelosi et al don't want to pass this without loading it up with billions more in cash handout "stimulus" payments. I am slim on the details, but that seems awfully dumb to me on the surface. you take a proposed precisely focused action that is potentially very expensive, but apparently necessary and defendable on the basis of going straight to the heart of the problem in our financial markets....and you try and add an unrelated couple hundred billion more that we don't have and can't afford that is would appear not to be focused on anything more than pandering for votes. that just sounds like typical washington irresponsible porky partisan BS.

[CaP'N GRuNGe]

well....the good thing about this newest bailout is it goes straight to the heart of the problem. rather than trying to extinguish the flare-ups that occur at the periphery, this one actually squarely targets the fundamental problem. the other good thing is that by the government buying these assets, the assets actually may become worth something again (as the housing market solidifies, etc.). the downside is, well, pretty obvious. the extent depends on details I don't really know at this point. like what kind of price are we getting on this debt?

 

from the snips I heard on the news, it sounds like obama, pelosi et al don't want to pass this without loading it up with billions more in cash handout "stimulus" payments. I am slim on the details, but that seems awfully dumb to me on the surface. you take a proposed precisely focused action that is potentially very expensive, but apparently necessary and defendable on the basis of going straight to the heart of the problem in our financial markets....and you try and add an unrelated couple hundred billion more that we don't have and can't afford that is would appear not to be focused on anything more than pandering for votes. that just sounds like typical washington irresponsible porky partisan BS.

 

Obama: 'I fully support' Paulson efforts

 

Barack Obama, flanked by former Treasury Secretary Robert Rubin and other finance heavyweights in Coral Gables, FL, addressed what he called "one of the most serious financial crises in this nations history."

 

In sharp contrast to John McCain's attacks on him this morning, Obama sought a bipartisan tone, but pressed to include domestic stimulus along with the mortgage bailout plan.

 

"I fully support the efforts of Secretary Paulson and [Fed Chief] Ben Bernanke to work in a bipartisan manner with Congress to find a solution," he said.

 

Obama called on President Bush and on McCain to join him in backing an "emergency economic plan" of domestic spending, proposed earlier, which would send cash back to taxpayers to pay for energy and would prop up the auto industry.

 

However, he was less assertive than some congressional Democrats have been about including domestic stimulus in the Wall Street bailout.

 

 

"Right now ...the problem is the capital markets and making sure we get something in place quickly," he said. "What we don’t want to do is get too bogged down in some complicated legislative wrangling."

 

Obama also laid out four principles: That the plan help "main street" as well as Wall Street; that it be fair, and not reward particular companies; that it be structured to be temporary and have a "process to restore private sector assets to the private sector;" and that it be coordinated internationally.

 

Obama called the crisis "a final verdict on [the] failed philosophy" of the Republicans, and recalled his own previous calls for more financial regulation.

[CaP'N GRuNGe]

well....the good thing about this newest bailout is it goes straight to the heart of the problem. rather than trying to extinguish the flare-ups that occur at the periphery, this one actually squarely targets the fundamental problem. the other good thing is that by the government buying these assets, the assets actually may become worth something again (as the housing market solidifies, etc.). the downside is, well, pretty obvious. the extent depends on details I don't really know at this point. like what kind of price are we getting on this debt?

 

from the snips I heard on the news, it sounds like obama, pelosi et al don't want to pass this without loading it up with billions more in cash handout "stimulus" payments. I am slim on the details, but that seems awfully dumb to me on the surface. you take a proposed precisely focused action that is potentially very expensive, but apparently necessary and defendable on the basis of going straight to the heart of the problem in our financial markets....and you try and add an unrelated couple hundred billion more that we don't have and can't afford that is would appear not to be focused on anything more than pandering for votes. that just sounds like typical washington irresponsible porky partisan BS.

 

Why is it pork to bail out individuals but not to bail out irresponsible financial institutions?

[Azazello1313]

Obama called on President Bush and on McCain to join him in backing an "emergency economic plan" of domestic spending, proposed earlier, which would send cash back to taxpayers to pay for energy and would prop up the auto industry.

 

However, he was less assertive than some congressional Democrats have been about including domestic stimulus in the Wall Street bailout.

 

 

"Right now ...the problem is the capital markets and making sure we get something in place quickly," he said. "What we don’t want to do is get too bogged down in some complicated legislative wrangling."

 

the snippets I saw he was emphasizing the first part above rather than the bolded part. hopefully, he'll stick to the bolded part. I guess we'll see where he goes with it.

[Azazello1313]

Why is it pork to bail out individuals but not to bail out irresponsible financial institutions?

 

who is he bailing out by giving blanket thousand dollar handouts? it might have some minor general economic stimulus effect like the last round, that would be the justification, not bailing anyone out. bailing out individuals would be something like paying to keep people who are defaulting on these junk mortgages out of foreclosure. I know you're just trying to spin a dumb little talking point, but giving everybody in the country a thousand dollar check isn't a bail out in any meaningful sense of the term.

[Chavez]

Sox is completely worthless and does nothing more than waste the money of business owners and the time of accountants like me who have to push the extra paper around. All it does is give people a false sense of security.

Isn't that what gov't is for?

[Perchoutofwater]

I know people want to throw people in jail for what is happening, but I'm not really sure that there is fraud in this whole mess (with the exception of the tens of thousands of cases of fraud when people (either home-buyers or mortgage brokers) lied on mortgage applications).

 

Mostly what seems to have happened is that there is just a huge information problem that the market failed to fix--in large part because everybody just got comfortable with the idea that somebody else had already done all the proper information-gathering and assessing, when in fact, nobody really had.

 

I tend to agree with your statement above, though I feel fairly certain there has been a considerable amount of fraud coming from home appraisers.

[Perchoutofwater]

well....the good thing about this newest bailout is it goes straight to the heart of the problem. rather than trying to extinguish the flare-ups that occur at the periphery, this one actually squarely targets the fundamental problem. the other good thing is that by the government buying these assets, the assets actually may become worth something again (as the housing market solidifies, etc.). the downside is, well, pretty obvious. the extent depends on details I don't really know at this point. like what kind of price are we getting on this debt?

 

from the snips I heard on the news, it sounds like obama, pelosi et al don't want to pass this without loading it up with billions more in cash handout "stimulus" payments. I am slim on the details, but that seems awfully dumb to me on the surface. you take a proposed precisely focused action that is potentially very expensive, but apparently necessary and defendable on the basis of going straight to the heart of the problem in our financial markets....and you try and add an unrelated couple hundred billion more that we don't have and can't afford that is would appear not to be focused on anything more than pandering for votes. that just sounds like typical washington irresponsible porky partisan BS.

 

Until I've seen some details about the additional bail-outs, I'm not 100% sure how I feel about them. If we are sending out more pandering checks, I'm, pretty sure I'm against it.

[Clubfoothead]

What a joke. If AIG is so important then it should remain a federal institution not turned back over to the profiteers once the American taxpayer fixes it.

 

And everybody who says that this is a gauranteed money-maker for the government isn't doing their homework. Some analysist say there is no way the government is going to do anything but lose money because of the amount of "toxic" assets AIG is lugging around. The best other analysts can say is that the government might make a profit. There's no gaurantee that's for sure.

 

Why would AIG filing for bankruptcy cause a global economic crisis anyways? In every article I've read that is assumed as a given and they move on but I've yet to read anywhere why that is. And if AIG oberates globally and the negative ramification of it's failure are global, shouldn't other nations chip in on the bailout? Why does the American taxpayer once again have to save the world? We aren't even done saving it from Saddam Hussein yet and we won't be done paying for saving the world from Hussein for decades.

Edited September 20, 2008 by Clubfoothead

[muck]

Club ... your missives would carry more weight if you'd simply spell the words you use correctly.

 

Sure, the US taxpayer may lose on AIG, but I think we will do quite well. FNM/FRE ... dunno; that's more of a crapshoot it seems. We'll probably lose money on this next round of bailouts that's been tentatively launched this weekend. How much will we make / lose across all of these deals is a hugh unknown.

 

Is it the right thing to do?

 

Dunno. I think so.

 

How do we keep this from happening again?

 

Dunno. One option is to put caps on corporate balance sheets so they can no longer be "too big to fail". Another thing that would be worth considering would be to make any bonus paid to any employee of any publicly traded firm that is in excess of their annual salary to be put into some sort of "deferred compensation" bucket where the employee would actually be entitled to the bonus over a 3-10 year period.

 

...just a couple of ideas...

 

It's time for hamburgers w/ my folks.

[BLIND HOMER]

Ah trickle down