wiegie Posted March 22, 2009 Share Posted March 22, 2009 Details have leaked and it appears that this is going to be a hugh giveaway of money from taxpayers to the financial sector (consider it the "Hank Paulson Plan Version 2.0"). I'm not pleased. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted March 22, 2009 Share Posted March 22, 2009 Details have leaked and it appears that this is going to be a hugh giveaway of money from taxpayers to the financial sector (consider it the "Hank Paulson Plan Version 2.0"). I'm not pleased. How could it be anything else? The "assets" are worthless and unless they are removed from the books, everything is stuck and the death spiral continues. As long as the government gets stakes in future profits, we have to bite the bullet. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted March 22, 2009 Share Posted March 22, 2009 How hugh is Geithner's plan and when will we see Son of Stimulus? Quote Link to comment Share on other sites More sharing options...
wiegie Posted March 22, 2009 Author Share Posted March 22, 2009 How could it be anything else? The "assets" are worthless and unless they are removed from the books, everything is stuck and the death spiral continues. As long as the government gets stakes in future profits, we have to bite the bullet. Alas, the way this plan is structured, there is a good change that the government stands to get very little stake in the future profits: consider this There has to be a better way (such as, nationalize the bad banks). Quote Link to comment Share on other sites More sharing options...
SheikYerbuti Posted March 23, 2009 Share Posted March 23, 2009 So now the word is both sides are calling for Geithner to resign? 1. Is he doing that bad a job? 2. Is there an obvious choice on who'd be better? 3. What person in their right mind would want this job?? Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 23, 2009 Share Posted March 23, 2009 (edited) my first thought when reading the article on cnn.money was, "it sounds just like the original bush-paulson TARP plan". edit to add: which to me, sorta seemed like the best way to approach this mess from the beginning. but everyone seems to think it's such a schitty idea, I dunno Edited March 23, 2009 by Azazello1313 Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted March 23, 2009 Share Posted March 23, 2009 get your money out of cash. it will be worthless in the coming years. Quote Link to comment Share on other sites More sharing options...
TimC Posted March 23, 2009 Share Posted March 23, 2009 You throw a trillion dollars at almost anything and it'll help short-term. The real fun comes when Obama and everyone else has to look his two adorable children in the eye and apologize for ruining any future they had because of some people's short-term greed. And when the children say "That's okay Daddy, I'm sure those mean old men paid for it and regret it now", you may give them this look and don't dare tell them the people are laughing at us from their mansions behind gated country clubs. Quote Link to comment Share on other sites More sharing options...
wiegie Posted March 23, 2009 Author Share Posted March 23, 2009 awesome, Citi closed on Friday at $2.62 and opened this morning at $3.32 (a jump of 26.7%) This means either: 1) Shareholders love the Geithner plan because they think it will fix the financial system. OR 2) Shareholders love the Geithner plan because it basically takes money from the rest of America and gives it to them. I'm voting the reason has a lot more to do with (2) than it does with (1). Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted March 23, 2009 Share Posted March 23, 2009 The market loves it. My 401K is happy for today at least. As far as inflation goes, I've heard people say it wouldn't be a problem because they can turn that around pretty quickly with monetary policy. I wonder how true that statement is. I can only imagine any kind of joint private/public purchase of toxic assets will only be as good as the details governing the transactions. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 23, 2009 Share Posted March 23, 2009 it appears that this is going to be a hugh giveaway of money from taxpayers to the financial sector (consider it the "Hank Paulson Plan Version 2.0"). I'm not pleased. now, you keep framing the issue this way....i.e., the two options are 1) nationalizing the bad banks, or 2) a "massive transfer of wealth from the taxpayers to the banks". aren't BOTH options massive transfers of wealth from the taxpayers to the banks? and in both cases, the taxpayer is presumably getting something back. either 1) an ownership stake in several of the banks, or 2) a bunch of the "toxic assets". both would seem to qualify to me as "troubled assets". I'm sure there are plenty of reasons to argue over buying up bank stock versus buying up troubled securities, but it just doesn't quite seem completely accurate to characterize the two options the way you have been. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted March 23, 2009 Share Posted March 23, 2009 get your money out of cash. it will be worthless in the coming years. Wasn't it you that was advocating socking all your money under the mattress a few weeks ago? Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted March 23, 2009 Share Posted March 23, 2009 Wasn't it you that was advocating socking all your money under the mattress a few weeks ago? that was before the usg decided to print dollars at the rate they are. the us dollar will be worthless. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted March 23, 2009 Share Posted March 23, 2009 The market loves it. My 401K is happy for today at least. As far as inflation goes, I've heard people say it wouldn't be a problem because they can turn that around pretty quickly with monetary policy. I wonder how true that statement is. I can only imagine any kind of joint private/public purchase of toxic assets will only be as good as the details governing the transactions. why would any private investor want to be partners with the usg after last weeks 'tax bonuses' fiasco? Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted March 23, 2009 Share Posted March 23, 2009 why would any private investor want to be partners with the usg after last weeks 'tax bonuses' fiasco? AIG would not have been in business if not for the fedgov interceding. Private investors that partner with the fedgov would be in Romer's words doing the fedgov a favor and would not be in the same category as those being bailed out. I doubt you'll see the same type of rules governing them regarding oversight of bonuses, etc. That would make no sense. Quote Link to comment Share on other sites More sharing options...
wiegie Posted March 23, 2009 Author Share Posted March 23, 2009 now, you keep framing the issue this way....i.e., the two options are 1) nationalizing the bad banks, or 2) a "massive transfer of wealth from the taxpayers to the banks". aren't BOTH options massive transfers of wealth from the taxpayers to the banks? and in both cases, the taxpayer is presumably getting something back. either 1) an ownership stake in several of the banks, or 2) a bunch of the "toxic assets". both would seem to qualify to me as "troubled assets". I'm sure there are plenty of reasons to argue over buying up bank stock versus buying up troubled securities, but it just doesn't quite seem completely accurate to characterize the two options the way you have been. at least when we own the banks we take on the bad assets but WE get any upside, the way it works now is that we take on the bad assets and stand a very good chance of getting almost no upside. The people who own stock in these banks should get nothing. The executives who run these banks should get fired and get nothing. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted March 23, 2009 Share Posted March 23, 2009 AIG would not have been in business if not for the fedgov interceding. Private investors that partner with the fedgov would be in Romer's words doing the fedgov a favor and would not be in the same category as those being bailed out. I doubt you'll see the same type of rules governing them regarding oversight of bonuses, etc. That would make no sense. im just telling you the perception on wallstreet of doing biz with the usg. sure there are some great deals out there on these distressed assets. but believe me, the 'tax on bonuses' is on the mind of everyone. Quote Link to comment Share on other sites More sharing options...
wiegie Posted March 23, 2009 Author Share Posted March 23, 2009 why would any private investor want to be partners with the usg after last weeks 'tax bonuses' fiasco? consider this Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted March 23, 2009 Share Posted March 23, 2009 (edited) im just telling you the perception on wallstreet of doing biz with the usg. sure there are some great deals out there on these distressed assets. but believe me, the 'tax on bonuses' is on the mind of everyone. Why would anyone want to do any business in this country? I was outraged at the bonuses, but understood why they were offered and why they were paid. I'm a lot more outraged by this tax on the bonuses. It just scares the crap out of me that our government would act in such a manner. What is to keep them from retroactively taxing something else in the future because it is politically expedient to do so, and might change the subject off of how much money they are spending? The tax system is bad enough as is, before you start throwing punitive retroactive taxes around. Who is next? Are you looking over your shoulder? Edited March 23, 2009 by Perchoutofwater Quote Link to comment Share on other sites More sharing options...
cre8tiff Posted March 23, 2009 Share Posted March 23, 2009 Why would anyone want to do any business in this country? I was outraged at the bonuses, but understood why they were offered and why they were paid. I'm a lot more outraged by this tax on the bonuses. It just scares the crap out of me that our government would act in such a manner. What is to keep them from retroactively taxing something else in the future because it is politically expedient to do so, and might change the subject off of how much money they are spending? The tax system is bad enough as is, before you start throwing punitive retroactive taxes around. Who is next? Are you looking over your shoulder? Funny how your sentiment here reflects the President's attitude towards using tax in a punitive manner. Quote Link to comment Share on other sites More sharing options...
Pope Flick Posted March 23, 2009 Share Posted March 23, 2009 I'm with perch and dmarc: it flies in the face of ex post facto in this country and that shouldn't be messed with EVER. Especially over less than 1% of the total bill to salve a few egos. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted March 23, 2009 Share Posted March 23, 2009 Why would anyone want to do any business in this country? I was outraged at the bonuses, but understood why they were offered and why they were paid. I'm a lot more outraged by this tax on the bonuses. It just scares the crap out of me that our government would act in such a manner. What is to keep them from retroactively taxing something else in the future because it is politically expedient to do so, and might change the subject off of how much money they are spending? The tax system is bad enough as is, before you start throwing punitive retroactive taxes around. Who is next? Are you looking over your shoulder? It is scary that we have a congress that is so out of touch with their responsibilities and constitutional boundaries. Even if the senate passes this law, it sounds like Obama will rightfully veto it. I think it would be overturned in court if it actually were passed into law. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted March 23, 2009 Share Posted March 23, 2009 bad assets just being passed from banks to the taxpayer. these debts will never be repaid in whole. thus, taxpayer loses. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted March 23, 2009 Share Posted March 23, 2009 Funny how your sentiment here reflects the President's attitude towards using tax in a punitive manner. I have no problem agreeing with him when I think he is right. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted March 23, 2009 Share Posted March 23, 2009 I have no problem agreeing with him when I think he is right. +1 Quote Link to comment Share on other sites More sharing options...
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