Does anyone agree with the $700 bailout?

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It's going to pass and I don't know anyone for it. No one at work, my family, friends, web dorks, no one.
 
Some one posted a story about a democratic rep's office in Ohio and he said that he got close to zero calls in support of this bull$hit.

They even admitted that it wasn't based on any particular data point!
 
I have seen some financial people that say its a big mistake.

I don't know anyone who is favor of it personally.


But I doubt any of that matters. We are gonna get screwed.

It reminds me of an old Navy saying "BOHICA!"

(Bend Over Here It Comes Again)
 
I don't think that any of us are knowledgeble enough to know just how bad, or how not bad, the crisis is. From everthing I've read, other than the CNBC anchors, who one person wrote were acting as if they were going to jump out their skyscraper windows any second (and they are acting that way, and it's realy funny, because of course, most of that is probably about their own very high net worth getting lower), it seems as if things are bad, but there is no imminent collapse. There might be one months from now, a year from now, but not Monday. Not even next monday. So I am all for giving them a little bit of money, telling them to grease the wheels but not the pigs, and then just cooling off for a bit.

There is no doubt this is another bush hair on fire sign this now! moment. But they're going to sign, and we're going to pay. That's one fact that's really not in dispute.
 
Obfuscate said:
It's going to pass and I don't know anyone for it. No one at work, my family, friends, web dorks, no one.
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If it is done as a bailout... no

If it is done as the debt swap they are proposing, then yes.... provided they...

1) Get direct equity/warrants on the stocks of the participating firms

2) Pay no more than 65 cents on the dollar (I think 55-60 is a better top, but 65 should still work)

3) Put a moratorium on golden parachutes for participating firms

They do the above and they will have the flexibility to unwind the bad debt and refi the worst case scenarios to attempt to prevent default. The shareholders of the firms would suffer, but not the taxpayers.
 
Darla said:
I don't think that any of us are knowledgeble enough to know just how bad, or how not bad, the crisis is. From everthing I've read, other than the CNBC anchors, who one person wrote were acting as if they were going to jump out their skyscraper windows any second (and they are acting that way, and it's realy funny, because of course, most of that is probably about their own very high net worth getting lower), it seems as if things are bad, but there is no imminent collapse. There might be one months from now, a year from now, but not Monday. Not even next monday. So I am all for giving them a little bit of money, telling them to grease the wheels but not the pigs, and then just cooling off for a bit.

There is no doubt this is another bush hair on fire sign this now! moment. But they're going to sign, and we're going to pay. That's one fact that's really not in dispute.
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The biggest problem, that no one is talking about (probably what Bernanke told Congress that spooked them so bad) is that banks are not loaning money to one another. When that happens, credit tightens up for damn near everyone.

If we do nothing, the costs to the taxpayers is going to run in the hundreds of billions anyway due to the FDIC having to step in and cover assets. By doing a debt for equity swap (which for the record is not a bailout) the taxpayers will most likely benefit in the long run.

Again, this is provided they get the equity in exchange for taking on the bad debt.
 
Superfreak said:
The biggest problem, that no one is talking about (probably what Bernanke told Congress that spooked them so bad) is that banks are not loaning money to one another. When that happens, credit tightens up for damn near everyone.

If we do nothing, the costs to the taxpayers is going to run in the hundreds of billions anyway due to the FDIC having to step in and cover assets. By doing a debt for equity swap (which for the record is not a bailout) the taxpayers will most likely benefit in the long run.

Again, this is provided they get the equity in exchange for taking on the bad debt.
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But if the equity is not such a bad deal, then why are not other private investors attempting to buy it?
 
Unfortunately It may be necessary at this point. I just hope they are smart enough to look at this as an investment like the S&L bailout. The govt actually ended up making a profit off of that.
 
KingCondanomation said:
But if the equity is not such a bad deal, then why are not other private investors attempting to buy it?
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Because they don't generally have enough to offset the risk, unlike the massive amounts brought to bear in this case. How much capital does a company already saddled with other loans have to purchase these?

I can see what is happening here, and can see what they could do with it.
 
Damocles said:
It would be cool if we could retire the National Debt using this means. However 2.2 Trillion 30 years down the road... that's a long way away and Americans don't tend to have that kind of attention span. I suspect they'll sell of much earlier than that, at a profit, but not nearly that much.
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It depends. If they buy the bulk at 15-30 cents on the dollar and at most pay 60-65 cents on the dollar... they can revamp the economy within a few years and turn around and sell that debt back into the market as you suggest.

That which is pricing at the low end could provide doubles for the Treasury. Not to mention the gains they would get from the equity of banks with suddenly clean balance sheets.
 
KingCondanomation said:
But if the equity is not such a bad deal, then why are not other private investors attempting to buy it?
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Because they do not have the capital to do so and the time to unwind the debt. The Fed can also cheat by flooding the market with cash. That would provide liquidity that the banks (now with clean balance sheets) could loan out and loosen credit in the markets.

The hedge funds and private investors cannot do that. Though you still see some, like Buffett yesterday, taking big positions in banks to take advantage of the equity portion of the gains.
 
Chapdog said:
Unfortunately It may be necessary at this point. I just hope they are smart enough to look at this as an investment like the S&L bailout. The govt actually ended up making a profit off of that.
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That is EXACTLY what they need to do. Which looks to be the case. As long as they go with the Congressional plan and not Bush's... which also looks to be the case as Bush has begun capitulating to Congress on most points.
 
Superfreak said:
Because they do not have the capital to do so and the time to unwind the debt. The Fed can also cheat by flooding the market with cash. That would provide liquidity that the banks (now with clean balance sheets) could loan out and loosen credit in the markets.

The hedge funds and private investors cannot do that. Though you still see some, like Buffett yesterday, taking big positions in banks to take advantage of the equity portion of the gains.
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How do bad mortgages gain value? IF there was a realistic chance of these appreciating, someone in the private sector would want them. stop spouting your fascist bullshit and lies. You liar.
 
If they were worth 65 cents on the dollar private banks would buy them. It's a bad deal no matter what. Credit will get tight but with our excesses of the past we need to pay them off and get them behind us. Paul Volcker knew this when he raised rates to 20+% and haulted credit in the last 70's early 80's. Too bad Bernanke and Paulson are no Volcker.
 
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