U.s. Banking Crisis: Capitalism "gone Wild"?

[Jingthing]

About your 90 percent beleiving in angels and astrology, it doesn't much reading between the lines to know how much respect that you have for the American people. I suppose that since they are such a bunch of backwards peasants they are just getting what they deserve.

How about people in general? I agree the public opinion is mixed and pretty even and in my view people have just let their emotions get the better of them, and do not realize how gravely serious this situation really is. People are right to be mad about some of the behavior on Wall Street such as the obscene golden parachutes and the creation of these toxic debt vehicles to begin with. Hopefully, these issues can be addressed as well, but right now, the system needs some serious unclogging, and fast.

Edited October 1, 2008 by Jingthing

[lannarebirth]

I have not heard Pelosi's speech yet, but the right wing hates her with 128 vengences. So how come 33% of House Republicans went ahead and voted for the bailout, and 67% let a hated woman change their vote? What Republican changes his mind on 700 billion dollar bailout of Wall Street because of what Nancy said? Millions of Americans contacted their Congressmen (all 435 of whom stand for election in six weeks) and said NO!

Polls say its about 50/50. Of course the loudmouths contacted congress. Congress is there to do the right thing, not follow the mob. Turns out their main function is getting reelected and that is a tragedy. Probably Bush cried wolf one too many times; this time it is for real.

The mob you speak of is over 90% of americans. I for one think congress should listen to them (the mob).

Oh you mean the 90 percent that believe in angels and astrology? Actually, objective polls have shown it is more like 50/50 and that is even before proper selling has been done. People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS, people want home loans, car loans, trying to sell a house, get a job, etc.

I remember when 90% of Americans used to believe in Standard and Poors earnings forecasts, and that their home values would rise forever. Rather than castigating them for their former ignorance, I choose to applaud them for seeing their delusion for what it was (greed) and taking steps to overcome it.

Edited October 1, 2008 by lannarebirth

[ray23]

Well good bad or indifferent, things seem to be in place for a yes vote tomorrow. I think they are being a bit more careful this time.

[Lopburi99]

Commentary: Bankruptcy, not bailout, is the right answer

By Jeffrey A. Miron

Special to CNN

Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.

CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.

This bailout was a terrible idea. Here's why.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.

The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.

Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.

So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.

The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

Reagan would have agreed and said, "Wellll......No, there will be no government bailout" and let the , accepting short term pain while waiting out what he believed would be a better solution.

Love him or hate him, he would never back down from his principles.

Remember when he fired all the Air Traffic Controllers? Hardly comparable I know, but the man had backbone.

Edited October 1, 2008 by Lopburi99

[Jingthing]

Reagan would have ignored the fed chairman? No way. You are dreaming.

[OriginalPoster]

About your 90 percent beleiving in angels and astrology, it doesn't much reading between the lines to know how much respect that you have for the American people. I suppose that since they are such a bunch of backwards peasants they are just getting what they deserve.

How about people in general? .

Unfortunately the elitism that you are displaying has become the hallmark of what passes for "liberalism" in the USA. The people are just too ignorant to understand what is going on, if only they weren't so bitter, gun clinging, and God fearing we'd have a more just societry. Though we can't blame them for their ignorance, we can hope that one day they will be more like us, reject ignorance, and drink lattees.

[lannarebirth]

People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS, people want home loans, car loans, trying to sell a house, get a job, etc.

It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error.

-- U.S. Supreme Court, in American Communications Association v. Douds, 339 U.S. 382,442

[Naam]

I have not heard Pelosi's speech yet, but the right wing hates her with 128 vengences. So how come 33% of House Republicans went ahead and voted for the bailout, and 67% let a hated woman change their vote? What Republican changes his mind on 700 billion dollar bailout of Wall Street because of what Nancy said? Millions of Americans contacted their Congressmen (all 435 of whom stand for election in six weeks) and said NO!

Polls say its about 50/50. Of course the loudmouths contacted congress. Congress is there to do the right thing, not follow the mob. Turns out their main function is getting reelected and that is a tragedy. Probably Bush cried wolf one too many times; this time it is for real.

The mob you speak of is over 90% of americans. I for one think congress should listen to them (the mob).

the problem with the "mob" (i hate this expression ) is the influence by mass media and its televangelists, be it 'holier than thou' Bill O'Reilly or St. Pat Robertson (i don't think Benny Hinn or Jim Bakker ever bothered with politics ). there are millions of american citizen (voters!) who believe whatever these charlatans preach, using wrong assumptions, distorting facts and very often presenting plain lies. solution? i don't see one! after all this "mob" has the voting power and the right to "decide"

[Naam]

People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS, people want home loans, car loans, trying to sell a house, get a job, etc.

It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error.

-- U.S. Supreme Court, in American Communications Association v. Douds, 339 U.S. 382,442

my [not so] humble [but quite arrogant] opinion is: any Supreme Court which rules like this should be sent to the Rub' al-Khali for one year, counting sand grains daily for 11¼ hours, forced to meditate and pray for wisdom 8 hours and given 4 hours to sleep as well as 15 minutes each for breakfast, lunch and supper

p.s. the 4 hours of sleep can be extended by half an hour (american = a half hour) for those who forego breakfast and lunch

[Pakboong]

I have not heard Pelosi's speech yet, but the right wing hates her with 128 vengences. So how come 33% of House Republicans went ahead and voted for the bailout, and 67% let a hated woman change their vote? What Republican changes his mind on 700 billion dollar bailout of Wall Street because of what Nancy said? Millions of Americans contacted their Congressmen (all 435 of whom stand for election in six weeks) and said NO!

Polls say its about 50/50. Of course the loudmouths contacted congress. Congress is there to do the right thing, not follow the mob. Turns out their main function is getting reelected and that is a tragedy. Probably Bush cried wolf one too many times; this time it is for real.

The mob you speak of is over 90% of americans. I for one think congress should listen to them (the mob).

Oh you mean the 90 percent that believe in angels and astrology? Actually, objective polls have shown it is more like 50/50 and that is even before proper selling has been done. People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS, people want home loans, car loans, trying to sell a house, get a job, etc.

According to research produced by MAPLight.org, House members who voted "yes" on the proposed bailout package received 54 percent more money from banks and securities than members who voted "no":

ver the past five years, banks and securities firms gave an average of $231,877 in campaign contributions to each Representative voting in favor of the bailout, compared with an average of $150,982 to each Representative voting against the bailout – 54 percent more money given to those who voted "Yes".

Democrats who voted yes received “an average of $212,700 each, about twice as much as those voting No, $107,993.” Republicans who voted yes “received an average of $273,181 each, 50% more than those voting No, $181,688.”

http://thinkprogress.org/2008/09/30/banks-contributions... /

[lannarebirth]

People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS, people want home loans, car loans, trying to sell a house, get a job, etc.

It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error.

-- U.S. Supreme Court, in American Communications Association v. Douds, 339 U.S. 382,442

my [not so] humble [but quite arrogant] opinion is: any Supreme Court which rules like this should be sent to the Rub' al-Khali for one year, counting sand grains daily for 11¼ hours, forced to meditate and pray for wisdom 8 hours and given 4 hours to sleep as well as 15 minutes each for breakfast, lunch and supper

p.s. the 4 hours of sleep can be extended by half an hour (american = a half hour) for those who forego breakfast and lunch

Well, the court case the quote is drawn from is dubious at best, but the sentiments I tend to agree with for the American country at this time in it's evolution. I would not agree with it for other countries whose population may be more homogemous and whose "culture" is more longstanding. I do not agree with it as a destination, but as a waypoint in a countrys journey it will suffice. Frasnkly Dr. Naam, I'm a little scared for America. All it's strengths have become it's weaknesses. This legislation under discussion stinks and I can't help but feel more careful deliberation would be helpful in crafting a better solution. I'm less concerned about the economics of the matter, than I am with the sustained immorality of the matter. Previously, it was the populace that could provide the moral compass, but I feel they have been co-opted in this greedy, self destructive enterprise, which is all America has become.

[BEENTHEREDONETHAT]

Don't know how anyone can read lannarebirths "financial sense" documents and feel that 700 billion will even put a small dent in the problem. IMHO it will just be throwing good money after bad.

So tell me (after you read the following documents) how the bailout is going to solve the problem?

lannarebirth I'm taking the liberty to provide these again.

http://www.financialsense.com/editorials/e.../2007/1124.html

http://www.financialsense.com/editorials/e.../2008/0116.html

http://www.financialsense.com/editorials/e.../2008/0123.html

http://www.financialsense.com/editorials/e.../2008/0208.html

http://www.financialsense.com/editorials/e.../2008/0225.html

[midas]

Don't know how anyone can read lannarebirths "financial sense" documents and feel that 700 billion will even put a small dent in the problem. IMHO it will just be throwing good money after bad.

So tell me (after you read the following documents) how the bailout is going to solve the problem?

lannarebirth I'm taking the liberty to provide these again.

http://www.financialsense.com/editorials/e.../2007/1124.html

http://www.financialsense.com/editorials/e.../2008/0116.html

http://www.financialsense.com/editorials/e.../2008/0123.html

http://www.financialsense.com/editorials/e.../2008/0208.html

http://www.financialsense.com/editorials/e.../2008/0225.html

These links are not accessible ?

[BEENTHEREDONETHAT]

Don't know how anyone can read lannarebirths "financial sense" documents and feel that 700 billion will even put a small dent in the problem. IMHO it will just be throwing good money after bad.

So tell me (after you read the following documents) how the bailout is going to solve the problem?

lannarebirth I'm taking the liberty to provide these again.

http://www.financialsense.com/editorials/e.../2007/1124.html

http://www.financialsense.com/editorials/e.../2008/0116.html

http://www.financialsense.com/editorials/e.../2008/0123.html

http://www.financialsense.com/editorials/e.../2008/0208.html

http://www.financialsense.com/editorials/e.../2008/0225.html

These links are not accessible ?

Sorry about that........if you go up to post 351 on this thread it should work. Don't know what the problem with these is.

[Jingthing]

About your 90 percent beleiving in angels and astrology, it doesn't much reading between the lines to know how much respect that you have for the American people. I suppose that since they are such a bunch of backwards peasants they are just getting what they deserve.

How about people in general? .

Unfortunately the elitism that you are displaying has become the hallmark of what passes for "liberalism" in the USA. The people are just too ignorant to understand what is going on, if only they weren't so bitter, gun clinging, and God fearing we'd have a more just societry. Though we can't blame them for their ignorance, we can hope that one day they will be more like us, reject ignorance, and drink lattees.

Yes, we want unworldly, ill educated, intellectually incurious, shockingly non-elite people like Sarah Palin to run the country. Good luck with that.

BTW. the call pattern has shifted DRAMATICALLY to reflect the real sentiment out there, at least TRY to rescue the economy: washingtonpost.com

This fits with my perception that the public needed some time and reality therapy (stock market) to be persuaded to take their bitter medicine. If we didn't have a miserably failed lame duck president with the lowest popularity in polling history, the failed vote in congress wouldn't have even happened in the first place.

There was a widespread sense on Capitol Hill that Monday's vote had snapped the public to attention about the potential repercussions of Congress's failure to act. Last week, House and Senate offices were bombarded with calls from opponents who viewed the bill as a Wall Street boondoggle. That call pattern shifted sharply after Monday's vote, aides to lawmakers in both parties said. "It's completely in the other direction now," said Michael Steel, a spokesman for House Minority Leader John A. Boehner (R-Ohio).

Edited October 1, 2008 by Jingthing

[midas]

So tell me (after you read the following documents) how the bailout is going to solve the problem?

Sorry about that........if you go up to post 351 on this thread it should work. Don't know what the problem with these is.

Thanks BEENTHEREDONETHAT ! I have already read 3 of these reports and I share your view !

Interesting reading...................!

[BEENTHEREDONETHAT]

So tell me (after you read the following documents) how the bailout is going to solve the problem?

Sorry about that........if you go up to post 351 on this thread it should work. Don't know what the problem with these is.

Thanks BEENTHEREDONETHAT ! I have already read 3 of these reports and I share your view !

Interesting reading...................!

[OriginalPoster]

About your 90 percent beleiving in angels and astrology, it doesn't much reading between the lines to know how much respect that you have for the American people. I suppose that since they are such a bunch of backwards peasants they are just getting what they deserve.

How about people in general? .

Unfortunately the elitism that you are displaying has become the hallmark of what passes for "liberalism" in the USA. The people are just too ignorant to understand what is going on, if only they weren't so bitter, gun clinging, and God fearing we'd have a more just societry. Though we can't blame them for their ignorance, we can hope that one day they will be more like us, reject ignorance, and drink lattees.

Yes, we want unworldly, ill educated, intellectually incurious, shockingly non-elite people like Sarah Palin to run the country. Good luck with that.

You might be surprised to learn that not all people who disagree with your politics are "unworldly, ill educated, intellectually incurious".

[lannarebirth]

Japan Redux?

...the real question is whether the United States will suffer anything like the "lost decade" that haunted Japan (actually, it has been almost two "lost decades"). There are significant differences between Japan and the United States (the most troubling, perhaps, being that Americans do not possess nearly the savings that the Japanese did entering their difficulties), but the question will gain more attention in the coming months.

While it is too soon to make any judgments that far into the future, America is certain to see very slow economic growth in the immediate future. The world's only superpower may see its first trillion dollar deficit within the next couple of years, although Washington will try to dress up the number to keep it under thirteen figures (an unlucky number in too many ways to count). That alone should be sufficient to knock down American hegemony a further peg or two. Such a deficit will contribute to a further debasement of the U.S. dollar against Asian currencies and the Swiss franc.

Thanks for the great post. I don't know if it's going to be an inflationary or deflationary or superslomo crash of the $ but the end result is going to be far worse than it was in Japan IMO. The attempts of the central banks that are themselves most vulnerable to a $ devaluation to prop up the value of the $ will prove, sooner or later, to be futile.

The dollar run isn't caused by it being "propped". I'm not sure what it's caused by other than it's 80 week cycle bottomed back in March. It's also possible that it's 18 year, 9 year and 4.5 year cycles (Cycles per most gifted Hurst Cycles practitioner I ever met)bottomed then, but that's probably not it, as it wasn't expected for a couple more years. Although in cycles as long as 18 years 1-2 years off is acceptable.

Maybe I shouldn't have used an aviation term. According to this http://jessescrossroadscafe.blogspot.com/ blog by Brad Setser about 70% of ALL the outstanding treasury paper is held by foreign central banks and it is their voracious buying that is absorbing and continuing the demand for (now) the huge amount of $US debt being issued.

Edit - this is a more direct link to the original blog as well as commentary:

http://blogs.cfr.org/setser/2008/09/30/do-...heet/#more-3827

Now this falls under the heading of "thinking too much", so I could very well have it wrong. What if the "carry trade" was extant not only from Japanese yen but also $USD? Makes sense doesn't it? Low cost of funds in a declining currency = cheap payback. Stash that money , leveraged to the hilt overseas in some emerging economy in a currency appreciating against the $USD. It's about the sweetest trade imaginable until emerging markets start to get hit and/or the dollar makes more than a minor rebound. Anyway, just thinking out loud, too much.

[lannarebirth]

Got an email today from my friend Igor, who isbrilliant Russian mathematician and computer programmer (he programmed the Bloomberg Terminals).

You better call your senator/representative and ask to stop that bailout BS.

My caluslations show 700bln/300mln=$2333 per US citizen

Considering that just 1/3 is working/paying taxes it becomes = 7000 per worker

Considering that only 1/2 of working pay taxes this becomes = 14000 per tax payer.

Alternative calculations show that if they really wanted to stabilize home prices and avoid foreclosures (which I'm against too) then: assuming that there are 5mln people in foreclosure trouble (1/60th of population) then:

700bln/5mln=$140,000 per person in foreclosure

assuming average family in foreclosure is 3 persons:

$140000 * 3 = $420,000!!!!

So, all this is BS and has nothing to do with real estate market...

They just want to finance something else... or steal more...

Igor defected in Finland to come to America and cares about good governance more than most.

[Jingthing]

You might be surprised to learn that not all people who disagree with your politics are "unworldly, ill educated, intellectually incurious".

Did I ever imply such a thing? Of course not. There are great intellects on the right wing side of things. It just so happens that the likes of Sarah Palin and GW Bush are not among them.

Here is direct evidence of the intellectual black hole that is Sarah Palin, on this very issue, the so called bailout:

COURIC: Why isn't it better, Governor Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries; allow them to spend more and put more money into the economy instead of helping these big financial institutions that played a role in creating this mess?

PALIN: That's why I say I, like every American I'm speaking with, were ill about this position that we have been put in where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health-care reform that is needed to help shore up our economy, helping the--it's got to be all about job creation, too, shoring up our economy and putting it back on the right track. So health-care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans. And trade, we've got to see trade as opportunity, not as a competitive, scary thing. But one in five jobs being created in the trade sector today, we've got to look at that as more opportunity. All those things under the umbrella of job creation. This bailout is a part of that.

This incoherent rambling is the product of the brain of an uneducated, unqualified, non-thinking person. I wouldn't hire a scatterbrain like her for even the small town mayor she used to be, much less president. Scary times indeed.

Edited October 1, 2008 by Jingthing

[flying]

People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS,

This is one of the things that bothers me.

These folks *invested* in stocks. There was no guarantee that it would only go up.

Dont roll the dice if you cant pay the price they say.

Yes I am sorry these folks *may* lose big.

The other thing that really bothers me about the bail out is the way it went from 0 to 1000 in a blink.

Fear seems to be the biggest motivator to sign the bail out. A short while ago none heard a peep about it........Suddenly it is sign the paper or your world is toast?

Yes simplistic I know but I generalize.

[VegasVic]

People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS,

This is one of the things that bothers me.

These folks *invested* in stocks. There was no guarantee that it would only go up.

Dont roll the dice if you cant pay the price they say.

Yes I am sorry these folks *may* lose big.

The other thing that really bothers me about the bail out is the way it went from 0 to 1000 in a blink.

Fear seems to be the biggest motivator to sign the bail out. A short while ago none heard a peep about it........Suddenly it is sign the paper or your world is toast?

Yes simplistic I know but I generalize.

That paper (in the form of stock certificates) will be just fine in the long run. U.S. equities have returned nearly 11%/ annum over the long haul, so unless you are retiring right at this very moment and need access to these funds to live on you will do just fine! Bernard Baruch, Benjamin Graham, and Warren Bufett became immensely wealthy because they kept emotion out of their investments and knew that when the panic is at its height and there is blood in the streets, that is the time to buy. I know it sounds opportunistic, but this has happened time and time again in the past and will likely happen time and time again in the future, its just a fact of human nature

[LaoPo]

Got an email today from my friend Igor, who isbrilliant Russian mathematician and computer programmer (he programmed the Bloomberg Terminals).

You better call your senator/representative and ask to stop that bailout BS.

My caluslations show 700bln/300mln=$2333 per US citizen

Considering that just 1/3 is working/paying taxes it becomes = 7000 per worker

Considering that only 1/2 of working pay taxes this becomes = 14000 per tax payer.

Alternative calculations show that if they really wanted to stabilize home prices and avoid foreclosures (which I'm against too) then: assuming that there are 5mln people in foreclosure trouble (1/60th of population) then:

700bln/5mln=$140,000 per person in foreclosure

assuming average family in foreclosure is 3 persons:

$140000 * 3 = $420,000!!!!

So, all this is BS and has nothing to do with real estate market...

They just want to finance something else... or steal more...

Igor defected in Finland to come to America and cares about good governance more than most.

Interesting and shocking.

I wonder however if the $700 Billion Bail Out will be used for -just- buying bad products/loans from the mortgage industry....I don't think so.

LaoPo

[lannarebirth]

Got an email today from my friend Igor, who isbrilliant Russian mathematician and computer programmer (he programmed the Bloomberg Terminals).

You better call your senator/representative and ask to stop that bailout BS.

My caluslations show 700bln/300mln=$2333 per US citizen

Considering that just 1/3 is working/paying taxes it becomes = 7000 per worker

Considering that only 1/2 of working pay taxes this becomes = 14000 per tax payer.

Alternative calculations show that if they really wanted to stabilize home prices and avoid foreclosures (which I'm against too) then: assuming that there are 5mln people in foreclosure trouble (1/60th of population) then:

700bln/5mln=$140,000 per person in foreclosure

assuming average family in foreclosure is 3 persons:

$140000 * 3 = $420,000!!!!

So, all this is BS and has nothing to do with real estate market...

They just want to finance something else... or steal more...

Igor defected in Finland to come to America and cares about good governance more than most.

Interesting and shocking.

I wonder however if the $700 Billion Bail Out will be used for -just- buying bad products/loans from the mortgage industry....I don't think so.

LaoPo

Maybe this is what my friend is alluding to:

http://globaleconomicanalysis.blogspot.com...ut-foreign.html

[Bizz]

My 2cents

As distasteful as it may be as painful as is clear I believe this has to go ahead.

It is unfortunate that we have to use those who we believe to be the instigators of our misfortune. We need them to clean up there own mistakes; there are the best people to achieve this.

Liquidity breads liquidity they are the only ones to cure this problem.

Later those who are accountable can be brought to justice.

This I also believe will be less damaging to the tax payer.

Watch out for major cleaning houses.

Banks will take time to gain confidence loans will be tight.

Commodities look good for now.

[lannarebirth]

People aren't yet aware how serious this is to everyday people, small business owners, people depending on a paycheck, the 60 percent of Americans who own STOCKS,

This is one of the things that bothers me.

These folks *invested* in stocks. There was no guarantee that it would only go up.

Dont roll the dice if you cant pay the price they say.

Yes I am sorry these folks *may* lose big.

The other thing that really bothers me about the bail out is the way it went from 0 to 1000 in a blink.

Fear seems to be the biggest motivator to sign the bail out. A short while ago none heard a peep about it........Suddenly it is sign the paper or your world is toast?

Yes simplistic I know but I generalize.

It reminds me of that Twilight Zone episode. Seemingly the aliens had come to Earth to help humankind. Only later, after a complete translation, was it discovered that their manifesto "To Serve Man" was actually a cookbook.

Edited October 1, 2008 by lannarebirth

[flying]

It reminds me of that Twilight Zone episode. Seemingly the aliens had come to Earth to help humankind. Only later, after a complete translation, was it discovered that their manifesto "To Serve Man" was actually a cookbook.

Yes That is what Im thinking too

The other thing that really bothers me about the bail out is the way it went from 0 to 1000 in a blink.

Fear seems to be the biggest motivator to sign the bail out. A short while ago none heard a peep about it........Suddenly it is sign the paper or your world is toast?

Yes simplistic I know but I generalize.

That paper (in the form of stock certificates) will be just fine in the long run. U.S. equities have returned nearly 11%/ annum over the long haul, so unless you are retiring right at this very moment and need access to these funds to live on you will do just fine!

Actually *that* paper I was referring to was the bail out bill.

Is that the same or did you mean the stocks?

[LaoPo]

Got an email today from my friend Igor, who isbrilliant Russian mathematician and computer programmer (he programmed the Bloomberg Terminals).

You better call your senator/representative and ask to stop that bailout BS.

My caluslations show 700bln/300mln=$2333 per US citizen

Considering that just 1/3 is working/paying taxes it becomes = 7000 per worker

Considering that only 1/2 of working pay taxes this becomes = 14000 per tax payer.

Alternative calculations show that if they really wanted to stabilize home prices and avoid foreclosures (which I'm against too) then: assuming that there are 5mln people in foreclosure trouble (1/60th of population) then:

700bln/5mln=$140,000 per person in foreclosure

assuming average family in foreclosure is 3 persons:

$140000 * 3 = $420,000!!!!

So, all this is BS and has nothing to do with real estate market...

They just want to finance something else... or steal more...

Igor defected in Finland to come to America and cares about good governance more than most.

Interesting and shocking.

I wonder however if the $700 Billion Bail Out will be used for -just- buying bad products/loans from the mortgage industry....I don't think so.

LaoPo

Maybe this is what my friend is alluding to:

http://globaleconomicanalysis.blogspot.com...ut-foreign.html

I gets more interesting with the minute

However, I don't think, with the utmost respect for you and your friend, that the $ 700 Billion bail out will -exclusively or even a larger part.....even 40%- go to foreign banks/countries; the thousands of Banks/Institutions/Companies (THOUSANDS !) in the US (with loads of bad loans/products) wouldn't be that stupid to let that happen, even in the case that Paulson has an almost free mandate to ''steer'' the money the way HE wants.

The way I read it, the possibility is there, no doubt, but I don't think he would survive..literally, if he would send (a large part of) that money abroad. But...the possibility, IF the Bail Out Bill is written the way it's NOW, is there.

But so many amendments are being drafted right now, that I don't see that happen.

The sentence: "US citizens should not spending $700 Billion to bail out foreign investors. The actions of Treasury Secretary Paulson go far beyond disgusting, to outright betrayal of US citizens."..is overdone and a political move to have their voices heard.

But, in these crazy days of elections AND a time of recession, anything is possible. We shouldn't forget however, how MANY BILLIONS foreign countries have invested in the USA....an amount of almost 2,7 TRILLION Dollars (2,700 BILLION Dollars) in TREASURY SECURITIES........ ........and that's WITHOUT their other investments in companies, real estate, shares, (Hedge) funds etc.

http://www.ustreas.gov/tic/mfh.txt

We will see on Friday what happens, when they will vote -again-.

LaoPo

[flying]

The sentence: "US citizens should not spending $700 Billion to bail out foreign investors. The actions of Treasury Secretary Paulson go far beyond disgusting, to outright betrayal of US citizens."..is overdone and a political move to have their voices heard.

Funny just today someone was mentioning to me how much of America is being bought up. She mention Russians & Chinese buying much midwest properties.

I remember seeing this article awhile back

Article

& this Article 2

Puts a different spin on it

You know where I live is US soil but it once was a Kingdom.

I wonder at times if maybe the Thai's have that part right?

Edited October 1, 2008 by flying