Lets Bail Out The Poor Financiers

[benjamat]

Always it is the poor and middle classes that pick up the tab for the failings of the powerfull and rich.

In reality the poor and middle class are picking-up a very small portion of the tab. The top 25% income earners pay 80% of the federal income taxes that are being used for the bailout. The bottom 50% pay 3% of the taxes and the poor basically pay 0%.

To me it sure seems the wealthy are bailing out the wealthy.

Hmm, well whilst there is of course some truth in waht you say Im afraid you omit completely the impact of recession and higher prices on the poorest people.

For example the increase in cost of basics such as food and heating. Some one earning 40k plus will not really be impacted by these things unless they are already over extended by debt repayments but someone earning 20k or less will be hit hard and the 4 million people in the uk earning under 12k will really struggle.

Often we forget that in our society many people do not see the benefits of these financial games but in the end they are always hit the hardest in the cost of living.

[benjamat]

1 year away from retirement I think I would consider moving any cash away from any risk. Understand the problem with pensions not so easily fixed.

However, at various times if the market is high the value of some pension funds will be high also. The market goes up and down and we have had 10 years of "over" growth so we have been heading for a balancing out for some time. Where possible move your assets but dont expect the general taxpayer to support investments or pensions that have grown more than was a true growth rate.

My matress is too small to stuff USD2 mill into.

Where else would you suggest keeping cash if not in a bank?

Building societies, government bonds and savings accounts, cash and gold accounts, there are many.

[BEENTHEREDONETHAT]

According to CIA world facts there are about 200 million americans between the age of 15 and 64. While the 700billion covers the present bill before congress you have to consider what has already been spent for AIG, Fannie Mae and Freddie mac and others that bring the total to 1.8 trillion. Add that to the existing 10 trillion deficit and each of those 200 million tax payers need to cough up roughly $60,000 to make things right. Are you ready to contribute your share?

[Groongthep]

and here we go again - let's blame someone else for our own fuc_kups.

today's credit crunch is caused by individuals borrowing too much to buy 42 inch tvs and houses they can't afford. It's as simple as that. It;'s not the banks' fault . .it's people can't keep their fuc_king wallets in their pocket.

What happened to the idea of saving for things you want?

Not exactly.

Our biggest fuc_k up was that we have allowed our elected representatives to take away all regulations that we had protecting the financial system, which in turn created this hyper capitalism mistaken for the "free market economy" that it never was and never will be. Only this made it possible that investment banks could get into the highly speculative business of selling bad loans (how the fuc_k can one possibly sell a bad loan?!), which in turn made it possible to give loans to people who could otherwise have never qualified for one.

And then chain reaction, exposing the whole system for the mess it is - alchemist schemes to make shit appear golden.

Not allowing the 700 Billion package to go through is making this even worse, and will spiral this thing into something similar the world has seen in 1929. Save the fuc_king banks, save us, and if one wants to, punish CEOs or whoever afterward.

If these packages don't go through, banks go broke, and with that all the little moneys we saved, stocks go down, jobs get lost, poverty starts, extremist parties will score points with knee jerk policies...

And don't forget to bring back the checks and balances, so that this won't happen again. Free market never was, never is. It's just a whole lot of BS.

Howsitgoin is absolutely right and is the only person on this thread who has shown that he understands what has really happened and how important it is to save the credit markets. Complaining may make us feel better but it won't do any good. What is needed is action. Yes it's a rotten situation but if the government doesn't buy the bad loans the banks won't be able to start lending again and if they have no money to lend the entire economy could fail.

Edited October 2, 2008 by Groongthep

[bendix]

Why feel sorry for the middle classes? They are adults. They hocked themselves up on debt. The banks didnt force them to borrow so much? You can't blame banks sending out marketing materials - they don't hold a gun to people's heads to sign and borrow more.

It isnt rocket science. Any idiot should know that if you earn 50,000 a year, borrowing 2m is fundamentally a stupid irresponsible thing to do.

[Gumballl]

Why feel sorry for the middle classes? They are adults. They hocked themselves up on debt. The banks didnt force them to borrow so much? You can't blame banks sending out marketing materials - they don't hold a gun to people's heads to sign and borrow more.

It isnt rocket science. Any idiot should know that if you earn 50,000 a year, borrowing 2m is fundamentally a stupid irresponsible thing to do.

I agree. But I sure hope the banks are as gullible when it comes time for me to retire. Boy, are they in for a surprise when I default on my loan!

[lannarebirth]

and here we go again - let's blame someone else for our own fuc_kups.

today's credit crunch is caused by individuals borrowing too much to buy 42 inch tvs and houses they can't afford. It's as simple as that. It;'s not the banks' fault . .it's people can't keep their fuc_king wallets in their pocket.

What happened to the idea of saving for things you want?

Not exactly.

Our biggest fuc_k up was that we have allowed our elected representatives to take away all regulations that we had protecting the financial system, which in turn created this hyper capitalism mistaken for the "free market economy" that it never was and never will be. Only this made it possible that investment banks could get into the highly speculative business of selling bad loans (how the fuc_k can one possibly sell a bad loan?!), which in turn made it possible to give loans to people who could otherwise have never qualified for one.

And then chain reaction, exposing the whole system for the mess it is - alchemist schemes to make shit appear golden.

Not allowing the 700 Billion package to go through is making this even worse, and will spiral this thing into something similar the world has seen in 1929. Save the fuc_king banks, save us, and if one wants to, punish CEOs or whoever afterward.

If these packages don't go through, banks go broke, and with that all the little moneys we saved, stocks go down, jobs get lost, poverty starts, extremist parties will score points with knee jerk policies...

And don't forget to bring back the checks and balances, so that this won't happen again. Free market never was, never is. It's just a whole lot of BS.

Howsitgoin is absolutely right and is the only person on this thread who has shown that he understands what has really happened and how important it is to save the credit markets. Complaining may make us feel better but it won't do any good. What is needed is action. Yes it's a rotten situation but if the government doesn't buy the bad loans the banks won't be able to start lending again and if they have no money to lend the entire economy could fail.

And if it were to fail, mightn't a new economy, with a greater emphasis on savings, rise up in its place?

[PattayaParent]

1 year away from retirement I think I would consider moving any cash away from any risk. Understand the problem with pensions not so easily fixed.

However, at various times if the market is high the value of some pension funds will be high also. The market goes up and down and we have had 10 years of "over" growth so we have been heading for a balancing out for some time. Where possible move your assets but dont expect the general taxpayer to support investments or pensions that have grown more than was a true growth rate.

My matress is too small to stuff USD2 mill into.

Where else would you suggest keeping cash if not in a bank?

Building societies, government bonds and savings accounts, cash and gold accounts, there are many.

Like Northern Rock? Halifax/HBOS? Bradford and Bingley? The very organisations that are having the problems where my money is already located.

[BEENTHEREDONETHAT]

Part of the problem. From FS Editorial by William Engdahl

Fraud a la mode

It didn’t take long before lending banks across the United States realized they were sitting on a bonanza bigger than the California gold rush. With no worry about whether a borrower of a home mortgage, say, would be able to service the debt for the next decades, banks realized they made money on pure loan volume and resell to securitizers.

Soon it became commonplace for banks to outsource their mortgage lending to free-lance brokers. Instead of doing their own credit checks they relied, often exclusively, on various online credit questionnaires, similar to the Visa card application where no follow-up was done. It became common practice for mortgage lenders to offer brokers bonus incentives to bring in more signed mortgage loan volume, another opportunity for massive fraud. The banks got more gain from making high volumes of loans then selling for securitization. The world of traditional banking was being turned on its head.

As the bank no longer had an incentive to assure the solidity of a borrower through minimum cash down payments and exhaustive background credit checks, many US banks, simply to churn loan volume and returns, gave what they cynically called “Liars’ Loans.” They knew the person was lying about his credit and income to get that dream home. They simply didn’t care. They sold the risk once the ink was dry on the mortgage.

A new terminology arose after 2002 for such loans, such as “NINA” mortgages—No Income, No Assets. “No problem, Mister Jones. Here’s $400,000 for your new home, enjoy.”

With Glass-Steagall no longer an obstacle, banks could set up myriad wholly-owned separate entities to process the booming home mortgage business. The giant of the process was Citigroup, the largest US bank group with over $2.4 trillion of group assets.

Citigroup included Travelers Insurance, a state-regulated insurer. It included the old Citibank, a huge retail lending bank. It included the investment bank, Smith Barney. And it included the aggressive sub-prime lender, CitiFinancial, according to numerous consumer reports, one of the most aggressive predatory (6) lenders pushing sub-prime mortgages on often ignorant or insolvent borrowers, often in poor black or Hispanic neighborhoods. It included the Universal Financial Corp. one of the nation’s largest credit card issuers, who used the so-called Law of Large Numbers to grow its customer base among more and more dodgy credit risks.

Citigroup also included Banamex, Mexico’s second largest bank and Banco Cuscatlan, El Salvador’s largest bank. Banamex was one of the major indicted money laundering banks in Mexico. That was nothing foreign to Citigroup. In 1999 the US Congress and GAO investigated Citigroup for illicitly laundering $100 million in drug money for Raul Salinas, brother of the then-Mexican President. The investigations also found the bank had laundered money for corrupt officials from Pakistan to Gabon to Nigeria.

Citigroup, the financial behemoth was merely typical of what happened to American banking after 1999. It was a different world entirely from anything before with the possible exception of the excesses of the Roaring ‘20’s. The degree of lending fraud and abuse that ensued in the new era of asset securitization was staggering to the imagination.

If you are interested in the Editorial this was taken from

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

[Naam]

According to CIA world facts there are about 200 million americans between the age of 15 and 64. While the 700billion covers the present bill before congress you have to consider what has already been spent for AIG, Fannie Mae and Freddie mac and others that bring the total to 1.8 trillion. Add that to the existing 10 trillion deficit and each of those 200 million tax payers need to cough up roughly $60,000 to make things right. Are you ready to contribute your share?

no

[BEENTHEREDONETHAT]

According to CIA world facts there are about 200 million americans between the age of 15 and 64. While the 700billion covers the present bill before congress you have to consider what has already been spent for AIG, Fannie Mae and Freddie mac and others that bring the total to 1.8 trillion. Add that to the existing 10 trillion deficit and each of those 200 million tax payers need to cough up roughly $60,000 to make things right. Are you ready to contribute your share?

no

That makes two of us

[Beardog]

1 year away from retirement I think I would consider moving any cash away from any risk. Understand the problem with pensions not so easily fixed.

However, at various times if the market is high the value of some pension funds will be high also. The market goes up and down and we have had 10 years of "over" growth so we have been heading for a balancing out for some time. Where possible move your assets but dont expect the general taxpayer to support investments or pensions that have grown more than was a true growth rate.

My matress is too small to stuff USD2 mill into.

Where else would you suggest keeping cash if not in a bank?

Nah stacks of hunskies are only 6& 1/2" TO 8" pending on how old the bills are per 100,000 20 stacks of 100,000 would fit into a twin mattress nicely & Be as uncomfortable as the usual hard Thai mattresses. I like the Italian Idea of burying it in glass jars with wax around the seal better.

[Beardog]

Dam internet keeps dropping.

Give the money back to the homeowners to pay off the loans. They will eventually repay +tax.

If you buy someone poor a meal (or a fishing pole & showing how to slay em & eat all the time.) instead of giving it to a charity agency they get the food to eat. give it to a bank they fatcats just get fatter. I can't wait to see B of A go under. Will throw a couple shrimps on the barbie & some nice t-bones to go with it.

We all know that they are too late to make a difference at this point. & The top 1&1/2 % bracket won't even have to pay but

pennies on hundreds of thousands of dollars . They have the best accountants & the government always gives them the best breaks. A flat tax would be much fairer!

Besides if you pay for a new truck & bring in 10,000 cash & draw the rest from a bank you have to fill out forms that go to the gov. to see if they want to investigate if the money is legit. Over 20,000 automatically is reported on money transfers so the gov. can see if they can tax you for the 3rd or 4th time on the same money. A lot of Americans use the money to build credit.It just throws up RED FLAGS if you do a Beverly Hillbilly thing & walk in with $300,000 in cash to buy a modest house.

It just does not look good. If you were unfortunate to be caught in the stock market & got beaten down that would affect your assets & possibly default on a loan if you had to cover stock contracts, So I wouldn't clump everyone into the plastic hero mold. I use my credit & pay each month in full to avoid finance fees in the U.S. Often in business it is much more favorable to use someone else's cash & repay it back quickly to keep solvent. The banks & the sales people are as I see it every bit to blame as they new they were baiting people that really could not afford the purchases in the first place.

I think that it would be a good idea to have the top players that got out before the shit hit the fan have them pay the majority of the stolen(possibly to strong a word) lets go with sheistered monies back to the pot to alleviate the burden on the lower & middle class. No love lost for the banks . I feel way more sorrier for my friends in the construction field losing than I do about the corporate jerk- offs.

[Heng]

If you're a net saver, you'll come out just fine. It's those in the red or near red (in particular those who are going to get their loans/credit lines/margin calls/etc. etc. cancelled or called in) who'll be hurting as usual.

[flying]

In the UK, the 5th richest country in the world we had in excess of 10,000 people die last year from hypothermia because they could not afford to heat their homes and we do nothing. The bankers with their obscene salaries and bonuses will not have to worry about food and heating prices.

I am very sorry to hear this & would have never guessed it.

I for one would be happy to cheer the fall of the banking institutions as they are now as it will be the only way to get any meaningfull change in attitudes, our politicians are not going to risk their future financial goodies.

I agree 100%

I would much rather give the money to prevent the 10,000 deaths you describe than give these dogs another dime.

The Jump you F'er's signs I see posted on Wall Street are how many feel I think.

Jump

[elkangorito]

According to CIA world facts there are about 200 million americans between the age of 15 and 64. While the 700billion covers the present bill before congress you have to consider what has already been spent for AIG, Fannie Mae and Freddie mac and others that bring the total to 1.8 trillion. Add that to the existing 10 trillion deficit and each of those 200 million tax payers need to cough up roughly $60,000 to make things right. Are you ready to contribute your share?

no

That makes two of us

That makes 3 of us except that I have absolutely nothing to share/give. Nor have I had any sort of credit for the last 15 years or so.

I guess I'll go hungry just to keep the shareholders happy. I'm sure that if I can cut my weight down to 50kg, I won't quickly die & I will be praised by the all demanding & ever profit seeking shareholders...even though I haven't had any credit for over 15 years.

[JimsKnight]

Four for me.

Let the shares fall I say.

Cash is king and you need to save money not live off credit.

Saving money is the new groove now.

[flying]

Four for me.

Let the shares fall I say.

Cash is king and you need to save money not live off credit.

Saving money is the new groove now.

5 for me

Hey I think you could make a T shirt or bumper sticker with your

Saving money is the new groove now.

I think it would sell big !

Edited October 2, 2008 by flying

[lifeisrandom]

Why feel sorry for the middle classes? They are adults. They hocked themselves up on debt. The banks didnt force them to borrow so much? You can't blame banks sending out marketing materials - they don't hold a gun to people's heads to sign and borrow more.

It isnt rocket science. Any idiot should know that if you earn 50,000 a year, borrowing 2m is fundamentally a stupid irresponsible thing to do.

the bailout is not selflessly motivated. the basis behind the bailout is that for an economy to grow, you need a healthy banking industry. whether you disagree with that fact is fine, but nobody is suggesting "save the middle class", as a matter of fact, the bailout will not even do that.

[JetsetBkk]

700 billion dollars, not million.

Yes, and it's American billions, not the old (pre-1974) UK billions. Big difference.

http://en.wikipedia.org/wiki/Long_and_short_scales

[PattayaParent]

If you're a net saver, you'll come out just fine. It's those in the red or near red (in particular those who are going to get their loans/credit lines/margin calls/etc. etc. cancelled or called in) who'll be hurting as usual.

Unless of course the bank or building society you have your savnings in goes under and then you'll lose everything except the paltry 'protected' amount (per person, per bank).

[siamamerican]

Always it is the poor and middle classes that pick up the tab for the failings of the powerfull and rich.

In reality the poor and middle class are picking-up a very small portion of the tab. The top 25% income earners pay 80% of the federal income taxes that are being used for the bailout. The bottom 50% pay 3% of the taxes and the poor basically pay 0%.

To me it sure seems the wealthy are bailing out the wealthy.

Hmm, well whilst there is of course some truth in waht you say Im afraid you omit completely the impact of recession and higher prices on the poorest people.

For example the increase in cost of basics such as food and heating. Some one earning 40k plus will not really be impacted by these things unless they are already over extended by debt repayments but someone earning 20k or less will be hit hard and the 4 million people in the uk earning under 12k will really struggle.

Often we forget that in our society many people do not see the benefits of these financial games but in the end they are always hit the hardest in the cost of living.

Sorry, missed this post. I agree with you - the poor feel a lot of pain during a recession. Also, I don't think you can exclude the 40k plus crowd. They will have it rough during the impending recession.

My point was the money being used for the bailout isn't coming from the poor. The vast majority is coming from the wealthy.

[Heng]

If you're a net saver, you'll come out just fine. It's those in the red or near red (in particular those who are going to get their loans/credit lines/margin calls/etc. etc. cancelled or called in) who'll be hurting as usual.

Unless of course the bank or building society you have your savnings in goes under and then you'll lose everything except the paltry 'protected' amount (per person, per bank).

The same goes for folks who have been amassing their life savings in the form of gold nuggets or baseball cards, both buried in the backyard.

The folks who have their banks go under (yet don't owe anyone anything, still own their land and home(s), etc.) will still have their *relative advantages* compared to those in the red. It's just a question of whether everyone else is drowning in water or molten lava... still much better to be onshore or at least on solid rock.

Edited October 4, 2008 by Heng

[Pakboong]

and here we go again - let's blame someone else for our own fuc_kups.

today's credit crunch is caused by individuals borrowing too much to buy 42 inch tvs and houses they can't afford. It's as simple as that. It;'s not the banks' fault . .it's people can't keep their fuc_king wallets in their pocket.

What happened to the idea of saving for things you want?

Not exactly.

Our biggest fuc_k up was that we have allowed our elected representatives to take away all regulations that we had protecting the financial system, which in turn created this hyper capitalism mistaken for the "free market economy" that it never was and never will be. Only this made it possible that investment banks could get into the highly speculative business of selling bad loans (how the fuc_k can one possibly sell a bad loan?!), which in turn made it possible to give loans to people who could otherwise have never qualified for one.

And then chain reaction, exposing the whole system for the mess it is - alchemist schemes to make shit appear golden.

Not allowing the 700 Billion package to go through is making this even worse, and will spiral this thing into something similar the world has seen in 1929. Save the fuc_king banks, save us, and if one wants to, punish CEOs or whoever afterward.

If these packages don't go through, banks go broke, and with that all the little moneys we saved, stocks go down, jobs get lost, poverty starts, extremist parties will score points with knee jerk policies...

And don't forget to bring back the checks and balances, so that this won't happen again. Free market never was, never is. It's just a whole lot of BS.

Howsitgoin is absolutely right and is the only person on this thread who has shown that he understands what has really happened and how important it is to save the credit markets. Complaining may make us feel better but it won't do any good. What is needed is action. Yes it's a rotten situation but if the government doesn't buy the bad loans the banks won't be able to start lending again and if they have no money to lend the entire economy could fail.

And if it were to fail, mightn't a new economy, with a greater emphasis on savings, rise up in its place?

As was the case after the great depression. Those who survived it became arguably the most prosperous generation per capita in recent history.

[Groongthep]

and here we go again - let's blame someone else for our own fuc_kups.

today's credit crunch is caused by individuals borrowing too much to buy 42 inch tvs and houses they can't afford. It's as simple as that. It;'s not the banks' fault . .it's people can't keep their fuc_king wallets in their pocket.

What happened to the idea of saving for things you want?

Not exactly.

Our biggest fuc_k up was that we have allowed our elected representatives to take away all regulations that we had protecting the financial system, which in turn created this hyper capitalism mistaken for the "free market economy" that it never was and never will be. Only this made it possible that investment banks could get into the highly speculative business of selling bad loans (how the fuc_k can one possibly sell a bad loan?!), which in turn made it possible to give loans to people who could otherwise have never qualified for one.

And then chain reaction, exposing the whole system for the mess it is - alchemist schemes to make shit appear golden.

Not allowing the 700 Billion package to go through is making this even worse, and will spiral this thing into something similar the world has seen in 1929. Save the fuc_king banks, save us, and if one wants to, punish CEOs or whoever afterward.

If these packages don't go through, banks go broke, and with that all the little moneys we saved, stocks go down, jobs get lost, poverty starts, extremist parties will score points with knee jerk policies...

And don't forget to bring back the checks and balances, so that this won't happen again. Free market never was, never is. It's just a whole lot of BS.

Howsitgoin is absolutely right and is the only person on this thread who has shown that he understands what has really happened and how important it is to save the credit markets. Complaining may make us feel better but it won't do any good. What is needed is action. Yes it's a rotten situation but if the government doesn't buy the bad loans the banks won't be able to start lending again and if they have no money to lend the entire economy could fail.

And if it were to fail, mightn't a new economy, with a greater emphasis on savings, rise up in its place?

As was the case after the great depression. Those who survived it became arguably the most prosperous generation per capita in recent history.

Very arguably. Everyone I know who lived through the Great Depression suffered terribly. The most prosperous generation per capita in recent history has to be those of the 70s 80s and 90s not the late 40s 50s and 60s.

[Pakboong]

and here we go again - let's blame someone else for our own fuc_kups.

today's credit crunch is caused by individuals borrowing too much to buy 42 inch tvs and houses they can't afford. It's as simple as that. It;'s not the banks' fault . .it's people can't keep their fuc_king wallets in their pocket.

What happened to the idea of saving for things you want?

Not exactly.

Our biggest fuc_k up was that we have allowed our elected representatives to take away all regulations that we had protecting the financial system, which in turn created this hyper capitalism mistaken for the "free market economy" that it never was and never will be. Only this made it possible that investment banks could get into the highly speculative business of selling bad loans (how the fuc_k can one possibly sell a bad loan?!), which in turn made it possible to give loans to people who could otherwise have never qualified for one.

And then chain reaction, exposing the whole system for the mess it is - alchemist schemes to make shit appear golden.

Not allowing the 700 Billion package to go through is making this even worse, and will spiral this thing into something similar the world has seen in 1929. Save the fuc_king banks, save us, and if one wants to, punish CEOs or whoever afterward.

If these packages don't go through, banks go broke, and with that all the little moneys we saved, stocks go down, jobs get lost, poverty starts, extremist parties will score points with knee jerk policies...

And don't forget to bring back the checks and balances, so that this won't happen again. Free market never was, never is. It's just a whole lot of BS.

Howsitgoin is absolutely right and is the only person on this thread who has shown that he understands what has really happened and how important it is to save the credit markets. Complaining may make us feel better but it won't do any good. What is needed is action. Yes it's a rotten situation but if the government doesn't buy the bad loans the banks won't be able to start lending again and if they have no money to lend the entire economy could fail.

And if it were to fail, mightn't a new economy, with a greater emphasis on savings, rise up in its place?

As was the case after the great depression. Those who survived it became arguably the most prosperous generation per capita in recent history.

Very arguably. Everyone I know who lived through the Great Depression suffered terribly. The most prosperous generation per capita in recent history has to be those of the 70s 80s and 90s not the late 40s 50s and 60s.

Prosperity on a grand scale usually takes more than a few minutes to cultivate.

[PattayaParent]

If you're a net saver, you'll come out just fine. It's those in the red or near red (in particular those who are going to get their loans/credit lines/margin calls/etc. etc. cancelled or called in) who'll be hurting as usual.

Unless of course the bank or building society you have your savnings in goes under and then you'll lose everything except the paltry 'protected' amount (per person, per bank).

The same goes for folks who have been amassing their life savings in the form of gold nuggets or baseball cards, both buried in the backyard.

The folks who have their banks go under (yet don't owe anyone anything, still own their land and home(s), etc.) will still have their *relative advantages* compared to those in the red. It's just a question of whether everyone else is drowning in water or molten lava... still much better to be onshore or at least on solid rock.

These relative advantages are not worth much when you're 1 year away from retirement and your $2million retirement fund wil be worth only 5~10% and you have to work another 20+ years to get back to the same position.

Let's see you cheer the collapse of world banking when you're in that position.