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After a frantic week of negotiations, Congress and the White House are nearing agreement on a plan to quell the panic gripping the credit market. A congressman involved in the talks said Thursday morning that “the cavalry has arrived.” The big question now is whether they’ve brought enough bullets.
Here’s a look at the broad outlines of the plan — and what it’s supposed to do:
What’s in the plan? How is it supposed to work?
The core of the plan is the funding of what amounts to a $700 billion, government-run hedge fund that will buy up bad mortgage-backed debts from banks and other financial institutions, allowing them to raise cash and get money moving through the system again.
Since no one wants to buy these bad debts, no one knows how much they’re really worth. That uncertainty was part of the reason Fannie Mae, Freddie Mac and insurance giant AIG had to be rescued this month.
The hope is that if the government steps in as a buyer of mortgage-related securities, that demand will help everyone put a price on these assets and remove fears that more companies holding these bad debts will go under.
The government’s going to run a hedge fund?!? They can’t even balance the budget! Who’s going to manage this thing?
That’s still unclear. Early on, some members of Congress wanted to set up a separate entity —like the Resolution Trust Corp. that cleaned up the savings and loan mess in the 1980s. But that plan was abandoned as the market meltdown deepened because it would take too long to set up a new agency.
The Treasury will likely manage the overall buying and selling of bad debts. It already handles multibillion-dollar auctions of Treasury debt. Treasury Secretary Hank Paulson said private Wall Street firms might be hired to handle the some of the analysis of which debt to buy. Chairman Rep. Barney Frank, chairman of the House Financial Services Committee, has suggested that the New York Federal Reserve — which also buys and sells billions in debt securities every day — might be tapped to manage the fund’s operations.
So how will the government figure out how much to pay for these bad debts?
That's the $700 billion question.
Details are still being worked out, but the most likely scenario involves a kind of “reverse” auction. When the Treasury sells new bonds, it takes bids and sells what it needs to whoever agrees to take the lowest interest rate. As a buyer of bad mortgage-backed paper, the Treasury would want to buy the cheapest paper first. Once investors in the credit market see these bad debts changing hands at real prices, the hope is that market demand for this paper will improve.
What could go wrong?
It’s still not clear that an auction system will assign a true value to these securities. Since they’re backed by mortgages, a lot depends on how many more families default on their loans.
This paper is almost certainly worth something: Ultimately it's backed by houses, which have some value. But if the government buys mortgage-backed securities now, and home prices keep falling, it could wind up overpaying, with taxpayers picking up the tab.
There’s another risk. Banks holding these securities have to mark down their value on their books based on market prices. So far, since there is no market for this paper, they had to guess what it's worth. Some banks have marked the securities down further than others.
If the market price established by the government turns out to be lower than the price banks are using to value their holdings, those banks are going to have write them down further. That would mean another wave of writedowns and losses for a banking industry that’s already on the ropes.
How much is this going to cost me?
No one knows. The plan is for the government to hold on to these mortgage-back securities until the economy and housing market improve, and then sell them — possibly for a profit. Banks that sell their bad debts into this plan may also have to give stock to the Treasury. As the crisis subsides, and banks get back on their feet, that stock could also be a winning investment for the government.
But if the housing market keeps falling and mortgage defaults keep rising, the government may wind up on the losing side of the trade. The latest housing data, released Thursday, shows home prices fell much further than expected in August. Until the housing market stabilizes, and home prices stop falling, buying mortgage-backed securities is a risky bet.
But the government is now the investor of last resort.
Do we really need to do this? My ATM machine is still working. Isn’t the government just scaring us into bailing out Wall Street?
The effects of the credit freeze haven’t yet fully worked their way through the system to consumers, though there are early signs that’s it's doing so. Some banks have begun canceling home equity lines of credit. Private lenders have been fleeing the student loan market.
One way to think about the crisis: The economy is like a patient who was just diagnosed with clogged coronary arteries. The patient feels fine and might continue to feel fine for days, weeks or even months. But without treatment, he’s at grave risk of a heart attack. So think of the government’s plan as a kind of financial bypass surgery — to restore the flow of capital through the economy. The treatment is not without risks, but the risks of doing nothing are much greater.
What about the homeowners stuck with these bad mortgages: Are they getting help too? Or is this just a bailout for Wall Street?
This was one of the biggest objections to the Treasury’s original proposal; Paulson told Congress that once the government buys up mortgage-backed paper, it may be easier to work out better loan terms with homeowners at risk of default. That's a big maybe.
Congressional Democrats countered with a proposal they’ve been pushing for the past year: Give bankruptcy court judges the authority to set more affordable loan terms, and cut through the red tape that has slowed voluntary efforts to get lenders to renegotiate bad loans with ruinous terms. The White House has been dead set against the idea, saying it would make new mortgages harder to get. At this point, the White House appears to be prevailing.
How about the CEOs in charge of the banks that got us into this mess? Are they going to get to keep their millions in salaries and bonuses?
Congress also made clear this week that their constituents would squawk loudly if Wall Street executives walked away from this mess without suffering the consequences of the failed bets their companies made. To be sure, some of those executives already have lost millions in personal wealth as stock holdings in their companies have plummeted in value.
Congressional leaders have insisted on capping the pay packages for CEOs of companies that will benefit from the plan. But it’s far from clear how that will work: Many CEO pay packages include forms of deferred compensation that, if structured to work around the new law, could wind up being sheltered over the long term.
So this will keep the economy from getting worse, right?
If the plan works, the hope is that it will minimize the economic damage from the current financial panic. But even before the credit market began to freeze up this month, most forecasters were expecting the economy to get worse before it gets better. Unemployment is rising and home prices are falling. The recent shock to the financial system has spilled over to the wider economy, but there’s a lag as that impact moves through the economy. Even if it doesn’t spread further, the damage won’t be known for some months to come.
No matter how well the bailout works, the age of easy-money lending is over. Consumers who have been accustomed to borrowing to pay bills will have to tighten their belts. Small businesses may have a harder time getting loans. If foreign investors lose their appetite for Treasury securities — including the latest serving of $700 billion in fresh debt — Uncle Sam will have to pay higher rates to sell bonds. Until lenders' fears subside, tight money will continue to be a drag on economic growth.
What if it doesn’t work?
The plan is still very fluid, and Congress and the White House will likely continue to work on broader solutions in the coming months. The main concern is that financial markets move a lot more quickly than Congress. That’s why the Treasury initially asked for broad powers to act quickly.
If the plan doesn’t free up the flow of money, companies won’t be able to get the short-term loans they need to smooth out the seasonal ups and downs of their cash flow. If they run out of cash, they could be forced out of business. If mortgage lending gets tighter, the housing market will take longer to recover. If the money freeze continues, consumer credit like car loans could become harder to get and more expensive when approved. If consumer spending slows further, that drags the economy down with it.
We may not know for awhile whether the plan is working. Over the short term, if key interest rates come down, that’s a sign that confidence is returning to the markets. But because most of the bad debt clogging the system is hidden from view, it will be months — at least — before the economy and financial markets will flash the “all clear” signal.
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- John Schoen's Column, All of Newsvine
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 | Eye on the Economy: Bailout Q&A | Associated Press | Tue Sep 23 | 226 |
 | Text of President Bush's speech on economic crisis | Associated Press | Thu Sep 18 | 0 |
| Foreclosures are key element missing in plan | Associated Press | Sun Sep 28 | 447 |
| Answer Desk: What's your take on bailout? | Associated Press | Sun Sep 28 | 338 |
| Bailout failure throws banks into disarray | Associated Press | Mon Sep 29 | 148 |
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4.6
1.2
{"commentId":3117369,"authorDomain":"spudmck"}
So the overwhelming majority of Americans are against this bail-out but congress is going to do it anyway? Best of all the main assumption is that these assets will be worth something in the future....hmmmm....if that were the case why don't these companies hold on to them?
I find it funny they say the market fundamentals are still sound but the bail-out is needed or it will be catastrophic...well you cant have it both ways it is either sound or it aint.
{"commentId":3117369,"threadId":"368173","contentId":"1912018","authorDomain":"spudmck"}
- 7 votes
#1 - Thu Sep 25, 2008 2:00 PM EDT{"commentId":3126722,"authorDomain":"david393071"}
These "Lawmakers" are bailing out their buddies. Look at the Biographies of the Corporate Board Members of Fannie Mae, Freddie Mac, Lehnman Brothers, AIG.
You will see former members of Halliburton, Federal Reserve Bank, club membership with Economic Club (conspiracy?), IBM, Presidential Advisors.
These are the same Corporate Board Members that sit on numerous boards. They keep voting for their own outrageous Salaries/Benefits/Bonuses/Separation Packages.
These people succeeded in bring the U.S. Economy into crisis, something the 911 Terrorists failed to do. Therefore, try them as what they are Terrorists. We are currently at war, "Global War Against Terrorism", these are domestic Terrorists. They willing made the choice to stuff their pockets with money instead of the entire United States of America. During World War II, this would have been considered Treason (wikipedia definition). These people would have been tried by Military Tribunal and executed.
To call these people what they are: Treasonous Terrorists.
Detain them at Guantanimo indefinitely, no legal representation, no communication, trial by Military Tribunal, not U.S. Court. Just like the other Terrorists.
DO NOT BAIL OUT THE unAmerican Auto Industry (Ford, GM, Chrysler). Unless we get shares at the same rate as Corporate Executives (exaggeration: 300 shares for $1.00). These people are responsible for reinvesting their profits into their own business. No shares for us. Ok then they can be also tried as what they are for sabotaging the U.S. Industrial Complex, part of the U.S. Defense Industrial Complex (Warfighthing, Defensive Capabilities) same as the other bumbs of Lehnman Brothers, Fannie Mae, Freddie Mac, AIG.
If you don't do something about these bumbs they are going to keep coming back for "mo money", look at how many times the unAmerican Auto Industry has asked to be bailed out. This bull@!$%# about retooling, research has been going on since 1970s. GM, Ford already have built more than 3 million E100 and more "Flex Fuel" Vehicles in Brazil (ethanol fuel in Brazil, wikipedia). Isn't lying under oath to Congress a crime?
I keep saying that Ford, GM, Chrysler are unAmerican. That is the truth, where are they built, Mexico and Canada. So unless the United States of America annexed Mexico and Canada as new States. These are Mexican and Canadian products. Putting on one or two bolts at an assembly plant in the U.S. on a car made in Mexico or Canada is not assembled in the U.S. stop lying. The only real American Auto Plants are located in Kentucky, Toyota; California, Honda; Alabama, Hyundai; Nissan, USA.. Americans building cars for Americans. Stop lying to the Citizens of the United States of America, we know. Since 1994 NAFTA, Ford GM Chrysler and afterwards all their U.S. Auto Manufacturing was being sent to Mexico or Canada. This makes them Canadian or Mexican built or assembled that makes Ford, GM or Chrysler Canadian or Mexican, NOT AMERICAN.
So unless you get rid of the cancer (Corporate Board Members) it (they) will keep coming back to suck the life out of the American Citizens.
{"commentId":3126722,"threadId":"368173","contentId":"1912018","authorDomain":"david393071"}
- 1 vote
{"commentId":3129489,"authorDomain":"zebbbbb"}
Doesn't people see that history is repeating it self? The only difference is we are dealing with more money, companies, and people now. The last thing we need is the government borrowing more money from the Federal Reserve. The Federal Reserve has no real money and the government borrowing more will only hurt the dollar value and cause more debt to the people as we can hardly pay the interest on what has already been borrowed. The Federal Reserve needs to be dismantled immediately as it does absolutely nothing to better our society, it just lets the benefices of the reserve to become richer. Everyone needs to know the real truth about the Federal Reserve and how it came to be and how it functions. People just need to wake up to what has been going on here for too damn long. So as the end of the fiscal year approaches let's see what kind of plan the money manipulators have in store for us as the next shock and awe. God help our country if these banks start calling back loans, because with no buyers they will take everything you think you own.
{"commentId":3129489,"threadId":"368173","contentId":"1912018","authorDomain":"zebbbbb"}
- 1 vote
{"commentId":3133273,"authorDomain":"parthur169"}
No, it will not work because human nature brought this about - one word: greed.
Unregulated Capitalism is Greed. Capitalism is the best system, but it must be regulated and taxed to properly channel it.
{"commentId":3133273,"threadId":"368173","contentId":"1912018","authorDomain":"parthur169"}
- 1 vote
{"commentId":3175410,"authorDomain":"kentmmillen"}
Republicans have all approved bankruptcy courts modifying union contracts to give employers help, but now they refuse to approve of bankruptcy courts modifying homeowners mortgages to give borrowers breathing room! THIS IS GROSSLY UNFAIR, AND DISCRIMINATORY, AS THE VERY HOMEOWNERS WHO NEED THE HELP ARE THE ONES HAVING TO PAY TO BAIL OUT THE WALL STREET CROOKS WHO GOT US IN THIS MESS! WE MUST ll write our elected officials and demand that bankruptcy courts be able to modify mortgages, to give borrowers who got shafted by unscrupulous bankers some help! as a whole they are a bigger loss to the economy than the few walls street firms asking for a handout!
{"commentId":3175410,"threadId":"368173","contentId":"1912018","authorDomain":"kentmmillen"}
- 1 vote
{"commentId":3117925,"authorDomain":"smrtcookie04"}
The administration gets what they want, Congress gets to flee Washington for the hinterlands for a few months looking like they have "done" something, Wall Street rallies big (for a day or two), and the American taxpayer gets the big bill for a contract that has no details and no assurances for the signers. Our Constitution just got flushed down the toilet, and our economy is going to continue down with it. This "bail out isn't going to fix what is wrong with our economy and our country. The disease of greed has metastasized, and now the entire system is not just "at risk" of dying but actually dying. No magic pill or bullet can save us now. Our sick system will just keep asking for more and more pain medication until it closes its eyes. We might have had a chance if Congress had been brave enough to have allowed Wall Street to devalue their own holdings and to go out and offer those being foreclosed on cheaper mortgages and better terms at reduced prices. The overpriced housing market, at least, would eventually have righted itself so that market could get moving again. What these "capitalists" have forgotten is that capitalist ventures actually require CAPITAL, not debt. And ventures aren't certain. When the venture doesn't work out, that's how the market corrects itself and improves. The whole thing just sickens me.
{"commentId":3117925,"threadId":"368173","contentId":"1912018","authorDomain":"smrtcookie04"}
- 6 votes
#2 - Thu Sep 25, 2008 2:12 PM EDT{"commentId":3118052,"authorDomain":"tktaft"}
We had a term in the military to describe a mess like this "fubar". I think liberals and conservatives both would agree this would be an accurate description of the situation.
{"commentId":3118052,"threadId":"368173","contentId":"1912018","authorDomain":"tktaft"}
- 3 votes
#3 - Thu Sep 25, 2008 2:14 PM EDT{"commentId":3118306,"authorDomain":"agambitta"}
AND MAIN STREET AMERICANS LOSE....................... AGAIN!! BAILOUTS FOR THE RICH AND GREEDY, PORK AND BEANS FOR THE WORKING TAX-PAYING AMERICANS. I AM DISGUSTED ABOUT THIS WHOLE BS....
AND SIX MONTHS FROM NOW, ANOTHER BAILOUT, AND ANOTHER, AND WHEN IS IT ENOUGH! 2 MONTHS AGO IT WAS FREDDIE/FANNIE, LAST MONTH AIG, THIS MONTH...
LIKE PUTTING A BAND-AID IN A GASH WOUND.
{"commentId":3118306,"threadId":"368173","contentId":"1912018","authorDomain":"agambitta"}
- 5 votes
#4 - Thu Sep 25, 2008 2:20 PM EDT{"commentId":3123225,"authorDomain":"cindii"}
It isn't only wall street, main street is to blame also. No one forced them to lie or take mortgages they would never be able to pay for or use their home as a piggy bank for cars, boats, tvs, and vacations.
{"commentId":3123225,"threadId":"368173","contentId":"1912018","authorDomain":"cindii"}
- 1 vote
{"commentId":3123946,"authorDomain":"marklineburger"}
Thank you Cindy! I think that people forget that this is a bailout of the American people and not the financial institution. America needs to have regulation in place where greed and desire harbor. This is why the industry was regulated after the Great Depression! The only problem was Bill Clinton and Newt Gingrich pushing the Bank Deregulation Act of 1999 through legislation! America got America into this mess!
{"commentId":3123946,"threadId":"368173","contentId":"1912018","authorDomain":"marklineburger"}
{"commentId":3124331,"authorDomain":"marksbunch"}
And no one forced these sharp, circumspect, and otherwise savvy lenders NOT to verify the likelihood of repayment. In fact, I'm certain they were the very ones ASSURING the buyers that by the time the loan reset their salaries would have increased. Their own greed led on the buyers and blinded themselves. And on top of that, the loan wouldn't be theirs by reset time, would it? And those who bought the bundles of loans weren't really too worried about verifying anything either because they were going to sell them also. Regulation was lax, where it even existed; however, integrity is first of all a personal quality at every step. It isn't only the most remunerated CEO's who are guilty; so is everyone who was in on the mortgage trade business. In many cases--but, I agree, not all--the original buyers are the least culpable (which is short of saying innocent, please note).
{"commentId":3124331,"threadId":"368173","contentId":"1912018","authorDomain":"marksbunch"}
{"commentId":3126839,"authorDomain":"kramer-mw"}
Cindy and Mark L. I'm not going to say the borrowers are without blame. Frankly quite a few are just plain stupid. However, you had an industry that systematically gamed their own system. They talked people into taking ARMs on notes that couldn't be handled if the adjustment occurred. If somebody was bright enough to do the math they scoffed and pointed at the recent history. Sheesh. It was to good to be true. Realtors had a field day up-selling and jumping into new construction.
And I believe that in this country we take care of our stupid people. However, we should not take care of those that prey upon them.
{"commentId":3126839,"threadId":"368173","contentId":"1912018","authorDomain":"kramer-mw"}
- 2 votes
{"commentId":3118328,"authorDomain":"kevindanson"}
America has just been sold out by our elected officials playing into the hands of the fraudsters that created this whole mess.
The vast overwhelming majority of the American public is opposed to this bailout. Our elected officials are supposed to represent the will of the people. Thats what we were all taught in school. Something is wrong with this picture.
RE-ELECT NOBODY except congressman Ron Paul.
{"commentId":3118328,"threadId":"368173","contentId":"1912018","authorDomain":"kevindanson"}
- 2 votes
#5 - Thu Sep 25, 2008 2:21 PM EDT{"commentId":3124201,"authorDomain":"marklineburger"}
The fraudsters are the American public that should not have been applying for loans they could never pay!
{"commentId":3124201,"threadId":"368173","contentId":"1912018","authorDomain":"marklineburger"}
{"commentId":3124648,"authorDomain":"hektop0070"}
Mark, those people that you are calling fraudsters loss their homes, down payments, and closing costs. Those people are living in poor conditions and as far as I know the Government have said scr@w them, but everyone should be told also to scr@w themselves, that would be fair. Why are we bailing out the rich and scr@w the poor? are they getting their homes backs, their down payments, their closing costs, no?
Pretty unfair isn't?
You and I will pay for the wealthy ones, they are not loosing a single dime for their sins, only the poor are.
{"commentId":3124648,"threadId":"368173","contentId":"1912018","authorDomain":"hektop0070"}
{"commentId":3125829,"authorDomain":"marklineburger"}
So you feel that we should bail out people who made faulty decisions? I don't believe for a minute that they are all poor...they were people that could not manage there money. The only reason that we have to bail out the finical institutions, is because, almost every store that you buy retail goods from runs some kind of floor credit, and they will not be able to stock themselves. Now, I feel, that the small business owner would be the hardest hit and I don't here to many people crying for the person who is loosing 10 to 25 percent of their net worth...even though they followed the rules and made responsible decisions!
{"commentId":3125829,"threadId":"368173","contentId":"1912018","authorDomain":"marklineburger"}
{"commentId":3130112,"authorDomain":"bgil"}
So let wall-street loose their money, give the 700B to a responsible bank to make loans or charter a new bank.
{"commentId":3130112,"threadId":"368173","contentId":"1912018","authorDomain":"bgil"}
{"commentId":3118384,"authorDomain":"Steve64"}
I had, be it good or bad, the opportunity to work for the FDIC/Resolution Trust Corporation (RTC) from 10/1987 thru 12/1995 during the "Savings and Loan Bailout". Whether you agree or not, the "Savings and Loan Bailout" occurred due to deregulation and poor over-site by the US government of the Savings and Loan industry.
The FDIC/RTC's quick liquidation of the failed savings and loans, their assets, and closure of the RTC offices by 12/1995, was merely to hide the US government's failure of the deregulation and poor over-site. Fortunately, the cost to the taxpayers of the bailout was around $5 to $6 billion. The most important fact is that most taxpayers had forgotten about this bailout.
The bailout of the US Financial System (Wall Street) again is occurring due to deregulation and poor over-site by the US government of the Financial System (Wall Street). In the beginning, the so called experts compared the bailout to the "Savings and Loan Bailout". As we all know, this bailout (or failure due the lack of regulation and over-site) is more complex, much larger, and will impact everyone from Wall Street to Main Street USA, and the economies from Europe, to China, and around the world.
My concerns are not of the greed from Wall Street or even the economies around the world. It's all about Main Street USA. It's the hard working middle-class, the poor, and each and every small business that in their hey day grew this country to be the world power that it was. Look at the US statistics, the majority of the residents in the US are 50 years and older, and the middle-class and poor make up more than half of the population. How does the US congress expect to pay for the bailout? The US is not in the position to roll the dice with the lives of every american.
Today's taxpayer will not stand for a $700 billion bailout of Wall Street. Period… It being election year you'll see it in November. Once the bailout is passed (if it passed), the bailout most completed in orderly fashion, and handled from and by a "Private Sector" business perspective (not necessary the companies that caused this problem in the first place). Not like a FDIC/RTC liquidation fire sale. The US government should have over-site.
My God, does congress fully understand the impact of the $700 billion bailout to the middle-class, the poor, the elderly, and the small businesses in the US? We can not afford quick fire or a slow burn.
"I God We Trust"
SAOrzel
{"commentId":3118384,"threadId":"368173","contentId":"1912018","authorDomain":"Steve64"}
- 2 votes
#6 - Thu Sep 25, 2008 2:22 PM EDT{"commentId":3121009,"authorDomain":"smrtcookie04"}
What will we see in November that will change any of this? BOTH parties are party to this bail out scheme. Both parties allowed Depression era regulations to expire or to be removed so Wall Street could thrive and gorge on DEBT. Nothing will change in November, no matter WHO we vote for -or don't.
I don't imagine any of those folks laughing at Ron Paul are laughing now. Even as we post, Congress has a bill to bail out the big three auto companies. Yesterday Bernanke injected $30 Billion into central banks in Europe. FDIC is still reporting they may need more money from the Treasury with expected bank failures clearing out the insurance fund.
We are TOAST, and nobody winning in November will change one thing.
{"commentId":3121009,"threadId":"368173","contentId":"1912018","authorDomain":"smrtcookie04"}
- 3 votes
{"commentId":3122210,"authorDomain":"badkitty4x4"}
Who are these people, do they forget that they are elected to be our voice?!?! We have spoken and it should be so! NO BAILOUT!
Time to go back to basics!
There is an option, and what do we have to loose to try something new? Ron Paul endorsed CHUCK BALDWIN for PRESIDENT! Baldwin08.com
Time to hit the streets of D.C.
{"commentId":3122210,"threadId":"368173","contentId":"1912018","authorDomain":"badkitty4x4"}
- 2 votes
{"commentId":3129204,"authorDomain":"consuelo-777"}
This is like the blind leading the blind. Why do american taxpayers have to get the short
end of the stick. What the people need to do is proclaim a fast to our GOD in heaven, so
we can get out of this mess, if not its only going to get uglier.
{"commentId":3129204,"threadId":"368173","contentId":"1912018","authorDomain":"consuelo-777"}
{"commentId":3118616,"authorDomain":"bgbarry1987"}
Again, Congress is patting themselves on the back for bi-partisan agreement. Government and no accountability of CEO's has brought us to this point. This bill doesn't help the average family who is already in foreclosure; by the way these are the REAL consumer who makes the US economy run. Who are they kidding!!!!!!!!!!!! The government/white house can bail out the banks but won't help the tax payers who really need's the help
{"commentId":3118616,"threadId":"368173","contentId":"1912018","authorDomain":"bgbarry1987"}
- 1 vote
#7 - Thu Sep 25, 2008 2:28 PM EDT{"commentId":3118705,"authorDomain":"bgbarry1987"}
Again, Congress is patting themselves on the back for bi-partisan agreement. Government and no accountability of CEO's has brought us to this point. This bill doesn't help the average family who is already in foreclosure; by the way these are the REAL consumer who makes the US economy run. Who are they kidding!!!!!!!!!!!! The government/white house can bail out the banks but won't help the tax payers who really need's the help
{"commentId":3118705,"threadId":"368173","contentId":"1912018","authorDomain":"bgbarry1987"}
- 2 votes
#8 - Thu Sep 25, 2008 2:30 PM EDT{"commentId":3125318,"authorDomain":"marklineburger"}
The best help that these " tax payers" in foreclosure is for them to fail...They are part of the reason that we are in this mess! I'm not being foreclosed on...and that's because I would not get myself in that position. That being said, I don't want to bail them out! As for the financial institutions the FBI is investigating and I bet someone will go to jail...
{"commentId":3125318,"threadId":"368173","contentId":"1912018","authorDomain":"marklineburger"}
{"commentId":3118963,"authorDomain":"lburgess37"}
The best thing the government could do is to leave everything alone. As I understand it, the main problem is there would be no credit available. Would that be a bad thing? There would still be credit for people and businesses with stellar credit ratings, but those with less than stellar would have to wait to buy that house or that car or that boat or expand their business or start a new business. They also say that if there would be no growth if this bailout does not occur. Again, would that be a bad thing. Businesses (and their shareholders and CEOs) are not happy with a consistent 10% profit every year. That profit has to double the next year or else it's considered as a failure. The government can't continually keep borrowing these huge sums of money. This debt is being bought by other countries, you know. China is starting to own more and more of the United States with each new bailout, with each day the Iraq war continues. When is this going to stop??
{"commentId":3118963,"threadId":"368173","contentId":"1912018","authorDomain":"lburgess37"}
- 3 votes
#9 - Thu Sep 25, 2008 2:36 PM EDT{"commentId":3130107,"authorDomain":"becbar63"}
Absolutely!!!! The problem is people think they need the American Dream whether they can afford it or not. Buy now, worry about the payments or nonpayments later. People should lose their house. They took the gamble let them pay for it. If I take a gamble in the stock market and it tanks, do I ask for someone to bail me out? NO! It was my poor gamble. Why do I have to pay for someone else's bad decision. Will America wake up when China owes so much of our debt they say, "We'll take California and Texas in lieu of cash payment."
{"commentId":3130107,"threadId":"368173","contentId":"1912018","authorDomain":"becbar63"}
{"commentId":3119179,"authorDomain":"logdump"}
Ok whos next: Every business that is in trouble step right up and get your bailout!
{"commentId":3119179,"threadId":"368173","contentId":"1912018","authorDomain":"logdump"}
- 1 vote
#10 - Thu Sep 25, 2008 2:40 PM EDT{"commentId":3119269,"authorDomain":"bubba-rr620"}
WHEN WILL MEMBERS OF THE MEDIA START TO ASK QUESTIONS ?
1. IF THE MORTGAGE MARKET WAS SO IMPORTANT WHY WASN'T IT ADEQUATELY MONITORED?
2. IF THE VAST MAJORITY OF MORTGAGES ARE BEING SERVICED PROPERLY WHAT EXACTLY IS GOING TO BE BOUGHT BY THE TREASURY.
3. WHY SHOULD MANAGEMENT BE ALLOWED TO PROFIT FROM ANY INCREASE IN STOCK; SHOULDN'T THAT VALUE GO TO CAPITAL INVESTORS WHO HAVE PLACED THEIR FUNDS AT RISK?
4.WILL SOMEONE EVER POINT OUT THAT A STOCK CERTIFICATE IS A PIECE OF PAPER? IT HAS A PURCHASE PRICE AND A SELLING PRICE FLUCTUATIONS IN THE INTERIM DO NOT SHOW A LOSS NOR A GAIN . AT BEST IT IS ONLY ENTERTAINMENT UNTIL SOLD.
5.WHY REFER TO UPS AND DOWNS OF THE DOW INDUSTRIAL AVERAGE AS IF IT HAD SOME REAL EVERYDAY MEANING?
{"commentId":3119269,"threadId":"368173","contentId":"1912018","authorDomain":"bubba-rr620"}
#11 - Thu Sep 25, 2008 2:42 PM EDT{"commentId":3119277,"authorDomain":"wmaltais-1"}
What they are doing is criminal. The federal reserve is nothing but a bunch of crooks. Take back your country. I think everybody better have a little bit saner solution. Like ELECT RON PAUL!
{"commentId":3119277,"threadId":"368173","contentId":"1912018","authorDomain":"wmaltais-1"}
- 1 vote
#12 - Thu Sep 25, 2008 2:43 PM EDT{"commentId":3119529,"authorDomain":"jlrcanolick"}
Just another welfare program for the rich. But that's the way a so called democracy works. What does the ordinary person making less than $50,000 or less than $30,000 get out of this deal? Will anyone be prosecuted for causing this mess or is it a mess anyway or is it just another money laundering operation by Cheney & Bush & Rumsfeld like in Iraq so they can sit back & laugh how dumb the american people are when they leave the White house while they count their money.? Or are rich republicans & democrats working together to pad their their secret bank accounts a little more? Someone should be asking the tough questions about this. I don't get a thing out of this $700 billion giveaway. We have only 305 million people in this country. Give everyone a million dollars out of this deal anyway.
{"commentId":3119529,"threadId":"368173","contentId":"1912018","authorDomain":"jlrcanolick"}
- 3 votes
#13 - Thu Sep 25, 2008 2:48 PM EDT{"commentId":3119563,"authorDomain":"goldnmypoc2"}
You want to hear real? I've been working 40 years. Never without a job. Great experience, 30 years in accounting, single parent, credit score in the 800's last I checked. Unemployed since Jan 08, house on the market since Feb 08, sitting here wondering if my child is going to be homeless one way or another. Selling the home because I can't afford it unemployed but knowing that if I don't get a job that anything for rent in the area I am in will cost me more than the mortgage payment. Let's talk catch 22 in real life. Land of opportunity NO MORE. Rename this country "The Corporate States of America", as they are getting the bail out.
{"commentId":3119563,"threadId":"368173","contentId":"1912018","authorDomain":"goldnmypoc2"}
- 3 votes
#14 - Thu Sep 25, 2008 2:49 PM EDT{"commentId":3122586,"authorDomain":"rrubino3"}
I did not take a sub prime mortgage. I had a mortgage I could afford but I lost not 1 but 2 jobs due to downsizing in a years time. My house is in pre-forclouser now and I don't know where we are going to live when it forclouses. My husband has taken on as many hours as he can at work and we still can't meet our mortgage. We have exhausted our 401K, savings and my daughters college fund. We are now broke!!! Where is my bailout. I just want to work. I can't find a job anywhere. I am now looking to stores to be a cashier. So much for my BS in Business.
{"commentId":3122586,"threadId":"368173","contentId":"1912018","authorDomain":"rrubino3"}
- 1 vote
{"commentId":3119620,"authorDomain":"timfournier"}
So we have let two Wall Street guys (Bernanke & Paulson) and a clueless President move forward with a bailout which is neither reccomended or needed except of course by the three guys who engineered the "crisis" Bernanake-Paulson-Bush. Stand up people and e-mail your representatives in Washington telling them simply NO BAILOUT...NO WAY.
{"commentId":3119620,"threadId":"368173","contentId":"1912018","authorDomain":"timfournier"}
- 2 votes
#15 - Thu Sep 25, 2008 2:51 PM EDT{"commentId":3124809,"authorDomain":"mpenttila"}
I agree this is another orchestrated and engineered "crisis", but I think the three stooges are not the play makers (nor is McCain as much as he'd like to believe he is), they're just the front men.
More is coming, the next suprise will be even bigger, be prepared as it ain't over yet ...... namaste
{"commentId":3124809,"threadId":"368173","contentId":"1912018","authorDomain":"mpenttila"}
{"commentId":3119678,"authorDomain":"barry-rosenbloom"}
Greed did this to the working man.
The bankers with there cold hearts gave us cheap money to buy worthless property.
Then they went in for the kill when they increased their rates.
I don't think this would have happened if the banks realized what they were doing as the executives lined their pockets with the blood, sweat and tears of their mortgage holders. When my friends went to the back to try and renegotiate their mortgages, the banks just turned away. I'm glad the bank is now stuck with this over priced piece of real estate. Now the government is going to buy it. Great now it will become a derelict blight in the neighborhood.
I want to see drastic changes in the backing industry, I know it will hurt me in the short term, but right now there is no long term. If I don't see changes right away, the politicians better look out, they will be the first I will put out of a job. If the bankers were selling poison the government would have stepped in right away. Because what the bankers were doing looked proper nobody had the fortitude to investigate and determine if this was sound financial business. So now that the financial emperors are in trouble and all the politician's friends are in danger of loosing their millions, now the government wants to help.
I want to know what it is going to cost me. I want to know how much my taxes are going up, I want to know how they are going to fund this bail out, I want to know how long, I want to know who is going to be punished, I want to know who is going to be rewarded, and how. I want to see the plan in black in white, and not one of those thousand page documents the government puts out that says nothing. If the President can sum up the crisis in 20 minutes, they should be able to explain the plan to me in 30 minutes.
Right now I'm OK, I'm paying my mortgage, paying my taxes, but what happens if the economy doesn't pull out of this tail spin? I loose my house, my job? I have to pull my children out of college? Won't be able to feed my family? Won't be able to pay my taxes, then what is the government going to do?
{"commentId":3119678,"threadId":"368173","contentId":"1912018","authorDomain":"barry-rosenbloom"}
- 2 votes
#16 - Thu Sep 25, 2008 2:52 PM EDT{"commentId":3128483,"authorDomain":"aceking123"}
You're right, the "explanations" given so far have explained NOTHING, it's all very vague.....and VERY SCARY. Are we supposed to have "blind faith" that our government and Wall Street are assuredly going to look after the interests of the taxpayer?
{"commentId":3128483,"threadId":"368173","contentId":"1912018","authorDomain":"aceking123"}
- 1 vote
{"commentId":3119719,"authorDomain":"randy-roffina"}
I cannot believe "we" the taxpayers are going to do this...PLEASE put it to a public vote ! Our great country was built on the principles of free enterprise (including the freedom to screw up and be put out of business), NOT BIG GOVERNMENT ! All this is doing is masking the problem for another 5-20 years so my kids can fix it. People need to live within their means. Businesses need to make good sense/deals. I am so sick of the McMansions being built around town for 2 kids to live in, in zero-down, balloon-payment mortgages, frankly I do not care about the silly people signing up for these loans nor the incompetent mortgage companies involved. This bailout program does not address the CAUSES for the problems, just bandaids it and the SYMPTOM for awhile. God Bless America with common sense and discipline.
{"commentId":3119719,"threadId":"368173","contentId":"1912018","authorDomain":"randy-roffina"}
- 4 votes
#17 - Thu Sep 25, 2008 2:53 PM EDT{"commentId":3119817,"authorDomain":"rosesinjanuary"}
The economic fundamentals are not strong, they have known this for a long time as have a lot of us average tax paying citizens. They just reached a point where it could no longer be 'hidden." Hyperinflation here we come wonder what a loaf of bread will cost/
{"commentId":3119817,"threadId":"368173","contentId":"1912018","authorDomain":"rosesinjanuary"}
- 1 vote
#18 - Thu Sep 25, 2008 2:55 PM EDT{"commentId":3119940,"authorDomain":"sneila"}
{"commentId":3119986,"authorDomain":"jerryed"}
Buy Good Debt.
Fund loans through healthy banks to companies and people with good credit.
Buy Good Debt not Bad Debt!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
cjer@win.net
{"commentId":3119986,"threadId":"368173","contentId":"1912018","authorDomain":"jerryed"}
#20 - Thu Sep 25, 2008 2:59 PM EDT{"commentId":3119990,"authorDomain":"sneila"}
{"commentId":3120143,"authorDomain":"badazbrad"}
we dont want it and it will happen anyway. lock and load
{"commentId":3120143,"threadId":"368173","contentId":"1912018","authorDomain":"badazbrad"}
- 1 vote
#22 - Thu Sep 25, 2008 3:02 PM EDT{"commentId":3120328,"authorDomain":"kittiekins"}
I think the 700 Billion would be better spent on creating green jobs to replace the jobs lost by the companies going under - rather than support the idiots for the crap job that got them to this spot in the first place. Not only would we replenish jobs we would also be attacking global warming and creating more eco-friendly ways to co-exist and make the future for our children not as dire as it seems. Maybe by using this money for good use we can finally get gas prices under control and create a green fuel to operate machinery in the united states and move away from our dependency on foreign oils. I call that killing a couple birds with one stone.
{"commentId":3120328,"threadId":"368173","contentId":"1912018","authorDomain":"kittiekins"}
- 1 vote
#23 - Thu Sep 25, 2008 3:06 PM EDT{"commentId":3120602,"authorDomain":"highsnake"}
Hang on my fellow sheep-we're going to get sheared before winter-won't be time to grow more wool-will they pay our heat bills??????
{"commentId":3120602,"threadId":"368173","contentId":"1912018","authorDomain":"highsnake"}
- 2 votes
#24 - Thu Sep 25, 2008 3:13 PM EDT{"commentId":3121165,"authorDomain":"philip-pace"}
Chris Dodd in charge?? Wasn't he one of the idiots that crafted the law to force banks to loan money to low incomers who couldn't really afford what they were buying. And now he's got the gall to be at the helm? Bull. This smacks of the same kind of dunderheadedness that preceded us marching into Iraq. Get ready to pay out the nose and butt for gasoline and food. Our money is going to be worthless.
{"commentId":3121165,"threadId":"368173","contentId":"1912018","authorDomain":"philip-pace"}
- 1 vote
#25 - Thu Sep 25, 2008 3:26 PM EDT{"commentId":3125007,"authorDomain":"poemslikethis"}
Our money is already worthless. But, ssh! Don't tell anyone.
{"commentId":3125007,"threadId":"368173","contentId":"1912018","authorDomain":"poemslikethis"}
- 1 vote
{"commentId":3121406,"authorDomain":"philip-pace"}
We are doomed. Chris Dodd was one of the idiots that crafted the banks gotta take low income applicants for mortgages years back. Now he's heading this bailout up. Our money is going to be worthless. Ron Paul should be running this show.
{"commentId":3121406,"threadId":"368173","contentId":"1912018","authorDomain":"philip-pace"}
- 1 vote
#26 - Thu Sep 25, 2008 3:31 PM EDT{"commentId":3121740,"authorDomain":"wizz220"}
Chris Dodd received numerious payoff's from freedie and fannie and also got sweet heart loans from countrywide. He is just as crooked as Paulson is.
{"commentId":3121740,"threadId":"368173","contentId":"1912018","authorDomain":"wizz220"}
- 1 vote
#27 - Thu Sep 25, 2008 3:38 PM EDT{"canLink":false,"threadId":"368173","isPrivate":false}
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