Comments on: Bailout's Passed - Now What?

The Ultimate Effectiveness Of The Historic Financial Rescue Plan Remains Unclear

[ragnar30066]

I don''t think much will change. The New York news media will just have to work that much harder to fuel the "economic crisis" perception that they think will help get their chosen candidate elected. And to pin the blame on the very Republican who tried unsuccessfully to prevent it back in 2005.

Does anyone think that the Fannie Mae/Freddie Mac caved just a month before the election by accident?

And just check out Obama''s performance in the crisis. McCain suspended campaigning and went back to work because the democrat''s who have the majority knew conservative republicans wouldn''t support it. Obama said "if they need me they''ll call me". The same old stuff he did in the Illinois State Senate, except this time he voted "Present" by phone.

So what kind of leadership did Obama show and what kind of clout did he wield by phone? He couldn''t even deliver the vote of the Black Caucus, in either the House or the Senate. They voted against the bailout both times. Check out the facts, it''s public record.

Obama is a leader only in New York media hype.

[pollroller1]

Pass the pork please, will you please pass the pork.
I just can''t pass a bill without my pork.

[thcarson-2009]

In an open letter sent to Congress on September 24, over 100 university economists expressed "great concern for the plan proposed by Treasury Secretary Paulson". The letter, endorsed by 231 economists at American universities within a few days, has been described as "the emerging consensus from academic economists".[86] Its authors described three "fatal pitfalls" they perceived in the plan as it was initially proposed:
1) Its fairness. The plan is a subsidy to investors at taxpayers%u2019 expense. Investors who took risks to earn profits must also bear the losses. [...] The government can ensure a well-functioning financial industry [...] without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America''s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

[book54552134]

After being forced to pay for an expensive & unnecessary war in Iraq, the overwhelming majority of Americans didn''t want the cost burden of this Corporate Welfare foisted upon them & their children.

A hundred million Americans are irate & angry at this utter betrayal of middle class Americans, esp. by Democrats, whom they trusted to look after their best interests.

How much more abuse are Americans willing to take from their utterly corrupt government?

[airboatboy1]

It amazes me they passed this bill and have the money, and NOW they their going to come up with a plan. You know the "experts" will be the same people that created this mess. And we have a choice in the elections of a Republican or a Democrat. No thanks.

[scorpio59er]

They get the mine and we get the shaft.

[incog-nito]

brianbwb: With today''s job market where people change jobs and have to move around quite a bit, I don''t think home ownership necessarily makes sense for a lot of people. In urban areas people change house nearly as often as they change cars nowadays. Even getting a new job across town may mean that you need to move. I own a house, but plan to rent in the future. That would give me a lot more flexibility career-wise.

[notfooled]

In answer to the question posed, "Now What?"

Thats just too easy. Bush, Paulson, Goldman Sachs and the rest all get together and have a big laugh at our expense while they divvy up the "take" from their latest big scam on the American people.

And then they come up with the final touches of the slippery slope argument where they repeatedly come back to the table for more arm twisting and protection money from the rest of us.

In the meantime, in a fitting reversal of fortune, the American people unite, reminiscent of 1776, and vote each and every bought and paid for bribed charlatan masquerading as our leaders - out on their ears - and take the country back - by voting every single incumbent out of office as payback for thieving 700+ billion dollars from the taxpayer.

And for icing on the cake, George W. Bush and D*ck Cheney are tried and convicted of war crimes, crimes against humanity, and genocide for the murder of over a million humans in their illegal war for oil profits (wmd,wmd,wmd).

And they lived happily ever after.

[brianbwb-2009]

"The American dream of home ownership is not all what it''''s cracked up to be." Posted by incog-nito

A home should be a fixed location, a secure shelter for your families security, growth, and progression through life. One should buy a home with the intent of living in it, and more homes as the family grows.

To buy a house as an investment is on the face of it foolish, house values cannot rise forever. When they do rise to the level that no one can afford them, the value drops, and you lose your "investment" value.

There were an estimated 129.9 million housing units in the United States in the second quarter 2008. Approximately 111.2 million housing units were occupied: 75.7 million by owners and 35.5 million by
renters. (CENSUS BUREAU REPORTS ON RESIDENTIAL VACANCIES AND HOMEOWNERSHIP)

So 75 out of 300 million Americans own their own homes, a 25% rate, compared to the 85% rate of a country like Singapore, it is a very weak pillar of US social strength, and contributes greatly to socio-economic instability, which in turn further exacerbates the problem.

The majority of the media, and those contributors bemoan the fall in housing prices, and the resulting loss of their investment, but for those who were priced out of home ownership, (at this point, by far the majority of Americans) it is a welcome and long overdue development, too bad that their voice is seldom included in the discussion.

[nurse70-2009]

NOW AMERICANS SHOULD DEMAND THAT ALL OF THE FAMILIES WHO WERE DOUPED INTO AN ARM MORTGAGE GET A LOWER FIXED RATE SO THAT THEY CAN STABILIZE THEIR PAYMENTS AND KEEP THEIR HOMES!!! IT''S THE LEAST OUR GOVERNMENT AND THE LENDERS COULD DO CONSIDERING THOSE SAME STRUGGLING FAMILIES ARE PAYING FOR THE BAILOUT ALSO !!! ENOUGH IS ENOUGH ..... NO MORE FORECLOSURES DUE TO SUBPRIME TRICKERY !!! ONE HOMELESS FAMILY IS TOO MANY AND WHEN THE BIG C.E.O''S CAN GET OFF WITH MILLIONS AND WE BAIL THEM OUT , IT''S A SAD DAY IN AMERICA. SAVE OUR FAMILIES !!!

[t_barr]

FACTBOX - Fannie, Freddie CDS Auction Timeline
www.reuters.com/article/marketsNews/idUSN0335610020081003

''The value of credit default swaps backed by the debt of Fannie Mae and Freddie Mac will be set on Monday, Oct 6th, in a series of auctions, which will be the largest settlement of the contracts the market has ever seen. Four separate auctions will be used to determine the value of the agencies debt. The auctions are for Fannie Mae''s senior debt, Fannie Mae''s subordinated debt, Freddie Mac''s senior debt and Freddie Mac''s subordinated debt.

Estimations on how much credit protection is outstanding on Fannie and Freddie''s $1.6 Trillion in debt range from Hundreds of Billions of dollars to as much as $1.2 Trillion.

22 dealers will participate in the auctions, which will determine how much protection sellers will recover after paying out the insurance. The timeline for the auctions follows. 0830 to 0930 - Auction participants will submit initial bids and offers for the debt backing the credit default swaps...1200 to 1430 - Limit orders will be submitted for debt in the following order: Fannie Mae''s senior debt, Fannie Mae''s subordinated debt, Freddie Mac''s senior debt, Freddie Mac''s subordinated debt. 4 p.m. - The final prices of the auctions are calculated and published.''

Lehman''s CDS Auction will be Friday the 10th. You might want to pay close attention to these auctions.

www.independent.co.uk/news/business/news/moment-of-truth-for-default-derivatives-949823.html

[incog-nito]

ibsteve2u: I find interesting that people have been told that owning a house is a good investment because prices increase on average 6% a year (this is before the housing boom and bust). Well under the best circumstances people''s incomes as a whole don''t rise 6% a year (in fact real income has gone backward in the past few decades). So there is no way this scenario will sustain in the long run.

The American dream of home ownership is not all what it''s cracked up to be.

[riddelup]

I suggest we vote in a way the bankers respect. We should vote with our dollar. What I suggest is that we disintermediate.By that I mean for a month we do no transactions involving interest payment. That means for a month we do not use credit cards, we do not get an auto loan, no new mortgages, no personal loans you get the idea . The banks think we cannot do without them and will do anything to insure their propagation. We can show them by boycotting interest. this would not endorse a party or politician. This would just show we have some power. Boycott interest. If you are addicted to paying interest maybe you can do a week.

[missingamerica]

I said: "That is a failure in basic arithmetic: You can never catch up to something that is going up 100% at some interval if you only go up 1% in the same interval."

Speaking of failures...should have said: You can never catch up to something that is going up 100% at some interval if you only go up 6% in the same interval."

It must be past my bedtime.

[missingamerica]

ibsteve2u: To be honest I have no idea how the stock market will behave next week. I have read that we can expect some kind of a bounce. I think the financial companies may experience a rally, considering how much they''ve dropped in the past few weeks. I''m going to look at those very carefully. I do some trading so I try to keep up with these things.

Posted by incog-nito at 01:03 AM : Oct 05, 2008

What I found to be ironic during the markets 777 point drop is the only stock that went up was Campbell Soup.

I was afraid that I would find out that an honest and astute investor like Warren Buffett was buying it up because he anticipated the return of soup kitchens in the near future.

[t_barr]

Another major European financial institution is teetering on the brink of collapse after a banking consortium withdrew from rescue talks.
http://news.bbc.co.uk/2/hi/europe/7653133.stm

''Germany''s second-largest mortgage lender, Hypo Real Estate, said a bailout deal had fallen apart.
Correspondents say its failure would put further strain on financial institutions in other countries.

Some analysts are saying the bank will not last more than a few days without a rescue package, so action must be taken before the markets open on Monday.

Britain, Germany, Italy and France all agreed to work together to support financial institutions but did not agree to set up a big rescue fund similar to that of the US.

The leaders also issued a joint call for a G8 summit ''as soon as possible'' to review the rules governing financial markets. Mr Sarkozy announced a series of other measures - including unspecified action against the executives of failed banks.

Speaking after the meeting at a joint news conference, he said the four had agreed that the leaders of a financial institution that had to be rescued should be ''sanctioned''.''

''sanctioned''? I can think of a few other verbs that might be appropriate.

[incog-nito]

ibsteve2u: To be honest I have no idea how the stock market will behave next week. I have read that we can expect some kind of a bounce. I think the financial companies may experience a rally, considering how much they''ve dropped in the past few weeks. I''m going to look at those very carefully. I do some trading so I try to keep up with these things.

[emperorlotku]

Is it possible that we could demand that all politicians return the monies their campaigns have collected from any financial institution back to the general fund. Or should any politician that received monies from lobbying groups that represent banks and organizations that are being bailed ever have been allowed to vote on the 850,000,000,000.00. Maybe we could take some of that money and build more jail cells at Guantanamo Bay for those that bailed out the same people that financed their campaigns.

[samthetvcat]

Posted by ibsteve2u at 12:12 AM : Oct 05, 2008

That''s a great comment too!

[samthetvcat]

---"We can do some "deleveraging" by buying worthless mortgages. In other words the tax payers buys up the "leverage".---
Posted by curse914 at 07:01 PM : Oct 04, 2008

I guess that''s what''s making everybody scratch our heads - is it deleveraging if you have to borrow to do it?

PS I really enjoyed reading your comments curse914 - really interesting!