Are you for or against the 700 billion Bail out?

[Pedronicus]

A drug dealer found guilty will have his assets seized. I see no reason why the men in suits that allowed this situation to spiral out of control should not be pursued in such a similar fashion.
Every man woman and child in America is going to have to foot the bill for this. The government should have no trouble in discovering who was paid what when the times were good and should be relieved of all their millions.

Louis Winthorpe III and Billy Ray had the right idea

[Napoleon Ier]

A $700 billion subsidization of fraudulent financial practices, but it may be a necessary one to save us from economic meltdown. However-maybe the meltdown is something that just needs grinning and bearing, if we're going to let the system self-adjust rather than perpetuate a clearly broken system in the name of short-term security.

I think we all feel slightly sickened that public money is bailing out the fat cats but there really was little choice , remember that those who drove the problem would be nicely cosseted from a severe depression as a result of the millions they salted away. The lesson to be learnt is that in future, economic policy should never be driven solely by political dogma.
Decisions should be made on the basis of sound financial sense not because they fit with the concept of Big/Small government or shock horror may be tainted with a degree of Socialist
thought. This really was the unacceptable face of capitalism and I trust that, at the very least ,there will be some attempt to claw back the vast sums taken by executives at the expense of shareholders and taxpayers in general.

Bankers aren't guilty of greed in the way the rest of humanity isn't, though... to assume bankers are all evil bastards with horns on their head, that's bogus argument. Capitalist greed? No... the State cannot organize financial policy any better than the market, thats practically axiomatic. Monetary policy, that's different. I don't know... they've left interest rates too stupendously low already, it could result in a liquidity crisis, but I certainly think that lowering rates is going to do more to aid liquidity than a bail out which essentially means this crisis will be repeated again and again, short, as you say, of total State control of the banking system.

[jbrettlip]

The bailout helps the liquidity crisis more than cutting rates (which spurs inflation, price of oil etc.) What it is doing is swapping treasury securities fo rthe assets on bank balance sheets. The "bad assets" that the Fed is buying could not be held as reserves for a bank to make loans against. Treasurys can. So this will enable consumers to get loans again, and keep the system working.

I agree some people should go to jail ala Enron. In fact several should, and also there should be some reparations paid. Since the Dems are so big on a windfall tax, why not include the bailout costs as operating income to the banks, and have them pay taxes on it (just like if I win a car, I pay tax on that). Instead, they sell mortgage A to the fed for 50 cents on the $ and write off the other 50 as a loss....not too sensible.

Finally, the Fed will get some of this money back.These aren't all in default. And they are backed by real property (in some cases, not the derivatives) In fact, it is likely they will turn a profit on these deals. Of course, they can screw up anything, so I wouldn't bet on too much profit.

[Snorri1234]

A $700 billion subsidization of fraudulent financial practices, but it may be a necessary one to save us from economic meltdown. However-maybe the meltdown is something that just needs grinning and bearing, if we're going to let the system self-adjust rather than perpetuate a clearly broken system in the name of short-term security.

The cleary broken system of capitalism?

[Napoleon Ier]

A $700 billion subsidization of fraudulent financial practices, but it may be a necessary one to save us from economic meltdown. However-maybe the meltdown is something that just needs grinning and bearing, if we're going to let the system self-adjust rather than perpetuate a clearly broken system in the name of short-term security.

The cleary broken system of capitalism?

Of gigantic banks able to take preposterous risk because propped up by government.

[Snorri1234]

Bankers aren't guilty of greed in the way the rest of humanity isn't, though... to assume bankers are all evil bastards with horns on their head, that's bogus argument.

Most of them are though.

You are always saying that bankers are just like normal people but seem to miss the fact that that just means normal people would do the exact same thing in those situations. If I found such a way to get really, filthy rich I would probably do it too. Most of us would, despite our morals.


People are corrupt, greedy bastards. There is no changing that. You gotta design a system based around that fact, not the other way around.

[Napoleon Ier]

Exactly my point snorri, people want to maximize their wealth, and are themselves the best placed to make rational decisions that will help them achieve that aim... sounding familiar?

[Snorri1234]

Exactly my point snorri, people want to maximize their wealth, and are themselves the best placed to make rational decisions that will help them achieve that aim... sounding familiar?

Yes. And since people are willing to maximize their wealth no matter the consequences for the rest of the people, letting it go freely is pretty stupid.

[Napoleon Ier]

Exactly my point snorri, people want to maximize their wealth, and are themselves the best placed to make rational decisions that will help them achieve that aim... sounding familiar?

Yes. And since people are willing to maximize their wealth no matter the consequences for the rest of the people, letting it go freely is pretty stupid.

But this is the brilliant thing, everyone in a market is inter-dependent. If the State hadn't tampered with the housing bubble, with banks, with security prices, with monetary policy (artificial interest rates) bankers would have had no motivation to make bets they knew would land their institution in bankruptcy. They would be best placed to regulate their own affairs with investors. Think about it, no investor would give money way to an irresponsible bank if they know it is going to squander it on toxic securities. These banks though had been allowed to overdevelop and grow into gigantic monstrosities far removed from your local friendly banker who'd sit down with you and talk through your mortgage/what you wanted a loan for etc... why? Because the State chartered an nurtured these cancerous growths, rather than applying the gamma ray (decent monetary policy). I hope you appreciate the medical analogy? As it is, the risk they took which brought about this collapse is being vindicated by a government bailout.

[vtmarik]

So, this bailout is going to right the economy.

What ever happened to free market politics? "Let the market decide" right?

Well, it decided, and since it made the wrong choice you want to declare a do-over.


Newsflash guys, it isn't 5th grade anymore. If the ball goes out of bounds you can't call for a do-over, you just have to forfeit the loss and move on.

[Napoleon Ier]

So, this bailout is going to right the economy.

What ever happened to free market politics? "Let the market decide" right?

Well, it decided, and since it made the wrong choice you want to declare a do-over.


Newsflash guys, it isn't 5th grade anymore. If the ball goes out of bounds you can't call for a do-over, you just have to forfeit the loss and move on.

Is this meant to be pro or anti-bailout?

[got tonkaed]

So, this bailout is going to right the economy.

What ever happened to free market politics? "Let the market decide" right?

Well, it decided, and since it made the wrong choice you want to declare a do-over.


Newsflash guys, it isn't 5th grade anymore. If the ball goes out of bounds you can't call for a do-over, you just have to forfeit the loss and move on.

Is this meant to be pro or anti-bailout?

im not sure how i see it being read as pro bailout tbh

[Snorri1234]

Exactly my point snorri, people want to maximize their wealth, and are themselves the best placed to make rational decisions that will help them achieve that aim... sounding familiar?

Yes. And since people are willing to maximize their wealth no matter the consequences for the rest of the people, letting it go freely is pretty stupid.

But this is the brilliant thing, everyone in a market is inter-dependent. If the State hadn't tampered with the housing bubble, with banks, with security prices, with monetary policy (artificial interest rates) bankers would have had no motivation to make bets they knew would land their institution in bankruptcy. They would be best placed to regulate their own affairs with investors. Think about it, no investor would give money way to an irresponsible bank if they know it is going to squander it on toxic securities. These banks though had been allowed to overdevelop and grow into gigantic monstrosities far removed from your local friendly banker who'd sit down with you and talk through your mortgage/what you wanted a loan for etc... why? Because the State chartered an nurtured these cancerous growths, rather than applying the gamma ray (decent monetary policy). I hope you appreciate the medical analogy? As it is, the risk they took which brought about this collapse is being vindicated by a government bailout.

But the banks weren't aware they would be bailed out, were they?
And sure, I know the State with it's tampering forced the banks to give out loans they couldn't handle. However, the government did that because they wanted people to be able to get good housing and so on. They basically wanted to give everyone more equal oppurtunities, but since the USA has never been used to that they did what any sane man would never do. I think it was a noble goal, but they fucked up by not putting checks and balances up to regulate it more.

The government wanted to solve a problem which would never be solved without their intervention, but they went about it in the wrong way and caused this mess.




Still the bailout is a far better solution than the meltdown. The self-adjustment would take ages and people would be severly fucked during that time. And not just in the "yeah, pretty hard time, we will postpone buying that car"way but in a "holy shit how are we going to pay for our monthly expenses?!"-way. Starting from scratch is just not an option for the US.

[gdeangel]

You are getting your meltdown either way. Look at the market today. Here's the visual: everyone is standing around with something they paid $1000 for. Call it an egg. Now these people, they are bankers. They are not farmers. They see eggs trading at $1000. They buy the egg.

Then someone drops a few eggs. The bankers look around and say, "Oh crap, these eggs are not good investments. They break pretty easily. And even though we might have taken all the eggs for chickens in Ohio and mixed them up with eggs from Chickens in Florida, New York, and California, it turns out that when something breaks an egg from Ohio (like we dropped the carton), there is a pretty good chance that same something is going to break all the eggs in the carton even though we've "diversified" our cartons (... rather than filling them all with eggs from the same state). Um, we can't diversify these eggs, so lets sell them."

The bankers all line up with their eggs at the market. But they've got so many eggs, and the other people who might buy them are not stupid, they know about eggs breaking, so there are too many sellers and no buyers. Rather than sell the eggs for $50 bucks are take a hit of $950 loss, our banker friends decide with a wink and a nod that they will wait it out. Once in a while one of them has to sell, and when that happens, the other banks have to write down the eggs that match the eggs that were sold, making their earnings lower. And finally they start to mumble: we had to write this all down anyway, let's not be the last one in line to sell, because right now there are a bunch of people who want eggs at $50, but if someone else sells to them, then there really might not be anybody to sell them to. But they aren't selling yet. And the eggs are starting to get rotten. A few banks have so many rotten eggs that the government decides to step in and sell their eggs for them to some other banks.

Now up walks a fellow with bags and bags of money. He sets up a table, and a big sign that says: I buy eggs! Immediately all the bankers jump in line to sell their eggs. Our money man purchases the eggs. The bankers wait in line to get up to the table for their turn to sell. But eventually they can see there will not be enough money to buy all their eggs. They start to push and shove. Someone runs up with another bag of money for our buyer. The banks get back in line and are waiting. Until that bag starts to get empty. So the bring out another bag of money. Which gets emptied also. God help us if the buyer runs out of egg money. There will be rioting. Revolt. Upheaval of society. But the buyer dutifully continues to buy, and finally all the bankers have sold their eggs. Our buyer takes the eggs home, and the next day he shows up at the market, not with all the eggs, but just a few, and says, "Anyone want to buy some eggs?"

What do you think will happen?

Who is the idiot in this story?

The equity markets understand this is the scenario. They also understand that the egg farmers who generate real GDP are all going out of business during this process. And that means major recession, regardless of how much cash gets into the hands of the bankers who are lucky enough to have sold their eggs in the end.

[comic boy]

A $700 billion subsidization of fraudulent financial practices, but it may be a necessary one to save us from economic meltdown. However-maybe the meltdown is something that just needs grinning and bearing, if we're going to let the system self-adjust rather than perpetuate a clearly broken system in the name of short-term security.

I think we all feel slightly sickened that public money is bailing out the fat cats but there really was little choice , remember that those who drove the problem would be nicely cosseted from a severe depression as a result of the millions they salted away. The lesson to be learnt is that in future, economic policy should never be driven solely by political dogma.
Decisions should be made on the basis of sound financial sense not because they fit with the concept of Big/Small government or shock horror may be tainted with a degree of Socialist
thought. This really was the unacceptable face of capitalism and I trust that, at the very least ,there will be some attempt to claw back the vast sums taken by executives at the expense of shareholders and taxpayers in general.

Bankers aren't guilty of greed in the way the rest of humanity isn't, though... to assume bankers are all evil bastards with horns on their head, that's bogus argument. Capitalist greed? No... the State cannot organize financial policy any better than the market, thats practically axiomatic. Monetary policy, that's different. I don't know... they've left interest rates too stupendously low already, it could result in a liquidity crisis, but I certainly think that lowering rates is going to do more to aid liquidity than a bail out which essentially means this crisis will be repeated again and again, short, as you say, of total State control of the banking system.

I agree that essentially bankers are no better or worse than others but its a question of degree, they have the opportunity to be far more greedy than most and their actions can impact on a great deal of people.

[bedub1]

Yeah apparently the bailout hasn't helped the markets...

[jbrettlip]

Yeah apparently the bailout hasn't helped the markets...

2 different things. It is helping the liquidity and credit markets. See my post two pages back.

[gdeangel]

Yeah apparently the bailout hasn't helped the markets...

2 different things. It is helping the liquidity and credit markets. See my post two pages back.

See my post three posts back - it's temporary. And you can't eat credit. You eat real GDP.

[Pedronicus]

See my post three posts back - it's temporary. And you can't eat credit. You eat real GDP.

I read your last post, I'm expecting to eat lots of omelette for virtually nothing.
As far as I see it only vegans will be pissed off

[millertime13]

What else could be expected?

AIG executives throw themselves a nice party after the bailout is passed. A "retreat" in an exclusive California resort for $440,000.

Lets make this as simple as possible: When a known crack fiend asks you for money, you
A. hand him your life savings cuz he needs it real bad
B. Kick him to death
C. What's on TV tonite?

The answer is B...you eliminate the scum that has no value to the community.

bailout bankers = giving money to crack heads

Sounds harsh? Unreasonable? Wait until you have to fight to feed your family...for real.

[Dancing Mustard]

Lets make this as simple as possible: When a known crack fiend asks you for money, you
A. hand him your life savings cuz he needs it real bad
B. Kick him to death
C. What's on TV tonite?

The answer is B...you eliminate the scum that has no value to the community.

bailout bankers = giving money to crack heads

Sounds harsh? Unreasonable? Wait until you have to fight to feed your family...for real.

Well you certainly sound like an informed critic who is committed to reasonably presenting facts and not overstating his opinions. How could we possibly dismiss you as a crazy loon having a bizarre paranoid rant about something you don't appear to understand?

Please continue to share your non hyperbolic viewpoints in the future. I can assure you that we're all benefiting from our exposure to your not at all incoherent and ridiculous points of view.

[millertime13]

Lets make this as simple as possible: When a known crack fiend asks you for money, you
A. hand him your life savings cuz he needs it real bad
B. Kick him to death
C. What's on TV tonite?

The answer is B...you eliminate the scum that has no value to the community.

bailout bankers = giving money to crack heads

Sounds harsh? Unreasonable? Wait until you have to fight to feed your family...for real.

Well you certainly sound like an informed critic who is committed to reasonably presenting facts and not overstating his opinions. How could we possibly dismiss you as a crazy loon having a bizarre paranoid rant about something you don't appear to understand?

Please continue to share your non hyperbolic viewpoints in the future. I can assure you that we're all benefiting from our exposure to your not at all incoherent and ridiculous points of view.

Your answer was A, but thats okay...the majority would answer C...hey I just spent all my dough on liquor and whores, and I have to tell you. We are all screwed if you dont loan me a ridiculous amount of cash. Meet me at the liquor store, I will wait in my Cadillac with Trixie in the passenger seat. Better?

[Dancing Mustard]

I just spent all my dough on liquor and whores, and I have to tell you. We are all screwed if you dont loan me a ridiculous amount of cash. Meet me at the liquor store, I will wait in my Cadillac with Trixie in the passenger seat. Better

See... absolutely no grasp of the basics of the situation; just weird paranoia and off-the-wall analogies.

[DaGip]

Did I ever mention that I am against this bail out and every other past and future bail out? AIG is now asking for another 38 BILLION DOLLARS!

[NightWolf]

This bailout is not only a waste of cash, but it was passed using an illegal tactic--- bribery. They stuck at least 110 billion dollars in pork in that bill just to appeal to various people so that they could not vote no. To make things worse, there was not even a specific reason for why the number 700 billion dollars was even set---they just wanted a "big number". I could not be more against the bailout.