The bail out

[adrians]

Tell me people - How does the average American view the Bail-out proposal and the flow on effects ?

We in Australia wait and wonder what your Congressman are doing to do ?

Luckily we're in better shape here because our banks don't allow 'jingle mail' ! ! !

[mdrburchette]

Well, I'll tell you that I don't fully understand it but I think we're stuck in a "catch 22". It upsets me that we'll be using our tax dollars to bail out an entity that let greed dictate their actions and they won't be held accountable, but I also understand that our economy is at a standstill and something needs to be done. The government sure can make a mess of things, can't they?

[mbouse]

we've lost the sense of PAY AS YOU GO. gone is the thought that I own the concequences of my own decisions, good or bad. no one wants to be accountable, committed, or values their word. integrity is a word most americans need to look up in the dictionary to figure out what it means, they could not live it if they had to.... and unfortunately, our society no longer demands or expects anyone to live a life of integrity.

everyone "needs" to blame someone else for their own mistakes now adays. a very sad situation. the current "bail-out" schemes are just the latest manifestation of this changing attitude in this country. it has been festering and growing for quite some time...divorce rate skyrocketing, drastic drop in new marriages with couples only living together, abortions continue to be hugely desirable. Frivolous lawsuits clog the courtrooms.

[81autospider]

just my 2 cents...cuz that's all I got left ...I don't think that these greedy corporate monopoly owning a$$ holes should get one dime ...I listen to am talk radio here in the USA and heard that Michael Savage, registered independent like myself says that 700+Billion dollars bail out would be the worlds largest scandal to rip off the American tax payers...these big Corp. companies should learn by their own mistakes...if you were to take 700+ Billion dollars and divide it evenly between every American citizen 18 yrs old and up...after paying for taxes every citizen would end up with $269,000+ ...lets give the American people that money, not greedy corporations that caused this mess...were not going to see one dime of that money if congress supports the bail out...if I had $269,000 bucks...I would buy a new car and buy a house...think about how that would boost the economy...not big corporate...do you think we'll see house loans with 1.9% interest rate after the bail out?....not!...so why doesn't the GOV. just spread the money around and spread the wealth to the tax paying citizen instead of giving it to a few big greedy Companies.

[baltobernie]

Sent this to my congressman. He voted "No" last time; who knows what'll happen this week.









September 30, 2008

The Honorable Elijah E. Cummings
Washington, D.C.

Dear Representative Cummings,

Amid the hysteria, arm-twisting and political blackmail presently underway in the halls of Congress, it is important that you and your associates acknowledge that there are two distinct problems facing U.S. financial institutions. One deserves your support and my money; the other does not.

1. Greed, stupidity, and plain bad luck encouraged some individuals, corporations and institutions to purchase investments that have since decreased greatly in value. In the absence of fraud, these losses are an unfortunate, but inherent, component of most investment portfolios. Fraud of course is a different matter, and a subject for law enforcement, but not Congress.

While stockholders, employees, suppliers and others may suffer mightily because of bad business decisions, no depositor will lose any FDIC –insured money. These companies may go bankrupt, and their employees may lose their jobs, but none of these unfortunate situations are the responsibility of the Maryland taxpayer.

2. If enough institutions make enough bad investment choices, a shortage of lendable money occurs, whereby institutions cannot make the smart, necessary, collateralized loans to credit-worthy businesses and individuals which keep the economy going. Your job; the central bank’s job is to prevent this from happening on a large scale. It is liquidity, not bankruptcy prevention, that you must ensure.

Mr. Paulson’s plan wants you to spend hundreds of billions of dollars to purchase dud loans from banks that are not actually insolvent. Read that last sentence a few more times. How is the government going to shop for bad loans? These CDO’s are so complex that their present owners don’t even know how to value them. They are weighing down the financial system precisely because private-sector experts can’t determine their worth. The government will be required to invent yet another bureaucracy to make subjective choices about which bad loans to buy, and it will, by definition, pay more than market value. They will buy the most from the sickest institutions.


The Honorable Elijah E. Cummings
September 30, 2008
Page 2



With the goal of increasing capital, as opposed to reducing loans, several notable economists have proposed a variety of measures to raise capital without a blank check drawn on future Americans. Have your staff do Web searches on Raghuram Rajan and Luigi Zingales of the University of Chicago, Charles Calomiris of Columbia and Douglas Elmendodrf of the Brookings Institution. Some of their suggestions are as simple as the US Government buying bank shares.

I am not opposed to action in this crisis. I am opposed to spending good money for bad assets.



Yours truly,

Both Maryland senators approved the bill yesterday. I tried reading the damn thing; 451 pages long, and its so vague, who knows WTF they'll do with the money. Its political blackmail, and I don't respond very well to threats.

[kristoj]

The folks responsible DO need to be held accountable, including the congressmen who were supposed to be responsible for oversight. Fanny Mae and Freddie Mac are government regulated entities that were giving mortgages to people who I would not have lent pocket change. Of course these mortgages were packaged with good ones and sold off to unsuspecting investors, and so on down the line. This began a domino effect that, if not stopped, will continue to lead to more bank failures and eventually many business failures and companies large and small cannot get short-term credit needed to operate.

The "bailout" is actually the government (us taxpayers) stepping in and buying the so called toxic assets banks need to unload to get the credit flowing again. These assets do have value in a more stable market. The idea is that these toxic assets are made up mostly of good mortgages, but also the bad ones. The strategy is that once we are on the other side of the real estate debacle, these assets will be sold and the governement would get some, most or more than its money back depending on who you want to believe. But the point is that it isn't a straight up hand out and there are many strings attache to institutions that chhose to take advantage of it (equity, executive pay limitations, etc).

Make no mistake, without some sort of government intervention, the dominos will continue to fall and lead to many more bank failures and companies going out of business. Heck, Warren Buffet had to step in and provide GE with $5 billion this week because they couldn't get credit...GE couldn't get credit!!! Look at your most recent 401(k) statement if you think this doesn't affect you! Jobless claims hit a seven-year high today. The question isn't whether or not we need this legislation. The question is whether it will be too little too late.

[kristoj]

we've lost the sense of PAY AS YOU GO. gone is the thought that I own the concequences of my own decisions, good or bad. no one wants to be accountable, committed, or values their word. integrity is a word most americans need to look up in the dictionary to figure out what it means, they could not live it if they had to.... and unfortunately, our society no longer demands or expects anyone to live a life of integrity.

everyone "needs" to blame someone else for their own mistakes now adays. a very sad situation. the current "bail-out" schemes are just the latest manifestation of this changing attitude in this country. it has been festering and growing for quite some time...divorce rate skyrocketing, drastic drop in new marriages with couples only living together, abortions continue to be hugely desirable. Frivolous lawsuits clog the courtrooms.

So the end of the world is near. But you didn't answer his question regarding your view on the bailout.

[So Cal Mark]

I'm just waiting for the bailout to trickle down to me

[pope]

So...do you guys like the old style bumpers with krinkle paint or the new style bumpers with Crackle paint

[kristoj]

I'm just waiting for the bailout to trickle down to me

It won't make you rich. Well, it could eventually lead to you being as rich as you were last month:)

[Leesfer]

just my 2 cents...cuz that's all I got left ...I don't think that these greedy corporate monopoly owning a$$ holes should get one dime ...I listen to am talk radio here in the USA and heard that Michael Savage, registered independent like myself says that 700+Billion dollars bail out would be the worlds largest scandal to rip off the American tax payers...these big Corp. companies should learn by their own mistakes...if you were to take 700+ Billion dollars and divide it evenly between every American citizen 18 yrs old and up...after paying for taxes every citizen would end up with $269,000+ ...lets give the American people that money, not greedy corporations that caused this mess...were not going to see one dime of that money if congress supports the bail out...if I had $269,000 bucks...I would buy a new car and buy a house...think about how that would boost the economy...not big corporate...do you think we'll see house loans with 1.9% interest rate after the bail out?....not!...so why doesn't the GOV. just spread the money around and spread the wealth to the tax paying citizen instead of giving it to a few big greedy Companies.

Actually the US population is 301,139,947 +/- some in the moments of typing this sentence.

Devide 700billion by the lets say half the population, 150,000,000.

That is only $4,700. You're talk show host failed.

[mbouse]

Crackle is sooo much better than krinkle ever could be.

[mdrburchette]

Oh goodie! The new bill is for $850 billion now and includes enticing little frivolous tidbits to help the House pass it. Damn, I love politics!

[Danno]

My father-in-law and MIL tried this with my SIL. The thing you have to understand with my SIL is that she has twins who just turned one. So the financial state of my SIL directly impacts the twins. Who wants twin babies to suffer because of the actions of my SIL? not me. They were facing eviction, repossession, etc etc. FIL&MIL bailed them out. roll ahead a few months: guess what. Same problems as before. Perhaps my niece and nephew would have had to live in less than acceptable conditions, but that would have been short lived. Because my SIL won't learn a lesson using these methods my neice and nephew will have to repeat this horrible uncertainty in their lives over and over. Sad really.

Moral to the Bailout story
Take business risks. only two outcomes will happen to you
1. Risks can pay off, you could get uber rich
2. You could fail miserably if the risks don't pay off, but it's ok, move on to the next big risk. gov't won't let anything bad happen because of your ineptitude.

I've been dirt poor. Mom was on welfare while going to college when i was young. bootstrap pulling worked out in the end. Beth and I got married young, we've been broke. owed thousands of dollars that we couldn't really pay off. worried about groceries. If it means that I only have to worry about a recession or economic crisis once in my lifetime then bring on the hardship. I'll make it. If they bailout and we have to do this crap all over again I will be majorly pissed off.

[Danno]

ps. I love crackle.