$700 BAILOUT PLAN FAILS TO PASS

I totally agree with you here. I really hate the living-on-credit culture that has come about in this country, and as much as the near future is going to suck, I think that it's going to be the kick in the face this country needs to see some of these glaring issues, and hopefully correct them.

That said, the people who are in the situation you described are the problem. If it was a small group of Americans in that situation, the markets would have absorbed and then eventually rebounded those losses. Unfortunately for everyone now, there are SO many of these loans that are failing that it's absurdly far beyond the capacity of the market to bear without constricting VERY quickly to where it (I'm guessing) really should be had so much credit not been extended in the first place. That's what we're seeing now, with this 770 point loss on the Dow yesterday, and I would be AMAZED to see it not continue to fall through the rest of the week. The simple reality is that until the majority of these mortgages and lending packages are worked out in some form, we're toast....

This issue is getting quite a bit of coverage in the media; however I'm so surprised by the response from the country so far. I don't think people are nearly as afraid as they need to be about the implications that this debacle is going to have both short and long term...........
 
The banks gave loans to people who couldn't afford them on purpose, collect monthly mortgage payments for a few months/years, then when the poor bastards can't pay anymore sell the house off, keep what was already put into it. It's the same thing scummy used car dealerships do, sell to people they know probably can't pay the whole thing off, collect monthly payments for a bit, repo and repeat. When I was buying a house banks tried to offer me insane amounts for a loan, way more than I could afford, and they knew my income levels. I blame the greedy banks and real estate agents.
 
in my opinion a possible solution would be to greatly restrict building permits on residential homes, this would slowly bring values back up as the population continued to grow. Home builders could turn to commercial or government contracts to stay afloat.
 
There are a lot of enlightened opinions in this thread and it has been an extremely interesting and informative read.

However, I'm pretty disappointed that some people still manage to dissolve this into a partisan debate. Leave the red vs blue finger pointing out of it, this is bigger than that.

In my opinion, if it matters at all. The buyout was necessary, YES companies made a lot stupid decisions, I support capitalism and truly wish that they could pay for them. But the truth is, the market needs stability. Our entire economy is based on confidence, without confidence the market suffers. No this buyout would not fix everything, but it would certainly rebuild some of the shattered trust in the market and help provide some of the stability we desperately need right now.

However, what's done is done.

 
At the risk of opening a can of worms, I think deregulation was a significant driver of this.
 
good, just because a business fails why should the govt. take over for it? the pay outs of those companies were really obnoxious and if they failed i think the reasons are pretty easy to see. if you opened a business and it went under the gov wouldnt bail you out.
 
No.

I'm personally pretty surprised it didn't go ahead. The reason the US economy is getting crushed is because of all these shitty mortgages which bush (or should i say his advisory who know what there talking about) want to bail out. Usually when they bundle them up the chance of them all getting defaulted is low so they become pretty safe investments. But at the moment...all the idiots who got mortgages they couldn't afford are defaulting due to the economy's current state.

Didn't have time to read the whole thread so sorry if someones already said this.
 
don't buy what you cant afford. debt is inevitable when you have a bunch of dumb fucks buying stuff with high interest rates then buy more stuff with high interest rates. I realize a lot of people are in shit and this bill could have helped maybe, but no ones sure that's why it didn't pass. if it was a sure fix and america would be wala good then it would have went through. Because of the reelection coming people didn't want to vote for the bill when everyone was calling and mailing them to vote against 10 to 1, (just read it in the paper). there's alotta factors that play into this situation, undereducation, sending jobs overseas, sending money overseas instead of keeping capital in the country are on the top of the list of what i think are mainly attributed to the collapse. As education fails so does the economy.
 
I see the argument about not bailing out the people that have caused this, but the bigger macro picture needs to be focused on here, it spans across the rest of the world. The US economy is essentially broke and the rest of the world isn't yet. Without intervention other world markets will follow suit.

Without the US having a credit market (which is essentially what is happening) even things such as day to day business loans are going to be near impossible to get. Banks won't lend to each other, businesses won't be able to gain funds to pay wages, unfortunately unemployment will result. Thats just the tip of the iceberg.

Looking from the point of view of Australia, we are very fortunate that we have a comparative advantage in the exportation of our resources and commodities..outside of commodities we are still an export led country with the US and Asian markets our major partners. With China and Japan already in financial anguish over this crisis, demand for our exports has certainly fallen - thats reflected in the recent performance of our resource stocks. Our two majors falling by around 10% today.

All i'm trying to say is that a lot of people are taking a far too simplistic view on this and saying 'government intervening into the public sector is wrong', 'bailing out big business doesn't help those who can't pay their mortgages and we shouldn't bail out those that caused this anyway' - sure, but it's ignoring fundamental economics.

Yes it would be inflationary, and it is easy to argue that it is only a short term fix, but i think the effective absence of a credit market is diabolical without some financial relief.
 
Japan went through a very similar problem a few years ago, lots of people defaulting on their mortgages and the banks were in serious debt. They were bailed out and it took about 4 years or so for the banks to pay everything off but the government actually made a profit out of giving them the money. Americas economy is fucked, get over it and start trying to do something to fix the problem rather than moaning about it and hoping it will go away. Think of the interest you could make of 700bn that could be reinvested into better financial regulation or education or whatever that could stop this from happening again or lessen the effects as you will always have a boom and bust period that is just the way things go. Seriously they need to grow some balls and deal with it rather than piss people off before a election because on the face of it it looks like they are spending your money.
 
How very socialist of you...by the way, do you vote CCP by any chance?

I'm not going to blame the "poor" but I will blame those that borrowed money that they couldn't pay back. People as individuals need to be fiscally responsible and with everyone taking loans and mortgages they can't afford, this shit is what caused the problem. You can blame whoever you want but at the end of the day, it's the American people that caused this financial crisis. It's those that borrowed and those that lent the money.

Anyone else see anything reminiscent of the late 1920s/early 1930s?

 
The problem is that the bill would not have changed the market at all. Thats why it was voted down. It would have just thrown money at the problem and the result would have just repeated this same problem a few years down the road. The only role the government should ever play in a capitalist model is to give industries incentive to perform a certain way, it should never go beyond that.
 
Because it was the poor peoples fault! Go read up on some history cough Community Reinvestment Act cough Clinton provision cough. The rich greedy people can afford their mortgages and dont take out ARM's and dont default on their mortgages. Almost all MBS's are composed of the mortgages from the poor people. If poor people didnt take out mortgages, this wouldnt happen....
 
It's pretty well understood that the home building business drives everything else. If Home building slows, so does everything else.

BTW......... No one has mentioned that Oil prices are plunging and are predicted to continue plunging especially if there is no Federal investment bail out .

Good thing? I think so!

I also think that the big banks will smarten up and renegotiate the "bad mortgages" with each individual. The Fed prime is at what? 1 or 2 % - wouldn't it be smart for them to get their money back minus the interest vs a loss that would get as a result of a foreclosure?
 
c'mon man - you are smarter than that. it was the 17th largest drop. Don't bullshit people with stats. The point drop is porportionate to the overall. it was not the largest drop, it was only large in points. Furthermore its up 350 today at last check
 
the mortgage default rate is currently at 6% where are these for closures???????? the problem is these mortgage assets are being marked to market. what ever why am i explaining this to a bun ch of kids that have no clue. we wernt giving away 700 billion. we were buyoing 700 bil of devalued assets. which if held to maturity even if we hit great depression default rates 23% the government would have actually made money. the banks would have eased some liquidity issuues but nobody told peopekl that they just thought the fed was giving 700 bill so are you asshole that think this was good might have just laughed your way into the next great depression.
 
haha ok im out of little half joke quips. seriously though i cant stand listening to this thread, every 15 year old and his brother giving their heavy handed completely ignorant views. now im just gonna fuck with people. pump some more unsubstantiated statements back into this thread... much like the way BUSH should pump some more money into my wallet.
 
oh and thank god we live under a republic. because if everyone deserved to have their opinions heard, we'd be like sierra leone, having a new revolution every other day.
 
hahahahahahaha. you're kidding right? well over $100!?!!?!?!?! i'm so so sorry for your huge loss. we're in and entering one of the worst recessions in our nation's history and you lost "well over" $100. dude, our country is effffed right now. you should be grateful that's all you've suffered.
 
the funny thing is if the goverment is already greatly in debt, they are issuing credit to these companies or what?? where do you get 700 billion when you dont have 700 billion....its the american way just charge it and pay for it later. thats just silly.

when is the last time someone was late on their credit card or taxes and losing money that the government stepped in and did something? yea they will step in, and put you in jail and take your things. but if a company is in trouble....oh shit lets bail em out quick.
 
say what you will but it is the truth.

it is unprecedented that our government is say that a company is to large to fail. that's what capitalism thrives on.
 
The fuckin bill is going to the Senate tomorrow, an unprecedented thing to happen.

Today, servers were shut down at the House of Representative because of heavy email traffic. Everyone should now flood the senate and White House and Capitol switchboards to what they can to keep that bail out from happening.

There are new plans in the infancy, we should look at other options NOW!
 
can you provide more information on this? I just don't see how restricting new home permits would hurt more than it would help. Sure, no new neighborhoods with cardboard houses and strip malls would be popping up, but it would drive the current home market up. Maybe the correlation goes the other way, or maybe you're on the old school train of thought that a home should grow in value 10k a year and it's always a good investment and we should keep building more and more flodding the markets. Or maybe you just say things like that because you're a residential construction manager. I really can't see any flaws in my plan that outweigh the positives. Please enlighten me.
 
Thankyou.

I'm not an economist. I will not even pretend to understand the nuances of the proposed bill. I will also not pretend to know what the long term effects of such a bill would be.

In principle and fundemental belief, I am vehemently against the idea of the federal government intervening on such a grand scale in the private financial sector.

That aside, I've noticed that many of those that have chastised the mere thought of the bailout (or any governmental intervention) seem to adopt the stance of "Why should tax payers bailout the greedy wall street bastards blah blah blah".

Simply put, this is a gross misunderstanding and over simplication of the issue. The fact is, as Wall Street goes, the rest of us go. If something is not done, we will indeed bare witness to a "trickle down effect" that may result in a nearly unfathomable collapse of our economy.

I'm not saying the bailout in it's current form was the answer, but to bog down the tackling of the most important issue to face this generation with partisan nonsense and fingerpointing, is fucking nauseating and infuriating.

Axe Murderer and Ski Minnesota...give it a fucking rest already. You guys come across as caricatures. Are you guys aware that we are in a tremendous crisis that transcends party lines...or is this just another opportunity to feel a little more secure in your, let's say, overt political leanings?
 
well home builders being #2 on the tangible product list certainly would account for the surplus of homes and the over saturated market. It's just too easy to clear cut a 200 year old farm throw a few hundred houses up, rake in the millions, repeat with the plot of land right beside. I understand that new homes generate the need for other things, like schools; but by not building these things, or creating the "artifical" need for, we would save money.
 
so when is this going to be voted upon again? (sorry if theres a technical term im a dumb kid remember) is it thursday i believe?
 
I love this argument.. hahahaha

Dude, if you want homes to stop being built then the demand has to stop, want to know how to stop demand?

Birth control!

 
Thursday is when the House of Representatives reconvenes. They have been on recess for a Jewish Holiday. Tomorrow the bill goes to the Senate, which is unprecedented. I am hoping it gets filibustered.
 
Thank you for at least realizing it. There's far too many people who talk without really understanding things.

I'd reccommend reading the New York Times, and BBC websites for the news. Be advised the Times is occasionally a little bit to the left, but they're still by far one of the best American newspapers, especially on the web, and they do some multimedia things that really breakdown the numbers behind all of this stuff well. Between the Times and the BBC I feel I get a pretty good overall read of the situations that come up.
 
The Wall Street Journal is actually probably the best written newspaper in the world. If you're looking for business and financial oriented stuff, I would also recommend the Financial Times, The Economist, and BusinessWeek.
 
clearly this video was made with a partisan bias, but it's still interesting/worth watching

 
Furthermore the calls and emails going into the various Senate offices are reported to be 100 to 1 AGAINST this.
 
i agree also. another good source (if you can do it or have connections) is talk to people who are in the financial world. ive been talking to my stock broker and our bank president to get some further information. its very interesting to hear what the financial world is saying on both sides of the arugment.
 
You do realize that the vast majority of the U.S. general population, including you it seems, is terribly ignorant and have no idea about anything that goes on in our government. If the general public actually ran our country we would be worse off than we are now.
 
You must log in or register to reply here.
Back
Top