106 replies to this topic

[Kelly A]

To put this in Palin's words..

Katie Couric: Why isn't it better, Gov. Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries; allow them to spend more and put more money into the economy instead of helping these big financial institutions that played a role in creating this mess?

Gov. Sarah Palin: That's why I say I, like every American I'm speaking with, we're ill about this position that we have been put in where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health-care reform that is needed to help shore up our economy, helping the -- it's got to be all about job creation, too, shoring up our economy and putting it back on the right track. So health-care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans. And trade, we've got to see trade as opportunity, not as a competitive, scary thing. But one in five jobs being created in the trade sector today, we've got to look at that as more opportunity. All those things under the umbrella of job creation. This bailout is a part of that.

[trix]

remring said:

Lastly, there seems to be this belief that we are giving 700 million to the financial sector without oversight, i.e. a blank check when in fact the federal govt. would be purchasing assets that could break even or even make money when they are sold back.

Well, I think the initial proposal was pretty close to a blank check, although it had been improved significantly by the time it came to a vote.

[Kelly A]

This is probably an unpopular opinion, but in many cases we're talking about bad loans from people that really can't afford a house at this time. The predatory lending pulled those people in. I think the best thing we can do is let those people back out gracefully.

If you think we're going to break even, I disagree.



Anyway, too many posts in a row. Sorry about that.

Edited by Kelly A, 29 September 2008 - 08:46 PM.

[remring]

trix said:

Well, I think the initial proposal was pretty close to a blank check, although it had been improved significantly by the time it came to a vote.

You are absolutely right, it was. However, the American public never really got a grasp of what was going on and the initial polling results would have suggested that people were against the bailout. It was an awful marketing job by Paulson who went into this process looking strong and leaves looking very weak. He asked for a blank check and he asked for "Golden Parachutes" and got golden showers instead. He also didnt know how to sell the bill to the American public.

The GOP got scared and they got screwed over in the process.

John McCain looked awful in this mess and continues his streak of showing just how awful a leader he would be. He had no idea what was going on and took the credit for a credit crisis bailout that never happened.

For the most part Obama stuck with his guns keeping presidential politics out of the mess but also listing what he thought that the bill should include, and being very clear on that.

Extremists in both parties looked awful as well, standing for ideals that had nothing to do with realism. Being anti-Wall Street or Pro-Capitalist has never really worked. The economy is severely broken now and the government has to come in and fix it.

In a way, the GOP kicked McCain in the ass again as well but they are as clueless because it is not in their mindset to have government involved.

This is a "Katrina Moment".

[remring]

Kelly A said:

To put this in Palin's words..

Katie Couric: Why isn't it better, Gov. Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries; allow them to spend more and put more money into the economy instead of helping these big financial institutions that played a role in creating this mess?

Gov. Sarah Palin: That's why I say I, like every American I'm speaking with, we're ill about this position that we have been put in where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health-care reform that is needed to help shore up our economy, helping the -- it's got to be all about job creation, too, shoring up our economy and putting it back on the right track. So health-care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans. And trade, we've got to see trade as opportunity, not as a competitive, scary thing. But one in five jobs being created in the trade sector today, we've got to look at that as more opportunity. All those things under the umbrella of job creation. This bailout is a part of that.

I think that anyone who is voting for John McCain should be given this quote, have them read it and then have them explain why Sarah Palin is qualified to speak to Katie Couric.

[pebbles]

Catapult321 said:

If the bailout/investment plan is not a good idea,what other route could or should be taken? I have no idea myself on what could or should take place.

                                   Lee

That's the big question, IMO.  They voted down one plan.  So what happens now?  Is there a better way to get things moving again?  I wish I knew.

[Sweet Fanny Addams]

What stunned me yesterday was some of the statements made by congressmen who had vetoed the plan. One said that Joe Sixpack shouldn't bail out Wall Street or words to that effect. Nice imagery there. But the one which made my jaw hit the floor was some  foaming loony shouting that the rescue package was " a slide down the slippery slope into socialism". What fucking century are we living in?
Mc Carthyism lives on! Buy yourselves a gun, there are Commies under your beds!
Don't these people see that letting the  economy plop into the shitter will affect everyone and everything? They remember Commie bashing but not the depression? Sometimes I just despair.

[AgainstAllOdds]

the thing I haven't worked out and can't seem to find the answer is ....where is the money coming from? and what services are going to suffer in the long term. Yes the economy needs stabilising, but what is the long term cost? But at teh same time, I don't know what the alternative is:confused:

I read somewhere that the UK debt has never been as high as it is now - is the US the same?

[Sweet Fanny Addams]

[sadtom8o]

Sweet Fanny Addams said:

But the one which made my jaw hit the floor was some  foaming loony shouting that the rescue package was " a slide down the slippery slope into socialism".

I saw this too. My response to this is, "Yeah and capitalism is working really well for you right now, isnt' it?":rolleyes:

[cjr67]

remring said:

I do not think that this plan actually enforces some of the problems associated with the current bailout. How will this help the financial sector?

Well, I guess my initial point was that the financial markets will take care of themselves.  Credit may be tight in the short term, but solid businesses and individuals with good innovative ideas are going to get access to capital.  Banks aren't going to be content to just sit on their money, particularly once the panic subsides. They may be more conservative in their lending practices but I think we could all agree that is probably a good thing given the current mess.

My second point was really just an aside - that if we are going to spend $700 billion, there are better investments.

Edited by cjr67, 30 September 2008 - 06:15 AM.

[remring]

cjr67 said:

Well, I guess my initial point was that the financial markets will take care of themselves.  Credit may be tight in the short term, but solid businesses and individuals with good innovative ideas are going to get access to capital.  Banks aren't going to be content to just sit on their money, particularly once the panic subsides. They may be more conservative in their lending practices but I think we could all agree that is probably a good thing given the current mess.

My second point was really just an aside - that if we are going to spend $700 billion, there are better investments.

The financial markets just do not take care of themselves. We as citizens are connected to that chain and human behavior is something that capitalism cannot fix.

Also if banks are more conservative with their lending practices this will mean that citizens will as well. Instead of spending money we will be holding onto it or even taking it out of financial institutions for fear that there will be a run on a bank. Most of the times it is Friday when the local ATM machine by me has a line, not on Tuesday mornings.

[cjr67]

remring said:

The financial markets just do not take care of themselves. We as citizens are connected to that chain and human behavior is something that capitalism cannot fix.

OK, well you're being a bit literal about the observation that the market will correct itself (which it will, we already recovered 200 points)- yes of course that correction will come about through human activity but it will be in the course of normal investment activity.

Quote

Also if banks are more conservative with their lending practices this will mean that citizens will as well.

So?  Again, it's probably a good thing if we increase our savings rate.  

Quote

Instead of spending money we will be holding onto it or even taking it out of financial institutions for fear that there will be a run on a bank. Most of the times it is Friday when the local ATM machine by me has a line, not on Tuesday mornings.

I'm not sure that taking out cash for a weekend of barhopping is driven by the same panic-response as a bank run or is in any way equivalent to a "mini-run."

Edited by cjr67, 30 September 2008 - 07:30 AM.

[remring]

cjr67 said:

OK, well you're being a bit literal about the observation that the market will correct itself (which it will, we already recovered 200 points)- yes of course that correction will come about through human activity but it will be in the course of normal investment activity.

So?  Again, it's probably a good thing if we increase our savings rate.  

I'm not sure that taking out cash for a weekend of barhopping is driven by the same panic-response as a bank run or is in any way equivalent to a "mini-run."

I would hardly characterize this jump as the market adjusting to itself without government intervention. First off, investors are doing a couple things 1) they are buying at a bargain and 2) more importantly, they still believe that a deal will occur. Unless we get to a situation where a deal is completely off the table can we make that claim that government intervention is not a solution and that capitalism is solving itself on it's own. I think if you talk to investors they still believe that a deal is going to be done.

It's fine if we are increasing our savings rate, however, the question is, where we will be saving it. Our economy, whether you like it or not relies on credit and if we cannot get credit it will fail. We have an excess in houses for sale and it will be difficult to get out of this credit crisis if that supply does not decrease. The package offered by government attempts to make sure that homeowners do not have to give up their houses, that the credit industry can remain stable and that the supply of houses does not increase. If we flood the market with real estate, prices drop suddenly which puts homeowners in a bind.

My point about people taking money out on friday is that typically many do get paid on fridays which is why ATMs, can be a little bit more packed.

Lastly, in other recessions that have occured similar to this, government intervention was necessary. Capitalism does not succeed by itself because it never looks out for the best interests of society, nor does it have any ethics or means in to obtain that wealth. A corporation is not concerned as much with the environment but themselves.

We got into this problem from deregulation; we took a healthy economy and over time made it unhealthy and now it needs to be fixed.

[cjr67]

remring said:

I would hardly characterize this jump as the market adjusting to itself without government intervention. First off, investors are doing a couple things 1) they are buying at a bargain and 2) more importantly, they still believe that a deal will occur. Unless we get to a situation where a deal is completely off the table can we make that claim that government intervention is not a solution and that capitalism is solving itself on it's own. I think if you talk to investors they still believe that a deal is going to be done.

It's fine if we are increasing our savings rate, however, the question is, where we will be saving it. Our economy, whether you like it or not relies on credit and if we cannot get credit it will fail. We have an excess in houses for sale and it will be difficult to get out of this credit crisis if that supply does not decrease. The package offered by government attempts to make sure that homeowners do not have to give up their houses, that the credit industry can remain stable and that the supply of houses does not increase. If we flood the market with real estate, prices drop suddenly which puts homeowners in a bind.

My point about people taking money out on friday is that typically many do get paid on fridays which is why ATMs, can be a little bit more packed.

Lastly, in other recessions that have occured similar to this, government intervention was necessary. Capitalism does not succeed by itself because it never looks out for the best interests of society, nor does it have any ethics or means in to obtain that wealth. A corporation is not concerned as much with the environment but themselves.

We got into this problem from deregulation; we took a healthy economy and over time made it unhealthy and now it needs to be fixed.

We could back and forth like this forever (although I don't know why we'd want to), but the bottom line is that we simply have different views of what is likely to happen in the absence of federal intervention (which isn't surprising since even the experts can't agree - some foresee economic armageddon while others anticipate a temporary period of adjustment while the excesses that got us into this mess are wrung out of the system.  You agree with the former perspective, while I think that the latter scenario is more realistic).  There are winners and losers no matter what the economic situation.  If home prices decline, that's bad for homeowners but good for those looking to purchase (and vice-versa).  And the most credit worthy of those looking to purchase will be able to get mortgages for the simple reason that banks don't want to be landlords.  They may pay a higher interest rate, but c'est la vie.

[remring]

cjr67 said:

We could back and forth like this forever (although I don't know why we'd want to), but the bottom line is that we simply have different views of what is likely to happen in the absence of federal intervention (which isn't surprising since even the experts can't agree - some foresee economic armageddon while others anticipate a temporary period of adjustment while the excesses that got us into this mess are wrung out of the system.  You agree with the former perspective, while I think that the latter scenario is more realistic).  There are winners and losers no matter what the economic situation.  If home prices decline, that's bad for homeowners but good for those looking to purchase (and vice-versa).  And the most credit worthy of those looking to purchase will be able to get mortgages for the simple reason that banks don't want to be landlords.  They may pay a higher interest rate, but c'est la vie.

Actually I still believe that housing prices will decline, it just wont hurt as much and keep more people in their homes than out. In a way, its just a matter of sofening the blow a little bit and I think that is much safer than dealing with these situations cold turkey.

Secondly, we cannot create a housing market with a huge supply and high rates for lending and expect to get out of this mess. There needs to be confidence in the markets and this deal allows the government to act like a "Lender of Last Resort" ; i.e. we have issues in the market and the Government will buy up assets and will sell those assets off when the market improves which could mean that they make money off of this.

[remring]

On a more humerous note...

Campbells Soup was the only stock to rise out of the S&P 500 stocks

http://finance.yahoo...^gspc,^ixic,cpb

[kohoutekdriver8]

AgainstAllOdds said:

the thing I haven't worked out and can't seem to find the answer is ....where is the money coming from? and what services are going to suffer in the long term. Yes the economy needs stabilising, but what is the long term cost?

That's what I said a few months ago when that economic stimulus thing was going on - and no, it wasn't sour grapes because I wasn't qualified.  WHERE DID THAT MONEY COME FROM?

[slinky1]

kohoutekdriver8 said:

That's what I said a few months ago when that economic stimulus thing was going on - and no, it wasn't sour grapes because I wasn't qualified.  WHERE DID THAT MONEY COME FROM?

From those of us who weren't qualified (just kidding):p