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bail outs

cutterone

Well-known member
I’m just totally confused. I’ll admit I’ve never been one to delve into the workings of big business, global trade, or even politics. I guess I’ve been too busy trying to raise a family and just make a living. My lack of knowledge of how the “real world” operates puts me at a disadvantage keeping up with what is going on outside my borders of concern so I apologize in advance of asking these questions.
How does the risk of Bears Stearns, AIG, Merrill Lynch, or others failing really effect “Joe Potatoes” folks like you and me? Does it really matter the global markets might get hurt? Do we really need Korea to produce and sell beef? Seems like we are kinda chasing our own tails and wondering why it hurts when we bite it.
To put this into a perspective “at my level” this would be like worrying if a big farmer or rancher down the road is having financial problems. Would you, we, run down there and give him some money to bail him out? Particularly if his management decisions were poor.
Help me understand this.
 

Sandhusker

Well-known member
Basically, it's the domino effect that they're worried about. Ordinarily, a company going belly up, even a huge company, will have ripples across the markets but wouldn't be a huge deal for everybody because there would be somebody there to buy them out. The problem now is that there isn't anybody else there to buy them - they're too big and everybody else in that industry is barely hanging on themselves.

Consider a situation like cattle prices had been bad for an extended time and everybody is just trying to hang on. A huge ranch needs a buyer or they're toast. If they go down, none of the locals will be able to even pool together to pick it up and then you'll have a fire sale on land and cattle as that place will flood the markets. The lower prices will give everybody else a loss and cause them to go belly up, too, as they're not in condidtion to take another loss. If you don't get somebody to set in and pay market price for the whole deal, down go the dominos.
 

cutterone

Well-known member
Then why don't we split them up into more attractive and affordable pieces and let several owner/operators conduct the same business on a much smaller scale? Are we not just setting ourselves up for the same again down the road?
 

Sandhusker

Well-known member
cutterone said:
Then why don't we split them up into more attractive and affordable pieces and let several owner/operators conduct the same business on a much smaller scale? Are we not just setting ourselves up for the same again down the road?

I hear what you're saying - and you're right - but there isn't even any smaller outfits that are in any shape to even take a piece. Practically the whole dang industry is managing things day to day. They're living paycheck to paycheck. They don't have the money to be buying and nobody will give them the money. Even the Europeans have been stung by this, so there's not much hope in looking over there for help. It's just a huge crappy deal that was brought on by the greed of many entities.
 
A

Anonymous

Guest
cutterone said:
OK I'm listening. But ... going back to the question say of AIG -what really happens if they fold?

cutterone- this evening they had several economists/entrepreneurs on CNN (don't know their political gender)..One was the conservative Ben Stein- another was "The Donald"- several more....

And their explanation of the AIG nationalization was that it is one of the biggest insurance companies in the world- that insures much of the countries/worlds oil companies, airlines, railroads, auto industry, most all industries and that its fall would bring a complete standstill to the country - and much of the economy of the world...

They said that we can afford to let some banks and lending institutions fail as there are several of them to pick up the slack- but the economy would cease to function without AIG...Which they also commented shows the total seriousness of this crisis...
(Which also plays to the Obama argument- that no one company- or insurer should ever be allowed to get so big- or so important)...

Stein really tore into Bush and the Bush crew- and how they fiddled while Rome burned and are so tied to Wall Street - and in the pockets of the rich Speculators--(but said both parties are) that they did absolutely no oversight or regulation-and had to be asleep not to see this coming, when many have been warning about it for years.. He called for the immediate firing of Paulson and Cox for allowing it to get so far without doing something....Bush's current silence was also noted... :shock:

Trump endorsed McCain- while several others including Stein says that Obama has the best chances at changing Wall Street since McCain is/has been part of the problem for 30 years and has been echoing Bush's failed policies - but Stein says he is doubtful anyone can really do it as Wall Street has become so rich and powerful.... :( He also said he can't endorse Obama because Obama is pro-choice....
 

TSR

Well-known member
Oldtimer said:
cutterone said:
OK I'm listening. But ... going back to the question say of AIG -what really happens if they fold?

cutterone- this evening they had several economists/entrepreneurs on CNN (don't know their political gender)..One was the conservative Ben Stein- another was "The Donald"- several more....

And their explanation of the AIG nationalization was that it is one of the biggest insurance companies in the world- that insures much of the countries/worlds oil companies, airlines, railroads, auto industry, most all industries and that its fall would bring a complete standstill to the country - and much of the economy of the world...

They said that we can afford to let some banks and lending institutions fail as there are several of them to pick up the slack- but the economy would cease to function without AIG...Which they also commented shows the total seriousness of this crisis...
(Which also plays to the Obama argument- that no one company- or insurer should ever be allowed to get so big- or so important)...

Stein really tore into Bush and the Bush crew- and how they fiddled while Rome burned and are so tied to Wall Street - and in the pockets of the rich Speculators--(but said both parties are) that they did absolutely no oversight or regulation-and had to be asleep not to see this coming, when many have been warning about it for years.. He called for the immediate firing of Paulson and Cox for allowing it to get so far without doing something....Bush's current silence was also noted... :shock:

Trump endorsed McCain- while several others including Stein says that Obama has the best chances at changing Wall Street since McCain is/has been part of the problem for 30 years and has been echoing Bush's failed policies - but Stein says he is doubtful anyone can really do it as Wall Street has become so rich and powerful.... :( He also said he can't endorse Obama because Obama is pro-choice....

But the top exec's at AIG will still walk away with their millions while the taxpayer will foot the bill, is basically what I heard on the news. And now as has been mentioned the auto makers will probably be next in line for their handouts.
 

TexasBred

Well-known member
TSR said:
Oldtimer said:
cutterone said:
OK I'm listening. But ... going back to the question say of AIG -what really happens if they fold?

cutterone- this evening they had several economists/entrepreneurs on CNN (don't know their political gender)..One was the conservative Ben Stein- another was "The Donald"- several more....

And their explanation of the AIG nationalization was that it is one of the biggest insurance companies in the world- that insures much of the countries/worlds oil companies, airlines, railroads, auto industry, most all industries and that its fall would bring a complete standstill to the country - and much of the economy of the world...

They said that we can afford to let some banks and lending institutions fail as there are several of them to pick up the slack- but the economy would cease to function without AIG...Which they also commented shows the total seriousness of this crisis...
(Which also plays to the Obama argument- that no one company- or insurer should ever be allowed to get so big- or so important)...

Stein really tore into Bush and the Bush crew- and how they fiddled while Rome burned and are so tied to Wall Street - and in the pockets of the rich Speculators--(but said both parties are) that they did absolutely no oversight or regulation-and had to be asleep not to see this coming, when many have been warning about it for years.. He called for the immediate firing of Paulson and Cox for allowing it to get so far without doing something....Bush's current silence was also noted... :shock:

Trump endorsed McCain- while several others including Stein says that Obama has the best chances at changing Wall Street since McCain is/has been part of the problem for 30 years and has been echoing Bush's failed policies - but Stein says he is doubtful anyone can really do it as Wall Street has become so rich and powerful.... :( He also said he can't endorse Obama because Obama is pro-choice....

But the top exec's at AIG will still walk away with their millions while the taxpayer will foot the bill, is basically what I heard on the news. And now as has been mentioned the auto makers will probably be next in line for their handouts.

No they'll probably get hired as economic advisers by Barrack Hussein Obama campaign just like they did the big dogs at Fannie Mae and Freddie Mac.
 
A

Anonymous

Guest
The Fed has pumped so much money into bailing out the financial industry that it has run out of cash and has asked the Treasury Dept. to give it $40 billion. To raise the money, the Treasury Dept. will have to auction off T-Bills. Everyone will be watching to see how much interest the government has to pay to sell them all.

Fire up the printing press's :shock: I think all registered Republicans should be required to go buy all these Treasury bills to pay for the incompetency of King George and his Court of Fools that they allowed to run amuck... :wink:
 
A

Anonymous

Guest
.Frankie said:
Oldtimer said:
The Fed has pumped so much money into bailing out the financial industry that it has run out of cash and has asked the Treasury Dept. to give it $40 billion. To raise the money, the Treasury Dept. will have to auction off T-Bills. Everyone will be watching to see how much interest the government has to pay to sell them all.

Fire up the printing press's :shock: I think all registered Republicans should be required to go buy all these Treasury bills to pay for the incompetency of King George and his Court of Fools that they allowed to run amuck... :wink:

you are one sick liberal puppie. to deny giving credit where credit is due. the demogogs caused this crap it started under blow jo- clinton and has progreesed till the present. pull your head out of your duff and get some integrity and honesty even at your age. think about the crap you are teaching grand kids to accept and blame on other people. .

wait I almost forgot you are a horse trader and everyone knows if their mouth is moving they are most likely lieing. talk about retards. Is it true before you beacame a judge, sherif,f or coroner your family took you to a mental institutiion to have you committed and you failed the entrance exam/

I am so glad you showed up Frankie-- Now I can show people why I refused to join the Republican party..... :wink: :lol: :p
 
A

Anonymous

Guest
TexasBred said:
TSR said:
Oldtimer said:
cutterone- this evening they had several economists/entrepreneurs on CNN (don't know their political gender)..One was the conservative Ben Stein- another was "The Donald"- several more....

And their explanation of the AIG nationalization was that it is one of the biggest insurance companies in the world- that insures much of the countries/worlds oil companies, airlines, railroads, auto industry, most all industries and that its fall would bring a complete standstill to the country - and much of the economy of the world...

They said that we can afford to let some banks and lending institutions fail as there are several of them to pick up the slack- but the economy would cease to function without AIG...Which they also commented shows the total seriousness of this crisis...
(Which also plays to the Obama argument- that no one company- or insurer should ever be allowed to get so big- or so important)...

Stein really tore into Bush and the Bush crew- and how they fiddled while Rome burned and are so tied to Wall Street - and in the pockets of the rich Speculators--(but said both parties are) that they did absolutely no oversight or regulation-and had to be asleep not to see this coming, when many have been warning about it for years.. He called for the immediate firing of Paulson and Cox for allowing it to get so far without doing something....Bush's current silence was also noted... :shock:

Trump endorsed McCain- while several others including Stein says that Obama has the best chances at changing Wall Street since McCain is/has been part of the problem for 30 years and has been echoing Bush's failed policies - but Stein says he is doubtful anyone can really do it as Wall Street has become so rich and powerful.... :( He also said he can't endorse Obama because Obama is pro-choice....

But the top exec's at AIG will still walk away with their millions while the taxpayer will foot the bill, is basically what I heard on the news. And now as has been mentioned the auto makers will probably be next in line for their handouts.

No they'll probably get hired as economic advisers by Barrack Hussein Obama campaign just like they did the big dogs at Fannie Mae and Freddie Mac.

I don't know who all are Obamas advisors- but Austan Goolsbee is Obamas number 1 economic advisor- and I'll take him anyday over Carly Fiorina or Foreclosure Phil Gramm :roll:

Here's what George Will said about Professor Goolsbee:

Economics is the only academic discipline that in recent decades has moved in the direction that America and much of the world has moved, to the right. Goolsbee no doubt has lots of dubious ideas -- he is, after all, a Democrat -- about how government can creatively fiddle with the market's allocation of wealth and opportunity. But he seems to be the sort of person -- amiable, empirical and reasonable -- you would want at the elbow of a Democratic president, if such there must be.
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/03/AR2007100302003.html

Austan Dean Goolsbee is an economist and is currently the Robert P. Gwinn Professor of Economics at the University of Chicago Graduate School of Business. He is also a Research Fellow at the American Bar Foundation,[1] Research Associate at the National Bureau of Economic Research in Cambridge, Massachusetts,[2] and a member of the Panel of Economic Advisors to the Congressional Budget Office.[3] He has been Barack Obama's economic advisor since Obama's successful U.S. Senate campaign in Illinois. He was until recently the lead economic advisor to the 2008 Obama presidential campaign[4] and is known as a centrist.[5] Austan Goolsbee is Senior Economist to the Democratic Leadership Council (DLC) and the Progressive Policy Institute (PPI).[6] He was interviewed in January 2008 about the Obama economic plan on tax cuts, deficits, and trade policies.[7]

Some of the known press profiles of him include those done by NPR,[8] George Will,[9] the Financial Times,[10] Reuters TV,[11] the Chicago Tribune,[12] Crain's Chicago Business,[13] and the Abilene Reporter-News.[14]

He is the former host of the show History's Business on the History Channel.

Goolsbee's academic research focuses on the Internet, the new economy, government policy, and taxes. He currently teaches a class on economics and policy in the telecom, media and technology industries. He's part of a new wave called "new social economics". Along with Steven Levitt, author of Freakonomics, he and others focus on human activity in natural settings and find economic explanations for how people behave.[15]

In April 2006, Goolsbee began writing for the Economic Scene column in the New York Times. He has also appeared in their Economic View column. Before that he wrote the Dismal Science column for Slate.com, for which he won the 2006 Peter Lisagor Award for Exemplary Journalism. He has many published papers in various peer-reviewed journals.[16]
http://en.wikipedia.org/wiki/Austan_Goolsbee#cite_note-8
 

TSR

Well-known member
TexasBred said:
Damn, OT...your sources are enough to make a person scared of this guy. NYTimes..Washington Post...."New social economics"???

Looks like we should have been more scared of the "other ones" for about the last 8 yrs. But we now know what their motives were.
 
A

Anonymous

Guest
Sounds like the Fed now wants to set up a Trust so we can bail out all the bankers and fat cats that got caught in their greed...

Lets see-- now I'm/we're in the banking industry, the home mortgage industry, and the insurance industry....

Before its over we will be more of a "nationalized" country than China... :shock:

Hey Kola- we may end up being Sandhuskers boss :wink: :lol: :p
 
A

Anonymous

Guest
Thank you GW :wink: :( :mad: :mad:

New bailout planned
Paulson, Bernanke briefed lawmakers on plan aimed at troubled mortgage securities.


NEW YORK (CNNMoney.com) -- The federal government, in what could prove to be its most comprehensive effort yet to contain the financial crisis, is poised to establish a program to let banks get rid of the mortgage-related assets that have been hard to value and harder to trade.

Leaders from both the House and the Senate were briefed on Thursday evening by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.

"The root cause of distress in capital markets is the real estate correction and what's going on in terms of the price declines in real estate," Paulson said at a press briefing after the meeting. "So we're coming together to work for an expeditious solution aimed right at the heart of this problem, which is illiquid assets on financial institutions' balance sheets."

House Speaker Nancy Pelosi, D-Calif., said lawmakers expected to get the proposal from Treasury in a matter of hours.

"We hope to move very quickly - time is of the essence," Pelosi said.

While no formal plan was announced when the meeting adjourned, Paulson, Bernanke and other officials expected to work through the weekend with congressional leaders to finalize a plan, said Brookly McLaughlin, a Treasury spokeswoman.

The announcement is the latest stunning turn in an extraordinary six days that have rocked Wall Street. A widening banking crisis has toppled two major firms - Lehman Brothers and Merrill Lynch - and prompted an $85 billion government loan to stem the sudden collapse of insurance giant American International Group.

Meanwhile, mainstay financial institutions are scrambling to raise cash or find merger partners - all because of a freeze-up in lending that stems from a collapse of the home mortgage market.

Speculation that the Bush administration was developing a comprehensive plan jolted Wall Street on Thursday and sent stocks higher. The Dow ended 410 points higher.

There's precedent for the federal government taking on troubled assets from the private sector. In the 1930s, the Home Owners Loan Corp. was set up to issue bonds to refinance borrowers. Then during the S&L crisis Congress set up the Resolution Trust Corp. to sell assets of failed banks.

The Treasury has been talking about the concept of an agency to take on bad debts of financial institutions "for several months," a source with knowledge of discussions on the issue told CNN.

One way the agency reportedly under discussion could work is by setting up bulk auctions to buy mortgage debt from financial institutions. The auctions would be for set dollar amount purchases. Companies that want to offload the hard-to-sell assets from their balance sheets bid to sell to the government at a huge discount. The company willing to sell at the lowest price wins.

The government would then be able to sell the assets back into the market.

According to policy research firm the Stanford Group, such a setup would allow the government to refinance borrowers in the loans owned by the government, thereby lowering the risk of their defaulting and eventually boosting the price of the mortgage security in which those loans are packaged.

The agency and auction facility is one that House Financial Services Chairman Barney Frank, D-Mass., and Senate Banking Committee Chairman have supported.

Jaret Seiberg, a financial services analyst at the Stanford Group, said he believes there is bipartisan support for allowing the Bush administration to take short-term action to "get us through the immediate crisis."

Not everyone supports the idea that the government should buy up assets that the market currently can't value and isn't trading.

Sen. Charles Schumer, D-N.Y., on Thursday proposed his own plan that would involve the government providing a cash infusion to financial institutions in exchange for stock in the companies and let the institutions offload their mortgage investments.

Banking consultant Bert Ely is skeptical about the government getting involved at all. If the government chooses to "prop up the institutions or allows the institutions to offload asset onto a government entity, who's going to take the losses? It's financial insanity. The markets have to clear. Our fundamental problem: an oversupply of housing."
 

cutterone

Well-known member
I understand that the bailouts may be the lesser of two evils but I think it also needs to include a few things. First I believe that the so called housing mortgage mess was generally created by use of credit cards. The very institutions involved in these mortgages were pushing credit cards use down the throats of consumers, raising rates and fees to the point where consumers could not make the payments knowing very well that consumers are just plain stupid when it comes to presure to have it all and pay for it later then attract them to "put in on an equity loan to cover your ass". I don't buy into the "we loaned money to dirtbags that should not have a home"!! We need a major overhaul of credit card practices of lenders! There is not a day goes by that I don't get this propagada crap in my mailbox.
Secondly, if we are going to bail out these institutions then some top heads should be required to fall. No one made these instituions make these loans and it clearly shows the greed and vandilism of the companies executives. I'll help pay to the stabilisation of the overall health of the economy but I want to see some asses kicked!
We are all part of this mess, not just one party or administration. The major deregulation started in the Clinton era and every congress since has allowed to contine and grow. And we as citizens have only ourselves to blame for voting and allowing our congressmen to act so corruptly.
PS
This as a side note is a classic example why the JBS acqusition of packers should not be allowed!
 

TSR

Well-known member
cutterone said:
I understand that the bailouts may be the lesser of two evils but I think it also needs to include a few things. First I believe that the so called housing mortgage mess was generally created by use of credit cards. The very institutions involved in these mortgages were pushing credit cards use down the throats of consumers, raising rates and fees to the point where consumers could not make the payments knowing very well that consumers are just plain stupid when it comes to presure to have it all and pay for it later then attract them to "put in on an equity loan to cover your ass". I don't buy into the "we loaned money to dirtbags that should not have a home"!! We need a major overhaul of credit card practices of lenders! There is not a day goes by that I don't get this propagada crap in my mailbox.
Secondly, if we are going to bail out these institutions then some top heads should be required to fall. No one made these instituions make these loans and it clearly shows the greed and vandilism of the companies executives. I'll help pay to the stabilisation of the overall health of the economy but I want to see some asses kicked!
We are all part of this mess, not just one party or administration. The major deregulation started in the Clinton era and every congress since has allowed to contine and grow. And we as citizens have only ourselves to blame for voting and allowing our congressmen to act so corruptly.
PS
This as a side note is a classic example why the JBS acqusition of packers should not be allowed!

You are right Cutterone. Top heads should fall but they won't imo. Its just not the mo of this administration. I will admit that Clinton signed a bill that he should have vetoed-maybe he knew it would have been overridden I don't know. But that bill was passed right along party lines with all the Republican Senators voting yes and all the Dem's voting no with the exception of one Dem. Have a good one.
 

Sandhusker

Well-known member
Oldtimer said:
Sounds like the Fed now wants to set up a Trust so we can bail out all the bankers and fat cats that got caught in their greed...

Lets see-- now I'm/we're in the banking industry, the home mortgage industry, and the insurance industry....

Before its over we will be more of a "nationalized" country than China... :shock:

Hey Kola- we may end up being Sandhuskers boss :wink: :lol: :p

If you can tell a dollar from a dime, you would have shown more qualifications to be my boss than Obama has shown to be president.
 

cutterone

Well-known member
Apparently there are many others that feel the same way.

Freddie Mac exec's $5M vacation home
Posted Sep 18 2008, 02:22 PM by Kim Peterson Rating: Times must be tough for Freddie Mac CFO Anthony "Buddy" Piszel. The New York Post reports that he's selling his vacation home on Maryland's Eastern Shore for $5 million.

The three-story mansion is named "Rigby's Lott," and has six bedrooms and six bathrooms. (Why do mansions have their own name?) The Huffington Post has pictures of the home here.

Piszel's job is hanging by a thread, the Post says. Unloading your vacation home isn't a bad idea in that situation.
not surprising this has to be the most grotesque insult of all!!! the man should be behind bars for life. Paid executive salary for the privilege of excelling in mediocrity on the job .and so many other inadequacies. I simply think that americans have fallen in a comatique infentilisum.or so engrossed into that M T V garbage and degradation.

There should be a taxpayer offender list like what we have for sex offenders. Wherever they live they must register with the local police and have their names listed in the newspapers. Include on the list the elected politicians and government employees that participated in the raping of the taxpayer.

http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/18/freddie-mac-exec-s-5m-vacation-home.aspx
 
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