Even though they include the automakers we need to stop it.

[fmccap]

It, or something close will go through, and quickly. Of this, there is no doubt.

 

How do we know this?

 

I never like answering a question by asking a question, but this is one of those times that it is appropriate!!!!

 

QUESTION-------->How would you like to be part of the people in opposition, if the financial markets go into lock up? If the banks have a run?

 

I wouldn't want to be, that is for sure.

 

They are not wrangling over the premise, they are wrangling over lotsa add ons for the most part. They are playing politics by using the leverage of the fact that it must happen. They are rolling the dice that all will go well while they wrangle.

 

On another note--------->The government appears to be willing to sell bonds on these new companys to the public, backed by the Fed. They are also wrangling over what rate will be paid to the bond holders.

 

We shall see!!!!

We know this because they always do something. What we also know is that for sure when they rush things through and a lot of what they regularly do always ends up a disaster.

 

Let the FREE MARKET work.

[Ralph Greene]

RE who is to blame....think about the history of this situation.

 

In the early 90's, some well meaning people in Washington decided a higher percentage of Americans s/b homeowners. They wanted to raise the number of families who ownd their own home, a number that had been constant for about 50 years, from the mid 60% range into the 70% range.

 

So they lowerd lending standards for low income people and those with poor credit histories, so more would qualify. Local banks and mortgage companies liked this idea, bingo....more business.

 

These smaller (and some not so small) local banks and mortgage companies sold these mortgages to Wall Street, so they could replinish their capital, and sell more mortgages. Sometimes even fudging the credit reports so more would qualify. Charging big fees also.

 

Wall Street was eager to buy them so they could bundle them into products they could sell to other investors and pensions funds, etc. They weren't asking too many questions obviously. Bingo....more business.

 

These pension funds and other large investors needing to own safe investments, bought insurance from big companies like AIG, to insure the safety of these investments, Bingo....more business. Even Congress was ignoring this situation.

 

All this cheap easy money caused a shortage of homes, and home prices started going up rapidly. The general idea being you can't lose money in real estate. Ordinary folks used this increasing home equity as a source of cash to make consumer purchases. Their lives were never better. Some ordinary folks even leveraged up these homes to buy more homes. No one complained much....bingo....more business.

 

Along comes 2005. Home prices unsustainable. Prices start to drop. Mortgage investments lose value as some of them aren't being paid. Companies like AIG were so over leveraged they could'n afford to pay off on these insured losses. Large bank and brokers were so leveraged up with these dropping in value assets, they start to fail. Fed and treasury gets involved. Our financial system starts to seeze up from the top down. Ordinary folks not too aware of how this will affect them....yet.

 

A Bail out plan is proposed. Extreme conservatives blame Wall Street. Let them work it out they say. Working people accept no blame, they didn't wind up with any of the gains they say (their homes....the ones they couldn't afford to begin with have dropped in value). So they blame the greedy rich as usual.

 

Folks....the blame and the fix for this rests with all of us.

Edited September 24, 2008 by Ralph Greene

[fmccap]

RE who is to blame....think about the history of this situation.

 

In the early 90's, some well meaning people in Washington decided a higher percentage of Americans s/b homeowners. They wanted to raise the number of families who ownd their own home, a number that had been constant for about 50 years, from the mid 60% range into the 70% range.

 

So they lowerd lending standards for low income people and those with poor credit histories, so more would qualify. Banks and mortgage companies liked this idea, bingo....more business.

 

These banks and mortgage companies sold these mortgages to Wall Street, so they could replinish their capital, and sell more mortgages. Sometimes even fudging the credit reports so more would qualify. Charging big fees also.

 

Wall Street was eager to buy them so they could bundle them into products they could sell to other investors and pensions funds, etc. They weren't asking too many questions obviously. Bingo....more business.

 

These pension finds and other large investorsn needing to own safe investments, bought insurance from big companies like AIG, to insure the safety of these investments, Bingo....more business. Even Congress was ignoring this situation.

 

All thiis cheap easy money caused a shortage of homes, and home prices started going up rapidly. The general idea being you can't lose money in real estate. Ordinary folks used this increasing home equity as a source of cash to make consumer purchases. Their lives were never better. Some ordinary folks even leveraged up these homes to buy more homes. No one complained much....bingo....more business.

 

Along comes 2005. Home prices unstainable. Prices start to drop. Mortgage investments lose value as some of them aren't being paid. Companies like AIG were so over leveraged they could'n afford to pay off on these insured losses. Large bank and brokers were so leveraged up with these dropping in value assets, they start to fail. Fed and treasury gets involved. Our financial system starts to seeze up.

 

A Bail out plan is proposed. Extreme conservatives blame Wall Street. Let them work it out they say. Working people accept no blame, they didn't wind up with any of the gains they say (their homes....the ones they couldn't afford to begin with have dropped in value). So they blame the greedy rich as usual.

 

Folks....the blame and the fix for this rests with all of us.

Why me.

 

Looking through your little timeline I would say those "well meaning people" were the blame.

 

I also don't see how this actually helps.

[Ralph Greene]

Those well meaning people are not getting blamed for this. Wall Street is. Wall Street was just a part of it.

[Imawhosure]

Why me.

 

Looking through your little timeline I would say those "well meaning people" were the blame.

 

I also don't see how this actually helps.

 

Because------------>YOU ARE WALL STREET my friend, regardless if you understand this concept or not!!!!! We who have a dollar in our pockets are the ones who will get the shaft, NOT the people who couldn't afford a house but purchased it anyway.

 

HERE IT IS IN A NUTSHELL---------->Without intervention, YOU ARE ABSOLUTELY going to take a bath. The people who have no equity in anything, will just walk away and have what they started with, NOTHING! This was born of FAIRNESS by the democrats, and the idiocy of total deregulation by the republicans. How does that translate into YOU having to take a bath?

 

With intervention, YOU may still take a bath, maybe not though, but if you do, the people who got us in this mess by over reaching will help pay the bill. How? Because there is no BANKRUPTCY on taxes. They will pay with us, and thus WE will pay less than if we pay it all by letting the markets tank!

 

Republicans are NOT the PANCEA for anything. But when you have people LEGISLATING fairness that costs you this down the road, you better wake up.

 

I would like to point out to you MR cap, that EVERY INDEPENDENT candidate besides the green party, proposes exactly OPPOSITE what the democrats suggest. In other words, IT IS JUST NOT THE REPUBLICANS, IT IS ALMOST EVERY CANDIDATE, descript, or non descript.

 

Are we to believe that learned individuals and partys ALL ARE WRONG, and the democrats are right?

 

If YOU being a Ron Paul supporter does NOT pay attention to what is obvious, then YOU sir, are NOT paying attention!!!!!!

 

Just look at the platforms they put forth, and you will see that; YES, they bash Bush, but their change in no way resembles what the LIBERALS want. (again, except for the greenparty which is in bed with the LIBERALS anyway)

 

It is your country, every party is against liberal ideas, but if you want to waste your vote, go ahead!

[fmccap]

Those well meaning people are not getting blamed for this. Wall Street is. Wall Street was just a part of it.

I know they are not and it's the American peoples fault.

 

P.S. I'm betting tonight's national address is going to be FEAR MONGERING. Bernanke already started during the Congressional hearings with the "GRAVE THREAT" crap.

Edited September 25, 2008 by fmccap

[sprinter]

I see you don't understand the plan either.

 

And you are another pin stripe bandit (retired)

 

How much is this going to cost? 700 billion.

 

How much did Bush say the Iraq war was going to cost? 50 to 60 billion

How much have we spent so far? Over 582 billion dollars

 

That is almost 10 times the original quote (use your fingers)

700 billion will turn into 7 trillion with government accounting methods. And who pays the interest on the money the feds prints for our government to spend?

Edited September 25, 2008 by sprinter

[fmccap]

And you are another pin stripe bandit (retired)

 

How much is this going to cost? 700 billion.

 

How much did Bush say the Iraq war was going to cost? 50 to 60 billion

How much have we spent so far? Over 582 billion dollars

 

That is almost 10 times the original quote (use your fingers)

700 billion will turn into 7 trillion with government accounting methods. And who pays the interest on the money the feds prints for our government to spend?

I don't think these guys understand that we have a faulty system. The way this system works it always comes at the taxpayers expense. They like to say that in history Socialism never worked but refuse to see that in this situation the same thing applies.

 

P.S. What did they say the S & L "crisis was going to cost? What did it end up costing?

Edited September 25, 2008 by fmccap

[sprinter]

And with all the honest members of our government, this surly wouldn't happen again

http://www.youtube.com/watch?v=HAzDEbVFcg8

[fmccap]

I would like to point out to you MR cap, that EVERY INDEPENDENT candidate besides the green party, proposes exactly OPPOSITE what the democrats suggest. In other words, IT IS JUST NOT THE REPUBLICANS, IT IS ALMOST EVERY CANDIDATE, descript, or non descript.

You forgot to include McCain.

 

Call Barack Obama at 866-675-2008.

Hit 6 to speak with a campaign volunteer and insist that Ralph Nader and other ballot qualified third party candidates be included in the upcoming Presidential debates.

 

Then, e-mail the executive director of the Commission on Presidential Debates Janet Brown at jb@debates.org

Tell her to end the exclusionary restrictions and allow Ralph into the debates.

 

I don't like Nader but for the good of our country we need to stop this practice.

 

If YOU being a Ron Paul supporter does NOT pay attention to what is obvious, then YOU sir, are NOT paying attention!!!!!!

I moved beyond the two party crap and I would rather focus on the bigger picture, the rest of my life and mostly my children's.

Edited September 25, 2008 by fmccap

[suv_guy_19]

I don't like Nader but for the good of our country we need to stop this practice.

 

No solution resulting in the freeze up of your financial system will be very good for this country.

[fmccap]

No solution resulting in the freeze up of your financial system will be very good for this country.

I was talking about the two parties working together to exclude any other candidates.

 

Here is something interesting. Bernanke agreed with Paul about the Great Depression at the hearing yet still wants to go down the same road. It's worth watching.

Ron Paul on Fox Business Sep. 24, 2008

 

Listen to his second sentence, he agrees with him.

Edited September 25, 2008 by fmccap

[suv_guy_19]

I was talking about the two parties working together to exclude any other candidates.

 

 

I guess I should have paid more attention to what you said....

[fmccap]

Response To Bush Speech: No Deal Start Over

I watched Bush's speech tonight and it left as many questions unanswered as before.

 

Specifically, it provided no assurances that the problems will be solved by throwing $700 billion of taxpayer money at failed institutions.

 

Former Governor St. Louis Fed: "taxpayer losses will be large."

 

Bush claims the value of these assets will likely be higher than the current price. I disagree. So does William Poole Former Governor of the St. Louis Federal Reserve Bank who states "The Treasury will be stuck with the least-attractive paper, and that means taxpayer losses will be large."

 

President Bush Is Disingenuous

 

Bush claims the Government is patient enough to buy assets at their current price and hold on to them until the price recovers. That is not the Paulson plan. Paulson and Bernanke do not want to buy at distressed prices they want to buy at above market prices to recapitalize banks, hoping they guess right. The Fed chief explicitly said "paying prices higher than the bad assets would aid the economy".

 

Bernanke and Pauslon have not guessed right about anything for years, including interest rates, or we would not be in the mess we are now in.

 

Paulson And Bernanke Do Not Deserve Your Trust

 

Neither Paulson nor Bernanke saw this coming. Paulson spoke on Face the nation saying our banking system was sound. Somehow we went from "sound" to the "biggest crisis since the great depression" in a few short weeks.

Why should trust be placed in those who did not see this coming? Instead trust should ONLY be placed in those who did see it coming, and have offered valid alternatives to consider.

 

Paulson asked for a blank check for Fannie Mae. He told you he had no intention us using the blank check. One week later Paulson wrote a $200 Billion taxpayer funded check to bail out Fannie Mae and Freddie Mac. He wrote another $85 billion taxpayer check for AIG.

 

How many more checks can he write before you get the idea "Paulson is flying blindly by the seat of his pants"?

 

Take Time To Study Alternatives

 

Senator, I am still asking "Why the mad rush to judgment?"

 

The financial world will not end if you delay passage. However, it may end if you pass a $700 billion boondoggle that morphs into a $1.8 trillion boondoggle.

 

Please scrap this proposal and start with a genuine look at real alternatives. This plan is nothing more than a $700 billion tax, a tax that will not provide a single job, not a one.

[fmccap]

my friend, regardless if you understand this concept or not!!!!! and thus WE will pay less than if we pay it all by letting the markets tank!

I would like to point out to you MR IMA

You are going along with the same thing you despise. Actually I'm thinking that the more the market tanks the better off I am, there is more than the stock market, GOLD, commodities.

 

I’m not sure they understand…

It’s about forcibly taking money from everyone else, and dumping it on those who have proven themselves to be terrible stewards of it. But more than that, it’s about the Constitution. You just can’t take public funds like this for the benefit of private companies. (Well, you’re not supposed to anyway.) It’s about personal responsibility and the free market. It’s about still having the possibilities of success and failure in our society.

 

It’s about nothing less than our way of life. In our way of life, if someone doesn’t pay their mortgage, they get foreclosed on. Then housing prices come down to reality and more homes they CAN afford become available. In our way of life, if banks take risks that don’t pan out, they fail, and another bank that is doing a good job buys their assets, hires their employees, and makes profitable use of them. That is how a society thrives, and why bankruptcy and foreclosure need to happen sometimes. Because in the end, the good guys can win.

 

Yes, we need change, but the change we need is to get rid of the perverse government incentives for banks to make those bad decisions in the first place. But all we hear about is band-aids, symptoms, and bedtime stories about how this will fix everything.

It won’t and it comes down to this: You can save the banks that are failing, or you can save the dollar. But you can’t save both.

[RangerM]

And you are another pin stripe bandit (retired)

 

How much is this going to cost? 700 billion.

 

How much did Bush say the Iraq war was going to cost? 50 to 60 billion

How much have we spent so far? Over 582 billion dollars

 

That is almost 10 times the original quote (use your fingers)

700 billion will turn into 7 trillion with government accounting methods. And who pays the interest on the money the feds prints for our government to spend?

 

700 Billion is what is requested. Think of it as a HELOC, except in this case the 'equity' is the American taxpayer, unfortunately.

 

I am not liking a bailout, but the problem is without adding grease (in the form of $) to the gears of the economy, the economy will freeze to a halt.

 

I sympathize with FMCCAPs viewpoint, but unfortunately if the credit market is allowed to freeze, what will happen is that there will be a run on banks, because everyone will demand payment upfront, and/or in cash (or gold, FMCCAP?).

 

At that point the house of cards will collapse, because so many companies depend on the ability to obtain shortterm loans to cover everyday costs (like payroll). Not that credit is impossible to obtain, it just costs so much more that you wind up with a situation similar to the late 1970s.

 

FMCCAP: The reason that you can't just simply "wait it out" and allow the mortgage-backed securitys' bad loans to default is that they have been allowed to taint the good ones.

 

(BEGIN METAPHOR) (pretend you're a farmer)

 

You have 10000 watermelons, and you know that 500 of them have been poisoned, but you don't know which ones.

 

You can't sell any of them because you don't know which ones are poisoned, and you can't simply replace them because all of the credit you obtained to grow them is tied up in the 10000 you have.

 

In the meantime, since you can't sell any of your fruit, you don't have any $$ to maintain your field, and you can't borrow money from the bank because you don't have anything to put up as collateral (remember your land was your collateral in the original loan to buy the seed, and fertilizer, to grow the watermelons in the first place).

 

You could test all the watermelons for poison, but that takes time. Time is a luxury that you don't have, because the field needs tending for your winter crop(s).

 

Also since you can't sell your watermelons, the people that were planning on buying your watermelons for their business/consumption won't be able to.

 

Unfortunately, enough farmers are in this exact situation, that too many people won't be able to buy watermelons, and many will go hungry.

 

With the shortage of watermelons, the price will go up (inflation), and/or just simply won't be available (stagnation).

Inflation + stagnation = "Stagnation" (welcome back Carter adminstration, and the 'misery index')

 

You need someone to give you the time you need. In this case, (rightly or wrongly) the government agrees to help you with the working capital. Your watermelons are the collateral, but you are only able to obtain $$ on a portion of the value of the watermelons, and not the value of 9500 watermelons (substantially less), but enough to get you through, per the government's approval.

 

The government (with Congressional approval) has the time and $$ to test the watermelons, and bring the good ones to market, presumably at a higher price that they were purchased for.

 

(END OF METAPHOR)

 

700 Billion dollars represents 5% of the outstanding value of all mortgages in the US, which is the approximate percentage of bad loans. 700 Billion is the line of credit that was requested.

 

Without the credit market, we will go back to bartering, and not only the 'bad people' will be affected, but you will too. Even if you own everything outright (no debt), you still depend on others (who aren't) for your ability to conduct your life (at least in a modern sense).

 

I don't like it, but unfortunately it was our elected officials that contributed to the problem by (in good faith) introducing that which inadvertently poisoned the watermelons.

 

RALPH GREENE: You probably have a better grasp on this than I do, so please fill in any blanks.

[sprinter]

700 Billion is what is requested. Think of it as a HELOC, except in this case the 'equity' is the American taxpayer, unfortunately.

 

700 Billion dollars represents 5% of the outstanding value of all mortgages in the US, which is the approximate percentage of bad loans. 700 Billion is the line of credit that was requested.

 

 

700 billion will only be the beginning. The prime loans have already started failing.

 

And you are not going to rush to the bank to get your money. The banksters work under the fractional reserve system with roughly 10% of deposits held in the bank. Don't count on the FDIC to bail you out. They are getting close to going under too.

The whole system is created with the consumer not understanding the inner workings. If consumer confidence fails so will the system.

[Ralph Greene]

I would prefer the "rescue" not be necessary. I even think....with some time, they could come up with better plan. But system almost froze up last Thursday, and showed signs yestrday afternoon of doing same. Banks were beginning to shut down automatic lines of credit companies use to make payroll and pay for inventory etc. Americans would have began seeing huge layoffs by this week. I don't know why this is not reported more. Probably for fear of starting panic. And I know most working Americans don't or can't watch news on CNN, CNBC, Fox Bus, CNBC world, and Blumburg like I do.

 

I believe the Treasury will make money on the deal.

 

They will borrow gradually as they need funds at around 3 percent by selling Treasury bills. Buying mortages at roughly on average around 50-60 cents on the dollar, in pools probably yielding in the 12-15 percent range. (a 7 percent mortage trading at 1/2 price has a yield of 14 percent) The government will begin collecting the payments....principal and interest.

 

Assuming a 10-20% loss from defaults in the pools, and assuming some of the mortages will almost bring full price at either maturity or refinance, it shouldn't be too difficult to make this profitable. Paulson was reluctant to say this because it's just not certain how this will work out....or what provisions will be in the bill. But the closer it stays to the original plan, the better it will work out for the tax payer financially.

 

If congress loads this down too much with other bailout provisions...car loans, student loans, etc....making it profitable gets more difficult. Also if they load it up with other provisions re executive pay, ownership stakes, stuff like that, banks may just hold on to the debt, figuring it more profitable to just let it mature....and thus "hunker down" to survive and stop making loans, defeating purpose of bill.

 

Warren Buffitt thinks the Government should make a nice profit on this for American tax payer. But folks have to understand....this plan is to rescue main street from what could happen. Also....there is no guarantee it will work.

Edited September 25, 2008 by Ralph Greene

[rc38]

You are going along with the same thing you despise. Actually I'm thinking that the more the market tanks the better off I am, there is more than the stock market, GOLD, commodities.

 

I’m not sure they understand…

 

 

Well fmccap,you will love this news. I'm writing in Ron Paul as president,McCain had in the past brought up about the problems with Frannie and Freddie in 2006. Sen. Dodd and others wouldn't have anything to do with regulating these to firms. McCain had his chance to stand up with others and fix this with the natural forces of the market. Since he choose not to,he has lost my support. This Bailout will actually be in the 2.0 trillion to 2.4 trillion range. If the Dems get the deal included to help individuals,the price tag will be even higher.