I understand that we can't exactly just let the financial sector collapse, but the more I think about this, the more it feels like a rush job to me. It could end up being the worst thing that ever happened to this country.

***********************************************
$700,000,000,000
divided by
United States Population: 301,139,947 (July 2007 est.)

EQUALS $2324.50 collected for every man woman and child.

How much is it for the average family?

Average family (mother, father, 2.5 kids) = $10,460 stolen from the average
family, and then handed to banks. It's reverse bank robbery!
***********************************************

Think about it this way - banks are unable to write their toxic assets down to true value, because they end up taking losses they can't sustain. If that's the case, common sense tells me that the only way for this plan to work is for us, the taxpayers, to grossly overpay for these assets.

This is a big deal, let's discuss...

I don't think we can afford to let all these financial institutions go under, but I'm VERY wary of a bail-out. Personally, I'd like to round up the officers who were in charge of these institutions, as well as the heads of the regulatory commissions who were supposed to be looking out for this sort of thing, and lock them all up in Gitmo as threats to our national security. Then leave them there for an undetermined length of time.

Once the U.S. government owns all of this debt, are they going to be servicing these loans, handling the foreclosure process, taking control and disposing of foreclosed assets that we the taxpayer now own? If so, imagine the gov't divisions that will have to be created and enormous number of workers needed to fill them.

You start unwinding all of this in your head and it just gets crazier and crazier, and the gov't wants to pull the trigger after kicking it around for a few days? What could possibly go wrong?

That's the really scary part about all of this. There's nothing quite like hastily making a life-altering decision. It reminds me of a Las Vegas wedding where we, the taxpayers, will wake up tomorrow with a huge hangover and say, "We did WHAT?!"

For some of you that don't fully understand the current situation, here is a good article explaining some of the options. (Keep in mind it is from the NY Times though so it will have a slight left spin)

What Are the Other Bailout Options? An Explainer - Economix Blog - NYTimes.com

The sad thing is that the bailout was done in hopes to avoid our economy getting even worse... Unfotunately, and ironically this may be the nail in the coffin of our already weak economy.

__________________
ProjectOKC.com

Why do you think the bailout is the death knell of the economy?

At least one version of the bailout - but I forget whose - puts this task in the hands of the FDIC. That agency has the experience from the oil bust bank failures, although after twenty years, it's doubtful there are many people left with institutional knowledge of that process. In addition, the FDIC hasn't been loaded up with Brownie-type Bush political hacks, so there's a good chance of some competent work getting done.

I wonder whether there's actually any intention, at least in the White House, of actually having some sort of bailout, or whether this is just some scheme to make one last big cash grab before leaving Washington.

There's a story on the Roll Call website (this is a highly-regarded Congressional newspaper, for those not familiar with it) in which White House spokesman Tony Fratto says this plan has been in the works for months.

So we're to believe that after months of planning, the solution the White House comes up with is 'give us $700,000,000,000 and don't ask any questions'? And that after months of planning, there isn't a minute to spare in making it law?

This is how we got the USA PATRIOT Act, which was in the planning stages for years before being thrown at Congress for immediate passage, and the war in Iraq - also in the planning stages for years.

The administration has had so much success with this induced-panic method of getting crazy legislation passed, it's no wonder it's giving it yet another shot.

So why the rush? Is it really because we're in imminent danger of global economic collapse, or is it because the plan is so obviously a con that the White House wanted to rush it through without anyone reading it, as they did with USA PATRIOT?

The most cynical interpretation I've read is that this is Paulson's plan to preserve and enhance the culture from which he comes as a Goldman Sachs executive, which is to say the Wall Street culture of multimillion-dollar bonuses: $700b for his friends and colleagues to deposit offshore when the rest of the nation, and perhaps the world, is plunged into depression.

I'm more impressed with the Chris Dodd plan, which gives us taxpayers some equity stake in the banks, investment firms and lord-knows-what-else from which we'll be buying almost-worthless assets.

Ron Paul...

Read it all: Commentary: Bailouts will lead to rough economic ride - CNN.com

__________________
ProjectOKC.com

Just hold the entire Congress responsible for this nation's financial mess by voting them out. Failure to do so will send them the mission that they've been doing OK, all along, after all. After all, doesn't Congress have an approval rating of 9?

Re: The Ron Paul commentary

I know the Community Reinvestment Act is a favorite conservative bugaboo, but it didn't cause or contribute in any significant way to where we are now. CRA was written to prohibit what used to be called 'redlining,' where lenders would rule out whole sections of a community (ie, 'n_____town') for lending regardless of the qualifications of individual borrowers or the value of individual properties.

The CRA was passed in 1977, long before the current crisis and even before the S&L debacle.

What we've seen the past few years is not a bunch of bad loans in formerly redlined communities, but a bunch of bad loans all over the place.

Irvine Housing Blog, for example, has chronicled foreclosure problems in Irvine. CA, and as you'll see if you look at some of the listings, these aren't shotgun houses in the 'bad part of town.'

Another conservative, Ben Stein, has an analysis at Yahoo! Finance, that reads, in part:

Stein's analysis is quite a bit more complicated than Paul's, but it gets closer to the truth, in my opinion. Here's the whole thing.

This mess is not the result of overregulation - just the opposite, in fact. The more restrictions we removed, the worse it got. We expected high-roller Wall Street execs to behave like adults with other people's money, and they did the opposite.

I'm of mixed feelings. It sickens me that we are going to further weaken the dollar and take on huge amounts of debt to try and stabilize the economy. On the other hand I can almost feel my 401k deflating as I type this, and although I like Ron Paul, I tend to think that his financial policies are not sound. I think that if the free market were entirely a free market, it would do what is in the best interest of the individual buyers/sellers, which might not always be in the best interest of national security. In the same way that we don't allow weapons makers to sell their stuff to Iran or just anybody, I also don't think we should allow short sells all day long that push the market to the brink of oblivion.

Our planner moved our money into small caps and short term bonds. We didn't
take too big of a hit. We'll just have to ride it out.

Well if we want history to repeat itself to where we make oodles of cash from our investments, history clearly shows a Democratic President and Republican Congress is the way to go. Whenever one party controls everything things go to hell...so I guess the first step is Barack in office this year, and Republicans take things back in 2010 if they can't this year.

I'm all about split power...keeps things somewhat moving.

Housing Crash Continues, Bubble Pops

In some ways, I think it's a necessary evil (something has to happen or our national financial situation is in great jeopardy) but what's crazy is this ....

If I have this right, the people won't foreclose thanks to the bailout... the coasts and hot markets ( Phoenix. Vegas ) will once again go up in value, enjoy a great increase of equity ( again ) drain that same equity through refinances, buy new cars, toys etc etc (again) while those of us here and in similar states, will pay for this, our values will remain stable, our equity won't increase as much yet these people get a free ride for making bad decisions and poor financial choices.

Most of these same people got into high priced homes by fudging their incomes, falsifying loan docs, were speculators etc etc...

I know some of these people are in dire need and I feel for them..... but I just don't think it's very fair to the rest of us who saved, scrimped and worked hard for what we have to bail out those who got to enjoy the equity ride up, up and away... and now are crying that they are going back down.

It just makes me mad that most of us average taxpayers will pay 5K each to save these homes that shouldn't have been bought in the first place.

I know this is simplified but is that most of you see it or am I way off in my line of thinking?

__________________
" You've Been Thunder Struck ! "

I agree Karried. Unfortunately this life isn't fair and now us hardworkers are footing the bill of the foolish.

I'm not sure who's crazier...the borrowers or the lenders. I have a friend who hasn't held a real job in about 15 years. Recently, he was able to go down and finance a brand new $26,000 pick-up. No down payment...no trade-in...no real job to speak of at the time. Since then, he has gotten a job and his banker has already told him that if he can hold this job for 30 days, they'll give him a home loan. Should we feel sorry for either one of these folks if this doesn't work out?

DOn;t listen to the media on all this. First of all, not all of these thigns are "bailouts." For instance, they are deciding whether taxpyers will have equity in some of these firms, and I udnerstand the AIG money was a loan. We're not just tossing money at them to keep; it's more complicated than that. Also, the economy is not nearly as weak as some say, and believe it or not, recessions can be healthy. Unemployment is still at a healthy level, gas prices have peaked, it seems, natural gas prices have PLUMMETTED, etc.

I wouldn't assume the bailout is going to contain the markets for more than a few days or weeks. This might save the banks, but the economy is about to undergo a painful contraction.

Just reflects that in Oklahoma a lot of bankers and others think the state economy is in good shape. After all, a magazine rated Oklahoma City the most recession resistant city in the nation.

And no I wouldn't feel sorry for those people. The banker should be fired. Several years ago I tried getting a bank loan for $15,000 to finish paying for my new house, but had nothing worth $15,000 to back it. It'a against regulations to use an IRA as collateral. So was rejected. But I ended up paying for my house by taking out two credit card loans.

I totally agree with this. Plus I think it generally keeps things from getting too insanely corrupt when a branch of government has to reboot itself every so often due to a party change-over.

Oh it won't. Even with the bailout the first quarter of next year is going to be bad. January is always one of the worst months for the stock market... I'm just hoping that the government's cash infusion will safe-guard against it being catastrophic.

You can sign a petition here against the bailout:

Doubt it will help though....

Housing Crash Continues, Bubble Pops

No Wall Street Bailout |

__________________
" You've Been Thunder Struck ! "

This crisis is hitting at the worst possible time of year, just before the holiday shopping season kicks off. I've already heard a few people saying they are scaling back on their spending for the holidays this year. Some businesses are likely to not be around in January.

Meanwhile, the other shoe is already starting to drop. One expert says we will need another $500B bailout for the banking industry almost immediately, on top of the $700B proposed: Banks Will Need Another $500 Billion: Gross - Markets * US * News * Story - CNBC.com

The FDIC is worried about numerous small banks approaching collapse, so they need a $150B bailout too: Bloomberg.com: Special Report

Meanwhile China has ordered its banks to stop propping up US banks, eliminating another degree of freedom: China banks told to halt lending to US banks-SCMP | Markets | Markets News | Reuters

And has anyone thought about what happens if Bank of America cannot handle all the toxic debt it just absorbed, even with the bailout? FDIC couldn't possibly handle all the insurance it would have to pay out if BOA collapsed, no other country would be able to help, and the panicked run on the bank that would ensue would cripple the economy and send us into Great Depression II.

If you're not scared yet, you're not paying attention. Adding up all the bailouts and all the money spent due to the mismanaged war in Iraq, we're up around $2,000,000,000,000.00 of mismanagement from the party of fiscal restraint.

Yeah, it's freaky scary.

So..... I'm wondering, what do people do with their current bank accounts..

Take the money out and put it where?

I'm not feeling confident about my bank about now.

__________________
" You've Been Thunder Struck ! "