50
What's your opinion on the bailout?
We've been hearing a lot from the bureaucrats, politicians and pundits about the U.S. government's plan to restore confidence in the financial system by rescuing banks from tons of bad debt. We'd like to get your opinions and hear how you're being affected. Your thoughts and experiences often shape our coverage. You can submit your comments to our Public Insight Network, post them here, or on any of our stories pertaining to the crisis.
Pages
I'm waiting to see what the candidates do.
One of them is going to be elected based on all kinds of promises to the electorate.They both made them!
How the heck are they ever going to be able to do anything with insurance or education or any kind of tax cuts when we're running trillions and trillions of dollars in debt?
There's going to be hell to pay whoever gets in. Cause they're going to be viewed as lying (once again) to all of us. They better start dealing with the bad news before they take office.
WE bail them out, THEY keep the millions they made. It's not fair!
It's just another way that people who aren't rich are being exploited by this government, which has deregulated everything, made the rich richer, and done irrevocable harm to our country.
I'm angry, disgusted, and scared, too. I don't see much hope.
Two quick points:
1)This bailout should be a wake-up call to any remaining Chicago School economists. Saint Milton Freidman is wrong. Freemarket economics don't work, financial institutions must have oversight. Keynesian capitalism is correct today as it was after the Depression.
2)The media has not reported the CEO's threat this weekend, they would rather have their companies go belly up than not take ANOTHER few million bonus. If the public were to ever hear of their threat, I can't imagine the fury our noble "representatives" would have to endure.
2nd shoe to drop.
I'm going to speculate that the reason why hank paulson has been scant on the details is that today's (wed) "blame" - Credit Default Swaps, is now a cascade of (again, unregulated) hedge funds in danger of collapse. Apparently hedge funds even acted as insurance parties to which ubs demanded they up their proof they could pay in the event of default. Hedge fund participants include institutions (like harvard endowment) to achieve 12% returns when the s&p was loosing in the market. It is LTCM all over again and no one wants to admit yet another problem due to missing oversight.
When BSC was liquidated the story was: "doing what the market would do naturally, but quickly so as to disrupt the market".
Preceding last fri, the story was: "need 700B blank check to mitigate problems by cdo's and siv's too complex to unwind". (gave my own rebuttal here: http://www.dailykos.com/comments/2008/9/20/191440/829/498#c498 )
Today with paulson, the talk is of Credit Default swaps as the problem.
BOB MOON:
The value of the entire mortgage market: $7 trillion.
The size of the credit default swap market last year: $45 trillion.
KAI RYSSDAL: That's a lot of money, Bob.
http://www.dailykos.com/story/2008/9/21/9322/74248/245/602838
Like the barrel of oil that trades 22 times on the nymex before being delivered, it looks like there are 6.4 dollars of "insurance" for every dollar of physical property.
so I'm guessing the public is being told "it's serious" but not given the fine details of yet another grand failure. They would much prefer to hide fault if it can be covered up by relieving pressure on balance sheets that have not been made public yet.
The thing that I find most troubling about the actions of the Federal government and Federal Reserve over the last couple of weeks is the lack of recognition being given to the destruction of the remnants of our once respected free market. The takeover of Fannie Mae and Freddie Mac amounts to nationalization of two of the largest corporations in the world, yet few people seem troubled by this step towards government control of the financial and other markets. If I were the CEO of any large corporation I would be very concerned. After all, what is to stop the Federal government from next declaring that the auto industry, to choose but one potential trouble spot, is too important to fail, followed by a government takeover of Ford, GM, and Chrysler? According to what seems to be current thinking, this is OK so long as it's done to "protect" American jobs, taxpayers, etc. no matter the long-term damage that is done to our economy.
Combine the takeovers with the bailout of AIG and American taxpayers are now liable to trillions of dollars of debt. Now comes word that the Treasury department is considering buying up the bad mortgage assets that, according to Treasury Secretary Henry Paulson, "are clogging up the financial markets". The new operation would be patterned after the Resolution Trust Corporation formed in the wake of the S&L failures in the crisis of the 1980s. The big difference is that the corporations from whom the debt will be bought will be allowed to continue in business. Does anyone else think that this will lead to yet more risky behavior by these businesses in the future? After all, the government will take care of any bad results that might occur. The only way to prevent this will be to heap yet more regulations and oversight on the financial markets. How can we still maintain that we have anything even vaguely resembling a free market?
And now, the SEC is getting in on the action by banning the short selling of the stocks of 800 financial corporations. This is supposedly going to be a temporary measure, but another precedent is being set, and the government will use its power again. Does anyone else find it troubling that the government has outlawed one of the prime price-finding mechanisms of the marketplace? All the government is doing is interfering with the efficient flow of capital within the markets - a move that will have unfortunate effects.
All in all, in my view, the government has effectively destroyed most of the remnants of the free market in the United States. The new regulations which will inevitably be put in place "to make sure this never happens again", will continue that process. By putting further barriers to the free movement of capital in place in the U.S. the government will run the real risk of killing the Golden Goose of the U.S. economy. The average American doesn't understand how much money the financial marketplace brings into the U.S.; money which goes far to offset the trade deficits we run with China and other developing economies. If capital is not free to move in the U.S. it will go elsewhere and U.S. financial markets will no longer be the most important in the world, with potentially devastating effects on our national economy. As Ronald Reagan so sagely observed, "Government is not the solution, government is the problem". More Federal government intervention in our markets will lead to disaster and the more bailouts, loan guarantees, and other regulatory tricks that are used to prop up our shaky financial system are merely postponing the day of reckoning, and ensuring that the crash, when it comes, will be far deeper and far worse than it need have been.
This proposed financial bail-out is a reckless attempt to excuse intentional "bad decisions" by these particular financial institutions. These companies obviously did not care about the possibility of this happening, no foresight of consequence... The tax payers should absolutely NOT have to take the hit in order to cover their mistakes...and that is assuming this plan would actually be effective, which in my opinion is rather far from practicality. If you stack up enough Band-Aids, eventually they will all tip over. I personally will be very upset with our government if they let this fly.
No to bail out. I do not trust any politician to spend that money wisely, and I truly believe there will be add ons to the bill as there was for the previous housing bail out. Any Senator or Congress Person who votes for the bail-out should not be re-elected.
Wall Street execs are getting a well deserved trashing in the press, but let's not forget the mortgage brokers, builders, real estate brokers and bankers who have oversold the housing market. Let us also remember the individuals who borrowed money without reading the fine print, mortgaged their home way beyond realistic value to help pay other debts and expenses.
Also remember the people who had never paid off or even paid on time any debt, who borrowed to buy homes because someone would let them. There is blame to go around -- some for the greedy and some for the foolish. The bailout will be
developed by smarter people than me and I hope they do the job well because I think it must be done. 700 billion won't touch it in my opinion.
300 million Americans, 700 billion in new debt. That's 2,333 in new debt for every man women and child. As a family of four, how am I supposed to get a mortgage when I just received an additional $9,333 in new liabilities. It would be ok is we had no national debt but our country runs in the red in the best of times. Is borrowing more really going to help anything?
Right now, no one really knows how much their homes are worth. That creates dangerous uncertainty that could have larger ramifications.
Months ago, a bailout plan was proposed for homeowners, with banks, such as Countrywide at the time, forced to refinance bad loans. Doesn't sound so bad now, does it?
Pages
