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Bail out, why

Discussion in 'Uncategorized Threads' started by maclellan1911, Sep 29, 2008.

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  1. maclellan1911

    maclellan1911 TS Member

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    Yet have I seen anything as to WHY we need to bail these bums out. These CEOs/owners/board members made a bad investment........also I know I had to pay PMI private mortgage insurance. Where and when does that come into play. Im quessing this is part of congress/senate retirement portfolio? I really want to know how or why this will affect me. Also how do we as tax payers profit from this.
     
  2. crusha

    crusha TS Member

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    Wow...10+ word sentences...and several of them strung together!


    Mac, I think you pulled MIA out of his shell...I'm going to have you two sit next to each other from now on!
     
  3. maclellan1911

    maclellan1911 TS Member

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    Ok so fan/Fred invested by buying mortgages from banks, so no they hope people who need to pay those mortgages do, and they have not. Now these said banks fan/Fred bought these loans from made their cut. So how does the fact that fan/Fred bought all these "bad loans" affect the banks they bought them from? I am just at a loss that fan/Fred "bought" these loans or did they themselves bowrow minies. 700m heck just give the 300m people living in the us 1m each as a long term loan, congress can seize the property sell it and replenish the loan. What just gets me is. THERE IS NO BAIL OUT FOR SCHOOL SYSTEM<VETS,SENOIRS,FIREFIGHTERS,POLICE,SS,HEATHCARE. Im guessing these loans that fan/fred bought are now worth less than they where. Also how many have borrowed the equity and now the property is worth far less. I really do not understand. what did fan/fred really think was going to happen......wait im sure they didnt care cause they have their own asses covered. I also bet congress will hire these bozo's as advisers for millions also.
     
  4. maclellan1911

    maclellan1911 TS Member

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    post did not complete, VETS,Senoirs,Emergency personal,military. Hey Ya know why dont we cut the nasa fund way back. do we really need to be going out into space, I dont think so.
     
  5. HDLLLIII

    HDLLLIII Member

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    MIA comes very close to hitting the nail on the head. The Democrats are in fact licking their chops. Am I eager to bail out Freddie Mac and Fannie May, NO but I would like to continue to live in the USA and maintain a similar lifestyle I have grown to enjoy. I do use credit (i.e. cars,motorcycles,home) and rely on others to provide financing to accomodate my wants. I have never been able to save enough money to pay cash for a new car or home. I think a novel approach is to hold accountable the people that have caused this problem. An example would be to bar any of the execs in mortgage banking from doing any financial business ever again. We, as a country, will survive.
     
  6. cubancigar2000

    cubancigar2000 Well-Known Member

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    MIA said it prety well or at least made it easier for some to understand. It wont be pretty but my biggest concern is that I cannot see the bailout solving the problem for very long, only delaying it. Actually the less informed have alreay made their run, others are waiting to see improvement. Maybe I am wrong, I hope so.
     
  7. dmarbell

    dmarbell Active Member

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    From wikipedia, on The Great Depression:

    "The even larger question is whether it was largely a failure on the part of free markets or largely a failure on the part of governments to curtail widespread bank failures, the resulting panics, and reduction in the money supply. Those who believe in a large role for governments in the economy believe it was mostly a failure of the free markets and those who believe in free markets believe it was mostly a failure of government that compounded the problem."

    I admit to not putting enough effort into understanding the current situation. However, the $700 billion bailout, if properly structured, would not/should not cost the US Taxpayers the full $700 billion. The value, meaning the face amount of the troubled loans, is $700 billion. The Taxpayers would also acquire the underlying assets (property) worth some amount, more than zero, up to $700 billion. The purchase of these troubled loans would help restore liquidity in the marketplace, because of the complex accounting methods used by banks and the Federal Reserve.

    I am not in favor of government ownership and bailouts. However, the government, through progressive loans structures and lack of regulation on other loan structures, has helped cause this mess. If we can print $700 billion to acquire the loans, pay interest on the $700 billion for some time, and reclaim some or all of the money by selling the underlying assets, then it might be worth it to avert a depression.

    We have to make sure there is adequate oversight of the transaction.

    Danny
     
  8. birdogs

    birdogs TS Member

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    All that being said, do you trust these Congresspeople to design a proper program and then to administer it in the best intereasts of the people? Just think, the Dems have already tried to give a huge amount of your money to La Raza and Acorn; groups that DO NOT operate in your best interests - and that was before the bill even passed! How can we trust these bums?
     
  9. Laudygirl

    Laudygirl TS Member

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    Will the $7 billion be used to buy the paper that these banks do not want? So we get the bad loans and they keep the good loans.

    Why I don't like it.

    1) The same people that got us into it are now telling us this is the way out. (I don't trust them.)

    2) They would not bailout me or you. (We don't contribute $K's of dollars to their campaigns.)

    3) It does not make Wall Street accountable for this problem.

    4) By discribing this as a crisis, our government then can convince us that this is the only (socialist) solution.

    5) This is only a band-aid on a sucking chest wound.

    6) I don't trust that we have been told the whole volitility of what these slimeballs have done.
     
  10. willing

    willing Member

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    Would you trust these congessmen/women to do anything? They are a bunch of theives crooks, adulterers, queers, drunks and liers. I can probably think of more. They care about nothing other than being re-elected. Nothing will ever change until we have term limits.

    Bill
     
  11. pendennis

    pendennis Well-Known Member

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    Depending on how these mortgages shake out when they go on the open market, these loans COULD make a profit. Right now, real estate values are in the pits, and selling them at even a modest profit would be good.

    The problem is one of liquidity, and and severe tightening of the capital markets. This is not a classic "bail out the rascals". In this instance, there are actual assets being purchased by the government.

    ASSUMING the Feds don't sell these mortgages at fire-sale prices at auction, the Federal treasury would make a profit. The Treasury Department will be calling the shots, pretty much at the discretion of the Secretary Of The Treasury.

    Dennis
     
  12. stokinpls

    stokinpls Well-Known Member

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    If you wonder why lately every sentence doesn't have, "It's Bush's fault." in it heres why. No wonder all we hear is, "Let's get this fixed." and "Bi-partisanship".

    "Subject: A Fannie Mae Timeline (excellent tracking)



    1997

    Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
    Fannie Mae buys mortgages from other companies.
    It is backed by the taxpayers for all losses, but keeps all profits.
    President Clinton loosens Home Loan Requirements



    1998

    Banks begin making thousands of bad loans,0 down, no documentation, for 120%!(1998 2008).
    Executives at Fannie receive huge bonuses if loan targets are met.
    Franklin Raines and Jamie Garelick from the Clinton Administration are appointed to run Fannie Mae.



    2003

    President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort.

    Rep. Melvyn Watt, (D-NC) Committee on Financial Institutions & Consumer Credit:
    I dont see much other than weakening the bargaining power of poorer families to get affordable housing.

    Rep. Barney Frank. (D-MA) Chairman of the House Financial Services Committee:
    These two entities --Fannie Mae and Freddie Mac --are not facing any kind of financial crisis The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.



    1999-2004

    Raines earns $100 million in bonuses.
    Garelick earns $75 million in bonuses.
    In 2004, Enron collapses, Congress investigates, Executives Skilling & Lay go to jail for fraudulent bookkeeping.
    Congress responds with the Sarbanes-Oxley Act, more heavy regulation of corporations



    2004

    An OMB investigation finds massive fraudulent bookkeeping at Fannie Mae.
    False numbers triggered executive bonuses every year.
    Congress holds no hearings, no one goes to jail, or is punished.
    WHY NOT?



    1999-2005

    Fannie Mae gives millions to Democratic causes, examples:Jesse Jackson & ACORN.
    Fannie Mae pays millions to 354 congressmen and senators, from both parties.
    Who got the most money?



    Top 4 Recipients

    #1 Sen. Christopher Dodd, (D-CT) Chairman of the Banking, Housing, & Urban Affairs Committee



    #2 Sen. Barack Obama, (D-IL) Federal Financial Management Committee (#2 in only 4 years in the Senate not bad, eh?

    The list was compiled on contributions made over 20 years.)



    #3 Sen. Chuck Schumer,(D-NY)Chairman of the Finance Committee

    #4 Rep. Barney Frank,(D-MA) Chairman of the House Financial Services Committee



    2005

    Franklin Raines & top execs are forced to resign from Fannie Mae.
    They do not go to jail.
    There is no media perp. walk.
    They keep all of their bonuses
    They finally pay $31.4 million in civil fines.



    2005

    The Federal Housing Enterprise Regulatory Reform Act is sponsored by

    #325 Sen.John McCain,(R-AZ)Armed Services, Commerce, Science, Transportation
    If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. (Remember --this was 2005!)



    2005

    None of the top 4 recipients support the legislation.
    The reform act is blocked by Democrats, never even making it out of committee.
    None of the politicians return any of the money, tainted by fraud



    2008

    Fannie Mae & Freddie Mac go bankrupt and the govt. takes them over completely.
    Lehman Brothers, goes bankrupt from investing in bad mortgages.
    AIG get $85 million in loan guarantees, after insuring bad loans & projects.
    Taxpayers will ultimately pay BILLIONS.



    2008

    Franklin Raines is now an advisor to the Obama Campaign which wants the govt. to take over more of the economy.
    McCain favors revising regulations & loan standards, selling off Fannie & Freddie.



    Sources:

    Congressional Record, 5/25/06
    Herald Tribune, 4/18/08
    New York Times, 9/13/03
    www. govtrack.com, 9/17/08"
     
  13. halfmile

    halfmile Well-Known Member

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    It's going to hurt a lot worse later. The whole mess is like a toothache.

    The reason we have this problem in our Monetary system/society is the fact that too many of us borrow to consume.

    Their answer has been to stimulate even more borrowing, which made for lots of buying, mostly imported goods to consume.

    This is like using a credit card to buy groceries. You eat the groceries but the debt remains.

    Propping up this house of cards with still more cards only forestalls the obvious and makes the problem more prolonged and worse.

    Our standard of living is going to go down, and much of the "fluff" as Newt said, is going to go away.

    I don't want the bailout because I don't want to prolong the agony.

    Pull the tooth and get it over with.

    HM
     
  14. halfmile

    halfmile Well-Known Member

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    Watch and learn.

    HM
     
  15. Buddy O

    Buddy O TS Member

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    It seems to me that the bailout program is terrible, but the alternative of not having a rescue package is even worse. The problem now is the banks cannot make any loans because their money is tied up in mortgages gone bad & they have no confidence in the future. The bailout will allow the FED to buy the bad loans from the banks at a discount so they will have funds to make loans to companies. The FED will then restructure the bad loans & re-sell them to investors hopefully at more than what they bought them for. Bank credit is the lubricant of the economy & without it, the engine will grind to a halt. Unfortunately the taxpayers are the ones who are providing the lubricant.
     
  16. JBrooks

    JBrooks TS Member

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    http://www.youtube.com/TheMouthPeace

    Watch it.
     
  17. highflyer

    highflyer TS Member

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    As a nation we are like a family in financial trouble that keeps getting new loans to pay off their old loans. But like a family that can keep printing new money. I don't know how we reached the point where everyone expects the federal government to pay for every problem we have as individuals. But payback is here now. We are going to find out as a nation that there is no free lunch. The politicians are only responsible for giving Americans what they demanded. McCain has now proved that he is no different supporting a new 500 billion dollars of wasteful spending. Start the money presses. We need more money.
     
  18. Recoil Sissy

    Recoil Sissy Well-Known Member

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    It has been widely reported that "the problem" originated with massive malfeasance perpetrated by Fannie and Freddie. In fact, it didn't.

    Fannie and Freddie are two of several GOVERNMENT SPONSORED ENTERPRISES, aka, GSE's. As creations of Congress, GSE's were contrived for the purpose of (what else??) social engineering. That is, Congress created them to achieve some societal goal that in their opinion the free market didn’t sufficiently facilitate. Assuming the original intent of a GSE was/is perfectly appropriate, politicians ALWAYS find the urge to tamper with rules (all rules and most notably - but forgotten in the current discussion - the tax code) irresistible. As we all know, pols 'bring home the bacon' by channeling money to favored groups. Read that "their voting constituents". That's how the pols purchase votes with public monies.

    Ultimately, GSE's march to the tune of their government 'sponsors'. So the real problem is that the federal government has no business involved in such matters to begin with. Sooner or later they absolutely ALWAYS - without exception - f... it up.

    At some point in these discussions, it is reasonable to ask why Fannie and Freddie became the relatively recent darlings of urban liberal democrats. The answer is simple and obvious... A majority of a liberal democrats controlling Congress tampered with the rules. However, before someone concludes liberal urban democrats means Congressional Black Caucus, keep in mind the big dollar mortgages aren't on modest inner city dwellings. The questionable big buck failed and failing mortgages (no documentation - aka, liar loans, variable rates, 'skip a payment', and other mortgage gimmicks) are found in the formerly HOT real estate markets. The location of recently failed banks is a real good clue as to where the big abuses took place. For example, that big state on the left coast, (home of House Speaker Nancy what's her name) figures prominently in this debacle but it aint loans in places like Compton that are choking the finance system.

    I have no clue how the whole process will ultimately play out but to their credit, a majority of House Republicans remembered yesterday that the more Congress and the federal government meddle in the private sector, the worse things get. It was Congressional meddling that created this mess. I have no illusion that federal meddling will correct it.

    And as a side note, politicians ALWAYS low ball the estimated price tag of legislation. When they say $700 billion is enough, rest assured they absolutely believe $700 billion ISN'T enough.

    sissy
     
  19. bobdog

    bobdog Active Member

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    Here's an uncharacteristically unbiased article from CNN (oxymoronic, I know) written by Harvard economist. Put your political hat away for five minutes and read the article. His take is that we should not do a bail out and should instead let these institutions go bankrupt. Lots of angry folks are yelling that lately, but this guy actually makes a reasonable case and supports it with some clear arguments. And it comes from economics, not politics.

    I don't say it's the only answer, but it's worth five minutes. This guy makes sense.
     
  20. oletymer

    oletymer Member

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    I am waiting for things to really hit bottom. I am looking at 5 or 6 homes that are for sale. When the price seems right I will buy them for rentals. I will pay cash by the way. When the economy takes a beating I make money. Idiots taking on more obligations than they can afford make me money.
     
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