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Not the brightest bulb in the packet

Discussion in 'Uncategorized Threads' started by leadhead358, Sep 24, 2008.

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  1. leadhead358

    leadhead358 Member

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    Would you please explain to me how the American tax payer is going to get paid back if this 700 billion dollar bailout. Serious answers please.
     
  2. halfmile

    halfmile Well-Known Member

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    My answer:

    It's a bad idea. Once the 300 Billion for Fannie and Freddie was on the table, all the rest of the rats came with their hand out, wanting some of that nice cheese.

    Now every bank with a bad loan is going to want bailout money, as long as it's available.

    Supposedly how you would get paid back is when the bad debts the government buys get paid off. I am not sure this will happen.

    They are arguing in Congress about how to do this now, and will go on for at least a couple weeks with it.

    The other problem is that a lot of banks have Fannie Freddie stock, as do a lot of American workers' 401K Plans.

    If nothing is done, they will all be screwed.

    If the plan goes ahead, the taxpayer will be screwed.

    Clear as mud, right?

    HM
     
  3. Dr.Longshot

    Dr.Longshot Banned Banned

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    Why can't they just adjust the interest rates on those mortgages to 5.75% and let the people stay in their homes, if they are behind on their payments forgive them, just start making the payments on the 5.75% re-adjusted mortgages and the banks have to take what they get as well as the mortgage holders and no one gets hurt but the crooked lenders, and some of them could go to jail after FBI investigation is done.


    Gary bryant
    Dr.longshot
     
  4. Rico46

    Rico46 TS Member

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    Leadhead, the American taxpayer will get the return on the capital, which means we will have a "solvent system" which will give you, your wife, kids, family & friends etc the ability to borrow for a new car, home, college education etc. The government will get paid back because unlike the S & L scandal the US government actually now "owns" part of Fannie Mae, Freddy Mac and AIG. The payoffs will have timelines and the money will go back in the system where it belongs.

    Rick

    HM,If the plan goes ahead or doesn't go ahead the American Taxpayer is already on the hook. We might as well try to get the system solvent instead of letting it plunge deeper into the abyss.
     
  5. wolfram

    wolfram Well-Known Member

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    You (the tax payer) do not get anything back. That is how it always works with taxes, you don't get a return on what you owe just what you over pay. So the objective of the bailout is to keep you paying taxes which hopefully you will be able to continue to do if a depression is avoided and you get to keep your job.

    Hopefully you don't expect to get paid back for what has been spent on the Iraqi war or for any of the relief programs that follow natural disaters either. The government doesn't borrow money from us, they take it for keeps buts thats okay because they have this machine called the FED that prints as much colorful paper as is needed to maintain the illusion of wealth. Feel better now?
     
  6. leadhead358

    leadhead358 Member

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    rico46, Im still lost. I already have the ability to borrow money, business loan, home mortgage, home equity, wifes college loan, both boys college loans, credit cards and all paid when due. So in your sight I'm not getting anything I do not already have. True? I was thinking of more tax breaks, money every now and then. So I'm getting the old shaft again am I not right?
     
  7. SoftCraft

    SoftCraft TS Member

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    OK so how many of you know how this system really works? Obviously not many. Any home loans currently being funded by FHA etc., were allocated 4 - 6 weeks ago.

    Credit lines are shrinking. Last Wed. morning the interbank loans quit both domestically and internationaly. To day it was announced that B of A cut off all McDonalds franchisee's credit lines. How will they buy supplies? And it gets worse each day.

    If you don't understand that this country is dependent on the credit system to keep the economy running then you need to go back to school. This economy runs on about $2 billion in credit per day. That is a lot of credit lines that run through interbank loans and they are not lending right now.

    This is a very serious situation that needs to be rectified quickly or the entire US banking system will collapse and take the rest of the free market countries with them. (Yes they are all dependent on our system being solvent.)

    If congress doesn't provide an acceptable solution (and I am not saying Bernake's is the only solution, nor is Bush's) then the end is very near.

    Rich
     
  8. Hauxfan

    Hauxfan Well-Known Member

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    Off the top of my head, and without to much thought..........Why don't they just give every family a cool $750,000.00. With that, every family could/should pay off all of their bills including the mortgage.

    But on the other hand, if they did, everyone would quit work and retire and we'd have no one to do any work at all.

    Oh well, better put my thinking cap back on...........lol

    Hauxfan!
     
  9. maclellan1911

    maclellan1911 TS Member

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    sounds more like a reason for big government to own more private land.
     
  10. Dave P

    Dave P TS Supporters TS Supporters

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    And nobody learned a damn thing from the Amcore fiasco!!!!
     
  11. pendennis

    pendennis Well-Known Member

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    Dave P - No one ever learns anything for long. Everyone in this mess either ignored or wasn't aware of market forces. No market ever goes up forever. In fact if they go up for more than 24 months, the investor is living on borrowed time.

    Second, these morons... Pardon me. These a$$holes give morons a bad name. These a$$holes turned a basic need (shelter) into a commodity with no more thought for the consequences than the lead, copper, or oil.

    The $770 billion won't begin to cover this mess, whether other debt is included or not. And it looks like there won't be nearly enough heads rolling in this. We're at the point in this election cycle, where Bush can't do much, and whether it's McCain or Obama, the incoming president won't want to exacerbate and extend the current problem.

    Justice will be short, especially where Fannie Mae and Freddie Mac are concerned. Raines, Johnson, Gorelick, Mudd, and the rest, won't really be punished. And the Congress will fail to deal with Dodd and Frank, who have had ethics problems for years.

    The Federal government created this problem, pure and simple. They created the mess by allowing FM/FM to pollute the market; drove mortgage brokers into insane loans by socializing the markets; and pulling down the firewall between investment and commercial banks. Now, in their solution, they want even more control.

    Dennis
     
  12. Shooting Coach

    Shooting Coach Well-Known Member

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    When my third wife left me, we had to sell and split our real estate holdings, and also retirement accounts. I GOT HAMMERED!

    Where do I apply for GOVT' money? (snicker)
     
  13. Bruce Specht

    Bruce Specht Well-Known Member

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    Did we get paid back for the Chrysler bail out?
     
  14. crusha

    crusha TS Member

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    To answer the original question:


    The banks have portfolios consisting of tons of good mortgages, mixed in with a few bad ones. Those asset portfolios were purchased with borrowed money from creditors at up to 30:1 leverage ratios. When the value of the underlying collateral assets (home values) began to fall, the creditors made the equivalent of a "margin call" and required the banks to keep more capital on hand to cover the loans. They couldn't get this capital without selling some of the assets. Problem is, they can't sell them right now, because nobody knows how to fix the actual value of those portfolios...nobody wants to buy them. The banks get into a liquidity crunch, credit dries up...and you get this unpleasant mess.


    In steps the Federal Government, to buy up some of these assets, so the banks can get liquid again, keep money moving, and keep the economy moving.


    How does the taxpayer get paid? Well, remember, there's a lot of good investments (mortgages) mixed into those portfolios. When the gov't becomes the owner of those assets, providing they get them at a "good price," there is theoretically "supposed" to be some upside potential left in there for the Gov't. to get back more over time than what they paid for them.


    So, whether or not the taxpayers get paid back depends on what price the Gov't. pays for these assets...in other words, the ability of Gov't. "purchasing agents" to fix and pay the "right" price for the assets when the banks unload them.


    ...that's their story an' they're stickin' to it.
     
  15. leadhead358

    leadhead358 Member

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    Now that an agreement has been reached for the bailout and if it passes through congress and gets signed, lets put all the profits, if any, into social security. I think this would be fair for everyone.
     
  16. Rico46

    Rico46 TS Member

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    Leadhead, if the bailout doesn't happen your future ability as an individual or small business to borrow money could diminish or simply disappear. The individual taxpayer like you and I will get nothing back per say, except a solvent system.

    What we got is fleeced by Wallstreet fat cats like our current U.S. Treasurer Henry Paulson. Paulson was the CEO of Goldman Sachs, a company looking to get bailed out. Mr Paulson as the CEO was pushing these worthless "mortgage backed securities" from 2000 to 2006. He leaves Goldman Sachs with a 107 million dollars on a golden parachute to take a $140,000 job in Washington D.C. In a nutshell, since these MBS are useless paper we are simplying transfering taxpayer monies to pay his golden parachute!

    Rick
     
  17. crusha

    crusha TS Member

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    Yep...no doubt about it...the AIGs of the world should be held down and have their guts stripped out.
     
  18. MTA Tom

    MTA Tom Active Member

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    "Paulson Plan is a Big Win for Taxpayers"
     
  19. 12Gagejon

    12Gagejon Member

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    Tell Me if we never get a cent back and we stay a solvent economy this is still a better place to live than the second choice. Jon PS would be nice if a few would go to prison too
     
  20. shooterIII

    shooterIII Member

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    Bruce Spect

    Question.

    Did we get paid back for the Chrysler bail out?

    Yes.
     
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