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Bush bailout for Dummies


Tiger Moth

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Without doubt there was real danger that there would be a significant financial melt down which would have impacted on everybody poor and rich.

It is easy to criticize but in the end I think there was no realistic alternative.

The lessons to be learnt should be that boom and bust is a natural phenomena and trying to stop periodic cycles is stopping something that is a fundamental and the result is that bust will happen but the longer you stop it the bigger it will be in the end.

Also the idea that everybody, however stupid and irresponsible they are can have a freehold property is unrealistic.

So politicians and not just Bush have caused this and it demonstrates, if ever it was needed, that career politicians are not safe with your money!

Ironically all this started with Bush senior who failed to get elected into his 2nd term because of an economic downturn. Ever since then the buzz words in politics have been: "its the economy stupid!"

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Can you explain it to/for us?

 

If you had any interest in the truth you wouldn't be popping off with nonsense.

 

 

I own a business and would like it explained also. Please tell. We will listen.

 

P.S. Please list all of your qualifications.

 

 

Asinine answers I accidentally see from "that guy" when he is quoted, are why I have him on ignore. Just sick of the "...I can't answer a simple direct question on something I claim to know about, so I will make a frail attempt at an insult..." It/he just get boring after awhile.

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Without doubt there was real danger that there would be a significant financial melt down which would have impacted on everybody poor and rich.

It is easy to criticize but in the end I think there was no realistic alternative.

The lessons to be learnt should be that boom and bust is a natural phenomena and trying to stop periodic cycles is stopping something that is a fundamental and the result is that bust will happen but the longer you stop it the bigger it will be in the end.

Also the idea that everybody, however stupid and irresponsible they are can have a freehold property is unrealistic.

So politicians and not just Bush have caused this and it demonstrates, if ever it was needed, that career politicians are not safe with your money!

Ironically all this started with Bush senior who failed to get elected into his 2nd term because of an economic downturn. Ever since then the buzz words in politics have been: "its the economy stupid!"

 

 

This is more less how I see it as well. Although I do see it a bit as "locking the bar door after the horse was stolen." I can't believe all the "experts" didn't see this coming, and thus try to prevent it. The bail out, while needed for certain, may have been fore seen, and thus provided the guilty parties with an excuse to keep it all going that much longer.

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Can you explain it to/for us?

 

I am well aware the fallout of their collapse would be fierce and far reaching, but I mean all the subtle crap the rest of us don't get.

 

OH, hereâ??s an example. Businesses large and small lose their pension plans, 401K holders lose their retirement savings, companies canâ??t get insurance. Individuals and businesses find it increasingly more difficult to obtain credit. Since airline travel revenue is heavily dependent upon business travel, an airline will see itâ??s passenger loads decrease (a la post-9/11); leisure travelers who often use credit cards will not use their precious credit for what is a discretionary expenditure. This will further decrease revenue for the airline. Less tickets purchased means fewer boarding passes printed, so printers will either end up laying off employees or folding. With fewer passengers transiting the airports, those who work in the stores may find themselves out of jobs due to insufficient revenue to keep those bandits in business. Luggage companies will sell less luggage and shut down/reduce production or lay off employees at the manufacturing, wholesale and retail levels. Cabbies will have fewer fares at the airports. Airline personnel will be affected due to decreases in passenger miles. People losing jobs may mean they canâ??t afford their mortgages or car payments and lose their two most-coveted assets. I could go on and on and on. Just used the above to bring it closer to â??homeâ?Â.

 

That is just for starters. People can forget about all these promises Obama and McCain are making now as to health care, green jobs, tax cuts, etc. They won't be in the works for the next presidential term. After Uncle Sam is finished buying up all the paper it appears poised to purchase, there won't be any money in the bank to carry out the initiatives "promised". That's not to say that Uncle Sam will lose all of the money it's putting into these portfolios. It might just happen that some, if not a substantial amount of monies will eventually be recovered. In fact, some "experts" have gone so far to say that some paper may turn out to show a positive return.

 

I'm just saying that there are so many cynical, sad old men (SOM's) here that just bitch, complain and blindly blame Bush and others for every "crisis", that it's almost embarassing to be associated on the same board with some of them.

If I were a cartoonist, I'd have a field day with some here.

 

HH

 

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I'm quite convinced that some drastic action needs to be taken to avoid a cascading and debilitating series of crises. But the more I look at the Bush plan, the more wrongheaded it seems. But if I'm understanding this deal, the taxpayers are going to pony up close to a trillion dollars to take bad debts off the hands of financial institutions who were foolish enough to make the deals in the first place. And in exchange, I think the tax payers get nothing? Sebastian Mallaby makes the good point that this is radically different than the Resolution Trust Corp which was liquidating the assets of thrifts that had already gone belly up -- paid the ultimate price, as it were. And as the insurer on the accounts, the government inherited the assets anyway. It was just a matter of selling them off. But here the point is to take these bad debts off these companies' hands so they can go back to being profitable businesses. This is moral hazard on steroids if I'm understanding this right.

 

Despite your alarmist speech HH, I'm still seeing nothing more here than corporate welfare and a payoff to the GOP's buddies at your's and my expense.

 

Also, according to the WSJ, finance industry lobbyists are already giving orders to Republican hill staffers not to allow any meaningful reforms or protections for taxpayers. So, just the money. No strings attached.

 

[color:purple] House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.

 

"We're opposed to adding provisions that will affect [or] undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers.

 

A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.[/color]

 

The key clearly is how much the government pays for these distressed assets. They may be bad debts, but that doesn't mean they have no value at all. Bought at the right prices and given time on the books -- which the government is uniquely in a position to allow them to do -- the government could even turn a profit on some of them. But the key is at what price they're bought and whose get bought. That seems like precisely the kind of process that requires oversight and accountability to make sure the taxpayer doesn't get fleeced. And we know how well Bush & the GOP do with oversight. :banghead:

 

Cheers,

SD

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