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When will the US financial baillout occur?


Tiger Moth

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Here is a link previously provided by Chocolate Steve: http://news.yahoo.com/s/ap/20080925/ap_on_bi_ge/financial_meltdown

 

Except for my perhaps naive personal belief that the beat solution if to let market forces play out as they may and that eventually this is in the best interest of the US and its citizens in the long run, I have no claims to be insightful. So, help yourself in offering your opinions. No offense will be taken.

 

It seems to me that the original Bush plan was focused on the financial institutions and did not appreciate the impact on the average citizen. Almost immediately, the reaction on Main Street was, fcuk me, why should I pick up the bill for wealthy, greedy Wall St. execs. Also, there seemed to be a feeling of, if some person took an irresponsible deal to buy a house and some irresponsible financial institution financed them - and now, they want me to pay for their irresponsibility, well, fcuk both of them.

 

As a result of the Main Street reaction (voters), the "leaders" of the US, immediately retrenched and began more closely examining Bush's bailout plan.

 

Bush, the lamest of ducks, calls the candidates to succeed him, to his office for a conference. Now, the Presidential election will take place in, what, 6 weeks.

 

So, Main Street is revolting, politicians are back pedaling, Presidential election candidates have become involved....

 

When do you think a bailout plan that will be approved in Congress will be established?

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Maybe it won't happen. I'm not sure hardcore Republicans will ever agree to it. It goes against everything they believe in. They've suggested a mortgage insurance plan as an alternative to the Paulson plan, plus they want a cut in the capital gains tax.

 

What if there is no bail out? Total financial meltdown? A run on the banks? Dollar collapse?

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The more I think about this the less sure I am. If I was a Republican and thought I was going to lose the election I would be more likely to support it. Let me explain:

The banks are being blamed for this crises but the reality is Governments are as much to blame: they took their eye of money supply because it suited them not to have a recession, be it a small one, so they kept expanding the amount of money in the system but usually when this happens you get inflation. But two thinks negated inflation: the main one was China: by pouring cheap imports into the US and Europe reduced many prices. In the UK clothing prices have gone down over the last few years and as a component of inflation it meant inflation did not show up. The other issue was in some countries housing prices were not included in inflation figures. So house prices kept going up fuelled by lax money supply controls (Government) and belief that houses had to keep going up forever (stupidity). It was a bubble waiting to burst: blame Greenspan. I think nobody was paying attention when these now infamous mortgage derivates were touted and sold: they had to be full of risk if you looked at them sensibly.

Now where we are now is that house prices are spiralling down making many mortgage positions worse and even bad and nobody knows where it is going to stop. Say it was bad enough that house prices, across the country, dropped fifty percent then almost all financial institution would have a problem. Not to mention the chaos it would cause to mobility and confidence. If something is not done that is exactly what could happen. The US economy could drop like a stone and you will have millions out of work: who will buy a car in such circumstances, who will buy furniture, decorate their home etc etc. So the economy would melt down and probable in a couple of years begin to pick up: say summer 2010.

If you bail out the lenders and maybe stabilise housing prices the problem will come later. Put bluntly the government will be short of money: very short of money and party because of that and partly because of what has happened everything will go a little slower, but the effects will be much longer term. It will take probable five years for the Government accounts to get back to where they are now and that is bad anyway. So I suspect that the bailout will haunt the US for ten years and growth will be slow, if at all for the beginning of that period.

If you wanted my best guess as to which is the better: in one yearâ??s time the bail out, in five years time fifty fifty, in ten years time: the bust

 

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I predict a bailout is bound to happen, with some restrictive measures, before next Wednesday.

 

I'm a financial dimwit, but I'm glad to see so many American citizens taking the stance that, "We've already been fucked, so fuck the financial institutions!", and be ready to take their medicine now rather than later.

 

What leaves me scratching my head is that many of these same responsible citizens coming together on this issue would have Sarah Palin as a potential President. Must be the 'can't do any worse' mindset at work. :dunno:

 

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What leaves me scratching my head is that many of these same responsible citizens coming together on this issue would have Sarah Palin as a potential President. Must be the 'can't do any worse' mindset at work. :dunno:

This question leaves most non US citizens scratching their head.

 

It seems that as long as you provide the (literally) 'right' values, experience is not that important and even incompetence is no impediment to get a top job at the US government.

 

I presume in retrospect when historians look at the last two decades of the US government, they will concede that the vast influence of the republican/hardcore capitalist and religious values (unregulated capitalism, pseudo 'lean' government, christian fundamentalist values deciding laws and action, reducing freedom rights) combined with moral and monetary corruption (K street, big oil, e.g.) on all governmental levels led to the demise of the USA as the global super power.

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No the failure is of democracy. The democratic leaders the west is electing are, on the whole, incapable of running a corner shop. Look at the US election every move ever made by the candidates is raked over and raked over and twisted: only a goody goody who has lived in a shoe surrounded by cotton wool will be prepared to have that examination. Real people make mistakes and pinch bottoms when drunk.

In addition politicians have manipulated the economies to suit their ends. They are not realistic and just want to get re-elected whatever the cost to the country. Just look at Brown in England and the so called democratic elected crocks of Thailand for examples. One thing that should come out of this is to question whether elected politicians are really safe with the economy â?? they are not!

 

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No the failure is of democracy. The democratic leaders the west is electing are, on the whole, incapable of running a corner shop. Look at the US election every move ever made by the candidates is raked over and raked over and twisted: only a goody goody who has lived in a shoe surrounded by cotton wool will be prepared to have that examination. Real people make mistakes and pinch bottoms when drunk.

In addition politicians have manipulated the economies to suit their ends. They are not realistic and just want to get re-elected whatever the cost to the country. Just look at Brown in England and the so called democratic elected crocks of Thailand for examples. One thing that should come out of this is to question whether elected politicians are really safe with the economy â?? they are not!

 

Sir, I beg to disagree. It is not a failure of democracy in general, but the US democratic and electoral system. The US are the only country which is spending around one billion USD just for the election campaign and which is so absolutely centered at the media. Also it concentrates much more at the personal life of the candidates (family, religion, e.g.) than in other countries. This fact seems to overshadow any political program.

Also the US has an outdated system with the two party rule, with outdated voting machines, e.g.

 

Other democracies are functioning much better. Of course corruption, cronyism and incompetence is everywhere, but it seems to have more devastating consequences for the USA compared to other industrial nations.

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The US people elect a personality not a skilled intelligent individual, bestowed with the virtues of integrity and honesty. Also, power corrupts....

 

That's the main problem IMHO.

 

Nice cartoon J2...maybe that's what RY is doing...denying any affiliation with the lunatics who are running the asylum. The games up! Argument lost.

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