I promise you it will be a lot less than 15-30 years before this comes back to haunt us. Yep...you keep saying that. Then tell me why no other entity on the globe is willing to touch them. No one wants to purchase them and no one is willing to insure them. I'll tell you why. It's called a bad investment. The damn bailout shouldn't have happened overnight. How many of those senators do you think had time to read those 451 pages? Their rush to do "something" only magnifies that these morons are being careless...just as careless as they have been over the last 15 years. I'll be sure to hold my breath on that reform. These financial institutions are getting a free pass. They hold all of the cards in this deal...and they know it. The crooks have the country by the balls and they're squeezing 'em tight. Narrowed my focus...? Not at all. I was sitting in group HQ in Chicago a year and half ago and listened to my CEO predict this mess. To be honest...I never thought it would get this bad but I promise you my focus isn't narrow. I understand perfectly well what will happen if they don't pass this bill. The difference between you and I is that I am willing to suffer the consequences. I believe it would be for the better good of our country. The entire system needs, no..deserves, to be shook up. I still believe it will. We're only prolonging the inevitable and making it even worse when it does happen.
Warren Buffett himself has said that he would take this investment if he had the cost of borrowing & the time-line the government has. Are you going to tell me he doesn't know a good investment? Drive our economy at all. Without credit, businesses cannot grow, new businesses cannot start. That means lay-offs, which then means reduced spending & a full blown depression. I agree that, in general, bailing out companies is bad for the future of our economy & that massive goverment debt is also bad. However, this situation could absolutely be so bad that it is worth it in this instance.
How? These are the same people who thought it was a great investment a few months ago. Most investors are irrational & overreacting. As I mentioned above, Warren Buffett is willing to invest in them. The bailout would have done absolutely nothing if it had happened any later. It had to be done quickly. Not exactly. These companies will never be able to operate as they once did until 50 years from now some other politician thinks it will be a good idea to deregulate them again. What I mean by narrow your focus, is that you seem to keep harping on the residential home side of it. That is not my concern. My concern is credit for businesses. It is easy to say that you are willing to suffer the consequences when you don't believe it will be you who is losing his job... I agree that the system needs to be shook up, but I don't see how the bailout will prevent that. I do not believe the bailout will make things worse by just delaying the inevitable. It will most likely prolong the recession, but it will stop us from going into a depression.
I find myself in the unusual position of agreeing with Mary Landrieu (paraphrasing) "if we don't include reforms, all we're doing is throwing money at the problem."
I do not trust Warren Buffett's motives CParso...so his opinion means nothing to me. You said that I'm not understanding this because I wouldn't lose my job? CParso, I only have a 50/50 shot at keeping my job with the bailout...without the bailout I have a zero chance of keeping my job. I am still 100% against the bailout. My job be damned! I'm scared to death of what type of country my children are going to inherit.
What this whole "crisis" shows me is that our whole economy is based on a giant ponzi scheme. By injecting this liquidity in the manner we are we are allowing that scheme to continue. Is it really so terrible if people can't borrow money for cars and furniture? Is it really so terrible that people can only qualify for mortgages if they have money for a down payment and a good credit history? The ease at which people can go into debt and lax lending standards got us into this mess? This bill does not address the root cause. This bailout equates to nothing more than throwing money in the bush. It has also shown me that there is no fundamental difference in the two political parties. I do get some comfort in knowing that my two senators and my district representative have all voted no. As far as an alternative solution I have heard several that used in conjunction make a lot of sense. Extend FHA type insurance to these toxic mortgages. Mandate that the loans be converted to 6% fixed rate 30 year notes with all back payments rolled into the balance. This should make valuing the notes easier, and give investors confidence as the loans are now backed by the full faith and credit of the USA. Eliminate the capital gains tax on any new investment for the next five years. This would inject billions of dollars into the economy overnight as investors would seek tax free profits. Suspend FAS 157 until there is a clear and identifiable market for these asset backed securities. This would make it alot easier to value these damned assets as they could be valued at cost until there is a market to determine value. Currently FAS 157 is pretty much making these places understate their assets. All of these plans are proposed as separate fixes, but together they accomplish everything this bailout package is attempting without 700 billion in debt.
Neccessary to the credit markets? I'm tired of this gloom and doom that all banks will dry up if this bill isn't passed. It is a total lie.
You each have a piece of it, but the answers lie somewhere in between. The Wall Street Bailout needs to morph into a Credit Relief bill that allows commerce to proceed but with measure to insure the taxpayers recoup the money when the economy rebounds, not the industry that failed. And that industry will have to be more carefully regulated in the future. We must do this to be competitive. Other governments are protecting their economies and we would be fools to do nothing. But Salty has a point about government growth. This credit relief needs to be temporary and geared towards getting back to a sound private credit system that operates within reasonable limits.
Business credit is my primary concern. This bailout needs to be in conjuncture with proper regulation. We all see that.
