Posted on 09/24/2008 11:10:00 PM PDT by Revel
Bailout Could Deepen Crisis, CBO Chief Says Asset Sales May Lead to Write-Downs, Insolvencies, Orszag Tells Congress
By Frank Ahrens Washington Post Staff Writer Thursday, September 25, 2008; D04
The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis.
During testimony before the House Budget Committee, Peter R. Orszag -- Congress's top bookkeeper -- said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.
"Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values," Orszag said in his testimony. "Establishing clearer prices might reveal those institutions to be insolvent."
More.....
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092402799_pf.html
(Excerpt) Read more at washingtonpost.com ...
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
economists suck
Ever have a feral cat that you leave a bit of milk out for?
They always come back.
Pretty soon the skanks will overrun ya.
Absolutely no doubt if this goes through, it will be the first of many, many more.
There will be a lot of crawly things coming out of the woodwork before it’s all over.
Now you know why Henry Paulson does not want to establish real prices on these things. He wants to buy them at very inflated prices.
Finally someone with insight into the obvious!
The self-interested, fear mongers will hate this.
If the housing crisis caused the very real possibility of our entire economy collapsing then can someone please explain to me how this could occur?
My point is that you could take ALL of the troubled mortgages in our nation, pay them off, and apply a fresh coat of paint for about $250 billion total.
Not to mention the fact that President Bush signed a $300 billion dollar house rescue plan on July 30, 2008 that is set to take affect on October 1st.
It take trillions of debt to crash an economy the size of ours. Where is that debt coming from?
I know the answer, I’m just trying to see if my fellow FReepers understand the real problem going on right now.
It’s called leverage. For every dollar a bank has, it can lend out ten dollars. That means at the very least, even if your numbers of $250 Billion are correct, it represents 10 times that much in actual credit the banks have loaned out based on those $250 billion in mortgage backed securities that they are holding on to.
And the investment banks were even more highly leveraged than the deposit banks.
The elite can’t build up their Swiss bank accounts like that! Get with the program. If Bush says this is the only way how could he be wrong?
No one is asking the question
IS THIS 770 BILLION, THE LAST MONEY WE WILL HAVE TO SPEND?
Not to mention the fact that President Bush signed a $300 billion dollar house rescue plan on July 30, 2008 that is set to take affect on October 1st.
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INteresting
try this for instance
http://www.freerepublic.com/focus/f-news/2089982/posts
the first,second, third of many.
I think you are right. Its the unacceptable face of capitalism. These financiers have been making dodgy deals and lining their own pockets at the expense of honest businesses (and working joes) for years, and now the whole house of cards is teetering.
These folk need prosecuting. It doesn’t matter if you take money with a shot from a gun or a stroke from a pen, theft is theft.
NZ, do you think the current Bailout plan will even keep the economy functioning for more than a few months?
Or does the Plan have a real possibility of propping the world economy long enough to reform and recover?
Cleanup on aisle 2...
Chickens coming home to roost at the book-cooker’s desks.
That is because the housing rescue is worthless. It has further reduced the eligible buyer pool to soak up the excess housing inventory. The $7500 tax credit loan is a sham, and they are raising the cost of credit with Conforming and FHA loans.
This bailout is going to spike the market higher on Day 1 and 2 and then level off for a week or two. Then in mid October, the bottom is going to fall out because a ton of banks will become immediately insolvent the minute the first trade in the auction hits.
One OUT that I have heard discussed, is removal or altering of the mark to market accounting rules on these assets. That rule change in and of itself would do more to save the banks than the $700 billion would.
“One OUT that I have heard discussed, is removal or altering of the mark to market accounting rules on these assets. That rule change in and of itself would do more to save the banks than the $700 billion would.”
I had heard about that but not sure if it’s being considered. If true, it certainly should be.
Also, I heard Newt say something about doing away with capital gains being something he would include.
I hope someone is paying attention, because the dems want to own the solution, which can’t be good for the country.
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