Posted on 09/18/2008 12:38:31 PM PDT by politicket
NEW YORK (AP) -- Wall Street surged higher Thursday, with the Dow Jones industrials up more than 400 points after a report that the federal government is considering creation of a repository for banks' bad debt. CNBC said Treasury Secretary Henry Paulson is considering creation of an entity like the Resolution Trust Corp. that was formed after the failure of savings and loan banks in the 1980s.
(Excerpt) Read more at biz.yahoo.com ...
and if there is no bailout you would probably lose your job, have diffculty paying the rent and finding money for food!
I agree that we need to ferret out the thieves and slackers but I am not willing to cut off my nose to spite my face.
All the more reason to send a major signal to Washington this November 4th that we’re tired of business as usual.
We’re tired of “quasi-government-agencies” which exist only to line the pockets of left-wing congress-critters who in turn use that money to purchase the votes of left-wing radicals like ACORN.
We’re tired of congress critters telling us how to run our businesses, to whom we can and cannot sell, the price at which we can sell, how much of the profits we might be allowed to keep, etc.
While we’re at it, lets also tell the congress-critters that we don’t need them to tell us how much we can smoke or drink, how much trans-fat or how many hamburgers we can eat or how much “community service” we need to do if we want to go to college.
As to your specific comment about the crooks keeping their jobs, I’m all for impeaching Dodd and prosecuting Obambi’s advisors Raines and whathisname.
The American Government is just experimenting with globalization and business in the third world. Our government is just allowing the American people to be the “fall guys”. Barney Frank says that the third world countries involved in this should be sharing with the bail outs, but they have been let off scott free.
I pray that it's a short-term hold proposition for you my FRiend.
When large holders of stock need to liquidate their positions they do it in exactly the way that we say today.
Here's a question for you: Have any of the financial dynamics of the troubled financial institutions changed over the last 48 hours for the positive? I think that an honest answer would be "No".
Another question: Have the problems in the derivatives market, especially surrounding huge amounts of highly questionable credit swaps improved over the last 48 hours? Again, I think an honest answer would be "No".
Why then, would anyone be buying in this market, except for speculative greed?
The distinguishably being...? /s
I often forget how difficult it is to imply sarcasm with the written word. Yes, I forgot my /sarc
Just so you know where I'm coming from - I too have a financial (and some insurance) background and have spent the last 7 years working with an organization that daily interacted with top investment advisers (typically VP and higher) across the broad spectrum of financial houses.
I know the pain that would be caused by "letting it happen", but I also know the greater pain that will be caused by "not letting it happen". People need to quit looking at this as simply a mortgage crisis. It is much, much bigger than that. Incredibly bigger.
And no, I am not short the market. I went to cash at the end of last year and have since picked up a few commodities, but not much to speak of - more as a hedge against inflation.
you are assuming that the market was valued properly yesterday.
No doubt the industry acquiesced (what other choice did it have?) to Carter’s Community Re-investment Act (CRA).
Raines exacerbated the problem by deciding that Fannie wasn’t sexy enough as it was and needed to show consistant Q-over-Q profits (not to mention his bonuses were based on EPS) leading to all the book-cooking that Dodd was paid to overlook.
You do mention something that I had neglected (for lack of space) to mention: the culpability of S&P and Moody’s in rating those bonds AAA. Obviously, the fact that Fannie and Freddie were QGAs kept them from looking more closely at what they were rating.
As to your derivatives point, they are just that: derivatives. Their value is a function of the value of the underlying securities backing them. The problem today is that no one knows the value of those securities. By giving those securities a value (even artificially by pulling a number out of a hat) the derivatives can be valued on that basis and we can move forward.
It did what it set out to do, and then it disappeared.
It unraveled the S&L mess, or at least managed to make it look like it did so.
I’m not an economic expert, but after seeing this “break”, I tend to agree wih your post!!
We agree that this is much bigger than a mortgage crisis.
And, now you even need to fearful of your cash position. If you have it in a money market fund it might break a buck. If you have it at a bank, there could be a run on the bank. If you have it under your mattress, it could even up not being worth the paper it is printed on.
Stupid lending practices, deadbeat borrowers, a declining real estate market, and short sellers have brought us to this. Imagine what happens if the entire deriviatives markets starts to unwind!
thanks much!!
The FED buys to debt of failed banks and sells the assets at pennies-on-the-dollar to other entities/corporations.So, in effect, the taxpayer gets the bill (bad debts) and corporate stockholders get to buy the assets -- usually at a single-digit percent of the actual asset value.
Then this is a resounding success. Eventually (probably sooner now), congress will catch up on the exotic financial acrobatics going on for the last ten years and put a stop to it, but in the meantime money needs to keep moving. Investors have already been bitten anyway and will not immediately make the same mistake, so it's not like we will continue back on the same course.
The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed the Glass-Steagall Act...The interesting element, that many fail to mention, is this:
The bills comprising the act were introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA). The bills were passed by a 54-44 vote along party lines with Republican support in the Senate and by a 343-86 vote with bipartisan support in the House of Representatives. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. It was signed into law by President Bill Clintonon November 12, 1999.
If you’re a citizen of the United States, you ARE in charge. Starting with your elected officials— they need to be instructed in no uncertain terms its time for impeachment of the elected in this mess, and firing of the bureaucrats colluding with them, along with a trial for subversion or treason, let the AG decide.
We’re all sitting here complaining but the one thing that would fix stuff in a hurry, citizens doing their civic duty to protect the Constitution, just isn’t happening, is it.
I don't think these guys are getting off "scott-free", even with a bailout. Their stocks have already tanked, housing is down, commodities are down, and foreclosures are up. Sure the government absorbed some of the hit, but it's not like their stock price is being propped up, or their bonds are back to AAA ratings.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.