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 ...
IN the end, the Resolution Trust Corporation worked.
If we can do this like we did that, it’s not a bad solution.
Of course, there are no details.
Seems to me this is the difference between getting food poisoning and living through it now (RTC-type solution) or eating arsenic and hoping they can bring you back to life later (letting the banking industry fail).
In many areas, the property will bring at auction 60% or less of the face value of the mortgage. The question is, do the taxpayers become the bagholders for that 40%?? We already know the answer, don't we?
Correct.
Hank Paulson's New America:
- You are born in the State Owned Hospital, which was nationalized due to the Health Care Cost Crisis
- You attend government schools, of course, which were the first of the Great Socialist Entities
- You live in government owned housing, because of course, Private Ownership Is Far Too Risky. Of course, you must be an obedient little Prole, or else No House.
- You buy your insurance from the State Owned Insurance Company, because of course, We Must Not Let The Insurer Fight the Ill Winds of Competition. They're Sacred, ya know.
- Your job as an adult will of course be in the Bowels of the Benificent Government, which Owns All, For the Good of All.
Ah, the New America...Land of the Free, right Comrade?
The government surely helped greatly in causing this problem with loose money, requirements of lenders to loan to people who didn’t deserve it, servicing Fan and Fred’s house of cards, and bad accounting rules.
That the Government then has to clean up a mess that big is probably inevitable.
But will they learn?
No. Get ready. Money is loose again, and the next bubble is being inflated somewhere right now.
My only concern for the Dow is that is behaved exactly the opposite of the way that it needed to today. I already know which way it is heading over the coming 6 months - and that is trending down.
My main concern is for the citizenry of this country that don't have a clue as to what just happened. If they did, there would be a march on Washington with sharp pitchforks.
“It feels like an Ayn Rand novel. The looters, in bed with the government, are running the show.”
(Shrug)....LOL
What shall we call this new ‘entity’?
Perhaps the ‘Department of Redistribution’??
In many areas, the property will bring at auction 60% or less of the face value of the mortgage. The question is, do the taxpayers become the bagholders for that 40%?? We already know the answer, don't we?
YEE-HAA!
I don’t see any light at the end of the tunnel.
You're exactly right. But the problem is that our U.S. government fraudulently forced them to, yet again.
As in National Socialism.
So we appear to both be right.
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It is true that this rewards the bums (i.e. Obama voters) and penalizes — over the long term — the responsible.
There is no ideal solution, but the alternative of letting the banking system to collapse is too scary to contemplate.
Those who think letting the banking system collapse will return us to old fashioned capitalism are dead dead wrong. It would instead lead to a new wave of FDR style socialism.
Worked for who?
This is a little like old age (a RTC type entity) and death (do nothing). It is not great but it does beat the alternative!!
One of the smarter posts I’ve seen on this thread. Thanks!
Tell that to the shareholders and bondholders. Our government should not be given the power to decide when it is "proper" to take over a private company. If a company does poor business, then it fails.
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