My take is that there are times when government intervention is needed. If done properly, it does not turn to socialism or result in astronomical costs to the taxpayers. A key difference between this crisis and the S&L was that the S&L had a guarantee behind it. The RTC was required to pay depositors 100% but was selling the assets for 30% or so. In this case, the government will be buying assets that are already marked down (perhaps to 35%). It is quite possible that if the taxpayers don't panic that they can actually MAKE MONEY on this deal.
I would like to see others do some research on this.
Don't think so, actually value of the millions of homes could be well below the base year value of 1996 or 1998. Most all appreciation from that point on was bogus. If the time and value of money during that period of time means anything.
A few points:
1) This will absolutely dwarf the RTC bailout.
2) The government does not have the time to set up an RTC-like organization. The old RTC took almost 2 years to get set up. Therefore, they will just give the "power" to some organizations (likely the Fed, Fannie Mae, and Freddie Mac) to accomplish their foolish "goals".
3) Everyone needs to remember that this bad debt that the government (we) are taking on does not currently have "value" assigned to it. In other words, they have no clue what, and how much, they are dealing with. Without value, it is impossible to say that there might be a profit on it (There won't be).
Seems to me that with the debt now to be $11.3 Trillion and not a large part of that debt will be in bad debt securities, it’s just moving a past due bill from one dresser drawer to another. It will still come due at some point. The largest problem is no one really knows how much the bill is for.
They are too busy:
1. Getting on their makeup
2. Getting their hair done
3. Preaching their opinion to viewers/readers
to bother with actual reporting.
I am not a big fan of bailouts either, but when the government steps in an says you need to lend money to these people with little prospect of paying it back, then we unfortunately need to make good on the peoples business we regulated into losses.
Additionally while the economy is strong, we don’t need to undermine with undermining the confidence in the financial markets.
Yeah there were some stupid RINOs on board with handing out free money ... You can probably name them off the top of your head.
Two questions, why aren't cells for the CEOs being prepared next to Ken Lays and why are the Democrats in Congress getting a pass?
A video that explains all, some really bad language at the end ...
Some are saying that the taxpayer actually made money with the first RTC as well but I haven't been able to find facts to back that up.
There are two different accountings of this, and you really need the facts to extend to 2001 when a huge amount of money was returned to the treasury, causing a actual surplus in that year. I think they took it on the 2000 books and the 2001 books which both parties claim to be their good work for the taxpayer and in reality it was a one time gain related to the RTC disposal of it's assets which had been transferred to another govt division in 1999 and do not show up as RTC assets.
You could piece this all together if you had the people in charge do it. It's really the only way you will get a answer because both parties in two administrations made sure that the money accounting was screwed up in their favor.
That's my take on it, and I think one could say accurately that the Fed actually made out pretty damn well, after it was all said and done, and the actual cost to the taxpayer was either negligible, or they made a small but important profit.
I was with an accounting firm that was heavily involved in the S&L scandals. Same kind of attitude that’s reared it’s ugly head in Enron/Anderson and now this. Greed, politics, incompetence, and a look the other way attitude. Partners looking out for themselves and each other. To hell with everyone else.
Same thing will happen here. Taxpayers have to clean it all up, some will make a killing on the clean up, new regulations to try to stem future abuses.
Then another set of politically connected crooks will start another scandal on down the road.