Posted on 09/26/2008 8:35:05 AM PDT by SE Mom
“My only fear is that the grassroots Rublications (read most Freepers) will continue to resist this”
From the populist rhetoric I’m not sure most people are educated enough to understand it. People that think the government spent $85B on AIG are a good example of the latter.
Frustrating.
The theory is that if you make the mortgages whole (current) then the really bad stuff, the CDSs, are not so bad.
The free market is the best determinant of fair price. List them on eBay.
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Free market theory doesn’t work in a distressed environment. Consider you own a house in a development of 100 houses each valued at $100,000. 20 of your neighbors need to sell at distressed prices of say $50,000. Is your house now worth $100,000 or $50,000? Now let’s say that those 20 forced sales cause another 40 to sell at $30,000. What is your home worth now? This is a panic situation. IMO, if you are not forced to sell, the value of your home will return to a more reasonable price (maybe not $100,000 but surely more than $50,000). The market needs to be calmed before prices can return to a more appropriate market value.
Well done John McCain. Well done Leader Boehner and House GOP!!
Well done John McCain. Well done Leader Boehner and House GOP!!
Why would grassroots Republican and most FReepers, in your words, resist this plan? Especially when looking at the charity bailout alternative? Your post does not make sense to me.
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Believe me, I would love to be wrong about this. But looking at the responses on this thread and others I just see so much resistance to any sort of plan. These resisters think we are blowing smoke about the severity of this crisis to both Main Street and Wall Street.
“The market needs to be calmed before prices can return to a more appropriate market value.”
I’m not sure what your definition of propriety is. The most anyone is willing to pay for something at any given time could be considered the fair market value. It might make sense to make sure that amount doesn’t swing too radically over time. It’s not self-evident to me that a massive infusion of thousands of dollars from every man, woman, child and infant in America passes a cost/benefit test. It certainly bears some careful scrutiny by people acting in our interest.
“The market needs to be calmed before prices can return to a more appropriate market value.”
I’m not sure what your definition of propriety is. The most anyone is willing to pay for something at any given time could be considered the fair market value. It might make sense to make sure that amount doesn’t swing too radically over time. It’s not self-evident to me that a massive infusion of thousands of dollars from every man, woman, child and infant in America passes a cost/benefit test. It certainly bears some careful scrutiny by people acting in our interest.
I am so confused on what’s going on. Where does this 700 billion go?
The best analogy is a line of credit. The government is borrowing money to set up a LOC to buy at a very low price then re-sell the securities and derivatives that are not jammed up in the banks, brokers and hedgefunds. The banks, brokers and hedgefunds have them on the books as assets they can lend against but no body knows for sure what they are worth so the lending gets slowed down - dramatically. What the government is proposing is to use the $700B LOC to buy these when nobody else can or will and therefor get them cheap and sell them back in a more orderly market.
Learn about 401Ks. It is tax law not an investment vehicle. You actually cannot invest in or put money in a 401K. That is a nonsensical statement. A 401k is a legal construct that allows some of you money to go into investments that are not taxed until later.
I am so confused on what’s going on. Where does this 700 billion go?
The best analogy is a line of credit. The government is borrowing money to set up a LOC to buy at a very low price then re-sell the securities and derivatives that are not jammed up in the banks, brokers and hedgefunds. The banks, brokers and hedgefunds have them on the books as assets they can lend against but no body knows for sure what they are worth so the lending gets slowed down - dramatically. What the government is proposing is to use the $700B LOC to buy these when nobody else can or will and therefor get them cheap and sell them back in a more orderly market.
Learn about 401Ks. It is tax law not an investment vehicle. You actually cannot invest in a 401K. That is a nonsensical statement. A 401k is a legal construct that allows some of you money to go into investments that are not taxed until later.
“Why not just let these people be able to re-finance their homes or adjust the payments to what it used to be so we can keep the 700 billion?”
Many, many of these people would never qualify for a mortgage,UNDER ANY REASONABLE ASSESSMENT OF RISK, let alone for a re-fi. But reasonable assessments were tossed out the window by lenders who repackaged the loans & sold them. Fannie & Freddie “bought” billions of these mortgages. So F & F got “stuck” with a gazillion bad loans. Everyone who invested in F&F lost money. Which includes some global payers. And most likely, includes the companies/firms that manage & invest your 401K.
The 700 billion is a guesstimate as to what would have to be poured back into the market to “correct” the losses
suffered b/c of BAD INVESTMENT STRATEGY. So the question is: should the American taxpayer foot the bill for these players?
Don’t forget: by default, your a player, too. Even though you might not have known it.
Okay, now I think I understand. You feel many on the right are resistant to any type of bailout at all, whether principally a government or private bailout. Yes?
Okay, now I think I understand. You feel many on the right are resistant to any type of bailout at all, whether principally a government or private bailout. Yes?
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Yes. I am reading a lot of posts that just say “stick it to those fat cats. We want to see them suffer.” While I believe bad behavior should not be awarded, this type of class envy will drag us all down.
It is interesting but not surprising that this is not getting out in the media. Reagan always went directly to the American people and that is what he should do during these debates.
The Palin pick got me to support McCain but going against the Dems and this $700B tax payer Wall Street bailout will get me to “fight for him.”
The dems have a majority, they could pass this by themselves, they want political cover, because it’s unpopular, and they want to shift blame if it does not work.
I know Bush hired him to get Wall Street cred ... but seriously, how much cred does a guy have if he’s the former CEO of one of the first companies to go under in all of this.
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FYI, Paulson was CEO of Goldman - one of the last firms standing. Nevertheless, I do have my doubts about Paulson, it does seem that he is serving Obama’s interest more than Bush’s. I am not sure if it makes sense to let him go during a market crisis like this. Do you know anyone that would want to jump into this mess??
Some people had better be going to jail over this bullsh*t...
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