Posted on 09/20/2008 10:17:51 AM PDT by Fox_Mulder77
Further stress on the nation's financial markets could reverberate and "cause massive job losses, devastate retirement accounts, further erode housing values, and dry up new loans for homes, cars, and college tuitions," Bush said.
I amazed he got that whole sentence out without one of his usual mistakes that end up on Letterman.
And the subsequent lending crunch will mean that will have to save more to qualify for a normal, non-subprime loan.
Thank you, a$$holes.
Don’t think about it too hard or you will go psycho.
It looks like they are planning to buy the bad assets, and then pay the folks who made the bad loans to continue to manage them. It’s a win-win for the banks.
How many bank/S&L crooks is it that Bush has pardoned?
“We’ll have a government run banking system for the first time since the United States Bank in the 19th Century. “
We’ve had that since 1913. The Federal Reserve.
and where do you plan on spending a fraction of an ounce of physical gold or silver on staples if your checkbook and plastic are worthless?
This whole rollercoaster ride is terrifying, and I wish I could find the exit door. But, as you observed, this Section 8 is the one that made my heart stop.
.. Section 8 will become a new catchphrase, they could have at least thrown a little leavity our way and called it “Catch 22”
LOL U’ve got a point!
I totally agree with your sentiment and your conclusion, with one exception: If we let it die (and I think we should), we'll be suffering for much much longer than the short term. But long term suffering is truly the only viable choice if we're to preserve our Republic. I don't see that happening, however.
could reverberate and “cause massive job losses,
Nah.....that was caused by GATT, WTO, NAFTA, MFN, etc etc etc, all of which in effect exported the American market as well jobs and tech, not to mention our REAL former strength, which was our late great industrial base.....
“All this proves to me is that the banking system, as we know it, is dead and gone.”
Uh ... no. This actually preserves it.
What has been done here is the federal govt is providing liquidty in the market for toxic derivatives and bad mortgages. In doing so, they are stabilizing as system that had ‘seized up’ due to the lack of liquidity and buyers for this stuff. the price of this ‘good deed’ is to add billions to our national debt.
Yes, this is not a good option, but good options ran out when banks started going under. The choice would be to see more banks go under due to lack of liquidity, see the stock market and economy tank, and consequently we’d see a global slump. After about 3 years we’d get through the ‘pain’.
I would add that ‘trust’ is not an artificial construct as lack of trust changes investment decisions. Adding ‘trust’ to markets via govt intervention is not fakery, but the real stabilizing factor that can end panic phases of credit cycles. Had the govt been this interventionist in 1930, we probably wouldnt talk about the great depression (never mind that govt created the great depression with 3 actions: high tariffs, high taxes, and overly tight deflationary money policy; my point is the *right* govt policies will make the difference between depressions or not.)
“3. But really, the banking system has effectively evaporated. At least that’s what this bill tells me. “
Again, no. the banking system will endure, but it would have been greatly damaged without some aid.
I would also add that $700 billion is the holding limit in the bill. People assume that would be the cost incurred, but it would likely be less if/when the Govt buy at market-stabilized prices and takes their time to resell at reasonable price. I won’t give an estimate on real cost, but leave that to some economists/analysts to estimate. I don’t know.
“If it’s not gone, this is the greatest power grab of the executive branch since the CIvil War”
I dont see it that way. The structure is not much different from RTC in the last 1980s for S&L bailout. This is just the bailout part, This is the authority of the Govt to in effect buy up at a steep discount distressed financial products. I dont see much regulatory/power stuff here. That could make a difference if we start adding moreregulations on investment houses. That could be counterproductive (as Sarbanes-Oxley has been in some ways by scaring off the IPO market).
” and the quality of our representative republican form of government just got downgraded like AIG.”
hyperbole. Our govt spends $3 trillion of other people’s money each year. a $700 billion bailout is huge, but hardly novel of the govt to take from peter to give to a supposed ‘good cause’. $200 billion for katrina, $500 billion a year for medicare, $800 billion a year in domestic spending, a $200 billion farm bill, etc. ... easy money come, easy money go.
My only concerns are the moral hazard aspect of this and the question of what it does to our long-term financial stability.
“Section 8 will become a new catchphrase, “
A Section 8 discharge from the miitary is (or at least WAS) based on mental health.....and I think there is some form of subsidized housing called section 8 as well......perhaps the authors are a bit cynical, hmmmmm?
Be careful - they might reinstitute debtors' prison.
We have to stop this plan. This is horrible beyond belief.
Exactly.
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