Posted on 09/21/2008 8:32:53 AM PDT by Flavius
Treasury Secretary Henry Paulson said Sunday that foreign banks will be able to unload bad financial assets under a $700 billion U.S. proposal aimed at restoring order during a devastating financial crisis.
"Yes, and they should. Because ... if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution," Paulson said on ABC television's "This Week with George Stephanopolous."
(Excerpt) Read more at news.yahoo.com ...
Stupidest thing ever said on FR.
Congrats.
No, actually this is making sense. Correct me if I'm wrong but the last time we had an RTC the Japanese got royally burned on land deals. Is this something similar to that?
The trick is knowing how to get in line to snap these up from the Fed. Anyone think they'll allow the public to the auctions or selloffs?
Thank you for a rational response.
Just bailing out Al Qaida so they can build more bombs.
was it the black tulip that brought the most value?
i forgot there was one that was like very expensive well, until it all crashed
not sweet bailout for weeds i tell ya
Absolutely not.
No.
No.
Those countries have tax bases of their own, let them sort it out.
No way.
Not close to being acceptable.
Harry, I agree the idea of bailing out the foreign institutions is a terrible idea. If we are going to write the checks, let’s prop up our own banks and make them more powerful vis a via the world.
The problem is however that all of our prosperity the last 5-10 years is courtesy of foreign investors financing our national debt. And this new $700b in debt won’t be bought up by investors here. We don’t have the money.
Something tells me in the last 48 hours a number of central banks and foreign governments called up Hank and told him that if the plan only helps US banks, you can forget the world buying anymore treasuries.
I’d still though limit it to US Banks and take my chances for now.
Under this new “regime”, defaulted debt is actually worth the same as cash. Because cash currency is the promise to pay via the Federal Reserve, but defaulted debt has been promised to be made whole by the Treasury. They are thus equivalent. Even more remarkable, bad debt is unquestionably worth more than performing debt, because defaulted debt is now backstopped by the Federal Government, and performing debt is only backed by the borrower! So defaulted debt is worth exactly the same as a T-bill or government bond.
Put that in your pipe & smoke it.
Why should the government be a buyer?
*************
To prevent another Great Depression.
that actually makes sense
im just confused with that 145Trillion outstanding, now with US pumping out 12Trillion as GDP its really not that bad
however none of that 12T is going to debt repayment like any average deadbeat that was not allowed to go bankrupt would do
so again what is the next scam i really want to be ahead seems there are great ways to make cash vs actually working
UBS and the rest didn’t have any problem buying this stuff up when it looked like easy money. Let them sort it out, it’s really not our problem.
I see your point about foreign investment, but I think they’ll still buy our treasuries when it makes financial sense. They can’t not, really. When it comes down to money or politics, money will win.
I suppose there might be a meaningful threat of de-pegging to the dollar in some foreign markets. The rumbling has been there, and it might even make sense to do so objectively.
If we have to pay that price, then so be it. We can’t bail out foreign banks.
Have you seen this line from the proposal making the rounds ? “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
That’s the truly terrifying line. Though I have to wonder about its constitutionality.
If it doesn’t scare you with Paulson, think about it with Obama’s Treasure Secretary.
If my neighbor bought that $100 stock and sold it to another neighbor for $30, and then held me responsible for that $30 with the promise of future return - I’m still out $30 buck.
***************
I am not sure I totally follow you. But if you are our the $30, you also own title to the real estate.
I see you have swallowed the public school history class propaganda. The government caused and worsened the Depression, and did not get us out of it.
They are going to destroy our economy and the value of US assets. But at least we won’t have to witness a negative quarterly GDP.
Neither MBIA or AMBAC has declared bankruptcy yet. Now, Lehman Brother already filed, so maybe it’s you who is not as familiar with the Real Estate Capital markets.
****************
I didn’t say bankruptcy, I said they went bust. IMO, a $50 stock that is now trading at $.75 is bust! Bankruptcy is a technical issue at this point. The fact is that the market does not expect payment on the guarantees issued by MBIA or AMBAC. There may actually be some payment, another fact that is drown out in the market panic.
No, you're trying to spread panic. You're claiming that there is a market price that the market isn't willing to pay.
Doubletalk.
And all smoke and mirrors.
I would just like to know the difference between the following two scenarios:
Hank Paulson locks himself and Congress into a room and tells them that if he isn’t given the unlimited power to act as he sees fit, without recourse, without legal or Constitutional scrutiny, the world will blow up.
An Al Queda terrorist locks himself and 30 people into a room and shows them the red button on the remote control he holds in his hands and demands they fork over their life savings or he pushes the button.
Hank Paulson and his ilk were instrumental in the creation of this crisis and benefitted handsomely therefrom.
Have you read the first draft of the legislation? Does it give you pause that Paulson will have power that cannot be checked by the judiciary, the president or the Congress?
Was this power granted during the S & L mess? Has it ever been granted to one person?
********************
Good questions. I have not yet read the draft legislation. I will look it up now. And yes, it would give me pause to give unchecked power to one person.
Rather than all the ranting, that is what we should all be doing. Accept that the bailout is happening and work on demanding full disclosure of the terms so that the taxpayers are positioned in the best way possible.
Just in case anyone else wants to look at the legislation here is a link.
http://money.cnn.com/2008/09/20/news/economy/treasury_proposal/index.htm
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.