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This bailout plan is the worst thing we could have done

Discussion in 'Sports and News' started by The Big Ragu, Sep 28, 2008.

Page 4 of 12
  1. trifectarich

    trifectarich Well-Known Member

    Part of the problem is that 99.9999 percent of the population doesn't understand the root of what got us into this trouble. This includes our elected politicians who we've entrusted to try to get us out of this god-awful mess.

    If you asked Dodd or Pelosi or McCain or Obama, "You've said that if we don't pass this bailout bill, the alternative will be far worse. Explain to me why that is," they wouldn't have the first clue in trying to rationally explain the problem or the solution. Their bumbling and stumbling would make Sarah Palin look like Albert Einstein.

    If you can't explain credit deritative swaps, you shouldn't be able to put millions of someone else's money at risk trading them.
     
    trifectarich, Sep 29, 2008
    #37
  2. The Big Ragu

    The Big Ragu Moderator Staff Member

    Tri, I couldn't agree more!

    It's even simpler than that, too, for anyone who doesn't want to try to understand swaps. You don't have to understand how derivatives are packaged. All you have to do is think of them as widgets. Let's say I borrow heavily (leverage myself way beyond my means) and buy up all of these widgets that I think are super valuable and will continue to increase in value. But then those widgets turn out to be pieces of crap that no one wants. I made a stupid buy, right? Not only that, I destroyed my credit doing it. I borrowed too heavily and now no one else will lend me money (basically our crisis. These financial institutions depend on others lending them money and no one will -- rightly!).

    There will still be a market for those widgets, but I am going to take a huge loss unloading them at prices much lower than what I paid for them. I may have to declare bankruptcy, unless I can figure out how to convince people I can pay back the debts I already owe and that I will be good for my future debts. Hell, the average Joe who has bad credit understands this. He got himself into debt and if he can get anyone to extend further credit, it is going to be at a very high interest rate, because of the risk involved with lending to someone like that. That is what these financial firms SHOULD be facing, just like you or I would.

    As for the widgets they are stuck holding, the market would have decided how much they worth and someone will pay exactly that much for them. There are vultures who will bargain the price down to the point there is upside potential if sentiment toward those widgets returns and they increase in value.

    The U.S. government just prevented that from happening, and they made us all pay thousands each for their stupidity. They are not allowing the market to determine the worth of these securities, so now they are going to step in and use my and your money to buy them for too much money. And because they are under political pressure, you can be guaranteed they will unload them at the exact wrong time, for too little. This is for two reasons: 1) government is corrupt, so cronyism will come into play and people with connections will get sweetheart deals. 2) Even if that doesn't happen (and I don't believe it won't for a second), they are left holding a bunch of securities that everyone knows they have to sell. There is no market. There is government stuck holding something that no one has any faith in. This will bid the price down, as the vultures try to get an even better deal than they would have if market forces had been causing a higher equilibrium price. Having a monopoly over these "widgets" is useless when there is no demand for the widgets. It makes you the idiot holding a pile of crap that no one wants to buy.
     
    The Big Ragu, Sep 29, 2008
    #38
  3. mustangj17

    mustangj17 Active Member

    I'm just bothered by the fact that banks got greedy and people got in over their head with mortgages they couldn't afford and as a result my taxes will be higher forever. Not to mention the loans I get on cars and homes in the future will be terrible. To some extent, I understand helping out people who are struggling, but in this case, with the banks, they can honestly go fuck themselves.


    They screwed up, let them deal with it.
     
    mustangj17, Sep 29, 2008
    #39
  4. poindexter

    poindexter Well-Known Member

    Here is your oversight for the bailout:
    3 (b) MEMBERSHIP.—The Financial Stability Over
    sight Board shall be comprised of—
    (1) the Chairman of the Board of Governors of
    the Federal Reserve System;
    (2) the Secretary;
    (3) the Director of the Federal Home Finance
    Agency;
    (4) the Chairman of the Securities Exchange
    Commission; and
    (5) the Secretary of Housing and Urban Devel
    opment.
    (c) CHAIRPERSON.—The chairperson of the Financial
    Stability Oversight Board shall be elected by the members
    of the Board from among the members other than the Sec
    retary.


    So the same boobs who got us into this mess... and who created a 700 billion dollar "solution"... are the same boobs who will provide oversight.

    Same shit, different day.
     
    poindexter, Sep 29, 2008
    #40
  5. dooley_womack1

    dooley_womack1 Well-Known Member

    The subprime lenders were a bunch of carney barkers, and should be prosecuted with more fervor than a grifter running a ponzi scheme would.
     
    dooley_womack1, Sep 29, 2008
    #41
  6. 2muchcoffeeman

    2muchcoffeeman Well-Known Member

    I read a story last week that said the FBI is looking into the matter.
     
    2muchcoffeeman, Sep 29, 2008
    #42
  7. ScribePharisee

    ScribePharisee New Member

    This is the fault of capitalism behaving irresponsibly and selfishly. Capitalism without ethics is as bad as Communism with Stalinism.

    Just a few moments ago on C-SPAN, Rep. Kanjorski of Pa. said more than he ever really meant to when he said that a couple of times a decade, this place is called to stand up and be counted. Right, Congressman. A couple of key votes a year for you guys, the rest of the time you're bringning home the bacon and taking back the re-election votes. Couldn't have said it better, parasite. On with the show...
     
    ScribePharisee, Sep 29, 2008
    #43
  8. poindexter

    poindexter Well-Known Member

    Yeah. Good luck with that.

    And Chris Dodd said a week ago that after Freddie Mac, there'd be no more bailouts.

    Its September 29, 2008. The FBI is NOW just looking into things?

    For fuck's sake.
     
    poindexter, Sep 29, 2008
    #44
  9. jgmacg

    jgmacg Guest

    Anyone else get the sense that when the deep, longrange history of this administration is finally written half a century from now - when the Robert Caro of 2065 at last lays hands on the records and crunches the numbers - that 2000-2008 will go down as the most malignant kleptocracy in the annals of the United States? Eight years of government-endorsed graft and cronyism and theft beyond the wildest dreams of Boss Tweed? Trillions in American middle-class wealth simply vanished? Most of it redistributed into the bottomless pockets of the corporations?

    Anybody?

    Just me?

    OK.
     
    jgmacg, Sep 29, 2008
    #45
  10. poindexter

    poindexter Well-Known Member

    No, its not just you.

    I give this country thirty or forty more years.
     
    poindexter, Sep 29, 2008
    #46
  11. ScribePharisee

    ScribePharisee New Member

    Corporations now owned by...um, Americans?

    This malaise of the parceling out of the nation began before this. Not to say there hasn't been some significant rotting in eight years, but someone gladly put America up for sale. With it went the foundation of the house. Everything we're putting into it is as a tenant.
     
    ScribePharisee, Sep 29, 2008
    #47
  12. Magic In The Night

    Magic In The Night Active Member

    When the baby boomers start really cashing in the Social Security, you can kiss it goodbye.
     
    Magic In The Night, Sep 29, 2008
    #48
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