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Huge Bailout Proposal--$700 billion--Suck the bad debt out of the financial system

Discussion in 'Politics & Religion' started by earlpearl, Sep 20, 2008.

  1. pizzaman

    pizzaman Active Member

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    #161
    they are going to give these guys the money. now you see what liberals talk about when they talk about tax breaks for the rich :p
    i still think my idea with loan guarantee would work, but they are not interested in a different plan at all.
    SEMrush
     
    pizzaman, Sep 27, 2008 IP
    SEMrush
  2. Hon Daddy Dad

    Hon Daddy Dad Peon

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    #162
    The only people that will benefit in these deals are executives and some pork barrel politicians.

    It won't benefit people with mortgages and its unlikely to save most banks. It will just make things worse. The banks will mostly still fail because its no where near enough money, those banks that do survive will still foreclose on bad loans, the tax payer will tick up another huge debt under the Bush Administration, and the same incompetent/crook executives will line their pockets further.

    More houses in the Hamptons, more yachts in St Tropez, with caviar and champagne for predatory bankers. Why do Americans allow politicians to subsidize these scammers?
     
    Hon Daddy Dad, Sep 27, 2008 IP
  3. browntwn

    browntwn Illustrious Member

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    #163
    Ahh, I miss the good 'ole days of champagne wishes and caviar dreams.
     
    browntwn, Sep 27, 2008 IP
  4. bogart

    bogart Notable Member

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    #164
    The banks will get the money yes.

    But the taxpayers will get thousands of homes, that Congress can give way.
     
    bogart, Sep 27, 2008 IP
  5. robjones

    robjones Notable Member

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    #165
    No... they'll skip in a few hundred other unrelated entities that have nothing to do with it too. All they need is a worthy sounding organizational name and a "friend" in Congress.

    When it's a line item on a multi-page bill thats being passed in about the time these guys usually spend deciding weighty subjects like whether National Watermelon Week should also include mention of cantelope... they can easily slide in a few million for The Society for Prevention of Cranial Deforestation without anybody noticing they just paid for a whole boatload of hair plugs.
     
    robjones, Sep 27, 2008 IP
  6. bogart

    bogart Notable Member

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    #166
    Breaking News:

    House Speaker Nancy Pelosi announced the $700 billion accord just after midnight but said it still has to be put on paper.

    http://biz.yahoo.com/ap/080928/financial_meltdown.html

    The US needs a line item veto. Congress has grown to powerful on the pork barrel spending. The President can't do much unless he vetoes the whole bill which Congress can overide the veto if they wish.
     
    bogart, Sep 27, 2008 IP
  7. pizzaman

    pizzaman Active Member

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    #167
    I found this blog that tracks a morgage bundle take a look some very intresting results and the comments look intresting but i haven't read them
    http://globaleconomicanalysis.blogspot.com/2008/04/wa-mu-alt-pool-deteriorates-further.html
    ================================================================
    lets not fool ourselves. the problem is not pork. Obama illustrated that pretty clearly. It is much bigger and pork is just a distraction or at least small thinking.
    The problem is that we keep on insisting that our representatives should be just like us, or in another word average. these special interest groups hire smart and persuasive people and the average joe, "sen just like me" falls for their sales pitch every single time. I know from personal experience that some of these people are really not the brightest bulbs.
    [​IMG]
     
    pizzaman, Sep 28, 2008 IP
  8. bogart

    bogart Notable Member

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    #168
    "You can put lipstick on a pig, but it's still a pig"

    [​IMG]

    The problem is that we keep on insisting that our representatives should be just like us ...

    [​IMG]

    [​IMG]
     
    bogart, Sep 28, 2008 IP
  9. Divisive Cottonwood

    Divisive Cottonwood Peon

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    #169
    Whats going on? Has this thread descended into silly picture time?

    [​IMG]

    [​IMG]
     
    Divisive Cottonwood, Sep 28, 2008 IP
  10. gworld

    gworld Prominent Member

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    #170
    Dumb & Dumber III :D
     
    gworld, Sep 28, 2008 IP
  11. earlpearl

    earlpearl Well-Known Member

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    #171
    Pizzaman:

    The above data is both fascinating and depressing. The writer identifies that the mortgage pool was evaluated as having a lot of AAA credit, even as many of the mortgages had little documentation. The pool involves over 1/2 billion in securities. That is a disgrace.

    It identifies big weaknesses in the companies that rate and evaluate credit, such as Moody's. Very scary. Looks like they need to be cleaned.

    The writer identifies the mortgages as probably being written in the 2004-2006 period. I wonder how he came to that conclusion.

    The depressing thing is how the package of loans continues to deteriorate month by month. Home owners are moving quickly through delinquency and walking from properties.

    That is a depressing characteristic relative to buying up mortgages. On one hand it suggests that nobody really knows where this thing is going now or where valuations might land. The trend is sickenly downward.

    If I'm the buyer, the US govt. and its taxpayers, and of course I'm the only buyer, I'd be buying very low. The only constraint I see is to not buy so low that the institutions I'm looking to maintain collapse. Other than that I'd be bottom fishing.

    If I own the mortgages and properties I'd firesale some in horrible regions trying to stem the collapse of markets where I own a lot of properties, to try and stem the downward movement.

    Frankly, If I own the properties and the mortgages I'd go in and renegotiate w/ as many distressed buyers as I could trying to put a bottom to the free fall downward.
     
    earlpearl, Sep 28, 2008 IP
  12. pizzaman

    pizzaman Active Member

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    #172
    @earlpearl
    I don't know if you noticed but the credit rating of these people is around 705.
    i have to agree that something has to be done to try to help these people to stay in their home.
    for example they have to extend the teaser rate, or even 1% for a few years. The problem is that people can buy the next house a lot cheaper.
     
    pizzaman, Sep 28, 2008 IP
  13. EI-SD

    EI-SD Guest

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    #173
    $700 billion injected into the economy to buy up bad mortgage debts doesn't solve the problem. It only delays it...
     
    EI-SD, Sep 28, 2008 IP
  14. homebizseo

    homebizseo Peon

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    #174
    Your are right. And we are turning the money over to the companies and people that blew it in the first place.
     
    homebizseo, Sep 28, 2008 IP
  15. bogart

    bogart Notable Member

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    #175
    One thing I've noticed is that a lot of subprime buyers bought homes in a rush. They were bidding up the prices rather than negociated lower prices for properties that needed repair. The homes now need repair. But the subprime buyers can't afford them and the banks foreclosing are not doing them.

    So not only will a lot of the mortgages need to be renogociated but when do we have a 'program' to provide the 'homeowners' with money to fix the homes.

    THis is out of hand when many of the buyers only put down 5% and with the declining home prices have zero equity.

    Btw, a lot of foreign banks will be the beneficary of the bailout.

    You're right that the $700 billion is no solution.
     
    bogart, Sep 28, 2008 IP
  16. earlpearl

    earlpearl Well-Known Member

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    #176
    Yeah, I noticed. Pretty high credit ratings. Then the bond ratings were good.

    Guess those credit ratings aren't as good anymore, huh? ;)

    Its a deteriorating mess. Very ugly. Assuming the bailout deal goes through, I 'd be buying deep low. Aggressively low.

    I'd have no problems rewriting mortgages. Its an ugly trend.


    Suppose I was the gov....and had to resell houses at @25% on loan value. I'd try and sell. Quick sales would be beneficial in terms of getting money back, and stabilizing values. On the other hand It would rip out my gut losing 75% on the value of mortgages. I'd try and sell some majority share of the houses at those low values and keep some equity looking for some more return over time.
     
    earlpearl, Sep 28, 2008 IP
  17. pizzaman

    pizzaman Active Member

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    #177
    you want to decide who is going to be president based on your irrational fear of obl. I think at this time there are greater challenges facing our country. Obama is a much better choice in national security also. McCain/palin administration is going to be controled by neocons
    Neocons want to start a conflict with russia. These people are crazy.
     
    pizzaman, Sep 28, 2008 IP
  18. bogart

    bogart Notable Member

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    #178
    The US is pumping $700 billion into the bailout or 1/3 of the Federal budget to pump up asset prices. There's no guarentee that this will even work. There's been no public hearing on this and it really seems that Paulson and Bernake are working for Wallstreet rather than the American taxpayer.

    This big banks will get $700 billion to play with. The same guys that got us into this mess. $700 nillion is 5% of GDP.

    Is there are better alternative to this bailout?

    [​IMG]
     
    bogart, Sep 28, 2008 IP
  19. LogicFlux

    LogicFlux Peon

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    #179
    Newt Gingrich on Paulson:

    "You have the former Chairman of Goldman Sachs asking for 700 billion dollars, and in his initial request, asking for it in such an un-American way that I think he should have resigned,"


    "I think Paulson has terminally misunderstood the nature of the American system. Not just no review, no judicial review, no congressional accountability. Give me 700 billion dollars, 700 BILLION dollars! 'I'll be glad to spend it for you.' That's a centralization of power that is totally un-American."

    http://blogs.abcnews.com/politicalradar/2008/09/un-american-pla.html

    Video: http://abcnews.go.com/video/playerIndex?id=5903025
     
    LogicFlux, Sep 28, 2008 IP
  20. pizzaman

    pizzaman Active Member

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    #180
    i guess that is what the bankers face also. they don't want to sell cheap.
    I really don't like the idea of buying these notes [i do not think they are mortgages]. People are going to get really upset if the price of stocks goes very high after the bailout.
    If some of the banks fail then some other banks will take its assets. maybe after 4 to 5 months we will end up with fewer banks.
    there might be a lot of cash around waiting for the fire sale and we are trying to prevent it. why? it has to be the 401s
     
    pizzaman, Sep 28, 2008 IP