bail me out too.

[Guest jackdog]

WTF, the federal reserve just ups and bails out a bunch of Aholes and drops the bill on the US tax payer. Why is congress not making these decisions, why the fed. This is corporate welfare at its finest. Corporations reap the profit and the tax payer reaps thier debt when the screw up. America the best government money can buy, this is BULLS**T. Ithink you will see this spread to the airline and auto industry next. Hey this is pure socialism.

[DavidD]

Hey this is pure socialism.

And the funny thing is the bailout is coming from the Conservatives .

[Guest gsbell]

The Federal Reserve is a bit of a misnomer. They are not "the" govt.

[TGO David]

I tend to be pretty against subsidizing anything, but these bailouts aren't protecting the companies so much as they are protecting the customers (mortgage and policy holders) and the employees. It's in the best interest of the economy to ensure that we don't end up with a bunch of unemployed people who's mortgages are suddenly being called due.

I blame the big-wigs at these companies and think they should lose their jobs. But I don't blame the workers or the consumers.

[Guest gsbell]

I had this very conversation with my wife this morning, she doesn't like it. Neither do I but we cannot allow total collapse as it's effect would be far worse. Also the terms the Fed gave them really suck they will get out from under that ASAP.

[TGO David]

I had this very conversation with my wife this morning, she doesn't like it. Neither do I but we cannot allow total collapse as it's effect would be far worse.

I would suspect that the Fed is paying out a lot less by propping out these companies, which is money that they will get back as it is a loan and not a gift... than they would have paid out in welfare, unemployment, medical assistance, housing assistance, etc. if they had allowed these companies to collapse and displaced hundreds of thousands of employees and rendered void hundreds of thousands of insurance policies and mortgages.

It's the lesser of two evils.

On a more positive note, the ridiculous glut of cheap housing seems to be drying up finally and the builders responsible for flooding the market with houses built w/o a contract on them are going out of business like crazy. Soon, it will be a seller's market again.

All of this is just the economy correcting itself for the past 15 years of artificially overinflated wealth. It happens every so often.

[saintsfanbrian]

My wife and I also discussed this. She was against it and I am for it for the same reasons that Tungsten has laid out.

Have to keep some of the banks going in order to keep the economy stable.

[strickj]

So far my insurance,and bank has been bailed out.I'm just waiting for Verizon,and Comcast to get the help they so desperately need!

No seriously,I'm all for it!

[Guest jackdog]

Ok, so how does this short term fix really help. One the federal government has not ever ran anything that they have not screwed up. What would lead you to believe that this will be any different? Since the fed is not part of the government, they really have no legal right to do this without the consent of congress. Worse still is the fact that the boys that screwed this up will walk away will millions and we are left holding the bag.

Once again the us dollar was devalued do to this course of action. that in turn costs every consumer in America More dollars for less goods and services. Did you notice that gold went up a bunch ? This is a temporary stop gap that is gonna fail, and a major crash on wall street is likely to happen.

Edited September 18, 2008 by jackdog

[TGO David]

Ok, so how does this short term fix really help. One the federal government has not ever ran anything that they have not screwed up. What would lead you to believe that this will be any different?

They aren't running anything here. They are loaning money to these businesses to keep them from tanking. It's not a government program.

Since the fed is not part of the government, they really have no legal right to do this without the consent of congress.

Actually they do not have to seek congressional approval for this at all.

Worse still is the fact that the boys that screwed this up will walk away will millions and we are left holding the bag.

It does suck that the people at fault are likely going to just walk away fat and happy, but not from this particular deal. Rather they already profited. But if any wrongdoing took place, it could catch up to them. Remember ENRON?

As for us being left holding the bag, again this is a loan. It's not a handout. The taxpayers shouldn't get stung for the difference unless these companies default on the loans. In which case the government will seize every asset they have and liquidate them, which should offset the loan amount.

Once again the us dollar was devalued once again do this course of action. that in turn costs every consumer in america nore dollars for less goods and services.

This contributed to the devaluation of the dollar a long time ago. We're just seeing the public face of it finally.

[strickj]

So you would rather have hundreds of thousands of un-employed people to support?

I would suspect that the Fed is paying out a lot less by propping out these companies, which is money that they will get back as it is a loan and not a gift... than they would have paid out in welfare, unemployment, medical assistance, housing assistance, etc. if they had allowed these companies to collapse and displaced hundreds of thousands of employees and rendered void hundreds of thousands of insurance policies and mortgages.

+1

Edited September 18, 2008 by strickj

[DavidD]

All of this is just the economy correcting itself for the past 15 years of artificially overinflated wealth. It happens every so often.

Now if we can just get the rest of America to understand this and that our "economy" isn't as bad as the Dem's want to make it out to be.

Ok, so how does this short term fix really help. One the federal government has not ever ran anything that they have not screwed up. What would lead you to believe that this will be any different? Since the fed is not part of the government, they really have no legal right to do this without the consent of congress. Worse still is the fact that the boys that screwed this up will walk away will millions and we are left holding the bag.

Once again the us dollar was devalued do to this course of action. that in turn costs every consumer in America More dollars for less goods and services. Did you notice that gold went up a bunch ? This is a temporary stop gap that is gonna fail, and a major crash on wall street is likely to happen.

Let's just hope jackdog that AIG makes good on the loan. As long as they pull themselves out of this mess and don't default, I can see where this would be a positive move on the Fed's part.

[Smith]

Market correction. The gov't is just trying to spread out the pain. We had exponential growth, historic/record stock market highs more months, unemployment at record levels. You can't grow at these rates indefinitely. There was bound to be an ebb and ths is it. Don't get panicked it is just market correction.

[DavidD]

.....the government will seize every asset they have and liquidate them, which should offset the loan amount.

I buy into your argument and agree with all of your points except this one. If their assets were that strong, they wouldn't need the Fed's to make them a loan as they'd have enough collateral. Either way, I see where the risk is worth the possibility of saving the jobs, insurance and mortgage policies as well as avoiding a further hit on the economy & Wall St.

[Angus]

I tend to be pretty against subsidizing anything, but these bailouts aren't protecting the companies so much as they are protecting the customers (mortgage and policy holders) and the employees. It's in the best interest of the economy to ensure that we don't end up with a bunch of unemployed people who's mortgages are suddenly being called due.

I blame the big-wigs at these companies and think they should lose their jobs. But I don't blame the workers or the consumers.

I completely aggree with you Tungston, except for that last word. There have been way too many folks, people I know personally, who have purchased homes that they knew they could not afford. They used variable rate mortgages, and balloon payments etc.. My wife and I got approved for $150k, but we knew we couldnt handle that kind of house note, so we didn't borrow $150k. As consumers, we need to live within our means. Too many people have this..."I want it all, right now " attitude.

[DavidD]

Market correction. The gov't is just trying to spread out the pain. We had exponential growth, historic/record stock market highs more months, unemployment at record levels. You can't grow at these rates indefinitely. There was bound to be an ebb and ths is it. Don't get panicked it is just market correction.

+1

[Guest jackdog]

Do I remember Enron? Oh hell yes I remember, and do I believe Ken lay died of a heart attack? No I think that prick is alive and well living somewhere like Costa Rica or Brazil.

How convenient kenny dies and the government can't go after the funds. Do you really think this guy just up an died of a coronary? Perhaps my tin foil hat is to tight but I just am not a big believer in coincidence.

[Guest Mugster]

This isn't a market correction, nor is it normal. And I have no idea how to fix it. Other than to roll back 50 years and start hammering personal responsibility and civic morality into these greedy SOB's.

In a real oversimplified nutshell, they turned mortgages into a bond like commodity and traded them on the international market. The foreclosure rate only had some effect on what happened. When confidence gets lost in a commodity the future value drops like a stone. So all these companies wound up with either worthless futures or the actual commodity (that wasn't doing too good anyway) that they could not sell. I believe they are getting .20-.25 on the dollar for some of it. Thats a pretty big hit. AIG sold insurance on this and is stuck paying the .75 cent difference, sorta. AIG is central to this entire scheme. If they go down, the whole system is likely to go down.

So the fed stepped in and loaned AIG cash to keep operating (and paying that difference) and primarily "restore investor confidence". My guess is, they hope that if confidence is restored, futures prices in those mortgage instruments will rise a bit and thus trading will resume and cash flow will continue. It might work or it might not.

Here's an article on one aspect of the problem. Note the tone of the article...they aren't too concerend about mortgage holders or making bad loans...they are concerned with the investors that buy those mortgages.This is heart of the thinking that got us in this mess, IMO:

http://www.cfo.com/article.cfm/10274798

[Guest 44M]

This is corporate welfare at its finest

no my friend, that has it`s name..socialism

Db

[fury2neon]

no my friend, that has it`s name..socialism

Db

+1!

[Guest Mezzaluna]

I don't agree with the bail outs at all, but this really bothers me:

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.

Its bad enough the Fed has no oversight at all, but don't just give them an empty check book and let them run loose.

[TonyT]

you realize GM, Ford, and the airlines are next, right?

seriously, game over man.

[Im Neero]

What do you guys think will happen if somebody doesn't step in and bail these guys out?

I'll give you a hint; do a google search for Black Tuesday.

[Guest Mugster]

The results could be alot worse than black friday even with a bailout.

The FBI is going to investigate some of the bigger names. Back in the 50's, the FBI had the braintrust to investigate stuff like that. They don't now though...I wonder what they hope to discover? A dime bag in the wall outlet of the brokerage houses? What a farce.

[Guest bang-flash]

To me it seems like nationaliziation, by a different name.

Seriously its all about greed and money. Live within your means and save. Its not that hard.

I am totally against all these handouts from the fed. Why should I foot the bill because someone bought too much house and can't afford it now. And the banks should just go under as well. They made the mistake of selling and buying financial instruments even they didn't understand.