[Inclag]

Bailout vote stalls

NEW YORK (CNNMoney.com) -- The House, following four hours of heated and emotional debate, started to vote Monday on a sweeping $700 billion bailout of the nation's financial system.

Investors were watching the vote closely. As votes mounted against the bill, the Dow plummeted more than 700 points at one point before pulling off its lows back to about 400 points lower as the House vote continued.

The debate included impassioned pleas for and against the measure from Democrats and Republicans alike. Even some of those arguing the legislation must be approved were quick to point out problems with it.

http://money.cnn.com/2008/09/29/news/economy/bailout/index.htm?cnn=yes



Look I'll admit I'm just as upset as average Joe Schmoe that it has come to a point where we need to bailout our financial system because of systematic flaws and an economy that runs on the system of credit and debt.

But sweet jebus I can't get over the fact that people can't get it through there thick skulls that if this doesn't happen this will be just the tip of the ice berg.

 

[kidwoo]

I went to my wachovia atm this morning and got a message on the screen that said "all ur assetts are belong to U.S."

 

[X3pilot]

Bailout vote defeated..

 

[X3pilot]

But sweet jebus I can't get over the fact that people can't get it through there thick skulls that if this doesn't happen this will be just the tip of the ice berg.

I think the average understands what could happen, I think they don't understand what will happen past the point of the first wave of job loss and financial ruin of the financial elite on Wall Street.

And come to think of it, do we REALLY think we know what would happen if they didn't pass this bailout bill? Isn't it all really just speculation on the part of financial wizards whose original speculation in regards to the housing and credit markets got us to this point?

 

[MMike]

Funny how it was the republicans that killed it too...

 

[stosh]

Honestly if I make it through this crisis with my shirt on I'm going to re-think how I use credit and loans.

 

[stosh]

Funny how it was the republicans that killed it too...

They blamed it on the Democratic speaker. Good move by the republicans in an election year. Bad move for the public.

 

[trebor]

So it's the republicans only??

I thought the bill only needed 218 to pass.... arent there more democrats than that in the house??? I think there are. It doesnt matter though, the bailout would only prolong the agony. What happens when you print out money?? Inflation.


The "gains" from selling assets at a premium would NOT be spent on / go back to the taxpayers. They would either fatten the pockets of legislators, special interest groups, or welfare. That's how it always works. I say teach the middle class / low income people a lesson. I have my bike, my degree (for when the economy comes back), and money for food. A recession just means the few trails we have here will stay longer .

 

[SkaredShtles]

Good.

This bailout is a f**king joke.

Let the economy go into the $hitter then recover... it (the economy) and the population of the U.S. will be better off for it in the long run.

 

[trebor]

Good.

This bailout is a f**king joke.

Let the economy go into the $hitter then recover... it (the economy) and the population of the U.S. will be better off for it in the long run.

thank you. who wants a "recession is coming" ride???

 

[Samirol]

Good.

This bailout is a f**king joke.

Let the economy go into the $hitter then recover... it (the economy) and the population of the U.S. will be better off for it in the long run.

The economy will go into a recession no matter what, but the bailout is hopefully going to result in a shorter recession

 

[Inclag]

So it's the republicans only??

I thought the bill only needed 218 to pass.... arent there more democrats than that in the house??? I think there are. It doesnt matter though, the bailout would only prolong the agony. What happens when you print out money?? Inflation.


The "gains" from selling assets at a premium would NOT be spent on / go back to the taxpayers. They would either fatten the pockets of legislators, special interest groups, or welfare. That's how it always works. I say teach the middle class / low income people a lesson. I have my bike, my degree (for when the economy comes back), and money for food. A recession just means the few trails we have here will stay longer .

Not really....

...Not only will banks no longer be able to accept people for loans, mortgages, etc.... (again part of the problem of our debt based society). But many companies will be f-d in the a. To give you an example, for a large companies operations, each day they will turn either a profit or a loss. Clearly they won't use capital on hand to pay for needs that will cost many millions of dollars. I'm a bit out of the loop of the proper terms but what the company will do is go to what is essentially a bank and broker a deal, so that they get say $99M to pay for stuff, and in return they will pay back $100M the next day to this bank. Well, if the bank doesn't give them no $99M what does that mean??????

 

[SkaredShtles]

The economy will go into a recession no matter what, but the bailout is hopefully going to result in a shorter recession

 

[trebor]

Not really....

...Not only will banks no longer be able to accept people for loans, mortgages, etc.... (again part of the problem of our debt based society). But many companies will be f-d in the a. To give you an example, for a large companies operations, each day they will turn either a profit or a loss. Clearly they won't use capital on hand to pay for needs that will cost many millions of dollars. I'm a bit out of the loop of the proper terms but what the company will do is go to what is essentially a bank and broker a deal, so that they get say $99M to pay for stuff, and in return they will pay back $100M the next day to this bank. Well, if the bank doesn't give them no $99M what does that mean??????

I know how the economy works, I have an accounting degree and steady A's in economics courses I took lol.

However, since I dont understand what you're trying to get at, although I have a general idea but you are mixing up a lot of different ideas so it's not coherent, I am going to talk about the part I put in bold.

It starts:
huh??? how is this a bad thing?? you do realize that the reason our banking industry is going to **** is not only due to corporate greed, but consumer greed as well. Not everyone deserves a house, not everyone deserves a loan. The simple fact is this, people are defaulting on their loans because they thought they could get a deal during the housing boom and were not informed when they made their decisions. First, people who make 8 dollars an hour DO NOT deserve a loan for any amount over 1000 dollars (or similar small amounts). Second, the people who wanted these houses thought they could "pull a fast one" by getting a loan for a house they couldnt afford, live in it until the value of the house went up, and then sell the house. Of course markets are like waves, they have ups and downs, and the market was at it's peak.

What we are seeing is the same thing as the dot com boom, except government wasnt pressuring people who knew HTML / E-business concepts to teach these concepts to poor people and minorities. Also, a 20 dollar / month website is a lot less risky than a 100,000+ dollar house.




If you want to re-type your argument (the second paragraph) in which I assume you're TRYING to tell me how loans work??? you may.

 

[SkaredShtles]

Bingo.

Let the chips fall. That's what I say.

We'll be better off for it in the long run.

And to be honest, I'm in this whole mess for the long run...

 

[trebor]

No. The bailout will NOT result in a shorter recession. The "bailout" will result in a prolonging of the "good times" until the current administration is out of office (and hopefully a democratic administration is in office when the effects hit). Perhaps you should lookup what inflation is, what it does, and when the last time we had it was.

The bailout plan implies that the assets will be bought at a discount (under par value) and sold at a premium (above par value) which will not only pay back the debt created by the 250 billion (and X incriments of 100 billion), but "supposedly" pay back the taxpayers in the amount of
(Price sold - Price bought) which isn't going to happen, and will look more like this
(Price sold - (price bought + amount padding pockets))

 

[Inclag]

I know how the economy works, I have an accounting degree and steady A's in economics courses I took lol.

However, since I dont understand what you're trying to get at, although I have a general idea but you are mixing up a lot of different ideas so it's not coherent, I am going to talk about the part I put in bold.

It starts:
huh??? how is this a bad thing?? you do realize that the reason our banking industry is going to **** is not only due to corporate greed, but consumer greed as well. Not everyone deserves a house, not everyone deserves a loan. The simple fact is this, people are defaulting on their loans because they thought they could get a deal during the housing boom and were not informed when they made their decisions. First, people who make 8 dollars an hour DO NOT deserve a loan for any amount over 1000 dollars (or similar small amounts). Second, the people who wanted these houses thought they could "pull a fast one" by getting a loan for a house they couldnt afford, live in it until the value of the house went up, and then sell the house. Of course markets are like waves, they have ups and downs, and the market was at it's peak.

What we are seeing is the same thing as the dot com boom, except government wasnt pressuring people who knew HTML / E-business concepts to teach these concepts to poor people and minorities. Also, a 20 dollar / month website is a lot less risky than a 100,000+ dollar house.




If you want to re-type your argument (the second paragraph) in which I assume you're TRYING to tell me how loans work??? you may.

Well I'm an enginerd so accounting isn't my strong suit, however my point more or less is that this doesn't have to do with the merely the housing market. If large businesses that need loans to operate cannot get them, then what?

Forgive me for my accounting ignorance (although I am proud that I have yet to have a need to get a credit card )

 

[stosh]

Has anybody here actually read the bill?

 

[SkaredShtles]

<snip> If large businesses that need loans to operate cannot get them, then what?

If the large business is not creditworthy (i.e. they aren't viewed as being a good risk with regards to paying the loan back) then they should NOT get the loan. If they go down the tubes... well... so much for it.

These bailouts are totally f**king with an investor's ability to assess risk. It's a bunch of goddam nonsense...

 

[X3pilot]

Has anybody here actually read the bill?

Yep, and the very first part should tell you what it's really about...

Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

 

[drkenan]

If the large business is not creditworthy (i.e. they aren't viewed as being a good risk with regards to paying the loan back) then they should NOT get the loan. If they go down the tubes... well... so much for it.

These bailouts are totally f**king with an investor's ability to assess risk. It's a bunch of goddam nonsense...

I don't know how much you know about the concept of cash flow, but many employers (small and large) rely on lines of credit for payroll, inventory, marketing, etc.

For instance, I'm about to embark on the most comprehensive marketing campaign I've ever done in 5 years of business. Thank God that I've already got a healthy line of credit because if I didn't, there's no chance that I'd get one now. The goal is to spend someone else's money and when I start seeing returns, pay it back.

The problem is that banks aren't loaning money to businesses anymore and that creates a very real problem for businesses that rely on this type of cash flow (for whatever they need it).

 

[SkaredShtles]

I don't know how much you know about the concept of cash flow, but many employers (small and large) rely on lines of credit for payroll, inventory, marketing, etc.

For instance, I'm about to embark on the most comprehensive marketing campaign I've ever done in 5 years of business. Thank God that I've already got a healthy line of credit because if I didn't, there's no chance that I'd get one now. The goal is to spend someone else's money and when I start seeing returns, pay it back.

The problem is that banks aren't loaning money to businesses anymore and that creates a very real problem for businesses that rely on this type of cash flow (for whatever they need it).

Are banks really not lending to ANY businesses any more? Why a bank wouldn't lend to a creditworthy business is beyond me. Even when credit is tight...

 

[rockwool]

It's been on the radio this evening that a group of countries are garanteing (or something like that) above $600 billion. The Swedish Riksbank (the Federal Reserve equivalent) garantees $30 billion. I sure hope this don't mean that my tax krona goes to the pockets of your already stinking wealthy bank owners..

 

[Inclag]

Are banks really not lending to ANY businesses any more? Why a bank wouldn't lend to a creditworthy business is beyond me. Even when credit is tight...

Well for one if the bank doesn't have money. But then again I believe we are looking at more of the Macro level.

 

[SkaredShtles]

It's been on the radio this evening that a group of countries are garanteing (or something like that) above $600 billion. The Swedish Riksbank (the Federal Reserve equivalent) garantees $30 billion. I sure hope this don't mean that my tax krona goes to the pockets of your already stinking wealthy bank owners..

That's what this whole bailout is all about! Sharing the wealth!

 

[SkaredShtles]

Well for one if the bank doesn't have money. But then again I believe we are looking at more of the Macro level.

I'm pretty sure that if a bank doesn't have money... they're doing something wrong... at least from a "banking" perspective.

 

[Westy]

"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for it &#8212; not me.' "

Gutless pussies.

 

[X3pilot]

Gutless pussies.

Well, it's been argued on this board that the government should be afraid of the electorate. It looks like they are, just for the wrong reasons..

Gutless is being kind...

 

[curtix]

Funny how it was the republicans that killed it too...

But in the end only 141 Democrats voted for the bill and were joined by 65 Republicans. And 94 Democrats voted against the measure, along with 133 Republicans.

 

[curtix]

Yep, and the very first part should tell you what it's really about...

That is some scary crap.

 

[ohio]

No. The bailout will NOT result in a shorter recession. The "bailout" will result in a prolonging of the "good times" until the current administration is out of office (and hopefully a democratic administration is in office when the effects hit). Perhaps you should lookup what inflation is, what it does, and when the last time we had it was.

If you force the entire institutional credit market to unravel you are certainly going to have much more drastic repercussions. This is not something we can simply ride out and wait for it to correct. It is much much larger than bad mortgages.

 

[curtix]

my bailout plan - cut Cap Gains Tax to 0% for 2 years.
cut corp taxes drastically for 2 years.
BAM -Invest madness.

 

[jimmydean]

I know from a housing and mortgage perspective, the ONLY way housing will return to "pre-surge" levels s for the industry to actually hit bottom.

As long as you keep pumping money into failing banks, the majority of Americans won't be able to purchase a reasonable home.

Does it suck? YES! But Jimmy Sh!thead shouldn't have bought a $500k house on a $50k salary to begin with. The banks that are failing are doing so because they made bad investments. It's not MY fault WaMu gave my neighbor too much money.

 

[curtix]

I know from a housing and mortgage perspective, the ONLY way housing will return to "pre-surge" levels s for the industry to actually hit bottom.

As long as you keep pumping money into failing banks, the majority of Americans won't be able to purchase a reasonable home.

Does it suck? YES! But Jimmy Sh!thead shouldn't have bought a $500k house on a $50k salary to begin with. The banks that are failing are doing so because they made bad investments. It's not MY fault WaMu gave my neighbor too much money.

Amen -
Wow I am agreeing with all sorts of people today.

 

[SkaredShtles]

If you force the entire institutional credit market to unravel you are certainly going to have much more drastic repercussions. This is not something we can simply ride out and wait for it to correct. It is much much larger than bad mortgages.

I think we can.

And should.

YMMV.

 

[Westy]

I think we can.

And should.

YMMV.

Not everyone will feel the pinch the same way. A lot of folks will end up jobless/homeless and in deep ****. Others will end up getting shot and robbed when less savory people hit rock bottom. It is a lot easier to say suck it up when you are not one of the people that has to suck it up.

Me, I just got a raise today.

 

[blue]

Fvck corporate welfare, let 'em burn. This country will be far better off after an economic catastrophe.

 

[SkaredShtles]

Fvck corporate welfare, let 'em burn. This country will be far better off after an economic catastrophe.

Arghghgh.

I can't believe blue's agreeing with me.

 

[SkaredShtles]

Not everyone will feel the pinch the same way. A lot of folks will end up jobless/homeless and in deep ****. Others will end up getting shot and robbed when less savory people hit rock bottom. It is a lot easier to say suck it up when you are not one of the people that has to suck it up.

Me, I just got a raise today.

Yup.

Things will probably get $hitty.

Maybe people will wake up and quit being some goddam complacent.

And being jobless is cool.

 

[narlus]

Not everyone will feel the pinch the same way. A lot of folks will end up jobless/homeless and in deep ****. Others will end up getting shot and robbed when less savory people hit rock bottom. It is a lot easier to say suck it up when you are not one of the people that has to suck it up.

let them eat corn syrup and drink previously-frozen milk!