I Have A Hard Time Believing. Can Someone Explain?

But Birch, you are not telling me why we need this bill, are you in the school of this thing won't do anything? It sounds like you think this is a plot by Paulson to support the Democrats? Plus, if it's welfare, why did the entire Black Caucus vote against it, since you say they are behind the equal housing plot?

Tying up $700B doesn't leave any money for spending, so this definately is no good if you want to spend to make your constituents happy.
 
Where did all this negative paper come from. It came from the at risk population trying to make oversized mortgage payments from their welfare payments and unemployment benefits - that was the source of income that qualified them for a mortgage. Now we are trying to keep these folks in their homes so they don't drown the rest of us with foreclosures. If we take this paper off the bank's books that will free them to lend again - the government can hold this bad paper until the family grows and gets more increases in their welfare payments. The Donkeys take care of their own - they need the votes. This was all accomplished due to affirmative action in the housing sector. Remember this is only 3% of the population causing this mess - most people are responsible enough to make their mortgage payments - or find a cheaper place to live. But we cannot let our good neighbors drown or we all drown. So the taxpayer will once again bail out the Donkey's constituent groups - the welfatre recipients. Now I realize many of you refuse to accept this reasoning but it will all surface as a policy related to political correctness.
 
Show-me said:
It does not "fix" anything. The "hope" is that the lenders will loosen up and lend once they sell the bad paper to the tax payer, thus continuing the crime that got us here.
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Totally agree, hence the regulation requirement that needs to be imposed that certain members of Congress can't seem to stomach.

amoeba said:
Hope all you want, but the only sure thing is that if you spend $700B for bad paper, then you own the bad paper and the entity that you sold it to will have your $700B.

As far as the beneficial effect on short term credit shortage, there is no evidence from the rates, spreads, and/or futures, that this is necessarily going to happen at all - and certainly not instantaneously.

In other words, it is a complete waste of money. Don't do it. It won't work.
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Unfortunately its a cascade effect. Banks don't lend, companies can't finance, companies close, employees let go, unemployed workers can't find work, retailers have no business, restaraunts go under more unemployment. Those left over have to foot the bill for programs that support those out of work. Yes, it's not like it is instantaneous but it can happen. Capitalism at its' finest. Unless you "have" a buffer, and its a BIG buffer, will you have to weather the storm. IMHO:cool:
 
Show-me said:
Because, it is what the lobbiest want to save their butts and it will get worse before it gets better. It always does when you try to stop a addictive habit.

quote]

Nice post!!! They're like heroin addicts agreeing to go to the methadone clinic -- nice try ... try jail for some good 'ol economic d.t.'s and a cold turkey solution!!!

This may be a bit harsh but I agree with your addiction analogy.
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Silverbird said:
:blink: So the House NOT passing this bill is irresponsible why?
I think we need a different bill?
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Because, it is what the lobbiest want to save their butts and it will get worse before it gets better. It always does when you try to stop a addictive habit.

amoeba said:
Hope all you want, but the only sure thing is that if you spend $700B for bad paper, then you own the bad paper and the entity that you sold it to will have your $700B.

As far as the beneficial effect on short term credit shortage, there is no evidence from the rates, spreads, and/or futures, that this is necessarily going to happen at all - and certainly not instantaneously.

In other words, it is a complete waste of money. Don't do it. It won't work.
Click to expand...

I agree, just to be clear it is not me that is hopeful.
 
Show-me said:
It does not "fix" anything. The "hope" is that the lenders will loosen up and lend once they sell the bad paper to the tax payer, thus continuing the crime that got us here.
Click to expand...

Hope all you want, but the only sure thing is that if you spend $700B for bad paper, then you own the bad paper and the entity that you sold it to will have your $700B.

As far as the beneficial effect on short term credit shortage, there is no evidence from the rates, spreads, and/or futures, that this is necessarily going to happen at all - and certainly not instantaneously.

In other words, it is a complete waste of money. Don't do it. It won't work.
 
Lending transfers wealth from the idiot people that can not afford the junk they buy throught the lender for a fee and to the retailers and producers. Thus, making the people that got us to this situation either more wealth or they have more junk to throw away at the city wide clean up.
 
It does not "fix" anything. The "hope" is that the lenders will loosen up and lend once they sell the bad paper to the tax payer, thus continuing the crime that got us here.
 
Silverbird said:
I have a hard time understanding how this not a bailout whateveritis bill does anything to fix the credit crisis (except maybe push it back to next year)?
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"I'll be long gone before some smart person ever figures out what happened inside this Oval Office." --George W. Bush, Washington, D.C., May 12, 2008
 
I have a hard time understanding how this not a bailout whateveritis bill does anything to fix the credit crisis (except maybe push it back to next year)?
 
It is a gov. sponsored addiction called credit and is sold by proclaiming "why wait, buy it NOW".
 
Person:
wants house but money tight
buys house with A.R.M (even Sub Prime)
moves in
pays mortgage
2-5 years later A.R.M. gets crazy
Mortgage too high
Can’t pay mortgage
Foreclosure: Bank Owns

Bank:
Gives person A.R.M.
Bundles loans in M.B.S.
Sells MBS
MBS pays interests owner happy

MBS:
Gets created
Gets sold
Person defaults on loan
MBS bad, owner not happy

Bank:
Tries to sell new MBS
Insurer raises rates on MBS
No buyers
Can’t raise money
Can’t loan money
Holds on to assets and money

Businesses:
Can’t get loans from bank
Can’t run business
Shut down or consolidate and lay-off

Government:
Buys bad MBS from Banks
Banks raise money to lend
Bank lends money
Business stays open people have jobs
Government sells bad MBS later for profit

We have another name for this already
WELFARE except this time the government actually “OWNS” property
Bail out of corporation instead of people very hard to digest
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If the government steps in, then the money comes from the treasury, and that will take a big IOU. That IOU is to be paid by the taxpayer or sale of the assets the government buys. To me, this is deterrent/prevention/stabilizing efforts. However, if the government doesn't step in, the banks consolidate, stop lending money for a while, businesses close because they can't get money. People can't work and go on unemployment. Taxpayer pays more taxes to support those who can't support themselves. Sooner or later we pay for those banking practices.

By the way, if you have watched the markets steadily decline since Nov '07, can you imagine the retirees scratching their head at lack of buying power they have now? Not to mention a limited number of IFTs to make the most of the situation.:cool:​
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Miss Piggy said:
I have a hard time believing and understanding how if we as taxpayers provide our monies to save a few but gigantic institutions (rich, greedy and probably criminal) will benefit and will suffer individually (in our own pockets) if we don’t.

Can anyone help me understand? I'd appreciate any details in simple language.
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I think its all about credit and loans. On the retail side. If you can't get credit for a car loan, you can't buy car, car manufacturers can't sell cars if no one can buy, then car companies go out of business and the people who worked for those companies - manufacturing as well as sales, lose their job. Same for all retail that a lot of people buy with credit - washing machines, electronics. May be impossible to get a loan for kids college. Ultimately, it could be good...everyone will have to live within their cash. Prices should on everything would have to drop considerably.
 
Miss_Piggy

Miss_Piggy

Member
I have a hard time believing and understanding how if we as taxpayers provide our monies to save a few but gigantic institutions (rich, greedy and probably criminal) will benefit and will suffer individually (in our own pockets) if we don’t.

Can anyone help me understand? I'd appreciate any details in simple language.
 
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