Posted on 09/24/2008 10:34:43 AM PDT by HAL9000
Breaking News - Republican officials say the Bush administration will accept executive-pay curbs as part of the bailout. President Bush plans to address the nation Wednesday at 9:01 p.m. EDT on the financial crisis.
We have not seen everyone else selling in a long long long long time.
Yes I know. I read that too. I was just trying not to be anymore pessimistic than I was already being...LOL
You have already been skewered.
That depends on the foreclosure.
Now it's their turn.
I was involved in the RTC process and the Feds realized a pretty high return on the assets sold by the RTC, especially after investors gained an understanding and confidence in the process. This problem dwarfs the S & L situation, but I think there are some similarities.
I agree, the plan has to be no-frills and easily understandable. A bad plan would be worse than nothing.
We have had 20 years, if not more, of folks getting ahead by going along to get along. Most of the folks I see in senior management postions are a net loss and we are better off without them. That includes the heads of these companies that lacked the foresight to see where leveraging debt was going to get us and the lack of morals to restrain themselves from screwing everybody in their haste to get all they could.
Good grief, GE capital is one of the guys in on the merry go round. GE transformed itself from a manufacturing company to a fee for debt company.
“My bigger fear is do nothing, let the financial markets continue to decline, and then have people demand even more socialism.
This is 1929 in live slow motion. We have the ability to stop this thing if we want. Realize, if it is not stopped, and economic uncertainty continues, there is strong chance Obama will come into office with a mandate for an aggressive socialist program.”
Bottom line, we have to stand behind McCain and the direction that he will take concerning this bail out. I am so sick of the liberals giving me the “you guys don’t even support your own candidate and not until he got Sarah on the ticket did the base get behind McCain, so why should we abandon Obama when you guys don’t really want McCain?”
Do you have more than $100,000 in WaMu?
Good Timeline.
God how I would love for there to actually be skin in the game when Congress has to vote on something.
This problem is MUCH bigger, but aside from scale, the situations are very similar.
I placed in bold the part that many people are missing. When a plan is in place and the panic dies down, the market can begin pricing these things.
Right now, illiquidity is slowing loan underwriting, driving down real estate prices, and actually feeding the problem.
An aggressive national socialist program.
An orderly plan to do what?
From another post: The fundamental problem is that the financial sector is propped up with various types of funny money like Credit Default Swaps. Imagine a bank which didn't open any of its books to inspectors. No individual had more than, say, $100,000 on deposit, and anyone could see that the bank had $10MM of cash in the fault, but nobody knew how much money had been deposited in the bank (except maybe the bank executives, and they weren't telling). To entice people to keep money in the bank, it offered very attractive interest rates. What the owners of the bank didn't bother to tell people was that 80% of their money was going into the pockets of the bankers and their friends, and would never be seen again. Unfortunately, some depositors started to get nervous, and taking out their money, and the bank risked becoming insolvent.
Under such a scenario, would it be better to (1) do nothing, (2) have the government loan the bank some money to make the depositors happy, or (3) kill the bank, divide up its surviving assets among the depositors, and prosecute the bankers?
Choice number one would cause an essentially arbitrary redistribution of wealth. Choice number two would increase the amount of money siphoned off by the bankers, quite possibly by an amount bigger than the size of the government's own "loan". Choice number three is the only one that makes sense to me. Yeah it's ugly having people's paper assets evaporate, but the point needs to be made that the money was stolen long before the crash--depositors just didn't realize it.
I have already said it: Uncle Sam.
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