Joe(types) what do you think of that time article?
Joe, isn’t your economic doomsday scenario overlooking one key piece of data; the fact that not all banks lent without a proper deposit base?
Citi, JP Morgan, Bank of America… they seem to be weathering this crisis quite well because they didn’t invest as heavily in junk mortgages as the rest. In fact, you could argue they’re benefiting from this mess because they’re buying up the competition for pennies on the dollar.
Besides that, who’s to say the government couldn’t take that bailout money and use it to increase federal lending to banks?
My point being that after finally seeing some of the anti-bailout points I’m glad this failed in it’s current form. I still believe some sort of bailout will need to be passed but it should be a better plan than what they had yesterday.
The times article fails to realize that it’s NOT a transfer of wealth, tax dollars will be used by the government to PURCHASE securities and then PURCHASE ownership of companies. We will receive equity and assets. It’s not a cash giveaway.
It also assumes that the Fed won’t allow financials to fail. It will.
The banks that do have money are hoarding it, they’re not lending. We’ve had conversations with HIGH level citi execs who have said that unless this bill passes it will be “At least a year, probably two” before they’ll be able to lend again. Two years with a credit freeze isn’t something the economy can handle. Again, this is about the credit market.
Yes now that this bill failed the democrats will draft the bill they want and push it through.
Meanwhile all the Jews are saying “fuck the holiday, there’s money to be made before they pass the bailout!”
I agree with you that the current bill wasn’t great. My point is that SOMETHING needs to be done to provide liquidity to the credit market. I’m really speaking to people who say “Fuck Wall Street, they’re not getting a dime”
Yeah, something needs to be done, but the more I look at the bill that failed I’m glad that wasn’t it.
I honestly doubt either side will accept “nothing” as a solution.
PS… it’s funny you say the democrats will craft the bill they wanted when the majority of them voted for this bill. From the looks of it they will have to craft a bill that more republicans want.
here it is in easy speak: ABC News Videos - ABC News
the majority of dems did vote for the bill. But the number of Dems that did NOT vote for it was around 90. If they sway even half of the remaining members of their own party, the bill will pass.
The ones that voted no mostly did so because it didn’t do enough for the homeowners and such. If they can get them all in line, they only need a simple majority and can hammer it through.
Joe isn’t this proof of trickle down economics?
My company will be just fine without borrowing for a while but, if my huge customers can’t get money I will suffer.
I know it’s not the exact definition but it is the same effect.
If the big guy(GE, GM, CAT) can’t spend, the little guy(Springville Mfg.) doesn’t get orders.
This not to say I believe that all of the money will dry up.
It is just proof that living/existing on credit will come back to bite you.
No, this whole crisis is proof of bottom up economics. The little homeowners couldn’t pay their mortgages because of recession/housing collapse. Then they start defaulting and hurting the little banks that made the loans. The little banks turn them into MBS and sell them to he big banks. The big and small banks go into a credit crunch and freeze the whole economy. All because of homeowners not having the money to pay their mortgages, whether because of the collapse or because they were stupid mortgages to begin with. You need the little guy to have the money to make those payments every month to keep the pump flowing.
Proof that only pain trickles down?
Democrats can push a bill through if they want. Republicans can all vote no and it’ll still pass.
you also need the banks to have some discretion when lending. No downpayment, subprime loans, and over extending what money they do have… sounds like a disaster on both ends
Hence the point of increased regulation.
Touche lol. I totally understand what you mean. That was the problem…there weren’t enough regulations to keep a check on who they lent money to. For once I totally agree with you.
Oh VERY true. I know many people that either order for, or work for companies that use credit to buy things. If you have say, $50k in products you have to buy for your business, you use your business credit card or w/e to purchase said item(s), then once you turn a profit you pay it back. Now if you are a small company that annually grosses lets say for the sake of our given, $250 a year, and you borrow $5 million to put up a new facility, well that is bad business and financial foolishness. Unfortunately banks were doing just that. giving people loans that were easily 5-10x their net worth, knowing they will never be able to keep up with payments.
Here’s what the country has a whole has to realize.
#1) Yes greedy mother fuckers on Wall Street fucked over the rest of the country in order to make insane profits extremely quickly without thinking about long term consequences.
#2)In the wake of the Great Depression, the US Government erected walls between the different types of banks, eliminating “one stop shopping”. They basically forced retail banks to be separate from commercial banks from investment banks, etc. Each group of firms was regulated differently and had different rules applied to them.
In recent years, the government ripped down many of these walls, but no increased regulation was placed on them as they were allowed to become one stop shops. There was no increased regulation placed on the firms though, which opened the door to increased risk taking.
#3) We’re WAYYY past the housing market being a problem. We’re into full on credit market freeze and a severe liquidity crisis. They’re much more dangerous than a decline in home value.
#4) While most people look to the stock market as the most visible indicator of economic performance, its actually a very small aspect of it. The Dow is an even worse indicator. Use the S&P 500 as a better indicator, and remember that we still have to consider the health of the credit markets, commercial paper markets, derivative markets, the debt markets, treasuries, etc. In this situation, those are more telling indicators than the equity markets.
#5) You’re more affected by the bill not being passed than you are going to be if it passes. If the government doesn’t do something major to keep the financial system working, the ability of the average person to get access to credit will go away. Not if, not when, but will. If the financial system is allowed to collapse it will trigger a situation that will put the Great Depression in it’s dust.
To put into scope how hard it is to access credit, franchisees can no longer access credit. Owning a fast food franchise is like printing money.
But… but… but… 72% of america doesn’t want the bill to pass!!!
Actually this past weekend I spoke to a few of these 72%ers and concluded as we could have guessed…they dont even know dick about the bill or economics in general. They are convinced we are just handing over $700bil just so rich people can be rich still.