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Old 09-30-2008, 08:20 AM   #141
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I'm not selling a thing, I'm just pointing out how big this beast of an economy is, and that the 700 billion bailout seems a bit niave. If you lost your job would a day's pay handout make difference?
Except I do not make $20-30,000 day, which is probably what this will cost me.
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Old 09-30-2008, 08:22 AM   #142
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Today's New York Times Headline: Mixed Markets Reflect Hope for Bailout

This is a typical mix of fact and opinion. Fact: mixed markets. Opinion: equity investors are still hoping for a bailout. Are there any facts to support the opinion? Nope.

It may be that markets fell because future taxpayers weren't indebted to the tune of $700B so that this money could be injected into the financial system today. Maybe the markets have stabilized at a lower level reflecting this reduced expectation. Are there any facts to support this opinion? Nope. However, at least I admit it.
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Old 09-30-2008, 08:23 AM   #143
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I suspect the cost of what we've been doing -- constantly sticking fingers into the dike to plug one leak after another, hoping the dam won't fail -- may greatly exceed the cost of a massive plan to rebuild the dam completely. Every time one more domino falls, it only increases the fear and the panic, and that only makes the situation more precarious -- making other dominoes fall.

Only when the panic has subsided and people and institutions no longer worry about the security of their deposits can things begin recovering. And the slow "drip, drip, drip" firefighting mode we're in now won't get us there any time soon. That's why as much as I hate the thought of throwing $700 billion at a bunch of irresponsible cretins, I fear the price tag for how we're doing it now -- direct liquidity injections, lost wealth in equities, cost to governments in terms of lost tax revenue and more unemployment benefit payouts -- may be much, much greater than $700 billion -- with little or no opportunity to recoup some of the payout through future asset sales.
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Old 09-30-2008, 08:29 AM   #144
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Just got this by e-mail: perfectly captures my opinion!

Let Risk-Taking Financial Institutions Fail
By ARI J. OFFICER AND LAWRENCE H. OFFICER Monday, Sep. 29, 2008

Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have "gone bad."

[MODERATOR EDIT - copyrighted material] The URL for the rest of the article is here:

Let Risk-Taking Financial Institutions Fail - TIME
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Old 09-30-2008, 08:38 AM   #145
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Just got this by e-mail: perfectly captures my opinion!
Yep, the Herbert Hoover Solution. That worked out well, didn't it.
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Old 09-30-2008, 08:39 AM   #146
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Great graphic and tables showing the breakdown by district / state / party etc.:

The No Votes - Interactive Graphic - NYTimes.com
I couldn't help but notice both Alaska and Arizona voted no in their entirety. This is a surprise since McCain "suspended his campaign" to help get this deal done.
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Old 09-30-2008, 08:43 AM   #147
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going to send some emails to different congresspeople urging them to look at an alternative proposal.

my idea is to simply buy up the homes in foreclosure. it will pay off the toxic loans but there won't be any interest like originally thought. and the government can rent the homes out to whoever lives in there.
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Old 09-30-2008, 08:43 AM   #148
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I couldn't help but notice both Alaska and Arizona voted no in their entirety. This is a surprise since McCain "suspended his campaign" to help get this deal done.
The "entirety" of Alaska is 18-term Congressman Don Young, who is in a precarious reelection battle. As has been demonstrated, the incumbents facing the toughest reelection battles were MUCH more likely to oppose this. I saw one report which mentioned that the most vulnerable incumbents voted 30-8 against it, with little break along party lines.
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Old 09-30-2008, 08:46 AM   #149
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Yep, the Herbert Hoover Solution. That worked out well, didn't it.
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Old 09-30-2008, 08:50 AM   #150
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Yep, the Herbert Hoover Solution. That worked out well, didn't it.
Ah man, you win the ChrisC comeback award for today (with apologies to Youbet for stealing his award program).
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Old 09-30-2008, 08:58 AM   #151
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Yep, the Herbert Hoover Solution. That worked out well, didn't it.
I doubt that's a valid analogy, considering how much gov't intervention is going on these days even without the bailout. However, it's not worth arguing the point.
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Old 09-30-2008, 08:59 AM   #152
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I think they all want it to pass, but in all the jockeying to either take credit or assure a foundation for laying blame depending on the outcome, they all overdid it a little bit.
Really? You aren't saying that this first vote is for show, and the next vote for the Bail-out will be the real thing, are you? If you're not, then I'm saying it!
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Old 09-30-2008, 09:36 AM   #153
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This thing will not be back as it was. It will be reworked and the modifications will be extensive but the end result will not change that much - just enough that it can be said it is "not the same bill". One change will be an increase in FDIC limits which is practically a given now that both Presidential Candidates have endorsed it and, in Senator McCain's he said he discussed it with the President (which to me, indicates the President agrees, or it would not have been mentioned by Senator McCain). Something will be done to at least look like there are controls on CEO (and high level staff) "windfalls" upon failure of the entity. I suspect these will be marketed heavily and may be enough to get it passed again by the end of the week. I would not be surprised if the Secretary of the Treasury resigns shortly thereafter. Her majesty the speaker of the house should be gone but probably will hang on until January when she will either "fade into the masses" or be replaced by another.
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Old 09-30-2008, 09:40 AM   #154
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The CEO parachutes should be deferred and become a percentage of whatever profit the government eventually turns as a result of unloading the bad debt.

We get nothing, they get nothing. Might also encourage them to fix things up a bit in the days and weeks they have left.
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Old 09-30-2008, 10:09 AM   #155
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Every time one more domino falls, it only increases the fear and the panic, and that only makes the situation more precarious -- making other dominoes fall.
And what if they pass the Paulson plan, and it doesn't work? What do think the panic will look like then?
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Old 09-30-2008, 10:16 AM   #156
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I'm not selling a thing, I'm just pointing out how big this beast of an economy is, and that the 700 billion bailout seems a bit niave. If you lost your job would a day's pay handout make difference?
To you or to your representative's re-election campaign?

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... in Senator McCain's he said he discussed it with the President (which to me, indicates the President agrees, or it would not have been mentioned by Senator McCain).
I'm not sure that anyone cares anymore whether the President agrees, least of all Congress. I'm also not sure that I'd want to have my campaign trumpet that I'm discussing things with the President-- let alone give the impression that he agrees with me...

Maybe it's better that Congress and the Execs keep wrangling over the legislation while the current financial/credit system works through its woes.
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Old 09-30-2008, 01:19 PM   #157
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Have to add another "we want it": First $50K, $100K of Interest is TAX EXEMPT and INDEX it to INFLATION. Would make people save more (any/some) and would help banks/CU get some deposits to prudently lend.

I am joking about the amount but we had this in smaller amounts not too many years ago and it would also require too much money to teach bankers what "prudent means".
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Old 09-30-2008, 01:51 PM   #158
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going to send some emails to different congresspeople urging them to look at an alternative proposal.

my idea is to simply buy up the homes in foreclosure. it will pay off the toxic loans but there won't be any interest like originally thought. and the government can rent the homes out to whoever lives in there.

I'm not sure if you were serious, but for last few days, I've been wondring the same thing. If this"problem" is because financial institutions have mortgages in default, then why not go to that core of the problem, and help not only the financial institutions get rid of tha risky(or bad) debt and at same time help people that are losing their home.

Must be some reason something this simple won't work.

Rick
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Old 09-30-2008, 02:12 PM   #159
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Apparently the FDIC is seriously underreserved and may soon have no choice but to dip into tax dollars [FDIC may borrow money from Treasury].

See generally Solvency Street is paved with pain:
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The United States, home of more than 8,000 financial institutions, has had relatively few of them go broke since the savings-and-loan debacle, and that was nearly 20 years ago. Only three small FDIC-insured banks failed last year and none in 2005 and 2006. There has been plenty of time to build up the fund. But it hasn't happened because some genius decided, back in the mid-1990s, that the deposit insurance fund need not save too much for a rainy day. So for the next decade, most U.S. banks got a holiday from sending their dimes to FDIC.

Well, baby, it's pouring outside now. And the tale of FDIC seems like a perfect illustration of what has made the U.S. economy so sick. Subprime mortgages are just a manifestation of the bigger problem: The people don't save, the government doesn't save and even the parts of it that exist to set aside money for the bad times, don't save enough.
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Old 09-30-2008, 02:20 PM   #160
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FDIC has formally requested permission to raise FDIC limits on savings. Lots of Government now talking about it. New limit would be $250K on single owner account.
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