Bail out doesn't pass!

[corndog]

The problem is liquidity. Banks and other financial institutions have held onto mortgage and other backed security, and have attempted to sell it. They cannot sell it. The prices have fallen like a rock. As a result, they are holding onto cash . . .

Yes, why didn't we realize this before! There's a liquidity problem because there's too much cash out there!

 

[Jennasis]

I'm trying to figure something out. The Republicans are using a speech by Pelosi as a reason to vote against it? Honestly? That's the reason? Boo Hoo, she said something we didnt like, so we're picking up our votes and going home. What are they, 5 year olds?

I can understand if they have true concerns about the bill, I understand they might be against the bill for what is contained in it. But to say they aren't voting for it simply because of a speech? That's just really childish.

I agree. Pelosi opens mouth, inserts foot and hurts the reps precious feelings, so they're going to allow the country to go to hell in a handbasket??? What the deuce???

I agree. So now let's see Pelosi act like the adult and go apologize for her childish stunt and perhaps this can still be salvaged.

Again, if anyone requires and apology from one loudmouth in order to do the job they were hired for and to prevent our country from descending into the dark ages, then the failure of this country goes far beyond wall street.

The Bush/Obama bill would have been defeated with or without the speech.

WHEN the heck did it become the Bush/Obama bill?? Right up to and THROUGH the POTUS debate all the reps on here were shrieking about how John McCain spearheaded the effort to get the bill moving. So now it's Obama's?? I think we can fairly describe this as the BUSH Bill.

Yes, actually.

Alos, WOW, I just listened to Pelosi's speech. What a partisan !@#$*What she said was completely uncalled for.

Yup...she's an idiot. But it in no way justifies the reps not backing THEIR president. Such babies.

 

[marybet]

I want to verify WHAT provisions of the bill were PORK. What was added which was not really needed to help our banking system regain liquidity?

Is it true the DEMs added a provision to directly help homeowners? If so then it is the DEMS who added that provision who derailed this emergency BILL. Although I'm from California where undoubtedly such a homeowner bailout would BENEFIT - I am more interested in saving the BANKING system now than anything else. Politics... it all stinks I tell ya.

OK... I'm leaving for Disneyland now... tomorrows a school holiday and I've already reserved a NICE hotel for tonite - so I'm off. Got it on PRICELINE ... a nice 4 star (or 3.5 star) for only $45 plus fees and taxes = 57.74.

You want to save the banks but not the homeowners? If the banks hadn't have made the bad loans to the homeowners we would not be in this mess. Sure some people bought more house than they could afford but they couldn't have done that if the banks had not lent them the money. It was the responsiblity of the banks to make good loans. Now some seem to think we should just throw the homeowners to the wolves. It is not enough to just save the banks, we have to stop the foreclosures. The economy will not improve if the housing maket does not improve. I would rather see my tax money keeping people in their homes than keeping bankers on their yachts.

 

["Got Disney"]

I would like to hear from ladyjayhawk, manning, etc. and those who say insurance will work, exactly how insurance will work. Frankly, insurance, repealling the capital gains tax, and reducing taxes on comapnies doing business overseas is not likely addressing the problem. This is the republican plan.

The problem is liquidity. Banks and other financial institutions have held onto mortgage and other backed security, and have attempted to sell it. They cannot sell it. The prices have fallen like a rock. As a result, they are holding onto cash, instead of loaning it between themselves, and to companies, because of the drain placed on them because of the markets failure to absorb the securities. Thus, the fact that the securities cannot be sold causes the available funds of the institutions to dry up. As a result of there being no liquidity in the credit market, things like car loans, mortgage credit and business credit (including lines of credit, commercial papers, etc.) dry up. This means that your paycheck might not be good because of the line that funds it is not being honored. Anyone else heard that Paychex may have difficulty meeting their customers' pay check requirements because of the commercial paper market. Anybody heard the McDonalds franchises are out of luck for upgraded equipment on credit?

Banks lend funds to each other every day. Every day, based upon the banks books, they either buy or sell funds for the day to match what their numbers are. In the negative, borrow. In the positive, sell. Howevere, because the daily market dried up because of the amount of borrowing needed, and 2, the fact that banks have decided to keep it for themselves in stead of lending it out, because they know when they need to borrow the funds, they wont be there, there is no avenue to jump start this liquidity crises than to infuse capital. The 700b would have infused capital by purchasing these loan assets, which would take them out of the credit market, and thus free up the capital that had been stymied by them. It works, if, the institutions then turn around and begin the loan process based upon the new liquidity. The foreign investors also need to look at the process and decide to become involved again as well.

It does not work if the loans are not made after the infusion. When the creidt market dries up, things grind to a halt. Homes, autos and big ticket items are not sold. People loose their jobs, which causes additional big ticket items not to be sold, etc. It spirals down. The way the county got itself out of the depression, spending--infusion of capital both on the corporate side as well as the individual side. The way it got itself out of recessuion in 1980, spending, from the top down--infusion of capital. This is the same theory, although the mechanism is different.

So, how does insurance put liquidity back? It does not. In fact, it does the opposite, it saps liquidity. It seves the wall street bottom line in the long run. It does nothing for main street. It does not pass on liquidity past wall street. Any wonder it was proposed by republicans who also wanted to repeal capital gains tax, and increase tax cuts to companies with foreign footprints. Nothing to help the crisis as it now exists.

Please tell me how insurance is going to solve this problem. Please tell me how insurance is going to allow institutions to lend money, which in turn will fuel the economy.

No, really, I want to hear the reasoning behind it, besides "we shouldnt spend 700b".

We all know that the bailout needs to happen that is not the problem...it is where when and how the 700 billion will be allocated is the issue and the hold up.

 

[LakeAriel]

[QUOTE="Got Disney";27875762]Do you honestly think that is the only reason...I hope not....because than we are in more trouble than we all think. This has never been a true done deal...even before Pelosi.....tell me... do you not think what pelosi did was being vindictive...or at the least childish...[/QUOTE]


Of course I know better..That is not what the GOP is trying to spew, however.
They came out, at a news conference..(did you miss it?) and stated it was in the bag and then when Nancy Pelosi spoke they changed their minds. What ignorant infants if that were true!

They should be mortified to even suggest that is why it failed!

 

[UConnJack]

I am here to help!

The blame lies squarely at the feet of the federal reserve board, but for some reason (which is beyond me) they have yet to be called on it.

Oh, ITA that Greenspan and the Fed perpetuated the housing bubble with no regard for the consequences. But my point is people have to assume some responsibility for themselves, we're the ones who took out the loans, we're the ones who tapped all of our equity, we're the ones who lived beyond our means.

 

[dennis99ss]

Got Disney-----I don't think everyone does believe help is needed.

corndog, to some extent, your comments are true, but they are used in a way that belies a false impression. Yes, those institutions with disposable capital cannot lend it on the overnight or shorterm market, because they do not know what their requirements will be for the next day. hence, there has been a drying up of the overnight market. Because of the market not being there, they cannot afford to lend the money because, if they are caught in a situation where they need the funds, but cannot get them, they are technically bankrupt, ie. not enough assets to cover liabilities.

But, the interbank market is not the cause, it is a symptom. Further, it does not have enough capital to free up the market, nor is there the will to free up the market this way. Hence, the only way to address the underlying problem is to infuse capital, free up credit, and encourage lending.

 

[TLSnell1981]

Looks like a majority of the House Republicans think going against Bush now, will win them re-election.

All I know - this is my retirement that they are gambling with (401k). And I am NOT amused.......

Watch - people may actually start a run at the banks.......

Oh, so all the dems voted YEA?

 

["Got Disney"]

You want to save the banks but not the homeowners? If the banks hadn't have made the bad loans to the homeowners we would not be in this mess. Sure some people bought more house than they could afford but they couldn't have done that if the banks had not lent them the money. It was the responsiblity of the banks to make good loans. Now some seem to think we should just throw the homeowners .

It is also the responsibility of the homeowner to not purchase a home they know they will never be able to afford...so it is not just the banks fault.

To many people in this country want the GOV to bail them out of everything....well fiscal responsibility starts at home.

I personally am mad at both sides....banks and homeowners. I pay my mortgage on time. I did not buy more of a house that we could afford...we bought less actually because life gets in the way so why burden ourselves more than we have to if something were to happen.

Many buyers got greedy and bought homes they could not afford to resell and make a big profit...but as more and more did that and the housing market became saturated so many houses came on the market to sell at theses ridiculous prices that people could not sell...than the bubble burst and those that could not get out were stuck in foreclosure.

Saw it coming and wanted no part of it.

 

[corndog]

Got Disney-----I don't think everyone does believe help is needed.

corndog, to some extent, your comments are true, but they are used in a way that belies a false impression. Yes, those institutions with disposable capital cannot lend it on the overnight or shorterm market, because they do not know what their requirements will be for the next day. hence, there has been a drying up of the overnight market. Because of the market not being there, they cannot afford to lend the money because, if they are caught in a situation where they need the funds, but cannot get them, they are technically bankrupt, ie. not enough assets to cover liabilities.

But, the interbank market is not the cause, it is a symptom. Further, it does not have enough capital to free up the market, nor is there the will to free up the market this way. Hence, the only way to address the underlying problem is to infuse capital, free up credit, and encourage lending.

You could do that simply by reducing the reserve requirements, without spending a penny of taxpayer money.

 

[jenfur]

Yup...she's an idiot. But it in no way justifies the reps not backing THEIR president. Such babies.

1. Since when does everyone get so riled up when someone doesn't support Bush? I though supporting Bush was a bad thing?

2. Gee, what big babies to vote against a bill the majority of Americans are against. I call it doing their jobs!

3. I see all this finger pointing about partisan politics, but John McCain simply went to DC and, in the opinions of Dems, did nothing. Yet, he is to blame for every problem this bill has had. I mean really? The Dems brought him up in every speech they have given on this bill!

4. Also, the idea that McCain didn't provide the votes...aren't these people supposed to have minds of their own?

 

[dennis99ss]

The fed is also a part of the problem, but from a different aspect. The fed has been raising interest rates, which makes certain of the mortgage backed securities even less desireable. The rates were being raised because the fed was attempting to fight inflation. Unfortunately, it did not work. Its actions, in tightening credit by raising rates will end up causing even greater inflation, irregardless of which way this bill goes.

 

[dennis99ss]

corndog:

why would you want to reduce the reserve requirements? don't you think that would cause even more taxpayer dollars to be put at risk, namely through the fdic

 

[UConnJack]

More than a repudiation of Democrats, Frank said, Republicans' refusal to vote for the bailout was a rejection of their own president.

"The Republicans don't trust the administration," he said. "It's a Republican revolt against George Bush and John McCain."

Way to go Barney, fan the flames even more.

Obama and McCain need to have a joint press conference stating that they are truly disgusted with the behavior of both of their parties.

 

[Golf4food]

But, the interbank market is not the cause, it is a symptom. Further, it does not have enough capital to free up the market, nor is there the will to free up the market this way. Hence, the only way to address the underlying problem is to infuse capital, free up credit, and encourage lending.

Not disagreeing, but lend to whom? The majority of consumers are in so much debt they should be receiving new loans and should have their current lines of credit cut off, many business with lines of credit can't meet their obligations either and are not worthy of new loans if you use strict underwriting criteria.

At some point if you get your leg clamped shut in a bear trap you need to just cut off the leg and try to recover before you bleed to death or die of starvation. I don't know if our country (or the individual person) is ever going to learn - and change for the better - if we don't allow consequences to catch up with actions at some point.

 

[JARNJ3]

Oh, so all the dems voted YEA?

oh for goodness sakes. The Dems were charged with having to clean up this Bush\Republican mess. They voted 60-40 in favor of it. Some holding their noses.

The Republicans voted against it 67 - 33. Some blaming the fact that Speaker Pelosi wasn't nice to them.......... They did not put the country first..........

 

["Got Disney"]

Of course I know better..That is not what the GOP is trying to spew, however.
They came out, at a news conference..(did you miss it?) and stated it was in the bag and then when Nancy Pelosi spoke they changed their minds. What ignorant infants if that were true!

They should be mortified to even suggest that is why it failed!

This morning at 6:30 pacific they said on CNN that they were HOPING by today or Wen that a deal would be reached. That they were closer to an agreement.....I never heard them say IT WAS IN THE BAG.

 

[Jennasis]

1. Since when does everyone get so riled up when someone doesn't support Bush? I though supporting Bush was a bad thing?

2. Gee, what big babies to vote against a bill the majority of Americans are against. I call it doing their jobs!

3. I see all this finger pointing about partisan politics, but John McCain simply went to DC and, in the opinions of Dems, did nothing. Yet, he is to blame for every problem this bill has had. I mean really? The Dems brought him up in every speech they have given on this bill!

1 & 2. This is supposed to be a non-partisan issue. It's something that has to be done, whether Joe Shmoe in Idaho likes it or not. I don't like it, but I understand it is a necessary evil. I expect the president's political party, AT LEAST, would support him. I don't support "Bush", but I do recognize the need for this action.

3. McCain and Obama and their jockeying for the white house has NO BEARING on this issue. I am not blaming McCain or Obama for any problems with the bill. I merely asked why corndog insists on referring to it as the Bush/Obama bill, when just a few days ago all the republicans were all gung ho about how McCain singlehandedly rode in on his white horse to make this bill happen??

 

[corndog]

The fed is also a part of the problem, but from a different aspect. The fed has been raising interest rates, which makes certain of the mortgage backed securities even less desireable. The rates were being raised because the fed was attempting to fight inflation. Unfortunately, it did not work. Its actions, in tightening credit by raising rates will end up causing even greater inflation, irregardless of which way this bill goes.

Finally someone who gets it! I've been wandering alone in the wilderness.

 

[dennis99ss]

we just disagree on the cure I guess.