New Bailout?!?

["Got Disney"]

Stay tuned...I'm sure the airlines will be next

They have denied them moneys to help but ya cant keep giving to one and tell another no....wait and see...there holding there hands way out.

What I hate is WE are having to reward businesses for doing bad business...I was always taught we get rewards for Jobs well done...not the other way around...

If AIG keeps doing what they are doing me thinks some crazy is going to blow them up....how the heck can our representatives give all this bailout money and not make these dying companies accountable for there spending....

Unbelievable...

 

[FINFAN]

and other countries are just circling, smelling the blood......

 

[Colleen27]

I say help the auto industry but cancel the Union Contracts. That is what would happen if they had to file bankruptcy instead of being bailed out.

I really don't get this outrage at unions. Why the call to cancel union contracts, which are nothing more than hardworking people trying to ensure a decent standard of living, but not bother with limiting CEO salaries or golden parachutes?

 

[FoundMyPrince]

The things that irritates me is there seems to be no end to the madness. All the big businesses have their hand out and want something for seemingly, nothing. Isn't that partially what caused this big mess?

 

[LuvOrlando]

I really don't get this outrage at unions. Why the call to cancel union contracts, which are nothing more than hardworking people trying to ensure a decent standard of living, but not bother with limiting CEO salaries or golden parachutes?

I'm not anti union. After all, it is the union system that created safe business practices. But the contracts that are negotiated when times are good seem set in stone even in bad times. Some unions strangle the industries they depend upon.

As for CEO's etc, I don't think you can limit how much they make. However, I do think that taxpayers can demand stipulations be attached to OUR tax money. Once public funds are tapped all other free market rules regarding freedom with in-house money must be suspended.

 

[RitaE]

Today Paulson was talking about lending assistance to the Credit Card companies and Auto Finance Corporations - ie American Express and such.

I'm sorry, but those industries have been making billions of dollars for YEARS off of consumers. Now we are supposed to turn around and give them our tax dollars because they've had 2 bad years?

I'm literally sick to my stomach over this whole thing. This is nothing like what the "TARP" was billed as when it passed. Remember? The Treasury was going to buy Toxic Mortgage Assets and hold them for a couple of years and then make money! It was a deal for the Taxpaying public!!! Unfortunately, it was all a huge lie.

When is the public going to wake up and start screaming? I'd like to be there for it.

 

[eliza61]

The bailouts should be loans, just like what happened with the Airlines. And there need to be stipulations in order to get the loans.

But I thought the airlines did not pay back those loans. Many of them declared bankrupcty anyway and we still got left holding the bag. either way it sucks.

If we blame the unions then we also must blame greedy coporate execs that are in bed with the republicans. Every one had their hand in the cookie job.

Unfortunately we will have to bail out the auto industry, I read that for every unemployed auto worker there will be 4 unemployed support business that will go under as a direct affect. Now we will be looking at unemployment rates of 13%.

 

[LuvOrlando]

Today Paulson was talking about lending assistance to the Credit Card companies and Auto Finance Corporations - ie American Express and such.

I'm sorry, but those industries have been making billions of dollars for YEARS off of consumers. Now we are supposed to turn around and give them our tax dollars because they've had 2 bad years?

I'm literally sick to my stomach over this whole thing. This is nothing like what the "TARP" was billed as when it passed. Remember? The Treasury was going to buy Toxic Mortgage Assets and hold them for a couple of years and then make money! It was a deal for the Taxpaying public!!! Unfortunately, it was all a huge lie.

When is the public going to wake up and start screaming? I'd like to be there for it.

Ohhh, I'm already screaming...

I think the reason why people aren't taking a huge stand is because they are trusting that the powers that be are doing things in their best interests. Since I have yet to see a single Economist on TV stand up & recommend a course of action and tell me why it will work I have zero confidence in any of this nonsense. To be honest I think we have politicians developing Economic policy, and they are utterly and incomprehensibly ignorant of how the Economy works.

To be frank, I think this is a case of the foxes watching the chicken coop. All the special Interest Lobbies are in line waiting for election pay-backs and we're going to be left holding the bill. And, quite frankly I could almost tolerate that if I thought my neighbors would get their jobs back. But, since I just don't see how any of this will help a single person I know I think the whole thing has catastrophe written all over it.

 

[Quiksilvr]

I really don't get this outrage at unions. Why the call to cancel union contracts, which are nothing more than hardworking people trying to ensure a decent standard of living, but not bother with limiting CEO salaries or golden parachutes?

Union pension and retiree welfare obligations in the auto industry outweigh CEO salaries and parachutes by an order of like 1000 to 1. It costs a lot of money to fund those pensions, and the pension assets are deteriorating in value just like your 401(k) assets.

You're right; unions are full of hardworking people trying to ensure a decent standard of living. By doing that, they have guaranteed that American auto manufacturers cannot remain competitive compared to foreign manufacturers who are not under the same constraints. Unions have done a great job looking out for themselves, but their inflexibility and demands come at a cost.

 

[LuvOrlando]

But I thought the airlines did not pay back those loans. Many of them declared bankrupcty anyway and we still got left holding the bag. either way it sucks.

If we blame the unions then we also must blame greedy coporate execs that are in bed with the republicans. Every one had their hand in the cookie job.

Unfortunately we will have to bail out the auto industry, I read that for every unemployed auto worker there will be 4 unemployed support business that will go under as a direct affect. Now we will be looking at unemployment rates of 13%.

Loans can be forgiven. This country keeps forgiving loans to foreign countries as a part of foreign policy. This country can also forgive loans within our boundaries if, I suspect, the right person gets the right campaign contribution. I'm disgusted.

As for the Auto industry. Who exactly are we bailing it our for? More precisely, who has the money to buy all the cars they want to build? AM I in a bubble, from where I sit most people are struggling with normal day to day expenses and won't be lining up to purchase new year cars off the lot anytime soon.

 

[Quiksilvr]

Ohhh, I'm already screaming...

I think the reason why people aren't taking a huge stand is because they are trusting that the powers that be are doing things in their best interests. Since I have yet to see a single Economist on TV stand up & recommend a course of action and tell me why it will work I have zero confidence in any of this nonsense. To be honest I think we have politicians developing Economic policy, and they are utterly and incomprehensibly ignorant of how the Economy works.

To be frank, I think this is a case of the foxes watching the chicken coop. All the special Interest Lobbies are in line waiting for election pay-backs and we're going to be left holding the bill. And, quite frankly I could almost tolerate that if I thought my neighbors would get their jobs back. But, since I just don't see how any of this will help a single person I know I think the whole thing has catastrophe written all over it.

This was one of my criticisms of Barack Obama AND John McCain. All of President-elect Obama's vaunted thoughtfulness and intellectualism will get him nowhere on this issue because he doesn't know his bum from a hole in the ground when it comes to economics. He's a lawyer! When will people get it through their heads that lawyers are generally clueless when it comes to anything other than law. My law school class (at a top law school, no less) was full of clueless people who were scared to death of anything that looked like long division. Most of them said things like: "If I had wanted to do math or understand numbers, I wouldn't have become a lawyer."

You're partially right about the "fox" point. I think their mentality is: why not? If they'll give us money, why not take it? The special interest groups are very well represented in this town.

I think this thing is going to get way out of control. Everybody has their hand out for money that the government doesn't really have.

 

[Quiksilvr]

But I thought the airlines did not pay back those loans. Many of them declared bankrupcty anyway and we still got left holding the bag. either way it sucks.

If we blame the unions then we also must blame greedy coporate execs that are in bed with the republicans. Every one had their hand in the cookie job.

Unfortunately we will have to bail out the auto industry, I read that for every unemployed auto worker there will be 4 unemployed support business that will go under as a direct affect. Now we will be looking at unemployment rates of 13%.

Uh, there are just as many "greedy corporate execs" in bed with Democrats. You're ignoring reality if you think otherwise. I work in a law firm where the average partner profits well over a million dollars a year, and most of them voted for Barack Obama. A number of our clients are some of America's largest companies, and they are generally willing to work with Democrats OR Republicans to get what they want from the government.

This idea that Democrats don't have major ties to big business is completely ridiculous.

 

[golfgal]

I really don't get this outrage at unions. Why the call to cancel union contracts, which are nothing more than hardworking people trying to ensure a decent standard of living, but not bother with limiting CEO salaries or golden parachutes?

Unions serve a purpose but when auto line workers are making $42/hour to tighten bolts on a car, something is wrong there. Yes, at the turn of the century when labor laws were non-existent, unions provided FAIR pay and safe working conditions. Now, they make sure that the US auto industry bankrupts itself because they would NEVER consider a pay decrease like airline employees have been asked to take year after year. Again, I am NOT anti-union, just the autoworkers union has gone overboard with their 'fair pay'.

 

[dvcgirl]

Here's the problem with these bailouts.

There is *no* plan. Paulson literally got down on bended knee to Nancy Pelosi back in September begging her for this 700 Billion. He told Congress that he was going to use that money to buy toxic mortgage paper to "unclog the credit markets", so that banks would start lending again.....people wold buy houses and SUVs and 58 inch plasma TVs......and we'd all go back to our over-spending ways.

But then the House Republicans blocked it....and the markets tanked.

Then the House and Senate passed the bill and King Henry got his the first "installment" of the 700 Billion. By then the markets tanked so much by that point that King Henry decided that it would be better to spend at least 250 Billion on the banks....by injecting liquidity directly into their accounts. He said that we'd still be buying the "toxic paper" down the road, but we needed to stabilize the banks.

So out goes 250 Billion to about 12 banks.....regardless of whether they need this money or not. And so what do the banks do with this 250 Billion? They hoard it. They're losing money so fast that they can't afford to lend....they need that money to meet basic capital regulations.

So central banks around the world start cutting rates like crazy and flooding the world with money.....which brings the Libor spread down.....which basically means that banks will start lending to each other......but they really aren't, not in any significant way, because they still have all that toxic paper on their balance sheets....and housing continues to fall. And they're still not lending to businesses or the public anywhere even close to what they were doing before this crisis.

So today Paulson comes out with Plan E, or is it plan J....I've lost track. Now we're going to "help investors" get back into the consumer loan securitization markets. He said that about 40% of that market is still "frozen".....which means banks aren't lending to about 40% of businesses or the public (and for what it's worth I think the number is much higher).

So, we're going to inject tax payer dollars into the securitization markets now....and not the *housing* securitization markets......but the *consumer credit* markets, so banks will start lending to the half of the public that they never should have been making loans to in the first place. And what insane investor is going to jump into the credit card/auto loan debt markets when unemployment and foreclosures are skyrocketing. Maybe they need a simpleton like me who has some common freaking sense to explain this to them.

BRILLIANT!

Here's the Government plan, and it's a scary one. "Keep throwing Billions of dollars at random hatched ideas and see what sticks".

Nobody knows what the hell to do.

Everything they have tried has failed......miserably.

If they can't get a handle on this thing, you're going to start to hear the "D" work again....

If people don't think that this economy can get much worse.....don't kid yourselves. If you don't have an emergency fund, get one started.

 

[LuvOrlando]

Its good to know I am not alone in my concerns here. Hopefully there are some people in positions of influence who can see what is ahead of us and can put the brakes on before its too late... I don't have much confidence though.

 

[dvcgirl]

Its good to know I am not alone in my concerns here. Hopefully there are some people in positions of influence who can see what is ahead of us and can put the brakes on before its too late... I don't have much confidence though.

I have lost all confidence in the Paulson team. I know he'll be out soon enough, but Congress should hold onto the other 350 Billion (and I think that they will), because this guy's ad hoc approach to "fixing things" is just wringing confidence out of the markets......

Gotta tell you, if things continue to sprial....it becomes a self-fulfilling prophecy to a certain degree. Wait until the January layoffs start....

 

[LuvOrlando]

And they're still not lending to businesses or the public anywhere even close to what they were doing before this crisis.

He said that about 40% of that market is still "frozen".....which means banks aren't lending to about 40% of businesses or the public (and for what it's worth I think the number is much higher).

'

That's the rub isn't it. No way is there anyone who is going to risk being burned twice by extending credit to those who are a bad risk... those who are in need & out of work. The money will not trickle down because banks need to answer to stockholders first and foremost, and stockholders do not care about whats right or wrong, they care about the bottom line.

So this begs the question, who exactly is this bail out going to benefit and why are we putting up with it?

 

[Charade]

Here's the problem with these bailouts.

There is *no* plan. Paulson literally got down on bended knee to Nancy Pelosi back in September begging her for this 700 Billion. He told Congress that he was going to use that money to buy toxic mortgage paper to "unclog the credit markets", so that banks would start lending again.....people wold buy houses and SUVs and 58 inch plasma TVs......and we'd all go back to our over-spending ways.

But then the House Republicans blocked it....and the markets tanked.

Then the House and Senate passed the bill and King Henry got his the first "installment" of the 700 Billion. By then the markets tanked so much by that point that King Henry decided that it would be better to spend at least 250 Billion on the banks....by injecting liquidity directly into their accounts. He said that we'd still be buying the "toxic paper" down the road, but we needed to stabilize the banks.

So out goes 250 Billion to about 12 banks.....regardless of whether they need this money or not. And so what do the banks do with this 250 Billion? They hoard it. They're losing money so fast that they can't afford to lend....they need that money to meet basic capital regulations.

So central banks around the world start cutting rates like crazy and flooding the world with money.....which brings the Libor spread down.....which basically means that banks will start lending to each other......but they really aren't, not in any significant way, because they still have all that toxic paper on their balance sheets....and housing continues to fall. And they're still not lending to businesses or the public anywhere even close to what they were doing before this crisis.

So today Paulson comes out with Plan E, or is it plan J....I've lost track. Now we're going to "help investors" get back into the consumer loan securitization markets. He said that about 40% of that market is still "frozen".....which means banks aren't lending to about 40% of businesses or the public (and for what it's worth I think the number is much higher).

So, we're going to inject tax payer dollars into the securitization markets now....and not the *housing* securitization markets......but the *consumer credit* markets, so banks will start lending to the half of the public that they never should have been making loans to in the first place. And what insane investor is going to jump into the credit card/auto loan debt markets when unemployment and foreclosures are skyrocketing. Maybe they need a simpleton like me who has some common freaking sense to explain this to them.

BRILLIANT!

Here's the Government plan, and it's a scary one. "Keep throwing Billions of dollars at random hatched ideas and see what sticks".

Nobody knows what the hell to do.

Everything they have tried has failed......miserably.

If they can't get a handle on this thing, you're going to start to hear the "D" work again....

If people don't think that this economy can get much worse.....don't kid yourselves. If you don't have an emergency fund, get one started.

IMO, this it typical of government and it baffles me to no end why many people want them to do more!!!

 

[dvcgirl]

IMO, this it typical of government and it baffles me to no end why many people want them to do more!!!

I agree....

Well, I mean, I get that Governments *always* spend more money, even if they have to go into debt, during a recession. Right now they're the only "leg" of the "GDP table" that is spending.....consumer spending is negative, business spending is negative, and exports are falling.

However, you'd think that "those in the know" would actually *know* how to best spend that 700 Billion that our very generous congress so graciously entrusted them with....wouldn't you?

It's becoming increasingly clear to me that they really and truly don't know what to do. They're running around trying to put out raging fires with a squirt gun.

And so, in my very simplistic way of thinking, if you really and truly don't know what to do.....wait until you *do* know what to do.....before doing something. lol!

Also keep in mind that the Federal Reserve has very quietly tripled their balance sheet. That's where the AIG money came from....and the Bear Stearns money.....and whoever else steps up. I believe we're at a real risk of losing that AIG loan.

They can try and "prop up" the securitized consumer paper market as much as they want.....but just like they pumped all of that money into those bank vaults....they can't *force* over-leveraged banks to lend.

And so now they'll pump many more billions into the debt markets....but they can't *force* over-leveraged, unemployed and foreclosed-upon consumers to borrow.

 

[LuvOrlando]

Thank goodness, the Economists are speaking up!

http://www.cnbc.com/id/27662540/

Finally some common sense.