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 MermaidSari
Joined: 2/4/2007
Msg: 1
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Government bail-out planPage 1 of 3    (1, 2, 3)
Exactly what I said: I think the government should bail out

We all watched Lehman file bankruptcy, AIG get gov. bail out, Wamu get 'seized' by the federal government [some of us might have even might have been shareholders. :-( ]...so what do you think about the 700 billion dollar bail out plan?

Should government tote the line of market intervention? Has anybody thought about 'federally owned foreclosures' if other financial institutions [globally or domestically] didn't buy the faulty loans/paper that the gov. supposes to took over for the banks? <--not discussed much in the media, it's just me that comes up with these crazy ideas.

And alas, what is in the future for Wachovia, our friendly east coast lender?

(Actually I hope the plan passes the house this Monday as I truly just care about remaining stocks held after my losses on WM, since I'm selfish that way). :-p

Yes, POF this is your thread to financial strategize [just what you were thinking about ...right? ;-p].
 MermaidSari
Joined: 2/4/2007
Msg: 2
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Government bail-out plan
Posted: 9/28/2008 11:16:26 AM

surprises in store

Candy canes and Sugarplums dance in my head.

The media reported billions in banking customer withdrawals as the cause for government seizure of Wamu. With asset worth just above 304 bill, WM was offered a great amount more by JP/Chase the week prior to its fire sale. Citibank offered billions for WM last Monday as well, while WM released press report that it is waiting for the gov. bail out plan as 'promised.'

Gov. then closed the doors on the bank [slapping the hand of a banking industry and investors trusting promise by the gov.?] <--the FDIC was paid 13 billion for take over by JP Morgan and 1.9 bill was the fire purchase price (someone cleaned up on the deal, eh?). The 6th largest bank in the nation's securities is now carried over into the promised 700 billion bail out for the jolly green Morgan giant, while billions of investor's dollars were wiped out in the 'after trading hours' gov. seizure/acquisition transaction.

Investors lost much more than the 1.9 bill dollar price tag (one business in particular had 40 billion in recent reinvestment [unsure how much escaped], while 7 billion was held by another and wiped out via gov. action. This not including the average middle class investor). The stock which plummeted to 1.69 was actually lower (1.50) the week prior and was as high as 3.33 the Thursday the bank was taken over by Feds.

Wachovia (also awaiting for the gov.'s bail out promise) immediately on Friday held talks of merger/acquisition with Wells Fargo and the other two looking to spread its wings to east coast. <--While Wachovia has less bad debt than WM, investor reaction to the gov.'s seizure of WM is causing WB stock to tumble. <--the suspension of sales against this bank notwithstanding scrunity.

Wamu's and Wachovia's new business venture: a reality television program called government flippers?

Confidence in Wall Street or confidence in our gov. ... is the question in my mind? I know I as a taxpayer am reassured in our bipartisan system pitching blame for the election's sake while billions of dollars are being shuffled around under after the market is closed.
 AceOfSpace
Joined: 5/28/2007
Msg: 3
Government bail-out plan
Posted: 10/1/2008 12:21:04 PM
Well, here's the thing. It now appears (doh) that certain types of markets require regulation. Mortgage credit, in particular, appears to be one. Why? Because of the inability of secondary holders of collateralized paper to verify the actual value of the assets.

Markets only function efficiently (meaning that prices tend toward fair market values) when there is adequate information available for purchasers to make rational, self-interested choices. The right to exclusive possession of real estate is intangible. How can you value it reliably? If everything is based on comps, then as we have seen, the real-estate market is a house of cards.

All of these people who leveraged themselves into properties they cannot afford are now in trouble, but ultimately it is the lenders and repackagers who committed what amounts to legal fraud. I can understand the taxpayers who would rather see the entire economy undergo massive restructuring than to reward that fraud. And who knows? Maybe that's exactly what we need.

Why? Because we're going to have to retool soon anyway. Our entire economy is built on another fraudulent assumption--the idea that our supply of liquid fuel is inexhaustible. It's not. So, rather than bailing out all those old-school idiots who will just turn around and run us into the ground again, perhaps we should just let the market shake out, re-establish appropriate regulation to guarantee the ability of borrowers to pay off any loans that could be resold on the open market, and start investing in industries with a real future--such as solar power generation, geothermal air conditioning, LED lighting (and safe reprocessing of CFLs that contain mercury), localized production of fresh produce, and so on.

I'm glad the Senate wants to extend tax credits for energy-saving purchases. If the energy companies aren't going to willingly invest in energy-saving technology and infrastructure, then I believe we should feel free to tax them and use the revenues to do that research and development ourselves. All those investors can then put their money into ventures that will actually build a new, sound economy, and with it, their future fortunes.

The old economy is dying. Fun though it has been, perhaps we should just let it die, be done with it, and get on with building a sustainable future.
 MermaidSari
Joined: 2/4/2007
Msg: 4
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Government bail-out plan
Posted: 10/7/2008 12:12:14 AM
Ace -- do you mean capitalism and free market is dying? The Senate bill was called the finanical socialization Act.

As far as mortgage bail outs...what about consumer beware and consumers educating themselves on loans offered by lenders? I didn't see lenders slipping consumers' stupid pills? Did you?

My family and friends all have the same fixed loans and aren't falling into default. Why should everyone pay for other's unwise decisions? Don't those who stayed clear of the subprime mess have any reward for doing so ... or should we all pay while banks profit via funds stored by those who were wise? Then we have to ask the question...how does socialist governments fair in global considerations and are we really desiring to make that move and jeopardize our free market system? Ooops...too late. Who pays for gov. delays and failures to test the new loans offered as well as consumer ignorance: taxpayers.

That said, the banks being bailed out by taxpayers to me is only something I supported when I had stocks invested. Having taken away my selfish interests [selling my stocks off and cutting my losses when gov. failed to act]...I view the whole thing as robinhood in reverse when considering the profit for years that banks have made in lending.

Watch as injustice increases as well as multitudes of law suites as the economy continues to stuggle regardless of the bail out enacted now. Palson's plan will not fix the global economic situation that is caused by more than just the subprime situation but a domino effect that was responded to too late. Bush himself stated concern 5 years ago about our economy, but wasn't heard [although now blamed] . McCain stated concern 2 years ago and wasn't heard. I'm not sure if Obama did, but give him fair mention for bipartisan purposes.

What an interesting situation to watch though [predicted far in advance by Dow theorists]. My only failure was trusting the government when they first announced the plan as was Washington Mutual's error. :-p
 AceOfSpace
Joined: 5/28/2007
Msg: 5
Government bail-out plan
Posted: 10/7/2008 11:34:54 AM
Here's how I see it.

Capitalism as a means of organizing production will never die because it is the most efficient approach for organizing human activity. In an environment of cheap fuel, maximizing the return on labor cost (currently termed "productivity") by investing in ever-more-elaborate machinery makes sense. However, as feul costs increase, there will be an increasing shift away from return on labor as the sole measure of productivity to a trade-off between the return on fuel costs and the return on labor costs. That trade-off will gradually shift away from minimizing labor at all costs toward minimizing fuel costs as well. Investors will favor companies who are best able to strike an appropriate balance to minimize the cumulative sum of those costs, over time, per dollar earned.

As the fundamental measure of competitiveness shifts, the entire financial market will have to undergo a restructuring. The smart investors have already begun to factor peak oil into their risk/return calculations. As a result, the post-WW II ecnomic system is ripe for a shakeout, which contributes to the current instability.

But that only accounts for part of the current bust, though it does add momentum. The idea that markets function best when regulated least has proven time and time again to lead to destructive busts like this. Why? Because people don't need stupid pills to make bad financial decisions--especially when they can shift the up-front risks to others.

All it takes is a lack of sophistication or a pervasive lack of information. We are insane to base our economic well-being on an assumption of market rationality alone. Markets are incredibly powerful when the conditions under which they can work have been met. But those conditions are fairly stringent and require a certain amount of infrastructure to maintain. There are all sorts of conditions that can lead to market failures. The whole premise of the bailout is that among all those bad loans there is enough real value to allow the government to recoup the losses over time once the current panic subsides. What that says is that the real-estate market has been, and will continue to be, wildly inefficient/inaccurate at setting prices. Doh! That's what a "bubble" is! A failure of the market. But without regulation, a bubble is self-reinforcing right up until it bursts. We all saw this bust coming but did nothing, politically, to avert it. We saw the same thing with tech stocks, now with real estate, and who knows with what next? Probably nothing as the chickens are finally coming home to roost.

If the rules allow people to borrow, they are going to borrow. And if the rules allow people to profit by selling loans, they will sell loans because it is in their self-interest to do so--selling loans is much nicer work than turning bolts in a factory.

Until I took a graduate-level finance course, I had no idea that diversification did not mean spreading investments across different sectors. It means investing in the top 3-5 firms within a particular sector to eliminate the firm-related risk in that sector only. Having individual investments in multiple sectors exposes you to the full risk in each of those sectors for the amount that you have in that sector. The only benefit a "diversified" portfolio gives you is the hope that all of your losses won't occur at the same time.

Of course, when the entire market falters as a result of otherwise prudent investors failing to insist on adequate regulation,all of your losses just might. And when that happens, it is hard to say exactly where cuplability begins and ends. Certainly the idiots who got in over their heads are more culpable than those who stood pat, but how much appreciation did those who held back accrue as a result of the bubble, even if they didn't cash out? And what good is the self-satisfaction of having been "right" do if you wind up with homeless and hungry people camped outside your door? How much does that add to your property values and your sense of personal well-being? That most of them were impuslive, selfish, and short-sighted only adds to the worry.

After the S&L bailout of the 1980s, we all had ample reason to keep an eye on the government to make sure that regulation of the real-estate lending market was adequate. But no, we bought the deregulation line because we didn't want to be associated with "socialists." We were all stupid in that regard.

The economy is a complex system with more than two major variables that affect its performance. The law of supply and demand was an outstanding first cut at describing how a monetized economy works. However, money has two primary functions. It is a mechanism for transferring potential energy, and it also functions as a means of conveying information. As such, the price-setting function of a market is only one aspect of the economic system that bears watching. Even more important in the long run is the communication of timely and relevant information. However, unbridled competition reduces access to the very information that investors need to make informed and rational decisions.

They had much of this figured out when it came to instituting regulated investor-owned monopolies for public utilities back in the 1940s. Australia uses that sort of approach for health care. We have other options besides full-on privatization and totalitarian socialism.

We need to restructure to cope with diminishing fuel supplies. We can be stupid and ideological about it, or we can strike a sustainable balance. We can pick from a menu of options on an industry-by-industry basis depending on the extent to which each one meets the conditions for a self-regulating market. But if we're going to do well as a national economy in future, we're going to have to go beyond the old, outdated, cold-war conflict between "capitalism" and "socialism." The Republicans are killing us with greed. The Democrats are killing us with kindness. Either way, it's killing us, and it is irrational (stupid) to go on blindly following either ideology.

I think there is enough historical precedent by now to decide which markets require what degree of regulation based on the availability of information about actual underlying value. Real estate will always require validation of a borrower's ability to pay because the fair market value of an underlying asset is difficult to determine and subject to changing market conditions. How many more S&L-type bailouts do we need to go through before we figure that out? Appropriate regulations is required for _any_ market and any industry in which significant barriers to entry or exit exist or adequate information about underlying value and environmental impacts is hard to come by.

The question is not "do we need to regulate our markets?" The question is, "to what extent and in what form must we regulate each one?"
 Sirens Call
Joined: 7/29/2007
Msg: 6
Government bail-out plan
Posted: 10/7/2008 12:06:23 PM

I did read/hear something akin to federally owned foreclosures earlier, that government could conceivably make money by "fixing up" and selling some of the places when things get better


The FHA has been doing this on Federally insured homes for years. It's almost always done at a loss for the taxpayer. Speculators will be making a killing on these properties if they buy at the right time.
 Sirens Call
Joined: 7/29/2007
Msg: 7
Government bail-out plan
Posted: 10/7/2008 12:58:19 PM
One of many I'm sure Ringo. <<<(Ringo)

I got a Real Estate License, and I ain't afraid to use it!
 Palladin
Joined: 1/1/2008
Msg: 8
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History
Government bail-out plan
Posted: 10/8/2008 6:35:08 PM
They did it again today. They gave the crack addicts more crack by lowering the interest rate. Don't they understand that the credit markets are over extended. Why are they trying to encourage people to borrow more. It is insane
 AceOfSpace
Joined: 5/28/2007
Msg: 9
Government bail-out plan
Posted: 10/9/2008 12:19:13 AM
P,

It's more like an alkie who's going through the DTs. If you don't give that poor sot a sip of beer--just enough alcohol to quell the symptoms, He's liable to go into convulsions and die on you. Toxic paper indeed.
 Palladin
Joined: 1/1/2008
Msg: 10
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History
Government bail-out plan
Posted: 10/9/2008 6:23:48 AM
What was the problem. For me, the average consumer, things are going in the right direction. Gasoline prices are going down, housing prices are going down, the dollar is going up. The whole problem is the government is putting too many dollars out there. They have some phoney baloney way of measuring it that tells them they aren't. I work hard for my dollars. I want them to go as far as possible I don't want the government giving them away.
 Sirens Call
Joined: 7/29/2007
Msg: 11
Government bail-out plan
Posted: 10/9/2008 6:36:50 AM
Aw Palladin, let the government decide what's the best way to spend your money! You're just gonna spend it on wild women anyways.

Nice rant Reality, if you only knew what you were talking about. Truly professional Realtors advise their client's the best way they can. The investor's were willing to lend their money to those (who I felt) were unqualified but desperate for the American Dream of Home Ownership. Real Estate is all speculation. No matter the market. We don't have a crystal ball any more than you do. If the market hadn't collapsed, we'd be your Heroes.

Realtor's negotiate contracts. We don't lend money.
 Palladin
Joined: 1/1/2008
Msg: 12
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Government bail-out plan
Posted: 10/9/2008 6:46:46 AM
I spent most of my money on wine , women, and song. The rest I just wasted.
 cncgandolf
Joined: 7/29/2007
Msg: 13
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History
Government bail-out plan
Posted: 10/9/2008 6:47:53 PM
"Clinton changed the law in '99 "

Those original loans were good loans made to good people who paid them and did not go into foreclosure. Clinton did have a good idea. Longer term loans would have been good, too. I've never liked ARMs.

Sorry, it takes a Republican to take a good idea and twist it into the bad one we now have 9 years later .... after 8 years of "free market" brought to you by Bush, McCain and the rest of the Republicans.

None of us know yet what the bail-out plan will or won't do. It has only been passed. It has not been implemented yet. The interest drop is a separate issue ... and it was not about stopping the panic sale off. It was to free up credit. We didn't get to this financial mess in a day. I was actually calling it back in the late 80's October crash. I was absolutely assured that they would not deregulate the financial industry when I expressed my concern ... yet they did. Every year the Republicans pushed for more and more free market.

Congratulations ... free markets that swing up will also swing down. enjoy the pendalum swing. Voting trickle down and free market and all the rest of the Republican policies results in this kind of swinging.

It will easily take a couple of years ... hang on .. the ride will get tougher before it gets easier.
 MermaidSari
Joined: 2/4/2007
Msg: 14
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Government bail-out plan
Posted: 10/22/2008 2:59:45 AM
CN -- not to make this political...but we had a liberal legislative branch making decisions too...but morseso consumers failing to make educated decisions who couldn't afford homes and buying them anyway now pointing fingers everywhere.

An old Jewish professor of mine always said...when you see a finger being pointed somewhere -- there are 4 more being pointed back at the one accusing another.

Siren -- I want you as my agent! [I'm serious too]!

Palladin -- isn't it the truth about interest rates. They know they have to worry about inflation, but they won't let the market adjust itself and allow things to bottom out [both the RE market and the Stock market]. The bail out was too little too late...(consider AIG already spent up their tax dollars...and I hear they enjoyed 86k in England too )...yet...

citizens are still backing the bail outs/Paulson and Bernanke's plans? :shock:

[now they are only prolonging what they didn't fix soon enough].

Greenspan is saying they have to consider inflation and raise interest rates...he also stated concerns about the economy 5 years ago (along with Bush) ... but Congress didn't listen. [this is the same electoral college that will be picking our next President...not that I'm discouraging voting -- but I'm sure everyone here knows that its elected officials that have more say about who our next President will be].

Too little - too late. They are talking about another wonderful stimulus pay out at tax payers cost too [how high can the deficit soar until they begin to realize that lowering interest rates and raising the deficit doesn't built global confidence in U.S. paper ].

And even Democrats are discussing the Bush tax breaks that will end in 2010 looking at both the candidates (which 'neither' offered a solution to this) and wanting to push something now before Bush leaves office. Too little - too late though, imo. 5 years ago this was predicted by Greenspan and Dow theorists. The Dow theory is now a living prophecy.

New predictions are that unemployment is going to continue to increase regardless of who gets into office...but lets hope the right choices are made via businesses that employ. Businesses definately do not need their tax breaks cut and taxing capital gains at a higher rate...will create less productivity in the market that the Gov. should want to stimulate growth in. Simple economics.

Good posts all.
 AceOfSpace
Joined: 5/28/2007
Msg: 15
Government bail-out plan
Posted: 10/22/2008 9:55:13 AM
All things considered, we've got a lot of retooling to do to put our economy on a sustainable footing. If the stimulus takes the form of incentives to convert to lower-energy-consumption transportation, HVAC, and food production, we could all come out of this situation ahead--or at least our kids and grandkids will.

If the stiumulus is just another nontargeted give-away, it will be more money wasted. We could become the world's leader in the design and manufacture of an energy-efficient modern lifestyle. Or, we can continue to try to live out the 50s for as long as we can possibly hold out.

YMMV.
 The Minister of Dudeness
Joined: 6/11/2006
Msg: 16
Government bail-out plan
Posted: 10/23/2008 2:10:59 PM
cncgandolf

Oh please.

Jimmy Carter started this mess by pushing legislation that forced banks and other lenders into giving loans to unqualified borrowers. All in the name of justice and equal opportunity for all. Three decades later, in the beginning of the meltdown aftermath, the Messiah of Needed Change wants Joe Plumber to pay even more taxes to those "less fortunate", all in the name of justice and equal opportunity for all. But then again, the Messiah has never had to run a business, he can't even seem to find his Harvard papers to let us read them. (Harvard can't seem to locate them either.)

Clinton (um, he was a Democrat too) expanded the money-for-nothing lending program, then sicced Janet Reno on the sensible lenders who resisted.

Bush expressed concern about the toxic lending several years ago, and Congress shut him down. But the money-changers are making bank as long as they can, since they know that the poo will inevitably hit the fan. When it does, everyone stands around wondering how did this happen? "We gotta print some more money out of thin air and give it to the banks so borrowing and lending can start over again."

Now, don't get me wrong, Dubya spent like a drunken sailor on vote-buying by expanding Medicare so much that it actually removed the Social "Security" ticking time bomb as a primary concern. That was no small feat.

So the Republicans are as corrupt as the Democrats, and both parties take money from the same special interests, and neither party will imprison the robber baron CEO's who pay them their hush money. (Hookers don't call the cops on their johns after the prostitution occurs since there's always tomorrow.)

Presidents come and go, but Congress doesn't, and the Democrats have run Congress for several years now but keep telling the gullible citizenry that George Bush has ruined everything. (Good thing he didn't ruin Manhattan and New Jersey by invading Iraq thus intimidating next door Iran who pays for terrorists' activities more than anyone else. If there had been another 9/11 or worse on Bush's watch, he would have been crucified for not taking the fight to the enemy's backyard, and this other stuff would be second page news.)

Republicans are corrupt, but have enough sense not to kill the golden goose. Democrats are corrupt do-nothing finger pointers, and their blinding ideology speaks to the recently-diluted and dumbed down citizenry who is content to watch movies stars dance on television (instead of attending a school board meeting or doing anything to govern themselves) and take tax refund handouts, even if they don't pay taxes. Hey, fair is fair, and that kind of nonsense serves justice and equal opportunity, doesn't it?

Just wait until the gravy train really derails.
 AceOfSpace
Joined: 5/28/2007
Msg: 17
Government bail-out plan
Posted: 10/24/2008 1:55:59 PM

Jimmy Carter started this mess by pushing legislation that forced banks and other lenders into giving loans to unqualified borrowers.


Well, here's the thing. When the banks won't lend to qualified borrowers who happen to be the wrong color or have the wrong last name, that's a problem. If the bankers won't let competition do the job of making loans available to all who _qualify,_ then when the government steps in and they still don't want to do it, it's very easy to monkey-wrench the policy to "prove" that they were right all along.

The intention of the Fair Community Investment Act was _never_ to force bankers to make bad loans. But hey, it makes for a great excuse when loans turn up bad and you want some political cover for yourself and your cronies. And if you honestly think that it was the cause of the melt-down, you might want to look at what Ben Stein has to say about it. He attributes it to Credit Default Swaps, instruments that are essentially short-selling contracts for mortages, which are used to insure holders of real-estate-backed paper. The problem with them is that they too can be bought and sold on the open market and leverage the losses created by defaults. Creditors won't lend because they don't know what the exposures of their borrowers are to liabilities from instruments like these.

People _lie._ The lies that the _other_ side tells are easy to spot. I'm sure you've got a few to point out to me and please do.

The lies that are dangerous are the ones told by the people who claim to agree with the person listening.

Yes, both parties are corrupt, and both figure that the Treasury is their pie to divide up amongst themselves and their friends. The Cs use external security threats to justify their siphons. The Ls use internal injustices to justify theirs.

There is usually some underlying truth to their pretexts, though pretexts they often are. The bottom line is that no one in our government has a vision for what this country could be in 50 years, and so none of us is working toward anything beyond our own short-term self interest. In a climate like that, it's easy to lie.

Why should any of us sacrifice anything when our country no longer stands for anything worthwhile? Really. What _do_ we stand for now? And so, we're all ready to fall for anything.

Me? I stand for a future in which every person on American soil has ready access to clean air, clean water, fresh, nutritious food, adequate clothing, adequate shelter, adequate and appropriate health care, lifelong education, and ready access to the full range of technical information extant at the time. To me, that is the baseline from which a robust, innovative, and competitive culture can emerge.

Notice I didn't say I'd guarantee them wealth, luxury, or retirement benefits (other than adequate health care). I also didn't say I'd be willing to go on being the world's police force. Of course we need to protect our borders and look after our interests overseas--but we are woefully overextended as witnessed by our huge military budget and corresponding foreign debt. And as police forces go, we've now had to resort to open torture, so our credibility there is shot. They'd all be better off policing themselves at this point, and so would we. We still have a use for our nuclear arsenal, and that is to assure anyone else who drops one that they'll be hit themselves 30 minutes later. Otherwise, it's a waste of money. We'll be able to wield a lot more influence in the world when we aren't dependent on outsiders for our baseline needs anyway.

Jefferson's model of the yeoman farmer as the means for providing that baseline was good in agrarian times, but we have yet to figure out a good industrial model of a self-reliant community.

As far as I'm concerned, once the baseline is met, people can make as much profit as they can manage. And they can keep as much of it as they can legally hang onto, so long as they aren't making it by undercutting the next generation's ability to meet the baseline.

If that makes me a socialist, so be it. But if our civilizion isn't going to benefit us all equally to that minmal extent, why bother? If we ruin the world in the process of trying to get ahead at the expense of one another, that's not going to do us much good either.
 MermaidSari
Joined: 2/4/2007
Msg: 18
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History
Government bail-out plan
Posted: 10/26/2008 9:01:47 PM
Hey when did my thread turn political?

Ace -- I thought I mentioned this 'small' fact in another thread...it's when banks won't hand out loans based on bad credit scores. Again look at Wells Fargo (no racial motivated charges against them ) and they remained in the green through this whole banking crisis. Race? Has someone been getting mentoring lessons from Rev. Wright again?

Adding to Sock's comments (should I dare? ;-p)...I'm still waiting for my stimulus check that will never come because I paid enough taxes to subsidize a min. wage worker's job...yet I'm middle class and not wealthy. Liberals wouldn't approve a realistic stimulus though. They need to update their income guidelines to reflect inflation...and until they do this -- they haven't 'even' 'begun' to address the economic crisis in the U.S., let alone care about the middle class.

Yet it's those 'with' (versus without) that are spending right now and keeping the economy afloat...well then again we are a nation that lives on debt now aren't we and taking it to a smaller scale: does a person really need TIVO/DVR when they can't make a house payment?

Taking from the 'middle class' [at least here in CA that is what 75k-100k a year is] and giving to the 'truly rich' [banking industries] is not what 'should' make a market system tick. Is it? Who really believes here in CA, a person is wealthy if they make 100k? I think they are 'hard' working myself, but hardly rich. And btw -- over 250k for a business is not wealthy either if one was to consider overhead, taxes, health care, etc. ... chances are the business is netting close to or under 100k (middle class...owning a home and maybe a boat, sending their children to college...but by no means living in a 1.65 million dollar home (<--lol, now where did I get this figure from...hint, hint...he claims to be middle class and thinking of the middle class:]).

The stuff :-p is going to hit the fan if business taxes and capital gains taxes are raised versus helping the market (s) the way they are now. It's ECON 101. That's all I have to say as for politics...(okay not really...I could go on and on actually).

As for the Government bail-out...I still say we need different candidates for a 'true' bail out...and that's the 'only' change that is needed. (whoops -- scuse me. I think that might still be on political lines. Sorry). :-p

Thanks all for your thoughts and beyond politics (or any disagreements)...I hope all were prepared for economic changes now being experiencd (well predicted before hand) as well as continuing to be wise in choices made and choices to come. There is always an up side in every down market or situation.
 MermaidSari
Joined: 2/4/2007
Msg: 19
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History
Government bail-out plan
Posted: 10/26/2008 10:06:02 PM
Skooch -- and the Dem. chair Nancy P. is blaming Reagan.

Policies are enacted in the future. For example the Bush tax cuts are going to end in 2010 (well after his term in office) and even some Democratic leaders [if viewing legislative hearings] are recognizing these tax cuts were necessary and this is not being addressed in the 'O' economic plan or by advisors to the party. Some desired to push something through 'before' Bush left office. Again a dollar too short and out of time though.

We need more than 'hope' as far as the lemonade stand is concerned.

A revolutionary 'response' is fine and dandy when stated...but how does it look in reality and on paper?

Then again I work in government service myself while dabbling in investments -- so I'm probably not as educated as others here either. :-p.

I'm just sitting back enjoying my benefit package while tax payers bail out the boys with the real toys ...
 The Minister of Dudeness
Joined: 6/11/2006
Msg: 20
Government bail-out plan
Posted: 10/26/2008 11:26:02 PM
Skoochie



Outside of that, we will have a one term president after this election is over. This econ mess will take five to eight years to get out of and that is why the next president will be a one term president.


Why anyone wants to be elected President of the United States in 2008 is a mystery to me. Given the nearly intractable problems confronting this nation, you have to be either crazy or simply arrogant to want to be the President (and probably a one term President.) I believe that the next President will go down in history as being spectacularly ineffective.


The whole campaign to end the middle class was funded by the upper class.


Word! I concur, and the upper class is still playing the middle and lower classes like a fiddle, and is getting away with it! Shame not on those moneyed elite basstards, but shame on us--the masses who ignore our collective power to change things since we are so busy entertaining ourselves with gossip television and video games. We are just a load of chumps. More people watch the E Entertainment Channel (featuring celebrity nymphomaniacs) than C Span (featuring blowhard politicians who will become instant nymphomaniacs when a campaign contribution check is written to them.)

And Ace of Space my man... Bro, you have so bought into the whole Democrat/leftist/socialist viewpoint, I worry over your whether you can be salvaged or not at this point... But if I wait 4 more years, I know you and millions of other "progressives" will finally come around to the idea that Big Government is for the most part ridiculously incompetent, and that an uninvolved citizenry gets taken advantage of and should not count on The Government to watch out for them...
 AceOfSpace
Joined: 5/28/2007
Msg: 21
Government bail-out plan
Posted: 10/27/2008 2:56:05 PM

And Ace of Space my man... Bro, you have so bought into the whole Democrat/leftist/socialist viewpoint, I worry over your whether you can be salvaged or not at this point... But if I wait 4 more years, I know you and millions of other "progressives" will finally come around to the idea that Big Government is for the most part ridiculously incompetent, and that an uninvolved citizenry gets taken advantage of and should not count on The Government to watch out for them...


Sock, dude!

Do you know why there is a discipline called "macroeconomics?" A lot of people will say that it's about government policy and how it interacts with the economy, but the bottom line is that somebody needs to understand and reckon with market failures. If the market was a perfect mechanism, it wouldn't fail catastrophically every so often. The vaunted law of supply and demand is just _one_ feedback mechanism in the economy. When things go well, it dampens price fluctuations. But that's only when things are going well.

I'm not a fan of big government per se. I tend to agree that the people should do the things that need to be done. However, there are certain things, aside from the collective defense, that the market cannot do. For example, delivering water to your tap. Left to the free market, you'd be paying a dollar a pint for it and nobody can afford that.

Should the government be in the water business? Probably not. When there are significant barriers to effective competition, the appropriate arrangement is an investor owned regulated utility. For situations in which reliable information is unavailable for market decisions, SEC-style regulation is necessary. When there are environmental side effects or social dislocations, or when irreparable harm could result from market-driven behavior, prescriptive regulation is necessary. When there is a significant power imbalance such that uprotected workers can be reduced to virtual slavery, collective bargaining agreements are necessary.

In every situation where there is a lack of adequate regulation, competition overreaches and cannibalizes the resource base on which the market rests. Within bounds, I favor the market. But only within bounds.

BTW, people say that Keynsian policies lifted our grandparents out of the GD, but that's not necessarily so. WW II is really what got everyone busy. However, we won't have enough fuel to burn on another grand adventure like that.

The worst example of the government being in the wrong business is the lottery. I DO NOT WANT MY GOVERNMENT RUNNING LOTTERIES! I want the government to _regulate_ and _tax_ lotteries instead. I would prefer that the government not go into the medical care business. But, I do think that medical care should be handled like any other utility where the consumer has little control over supply, quality, or price, and cannot really shop around effectively.

Also, it's all to easy to say that the government is incompetent when every so often you get people in power who feel that it is their mssion to monkey-wrench any program that actually provides a social service . But then, I don't see why many of those programs couldn't be peformed by nonprofits or regulated monopolies anyway.

I don't see it as a "market vs. government" dichotomy the way that most people do. I see that we have a menu of choices for how to handle each type of product or service. The appropriate ownership and regulatory structure depends on the characteristics of the product or service, including how it's produced, delivered, and financed.
 Foster1
Joined: 1/8/2007
Msg: 22
view profile
History
Government bail-out plan
Posted: 10/28/2008 2:07:06 PM
I agree the government should bail out of office, out of the country, out of existence. There is no clear cut solution. We could talk until one or the other is blue in the face. Socialism, Marxism, and Communism already rules. McCain/Palin; or Obama/Biden doesn't have a clue or the awareness to maneuver past ignorance.

Ask yourself who is complaining, who is always complaining the one with the most to lose. If you think its the rich and not the middle class call me school is open 24/7. Deflationary forces are winning out take that to the bank. I wouldn't let the government mow my lawn. "I am not a crook." Don't look at the market the Feds are manipulating the market.

The government want solve the current crisis for the same reasons crooks can't out run the police in a car chase. The brain is connected backwards.
 MermaidSari
Joined: 2/4/2007
Msg: 23
view profile
History
Government bail-out plan
Posted: 10/28/2008 2:56:39 PM
Skoochie Sir --
What does Keynes or the Boston Tea Party have to do with the Candidates we have running now? Neither hold any revolutionary 'change' in their policies.

Both offer 'small' changes in tax conditions and neither has anything revolutionary as far as the economy as an aggregate. One offers enough 'change' to damage the economy (raising middle class business taxes in both the form of raised percentages and social security tax during a time of threatened recession/depression). The other Candidate keeps the tax status quo (while offering a bit of a break to those with children).

The 'truly' wealthy do not pay taxes. They don't own in their own name (foundations, etc.). Loop holes well established for 'old' money. A business grossing 250k might net under 100k. As well a family income of 200k income is not wealthy either. It's middle class spenders. They might own a home and be able to put their children through college...but most will not own the 1.65 million dollor home Senior Obama owns without the backing of old money.

Revolutionary? Perhaps you are thinking of Ron Paul who is out of the running?

Ace the man --
The dichotomy is not market or government and was drawn a long time ago (it's either socialsim or an alternative form of government...ours being built on market economics [well originally at least]).

The market is up somewhere around 900 today...if you think it will stay there then I do indeed have a wonderful investment for you to consider. I think Lucie called this vegaminvitam or something to that effect.

Much like the environment -- we see fluctuations or cyclical activity (and disruptions when placing policy into 'natural' competition or occurences such as raising/lower rates--a tool of the feds. I don't need to tell you about). The government hasn't developed birth control for bad business yet and when they do (new policy regulations) -- new birth in bad business will pop up (I think they are formed in cabbage patches :-p).

What happened to the banks and those holding mortgages they can't offord is the cost of doing 'bad business.' As stated before the fact is those holding ARMs couldn't afford a house to begin with. The banks made billions...and now they are making more money off of 'your' tax dollars once again. Even the new chair at Wamu didn't go unpaid for his short time in office (to a tune exceeding one mill).

That is the long and short of the macroeconomic policies that people try to dress up. To use a term that both Obama and McCain have claimed fame to...if you put lipstick on a pig...it's still a smelly creature. Oink, Oink.

(Now isn't it great to hear government policies and politicians referred to as this over that of men in the general population?)
 AceOfSpace
Joined: 5/28/2007
Msg: 24
Government bail-out plan
Posted: 10/28/2008 4:03:00 PM
What happened to the banks and those holding mortgages they can't offord is the cost of doing 'bad business.' As stated before the fact is those holding ARMs couldn't afford a house to begin with. The banks made billions...and now they are making more money off of 'your' tax dollars once again. Even the new chair at Wamu didn't go unpaid for his short time in office (to a tune exceeding one mill).

That is the long and short of the macroeconomic policies that people try to dress up. To use a term that both Obama and McCain have claimed fame to...if you put lipstick on a pig...it's still a smelly creature. Oink, Oink.


For better and worse, the Interstate Highway system is a macroeconomic investment. Any governmental expenditure on infrastructure that affects commerse is an intervention in the market that has measureable and predicatble effects. Don't believe me? Just look at all the small towns whose downtown areas when bust after Wal-Mart set up shop at a nearby freeway interchange. It was only a matter of time before the Interstates supplanted local roads to become the main arteries for retail commerce.

Funny, we all seem OK with speed limits and cops to pull over and arrest reckless drivers. But when it comes to reckless speculators, OMG we can't dare interfere with them! Let them crash and burn and shut down the economy with them! Enact preventive regulation to prevent such traffic jams, even when we can all see them coming? That would be unAmerican!

Pardon me, but I don't see the logic in that. This current bust is a result of a widespread failure to value mortgages based on the ability of borrowers to make the monthly payments for the life of the loan. The failure to require the proper measure of value was a failure of appropriate regulation. Without that information, the market was guaranteed to fail.

I do not favor burdensome regulation that does not address the predictable causes of market failures. But I do favor the minimum regulation needed to ensure that buyers and sellers can make intelligent choices. Appropriate regulation _supports_ the market. So does well-thought-out governmental investment. If the government can build roads and manage military operatons--the largest civil engineering projects and most challenging managerial environments imaginable, it should be able to manage just about anything.

I'm not saying it should. What I'm saying is that the claim that the government can't do anything right just because it's a government is hogwash. If there was anything to it, the last thing that anyone would entrust the government with would be the lives of their sons and daughters in times of war.
 MermaidSari
Joined: 2/4/2007
Msg: 25
view profile
History
Government bail-out plan
Posted: 10/28/2008 4:39:39 PM
Ey, yi, yi -- (as Ricky would say)...Ace man...

If you are going to sing a liberal tune, you must educate yourself on what tax dollars pay for what commodities. 'Fuel' taxes are earmarked for Freeways. It was California tax payers themselves (not fed. gov.) that paid for a large majority of our extentive infrastructure as far as the freeway stystem you enjoy. [a very good one at that, but it doesn't leave much room for public transportation]. Police is paid for by local and state government.

You compare mangos and coconuts here!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Transportation costs along side freeways are something 'all' people 'have the ***privilege*** of using.

Do you or I have the privilege of living in another's home if the government pays for it via bail out??? Do you and I have the privilege of executive annual bank salaries?

NO.

You can continue this conversation with Sock man. :-p

I will say one last thing though -- the tax payer should not have to pay 250 or 800 billion dollars for ***regulations***...even without out sourcing this can come quite a bit cheaper. If you can't see this...then again that vegavitam is still for sale if you'd like some.
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