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Another stimulus, this time $800B

2

Posts

  • AdrienAdrien Registered User
    edited November 2008
    Can someone be straight with me, here:

    Is western civilization going to collapse?

    Adrien on
    tmkm.jpg
  • bowenbowen How you doin'? Registered User regular
    edited November 2008
    bowen wrote: »
    bowen wrote: »
    Cap the income of an individual worker for those industries that get the loans maybe? And sell nonessential, luxury equipment. This includes, but is not limited to, jets, pools, limos, company cars, cocaine, whores, stripper poles, 8 story "management" buildings, company bling.

    Good idea. Not only do you know better how a company should use its finances, but you want to drive away all the talent that you possibly can. You know, the guys who at least have a semblance of an idea of whats going on.

    What, do you think these guys work for free? No, they work for the jets, pools, limos, company cars, cocaine, whores, stripper poles, 8 story "management" buildings, not to mention the company bling.

    You're right, I'm stupid to suggest cutting out unnecessary finances for a dying company might actually do some good. I'm sure they can find someone who'll work without it.

    How do you define what is "unnecessary"? Look, you're just pulling at the most obvious things. I agree that the taxpayer should not be funding "stripper poles", but that's just the most egregious example. How do you separate whats useful from waste? The distinction can be pretty fine.

    It's like trying trying to differentiate porn from art. The idea "I know it when I see it" codemns you to judge every instance by itself, rather than just say "when there are boobs."

    I'm pretty sure private jets are not required for the company to operate, or even more beneficial on any level unless moving large droves of employees between locations frequently. What exactly are you getting at?

    bowen on
    Ladies.
  • TK-42-1TK-42-1 Registered User regular
    edited November 2008
    Think about it. The guy from Lehman Brothers gets $22.1 million last year. If he had cut that down to a respectable $1 million (a year. thats more than most people make in 20) that alone could have provided a yearly salary of $50k for 420 people. I know thats not an incredible figure, but I know tons of people that would love to make $50k/yr and this kind of shit of going on all across the country. If the CEOs would take smaller salaries and pay their employees or put that money back into the company they might still have companies to be CEOs of.

    of course when you're putting that many 0s into your bank every year you can probably go unemployed for a while.

    TK-42-1 on
    sig.jpgsmugriders.gif
  • Mithrandir86Mithrandir86 Registered User regular
    edited November 2008
    bowen wrote: »
    bowen wrote: »
    bowen wrote: »
    Cap the income of an individual worker for those industries that get the loans maybe? And sell nonessential, luxury equipment. This includes, but is not limited to, jets, pools, limos, company cars, cocaine, whores, stripper poles, 8 story "management" buildings, company bling.

    Good idea. Not only do you know better how a company should use its finances, but you want to drive away all the talent that you possibly can. You know, the guys who at least have a semblance of an idea of whats going on.

    What, do you think these guys work for free? No, they work for the jets, pools, limos, company cars, cocaine, whores, stripper poles, 8 story "management" buildings, not to mention the company bling.

    You're right, I'm stupid to suggest cutting out unnecessary finances for a dying company might actually do some good. I'm sure they can find someone who'll work without it.

    How do you define what is "unnecessary"? Look, you're just pulling at the most obvious things. I agree that the taxpayer should not be funding "stripper poles", but that's just the most egregious example. How do you separate whats useful from waste? The distinction can be pretty fine.

    It's like trying trying to differentiate porn from art. The idea "I know it when I see it" codemns you to judge every instance by itself, rather than just say "when there are boobs."

    I'm pretty sure private jets are not required for the company to operate, or even more beneficial on any level unless moving large droves of employees between locations frequently. What exactly are you getting at?

    Actually, having a personal jet is an unjustifiable expense, but having a bunch of jets on retainer for executives is actually very worthwhile. When you consider that the shareholders are paying them millions of dollars per year, and are responsible for billions and billions more, having them wait for 2 hours before they get on a plane doesn't make a lot of sense. It is actually financially acceptable.

    You want them working, not waiting at customs.

    Mithrandir86 on
    MKR wrote: »
    Scalfin wrote: »
    MKR wrote: »
    Sausage and pancake on a stick is actually pretty good. And it's convenient if you need to go out early in the morning and don't want to be half-dead from lack of sustenance by 10.

    That's why god invented the bagel and gave it to his chosen people.

    Bagels do not sate me because I am not a heathen.
  • Mithrandir86Mithrandir86 Registered User regular
    edited November 2008
    TK-42-1 wrote: »
    Think about it. The guy from Lehman Brothers gets $22.1 million last year. If he had cut that down to a respectable $1 million (a year. thats more than most people make in 20) that alone could have provided a yearly salary of $50k for 420 people. I know thats not an incredible figure, but I know tons of people that would love to make $50k/yr and this kind of shit of going on all across the country. If the CEOs would take smaller salaries and pay their employees or put that money back into the company they might still have companies to be CEOs of.

    of course when you're putting that many 0s into your bank every year you can probably go unemployed for a while.

    50k a year? Hahahaha. At an investment bank? The secretaries make more than that. Way, way more.

    And $50 million is not a lot of money for a company. It's a lot for one person, but when you're talking about revenue in the 10s of billions, paying 0.5% of that to an executive who makes all of the big decisions makes sense. Especially when he can that somewhere else.

    Mithrandir86 on
    MKR wrote: »
    Scalfin wrote: »
    MKR wrote: »
    Sausage and pancake on a stick is actually pretty good. And it's convenient if you need to go out early in the morning and don't want to be half-dead from lack of sustenance by 10.

    That's why god invented the bagel and gave it to his chosen people.

    Bagels do not sate me because I am not a heathen.
  • bowenbowen How you doin'? Registered User regular
    edited November 2008
    Actually, having a personal jet is an unjustifiable expense, but having a bunch of jets on retainer for executives is actually very worthwhile. When you consider that the shareholders are paying them millions of dollars per year, and are responsible for billions and billions more, having them wait for 2 hours before they get on a plane doesn't make a lot of sense. It is actually financially acceptable.

    You want them working, not waiting at customs.

    If you can highlight how losing 4 hours a day is worth the expense for an executive to ride an airplane that can't be accomplished with phone meetings, camera meetings, or otherwise, I'd like to know.

    It's really not. Unless your company is financially in the green, then sure. But if you're asking for a cool billion to keep your company afloat I don't see why you'd have such an issue with it. Unless you're either a retarded stock holder that okays shit like that or you're the executive in charge that made the poor financial situation for your company.

    bowen on
    Ladies.
  • bowenbowen How you doin'? Registered User regular
    edited November 2008
    Yar wrote: »
    So now we're up to 1.3 trillion?

    Give every household in American $1,000,000. Require them to pay down their mortgage and credit card debt and buy an American care with it, and do what they will with the rest.

    That might actually more readily solve the fucking problem.

    But you're looking at $306T at that point. Which wouldn't shock me if we reached that with the way this is going.

    Edit:

    Likely less than that considering children, two parent households, etc.

    bowen on
    Ladies.
  • YarYar Registered User regular
    edited November 2008
    Yeah I deleted the post because I realized my math was a little off.

    Actually more like $110T but still off by a few places there.

    Yar on
  • bowenbowen How you doin'? Registered User regular
    edited November 2008
    Yar wrote: »
    Yeah I deleted the post because I realized my math was a little off.

    Actually more like $110T but still off by a few places there.

    Well our economy is likely to collapse without concessions from businesses at this point. What that means for the companies? Who knows. Most likely it'll be my good ol' pal Bogus McFuckerpants still drawing in a quarter of a billion annually in his salary and bonus options while simultaneously laying off 10+% of the workforce while still keeping company spending on luxury items high and snorting a kilo of cocaine off a hooker's tits twice weekly.

    bowen on
    Ladies.
  • override367override367 ALL minions Registered User regular
    edited November 2008
    TK-42-1 wrote: »
    Think about it. The guy from Lehman Brothers gets $22.1 million last year. If he had cut that down to a respectable $1 million (a year. thats more than most people make in 20) that alone could have provided a yearly salary of $50k for 420 people. I know thats not an incredible figure, but I know tons of people that would love to make $50k/yr and this kind of shit of going on all across the country. If the CEOs would take smaller salaries and pay their employees or put that money back into the company they might still have companies to be CEOs of.

    of course when you're putting that many 0s into your bank every year you can probably go unemployed for a while.

    50k a year? Hahahaha. At an investment bank? The secretaries make more than that. Way, way more.

    And $50 million is not a lot of money for a company. It's a lot for one person, but when you're talking about revenue in the 10s of billions, paying 0.5% of that to an executive who makes all of the big decisions makes sense. Especially when he can that somewhere else.

    It makes me sad that everyone on the internet makes more than $50,000 a year and the average income of the town I live in is closer to $18,000 a year

    override367 on
  • YarYar Registered User regular
    edited November 2008
    If you just worked a little harder you could have his job.

    Yar on
  • bowenbowen How you doin'? Registered User regular
    edited November 2008
    Yar wrote: »
    If you just worked a little harder you could have his job.

    And snort cocaine off a hooker's tits.

    bowen on
    Ladies.
  • YarYar Registered User regular
    edited November 2008
    I think that's more common in government agencies working with Big Oil.

    Yar on
  • override367override367 ALL minions Registered User regular
    edited November 2008
    I work my ass off for $6.75 an hour, can I have a government bailout check?

    override367 on
  • bowenbowen How you doin'? Registered User regular
    edited November 2008
    Yar wrote: »
    I think that's more common in government agencies working with Big Oil.

    Well, same basic principle applies here.

    bowen on
    Ladies.
  • TomantaTomanta Registered User regular
    edited November 2008
    If your company is not dying, sure, an executive can get a few perks.

    When you are begging for money, either
    1) Your executives suck and shouldn't be getting their perks
    or
    2) Your executives can afford to cut some of their perks to help keep the company afloat.

    I applaud the auto exec (forget which company) who has already halved his salary. He shouldn't have stumbled on the "Would you lower it to $1" question when asked, but at least he has already taken a reasonable step.

    Tomanta on
  • OrganichuOrganichu jacobkosh Registered User regular
    edited November 2008
    In all seriousness, what does it say about the amount of sheer idiocy involved in maintaining such a philosophical position when you're now faced with the largest socialist bailout in modern history just to fix this shit.

    In all fairness we don't know whether this is going to fix anything yet.

    Organichu on
  • override367override367 ALL minions Registered User regular
    edited November 2008
    It could, if spent properly and with some fucking terms, but it won't

    override367 on
  • Mithrandir86Mithrandir86 Registered User regular
    edited November 2008
    Tomanta wrote: »
    If your company is not dying, sure, an executive can get a few perks.

    When you are begging for money, either
    1) Your executives suck and shouldn't be getting their perks
    or
    2) Your executives can afford to cut some of their perks to help keep the company afloat.

    I applaud the auto exec (forget which company) who has already halved his salary. He shouldn't have stumbled on the "Would you lower it to $1" question when asked, but at least he has already taken a reasonable step.

    Like someone on these boards has said, it's like showing up to pick up your welfare check in a Ferrari. These guys should be living in log cabins, using computers from 1994, and wearing jeans and flannel. And flag pins.

    In other words, they should like they need 25 billion. Although they have to do the exact opposite of the above when they go to the bank asking for credit.

    It's kind of weird, actually.

    Mithrandir86 on
    MKR wrote: »
    Scalfin wrote: »
    MKR wrote: »
    Sausage and pancake on a stick is actually pretty good. And it's convenient if you need to go out early in the morning and don't want to be half-dead from lack of sustenance by 10.

    That's why god invented the bagel and gave it to his chosen people.

    Bagels do not sate me because I am not a heathen.
  • zeenyzeeny Registered User regular
    edited November 2008
    Adrien wrote: »
    Can someone be straight with me, here:

    Is western civilization going to collapse?

    No, but problems in the economic system would become more and more evident and we'd not be able to sustain economic growth, mainly, but not only, because of impossibility to meet ever raising energy demands.
    We'll have a bigger than the current collapse is(would have been) within our lifetime, probably even while most of us are young.

    On a related note, I watched Barroso today "explaining" the 1.5% of GDP plan(I guess other people did too). A lot of pretty words. It was the most discouraging thing I've heard from the EU ever and that's saying something when you talk about a bureaucracy that inept. Will it encourage spending and provide a temporary boost of the EU economy? Yes, it would. Will it stop the economy going into a "vicious recession cycle"? It may. Will it address problems within the financial institutions all over europe as far as business practices are concerned? Fuck no, it won't go further than saying "We should not allow this to happen again.".

    zeeny on
  • geckahngeckahn Registered User regular
    edited November 2008
    This is a pure fed endeavor . . . so, does this cost the federal govt anything or is this a fed financed deal?

    anyways, here's a rundown on the whole deal so far from TPM:
    With all the different programs being undertaken by the federal government to rescue the economy, it's hard to keep straight everything that taxpayers are now on the hook for.

    That's especially true because the commitments are being made by several different government agencies (primarily the Treasury Department and the Federal Reserve) and even more so, because they come in a range of forms.

    Some of these commitments -- for instance, the Treasury's bailout program -- represent actual spending. We could see a return on these investments, of course, depending on how the companies that we've taken on fare going forward, but there are by no means any guarantees.

    Others, meanwhile, represent loans backed by collateral, meaning the government would have had to have badly miscalculated for us not to be paid back in full, probably with interest. And some are simply loan guarantees.

    So putting an exact figure on exactly how much we've put up doesn't tell us much. But here's our best attempt, based on piecing together several reports, at a non-comprehensive rundown of the major components of the government's effort to stave off a financial collapse.


    Spending:

    - The Troubled Assets Relief Program, in which Congress allocated $700 billion to the Treasury to buy equity stakes in financial institutions.

    - A Federal Reserve program, announced in October, to buy up to $2.4 trillion in commercial paper that companies use to pay bills. That figure represents what eligible issuers could sell, but the Fed has said it does not intend to buy anywhere near that amount. Earlier this week the Washington Post put the amount that it had so far put up at $266 billion.

    - A combined Fed-Treasury effort, announced yesterday, to buy up to $800 billion in mortgage- and asset-backed securities, in order to unfreeze credit markets.

    - A Fed program, announced last month, to purchase up to $600 billion in US dollar commercial paper and certificates of deposit, in an effort to provide liquidity to money markets.

    - The Citigroup bailout, announced over the weekend, in which Treasury, the Fed, and the FDIC have agreed to shoulder up to $249.3 billion in losses from the company's risky assets.

    - Since September, Treasury has spent at least $26.57 billion in making direct purchases of mortgage-backed securities. It has said it will continue to make such purchases in the months ahead, reports CNBC.

    - Treasury has also spent $200 billion combined to prop up Fannie Mae and Freddie Mac, by purchasing preferred stock when they were taken over by the federal government back in September.

    - And according to CNBC, it has spent up to $144 billion in additional mortgage-backed securities purchases by Fannie Mae and Freddie Mac, since their portfolio limits were expanded at the time.

    - Meanwhile, the Federal Housing Administration spent $300 billion to refinance failing mortgages, in an effort launched this fall to rescue the housing market.

    - And the $29 billion in financing in March for JPMorgan Chase's government-brokered buyout of Bear Stearns.

    - The Fed has made up to $900 billion in loans to financial institutions. As of Nov. 19, it had extended $415.3 billion in credit.

    - The Fed also has continued its regular discount window lending, but at a much higher volume than normal. It loaned $91.5 billion last week, up almost 200 percent from the usual weekly average of $48 million over the last three years, according to Bloomberg News.

    - The Fed and Treasury will support AIG to the tune of $152.5 billion, in equity purchases and loans, it was announced earlier this month.

    - The FDIC last week announced that it will make available up to about $1.4 trillion in loan guarantees, to encourage bank-to-bank loans.

    geckahn on
  • MrMonroeMrMonroe Registered User regular
    edited November 2008
    bowen wrote: »
    Yar wrote: »
    I think that's more common in government agencies working with Big Oil.

    Well, same basic principle applies here.

    He's actually referring to a specific incident, in case you missed it.

    Great fucking party.

    MrMonroe on
  • bowenbowen How you doin'? Registered User regular
    edited November 2008
    MrMonroe wrote: »
    bowen wrote: »
    Yar wrote: »
    I think that's more common in government agencies working with Big Oil.

    Well, same basic principle applies here.

    He's actually referring to a specific incident, in case you missed it.

    Great fucking party.

    Haha I did miss that.

    Awesome.

    bowen on
    Ladies.
  • JastJast Registered User regular
    edited November 2008
    $800B is insignificant to the power of 7.7 trillion dollars

    20050311-30.jpg

    Money! Unlimited Money!

    Jast on
    Jast39.png
  • Mithrandir86Mithrandir86 Registered User regular
    edited November 2008
    Someone should photoshop that so that he's shooting money instead of lightning.

    Mithrandir86 on
    MKR wrote: »
    Scalfin wrote: »
    MKR wrote: »
    Sausage and pancake on a stick is actually pretty good. And it's convenient if you need to go out early in the morning and don't want to be half-dead from lack of sustenance by 10.

    That's why god invented the bagel and gave it to his chosen people.

    Bagels do not sate me because I am not a heathen.
  • SentrySentry Registered User regular
    edited November 2008
    where the fuck is all this money coming from? Did someone get a printing press as an early christmas present?

    Sentry on
    [SIGPIC][/SIGPIC]
    wrote:
    When I was a little kid, I always pretended I was the hero,' Skip said.
    'Fuck yeah, me too. What little kid ever pretended to be part of the lynch-mob?'
  • KartanKartan Registered User regular
    edited November 2008
    Sentry wrote: »
    where the fuck is all this money coming from? Did someone get a printing press as an early christmas present?

    frankly, all of this is starting to remind me of that one PA strip where the guy goes "Ding! 1 million dollars! You want more? Ding! Another million! Ding! Ding! DING!"

    Kartan on
  • SpeakerSpeaker Registered User regular
    edited November 2008
    It doesn't seem to be brought up very much in this thread that if the bailouts work, the government is going to be paid back with interest for almost everything it is putting into bailouts right now.

    So if it works, great. If it doesn't work, we'll have much bigger problems.

    Enough with the pissing and moaning about the cost.

    Speaker on
    Being walkers with the dawn and morning,
    Walkers with the sun and morning, we are not afraid of night,
    Nor days of gloom, nor darkness -
    Being walkers with the sun and morning.
  • Phoenix-DPhoenix-D Registered User regular
    edited November 2008
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs. You know what they normally do? If the project becomes a success, people start whining about how "it isn't fair to tax/regulate/etc business like that, we should lift the burden to encourage more investment!" and the money goes away.

    Phoenix-D on
  • PotatoNinjaPotatoNinja Fake Gamer Goat Registered User regular
    edited November 2008
    Speaker wrote: »
    if the bailouts work, the government is going to be paid back with interest for almost everything it is putting into bailouts right now.

    Best joke of the thread, 10/10 would read again.

    PotatoNinja on
    Two goats enter, one car leaves
  • SpeakerSpeaker Registered User regular
    edited November 2008
    Phoenix-D wrote: »
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs.

    O rly.

    Because we don't routinely nationalize banks here in the United States.

    So I am riveted and eagerly await your examples.

    Speaker on
    Being walkers with the dawn and morning,
    Walkers with the sun and morning, we are not afraid of night,
    Nor days of gloom, nor darkness -
    Being walkers with the sun and morning.
  • His CorkinessHis Corkiness Registered User
    edited November 2008
    Speaker wrote: »
    Phoenix-D wrote: »
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs.

    O rly.

    Because we don't routinely nationalize banks here in the United States.

    So I am riveted and eagerly await your examples.
    This $800b isn't going to nationalise any banks. It's going to give the banks money for their worthless assets.

    His Corkiness on
  • SpeakerSpeaker Registered User regular
    edited November 2008
    Speaker wrote: »
    Phoenix-D wrote: »
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs.

    O rly.

    Because we don't routinely nationalize banks here in the United States.

    So I am riveted and eagerly await your examples.
    This $800b isn't going to nationalise any banks. It's going to give the banks money for their worthless assets.

    $200 billion is being lent to triple A rated borrowers - not much risk there.

    $600 is going to securities backed by mortgages, some of which are currently overvalued. If the market is stabilized then any public loss would be trivial. And again, if it isn't then we have bigger problems.

    Speaker on
    Being walkers with the dawn and morning,
    Walkers with the sun and morning, we are not afraid of night,
    Nor days of gloom, nor darkness -
    Being walkers with the sun and morning.
  • BitstreamBitstream Registered User regular
    edited November 2008
    Speaker wrote: »
    Phoenix-D wrote: »
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs.

    O rly.

    Because we don't routinely nationalize banks here in the United States.

    So I am riveted and eagerly await your examples.
    This $800b isn't going to nationalise any banks. It's going to give the banks money for their worthless assets.
    Or, in the case of AIG, it buys an ownership stake in the company. Which is totally not nationalization. At all.

    Note - I know it really isn't the same, but you have to admit it sounds scary spelled out.

    Bitstream on
  • SalSal Damnedest Little Fellow Registered User regular
    edited November 2008
    geckahn wrote: »
    This is a pure fed endeavor . . . so, does this cost the federal govt anything or is this a fed financed deal?

    anyways, here's a rundown on the whole deal so far from TPM:
    Scary numbers

    Holy shit, I had no idea we were this deep in the hole. D: How much of this is recoverable?

    Sal on
  • SavantSavant Registered User regular
    edited November 2008
    Speaker wrote: »
    Speaker wrote: »
    Phoenix-D wrote: »
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs.

    O rly.

    Because we don't routinely nationalize banks here in the United States.

    So I am riveted and eagerly await your examples.
    This $800b isn't going to nationalise any banks. It's going to give the banks money for their worthless assets.

    $200 billion is being lent to triple A rated borrowers - not much risk there.

    $600 is going to securities backed by mortgages, some of which are currently overvalued. If the market is stabilized then any public loss would be trivial. And again, if it isn't then we have bigger problems.

    You know what else was highly rated debt? A good portion of the shit with securitized mortgages that kicked off this mess in the first place. Some of the same shit that they want to buy up with this.

    One of the more important lessons of this mess should be this: don't trust the ratings agencies with your life. They have proven that the have had their head completely up their ass at least some of the time.

    Saying that there is not much risk is dangerously naive. A big reason why the financials are falling apart right now is that they took on tons of risk without really appreciating or honestly analyzing what they were getting themselves into. There was at least one of them that never had a quarterly loss for years or decades, and just like that they are dead.

    Savant on
  • FyreWulffFyreWulff Registered User, ClubPA regular
    edited November 2008
    Bitstream wrote: »
    Speaker wrote: »
    Phoenix-D wrote: »
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs.

    O rly.

    Because we don't routinely nationalize banks here in the United States.

    So I am riveted and eagerly await your examples.
    This $800b isn't going to nationalise any banks. It's going to give the banks money for their worthless assets.
    Or, in the case of AIG, it buys an ownership stake in the company. Which is totally not nationalization. At all.

    Note - I know it really isn't the same, but you have to admit it sounds scary spelled out.

    AIG is going to be broken up and sold to private companies.

    FyreWulff on
  • Jealous DevaJealous Deva Registered User regular
    edited November 2008
    Sal wrote: »
    geckahn wrote: »
    This is a pure fed endeavor . . . so, does this cost the federal govt anything or is this a fed financed deal?

    anyways, here's a rundown on the whole deal so far from TPM:
    Scary numbers

    Holy shit, I had no idea we were this deep in the hole. D: How much of this is recoverable?



    In theory almost all of it is recoverable.

    In practice, it is essentially the same as if the government planned to bailout vegas by spending money playing slot machines. At least some of those loans are going to default, and a lot of that money isn't coming back

    And a lot of it coming back relies on people successfully managing firms who have already shown that they don't have a clue how to actually do that.

    Jealous Deva on
  • SpeakerSpeaker Registered User regular
    edited November 2008
    Savant wrote: »
    Speaker wrote: »
    Speaker wrote: »
    Phoenix-D wrote: »
    Bullshit. I've seen far too many "oh, this'll earn the money back" programs.

    O rly.

    Because we don't routinely nationalize banks here in the United States.

    So I am riveted and eagerly await your examples.
    This $800b isn't going to nationalise any banks. It's going to give the banks money for their worthless assets.

    $200 billion is being lent to triple A rated borrowers - not much risk there.

    $600 is going to securities backed by mortgages, some of which are currently overvalued. If the market is stabilized then any public loss would be trivial. And again, if it isn't then we have bigger problems.

    You know what else was highly rated debt? A good portion of the shit with securitized mortgages that kicked off this mess in the first place. Some of the same shit that they want to buy up with this.

    One of the more important lessons of this mess should be this: don't trust the ratings agencies with your life. They have proven that the have had their head completely up their ass at least some of the time.

    Saying that there is not much risk is dangerously naive. A big reason why the financials are falling apart right now is that they took on tons of risk without really appreciating or honestly analyzing what they were getting themselves into. There was at least one of them that never had a quarterly loss for years or decades, and just like that they are dead.

    Well then, let's assume that nothing is true and everything is worthless.

    This is just cynicism, ignorance and panic dressed up as some kind of worldly wisdom. Why don't you insist that both political parties are the same and run by corporations just to put the cherry on top of that turd sundae Mr. Nader.

    Speaker on
    Being walkers with the dawn and morning,
    Walkers with the sun and morning, we are not afraid of night,
    Nor days of gloom, nor darkness -
    Being walkers with the sun and morning.
  • SpeakerSpeaker Registered User regular
    edited November 2008
    Sal wrote: »
    geckahn wrote: »
    This is a pure fed endeavor . . . so, does this cost the federal govt anything or is this a fed financed deal?

    anyways, here's a rundown on the whole deal so far from TPM:
    Scary numbers

    Holy shit, I had no idea we were this deep in the hole. D: How much of this is recoverable?



    In theory almost all of it is recoverable.

    In practice, it is essentially the same as if the government planned to bailout vegas by spending money playing slot machines. At least some of those loans are going to default, and a lot of that money isn't coming back

    Some of the value on some of the mortgages.

    Yeah, that spells Vegas slot machine to me. What's your financial expertise again?
    And a lot of it coming back relies on people successfully managing firms who have already shown that they don't have a clue how to actually do that.

    This is like saying we should abolish the government because of the response to Hurricane Katrina.

    There was a regulatory failure in this case, but you have to accept that on a basic level our financial system works as long as the rules are straight.

    Frankly I'm more than a little tired of the panic going around because:

    1. Newscasters like to exaggerate the danger by throwing around scary words like "depression" and framing every intervention as a "bailout." This is useless. The credit market almost shut down in October, but it is getting going again. The most recent moves by the Treasury and the Fed have changed in character from defcon one emergency to confidence restoring measures.

    2. People are idiots, so when the financial data from October, when the economy was seizing up, comes out they freak out and act as though the same thing was still going on.

    3. We haven't been in a recession in about twenty years, so the talking heads treat eight percent unemployment as though the roof is on fire.

    Speaker on
    Being walkers with the dawn and morning,
    Walkers with the sun and morning, we are not afraid of night,
    Nor days of gloom, nor darkness -
    Being walkers with the sun and morning.
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