Bailout Rejected

[f.sciarrillo]

The bailout got rejected. I say good, let the greedy idiot banks go down - Fanny Mae and Freddy Mac are the biggest, they are the reason this is happening. Well, that and the bill Clinton passed allowing them to do what they did. Then if they donated millions to my campaign; I would do the same thing.

The only thing that I do not like is that the dow is dropping like a missle. As of this post it is down over 500 points.

[FrigoRecording]

Wow - I'm a bit surprised it got rejected, but yeah - the wheels for this catastrophe were definitely set in motion with some crazy stuff that happened 12 or so years ago, largely with Fannie Mae guarantees on hi-risk loans.

[KyleMayket]

Good. The bill would only make things worse in the long run.

I agree, but I can't help but fear what might happen to the economy in the short term, it seems that everyone is scrambling for their lives down on wall street.

[Banned]

Good. The bill would only make things worse in the long run.

I agree, but I can't help but fear what might happen to the economy in the short term, it seems that everyone is scrambling for their lives down on wall street.

Bailing those dumbfucks out just signals that it's perfectly alright to be financially irresponsible and the government will save you. All those people giving out bad loans need to be living in the alleys fellating hobo's for pocket change. Maybe next time they will be a little more careful.

[f.sciarrillo]

You know what? I am thinking that this could make you some money. People are selling on wall street like crazy. Getting it now at a basement price will make it pretty sweet when it goes back up. As it will not be down forever.

I think I might go for a little ride here lol ... I can seriously see some investors getting rich off this. Of course, I can also see some investors going bankrupt over this..

[f.sciarrillo]

I was just watching an interview with Donald Trump. He says oil is going to tank over this. That in turn will help the economy, which is true. Oil fell 10.00 today .. I hope it keeps going down. They are saying that it could go as low as 20.00 a barrel, in turn, killing opec - Which is a good thing...

Can you see it going below a dollar a gallon again ? If you think about it, the price of gas is one of the reasons why the economy is dieing. They get gas back down to where it should it be, you will see more spending, and more buying power.

[Rich]

Take that 700 billion and split it between all "real" tax paying American adults... Let them pay there morgages and loans... Wouldn't that bring things back into line?? We gotta pay for it. Why not get some use outta it!!

[bassist_25]

I hope this doesn't screw the economy in the long-term, as has been said, but I have a newfound respect for the Republican Party again (they are the ones who were voting against this, correct?).

Usually greed wins out in these types of things, so it's good to see greed pay the piper for once.

[tonefight]

What I don't get is if the banks are all "hurting" because people now can't pay their adjustable rate loans why not give them a resonable fixed rate so they don't have to forclose ?

I may have lost some money on my 401k but ya know what it'll be worth it in the long run for the feds not to do the bailout.

I think its all a bunch of shit.

[Banned]

Anything that Nancy Pelosi, George Bush, Harry Reid and Hussien Obama are for, I am against.

[JackANSI]

So... Monday morning quarterbacks... How would you fix it?

[f.sciarrillo]

I hope this doesn't screw the economy in the long-term, as has been said, but I have a newfound respect for the Republican Party again (they are the ones who were voting against this, correct?).

Usually greed wins out in these types of things, so it's good to see greed pay the piper for once.

Yeah, the republican party voted against it. The dems are saying that it was based on a speech that Nancy Pilosi gave in which hurt their feeling. I think they just opened their eyes and realized what this could mean.

133 Republicans voted against it ..

[JackANSI]

I hope this doesn't screw the economy in the long-term, as has been said, but I have a newfound respect for the Republican Party again (they are the ones who were voting against this, correct?).

Usually greed wins out in these types of things, so it's good to see greed pay the piper for once.

Yeah, the republican party voted against it. The dems are saying that it was based on a speech that Nancy Pilosey gave in which hurt their feeling. I think they just opened their eyes and realized what this could mean.

Or when they sat down they realized how little padding they were giving themselves and decided to wait for more...

This government is too corrupt to do any good anymore... BOTH sides...

[Hawk]

About 33% of all the house Republicans voted for it.
About 60% of all the house Democrats voted for it.

Mostly - they are afraid to vote for it and then go home and campaign for reelection. If this comes up after the election is over - they would vote for it. It's not their collective morality that stopped the bailout - It's a fear of losing their elections.

[f.sciarrillo]

I hope this doesn't screw the economy in the long-term, as has been said, but I have a newfound respect for the Republican Party again (they are the ones who were voting against this, correct?).

Usually greed wins out in these types of things, so it's good to see greed pay the piper for once.

Yeah, the republican party voted against it. The dems are saying that it was based on a speech that Nancy Pilosey gave in which hurt their feeling. I think they just opened their eyes and realized what this could mean.

Or when they sat down they realized how little padding they were giving themselves and decided to wait for more...

This government is too corrupt to do any good anymore... BOTH sides...

That could be it also. Either way, it will not pass which is good and should be the way it is.

As for adjustable rate mortgages, they should be illegal. I have never and will never agree with them.

[JackANSI]

About 33% of all the house Republicans voted for it.
About 60% of all the house Democrats voted for it.

Mostly - they are afraid to vote for it and then go home and campaign for reelection. If this comes up after the election is over - they would vote for it. It's not their collective morality that stopped the bailout - It's a fear of losing their elections.

And I say good.... Shows the people actually have some power once every few years...

[JakeWilliams]

Stock prices dropped about 5% on the dow today, and about 10% on average in the financial sector... Who knows what's going to happen tomorrow. I have my guess, but I hope I'm wrong...

The sad thing is that the 700 billion plan was improperly named a wallstreet bailout when it is primarily going to be used to purchase the risky investments (CDOs) from the wallstreet companies so they can have SOME liquidity in their portfolios... It's not just a bailout for wallstreet, but is also removing a few dominoes in the chain so that our banks can stay afloat. Without liquidity, our entire banking system will fail... If that happens, each of us could see our 401Ks and Money Market investments drop to $0.

The fact that the bill was so close to passing, and both presidential candidates cautiously supported the bailout gives me some indication that it *could* work... Those that did not vote for the bill said the primary reason they did not vote Yes was because they thought it was political suicide.

At this point, I'm for the bailout, but only when there are conditions applied... Something like the following would be nice:
1. Companies who take money offered from the bailout should terminate CEOs and send them packing without their golden parachutes
2. The money is not a "grant" but a "no interest loan" that must be repaid
3. The government should get stock/shares in the company equal to the amount borrowed so that they companies that rebound can help offset the cost of the plan.

If they add conditions like this (as many republicans and democrats have asked), it will be more likely to pass - and more likely to have a long term positive impact on the US and global economy...

[songsmith]

I think if crude was a nickel a barrel, they'd still charge $3.50 a gallon for gasoline. Why? Because we have no choice but to pay...---->JMS

[slackin@dabass]

Without liquidity, our entire banking system will fail... If that happens, each of us could see our 401Ks and Money Market investments drop to $0.

dosn't anyone just save cash anymore or am i the only one? i know it dosn't gain interest, but come on, how can you beat cold hard cash in a bind?

..oh, by the way, cash is that paper stuff with the dead presidents on, and those round, flat metal things, also with dead presidents on. not those flat plastic things with your name on

[JakeWilliams]

Without liquidity, our entire banking system will fail... If that happens, each of us could see our 401Ks and Money Market investments drop to $0.

dosn't anyone just save cash anymore or am i the only one? i know it dosn't gain interest, but come on, how can you beat cold hard cash in a bind?

..oh, by the way, cash is that paper stuff with the dead presidents on, and those round, flat metal things, also with dead presidents on. not those flat plastic things with your name on

I have some cash, but like most americans, most of my money is in "investments"... And if the financial system falls apart - it could all drop as fast as Fannie, Freddy, Bear/Sterns, etc...

[lonewolf]

What I don't get is if the banks are all "hurting" because people now can't pay their adjustable rate loans why not give them a resonable fixed rate so they don't have to forclose ?

Unfortunately, its not just the ARMs and its not happening everywhere--for instance, PA is not doing all that bad (as far as foreclosures go).

Most of this foreclosure action is happening in the western and southern states where real estate speculation was running rampant and home prices were going up at double digit rates. By the time the bubble burst, even the shoe shine boy was involved. Think of it as a pyramid scheme that hit bottom.

Anyway, wanting his slice of the pie, John Q. Public was taking out mortgages for 100% of appraised value, thinking they could sell for a profit in 6 months. When the bubble finally burst, most of that speculative real estate dropped by up to 30% of the amount on the mortgages. John Q. Public was left holding the bag. A million dollar home (and mortgage) was now only worth $700K. Multiply this by 3 million and it adds up pretty quick. Many people just walked away.

Places like Ohio and Michigan have been hit by economic hard times and many of their foreclosures are reasonable and should be dealt with like you suggested.

[JakeWilliams]

What I don't get is if the banks are all "hurting" because people now can't pay their adjustable rate loans why not give them a resonable fixed rate so they don't have to forclose ?

Unfortunately, its not just the ARMs and its not happening everywhere--for instance, PA is not doing all that bad (as far as foreclosures go).

Most of this foreclosure action is happening in the western and southern states where real estate speculation was running rampant and home prices were going up at double digit rates. By the time the bubble burst, even the shoe shine boy was involved. Think of it as a pyramid scheme that hit bottom.

Anyway, wanting his slice of the pie, John Q. Public was taking out mortgages for 100% of appraised value, thinking they could sell for a profit in 6 months. When the bubble finally burst, most of that speculative real estate dropped by up to 30% of the amount on the mortgages. John Q. Public was left holding the bag. A million dollar home (and mortgage) was now only worth $700K. Multiply this by 3 million and it adds up pretty quick. Many people just walked away.

Places like Ohio and Michigan have been hit by economic hard times and many of their foreclosures are reasonable and should be dealt with like you suggested.

Very good point.

And if it were a perfect system, the banks that took the most risk would simply fail and be bought up by the "conservative" banks that didn't have as much exposure to this type of risky behavior...

But the problem is that the public panicked and the ENTIRE financial sector lost trillions in equity (and liquidity) due to domino effect and now most (if not all) banks are hurting. Even the banks that have minimal exposure to the failing CDOs.

The government "wallstreet bailout" would essentially be giving the stronger banks the ability to secure the funding to buy out the weaker banks and grow - keeping the entire financial system spinning - while adding confidence to the general consumer - and hopefully bringing some stability to the stock market.

[Roar chick]

Okay Jake my question is…

1. Will these bigger banks than create a kind of monopoly in the banking world? With the ability to set new standards.
2. Should we, as Americans, feel secure knowing these banks needed bailed out?
I am referring to your statement “while adding confidence to the general consumer - and hopefully bringing some stability to the stock market”. I’m not sure I have confidence in a company that needed bailed out in he first place.

Correctly me if I’m wrong but I thought that most of the problem was not people like us pulling our money out, it was the companies that were causing the problem in the first place. They saw what was going to happen and pulled their money out of the stock market. Should they be aloud both the money the government was going to give them and the money from the stocks they sold?

This is way above my head, I admit. I am hoping to learn more.

[JakeWilliams]

Okay Jake my question is…

1. Will these bigger banks than create a kind of monopoly in the banking world? With the ability to set new standards.
2. Should we, as Americans, feel secure knowing these banks needed bailed out?
I am referring to your statement “while adding confidence to the general consumer - and hopefully bringing some stability to the stock market”. I’m not sure I have confidence in a company that needed bailed out in he first place.

Correctly me if I’m wrong but I thought that most of the problem was not people like us pulling our money out, it was the companies that were causing the problem in the first place. They saw what was going to happen and pulled their money out of the stock market. Should they be aloud both the money the government was going to give them and the money from the stocks they sold?

This is way above my head, I admit. I am hoping to learn more.

To answer your questions:
1. I don't know.
2. No.

I'm not an economist and a lot of it is complicated inter-related BS that I don't understand either. Hell, I don't even know if the "bailout" will have the effect the government is suggesting it will. I'm just reiterating the information I have, with some basic personal experiences weighing in...

But, the stock market tanked when the Gov't bailout was rejected - so consumer confidence is heavily tied to SOMEONE doing SOMETHING. The only thing I've agreed with Bush on in the last 8 years is that doing nothing in this situation is not an option.

Truth is, I hate the fact that we're in this mess - but that doesn't change anything. If the government does not act - the failure of banking systems will most likely start to spread globally - which is NOT good for anyone. The government in China has put a halt on lending money to the USA going forward - and other governments soon will do the same...

And FYI - it's not necessarily "bigger" banks that will survive this mess and come out on top. The fact is, the risky behavior is what caused a lot of these banks to grow so fast - but now that the bubble burst - they're screwed with a buttload of worthless assets and their liquidity is zilch.

I think the more conservative banks (no matter what their size) will be able to buy what used to be a big bank and take it over - rewarding the banks that did NOT heavily invest in the packaging and reselling of the risky CDOs.

Problem is, even the conservative banks are in the financial sector and are exposed to the major market fluctuations of the past year. And even though a conservative bank would have much better liquidity and value at this point - the credit market has dried up and it's impossible to raise the billions of dollars needed to buy another bank...

But don't get me wrong... I don't feel secure in anything the government gets their hands in - but deregulation didn't seem to work well either (Freddie/Fannie).

We're just stuck between bad and worse... There is no "good" way out.

[JackANSI]

The bailout got rejected. I say good, let the greedy idiot banks go down - Fanny Mae and Freddy Mac are the biggest, they are the reason this is happening. Well, that and the bill Clinton passed allowing them to do what they did. Then if they donated millions to my campaign; I would do the same thing.

The only thing that I do not like is that the dow is dropping like a missle. As of this post it is down over 500 points.

But your hero Bush is pushing for it? Where are your snide comments and O'Rielly quotes bashing Bush's support?

I love the smell of hypocrisy in the morning.