$700 billion from us to save the banks. Good?

BaldFriede wrote: Some reinvestment. The money is being moved from one shark to another. But is still is withdrawn from public circulation. That's not  really reinvestment. Joe Average won't see a dollar of it.

The T wrote: BaldFriede wrote: Some reinvestment. The money is being moved from one shark to another. But is still is withdrawn from public circulation. That's not  really reinvestment. Joe Average won't see a dollar of it.   You're missing the point here BaldFriede (and I'm with you...) Remember: if one person has 100 million dollars and the other one has 0, then economics tell us that each has 50 million! Voila! Everybody is happy!

Hey T, stop talking nonsense

IVNORD wrote: Slartibartfast wrote: IVNORD wrote: Slartibartfast wrote: BroSpence wrote: I found this commentary quite interesting: Another different look on the situation. Good article.  Still I can't help but wonder how many of those who got the crappy subprime loans might not have defaulted if they had been given decent fixed rate loans. First give them loans. Then give them a decent rate. What's next? Start making mortgage payments for them. How special is it Nope, you have defined where the line should be drawn. The point is WHY some people should be GIVEN something?

When I needed a house I was given a loan.  I guess I was just more worthy than others of getting a nice affordable fixed rate. 

If you see a doctor needing help why should you be given care that helps you rather than harms you?

IVNORD wrote: BaldFriede wrote: Some reinvestment. The money is being moved from one shark to another. But is still is withdrawn from public circulation. That's not  really reinvestment. Joe Average won't see a dollar of it. When you deposit your money in a bank account, you are in charge of it only nominally. Your bank has a full discretion how to use it. It may use it for a mortgage loan, or a personal loan, or buy treasury paper, or mortgage backed securities. Unless you keep your cash at home, it's in public circulation.

That's my point. You can hardly call it "public circulation" when the money is only being exchanged between banks and stockholders. That's not the public, that's an exclusive circle. We all can see where it leads to now. And the taxpayers are supposed to be putting an eiderdown beneath the banks so they fall softly when their speculations go wrong.
Try getting a loan as Joe Average for a change. The first question you'll be asked is: "Where are your securities"? But no-one ever asks for securities when banks are playing the "Stocks and Bonds" game.

I said it in the other thread (the poll) and I will repeat it here. the banks believe in capitalism and free market; it is the rules they like to play by when they win. they have ruined many people's business and fortune that way, cynically saying "well, that's capitalism". and they would strongly oppose any supportive action for other firms. so let them play by these rules when they lose too of course they will cry "this will ruin the economy", but that's a bunch of nonsense. as Friede already pointed out: the resources are all still there. if all the money in the world would suddenly disappear it would not change anything at all. all structures would still be there and functional. maybe some firms will become bankrupt; others will take over for them. now a natural catastrophe, that would be something else. but the economy always rises like Phoenix out of the ashes after a breakdown, and more alive than it was before, as history has shown

a bailout would be more costly. it won't stop at these $700 billion. once a precedence is set it would have to be done again and again. or what argument could a government come up with if it didn't? no, we should make it clear to the banks once and for all that they don't have a free ticket to do whatever they want with people's money. if they don't act responsibly then they have to carry the consequences.
also, do we believe in capitalism or do we not? if we do, a bailout is impossible. if we don't, we should better think up some other rules then, and quickly

BaldJean wrote: a bailout would be more costly. it won't stop at these $700 billion. once a precedence is set it would have to be done again and again. or what argument could a government come up with if it didn't? no, we should make it clear to the banks once and for all that they don't have a free ticket to do whatever they want with people's money. if they don't act responsibly then they have to carry the consequences. also, do we believe in capitalism or do we not? if we do, a bailout is impossible. if we don't, we should better think up some other rules then, and quickly

Of course $700 won't be enough, but it's a matter of saving the entire system, in my view. The financial industry should be regulated heavily and, as a result of the current events, most likely will be. Unfortunately they have too much power to bend it their own way, so there's no guarantee it will stick. They may re-write the rules again, the way they did during the Clinton era.

BaldJean wrote: well, if the whole system can only be saved that way then something is wrong with the system in the first place, so why should we save it then? better an end with terror than a terror without end.

The system is certainly flawed, but since we don't have a better one, living with no system at all may result in terror with no end in sight. And it stares us in the face already.

First the capitalists proclaim that the markets must be free from government intervention, that they will self-regulate. The government re-states this as an obvious truth.
Then capitalists exclaim that they need government intervention so as to avoid a  major financial cataclysm, that they were somehow unable to see coming, or understand why it happened. The government re-states the urgency of the need to "save" the financial industry as if the alternative was worse.
No delay can be considered to take time to review & analyze the situation, present possible options (including no government bailout or intervention) before going into action.
There will be a credit crunch no matter what. If the U.S. government borrows $700 billion (many are saying that will quickly balloon to over a trillion), that will in effect, take away from credit that might otherwise be available to the common man and the corporation. And claiming that you will sell zero value assets later at a profit is to base your plan on a dream that those who currently hold these investments clearly believe is not going to happen any time soon. Else, there would be someone looking to buy them. At some price, eh.
So bend over, and hope the next time the financial industry needs to be saved from itself, that this bill will have been paid. "Cause it is not certain that the U.S. has gotten over the S & L mess.

US Senate approved the 'package'.... orders for the new Bugatti Veyron Pur Sang will increase tomorrow: