1. The clowns who took out mortgages and could not afford them deserve to lose their homes. Why? Why the HELL should someone else who is a prospective homebuyer have to pay for this losers shelter expense? 2. Why the HELL should someone pay 10x as much for healthcare so we can support the fuggin crackhead and his healthcare? 3. and 4. The sky is not falling.
Landis, you are pretty direct typically. Let me be direct with you: If you think this legislation that's been proposed, at a cost of a trillion taxpayer dollars, or 1/1oth of the U.S. current national debt, will do ANYTHING to obligate banks to start lending again, or do anything other than waste taxpayer dollars, putting them in the position of the sucker buyer's of last resort (involuntarily) of trash paper, YOU REALLY ARE NAIVE. When the legislation has a clause ensuring these assets are purchased at objectively fair value, and that banks will be contractually bound to begin lending again to each other, businesses and consumers (isn't that the 'big risk' that Paulson keeps citing; that they won't), then you have a legitimate claim that this legislation should be passed, as it actually obligates financial institutions to do the very things that Paulson claims that they'll do, without obligating them to do it (they would most likely just rebuild their balance sheets and hoard cash to safeguard their payrolls and executive bonuses). This correction is great. Americans are getting acquainted with that long ago lost notion of LIVING WITHIN ONE'S MEANS.
It's not that simple my friend. This isn't just about Golden West Financial and their $120 Billion in ARMS being taken over by Wachovia in May of 2006 when Wachovia bought them out. It's waaaaay more than that. It's about the ECONOMY. Seriously, do yourself a favor and and take a class in "Money and Capital Markets".
Yes, we all know that you have a Master in Economics, but use QuoteTracker software to trade, post all day and night on an internet trading forum, and can't wait to PM me for help again. :eek: LOL, LOSER. Get a clue. Nobody in Washington gives a shit about your Internet Economics opinion, and neither does anyone else here on this board. LOL ... OL some more.
You got that right. But Landis82 is so busy looking at the Econ degree he got from his internet college studies he can't read what you're saying. All book knowledge, no real real knowledge.
Let me GIVE you some facts. Look at this : http://www.federalreserve.gov/releases/cp/volumestats.htm Look at total dollar for each catagory between 2006 - 2008 You tell me why AA non financial and A2/P2 has more commercial paper traded in 2008 than previous 2 years? You tell me whether the decrease in AA financial and AA aset back decrease are justified because of their shitty balance sheet? In reality, this is an isolated problem for financial companies only so far.
Fearmongering will not work on me, or a good deal of responsible Americans. You do the crime, you do the time. Entrepreneurs will come back, simple as that. I trust in the people. You don't.
No, my thinking is sound. Your belief that the system can continue in this manner with ever-increasing leverage from continued credit creation is unsustainable. Consider the outrageous sums needed to be infused into the market lately just to keep it limping along! This is your definition of a sound economy? Are you just talking your book? Credit will return to the productive economy when the excesses are cleaned out of the system. Of course it will cause global imbalances. But they will eventually work themselves out and an economy based upon real production and real value rather than levered credit/ FIRE economy will arise. I haven't seen commercial buildings imploding, houses being sucked into black holes, or forced lobotomies on those defaulting on their student loans. The essential underpinnings of an economy remain. Its just the finance sector that has far exceeded all reason and now is deleveraging with impressive acuity. Or, alternatively, the cycle will start over again. Like it always does. Everything works for a while. Until it doesn't.
Then why is someone like fixed-income money manager Bill Gross very supportive of this plan? Why is it that price discovery of these assets is a bad thing? Why is it that doing a "reverse-auction" and getting private capital involved in purchasing these assets a bad thing? You naively assume that this is "trash" paper. Yet, you obviously don't seem to have a COMMAND of the specifics regarding Paulson's proposal. "Are you even aware of the FACT that of the $1 Trillion presumed whole, $800 billion involve subprime and Alt-A mortgage securities, which are of slightly higher quality than subprime? The remainder of losses is accounted for by under-water prime mortgage securities and unsecuritized loans. Helping all this, is the fact that most of the troubled mortgage-backed securities lodged in financial institution balance sheets are senior slices of the securitizations that banks couldn't sell off because of their unexciting low-yields of 25-50 basis points over LIBOR. The good thing about these securitiies is that slices that are lower in the securitization structure have to absorb any losses on the underlying mortgages beofre the senior, triple-A tranches are touched. And most of the randier stuff was sold to hedge funds or shipped overseas to other speculative buyers. Even though the RTC's liquidation process took more than 6 years and was criticized for favoring certain buyers, political cronyism,. etc. - - - it was still able to cut taxpayer losses on the S&L industry collapse from estimates as high as $350 BILLION to just $125 billion. True, the RTC was simply involved in liquidation, rather than also buy assets since the govt. already owned the busted institutions. But in this case, the assets that the Treasury will wind-up with this time around will be much easier to manage than the "cats and dogs" that the RTC ended up with nearly 20 year ago."