I think you're missing the point. It's a systemic collapse we're dealing with, not some company that can't sell cars to anybody because they're crap. On extortion? I think the US government will buy on extremely favorable terms with the reverse auction process. It will set rock bottom bases for these instruments, guaranteed. We'll make a fortune on these.
I wouldn't be as hard as you are towards the working poor as they too will suffer job losses if the shit hits the fan. However, I do agree that many of the unwashed masses deserve nothing more that a kick in the nuts.
you're talking out of both sides of your mouth on the one hand, you say something terrible will happen if we dont hand it over, then you say it's a great investment know what? i''d rather let the 'free market' have that 'great deal' no sale and the public isnt buying it either
In this case, the free market is not sufficiently large enough to complete this process, which is at the heart of the problem. There is not one institution except for FNM or FRE who were formerly able to handle the size of the market. Now that they've been taken over, there's no one left to fill the void. Bad mojo. I'm not talking out of both sides. I think we'd be fine if FNM and FRE were still around and weren't mandated to take huge risks on subprime securities or securitized securities containing subprime mortgages.
Where have you been all these years? You've never seen pork barrel spending to support auto workers and their labor unions that negotiated ridiculous healthcare/pension benefits, the manufacturing sector, the defense industry, or subsidies to the farming community? What do you think Fannie Mae and Freddie Mac was? Get real.
It's simple, FRE and FNM are gone. They filled the 5 trillion dollar void. When they're not around, the market collapses. Now we have the US govt that is sufficiently capitalized to force instutitions to compete with each other to sell at the lowest price, not a market made price.
If you're such a believer in free markets, why are you posting on the government subsidized internet and trading in a government subsidized trading account? No bailout for you! You've already had yours.
I would agree 100%. The reason that he (swtrader) and most of Congress have no clue about the systemic deflationary collapse that the Fed and Treasury are trying to deal with is because they don't understand the capital markets, balance sheets, collateral, how banks are able to make loans, let alone counter-party risk. It was an absolute embarrassment to watch the "Q&A" session today in Congress. The lack of an economic knowledge base was thoroughly disgusting, as if it was rocket-science to understand that no liquidity in the capital markets means no loans made by the banks, and business contraction and a surging unemployment rate into double-digits. These are the same people that would lump AIG in with everyone else, because to them, it's all about fat cats on Wall Street. This is not a "bail-out". It's unfortunate that Paulson and Bernanke are not able to articulate this to Congress in a successful manner because Congress hasn't even taken a basic Econ. 101A class. What a shame. Perhaps Dumbya can "dumb-it-down" for Joe Lunchbucket ( and the rest of Congress ) tonight on TV.
I guess no one has been explained how a reverse auction works. I tell you I'd take every reverse auction offered to me in the stock market. It absolutely would set a rock bottom price. The free market has no ability to do this, but the treasury can. I think the plan is brilliant, and will work.