Oppose Wall Street Bailout

[Weasel]

[quote="Tap":1rj3c1pn][url:1rj3c1pn]http://www.youtube.com/watch?v=AHcxzBwjYHg[/url:1rj3c1pn]

Not true and yet, not unlikely[/quote:1rj3c1pn]
damn, that is awesome. expect it.

[Autolycos]

[quote="Tap":2h46dk13]trying to watch FOX News and I keep seeing news about pirates becoming more aggressive.

I blame Auto[/quote:2h46dk13]



*snicker

[Leaf]

[quote="Weasel":3mp5uec6]It's amazing how scared Palin has made the left.. heck, she's going for #2, I'd be far more concerned about Obama being #1 if I were you..
[/quote:3mp5uec6]

Got to look at the whole picture. #1 and #2 for this country. Since I have
a feeling that if Obama becomes Pres, then some KKK red-neck will try and
kill him. Then it will be Binden as #2.
And from a great quote from SNL... Palin is a heart beat away to become #1.

I'm not trying to change anyone's mind on who to vote for. Since most
ppl have made up their mind, and only 15% actually ever change it.

[Poggle]

15% is an optimistic estimate.

Btw, California going bankrupt is a rather big deal, they produce a very large portion of the nation's gross domestic product.

http://www.calchamber.com/BusinessResou ... stics.aspx

Illinois also produces quite a bit, and both of these states have huge population centers.
http://www2.illinoisbiz.biz/oti/toptrad ... ntries.xls

http://findarticles.com/p/articles/mi_m ... 34566/pg_4

So yea, if your goal is to prevent as much hardship as possible, these states should not go bankrupt.

[Weasel]

They're going bankrupt because they can't control their spending.. and if those states in particular produce so much relative to others, then their spending must [i:16zbhuwz]really[/i:16zbhuwz] be out of control.. Gee, aren't all three of those states democrat states? What a coincidence! Spend spend spend, much like the $105billion in earmarks added to this bailout, and much like Obama wants to do - spend money we don't have, at the expense of responsible taxpayers. Lovely.

California in particular need to suck it in.

[Mosaix]

So yeah I hate the bailout, I really hate it. Something needed to happen, but I disagree with this bailout. Though the AMT tax reduction will be nice come tax time in April 2009.

Weasel, California has a Republican Governor.

Also Weasel, President Bush a Republican president for the last 8 years, created the bailout plan, got on TV and asked congress to pass it, and Republican president George Bush signed it into law.
So is Bush a socialist then too? Cause he signed the bailout into law.
A bailout that is more money than the national budget of the Netherlands.

The Republican Bush presidency took office in 2000 with $5.7 trillion of national debt. Today that stands at $10.2 trillion on his watch. Its the single greatest increase under any president in US history.

Yet not a peep from you about any of that. Though im sure if Bush was a Democrat you would rant endlessly about this stuff too.

The banking industry was deregulated which caused wall-street to run free. Deregulation while nice, does not always work in all cases.
Sometimes you need to regulate. As we can live and see right now, deregulation doesnt always work.
They deregulated utilites here in Maryland. My electric and gas bill went up 70% that very year and another 8% this year. Baltimore Gas and Electric(constellation energy) to no suprise started to post record profits each quarter to boost its stock price. So between that and the wall street crap, I pretty much hate deregulation at this point. Do I want Socialism? No. Some thought out regulation when needed? Yes.

Google and look up what a Credit Default Swap is, and how it got out of control. Its a main reason right now why the banks are all messed up, and are going to get even worse. The banks are not lending money because they dont know what is going on from one bank to another. Because CDS's are not regulated, when they are bought nothing needs to be disclosed. So no one in the bank world knows who actually has what.
Below is the definition of a CDS to start to help you get more educated.

From Wikipedia,

"A credit default swap (CDS) is a contract in which a buyer pays a series of payments to a seller, and in exchange receives the right to a payoff if a credit instrument goes into default or on the occurence of a specified credit event (such as bankruptcy or restructuring). The associated instrument does not need to be associated with the buyer or the seller of this contract.[1]

Originally used as a form of insurance against bad debts, these instruments became a tool for financial speculation when the US Commodity Futures Modernization Act of 2000 specifically barred regulation of these trades."

Also CDS's started to get oversold and out of control in 2003. There are about 5 trillion dollars worth of equity backed by 40 trillion dollars worth of bogus CDS's. So if everyone gets to hedge their bets there is a 35 trillion dollar shortage. Thats a big financial time bomb headed our way. The more things that fail like Lehman Brothers, the more these CDS's get claimed, and the bigger and badder this financial mess will fall like dominos. The bulk of the reason AIG Insurance failed was they had backed a ton of these CDS's and didnt have the equity to pay for it.

Its a real and serious financial mess out there. Good luck.

[jezer]

[img:1yhg79dp]http://www.crabwalk.com/pix/rodent.jpg[/img:1yhg79dp]

[Weasel]

Exactly Jezer

Arnold got voted in because he's Arnold, not because he's Republican. The state itself boasts the biggest concentration of the most extreme liberals in the country.

The rest is BDS, but you seem to forget it's Congress that makes the calls - and Congress (and the House) is a Democrat majority. Bush can either sign or veto, but he's not a law unto himself as so many want to think when it comes to assigning blame, so don't try putting this all on Bush's lap, it doesn't wash. I'm not trying to defend Bush as such, but get kind of sick of Democrats blaming Bush for everything.. the same Democrats who've achieved next to nothing in Congress, and have the lowest approval ratings in history.

Credit swaps (and mark-to-market, which is also a big factor imho) is a different issue, but thanks for the Wikipedia quote.. I was talking about government spending though.

[Poggle]

After doing some reading, I see that california is asking for a loan, not a handout, to mitigate short-term damage caused by investors calling in municipal debts to cover their losses from the credit CF.

http://www.reuters.com/article/bondsNew ... 4620081007

http://financial-dictionary.thefreedict ... cipal+Debt

So in fact, this request is not a result of excessive spending.

[Weasel]

Well in that case, there is no bailout, because they're doing the same as AIG has done, and what many other corporates will be doing. Sorry, but you can't accuse Bush and Republicans of giving bailouts to Wall Street with taxpayer money, then say California is just getting a loan when one of the senators involved specifically said "we wanted to be treated exactly like the investment banks are". This is just the sort of cr@p I see in the MSM all the time - one spin is used to discredit Bush (and McCain by proxy), and another to make it look good for the democrats when the actual situation is no different. You really think California will pay it back? Many corporates have a far better chance than the State of California does. The corporates are victims of mark-to-market in many cases, and when those physical assets are realized they may be in pretty good shape, if allowed to survive in the meantime. California however is a victim of overspending and non-recoverable promises, such as insane pension packages for city/state employees - that alone has caused at least one city in Califonia to go bankrupt already.

Sorry for the rant, but these double standards REALLY piss me off.

[Poggle]

The difference is that the California thing really is a loan, they are selling California's future tax revenues.

The bailout thing is purchasing "troubled assets" with zero guidelines restricting price, and very little control over the actions of the Secretary of the Treasury. In fact, he doesn't even need to tell anyone what his plans are until well after he's completed them.
(but then he has to tell virtually all of washington)

I think the bailout plan is ill-conceived and dangerous, but it has nothing to do with California's loan request.

I don't know why you think I'm making this a double standard, I have not made any partisan statements.

[Weasel]

Ok. AIG is being called a bailout by pretty much everyone, yet it is a $85billion loan, with a very high 11% interest rate on it. Somehow I doubt California expect to pay interest like that, but that's beside the point. There are also short term loans available to businesses (new program announced today), yet that is also being termed as a bailout throughout the MSM. Call a spade a spade - either they're loans or they're bailouts, as long as you're consistent.

The actual 'bailout' portion of The Bill is not really a bailout strictly speaking - the government will effectively buy loans (or credit card debt etc etc) from banks etc, but pay maybe 30cents on the dollar (that will vary depending on risk, but still a hard pill to swallow for the businesses concerned) - this is where current mark-to-market rate comes in on unrealized assets, which is pretty harsh with the economy as it is - a consequence of SOX laws. If the businesses concerned had enough liquidity to sit out the current downturn in the economy, they'd be much better off in the long run, however they've overextended themselves, much like California has. The government will sit on those loans for several years and wait for the economy to improve, and then sell them back to the market when it is more liquid, making a substantial profit in the process.

Now if you believe that the government will not be able to make a profit (and possibly double their money in some cases), then that means you do not believe the economy will improve. If you believe the economy will not improve, then California will not be receiving sufficient tax revenues to repay their $7billion [i:1sgeksy9]bailout[/i:1sgeksy9] (or loan, whatever), especially if they don't have enough tax revenue to meet their blown-out budget right now. Had California been operating within their budget, they would not require this 'loan' in the first place, so what makes you think they will suddenly change their habits and not only operate within their budget but below it in order to repay the 'loan', particularly as the economy worsens. It doesn't make sense. Both the 'Wall St bailout' and State bailouts depend on the same thing - an improving economy in the future. If you believe in one, then you must believe in the other.

Do you get what I mean by double standard? Actually I don't think you said one way or the other if you think the (so called) Wall St bailout is a good idea or not... My comment re double standards is not really aimed at you personally, but at many people in general who seem to think in contradictory terms... if you follow..

Sorry if this is a little disjointed.. coming down with some nasty bug at the moment and am feeling sick as a dog, shaky and feverish but chilled to the bone at the same time... not much fun.

[Medios]

It is really funny to me that Republicans say that its both parties fault, and Democrats say that it is GW Bush's fault. So here is my question. Did GW Bush force banks to make sub prime loans? Did GW Bush force lenders to make 120% loans on properties? If the answer is no then why would all the blame fall on him. There is a reason this country has checks and balances. We are not a dictatorship(yet). If the Democrats want to sit on their hands and play the blame game all day that is fine were used to it. Meanwhile I hope you don't have any money in the stock market, that evil GW Bush is out to take it all.

[Medios]

[quote="Weasel":34ex69yu]Ok. AIG is being called a bailout by pretty much everyone, yet it is a $85billion loan, w[b:34ex69yu]ith a very high 11% interest rate on it. Somehow I doubt California expect to pay interest like that[/b:34ex69yu], but that's beside the point. There are also short term loans available to businesses (new program announced today), yet that is also being termed as a bailout throughout the MSM. Call a spade a spade - either they're loans or they're bailouts, as long as you're consistent.

The actual 'bailout' portion of The Bill is not really a bailout strictly speaking - the government will effectively buy loans (or credit card debt etc etc) from banks etc, but pay maybe 30cents on the dollar (that will vary depending on risk, but still a hard pill to swallow for the businesses concerned) - this is where current mark-to-market rate comes in on unrealized assets, which is pretty harsh with the economy as it is - a consequence of SOX laws. If the businesses concerned had enough liquidity to sit out the current downturn in the economy, they'd be much better off in the long run, however they've overextended themselves, much like California has. The government will sit on those loans for several years and wait for the economy to improve, and then sell them back to the market when it is more liquid, making a substantial profit in the process.

Now if you believe that the government will not be able to make a profit (and possibly double their money in some cases), then that means you do not believe the economy will improve. If you believe the economy will not improve, then California will not be receiving sufficient tax revenues to repay their $7billion [i:34ex69yu]bailout[/i:34ex69yu] (or loan, whatever), especially if they don't have enough tax revenue to meet their blown-out budget right now. Had California been operating within their budget, they would not require this 'loan' in the first place, so what makes you think they will suddenly change their habits and not only operate within their budget but below it in order to repay the 'loan', particularly as the economy worsens. It doesn't make sense. Both the 'Wall St bailout' and State bailouts depend on the same thing - an improving economy in the future. If you believe in one, then you must believe in the other.

Do you get what I mean by double standard? Actually I don't think you said one way or the other if you think the (so called) Wall St bailout is a good idea or not... My comment re double standards is not really aimed at you personally, but at many people in general who seem to think in contradictory terms... if you follow..

Sorry if this is a little disjointed.. coming down with some nasty bug at the moment and am feeling sick as a dog, shaky and feverish but chilled to the bone at the same time... not much fun.[/quote:34ex69yu]


If I had to pay 8.5% on an education loan from the Fed than I fully expect California to take one in the pooper.

[reboog]

According to the LA Times, "It's customary for California to borrow billions of dollars at the start of the fiscal year to fill its coffers until the usual flood of sales tax receipts comes in after Christmas and income tax receipts arrive in the spring."

Source: http://www.latimes.com/business/la-fi-c ... ?track=rss

Due to the credit crunch, CA is unable to do this.

Banks and insurers defaulted because they took huge risks. If what the LA Times says about CA's expenditure behavior is true, then California is operating the way it always has, and this emergency is an aftereffect of the credit crunch triggered from the subprime mortgaging.

If CA were able to pay the banks back (since allegedly this is normal behavior), then they should be able to pay back the government (eventually). You use the term "economy" as if it applies the same way to California as it does to the huge failed corporations. They took huge risks. Their mark-to-market assets could not realistically have been achieved, because there was no way for homeowners (home investors) to meet their mortgages. The homeowners default, the housing bubble finally collapses, and all of the lenders and insurers CANNOT realize their mark-to-market.

Assuming that CA did not play this financial game and are just operating within normal procedure, then CA is just caught up in the aftershock of this disaster. Whether or not they should've accounted for that is another matter, but it is not comparable to the huge risks that AIG and Bear Stearns and Lehman and Fannie/Freddie took.