Bailout bill fails

[dalakhani]

Originally Posted by SniperSB23

MCCAIIIIIIIIIIIIIIINNNNNNNNNNNNNNNN!!!!!!!!!!!!!!! !!!!!!!

In all seriousness, when this started locking up last summer the cost of commercial paper and the Libor went through the roof. Back then, it was more a liquidity issue than one of solvency.

A year later, that has changed. With all of the losses over the last year, banks are hoarding cash now because its all they have. And if they don't have cash, what are they going to lend ? And if they won't lend to each other without charging ungodly rates, what will that do to rates to consumers?

[SniperSB23]

Originally Posted by dalakhani

In all seriousness, when this started locking up last summer the cost of commercial paper and the Libor went through the roof. Back then, it was more a liquidity issue than one of solvency.

A year later, that has changed. With all of the losses over the last year, banks are hoarding cash now because its all they have. And if they don't have cash, what are they going to lend ? And if they won't lend to each other without charging ungodly rates, what will that do to rates to consumers?

It's not a good situation, no doubt. I just think there's an incredible irony here that all the bigwigs invested heavily suddenly need the taxpayers to bail them out, yet when it comes to them giving more money to help those truly in need then we are suddenly becoming a bunch of socialists. I believe in the golden rule. And last I saw the golden rule doesn't say f*** over others so when you are in need they will save your ass. Let's make it fair, the taxpayers bail out the wealthy, and in turn the Bush tax cuts are repealed for the wealthy to help pay for it. Then I'm 100% on board.

[dalakhani]

Originally Posted by SniperSB23

It's not a good situation, no doubt. I just think there's an incredible irony here that all the bigwigs invested heavily suddenly need the taxpayers to bail them out, yet when it comes to them giving more money to help those truly in need then we are suddenly becoming a bunch of socialists. I believe in the golden rule. And last I saw the golden rule doesn't say f*** over others so when you are in need they will save your ass. Let's make it fair, the taxpayers bail out the wealthy, and in turn the Bush tax cuts are repealed for the wealthy to help pay for it. Then I'm 100% on board.

Anyone who paints this as anything less than a bailout is being disingenuous and i hope i didnt come across that way. I think the tax payer can make money on this IF, big IF, they value the assets properly. Even so, it is still a "bailout" because any plan would require the govt to purchase the assets at above market prices. Before everyone starts crying, remember, market right now on a lot of those assets would be like 20 cents but thats simply because the market is an injured lion in the desert and the buyers are the circling vultures.

[SniperSB23]

Originally Posted by dalakhani

Anyone who paints this as anything less than a bailout is being disingenuous and i hope i didnt come across that way. I think the tax payer can make money on this IF, big IF, they value the assets properly. Even so, it is still a "bailout" because any plan would require the govt to purchase the assets at above market prices. Before everyone starts crying, remember, market right now on a lot of those assets would be like 20 cents but thats simply because the market is an injured lion in the desert and the buyers are the circling vultures.

Therein lies the problem. No one even trusts the government with a tiny if, not to mention a big IF. The chance of us ever seeing that money if Obama is elected is 10%. If McCain is elected it is 0%. Sounds like a great deal. Where is the negotiator for the taxpayers in all this?

[dalakhani]

Originally Posted by SniperSB23

Therein lies the problem. No one even trusts the government with a tiny if, not to mention a big IF. The chance of us ever seeing that money if Obama is elected is 10%. If McCain is elected it is 0%. Sounds like a great deal. Where is the negotiator for the taxpayers in all this?

Its not a question of intent here in my opinion. Look, these are some complex financial instruments we are dealing with. Each security represents a portion of MANY different loans. The bank that owns the security doesnt have any relationship with the borrowers. How is the bank supposed to be able to determine the value of all of those different loans going forward? How is the govt supposed to determine a value for a security with rising balances backed by a depreciating assets where a payment shock will be occuring relatively soon? How are they going to accurately guess on likelihood of payment?

If I were voting, I would love to hear a set plan on how they would do this.