Your idealism is touching, but pols say what is necessary to get in and then don't give a fart about you ever again. They are set for life by the end of their first term, a re-election would be for just more money. I guess there is one more sucker who thinks pols listen to the taxpayers.
Americans say no to bailouts, even if economy is harmed
- Thread starter Cutten
- Start date
Your idealism is touching, but pols say what is necessary to get in and then don't give a fart about you ever again. They are set for life by the end of their first term, a re-election would be for just more money. I guess there is one more sucker who thinks pols listen to the taxpayers.
Well, you're right about Berny not being elected. He is appointed, and no representative of the people can fire him.
My post had nothing to do with renters or cheap homes. The obvious point was about where most Americans' wealth is invested.
Econ 202 - creative destruction; "pushing on a string".
You really think if Wall Street gets $700bln that is going to jump-start the economy? No one is going to take loans, they are going to hoard cash and be defensive. If governments could avoid recession and cause recoveries just by lending money, Japan would have had the greatest boom on earth in the 1990s and the New Deal would not have seen a decade of 10-20% unemployment.
Keynesian economics does not work, it just prolongs recessions into stagnation. Letting the markets clear, bad institutions going bust, and then starting afresh with sound lending practices will result in far higher growth over the long-term.
IMO the appropriate way to handle this situation is for the Fed/govt to concentrate on providing liquidity to institutions that suffer runs or other short-term funding problems, but whose balance sheets are solvent. That's the classic central banking role. And it should be done at rates that turn a healthy profit for the govt if it gets involved.
If they are buying the assets at a discount to fair value, to create liquidity, then the plan would not be getting such big opposition. Bernanke was there insisting the government doesn't pay firesale prices - so it's not a liquidity provision to sound but frozen assets, it's pure payola.
As for the possibility of a credit crunch, yes that will happen. But there are sound US financial institutions who can take up the slack, an entire world economy with far more savings available (at the right price), and loans are not the only form of financing.
Quite frankly this whole episode has shown how over-reliant the US has been on short-term credit and confidence. That's symptomatic of excessive leverage and imprudent risk management. The last thing you need is to encourage more of the same by giving a slap on the wrist and re-starting the same system.
Looks like foreign banks can't wait to get their hands on US taxpayer bailout fund.
http://business.smh.com.au/business/nab-may-tap-us-rescue-fund-to-cut-losses-20080924-4n98.html
NAB may tap US rescue fund to cut losses
* September 24, 2008 - 5:51PM
*
National Australia Bank (NAB) may look to curb losses from its toxic conduit assets by tapping into the US government's $US700 billion ($840 billion) proposed rescue fund.
The bank may look into making a write-back once more detail emerges on the rescue package which was presented to US congressional members by Treasury Secretary Henry Paulson and US Federal Reserve chairman Ben Bernanke yesterday.
"NAB will review any forthcoming detail but it's too early to provide guidance,'' a NAB spokeswoman said.
Mr Paulson and Mr Bernanke yesterday signalled their priority is shoring up US banks by buying mortgage-related securities above "fire sale'' prices.
But the process whereby banks can tender for funds from the package has yet to be finalised, with uncertainty surrounding both which institutions are eligible to take part and the clearing price of the facility.
Both officials are set to face Congress for a second round of questions today.
The tender process could extend to Australian banks, with the possibility of NAB making a write-back on its July $1 billion write-down on its portfolio of collateralised debt obligations being raised by JBWere today.
If the bank is able to structure its conduit assets through its US subsidiary, Great Western Bancorporation, it may be able to tender in the already written-down $1.2 billion portfolio of residential mortgage backed securities in the conduit, JBWere's James Freeman, Ben Koo and Elizabeth Rogers said.
NAB bought South Dakota-based Great Western Bancorporation from the Hamann family last November for $US798 million to boost its footprint in the North American agribusiness market.
Great Western Bancorporation is predominantly funded by deposits and focuses on lending to the commercial and small business sectors in Arizona and five mid-west states.
It booked a $US65 million underlying profit to June 30, 2007.
Around 17 % of its $US2.6 billion in loans are made to consumers, with no exposure to subprime lending, NAB said.
NAB's stock has been trading below its peers over concerns it will have to make additional write-downs on another portfolio of conduits comprising $4.5 billion worth of commercial mortgage backed securities and other loans.
"NAB has appropriately briefed the market and there is no need for any further updates,'' NAB's spokeswoman said when asked about further write-downs.
JPMorgan and Citi have previously flagged expected write-downs of between $500 million and at least $1 billion for both NAB and ANZ.
JPMorgan says NAB could face a write-down of up to $1.5 billion from its $4.5 billion worth of exposures to conduits which are currently held in the hold to maturity portfolio despite likely trading well below book value.
"This must create a potential mark to market risk for NAB of between $500 million and $1.5 billion,'' JPMorgan said last week, adding that this would comprise the bank's tier one capital ratio.
Last week NAB flagged an exposure to failed US investment bank Lehman Brothers of less than $100 million.
Today NAB's shares finished 7.2%, or $1.74 higher, at $25.60, in a relief rally across the broader market driven by US billionaire and master stock picker Warren Buffett's $US5 billion investment in Goldman Sachs.
"ANZ and NAB are where people are short so that's where they're recovering,'' Richard Morrow, director at EL&C Baillieu said.
http://business.smh.com.au/business/nab-may-tap-us-rescue-fund-to-cut-losses-20080924-4n98.html
NAB may tap US rescue fund to cut losses
* September 24, 2008 - 5:51PM
*
National Australia Bank (NAB) may look to curb losses from its toxic conduit assets by tapping into the US government's $US700 billion ($840 billion) proposed rescue fund.
The bank may look into making a write-back once more detail emerges on the rescue package which was presented to US congressional members by Treasury Secretary Henry Paulson and US Federal Reserve chairman Ben Bernanke yesterday.
"NAB will review any forthcoming detail but it's too early to provide guidance,'' a NAB spokeswoman said.
Mr Paulson and Mr Bernanke yesterday signalled their priority is shoring up US banks by buying mortgage-related securities above "fire sale'' prices.
But the process whereby banks can tender for funds from the package has yet to be finalised, with uncertainty surrounding both which institutions are eligible to take part and the clearing price of the facility.
Both officials are set to face Congress for a second round of questions today.
The tender process could extend to Australian banks, with the possibility of NAB making a write-back on its July $1 billion write-down on its portfolio of collateralised debt obligations being raised by JBWere today.
If the bank is able to structure its conduit assets through its US subsidiary, Great Western Bancorporation, it may be able to tender in the already written-down $1.2 billion portfolio of residential mortgage backed securities in the conduit, JBWere's James Freeman, Ben Koo and Elizabeth Rogers said.
NAB bought South Dakota-based Great Western Bancorporation from the Hamann family last November for $US798 million to boost its footprint in the North American agribusiness market.
Great Western Bancorporation is predominantly funded by deposits and focuses on lending to the commercial and small business sectors in Arizona and five mid-west states.
It booked a $US65 million underlying profit to June 30, 2007.
Around 17 % of its $US2.6 billion in loans are made to consumers, with no exposure to subprime lending, NAB said.
NAB's stock has been trading below its peers over concerns it will have to make additional write-downs on another portfolio of conduits comprising $4.5 billion worth of commercial mortgage backed securities and other loans.
"NAB has appropriately briefed the market and there is no need for any further updates,'' NAB's spokeswoman said when asked about further write-downs.
JPMorgan and Citi have previously flagged expected write-downs of between $500 million and at least $1 billion for both NAB and ANZ.
JPMorgan says NAB could face a write-down of up to $1.5 billion from its $4.5 billion worth of exposures to conduits which are currently held in the hold to maturity portfolio despite likely trading well below book value.
"This must create a potential mark to market risk for NAB of between $500 million and $1.5 billion,'' JPMorgan said last week, adding that this would comprise the bank's tier one capital ratio.
Last week NAB flagged an exposure to failed US investment bank Lehman Brothers of less than $100 million.
Today NAB's shares finished 7.2%, or $1.74 higher, at $25.60, in a relief rally across the broader market driven by US billionaire and master stock picker Warren Buffett's $US5 billion investment in Goldman Sachs.
"ANZ and NAB are where people are short so that's where they're recovering,'' Richard Morrow, director at EL&C Baillieu said.
Yeah, rentiers around the world are just salivating at the opportunity to make money off the American taxpayer. Thanks, but no thanks - they gambled and lost.
Instead of tossing Wall Street money from a revolving 700B fund, it's time to tell them to pound sand and start to fix the trust problems in the financial system. Paulson's is not the only option - American taxpayers at http://www.fedupusa.org have a counter proposal that we challenge Congress to take up.
Instead of tossing Wall Street money from a revolving 700B fund, it's time to tell them to pound sand and start to fix the trust problems in the financial system. Paulson's is not the only option - American taxpayers at http://www.fedupusa.org have a counter proposal that we challenge Congress to take up.
It's "Animal Farm" all over again!! Don't you know that whatever they command, shouldn't even be questioned???