Bailout or no Bailout?
- Thread starter jonbig04
- Start date
Quote from Yannis:
Funny about that, he looks so much older, definitely more stupid...
He's gutless and a weenie, and without spine -- but not stupid as he never gets removed from power no matter what he does.
Bush is a stupid man. McCain is average. Obama is one of the tops of society to get where he is, an "elite", an "egghead."
It's not fair to give Rubin & Clinton a free pass on the issue of deregulation.
A recent IMF study says that the projected loss of economies involved in recent financial crises averaged around 16% of GDP. The 700 billion being talked about is roughly equivalent to 4% of GDP and that might be made back.
Based on the evidence I've seen the cost of not doing anything is likely to be higher than doing something. So there should be a bailout.
However, what form that bailout should take is another question entirely. There are previous precedents like the Swedish model referred to that can serve as a basis. The Paulson model is different from that and lacks precedent. The devil is in the details.
Based on the evidence I've seen the cost of not doing anything is likely to be higher than doing something. So there should be a bailout.
However, what form that bailout should take is another question entirely. There are previous precedents like the Swedish model referred to that can serve as a basis. The Paulson model is different from that and lacks precedent. The devil is in the details.
Paulson Plan Aimed at Helping `Poorly Run' Banks, Allison Says
By David Mildenberg
Sept. 25 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson's proposed $700 billion bank rescue aims to help ``poorly run'' companies and the primary beneficiaries would be Goldman Sachs Group Inc. and Morgan Stanley, said BB&T Corp. Chief Executive Officer John Allison in a critique of the plan.
http://www.bloomberg.com/apps/news?pid=20601109&sid=afxCLBycUdbc&refer=home
To see the letter and recommendations he wrote to Congress, click the below link:
http://media.gatewaync.com/wsj/pdfs/2008/09/allison.pdf
By David Mildenberg
Sept. 25 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson's proposed $700 billion bank rescue aims to help ``poorly run'' companies and the primary beneficiaries would be Goldman Sachs Group Inc. and Morgan Stanley, said BB&T Corp. Chief Executive Officer John Allison in a critique of the plan.
http://www.bloomberg.com/apps/news?pid=20601109&sid=afxCLBycUdbc&refer=home
To see the letter and recommendations he wrote to Congress, click the below link:
http://media.gatewaync.com/wsj/pdfs/2008/09/allison.pdf
Good read. Some of what he says makes sense, but I think this problem goes beyond anything he can grasp. For example, he mentioned that he didnt understand why insurance companies needed to be bailed out. I don't know the fine details either but I know AIGs problems begin with credit default swaps..I think this quote is meaningful "but fears that AIGââ¬â¢s huge, global credit-default swap positions will unravel. The $62 trillion dollar credit derivatives market is 50 times the size of the subprime mortgage derivatives market, and is indeed larger than the entire global economy."
No bail out.
Portions of the economy will suffer for only as long as it takes for business and individuals to adjust to the new economics.
Just because P&Bs (people and business) have become used to borrowing money to meet their daily needs, don't mean thats the only way of accomplishing their goals.
All this media stuff is nothing more than âMushroom cloudâ talk.
You think this "goes byond anything he can grasp"? He is the CEO of the 14th largest commerical bank in the US.
Think about what you just said. You think $700 Billion is going to somehow protect you against a $62 Trillion market that is little more than a casino? I think not.
Here's what I think this CEO grasps that you evidently don't grasp. This crises began out of distortions caused by government. Your buddies Barney Frank, Chuck Schummer, et al. There are those businesses who have now managed to put themselves into a position where they may well fail. I say let them fail. Allow the free market economy, which is what this country is based on, to work.
Yes, there may be some pain. But let's not penalize the good actors. Here's a banking institution that is telling you they don't want this plan. They don't need it. Sounds like Wells Fargo, JP Morgan, Bank of America are going to survive too.
And interestingly enough, deals evidently can be made without the government if the terms and the price are right. JP Morgan does a Washington Mutual deal. Bank of America does a Countrywide and a Merrill Lynch deal. Evidently there are some banks looking at Wachovia. If these guys are worth saving, they will be bought, merged, etc. If not, they're toast. And deservedly so.
I would have said the same thing about AIG. Except they "bailed" out AIG.
What you need to grasp is that the market is a clearing mechanism. Those that are in good shape, didn't overextend themselves, didn't gamble in credit default swaps, are going to survive. Some of those that didn't are going down. And it isn't going to make any difference whether the government takes our $700 Billion or not. Except that if the government gets involved it will simple delay recovery, and penalize all the good actors.
I guess sooner or later you need to declare yourself....you're either a believe in socialism, or you're a believer in capitalism. Since you claim to go based on fact, what facts do you have that indicate socialism will be a superior result?
OldTrader