Congress has bailout plan
POSTED BY: SignyM
UPDATED: Tuesday, April 8, 2025 20:49
VIEWED: 3660
PAGE 2 of 4
It'd be nice to think this congressional crime would be enough to convince people never to support anyone affiliated with the Democrats OR the Republicans.
No chance... 
SergeantX
"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock
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I am finding it kinda ironic that the only stuff makin any sense about it right now is coming from the two "resident kooks"...
Ron Paul and Dennis Kucinich.
I dunno folks, maybe we should start listening to the folk who warned of this, were shouted down as kooks, and then have responsible solutions in hand while the rest of them are scrambling to cover their asses.
Just a thought.
-Frem
It cannot be said enough, those who do not learn from history, are doomed to endlessly repeat it
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Perhaps you've seen this already --- if so, I apologize.
Dear American:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury Paulson
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Rue:
Yep, that's about the long and short of it. Our new economic plan will be based on the Nigerian E-Mail Chain Letter model...
Ain't life grand?
Mike
This world is a comedy for those who think, and a tragedy for those who feel.
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Say goodbye to the value of your dollars.
What I don't get is this: let's say there are 1 million households facing foreclosure (a generous estimate since "Nationwide, 739,714 homes received at least one foreclosure-related notice ..." but are not necessarily in foreclosure.). There are 305,249,245 (more or less) people in the US. http://www.census.gov/population/www/popclockus.html . The average household size is 2.59 http://factfinder.census.gov/servlet/SAFFFacts. Simple math gives us 117,860,000 US households. A million foreclosures is 0.8% of all US households. Let's assume that roughly half would have been foreclosed under normal circumstances - that leaves 0.4% of all US households that are facing foreclosure due to predatory lending. Does that justify ruining the value of the dollar for everyone ?
Or look at it another way - $700 billion will be spent due to 1 million homes. That's $700,000 per household. Were ALL these people buying million dollar homes ? And, WHAT is all that extra bailout money going for ? Or should I say who ?
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Quote:
Originally posted by rue:
Or look at it another way - $700 billion will be spent due to 1 million homes. That's $700,000 per household. Were ALL these people buying million dollar homes ? And, WHAT is all that extra money going for ? Or should I say who ?
The way I understand the plan, only a small portion of the 700 billion will go to help homeowners, and those that will be helped must not already be in foreclosure or behind on their payments. It's going to help responsible homeowners that could afford to keep their homes with better loan terms, primarily by getting them into fixed rate loans. Most of the 700 billion is going to be used to buy the Mortgage Backed Securities that have caused the financial markets to freeze up due to the inability to sell these securities at any price. Banks have been force to mark their balance sheets to market and because these assets are currently illiquide the market price for these securities is far below their actual value. This causes their balance sheets to look much worse than they actually are. Anybody that thinks that the banks and brokerages are going to come out on top because of this "bailout" doesn't understand the facts. The only benefit they are getting is that they don't have to claim bankruptcy. They will have to post massive losses when the Fed buys their security portfolios. The Fed is going to buy these securities at the market price, which is a lot lower than their actual value. If Paulson does this right and buys them low enough other buyers will start coming into the market and over time the Fed can sell them back into the open market, hopefully at a profit. Even if the Fed can't resell these securities they can hold them to maturity(about 7years) and possibly profit. I'm fairly optimistic that if we can keep congresses hands off the 700 billion, we might actually profit from this in the long run.
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"Most of the 700 billion is going to be used to buy the Mortgage Backed Securities that have caused the financial markets to freeze up due to the inability to sell these securities at any price. Banks have been force to mark their balance sheets to market and because these assets are currently illiquide the market price for these securities is far below their actual value. This causes their balance sheets to look much worse than they actually are."
So, the banks did the wrong thing by being undercapitalized, they sold speculative bonds, and the regulators were asleep at the switch, worse they were aiding and abetting. And this is my problem --- how ?
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Quote:Oh, someone will, that's for sure and that's for certain.
Originally posted by Kirkules:
I'm fairly optimistic that if we can keep congresses hands off the 700 billion, we might actually profit from this in the long run.
isall
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So, the banks did the wrong thing by being undercapitalized, they sold speculative bonds, and the regulators were asleep at the switch, worse they were aiding and abetting. And this is my problem --- how ?
I'll be checking back for an answer to this.
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