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Bailout

brian_eggleston
Posts: 3,347
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10/1/2008 8:48:33 AM
Posted: 8 years ago
C&P'd from my most recent debate:

"These days, the average stockbroker is about as popular as a ginger son-in-law. That's because they have had their snouts in the trough for years, amassing huge fortunes chasing short-term profits instead of investing in long-term gains, and now their irresponsible greed has caused the balloon to go up and the world economy is in meltdown as a result.

But they'll still get their bit, don't you worry – that's because western governments are planning to spend huge piles of taxpayers' money on covering the failed financiers' losses by buying up their toxic loans at face value.

But is it right that these rash and avaricious investors should disappear into the night with hard-working taxpayers cash, or should they face some sort of sanction?

In medieval Britain and colonial America devices called stocks were used to punish non-violent offenders.

It seems to me that, in order for a bank to qualify for government handouts, they should agree to put all the members of staff responsible for the losses in stocks placed outside their headquarters so that decent, law-abiding citizens can come and humiliate them by pelting them with rotten food."
Visit the burglars' bulletin board: http://www.break-in-news.com...
scissorhands7
Posts: 480
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10/1/2008 8:59:51 AM
Posted: 8 years ago
Its extremely necessary for short term stability in the markets which if the correct steps are taken afterward will lead to long term stability and growth.

If you're against the bailout then your for losing your job.
I rock peas on my head, but don't call me a peahead, bees on my head but dont call me a beehead, bruce lees on my head but dont call me a lee head...
I hang out with an apple who loves self loathing....
Its my show I'm andy milonakis.
s0m31john
Posts: 1,879
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10/1/2008 10:04:31 AM
Posted: 8 years ago
At 10/1/2008 8:59:51 AM, scissorhands7 wrote:
If you're against the bailout then your for losing your job.

Woo! I can have have a job where I get paid twice a day and my paycheck is $5 Million! It's okay if the dollar collapses, just so I have a job.
scissorhands7
Posts: 480
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10/1/2008 10:46:25 PM
Posted: 8 years ago
At 10/1/2008 10:04:31 AM, s0m31john wrote:
At 10/1/2008 8:59:51 AM, scissorhands7 wrote:
If you're against the bailout then your for losing your job.

Woo! I can have have a job where I get paid twice a day and my paycheck is $5 Million! It's okay if the dollar collapses, just so I have a job.

Woo! The US dollar has held its own against the baskets of major currency in face of the bailout.

Woo! I have no job and therefore have nothing to spend. Since, economic activity is 3/4 consumer spending, well... you get the picture.

If people lose trust in the financial system, banks lose appropriate amounts of capital to make loans. If loans become exceedingly strict than Joe who wants to buy a new car cant because he doesnt have enough credit to back his loan. If Joe doesnt buy a new car thats one less car the dealership sells so the employees get payed. Thats less money on all automakers jobs who make the cars; furthermore, that's less money on every other job that supplies automakers (because demand falls)

Since each of these employees receive less money than they were making previously (if not losing their jobs entirely) they spend less in the economy. As you can see the concept of loans and debt can severly hurt an economy. If this were not to be taken place you'd see a historic recession that might even last two quarters making it a depression.

Apply this to new homes, college loans, etc. Clearly you can see the effects.

Also its not a full-scale bailout. In exchange for the toxic assets the govt. is buying large percentiles of these companies for the future. Depending on the toxcity of AIG's derivative mess, AIG might be the most profitable for taxpayers.

If the federal reserve chairman requests an action, you do it. The federal reserve is one of the only tools which have made recessions much shallower, and possibly have prevented recessions.

So instead of criticizing the Fed, I will applaud them for their attempts to fix the financial markets. I have to give credit where credit is due.

If you're wondering who is responsible for the current mess we're in you can really blame Allen Greenspan, mismanagement, loansharks, homeowners who took loans using variable interest rates, and complex derivatives which should have required much more capital backing.
I rock peas on my head, but don't call me a peahead, bees on my head but dont call me a beehead, bruce lees on my head but dont call me a lee head...
I hang out with an apple who loves self loathing....
Its my show I'm andy milonakis.