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Thread: USA bailout failure

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    USA bailout failure

    What are your views on the negative vote yesterday?
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    Site Caretaker Dave A's Avatar
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    I can't blame them. It was like cutting a blank cheque.

    It doesn't mean they won't still do some select rescues, but this way the speculators (who arguably got everyone into this mess) can't count on anything.

    My theory is every now and then the market needs a good bleed with a healthy side dish of burnt fingers. It keeps fingers where they should be.
    The trouble with opportunity is it normally comes dressed up as work.

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    Moderator IanF's Avatar
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    Crisis explained simply

    here is a link http://www.businesspundit.com/sub-prime/ which explains the crisis simply. What is going to happen to all the parties involved from banks, rating agencies, auditors, etc. They should all be held liable. The big question is will anything happen to them?
    Only stress when you can change the outcome!

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    Site Caretaker Dave A's Avatar
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    Who would be left to screw us?
    That was a bad assumption. We fucked up. Sorry
    Classic!
    The trouble with opportunity is it normally comes dressed up as work.

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    Site Caretaker Dave A's Avatar
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    Even Nick Leeson (the reckless trader who collapsed Barings Bank) has got his say in. It's worth a read.

    Two highlights:
    The banking system in the United Kingdom is technically insolvent -- the value of outstanding mortgages and loans stands at £256-billion while the value of deposits is only £160-billion. A re-evaluation of the banks' property portfolios and likely bad debts would paint a bleaker picture still. Banks are not lending to one another and the daily operation of the system is reliant on handouts by central banks.


    Who is going to go after the individuals responsible for this financial catastrophe?

    Apparently no one. Who is going to bail out the businesses and individuals who are struggling at the moment? The banks? Not a chance: self-preservation is the only thing on their minds at the moment. The rest of us will be left to our own devices.
    full comment from M&G here
    The trouble with opportunity is it normally comes dressed up as work.

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    Full Member derrickm's Avatar
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    Michael Moore has an interesting list of suggestions:

    Here's How to Fix the Wall Street Mess ...from Michael Moore

    Derrick Markotter
    Get More Business From Your Website

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    Site Caretaker Dave A's Avatar
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    Michael Moore tends to have an interesting take on things. I particularly like the special prosecutor proposal, although I shudder at the thought of the legal fees to follow through. Each prosecution can probably expect some pretty stern defence.

    The CEO/COO salary limit proposal is also pretty neat.

    I'm just not sure it is the rich that are calling for the bailout though. They're not going to get hurt nearly as badly as the little guys.
    The trouble with opportunity is it normally comes dressed up as work.

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    An example of why the USA economy is in sh*&

    http://edition.cnn.com/2008/US/10/03...mpt/index.html

    "There's a lot of people like Miss Polk right now. That's the sad thing about it," said Sommerville, who had met Polk before and rushed to the scene when contacted by police. "They might not be as old as her, some could be as old as her. This is just a major problem."

    In 2004, Polk took out a 30-year, 6.375 percent mortgage for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls, Ohio. The same day, she also took out an $11,380 line of credit.

    Over the next couple of years, Polk missed payments on the 101-year-old home that she and her late husband purchased in 1970. In 2007, Fannie Mae assumed the mortgage and later filed for foreclosure.


    Forgive my ignorance, but who in his right mind grants a 30-year mortgage to a 90-year old biddy??? That is criminal behaviour and those bankers should be brought to justice.

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    Site Caretaker Dave A's Avatar
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    She was only 86 when they gave her the loans

    The whole thing actually suggests there is merit in the reckless credit provisions of our NCA. However, as a property owner, she might well not have qualified for protection if it applied over there the same way as it does here.
    Last edited by Dave A; 06-Oct-08 at 02:45 PM.
    The trouble with opportunity is it normally comes dressed up as work.

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    Site Caretaker Dave A's Avatar
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    So Paulson's plan has failed to pass the House again!
    It was a bad plan -- but it was a plan. The refusal of the United States House of Representatives to back Hank Paulson's bail out takes us into new territory.

    Some horsetrading in Washington may yet produce a revised deal that would be acceptable to the politicians, but the banks know there will be no easy handouts: Main Street, for better or worse, wants to see Wall Street suffer. In an election year, voters get what they want.

    What happens next? The immediate challenge for the central banks is simply to keep the banking system functioning -- ensuring that payments are processed and that companies can continue to pay everyday bills, such as wages. The Federal Reserve will flood the market with emergency funds. The sums were already staggering. Before the vote in the House this week the Fed (US central bank) released $620-billion. The number may get bigger in the next few days. It's a case of using "all tools available", as the treasury put it. These could also include emergency cuts in interest rates, as we saw after 9/11.

    Even so, more bank collapses and takeovers look almost inevitable.
    full story from M&G here
    The Capitol fiddles away while Wall Street burns.
    The trouble with opportunity is it normally comes dressed up as work.

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