"We Pay" BIGGEST BAILOUT EVER?? $500 Billion Washington Mutual, others to be infused with cash

  • HndsmKansan

    Posts: 16311

    Sep 19, 2008 12:04 PM GMT
    The government is announcing that other financial entities that have invested in "crappy mortgages" (for all practical purposes) will be bailed out...
    Washington Mutual is one of those to be assisted....
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    Sep 19, 2008 12:36 PM GMT
    That is interesting, and surprising. Is the Washington Mutual bailout being implemented the same way as the savings and loans mess of the 1980s?

    I would not be surprised if the US government re-examines the policy of allowng homeowners to deduct mortgage interest from taxes. It seems that home owners were taking on way too much risk in the past 5 years thinking that prices would keep going up and up. That coupled with new (and very risky) mortgage instruments and greedy lenders created a bubble that was bound to burst sooner or later.

    Also the Federal Reserve's unstated policy of stimulating growth through cheap credit, instead of sticking to their main purpose of controlling inflation, may be under the microscope. Two asset bubbles in 10 years is to much (Dot-com bubble and the housing bubble).
  • Koaa2

    Posts: 1556

    Sep 19, 2008 2:04 PM GMT
    Once again, the taxpayers, are going to be hit with a big bill and the wealthy are going to go on, having made millions on us! I am not sure any party is exempt from what has been going on in Washington.
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    Sep 19, 2008 2:13 PM GMT
    Taxpayers may be paying for it but at least the money is being used in something other than funding a senseless wars and Palin's hunting trips.
    If the Fed doesn't intervene and lets the banks collapse, it would send a ripple effect throughout the entire world and we would be in a worldwide economic crisis. Regardless of who is responsible, not letting these banks keep collapsing is beneficial to us all. Should the execs be held accountable? Absolutely.
  • PRDGUY

    Posts: 641

    Sep 19, 2008 2:48 PM GMT
    Not sure a s havent seen this am's news, but my understanding is that we will be setting up something similiar to the RTC (Resolution Trust corp) that was set up to take off the bad assets of the savings and loans..... [recall as that wound down that we-taxpayers,actually broke even to some say a small profit]

    WHAT CONCERNS ME
    is we have committed to 1.115 trillion in bailouts, promises and short term borrowing to ease the money supply this week alone.
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    Sep 19, 2008 7:56 PM GMT
    The Republicans are generally for corporate welfare but not generally for welfare to individuals who have run onto hard times. Individuals have to pull themselves up by the bootstraps. Hmmm, I wonder what ever happened to their obsession with letting the market decide. All their old sound bites are failing now that the majority of their buddies are filthy rich.
  • HndsmKansan

    Posts: 16311

    Sep 20, 2008 11:51 AM GMT
    alexander7 saidThe Republicans are generally for corporate welfare but not generally for welfare to individuals who have run onto hard times. Individuals have to pull themselves up by the bootstraps. Hmmm, I wonder what ever happened to their obsession with letting the market decide. All their old sound bites are failing now that the majority of their buddies are filthy rich.


    Your right....Herbert Hoover took that approach.... and look at what happened.
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    Sep 20, 2008 1:35 PM GMT
    maverickcj_ca said Should the execs be held accountable? Absolutely.


    It'll be a cold day in Hell before Republicans ever support accountability. No doubt any financial industry execs displaced by this upheaval will find new positions as economic advisors to the McCain campaign. Where they can serve alongside Phil Gramm, the principal author of much of the deregulation legislation that got the country into this mess.
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    Sep 20, 2008 1:44 PM GMT
    what annoys me is that when things are going "good" and profits are being made..they are retained by the few in the private sector, but then when their mismanagement brings a mess...they want the public to bear the burden of the losses. It's like saying to Joe Taxpayer..." when I make money...I keep it, but when I lose money, you pay for it".

    Sheesh
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    Sep 20, 2008 1:53 PM GMT
    alexander7 saidThe Republicans are generally for corporate welfare but not generally for welfare to individuals who have run onto hard times. Individuals have to pull themselves up by the bootstraps. Hmmm, I wonder what ever happened to their obsession with letting the market decide. All their old sound bites are failing now that the majority of their buddies are filthy rich.


    Yeah, I'm also struck by the double-standards in Republican thinking. But the alternative to bailouts is economic meltdown & chaos, maybe another Great Depression.

    And I wonder how much that realization played into their thinking, and that of the financial institutions that took these risks. These are supposed to be the best & brightest people in private finance, with 6, 7 and even 8-figure incomes. And they couldn't see this coming, didn't read the financial analysts who were predicting this outcome several years ago?

    I have to think the "safety net" in their thinking was, in a worst-case scenario, the US government would be compelled to do exactly what it's now doing: bail them out. There really is no choice, or else the innocent suffer along with the guilty. And even if individual senior executives should lose their jobs, they've got generous severance packages that will keep them fixed for life.

    That kind of corporate and personal "insurance" is what causes caution to be thrown to the wind, replaced by reckless risk taking. And why the regulations that former US Senator Phil Gramm methodically removed were essential to preventing such a scenario from ever developing. Phil Gramm, McCain's campaign financial advisor at one point, and still close to the organization.
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    Sep 20, 2008 2:45 PM GMT
    "The jury is still out on whether it will work, although experts are cautiously optimistic the plan will help the housing crisis. It will help banks shore up their balance sheets by removing hard-to-value assets. This would address the seemingly endless rounds of writedowns and capital raising that have been rocking the financial sector."

    http://money.cnn.com/2008/09/20/news/economy/bailout_proposal/index.htm?postversion=2008092009

    I can see that this is going to be good for irresponsible business. ...But who is looking out for the taxpayers' interest? ...A Republican administration!!!! ....OMG! .... icon_eek.gif .... the taxpayer is not represented!!!! And this is the same administration who told us the Iraq war would only cost us a billion. We are so fucked! ...

    I wonder what we, the public, get for this money. ...Just a bunch of bad mortgages??? ....Are the banks etc going to be put under greater regulation and scrutiny so this doesnt happen again?

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    Sep 20, 2008 2:48 PM GMT
    fluxu8 saidwhat annoys me is that when things are going "good" and profits are being made..they are retained by the few in the private sector, but then when their mismanagement brings a mess...they want the public to bear the burden of the losses. It's like saying to Joe Taxpayer..." when I make money...I keep it, but when I lose money, you pay for it".

    Sheesh

    Indeed!

    funny pictures
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    Sep 20, 2008 3:40 PM GMT
    privatize the profits, socialize the losses. great strategy.