jc, thanks for the info, Ive seen some of your other posts and you know a lot about money. I just think as long as we stay a good capitalist country, things will be done on its own. There is no forbearance going on as long as the people rule. I thought thats the way the economy was designed.

 

There have been two impulses in this country when it comes to financial markets: deregulate during good times and bail out during bad times. The Fed, under Greenspan, reacted to every large and small problem by throwing a ton of money at it.

Eventually, all this cash slushing around met the deregulated financial system. Someone figured out how to make money on mortgages whether or not anyone paid them back. The more mortgages you originated the more money you made. All the other checks in the system worked on commission (appraisers, agents, etc.).

Now all these banks own tons of stuff that nobody wants to buy. Then Paulson let Lehman go under, and that caused everything to freeze up. Banks don't know who would pay them back so they are not lending money.

I have doubts whether the original Bush/Paulson $700 BB blank check would have worked. I think buying the junk derivatives is a bad deal (especially at artificially inflated prices) and we should just recapitalize the banks directly (have the taxpayers buy stock in the banks they can sell later at a profit hopefully).

But the current plan (Dodd-Frank) would do more hopefully and buy the time we need to put a real plan in place.

 

Ingalls,

For what it is worth...I built a six figure portfolio over the past decade through my involvements in the financial markets. During the past five years that portfolio was virtually always invested exclusively in cash equivelents specifically because I knew this crisis would result sooner or later.

My point being...I am still prepared for a crash/ recession and would benefit more, relatively speaking, from a crash than virtually anyone on this board. However, I know what the right thing to do is for the average member of the board here...despite the fact that most of them don't know themsleves. That is for this bill to get done and to get done quickly....just because the average American is too dumb to realize that this bill is good for them in the long run, doesn't mean we should bend them over the barrel for second time, just as they were led like sheep into this crisis in the first place.

In summation, anyone that thinks that stopping bill will hurt Wall St, and help America, is as foolish as the average American that bought into the financial hype that lead to this crisis in the first place.

JC

 

....just because the average American is too dumb to realize that this bill is good for them in the long run

A little full of yourself arent you?

Only time will tell how this will work out. I believe this Bill is BAD for the country in the long term as do many others. Its good in the short term. Credit markets will ease knowing there is a govt backstop in place, but the problem hasnt been solved. Its just been pushed on to the taxpayer and the govt deficit only gets bigger. They say We the People may actually make money on this 'investment' Hell, we may, but I doubt it. As said, only time will tell.

The only way we will truly turn the corner here is to have all this bad debt purged from the system. Write it all off and start from scratch. This will cause TREMENDOUS short term pain. MANY business will fail. Need a loan, you better have excellent credit and have a decent down payment on whatever you want to buy. Even with that, be prepared ro pay a high rate of interest. Unemployement will spike. Our standard of living will fall. It wont be pretty at all. In fact, it would terrible, but doing this bailout is no guaruntee that it wont happen anyway. Its a bet, a gamble, a last shot by the Fed and the Treasury who, IMO, had a big part in us getting to this point in the 1st place.

So, do we pull the band aid off slowly or do we rip it off quick and get it over with?

And by the way, I work in the financial services industry. If we let the market work things out and my predictions came true, my job, bye bye! But I have confidence in America and the economy would recover quick enough that I could ride it out. I may not 'benefit' from the crash like JC, but I have done whats needed to be done to prepare for the worst case scenario.

It'll be an interesting next few months.

 

I believe this Bill is BAD for the country in the long term as do many others.

And what historical or statistical basis do you have for forming that belief?...

What experience do you have handling the liquidations of distressed securities?

Based on your statements it appears the answer is none....So it seems to me that the only one full of themselves is the people that are reaching conclusions on a subject that they have little, if any, practical knowledge of...

(For perspective...Remember Duckmaster you are the one who attempted to buy "puts" on this market in order to profit from this decline, only to repeatedly dump them long before this decline played out. Why would you have done that? Quite simply, there is only one reason why anyone would do that...you never actually realized that the financial markets would freeze up in the manner that they have...So, it is clear you failed to understand the enormity of the problem then, what makes you feel that you understand it now?)

In the end...there is a reason that the average American will never understand any of this...It is simply not worth the time or the effort to educate them on the subject. Instead, as fact has proven out, it is much easier to let them mindlessly hand over their money to those of us that do understand it...After all that is all a Bear market is all about...and always has always been. Removing the wealth generated during the previous bull market from those that benefited without having done anything to earn it, and returning that capital to those that individuals that were either knowledgable, and or wealthy enough, to profit from the ensuieng problems those people create with the money that they falsely belived they "earned". (Simply put...taking the bull market returns from the "borrowers" who failed to produce meaningful returns on capital and returning it to the "Savers" who will then invest that money in a more productive manner that will lay the ground work for the next bull market...)

Any attempt to argue that fact is not an argument with me, it would be argueing against the facts born out by centuries of history...

JC

 

Remember Duckmaster you are the one who attempted to buy "puts" on this market in order to profit from this decline, only to repeatedly dump them long before this decline played out. Why would you have done that?

Sorry if I dont have the time to concentrate every second on the market. Thats not my job. I am more than confident that if I had the time to devote to it, I could do just fine. Just because I cant call a bottem has nothing to do with the bailout and what it will do to with our economy. Take your attacks some place else or please PM so we can meet in person, I would look forward to that. [drinking]