Markets soar as bank rescue plan is detailed

Discussion in 'Politics, Religion, Social Issues' started by leekohler, Sep 19, 2008.

  1. leekohler macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #1
    I guess "big government" and "socialism" are good when it benefits bankers.

    http://www.chicagotribune.com/business/sns-ap-wall-street,0,4187589.story
     
  2. Much Ado macrumors 68000

    Much Ado

    Joined:
    Sep 7, 2006
    Location:
    UK
    #2
    It would have been poetic justice for there to be no bailout. "Sort it out yourselves, free market. That's what you do, isn't it?"

    Capitalism is dead.
     
  3. leekohler thread starter macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #3
    How about it? Don't wanna pay for universal health care? Well, I don't wanna pay for bankers mistakes either. :mad:
     
  4. jplan2008 macrumors regular

    Joined:
    Feb 15, 2008
    #4
    And, as expected, not only would this not only be much bigger than the S&L bailout, but also wouldn't have any strings attached for the recipients of the aid, since Bush is asking for "sweeping powers" to implement it, and Congress will have to rush the bill through without much debate. Receive $400 in welfare handouts, there have to be checks and balances that make it nearly impossible to receive. Want billions? Here's the check.

    The administration is asking Congress to give it sweeping new powers to execute the plan. Paulson said it "needs to be big enough to make a real difference and get to the heart of the problem."

    http://biz.yahoo.com/ap/080919/financial_meltdown.html
     
  5. leekohler thread starter macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #5
    This makes me seriously ill. Where is the punishment for all those involved? At least with the S&L scam there were some consequences. To me it sounds like they just want to artificially keep propping up wealth that doesn't exist, except on paper. Oh wait- That IS what they're doing.
     
  6. iGary Guest

    iGary

    Joined:
    May 26, 2004
    Location:
    Randy's House
    #6
    What do you propose?
     
  7. Peace macrumors P6

    Peace

    Joined:
    Apr 1, 2005
    Location:
    Space--The ONLY Frontier
    #7
    Sadly...

    Bail em out and have hearings on the banking industry with REAL consequences for the ones that caused this.

    And lastly.. Outlaw variable rate loans. That's what caused this whole mess.
     
  8. takao macrumors 68040

    takao

    Joined:
    Dec 25, 2003
    Location:
    Dornbirn (Austria)
    #8
    "if i owe the bank 1000 bucks, i have a problem
    if i owe them 1 million, the bank has a problem
    if i owe them 1 billion, the government has a problem"

    the whole thing is ridiculous .. hundreds of billions to save the US Banks.. who screwed it up themselves .. now they get the "you didn't do anything wrong" card.. and will continue business as usual .. which means this whole financial disaster is just postponed


    just watching on swiss TV: the former chief economist from the swiss national bank: "tha banks have been in a worse situation than before the 1929 crash" .."if there are no fundamental changes to the current system it will only take a few years to have it happen again"
     
  9. leekohler thread starter macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #9
    That those responsible (CEOs of the banks, etc.) be punished with the loss of their golden parachutes. No CEO involved directly with these failures should be walking away with one cent.

    Yep- and jail time should be mandatory for those proven to have been directly involved.
     
  10. atszyman macrumors 68020

    atszyman

    Joined:
    Sep 16, 2003
    Location:
    The Dallas 'burbs
    #10
    I don't think they need to be outlawed. It's not like there's no paper trail on a loan. God knows I've had to sign enough of the damn forms when buying our house, and a couple of refinances (for lower interest rates/payments only, no equity loans yet, thank God).

    You should be able to trace every loan that should have never been granted back to someone who approved it. As much as we talk about the "morons who bought a house they couldn't afford" there was an even bigger moron who looked at their meager assets and modest credit history and gave them a loan that never should have been granted.

    Go after them, make them pay, if the upper management at the bank is to blame for forcing the loans to be granted the bank officers will quickly turn on the upper management. Penalties need to be assessed and severe enough that it will make banks and the financial industry think twice the next time we have a bubble.

    It would really be nice to see an end to massive bonuses to upper management even when they quit, retire, screw up, just because their contract guarantees it, but with most Boards of Directors made up of the upper management of other companies, they'll keep doing it to ensure that the Board members get those kind of contracts as they move around.
     
  11. jplan2008 macrumors regular

    Joined:
    Feb 15, 2008
    #11
    Solutions? The problem is complex only because of the game-playing by the financial sector. A few ideas:

    In the short term, some of the billions needs to go to help homeowners KEEP their homes, instead of just letting the financial entities off the hook, putting the homeowner on the street, and letting speculators buy the property cheap.

    Ideally we'd go back to the time when companies couldn't be involved in banking AND insurance AND securities, and to a time when banks had a much harder time expanding throughout the country. That's not going to happen, so the next best for that aspect is Obama's proposal that entities be regulated based on what they DO, not what they ARE.

    If we're going to use tax dollars to bail out AIG, then how about putting in place a real government-run, rather than corporate, profit-run, mortgage insurance company. So, instead of AIG insuring the financial entity (but in such a convoluted way, that you can't even track an individual loan, making lots of middlemen and shareholders rich but not protecting a single homeowner) against losses (when they foreclose and sell a house at a loss), you're insuring the homeowner against losing their house to begin with. Not to make it easy to simply not pay the mortgage, but to act as a stop-gap in case of job loss or health emergency, etc. (and same with Fannie Mae, or it really only needs to be one entity: insure the HOMEOWNER, not the financial institution -- yes, the financial institution will still be paid, but the owner won't get kicked out on the street in the process.)

    Outlaw prepayment penalties. Currently, if a first-time homeowner with no credit history, or less-than perfect credit gets a mortgage, it's at a higher rate, or it's an ARM that goes up (a subprime mortgage). But they are PENALIZED for improving their credit and making regular payments, because they can't refinance to a traditional mortgage without paying a big prepayment penalty.

    But, better yet, with an insurance program, then banks wouldn't have the excuse to charge near-usury rates to low-income people. So outlaw those. Say that a loan for a primary residence home can't be, at any time, more than X% above the prime rate.

    Or, even better, why shouldn't someone with lower income pay a lower interest rate, instead of the opposite, which is accepted? So give breaks to financial entities not for helping first-time homebuyers buy a home they're sure to lose, but help banks to give terms that will help the homeowners keep the homes, by offering better terms.

    To the extent some of these losses are loans to businesses and corporations, I'm not sure of the answer for that aspect.

    And, yes, the criminals should go to jail. The one aspect of a commission, that McCain proposed, that could be a positive, is if it's a commission with the power to issue subpoenas, and they were serious about it, then some of the bigger criminals could be rooted out quicker. (I doubt that's why McCain proposed a commission).
     
  12. Thanatoast macrumors 6502a

    Thanatoast

    Joined:
    Dec 3, 2002
    Location:
    Denver
    #12
    I think we're just royally screwed. The Feds are about to buy eight hundred billion dollars of bad debt off the (can't find appropriate explicative) who started this mess. It wouldn't be so bad if we knew that re-regulation was coming with the bailout, but I'd guess that Congress is much too nuetered to consider such a thing.
     
  13. BoyBach macrumors 68040

    BoyBach

    Joined:
    Feb 24, 2006
    Location:
    UK
    #13
    Socialism for the mega-rich, free market forces for the rest of the USA. You've gotta love the new Wall Street not-quite-so-red-in-tooth-and-claw brand of capitalism. :rolleyes:

    Would it have been so bad to let the entire house of cards fall, thus flushing all the crap out of the system and leaving only the strongest standing? (If you'll excuse the mixed metaphors.)

    Pffft, Masters of the Universe, my arse!
     
  14. leekohler thread starter macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #14
    Communist. ;)

    Honestly- now I know why so many people are against universal health care. They're afraid we won't have enough money to bail them out when they screw up!
     
  15. kavika411 macrumors 6502a

    kavika411

    Joined:
    Jan 8, 2006
    Location:
    Alabama
    #15
    It is unfortunate that mortgages were given to people whose current income or prior financial history suggested they couldn't or wouldn't pay it back. I hope lenders will now return to more conervative days when they didn't give mortgages to as many people.
     
  16. jplan2008 macrumors regular

    Joined:
    Feb 15, 2008
    #16
    Yeah, and another one: the Federal Reserve is "Quasi-Government." I.e., Corporations have the power, we pay the bills. Make it fully government-run (and with oversight not just from the Executive branch), with advisory seats for financial institutions and community leaders.

    Even scarier than Bush having these sweeping powers over the next 4 months, is the idea of those sweeping powers going to McCain/Palin (if Bush hasn't already "solved" the problem in the meantime by already putting in place programs that can't be changed/spending the billions).
     
  17. leekohler thread starter macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #17
    Bush doesn't need anymore godd*** "special" powers. Why do we keep giving this dope everything he wants? WHY? :mad:
     
  18. yrsonicdeath macrumors 6502

    Joined:
    Jul 2, 2007
    #18
    Yeah, I think taking away the money they got at the expense of our country is a start.
     
  19. mactastic macrumors 68040

    mactastic

    Joined:
    Apr 24, 2003
    Location:
    Colly-fornia
    #19
    Well, we managed to make it harder for average folks who get in over their heads in debt to discharge their debts... you'd think we could do the same thing for the Masters of the Universe.

    If I'm going to own their s****y debt, the should be forced to pay it back, no?

    It's unfortunate that goods and services were given to people whose current income or prior financial history suggested they couldn't or wouldn't pay it back. Perhaps we should bail out all the bankrupt folks in the US, and call it "unfortunate"? Hell, why not pay off every American's debt, and call it "unfortunate"?

    Why these uber-rich elites get any sympathy from "personal responsibility" conservatives is beyond me. For people who can work themselves into a froth over a welfare queen in Detroit milking the government for a few tens of thousands of dollars, the conservative establishment has been remarkably acquiescent about this socialization of American industry.
     
  20. jplan2008 macrumors regular

    Joined:
    Feb 15, 2008
  21. Ugg macrumors 68000

    Ugg

    Joined:
    Apr 7, 2003
    Location:
    Penryn
    #21
    I hope lenders are given huge fines for falsifying the loan papers. Sure, a lot of people figured they could flip their houses or refinance but in the end, it was crooked and greedy lenders and their minions who allowed the loan to go through.
     
  22. Sun Baked macrumors G5

    Sun Baked

    Joined:
    May 19, 2002
    #22
    I see big slum lord in future, and a interesting new method to scam the govt out of the homes in trouble and still occupied by the note holder.
     
  23. kavika411 macrumors 6502a

    kavika411

    Joined:
    Jan 8, 2006
    Location:
    Alabama
    #23
    I can't tell whether you are agreeing or disagreeing with my commentary.

    Not being sarcastic; I can't tell whether you are agreeing or disagreeing with my commentary.
     
  24. Ugg macrumors 68000

    Ugg

    Joined:
    Apr 7, 2003
    Location:
    Penryn
    #24
    Your commentary was rather ambiguous. Are you saying that lenders have been forced to give loans to people that might not have otherwise? Or are you saying that under regulated mortgage firms loaned money simply to earn the outrageous fees?
     
  25. kavika411 macrumors 6502a

    kavika411

    Joined:
    Jan 8, 2006
    Location:
    Alabama
    #25
    If I came across as being ambiguous, I didn't mean to. I was simply saying that historically, lenders were more conservative regarding to whom they gave mortgages. (I use the word "gave" because I can't think of a better word. It isn't meant to be a loaded word.) The mortgages that are failing are part of a massive expansion in which lenders gave mortgages to people whose income and/or financial history indicated they could not or would not repay it. I was saying that - as someone who does not want to see this happen again - I look forward to lenders going back to a more conservative approach to lending. That's all.

    I am not assigning culpability to borrowers, lenders, the government or anyone else. I am simply saying I look forward to a time when lenders - like they used to - give out less mortgages, and give them out to more qualified borrowers.
     

Share This Page