Wall Street bail out

We have a copy of the draft bill which seeks to save the US and world financial system from a complete meltdown.

The document is over 100 pages and is currently being debated as we speak. Some believe that there should be no bail out of wall street without a bail out of main street.

There are many who believe that these companies should be allowed to fail rather than to be rescued by the Government, as its corporate greed which is to be partly blamed for this monumental mess.

See bill below.

http://i.cdn.turner.com/cnn/2008/images/09/28/ayo08c04_xml.pdf

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37 Responses

  1. Is it true that Olint’s money is locked in Panama under someones name and it can’t be touched by either the Turk’s nor US Government? I would like to know if anybody heard something.

  2. Truth is bailouts are most unfair. They plant the costs squarley on people who did their homework and avioded certain firms in a free market economy. To throw a bailout on these persons is akin to having a police state.

  3. The bill has failed. The european financial is worst shape this morning than the US.
    http://money.cnn.com/2008/09/29/markets/thebuzz/index.htm?postversion=2008092914

    You should delete this because the 700 billion USD bailout is dead.

  4. The bailout would not stop the meltdown. Price correction has to occur on property first and massive loss on wall street before the US market fixes itself. In another word a depression has to occur before people change their attitudes and habits.

  5. AML,

    Do you realize the huge fallout that is likely to face small developing states like Jamaica , whose economy is so closely tied to the USA.
    This is certainly not good news, and while I agree that wall street should stand the losses, that certainly will not happen.

    CEO are leaving with golden handshakes, while the average investor is left to “suck salt through wodden spoon”. (Jamaican talk).

    I think one approach is to bail out home owner, and I am know that I am opening a can of worms here, as some are saying people took loans and bought properties that they could not afford.

    The fact however is as long as the defaults continue, banks holding these “toxic” loans will continue to experience problems.
    The mechanics of how to assist the home owner would have to be worked out but I think that has to be part of any rescue package.

    We will all see how this one plays out .

    From my vantage point, it certainly does not look like good news.

  6. For all those people who laughed at people who lost money in theses schemes…you better hope and pray the U.S. dose not go into a depression.

  7. Most or all property is overvalued by 100% to 150% in the last 8 years. This will be a big crash. Someone has to take a loss somewhere. We will all suffer.

  8. Economy has to go back to the basics. No more playing with paper. Only cash will talk.

  9. 2008 can be seen as one that has brought on serious financial problems for many folks.

    From the trading that was supposed to yield 10% per month, to forex that was also supposed to yield 10% per.
    Inaddition we have a faltering stockmarket in Jamaica, world oil prices at record levels(has fallen slightly), airline failures, to now one of the biggest global financial crises that we have ever seen.

    No one in the middle of the storm err hurricance can truly predict the level of destruction that is likely to take place, so its just a matter of waiting and seeing how it all plays out.

    What it really shows however is that real wealth comes from being production, papers pushers appears at times to make money from “thin air” only to see it blown away with one big gust.

    People are suffering and we do hope the impact will not be as bad as many think it will.

  10. Olint gave you paper. FOREX dealers are not even playering with paper, they are the casino house. Freddy and Fanny turned paper/mortages into securities, wall street turned paper/mortages into CDO’s and other things and then the banks backed or bought into the mess. It is a big mess. The paper holders are not willing to take a loss and the whole system grinds to a halt. This is serious.

  11. Then the banks value are backed by shareholders and when the stock becomes worthless, the banks die not from customer deposits being withdrawn, but from a stockholder run.

  12. AML:

    What you are saying is basically the crux of the problem. Wealth creation based on zero production or zero delivery of service. People think they can make money off shorting stocks they don’t own, Derivatives, Forex and all the other exotic financial instruments that were created in the last 10-15 years, have created a system (castle) built on quick sand. Now the system has come home to roost (crumble). Ah, you have to love this stuff. Cash….who needs that, just charge it! Work hard for your money…no..invest in Forex trading schemes or hedge funds.

    Now we should offer bailout…hell no!!! Let the chips fall where they may. Cool…………no pain…no gain.

  13. No paper regardless of what is printed on it ,or who claims they are backing it is worth more than the paper itself.

    Historicall ALL fiat currencies eventually fail!!!!!!

  14. “The paper holders are not willing to take a loss and the whole system grinds to a halt.”

    I meant paper producer instead of paper holder. The banks are the paper holders and the paper is worthless or cannot be valued.

  15. Yes I agree HS. If the agencies do not give a damn we mus tuse our connections with the congress and the BP.

  16. THe bailout fail because it is on unfair and very socialist …

    The feds will have to show accountability ( arrest , etc..) before Us tax payers will go along with a bail out .. Mgt charge offs are running 4 % the other 96% are making their pmts, they will not go for a bail in the manner it is being presented….

  17. watching closely:

    So, lets re-write ALL the mortgages downward 🙂

    WIN-WIN for everybody!

  18. Stupid repbulicans and them socialist argument lol…

    SO the bail out is ‘socialist’ because it will cap ceo pay and compensation…no more sweet heart deals on wall st lol.

    The goverment will own a portion of these companies temporarily they help to bail out and give back the money to the tax payers when these assets become profitable.

    Not to mention freezing or reducing the mortgage interest rate for the home owners facing foreclosure.

    Yea that sounds like socialism alright because all the taxpayers are gonna get RICH because of the bailout plan and there will be no class structure left in America.

    And the government will thus take this oppurtunity to take over ALL of wall street LOL….everything will be nationalized…Karl MArx would be proud lol!!!

    your hilarious seriously….typical fearing mongering…irrational behavior lol..

  19. 80% of the wealth on wall st is on by 20% of the population. These greedy took high risk gambles because it was other people’s money they were gambling with. Got arrogant because they felt they were too big and too important to the us economy for Uncle Sam to let them fail. What happened in the congress today was truly a peasant revolt joe six pack had it. The F&^% up part of this deal is what the financial gods of this country exactly did not allow the asians countries to do during their currency crisis in the 90’s is what they want to shove down the US tax payers throat . Sweden went thru a similar crisis years ago and came out ok why Hank did not come up with a plan similar to what sweeden did .

  20. Who is likely to suffer the most from this “failed” bill, wall street or main street.

    Cost of rescue package US$700B
    Total losses on the stockmarket today alone US$1.2T(Trillion)
    Total losses for investors since start of 2008 US$4.3T.

    * No loans for cars, home, student loan.
    * No more credit – card .
    * Cannot sell your home if you want to, no one will buy as banks not leading to anyone.
    * Banks not leading to others expect for very short term loans
    * No overdraft facility from banks to support cash flow for companies to pay salaries.

    So really, who stands to lose the most wall street or main street.

    Look out for more “blood” on the street when the market opens 9:30am.
    Asia is already down 5% after opening 1hr ago, and its likely to get worse.

    Think about it.

  21. With no bail out, we all suffer equally.

    With the bail out plan, a few would be protected and the rest would suffer.

  22. @ Jay

    true to what you are saying but remember those activities you mention are the way financial institutions make their money, If they cannot perform these tasks well they will have to cease to exist, but I doubt that since they have been around since the days of the knight templars . They will continue to do business except now they risk appetite will be less if they know Captain America will not come to the rescue. Remember my friend money under a mattress is useless. Last I recall this is supposed to be capitalism not socialism. These dudes gamble the way they did because they came up with these derivatives which they thought will let some one else hold the bag while they laugh all the way to the bank.

  23. Jay:

    Don’t believe the hype being perpetrated on the financially illiterate masses. The bailout is really geared towards wall street and conveniently position as a rescue of main street.

    Now the truth is coming out that Paulson’s old firm had as much as $20+ Billion exposure to AIG…hence the $82 Billion federal bailout. I guess Paulson is worried about his stocks/options tied-up in Goldman Sachs. The same firm he milked for over $700+ Million before deciding on the treasury job (public service). Can be all say conflict of interest.

    Bottom line: a simple “tax” code change/treatment will right-side most banks/financial institutions and solves the liquidity crisis. A lot of smoke and mirrors shouldn’t be disguised as a bailout.

  24. DaveSin,

    Why dont you informed the illiterate masses what that SIMPLE tax code is that will right-side the market…Since we both agree that ben bernake and paulson are idiots…Maybe You should take their JOBS.

    Elaborate….Tell the masses what your plan is in detail that would save this economic crisis on wall street…You seem to be the only genius around that has all the answers.

  25. Davesin, this financial fiasco is coming from the
    fannie and freddy failures.

    The 700 billion bailout has too much earmarks attached to it and is not bi-partisian enough. the stock market dropped 22 % in 1987 , today was 7 % .the market will survive on tuesday .

    A simply tax code would not have prevented vultures from milking the system. There need to be enforcement something Barney Franks and congress has forgotten all about as they allowed fannie and freddy to spread there cancerous loans through wall st and world markets.

    This bailout is to help there friends . Will this hurt main st , Yes, but main st is who said no today , not the politicians.

    The politicians who are coming up for re-elections is who voted no today . Main St spoke and they finally listened .

    Bernanke and paulson did not invest in Olint ….. they are not idiots.

    Regards

  26. Most of us have no idea how deep this crises will go, however what I do know is that the average investors have watched in dismay as his/her stock portfolio shrivel up and their 401k continues to lose money.
    Their mortgages remains unpaid, no available credit for student loans, college drop out etc.

    My take on this is that the wealthy on wall street are not likely to suffer as great as the average man on main street as these guys often has large amount of funds stashed away in offshore accounts just for times like these.

    CEO of failed companies as well as there executives should not be allowed to leave with multi-million dollars packages as that is a diservice to the tax payer who has to foot the bill.

    These guys enjoyed the big life and the huge bonuses and hence should take the losses that comes along.

    The impact of more failures will (IMHO) have a devastating effect on those already suffering and less so on the “have’s”.
    I guess only time will tell, and that is not too far away.

    Can we expect a further steep decline today on wall street or all the bad news has already been factored into the markets.

  27. miachica:

    The term I should have used is accounting change, as oppose to Tax code change. The change that I was refering to is the “Mark-To-Market Accounting”

    “Mark-to-Market” Accounting and the Origins of the Financial Crisis: Mark-to-market accounting (also known as “fair value” accounting) means that companies must value the assets on their balance sheets based on the latest market indicators of the price that those assets could be sold for immediately. Under such a rule, declining housing prices don’t just reduce the value of defaulting mortgages. They reduce the value of all mortgages and all mortgage-related securities because the housing collateral protecting them is worth less. (see attached article from YOUR republican friend):

    http://www.forbes.com/home/2008/09/29/mark-to-market-oped-cx_ng_0929gingrich.html

    BTW, where were you genius duo a few weeks; months; years ago? Were they telling us that the fundamentals of the economy was great up to a few months ago?

  28. First of all I never believed the fundamentals of the economy was strong… especially if you were trading last year and paid attention to fundementals.

    SO you read one article in forbes magazine and you think that is the answers…did you ever stop to consider the other side of suspending M2M???

    Let me get this straight….Now that markets are volatile and assets are irrationally pessimistic, they want to suspend M2M accounting because the assets are seriously devalued.

    But back in 2003 to 2006 when the assets where OVER VALUED I never heard a hedge fund/AIG/Merryl Lynch managers etc ever suggest that a bank should lend them less money because the value of the collateral he was putting up was clearly a product of unwarranted optimism or that he shouldn’t collect management fees based on the assets under management because their value was clearly inflated. Nobody ever complains about the market’s ruthlessness and inefficiency when it’s making them money.

    An end to M2M accounting is way more dangerous than the $700B bailout Plan
    Talk about having your cake and eating it too…Who would really trust these unethical morons on wall st if M2M was suspended?

    This would be economic treason…if thats the case then they should let them crash and burn. Let the market correct itself in its own time.

    http://www.linkedin.com/answers/finance-accounting/financial-regulation/FIN_FRG/332166-4070624?browseCategory=

    The problem with this strategy is it will not achieve the goal of providing liquidity. At the present point in time there is a reduction in liquidity due to three main reasons:

    A) Losses at hand – failure of some securities to pay income and devaluing the available capital to lend. (i.e. as P/Es constricted and earnings outlooks were reduced there was less money to lend).

    B) Uncertainty as to own capital requirements – A bank will not lend liquid cash to a corporate or another bank if doing so will place its solvency in question.

    C) Uncertainty as to the risk position and credit worthiness of the counterparties.

    What happen to letting them crash and burn…you have two mouth davesin??

    Or is it the stupid people that lose their houses because of adjust rate mortgages that you dont like…they dont deserve no help right? THey are just bunch of idiots who got what they deserve…you would probably say somehting along those line lol!!
    (no I didnt lose my house lol)

    I think your a narcissitic….anywyz I will let you have the last word because people like you need to.

  29. Miachica:

    Reading your post the image that readily comes to mind is that of an angry black woman. Use of such adjectives/words as Narcissistic, two mouth, “people like you”, etc. only seek to reinforce this image. I’m just waiting now for your usual victimization patterns….you guys just hate me….line. Poor Miachica.

    Could you explain your comment? ……”Now that markets are volatile and assets are irrationally pessimistic”….. Are you attempting a Greenspan moment. What the hell is ……”asset are irrationally pessimistic”? I think you restrict your comments to Healthcare-related matters….you know, your limited area of expertise. 😀

  30. are you sure Miachica isn’t really Sara Palin? Sounds a lot like her.

  31. Miachica, are you from Alaska?

  32. I thought she sounded more like Michelle Obama . LOL…angry!

    anyway 93 dems and 73 rep said nay to the plan … Pelosi
    pre-emptive strike helped to kill the deal…. The loses on wall st are systemic and you can second guess with your 20/20 hindsight all day long . everyone knew about the cancer yet it was business as usual .
    The smartest of financial Minds failed and it was not from a lack of knowledge , but that of fear and political pressure . all where riding the hot potato ………

  33. You sure I am a woman davesin..make up your mind…I thought I was hispanic now I am black, next I will be chinese and indian…russian lol!!!

    GIVE IT UP LOL!!!!!!!!

    It figures you would think I am a black woman, they’re easy to talk down to and disrespect ???

    I hope your not all black men talking about your women like that lol…..you guys have no respect for your own race…no wonder Jamaica is in such a sorry state.

    Instead of changing the subject and acting like a high school boy who just got his feelings hurt..You should have proved to me why suspending M2M accounting is going to correct this market.

    Its like a pattern with you…whenever people call you out for the psuedo-intellectual that you are…you start making pointless statements lol!!!!!!!!!!!!!!!!!!!!!!!!

    Did I mash your corn by calling you a narcissist ???

    has a grandiose sense of self-importance
    is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love
    believes that he or she is “special” and unique
    requires excessive admiration
    has a sense of entitlement
    is interpersonally exploitative
    lacks empathy
    is often envious of others or believes others are envious of him or her
    shows arrogant, haughty behaviors or attitudes

    There is no point to arguing with some body with like you….

    When are these clowns you have around you going to figure out WHO YOU ARE????

    I WILL JUST SIT BACK AND LAUGH…BUT IN TIME THE TRUTH WILL COME OUT LOL!!

  34. @ dave sin

    My friend I cannot agree with you more in regard to miachica.
    There is a name for those types of people they are called posers.

  35. Consumers to be hardest hit by credit crunch.

    The credit freeze, which is shifting into overdrive heading into the holiday season, is expected to hit consumers harder than corporate America.

    http://www.cnbc.com/id/26956466

  36. Consumers who live on credit , Yes, others no , nuff deals ago round .

    Day 2 and the US has not collapsed yet ! LOL…….. Not believing the fundamentals where strong is not to know what the fundamentals are. lending and financial institutions that where involved are the ones in trouble many wall st Companies sw the cancer and the solid ones have been preparing for this , and have a lot of cash on hand. Most where financing their own inventories, Of course those on the edge will feel the stake and of course consumer down turn will eventually hurt everyone…………..

    The US economy can withstand no bailout , the bailout is necessary to send a message of security to help stabilize world economies and of course restore US reputation
    internationally . Many questions abound about this bailout package and the public is still not buying it …..

  37. Whats up with JMMB people are taking out their money
    fast……can’t blame them … we just have to juggle
    different banks account just to be safe.

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