I've already seen lenders walking away from executed loan commitment letters. They are willing to risk lawsuits because simply, they need to keep $ on hand in case a run is made on their bank. When people are pulling out $ of money market, ultra short term municipal bond fund yields have multiplied, businesses are forced to be ultra conservative. Capital intensive businesses are now requiring larger deposits for purchases because their banks won't extend them working capital credit. We've got a building under construction and we have a legitimate concern that since our lender is walking away from commitment letters too, is there a chance they stop funding our building half way through? (Historically, if a lender does this, they are subject to lender liability laws - except if the bank is going under, doesn't really matter since you can't collect anything for the damages done) - plus in the mean time while we try to find new funding, we layoff the management team we've hired to run the building and any related construction workers.
There is a major liquidity crisis on Wall Street right now and many banks (and other non-banking companies) won't survive till November if something is not done soon.
You are on an annual basis, but you need to fund working capital. Plus, while you get a 30 year loan for your house, business get shorter loans, so they have to refinance them (so they aren't borrowing more, just replacing existing debt with new debt)...except if you can't borrow new money and pay off your old money, you're in trouble.
This thing had a very, very real chance of working - and not costing very much in the end to boot. It very realistically could have even made a profit - especially with the warrants provisions and all that. It is/was a great solution to the problem. Does it fix the underlying problem? Absolutely not - that's what January and February regulations are for. But it would have bought many months to get things sorted out, so you don't have firms failing daily.
Your comment makes no sense as a response to my quote.. By the way, how many times have you had to tell people their house burned down or their small business (rafters, outfitters, guides, stores, hotels, B&Bs, etc.) will go under because of fires?
Democracy works, 40% of democrats voted against the bill; it wasn't just conservative republicans who voted against. There has to be a better way; too much money, too easy, with to little pain for the culprits and too much pain for the public.
I am so sick of that. You are naive if you think we would have made a profit.. and you trust these bastards to make the correct decision with that much money?
You are now letting your hate to the past blind your vision to the future. The plan would have purchased REAL assets, risky assets, yes, but real assets for probably significant discounts. This would have injected liquidity into the market so the economy can function at the micro level, with business needing money being able to get money. The risk would have then been taken on by the federal goverment, but despite the risk in the assets, there can and probably would have been a reward when purchased at a discount. Not every subprime loan goes into foreclosure, not every jumbo loan is a bad one. As the economy rebounded, the federal government would have packaged and sold off what they had purchased, with a big chance at a profit. Even Warrenn Buffett thinks the deal was a good one and could forsee a possible big profit...into the trillions. In the worst case scenario, the foreclosures skyrocket above what they already have done and the government resells at a loss eventually, but not at the full $700 Billion.
please- if there's a single failure here, it's pelosi's. if she hadn't called the republicans unpatriotic last night, she'd have her bill passed today.
For the plan to have stood a chance of working, the govt would have had to pay much more than the current value... and it is doubtful at best that the value would not increase to the point where a profit would be realized.
Maybe, maybe not, but it was a FAIL by both parties. The fact that the dems have a majority and couldn't pass the bill, and the fact that republicans let politics get in the way of the passage.
Stop exposing yourself. It's indecent. I know that you don't understand either the crisis or the proposed cure - but you're the one in here playing a partisan game of "Clue" like a complete moron. The blame for the failure is on the 228 who voted against it.
You’re jokeing right? This is what you’re going with? Pelosi hurt the wittle feewings of the wepublicans?!?!? I know a good Camembert to go with that whine.
