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This is America! We don't let people go out of business!

Discussion in 'BBS Hangout: Debate & Discussion' started by robbie380, Mar 23, 2009.

  1. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    So what doesn't have "systemic risk"? Can anyone tell me?

    Govt. is bailing out the financials, insurers, auto manufacturers, and auto suppliers. I know I have to be missing something else but whatever... I guess commerical real estate will be next since they are setting up for a spectacular crash. Should we bail out General Growth Properties since they supposedly have systemic risk to commerical real estate? Now we have a plan in place to overpay for bad assets in order to get the banks to "lend more". I love how they are calling it a "public/private" partnership too. lol the govt is subsidizing losses on the private side in order for them to participate...sounds a lot more like a screw the taxpayer partnership instead.

    Why can't we just nationalize these insolvent "too big too succeed" banks and break them up? Why are we trying to preserve a clearly broken structure? I don't get Obama and Geithner's complete unwillingness to consider nationalization. Hell, we are already socialist so I don't see what the big deal is.

    I dunno...to me this spamming money at the problem is just another way to try to inflate our way out of this asset deflation in a heavily leveraged world rather than actually attempting to fix the problem of being overleveraged.
     
  2. Invisible Fan

    Invisible Fan Member

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    We're slipping beyond the point of no return. Geithner's public private partnership plan seems like a skewed handout to rich counterparties. This is absolutely disappointing.
     
  3. wakkoman

    wakkoman Member

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    There just doesn't seem to be much of a direction with the administration. I don't see any sense of a long term plan in place. Most of it entails throwing money around and waiting to see what happens.
     
  4. pgabriel

    pgabriel Educated Negro

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    we are all in uncharted territory. besides that, this toxic asset plan is basically the same plan the bush admin proposed but then they took part of the TARP money and used it differently.

    Geithner was ripped last month for not having details on the plan would work, now he has details. so this isn't different from anything that started in September.

    AIG was also being bailed out prior to Obama. Other than the ridiculous bonuses AIG is paying out, the money is going exactly where it was intended, to keep counterparties whole and preventing a worldwide bank collaspe.

    this mess started with deregulation (other than the auto trouble), lets never forget that.
     
  5. pirc1

    pirc1 Member

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    What ever happens next we need prevent stuff like this from happening again, fk unlimited deregulations!
     
  6. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    Let's also not forget that Geithner was around when the problem was created. He loves him some AIG. I should probably bump my Geithner is a tool thread. :p
     
  7. weslinder

    weslinder Member

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    Mulligans for everyone.
     
  8. Dubious

    Dubious Member

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    The point isn't to keep big companies solvent, the point is to stave off a depression and the breakdown of the social order that would follow.

    Maintaining the general welfare is the primary job of government.
     
  9. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    and why can't this be done by breaking these institutions apart in an organized fashion?
     
  10. wakkoman

    wakkoman Member

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    Exactly.

    Legislation needs to be formulated to make sure no company poses that much systemic risk to the system. We cannot and should not have any company that is "too big to fail."
     
  11. Major

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    You don't try to change a person's diet in the middle of a heart attack. You fix the immediate problem first and then you make the lifestyle changes later on. There will be plenty of changes to make down the line, but that's not really a focus at this point.
     
  12. Grizzled

    Grizzled Member

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    In the market when a company is failing at least a couple of different things can happen. One is that the company can declare bankruptcy, and another is that another company may decide to buy it and try to turn it around. In this case the government has essentially bought AIG and is trying to turn it around.
     
  13. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    we aren't fixing anything. we are just throwing money at it. this new public private bs is just another example. the taxpayer is the only one at risk in this proposal. it is a freaking handout to the rich. where is the outrage? the AIG bonuses are nothing compared to this crap.

    how does this sound to you? does this sound like a great investment of your tax dollars? **** this.

    http://www.nytimes.com/2009/03/21/business/21bank.html?_r=2&hp

    To entice private investors like hedge funds and private equity firms to take part, the F.D.I.C. will provide nonrecourse loans — that is, loans that are secured only by the value of the mortgage assets being bought — worth up to 85 percent of the value of a portfolio of troubled assets.

    The remaining 15 percent will come from the government and the private investors. The Treasury would put up as much as 80 percent of that, while private investors would put up as little as 20 percent of the money, according to industry officials. Private investors, then, would be contributing as little as 3 percent of the equity, and the government as much as 97 percent.

    The government would receive interest payments on the money it lent to a partnership and it would share profits and losses on the equity portion of the investment with the private investors.
     
  14. deepblue

    deepblue Member

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    Shorts getting squeezed, robbie? :D

    Just kidding, I think the sharp drop of the markets had to have an impact on Obama's plans.
     
  15. Red Chocolate

    Red Chocolate Member

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    Yup we need a lot of smaller, solvent banks with minimal govt. interference. This is the exact polar opposite of what is going on right now. Although I wouldn't say the govt. has much influence on what the Federal Reserve does, I'd say it's more the other way around.
     
  16. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    i got short various reits about 5 min to the close today. i lost some trying to fade the move up in the morning because i think this public private plan is bs but whatever no biggie. what's another trillion when we are planning on losing 10 trillion over the next 10 years? :p
     
  17. BetterThanEver

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    Why can't be break up these too big to fail banks into a bunch of baby bells? Then, put in strict rules to keep them from getting too big via acquisitions like AT&T.
     
  18. ymc

    ymc Member

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    Because the big banks and their friends inserted moles in our government while AT&T didn't. :(
     

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