Thread: more bailout news

Paulson: Troubled assets won't be purchased - Economy in Turmoil

The important part was buried down about the 8th or 9th paragraph:

Paulson said the administration was looking at a major expansion of the program into the markets that provide support for credit card debt, auto loans and student loans. He said 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of these loans.

“This market, which is vital for lending and growth, has for all practical purposes ground to a halt,” Paulson said.

Ah.... and so, phase II begins.

This is what I predicted, right when the bailout started, yes?

I said, "this isn't even the problem - just wait till we get a consumer credit crunch".

Well, here it is.

At least they're aware of the issue, that's a good thing - so now, we're gonna see, HOW expensive this is gonna be, 'cause I can already tell you, 700 billion bucks ain't gonna cut it. That's NOT ENOUGH.

They're lookin' at a situation, where they have to convince people to keep BUYING things, and (they believe) make sure they have the means to do it! :laughing:

So, it looks like, some of these corps are gettin' squeezed on BOTH sides now - no more free money from the gov, and no more customers. GOOD. Maybe that'll force a reversal of the trend towards verticalization.

What'll have to happen now, is that the BIG corps will need to break themselves up, 'cause they won't be able to get the operating capital that's required to sustain "large" operations.

I love it when a plan comes together!

In case anyone wonders how much consumer debt is out there, it is over 13 trillion. Now they are thinking of a way to get people to borrow even more money? Give me a break! What ever happened to the notion of paying off ones debts and using cash or hell even if you are willing and capable of going into debt, why not put DOWN 20% at a minimum?

It is going to be real hard to find a prudent man to assume more debt when the prospect of having a job next year becomes more doubtful as time passes. The should be encouraging people to pay down their debts but I think we know what they are up to hear.

Originally Posted by anonnymous

In case anyone wonders how much consumer debt is out there, it is over 13 trillion. Now they are thinking of a way to get people to borrow even more money? Give me a break! What ever happened to the notion of paying off ones debts and using cash or hell even if you are willing and capable of going into debt, why not put DOWN 20% at a minimum?

It is going to be real hard to find a prudent man to assume more debt when the prospect of having a job next year becomes more doubtful as time passes. The should be encouraging people to pay down their debts but I think we know what they are up to hear.

This was the policy set in the 50's I believe, I could be wrong on the era. It used to be that expansion was paid from profits, the central banks reduced the available cash. This forced companies to borrow for expansion and inventory. Inflation has kept this trend alive and well. Now we are seeing the result of this tragedy.

right! and people still think government can solve this problem the Fed caused. Look, this may sound harsh but if a person can not afford a large mortgage that is not my problem. My suggestion would be to lower one expectations first and then not purchase a house that payments will exceed 1/3 rd of available income. Some people for whatever reason are in homes that not only are overvalued but are eating as much as 60% of their incomes. Its like they never sat down and done the math, accounting for things like inflation?

If our nation continues to follow this bailout path at the expense of the people who were prudent in their assessments then we all will be brought down the rabbit hole.

Originally Posted by anonnymous

right! and people still think government can solve this problem the Fed caused. Look, this may sound harsh but if a person can not afford a large mortgage that is not my problem. My suggestion would be to lower one expectations first and then not purchase a house that payments will exceed 1/3 rd of available income. Some people for whatever reason are in homes that not only are overvalued but are eating as much as 60% of their incomes. Its like they never sat down and done the math, accounting for things like inflation?

If our nation continues to follow this bailout path at the expense of the people who were prudent in their assessments then we all will be brought down the rabbit hole.

This was another abandoned rule, one that I still live by. Renters can benefit from this rule as well.

The people sold themselves to the idea that the government is here to help them, they sold the simple idea that they should take care of themselves. In doing so they empowered the government and really weakened the individual. I am supposed to accept that and be happy, odd!

Originally Posted by michaelr

This was another abandoned rule, one that I still live by. Renters can benefit from this rule as well.

The people sold themselves to the idea that the government is here to help them, they sold the simple idea that they should take care of themselves. In doing so they empowered the government and really weakened the individual. I am supposed to accept that and be happy, odd!

I see this a slightly different way.

The gubmint, sold these people a BILL OF GOODS.

Remember, these aren't the guys flippin' houses. These are FAMILIES - hard working families, who maybe don't make "quite" enough to pay the mortgage all the time.

They were TOLD, that it wouldn't be a problem, and now it is.

The GUBMINT, ultimately, is the one who did the telling - the one who spun this yarn out in the first place.

So now, I consider that they are TRYING to do the right thing, in terms of taking responsibility.

There are certainly OTHER reasons too, that they're doing that - but, we're talking about a million homeowners, right? That's a million votes. It's also a million pissed off American citizens.

Here is what I see: we are in a position now, where we have been SCREWED by the last CEO. Now, we got a new CEO, only, he's JUST NOW starting to uncover all the rotten crap the last guy did. We don't even KNOW what that all is yet - we don't really know the SCOPE of the problem, yet.

Our company - here's what's going on with our company - we got a mob of angry customers OUTSIDE, who're protesting and beating on our doors.

We got phone calls from the creditors (bankers) on the INSIDE, and there's so many of 'em that we don't have time to deal with the angry customers.

We got PROCUREMENT problems, 'cause our credit's no good anymore. So, even if we manage to talk to the bankers, and sweet-talk 'em into giving us another loan, that money is only gonna be enough to pay for the LAST purchase, and our suppliers are gonna want CASH for the next one.

And our new CEO, he just stepped into these shoes, and he doesn't even KNOW what the condition of the company is, yet. All he's seen so far, is the balance sheet, and he's already WELL aware that it does not accurately reflect the condition of the company.

So now, what's gonna have to happen, is he's gonna have to throw those angry customers a bone, just to shut 'em up long enough so he can get some work done - so he can answer some of those phone calls from the bankers, and talk to the suppliers, and try to do whatever smoothing over will float -

And I mean, he knows FULL WELL, that the angry customers are gonna come right back the next morning. What HE's lookin' for, is something GOOD to tell 'em, so they'll go away for maybe one MORE day, and that way he can get a little MORE work done.

It's gonna be a LONG TIME before those angry customers go away "entirely", 'cause no matter how much he offers 'em, there's always gonna be that one guy who says it's "not enough", and he's gonna rabble-rouse all his friends into saying "not enough", and then the whole mob's gonna be back the next morning.

See, so, what you're seeing now, is Obama trying to nip something in the bud, that would be IRREVERSIBLE. What's happening here, is that the "previous CEO", just before leaving, wants to "do something" with the remaining monies in the corporate coffer, and the NEW guy is lookin' at that goin', .... "wait a minute - if he does THAT, then I won't even have the money to pay my people who're handling these phone calls and providing securitiy from the angry customers outside - that would be a PROBLEM".... 'cause there's no way he could ever get that money back, right?

To reverse a previous "order", all he has to do is sign a piece of paper. But to get MONEY back, that's a huge problem, that involves MANY people, and enforcement, and I mean, it costs you more to do that than you're probably gonna get back. So, now, Paulson's not giving money to AIG anymore, he's gonna give it directly to the banks. Well, all that means, is there is a RECOGNITION, that the consumer credit issue is MUCH WORSE than any of the corporate bailout issues.

And the REALITY there, is we're going to have to let a few of these big companies fail, 'cause we can't do BOTH. We can't BOTH placate the angry customers, AND pay all the bills at the same time. There's not that much to go around. So, we gotta set PRIORITIES, and the priority that's comin' down, is the homeowners. 'Cause THOSE are the customers - the people who're buyin' your product - and without THEM, you got no business.

"A democracy is always temporary in nature; it simply cannot exist as a
permanent form of government. A democracy will continue to exist up until
the time that voters discover that they can vote themselves generous
gifts from the public treasury. From that moment on, the majority always
votes for the candidates who promise the most benefits from the public
treasury, with the result that every democracy will finally collapse due to
loose fiscal policy, which is always followed by a dictatorship."

~Alexander Tytler, 1747-1843


In my opinion this quote describes the fundamental dichotomy of Liberal
and Conservative in this country. Liberals wish to pull us further down the
path Tytler described and classic Conservatism resisted.
Sadly classic Conservatism is almost dead, and our Liberal government
(including current "big government" Republicans) is ballooning out of
control in a hedonistic frenzy of spending, corruption, and debt.

Originally Posted by nonsqtr

I see this a slightly different way.

The gubmint, sold these people a BILL OF GOODS.

Remember, these aren't the guys flippin' houses. These are FAMILIES - hard working families, who maybe don't make "quite" enough to pay the mortgage all the time.

They were TOLD, that it wouldn't be a problem, and now it is.

The GUBMINT, ultimately, is the one who did the telling - the one who spun this yarn out in the first place.

So now, I consider that they are TRYING to do the right thing, in terms of taking responsibility.

There are certainly OTHER reasons too, that they're doing that - but, we're talking about a million homeowners, right? That's a million votes. It's also a million pissed off American citizens.

Here is what I see: we are in a position now, where we have been SCREWED by the last CEO. Now, we got a new CEO, only, he's JUST NOW starting to uncover all the rotten crap the last guy did. We don't even KNOW what that all is yet - we don't really know the SCOPE of the problem, yet.

Our company - here's what's going on with our company - we got a mob of angry customers OUTSIDE, who're protesting and beating on our doors.

We got phone calls from the creditors (bankers) on the INSIDE, and there's so many of 'em that we don't have time to deal with the angry customers.

We got PROCUREMENT problems, 'cause our credit's no good anymore. So, even if we manage to talk to the bankers, and sweet-talk 'em into giving us another loan, that money is only gonna be enough to pay for the LAST purchase, and our suppliers are gonna want CASH for the next one.

And our new CEO, he just stepped into these shoes, and he doesn't even KNOW what the condition of the company is, yet. All he's seen so far, is the balance sheet, and he's already WELL aware that it does not accurately reflect the condition of the company.

So now, what's gonna have to happen, is he's gonna have to throw those angry customers a bone, just to shut 'em up long enough so he can get some work done - so he can answer some of those phone calls from the bankers, and talk to the suppliers, and try to do whatever smoothing over will float -

And I mean, he knows FULL WELL, that the angry customers are gonna come right back the next morning. What HE's lookin' for, is something GOOD to tell 'em, so they'll go away for maybe one MORE day, and that way he can get a little MORE work done.

It's gonna be a LONG TIME before those angry customers go away "entirely", 'cause no matter how much he offers 'em, there's always gonna be that one guy who says it's "not enough", and he's gonna rabble-rouse all his friends into saying "not enough", and then the whole mob's gonna be back the next morning.

See, so, what you're seeing now, is Obama trying to nip something in the bud, that would be IRREVERSIBLE. What's happening here, is that the "previous CEO", just before leaving, wants to "do something" with the remaining monies in the corporate coffer, and the NEW guy is lookin' at that goin', .... "wait a minute - if he does THAT, then I won't even have the money to pay my people who're handling these phone calls and providing securitiy from the angry customers outside - that would be a PROBLEM".... 'cause there's no way he could ever get that money back, right?

To reverse a previous "order", all he has to do is sign a piece of paper. But to get MONEY back, that's a huge problem, that involves MANY people, and enforcement, and I mean, it costs you more to do that than you're probably gonna get back. So, now, Paulson's not giving money to AIG anymore, he's gonna give it directly to the banks. Well, all that means, is there is a RECOGNITION, that the consumer credit issue is MUCH WORSE than any of the corporate bailout issues.

And the REALITY there, is we're going to have to let a few of these big companies fail, 'cause we can't do BOTH. We can't BOTH placate the angry customers, AND pay all the bills at the same time. There's not that much to go around. So, we gotta set PRIORITIES, and the priority that's comin' down, is the homeowners. 'Cause THOSE are the customers - the people who're buyin' your product - and without THEM, you got no business.

Again a post that will take some time to disseminate.

I understand the fraud, I know what it is like to walk into a dream home and get sold the bill of goods that this is for you and we can and will make it happen. You get all caught up in this, it is human nature to do so. But there is an old saying that really applies here; if it sounds to good to be true.....

I really do not see why people cant just stand back and look down the road. I blame a great part of this on the government, after all it is there numbers that we really one, right? Well maybe, but only if your blind. The indicators were there, but many failed themselves and fooled themselves. They listened to the news, man bad idea.

Still, thats only part of the problem, we could have absorbed that, I mean 1 in 15 homes in foreclosure come on. It goes back to the moneys leveraged. The official numbers are 1:70, so one billion in bad debt equals seventy billion in bad debt. Again the "official" numbers are wrong, the truth is we may never know. Every bank that receives a fractional reserve dollar can spread it ten times. There lays the problem. The banks give ones and zeros, we pay for that in actual dollars. There is the downturn and what can only equal stagflation.

Originally Posted by michaelr

Again a post that will take some time to disseminate.

I understand the fraud, I know what it is like to walk into a dream home and get sold the bill of goods that this is for you and we can and will make it happen. You get all caught up in this, it is human nature to do so. But there is an old saying that really applies here; if it sounds to good to be true.....

I really do not see why people cant just stand back and look down the road. I blame a great part of this on the government, after all it is there numbers that we really one, right? Well maybe, but only if your blind. The indicators were there, but many failed themselves and fooled themselves. They listened to the news, man bad idea.

Still, thats only part of the problem, we could have absorbed that, I mean 1 in 15 homes in foreclosure come on. It goes back to the moneys leveraged. The official numbers are 1:70, so one billion in bad debt equals seventy billion in bad debt. Again the "official" numbers are wrong, the truth is we may never know. Every bank that receives a fractional reserve dollar can spread it ten times. There lays the problem. The banks give ones and zeros, we pay for that in actual dollars. There is the downturn and what can only equal stagflation.

Yes. The good news is, that some of these corps actually appear to be playing ball now. That is a VERY good thing. I must say, I'm almost SURPRISED by it. That's a very "capitalist" result, and I'm pleased by it.

What I mean, is this: up until about a week (two, three) ago, corps kinda had this arrogant attitude that they held all the cards. So, you as a customer, you could call 'em up with a problem, and depending on the corp, they'd kinda say, "there's nothing we can do".

Now, that tune is changing. I was just off the horn with a buddy of mine, who now has 400 dollars more credit on his card, than he did yesterday. And he hasn't made any payments. What happened was, he got the clowns at the bank card company, to REMOVE several hundred dollars worth of "fees" from his card, going back an ENTIRE YEAR! Right? Would this have happened three weeks ago? Probably not....

So, some of these corps, seem to be catchin' a heads-up all of a sudden, about which side their bread is buttered on. That is a VERY good thing! The corps you see goin' to the guvmint for help, those are the ones you gotta keep an eye on. The corps goin' to the PEOPLE for help, those are the ones that'll get my business.

Originally Posted by bla bla

"A democracy is always temporary in nature; it simply cannot exist as a
permanent form of government. A democracy will continue to exist up until
the time that voters discover that they can vote themselves generous
gifts from the public treasury. From that moment on, the majority always
votes for the candidates who promise the most benefits from the public
treasury, with the result that every democracy will finally collapse due to
loose fiscal policy, which is always followed by a dictatorship."

~Alexander Tytler, 1747-1843


In my opinion this quote describes the fundamental dichotomy of Liberal
and Conservative in this country. Liberals wish to pull us further down the
path Tytler described and classic Conservatism resisted.
Sadly classic Conservatism is almost dead, and our Liberal government
(including current "big government" Republicans) is ballooning out of
control in a hedonistic frenzy of spending, corruption, and debt.

Exactly! To bad some think a dictatorship in this country is unlikely.