the mother of all bailouts on the horizon

justabubba · #1 (**permalink**) 09-18-2008, 09:27 PM

too late to go short now ...

Quote:

Treasury Secretary Hank Paulson briefed Congressional leaders on plans to address the "illiquid assets" on U.S. financial institutions' balance sheets, possibly including the creation of a government facility to take on financial firms' bad debts.
The proposal to create a massive facility to buy mortgage-backed securities could cost as much as a half-trillion-dollars and would involve the purchase of both private-label and government-guaranteed mortgages, according to an administration official.
The plan would have two parts. The largest part would be the purchase of private-label (those underwritten by Wall Street) mortgages by some as-yet unnamed vehicle. Financing would occur through the sale of treasuries, the official said. That part of the plan would require congressional approval. The idea is to hold the securities to maturity. The average mortgage has a life of about 7 years.
A second part of the plan would involve the purchase by Treasury of additional government-backed (Fannie Mae and Freddie Mac) under a plan it announced several weeks ago to rescue the two government-sponsored entities. Back then, it said it would purchase $5 billion initially. The idea is to ramp up those purchases more quickly. It does not require approval by Congress.
The administration is contemplating hiring a private investment manager to run the mortgage vehicle. Yet to be worked out with Congress are the amount of mortgage securities the government would buy and from whom the government would accept them.
The price to be set on those purchases and the process for setting it was also unknown.
CNBC first reported the creation of a Treasury plan, similar to the Resolution Trust Corp., that would take mortgage backed securities off the market.
...

http://www.cnbc.com/id/26779080

don't let this news get you down. to offset the fact that we wage earning taxpayers get to pay the losses of those rich robber barons who made bad investments, we each will get one of these in the mail because we will soon need it

Sparky Farkas · #2 (**permalink**) 09-18-2008, 09:36 PM

Quote:

Originally Posted by justabubba

too late to go short now ...

http://www.cnbc.com/id/26779080

don't let this news get you down. to offset the fact that we wage earning taxpayers get to pay the losses of those rich robber barons who made bad investments, we each will get one of these in the mail because we will soon need it

Once again the Middle Class is called upon to bail out America. We can't do it any longer. We are quickly becoming broke. And who, you ask, is "working hard" with President Codpiece to solve the crisis? The same dumbasses that caused the problem to begin with. President Codpiece's trusted financial advisors and the captain of Wall Street are meeting behind closed doors to make everything better! That should keep you up tonight.

I'm sorry, I don't want to save the corporations and the wealthy. We are fairly fecked no matter.

In the meantime of course President Codpiece has opened his personal war to include Pakistan. Ca-ching! That's really helping us stop the bleeding isn't it?

justabubba · #3 (**permalink**) 09-18-2008, 09:39 PM

it gets worse

Quote:

This is nothing short of a total panic by people who have no clue what they are doing. And to think, I mocked Russia for being a nation run by market commies.
This is the ultimate bailout attempt, which will have repercussions far far beyond our imaginations:

1) We suffer a loss of Market Integrity; The US is now a Banana Republic
2) Blatant market manipulation: this is nothing more than an attempt to force markets higher;
3) 60 days prior to a presidential election? This is a none-too-subtle attempt to influence the elections -- especially coming on top of the Fannie/Freddie bailout;
4) The coming pop will create a huge air pocket, ultimately leading to us crashing much lower;
5) Expect a huge increase in volatility -- upwards first, then down;

We Are A Nation of Morons, led by complete Idiots, making us complicit in our own self destruction.

http://bigpicture.typepad.com/commen...-sho.html#more

SEC intends to temporarily ban short selling, but it's not clear if the commission has approved the move. Cox is briefing congressional leaders. Separately, the government is seeking congressional authority to buy distressed assets.

Jaaaman · #4 (**permalink**) 09-18-2008, 10:17 PM

Quote:

Originally Posted by Koolaideman

We Are A Nation of Morons, led by complete Idiots, making us complicit in our own self destruction

.

We are a nation of morons... aw! Ok! Be my guest and get the (*)(*)(*)(*) out of my nation then!

Talo76 · #5 (**permalink**) 09-18-2008, 10:34 PM

Well, America has taken quite a ride down from the biggest creditor in the world to the biggest debtor.

White Fox · #6 (**permalink**) 09-18-2008, 11:35 PM

Quote:

This is nothing short of a total panic by people who have no clue what they are doing. And to think, I mocked Russia for being a nation run by market commies.
This is the ultimate bailout attempt, which will have repercussions far far beyond our imaginations:
1) We suffer a loss of Market Integrity; The US is now a Banana Republic
2) Blatant market manipulation: this is nothing more than an attempt to force markets higher;
3) 60 days prior to a presidential election? This is a none-too-subtle attempt to influence the elections -- especially coming on top of the Fannie/Freddie bailout;
4) The coming pop will create a huge air pocket, ultimately leading to us crashing much lower;
5) Expect a huge increase in volatility -- upwards first, then down;
We Are A Nation of Morons, led by complete Idiots, making us complicit in our own self destruction.

Excellent list!

The only thing I can think to add is the reduction in competition from all possibly competing firms that don't have direct government support. We will most likely have the economic problems that Japan has from lack of good competition in the future due to specialized government support to certain companies.

Daybreaker · #7 (**permalink**) 09-18-2008, 11:49 PM

So am I to understand that, so far, we're all in agreement that this is a bad idea?

justabubba · #8 (**permalink**) 09-19-2008, 12:07 AM

Quote:

Originally Posted by Daybreaker

So am I to understand that, so far, we're all in agreement that this is a bad idea?

i can't speak for the others but i try not to make a practice of rewarding stupid behaviors
this appears to be another corporate subsidy, on a mammoth scale ... socializing losses after the profits to be had were privatized

Talo76 · #9 (**permalink**) 09-19-2008, 12:11 AM

I hardly think America is going down the drain, all we need is another New Deal to sure up our economy and control and regulate capitalism for the public good.

PatriotNews · #10 (**permalink**) 09-19-2008, 12:36 AM

Too many more bail outs and we will see a total financial meltdown like the great depression. Hold on to your seats, it may be a bumpy ride.

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