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The best description of the fed bailout

angrybear.blogspot.com

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Re: The best description of the fed bailout

#11

Post by chaostheory »

LostInTheWoods wrote: post #8

Errr, Americans seem to need somebody to blame for this crisis. But before we lynch Bernake and Paulson, we should all take a good look in the mirror.

umm have you actually seen the terms of the bailout that Paulson is trying to sell?

the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” - the key words are 'at any one time' meaning this is a blank check for Paulson that he can just keep on drawing

It gets even better: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency"

so Paulson gets a blank check and we can't see what he's doing with our money - awesome! sign me up

to top it off with icing: "The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation... designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;"

so totalitarian socialism replaces free market enterprise? o yeah what happens to the dollar?

Re: The best description of the fed bailout

#12

Post by LostInTheWoods »

chaostheory wrote: post #11
LostInTheWoods wrote: post #8

Errr, Americans seem to need somebody to blame for this crisis. But before we lynch Bernake and Paulson, we should all take a good look in the mirror.

umm have you actually seen the terms of the bailout that Paulson is trying to sell? the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” - the key words are 'at any one time' meaning this is a blank check for Paulson that he can just keep on drawing It gets even better: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, a…

Who would you rather be in charge of the bailout? The President? Congress? ... Ill put my trust in Paulson, he and Bernake seem to be the only ones who have a clue as to what is going on and how to fix it.

Re: The best description of the fed bailout

#13

Post by nostrademons »

pmorici wrote: post #9
LostInTheWoods wrote: post #8

Errr, Americans seem to need somebody to blame for this crisis. But before we lynch Bernake and Paulson, we should all take a good look in the mirror.

The people who really have a potential to be screwed here are those who have a positive net savings as apposed to those who are mortgaged to the hilt.

Depends on whether you believe this'll be inflationary or deflationary.

If the government decides to inflate to pay off the bailout, then it sucks for savers and is awesome for mortgagees. But if their intervention isn't enough to halt the deflationary pressure of all these financial institutions failing, then it'll be catastrophic for debtors and good for savers.

People who held cash in the depression (and didn't see it wiped out by a bank run) gained close to 4x their money in about 2 years, which is as good or better than most other bubbles in history. That's relative to consumer prices: relative to asset prices (like stocks), it was nearly a 10x return.

Re: The best description of the fed bailout

#14

Post by nostrademons »

LostInTheWoods wrote: post #12
chaostheory wrote: post #11

Earlier quoted context omitted.

umm have you actually seen the terms of the bailout that Paulson is trying to sell? the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” - the key words are 'at any one time' meaning this is a blank check for Paulson that he can just keep on drawing It gets even better: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, a…

Who would you rather be in charge of the bailout? The President? Congress? ... Ill put my trust in Paulson, he and Bernake seem to be the only ones who have a clue as to what is going on and how to fix it.

I'd rather there not be a bailout: let investors like Buffett pick up $5B here, $3B there so that no one individual holds $700B in his hands.

Re: The best description of the fed bailout

#16

Post by aneesh »

LostInTheWoods wrote: post #12
chaostheory wrote: post #11

Earlier quoted context omitted.

umm have you actually seen the terms of the bailout that Paulson is trying to sell? the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” - the key words are 'at any one time' meaning this is a blank check for Paulson that he can just keep on drawing It gets even better: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, a…

Who would you rather be in charge of the bailout? The President? Congress? ... Ill put my trust in Paulson, he and Bernake seem to be the only ones who have a clue as to what is going on and how to fix it.

Definitely, Paulson knows more about this than Congress. But Paulson has the perspective that comes with being a former Goldman Sachs CEO, so he might (knowingly or unknowingly) be biased towards helping out the banks too much.

Re: The best description of the fed bailout

#17

Post by cturner »

Have you noticed that one of the main results of this saving of things which are "too big too fail" is a concentration of those big businesses into even bigger business, a greater proportion of which are now too big to fail? The rhetoric we had become used to hearing - that liquidity is subtle but very important (which it is) has changed to language of protection and we see policy responses to this. For example - the bans on non-naked shorting hits the liquidity of the options market (because it's harder to do things like hedging when you want to deal in options) and leads to further stagnation.

Re: The best description of the fed bailout

#18

Post by jcromartie »

LostInTheWoods wrote: post #8

Errr, Americans seem to need somebody to blame for this crisis. But before we lynch Bernake and Paulson, we should all take a good look in the mirror.

I looked in the mirror and saw someone who lives in a one-bedroom apartment, has modest and efficient '97 and '01 cars (one for his wife), saves about 10% of his income, and has no credit card debt.

So, yeah, I'm looking for who to blame.

Re: The best description of the fed bailout

#19

Post by MicahWedemeyer »

vaksel wrote: post #5

its not that big, should have pasted it: Dear American: I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude. I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you. I am worki…

Yes, but the formatting is important. The screwed up line breaks are not an accident!

Re: The best description of the fed bailout

#20

Post by rbanffy »

aneesh wrote: post #16
LostInTheWoods wrote: post #12

Earlier quoted context omitted.

Who would you rather be in charge of the bailout? The President? Congress? ... Ill put my trust in Paulson, he and Bernake seem to be the only ones who have a clue as to what is going on and how to fix it.

Definitely, Paulson knows more about this than Congress. But Paulson has the perspective that comes with being a former Goldman Sachs CEO, so he might (knowingly or unknowingly) be biased towards helping out the banks too much.

Not only that, but the lack of "checks and balances" in the whole deal is shocking.
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