The best description of the fed bailout • Hacker News Board

Re: The best description of the fed bailout

#21

Post by chaostheory » Wed, Sep 24, 2008, 3:00 PM UTC

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.

lostinthewoods I don't know if what you posted is a joke or not, but I'm going to assume you're serious

Paulson may know more than Congress about finance but it doesn't take a genius to see that the proposed bailout is just a scam.

The Swedes got into similar trouble in the 90s and they solved it the right way (a bailout with a fair return for the government): "Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well."

http://www.nytimes.com/2008/09/23/business/worldbusiness/23k...

so you'd still rather put your trust into something without reading the fine details? Paulson isn't your uncle you know - not to mention both Democratic and (even) Republican senators are just pissed: http://www.politico.com/news/stories/0908/13789.html

Re: The best description of the fed bailout

#22

Post by LostInTheWoods » Wed, Sep 24, 2008, 3:27 PM UTC

chaostheory wrote: post #21

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.

lostinthewoods I don't know if what you posted is a joke or not, but I'm going to assume you're serious Paulson may know more than Congress about finance but it doesn't take a genius to see that the proposed bailout is just a scam. The Swedes got into similar trouble in the 90s and they solved it the right way (a bailout with a fair return for the government): "Sweden did not just bail out its financial institutions…

If you're going to compare the US to another country you need to find a country of comparable economic size, complexity. I'll make it easy for you: there isn't one.

As for the bailout being a "scam", would seem to suggest that someone is flying off to Mexico with a bucket of cash. The reality seems to be that everyone is in for some pain. Companies have gone under, people have lost their jobs, and if the government doesnt act, its going to get worst.

Re: The best description of the fed bailout

#23

Post by LostInTheWoods » Wed, Sep 24, 2008, 3:31 PM UTC

jcromartie wrote: post #18

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.

We're all to blame for not paying attention to what our government and fellow citizens have been up to these past years that has gotten us into this mess.

Re: The best description of the fed bailout

#24

Post by chaostheory » Wed, Sep 24, 2008, 4:01 PM UTC

LostInTheWoods wrote: post #22

chaostheory wrote: post #21

Earlier quoted context omitted.

lostinthewoods I don't know if what you posted is a joke or not, but I'm going to assume you're serious Paulson may know more than Congress about finance but it doesn't take a genius to see that the proposed bailout is just a scam. The Swedes got into similar trouble in the 90s and they solved it the right way (a bailout with a fair return for the government): "Sweden did not just bail out its financial institutions…

If you're going to compare the US to another country you need to find a country of comparable economic size, complexity. I'll make it easy for you: there isn't one. As for the bailout being a "scam", would seem to suggest that someone is flying off to Mexico with a bucket of cash. The reality seems to be that everyone is in for some pain. Companies have gone under, people have lost their jobs, and if the government d…

that doesn't mean that what worked for Sweden wont work for the US. besides just in terms of common sense you don't just give someone money without being able to measure/keep track of anything along with a sizable return on investment

without any oversight whatsoever, a certain someone can technically go off to Mexico with 700 billion multiple times without anyone else knowing why or when

free markets self correct; if you're going to interfere with it since everyone has pain why not just bail out everyone then and not just Wall St? - hell even the auto makers need bailing out now

Re: The best description of the fed bailout

#25

Post by time_management » Wed, Sep 24, 2008, 4:11 PM UTC

This is a generational phenomenon. The housing-market racket of the late '90s and early 2000s was a case of a large, dominant generation (Baby Boomers; b. 1943-58ish) enriching itself at the expense of a small, recessive generation (Gen X; 1958-80). It occurred during a period when the Baby Boomers were selling houses (that they inherited from parents, or that they were selling in order to downscale to smaller, more maintainable dwellings), when young families (Xers) were buying them, and when Millennials were (thankfully, from my perspective) still renting. All of these bailouts, in my opinion, are the same thing. Bush-style "conservatism" is clearly not future-oriented, and not very conservative either. Cutting taxes while starting a war? Come on. It's a bunch of obnoxious Baby Boomers with no foresight plundering the future.

Re: The best description of the fed bailout

#26

Post by albeit » Thu, Sep 25, 2008, 3:59 AM UTC

nostrademons wrote: post #13

pmorici wrote: post #9

Earlier quoted context omitted.

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 se…

all the more reason to stabilize the dollar at its current value. Its the inflation of the dollar that set all of this bad investment into motion.

Re: The best description of the fed bailout

#27

Post by bp001 » Thu, Sep 25, 2008, 1:15 PM UTC

LostInTheWoods wrote: post #23

jcromartie wrote: post #18

Earlier quoted context omitted.

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.

We're all to blame for not paying attention to what our government and fellow citizens have been up to these past years that has gotten us into this mess.

There are most certainly those who have paid attention to this and recognized this mess was coming. The poster indicating he lived in the 1 bedroom apartment clearly recognized this as the difference between his situation and how those around him were acting was too obvious to ignore.

The majority rules in this democracy we live in and we can't have all policies the way we would like. However, we at least shouldn't distort the free market to this degree and spread the cost for this failure to properly judge risk.