Welcome to Fascism America style! For all you CONservatives who have been screaming about the free market and saying to the little guy…why don’t you pull yourselves up by your boot straps. Now, you see that you have been screwed as well. Keep dismantling what brought us the middle class…the right to organize unioins, regulating corporations, etc…and we will be back in the late 19th century having to claw our way back from serfdom. Quit voting against your own best interest sheeple! We the people have the power…if we want it! PS: Central banking is key tenet of Communism…remember those evil doers? They now make all our TV’s and shoes now. The American sheeple have been played for a bunch of SUCKERS!
What is with the endless parade of morons who keep touting the “Fed had to do this to prevent the whole system from going down and greater damage to all of us” b.s.?
Sure, a violent market correction will be painful for many. But the malinvestments are REAL, and losses MUST be taken by someone. Just what in the hell is wrong with letting a free market punish those responsible in exactly the proper proportions? What all you idiots fail to understand is that the meltdown you want to avoid is precisely the best thing that could happen to you. Those at the rotten core of this problem will be forced to eat their own cake, and their loss is your gain. The alternative, as it seems you will find out, will be a long, painful, and permanent descent into a 3rd world standard of living.
Isn’t it interesting how the “Free Marketeers” mantra has suddenly become “Privatize the profits and Socialize the losses”
These people are supposedly our best and brightest at the helm of the financial industry?
Leveraging their “assets” over 40 x!!??
Of course they’ll all get extra large golden parachutes for their “expertise” in destroying our economy and it all be at the taxpayers expense, thanks to their buddies at the Fed.
They have thrown our economy under a bus for their love of money and greed.
Yes yes yes we should bail them out!
…
Haha just playing. Seriously though, We should let the free market run its course and eliminate any and all who made these risky loans. Its Economic Darwinism at work.
Oh, and will someone please tell Bernanke that its not a liquidity problem, its an insolvency problem!
I don’t think the money loaned out by the TAF will ever be paid back.
No.
Please write your congress member and let them know how you feel.
I am continually disturbed by the fact that I must participate in a different financial system than the people that I give the privilege of holding my savings. I have to live within my means with the fraction of my paycheck I am left after paying taxes. If I decide to blow all of my cash on something that someone sold me as profitable and it wasn’t, I lose. This is not how it seems to work for Wall Street.
If Wall Street cannot control themselves without regulation and stop thinking of profits as number one, this nation and world will continue on this path of destruction with no acknowledged ill consequences, until it is too late. This is what we are seeing now in the housing industry. If banks loaned people money they could not pay back, this says to me that these banks NEED to fail. They adopted a plan that does not work. Plain and simple. This is similar to what is happening with our earths resources. They are treated as infinite and all warning signs are ignored until it is too late.
Our government is not looking out for our long term future. We are the people that created them and give them the means to carry on. That is disappointing and very very disturbing.
No! Another ’savings and loan’ debacle. These execs know what they’re doing. Congress can always bail them out. And Congress is ‘us’ for allowing them to do it.
Of course the Fed should NOT bail out the banks. But, people really need to get educated about this situation and stop debating only the symptoms of the disease… Go have a look at who OWNS the Federal Reserve Bank(s). The Federal Reserve Bank is a private entity and not a governmental entity. This private entity was created specifically for the purpose of running interference for the banking community (which is in essence one in the same as the Federal Reserve) by gaining control of the country’s public money supply.
Our country’s founding fathers knew that relinquishing control of the public money supply to private bankers (who chased Congress for decades prior to actually gaining this control early in the 1900s) would mean ultimate disaster for the country’s citizens. The role of the Federal Reserve Bank is simply to use subtle and sophisticated obfuscation of fiscal policies and to manipulate the money supply and the economy so as to move assets from the average individual American to the elite financial community bankers. Period. And it has had great success in doing so.
Never has an industry (aside from banking) had such success at privatizing profits and socializing losses. Why? Because the private Federal Reserve Bank has as its primary goal to enhance the profits of the financial community and the reduce that same sector’s losses (by foisting risk and losses onto the American public through the use of public funds). Your income taxes fund all of these Bankers and their billions. Yes, including the Federal Reserve bankers themselves.
To stop the problems the Congress has got to eliminate the private profit-ensuring Federal Reserve Bank. Sadly, Americans just don’t get it…
Paulson says we need a social security fix? Easy! Get the Fed to give it money. Medicare need fixing? Give it some Fed money too. If Bear Sterns is too big to fail, then isn’t S.S. too big to fail as well?
It’s understandable why the Fed is doing this. Nevertheless, it is still somewhat irritating that Wall Street doesn’t want government intervention during the good times, but it does during the bad times. The tax payers are now on the hook for a bunch of ill advised risks taken by some fat and happy pompous kneds on Wall Street. Capitalism is a beautiful thing if the government doesn’t interfere too much during the corrections.
Why in the heck we should socialize banks’ losses? Have they ever given us any profit before? Government encouages irresponsibility by helping banks this!
Despite all the hysteria, I am still not terribly alarmed.The government will step in and do what it does best.It will legislate new rules that lawyers will exploit.The rules and the exploitation of the rules will create desk jobs for all the mortgage types out on the rocks right now.The system will continue.
The government stepped in to prevent a cascade of repercussions that would have been much worse than a bailout.Does this mean the should or will bail every firm out? NO.
They have done and will continue to do their job,which is to keep the system in tune,and replace worn parts like any good mechanic.
The holders of the Bears\Stearns stocks are certainly not jumping for joy at getting maybe 10$ for their pricey 160$ investment house gold investments.
Unfortuneately it is all a house if cards right now with now one really knowing what anyone has in their hand. If we ignore Bear then the whole house could come down and then we would be in serious trouble. I don’t agree with it but the scary thing is I am beginning to wonder how bad of shape our financial system is in when you have people meeting and cutting deals and arranging takeovers on Sunday so they can announce things before the foreign markets open to keep calm. Think about it.
For the people who say FED had to bailout, i have few questions.
Apart from monetory policy FED has duties to monitor and enforce lending standards. During the hey days of real estate bubble, tell me how FED missed the signs of rampant low lending standards. Anybody who can breath was getting loans. What was FED doing at that time. Adding fuel to the fire. The then chairman Greenspan encouraged in a speech to take ARM loans. People even with an iota of common sense knew of the bubble. How could FED not know. Either they are incompetent or lying.
During that time the general obsession was realestate. People were expecting double digit appreciation to go FOREVER. FED has an army of researchers. What were they doing?
Everytime FED chairman goes to congress that person used to tell everything is fine. Dont tell me they didnt know about risky pyramids being built by so called investment banks. They never bothered to do anything about it. If the investment bank activities were RISKY and could lead to instability why did not FED ask for regulation from congress. WHY?
Even now after they bailed out, there are no concrete steps taken that these things will not happen. Show me what proposals are being put forward by FED so that these things will not happen.
The regulation is actually in place in the form of market forces. If you take risky bets which are not sustainable then market will wipe you out. Sadly FED interferes with the market forces and wont let natural regulation to happen in the form of bad firms going bankrupt.
In a matter of 8 years there were 2 bubbles. In both of those bubbles investment banks were main players. Why does this keep repeating? Because they know they dont have anything to lose.
5 years from now, we will again be in a new bubble with all the money being pumped by FED again FED will be bailing out investment banks. Sadly this will keep repeating.
No, absolutely not, these people have been screwing the consumers for years. IF the Fed is going to help anybody, help those who are losing paking up the furniture. The banks are the ones with the edge and the better playing field.
I wonder if the Feds would have bailed out poor farmworkers,blue-coller families and farmers on the hook so easily as they did their own kind
The unfortunate part of this is that the Fed had to do this. The other side of the coin is if Bernanke had let Bear Stearns go down,the Banks investors would have had a bigger run on other major investment banks. ( stock market crash) Which would have caused a liquidity crisis that we couldn’t correct. It will never change because the big dogs will always get theirs first. If they don’t get theirs then we all end up paying a bigger price than what we are paying. Just shows you how fragile financial markets are. When things seem like they’re too good to be true ( flipping houses in Florida or wherever) than it is. What a country!!!
no, everyone, including seniuor management of companies/corporations should be held accountably and suffer the consequences for their misdeeds. Taxpayers current and future shoud not provide the safety net. The general public/this country should not suffer consequences and jeopardize future prosperity on the account of a few greedy individuals.
No, people, including companies banks and their senior management need to be held accoutnablit for their misdeed and suffer the consequences. Taxpayers current and future should not be asked to provided safety net and the general public should suffer the consequences for greed and irresponsible behavior of a few individuals.
Yeah, save the free market by manipulating the free market. Feds are directly responsible for the losses of so many investors who due to their intervention sold out Bear Sterns at < $10. Now only rich guys with inside knowhow will make money with the deals behind closed doors with tax money. The common investors will always lose.
The FED bailing out banks is outrageous. When I make poor financial decisions, I lose money, plain and simple. These banks, supposedly run by professionals, were the ones who approved these high risk loans. They were very happy to collect the income these high interest rate loans provided when times were good, but now that things have turned against them, they want to be bailed out – but the people defaulting are STILL losing their homes.
What a crock.
We, as a people, both in the public and private spheres, are in over our heads financially because we do not have discipline and somehow came to believe that we have to have everything now. We also believe in making a quick buck and worrying about the consequences later – or let someone else bear the consequences.
We used to save for the things we wanted. Yeah, it took time, but we valued that which we finally got more highly. More importantly, our savings created capital reserves that could be used to finance businesses, homes, etc. – important things. It has only been in the last 30 years that this has changed. We need to get back to it. Yes, there won’t be the mega-bucks to be made, but there also won’t be the need to purchase all of our goods and servives from foreigners. Banks should provide financing and investment houses sell securities. Both should be adequately insured against major losses. They should be required by law to cap leverages and fully and accurately price risk. The number of investment instruments needs to be reduced and greatly simplified. All these things can be done and still have very attractive incentives for investment. What we won’t have is 35 year-old hotshots breaking all the rules and ignoring principles so that they can bank a $5M bonus this year.
Let’s see how big a bonus the folks at Bear & Sterns give themselves this year! I’m sure they will be very generous to themselves after all they did such a good job preventing things from getting worse didn’t they!
I have been sitting on the sidelines waiting for this ridiculous realestate market to cool down a bit all the while saving a nice down payment. Now the government is going to give all my hard earned tax dollars to those greedy Wallstreet losers! OH JOY now I don’t even get hardly any interest on my savings I guess the fed wants me to invest my money down on Wall street….Go figure???
The banks and credit card companies are raping the consumers by manipulating interest rates & fees. Maybe it’s time for the federal government to protect us for a change.
In a perfect world, we should help everyone in distress. In reality, we as a nation is approaching bankruptcy. The government, businesses and citizens are inundated with debt. It is becoming increasingly tougher to bear. We need to come to a realization this allusion of wealth we had and how we borrow to maintain our lifestyles is unsustainable. I for one is very bearish on the whole US economy. Medicare, medicaid and social security will burden us further in debt and when our creditors cut us off we will resort to printing money in ship loads destroying the currency as a result. Having a strong currency is vital to our standard of living. Once we start this path of debasing the currency, we will create inflation so high everything will spiral out of control. Unlike the previous recessions or depression, we will not have a speedy recovery unless we get to the bottom of the problem which is debt. 2/3 of the economy depends on consumer spending. My dream is hoping one day 2/3 of the economy will be manufacturing and exporting goods.
The Fed needs to get out of the way and let “nature take its course”. It’s call survival of the fittest. Markets are no different. The strong and smart will survive and the stupid will find new jobs. Had the Fed been able to read the signs, it would have been more aggressive in November and December when the first indicators said we have a problem. Besides, no one bails me out when I make an unwise decision.
Absolutely not! When these investment firms get into trouble, the Fed should shut them down, fully audit them, and if they are viable, allow them to re-open and let the market to the rest. If they are not viable, the good holdings in their portfolios are auctioned off and the proceeds used to cover as much of the bad investments as possible. After that, the investment firm is out-of-business. If criminal activity is discovered, the case is turned over to Justice for prosecution.
Some people seem to believe we’re looking as something new here. We most certainly are not. These are the same fast and loose games that lead to the Great Depression. The only reason our financial system has not collapsed is that we know more about preventing a collpse today. All of the safegaurds that were put in place after the depression, to prevent this from happening have been slowly stripped away for the sake of “free markets.” Healthy, free, unregulated and unscrutinized markets are a complete myth. It’s long past time when we tell the free marketeers that their free ride on the greed train is over.
No they should not help them out or guarantee them loss protection. It should be considered a normal buy sell agreement just like BOA or anyother type of business agreement. In my opinion the Fed Reserve is there to loan money, monitor banks behavior and to keep our dollar value within good measure so we can continue to import and export products profitably. The fed needs to step back and take its hand out of JP’s front pocket…JP is old enough to makes it own decision.
No bailouts UNTIL the top executives of the bailed-out company return 100% of their bonuses, their stock options, all other perks (cars, drivers, planes) and work for $1.00 per year! Lord knows, they all have already salted away plenty of their customers’ money.
I would venture a guess that most of the posters here have never experienced (me included)The Great Depression. We have no idea what it is like to have HALF the workforce idle. Bank failures and cascading defaults would recreate the nightmare of the early 1930s. That’s why Bernanke stepped in. Are these banks greedy and stupid? YES! But can we let a wave of defaults and bank runs engulf the country? Not unless we want a return to the 1930s. However, the price that these investment banks and other members of the “shadow banking” system should have to pay for the bailout is MUCH stricter regulation that commercial banks have had for decades. Bernanke had no choice; if he let it go, it would be 1931 all over and I’ve heard my grandmother tell the stories of that and I know that I don’t want to go there!
The entire argument for bailing out the banks seems to rest on “but we will all crash and burn if the fed doesn’t fix it”.
Maybe I could get behind the idea if it would work. But propping up foolish banks wont save us from the “perfect storm” behind the wind that is just starting to blow. It wont stop the inflation that is basic market forces on commodities, it wont stop the correction of an over inflated dollar, or a correction from over inflated home prices. Nor will it change the fact that owners borrowed against the over inflated prices. It wont change the government being too far in debt, it wont mitigate the trade deficit, it wont correct the lack of manufacturing, it wont even free up credit below the level of the banks themselves.
We need to go through it. Every action to delay the inevitable just makes the hole we have to dig out of deeper. We survived the depression. We will survive this. And be better for it most likely.
No, no more bailouts to the banks or investment firms. We heard the screaming about bailouts when the airlines collapsed years ago and the strongest survived.
Time for mis-management to pay the price. My savings accounts are paying the price as is my 401(k).
Screw them all.
No way. This is capitalism, economic darwinism, not socialism. These businesses have been making money hand over fist (in this case from sub prime loans and the poor) based upon a poor business model. Their business was bad and should fail. These financial instuitions should not reap the benefits of unbridled capitalism with the protection of a socialist model. I think every local, privately owned shop that is in a pinch should write Bernacke and ask for a bailout…which the middle class will pay with tax dollars. This is another example of the super rich succeding from society and our government paving the way for them to do it all over again based upon the leveraged capital in another sector.
Sure, they should help out other banks right after they lend me some money to refinance.
Most of these banks are not in trouble because they gave mortgages to people who didn’t qualify. There’s a reason why they did that, and they all profited hugely from doing so. Believe me, banks don’t lend money if they haven’t worked out a way of making it back – and in that case it was through extortionate interest rates, which more than covered the 15% you generally lose from foreclosure. If someone plays almost nothing but 10-15% interest on a mortgage for 2 years (prior to the reset), then that easily covers whatever is lost from selling the house fast.
These banks lost their money gambling on the stock market, currencies, hedge funds and the like.
So if the Fed would like to lend me a couple billion to go to Vegas, I’m fine with them lending money to reckless financial institutions.
Bailing out the banks will finish the Dollar. This is what Paul Rogers called “Socialism for the Rich”. Again, abolish the Federal Reserve Act, and take back control of your money. It’s in the constitution people! You know, that piece of paper that our government is stomping all over.
http://video.google.com/videoplay?docid=-6046520409389956642
It is only natural life for businesses to fail or make bad decisions just like it is natural during our economic cycle to be in a recession, oops did I just write that word! Hopefully I do not scare every Tom, Dick, and Harry into selling everything and hording money in their safe at home. The Government and the Fed are trying to force something natural from occurring and probably exacerbate the problem. This is the time to clear out the weeds. We made it through a depression, we can easily make it through this, let the market do what it is going to do.
Just as this guy’s rant claims, it’s destroying the capitalistic foundation. The weak ones in the herd as not only protected but encouraged! It’s time to thin the herd…
http://www.knology.net/aquaabyss/voice/
The banks are the channel by which the Fed implements monetary policy so they should in fact bail out banks and other financial instituions that would harm the financial system the US has in place. The Fed really has no responsibility to bail out individual investors.
Absolutely not! No, a thousand infinite times NO! Bernanke has given in to the very institutions who have benefited the most from the .com & housing bubbles!
Republicans used to complain about welfare and socialism for the lower class. On what moral ground do they stand on now that they have advocated and executed “socialism for the wealthy.”
This is grand larceny on an worldwide scale. The middle classes are being wiped out due to inflation (the invisible tax) and very wealthy are being protected. This is not capitalism. This is not democracy. This is not what made this country great. Our country revolted against Kings and dictators. Now they come in suits and ties rather than robes and crowns.
The republican leaders and bankers should be forced to read “Atlas Shrugged.” We are becoming the Peoples’ Republic of the United States!
Poor investments and failed businesses SHOULD BE ALLOWED TO FAIL so that the intelligent and prudent can succeed.
Keep in mind folks, that the FED doesn’t have a choice anymore. Once the amount of risk these institutions exposed themselves to (by way of credit-default swaps and other vague derivative type commercial paper) exceeded our nation’s GDP by 30 trillion dollars, the FED must do everything in its power to prevent any brokerage/bank/bond insurer from failing. If any of these entities fall the system deleverages.
Watch what the news. Look for politicians making statements like, “We won’t help unless a systemic threat exists,” or something along those lines. Well, guess what? The threat of a systemic meltdown has been here since the end of 2007. The FED has been behaving like the crew of the Titanic after they smacked into the iceberg.
Should they help? NO. But will they? Absolutely. Again, they have no choice but to intervene at this point.
The damage is done. Just like the 1920’s, the banks have “innovated” us into the poorhouse. Be sure to thank the Clintons, the Bushes, and the FED for handing us the biggest pile of crap this side of the Great Depression.
The only problem I have with the Fed bailing out the banks is that I can’t see how that helps the average consumer. Go ahead and help the banks, but help average Joe financially. That goes for not only those that are in trouble because of the mortgage problem, but those that are making it, but could use some help. The banks are getting all this help from the Fed and are not using that to help out their customers but instead are using the crisis to not help them and using the bail out funds to make their books look good.
In for a penny in for a pound,
Nowhere is any testicular fortitude to be found!
To big to fall
Let’s save them all!
And if things don’t go so well
Taxpayers can go to hell!
Subprime loans,credit,credit,credit,charge,charge,charge.Don’t worry the government will bail you out–not you silly!! The big boys,millionaires,billionaires,you know the greedy,the reckless,the immoral.Why does the Savings &Loan debacle come to mind?
Let the investment banks fail.
These banks and their masters of finance eschew the intervention of government in free markets. They talk about how efficient the market is and how pointless goverment is.
They talk the talk, but apparently don’t walk the walk. Shame on Bernanke for opening up the Federal trough. Get out of the way during this feeding frenzy, the billionaires will trample you during their feeding frenzy. (While my savings account shrivels).
Are you kidding? No way! The dirty little secret here it that the Fed is a private bank who’s shareholders are banks like Chase, Citibank, etc… They basically gave this bank to one of their share holders. Can anyone say “conflict of interest?”
As a matter of fact, we should abolish the Federal Reserve Act, and take the power of money creation away from them.
Please check out this link:
http://www.petitiononline.com/fedres/petition.html
The Fed is slowly chocking the middle class to non existence. And they’re killing the dollar. As an added bonus, if we abolish the Fed, we also do away with income taxes on our personal wages.
NO NO NO So if I was to over spend and make very risky investments I can always count on the Feds to bail me out? Where is the personal responsibility of these CEO’s and CFO’s and the investors that demand high returns? Let them sink like the rest of use.
Our financial leaders might be book smart–but seem to have no street smarts at all. What gives any of them the right to decide who and when they decide to put our hard earned money on the table to bail out an industry that has made and paid to themselves a lot of money. Financial corruption in this country is out of control and Bush, Bernanke and Paulson are a joke. Maybe our government should just add a couple of trillion more to our debt and pay off all of our homes, cars etc… then we will have a lot of disposable cash to really crank this economy up.
Most definitely NO!!!
Let them irresponsible and greedy creditor banks, as well as irresponsible, greedy and showoff debtor homeowners hit the ground, then we can start our road back to recovery. They cause all these economic mess, and any assistance to them are just prologing the inevitable woes and failure anyway. Since when did it become right in bailing out parties from learning their lessons of irresponsibilities and greediness, and in this case, on both ends of the pole – the creditors and debtors alike!
each case needs to be evaluated on its specifics, as the Fed appears to have done in the Bear Stearns situation.
Bear is/was a contract partner in tens to hundreds of billions [face value] of swaps and hedges with virtually every other major financial player worldwide.
The unattended collapse of Bear might well have triggered a world-wide credit implosion — which was one of several causes of the Great Depression.
***
For firms of lesser scale, I suggest the models from the major Chicago banks of the 1980s. They were taken over by the Comptroller of the Currency with Fed support when they got themselves into severe lending quality caused issues. Their stockholders lost nearly all value after the CoC operated them for several years. It was only after the situation stabilized that they were sold to other national players, and not at fire sale prices.
In the good times, just a year or so ago, the bankers and hedge fund managers were paying big money to lobbyists and politicians for tax breaks “to keep their own money that they risked and they earned”. They said it was capitalism at work. Why should that “capitalism” principle only apply when they are making money, but tax funded government bailouts apply when they are losing money? In real life with real capitalism, bad companies go out of business. Last year, the guys at the top made millions per year and did not want to pay the little guy’s tax rate. (Hedge fund managers rigged the system and paid 15% tax on “capital gains”, not a 35% tax on salary. Politicians let them get away with it.) So sorry, bankers and hedge fund managers, but it is now “your money” to lose, not just win. No Bailouts!
As distasteful as it is, the banks need to remain solvent to prevent a world wide economic disaster. I would like to see the CEOs, presidents, and boards of any bank that required this assistance to have felony fraud charges filed against them. Let them spend their millions trying to keep their butts out of jail.
It’s really a “Gordian Knot”. BY the FED standing behind Bear as well as now potentially other investment banks, there is a stablilizing effect for the financial infrastructure as a whole. If Bear had gone South, others would follow and the spillove effect woudl add woes to many sectors of the economy.
While I agree philosophically that the banking industry created its own mess, it would now be short sighted to say “let’em go – they got what they asked for” as many are opining. To do so would be to wreak even more havoc on the average stuggling American.
I just read yesterday that profits for financial entities has gone from the long term historic level of .75% of GDP to 2.25% for the last decade plus. An amount unsustainable by the economy and a lot of money. How much did they sock away for hard times? It seems none. Well, guess what, the US government doesn’t have any money socked away either. I don’t think we can afford to save these banks. And I don’t think they deserve to be saved. They are able to hold a “gun” to our heads – nothing short of total collapse of our economy – if we don’t save them from completely egregious business practice. I say, let them fall anyway. Bernake bailing them out will only save them, not us.
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having the fed watch over all banking and investment/lending institutions is like the fox guarding the henhouse