Paulson has decided: no federal bail out. Thus, Barclays and BofA walk away from an un-doable deal. Meanwhile, they held a special trading session this afternoon to settle out trades involving Lehman in preparation for a bankruptcy filing before midnight tonight (Sunday, 9/14). So, it appears that while Bear Stearns was deemed to be too big to fail, Lehman Bros. does not make the cut and will fail later today.
The hell with Lehman’s let them fail in 4 yours it won’t even matter when the mult-trillion dollar debt gorilla crushes the American economy……Something Wicked This Way Comes
Average American Household Debt
$170,000 and change
Average American Hosehold Savings
$372 and change
Point, Set……….MATCH 2012 It’s OVER
Lehman is too big to fail & too risky to buy without the FED backing…
New accounting rules state that any buyer of Lehman has to Mark to Market the toxic instruments they’re holding (derivatives). This means that they have to fix their books to represent what the market would pay for their assets… In these markets, they’re worth nothing (or close to it). Not a pretty picture, VERY BAD for a potential white knight suitor (same story for Washington Mutual)…
For the similar reasons, Lehman cannot fail because it is a counter party for loads of these toxic, hard to value assets. Since a trade is a two way street, if your partner defaults, then you’re stuck with the a ‘useless asset’ and you will have to write that down to Zero (or close to it) as well. It’s in nobody on Wall St.’s interest to let Lehman fail because they will all have to write down these derivative contracts that they’ve entered with Lehman.
FED to the rescue, what’s another $50 Billion of funny money??
this bailout is not necessary and will just serve as another sign to big wall street players that they do not have to account for mistakes that they have made. bear, fannie and freddie may have been to big to fail but lehman is not. hopefully lehman will find a larger bank to absorb them so their stockholders don’t get crapped on, but the Fed should not step in.
I needs to be allowed. Tired of the government bailing out these institutions, after their CEO’s Fuld, Russo, etc were paid extremely high saleries and most have cashed in on their stock options when their stocks were high. Who suffers the “MIDDLE CLASS” investors. These CEO’s need to be jailed
Kill them and let me die. The government surely cannot bail out everyone having financial problems. Who plans on bailing out my small business. We only have sales of 1 – 1 1/2 million per year. Let these businesses fail, pick up the pieces and move forward. By the way, all I need is $100,000 to get back on my feet
Nick from NY saying exactly what u might hear from Helicopter-Ben and good old fella Hank Paulson: Snowball Effect, everythink else will fall as well, from hospital to school, your company and 401k and after all, of cause, your wife will leave too. LOL. This fear thing always works so terrible good, the base of GW Bush (his own words) made zillions on it and started wars.
Regarding the snowball, and i very much question that would happen at all, let the swaps explode and the people who where buying Lehman bonds with 50 or so face value, make -50 instead of +50. Normal people call that risk/reward balance. period.
I agree with a previous blogger that the US capitalism may be in trouble. China and Russia are doing just fine and they are Communists. I thought 1989 showed the failure of Communism in Russia. What happened! It seems the Fed will in the end have to take over most of the banks – nationalisation! It seems that the bondholders of Fanny Mae and Freddie Mac that will continue to receive dividends and backing are China, Japan, Belgium, Cayman Islands, Luxembourg and Russia. Why do foreign government continue to be enriched when Americans with these stocks get no dividends. Will small banks that counted on large dividends for their profits also fail?
Whether or not Lehman is too big to fail is not the point. If we are going to bail them out then the managers of Lehman should help foot the bill by giving back a large portion of the bonuses they have given themselves over the past few years.
I say let them fail and see where the chips fall. Either way, in the biggest picture, the average investor takes similar risks.
There is absolutely no scenario where the government should bailout Lehman. This caca has to stop and stop now. I’ve been reading this column because it gives me a chuckle to read the permagrin bull spin of a writer who can’t see a recession/depression staring him straight in the face. Have you even taking the time to look at your past entries to see how rediculous you have sounded.
Wake-up! Join the deflation team or you will be misleading readers time after time after time. Everything that has happened so far has been easily predicted. There are plenty of people who have been spot on and use facts to support it…not just wishes, dreams and hopes. This country needs to take its medicine and take it quickly so we can move on to better things. Bailouts and stimulus only further break-dwon the price discovery process of the free market. Drop the socialist talk and let’s rip the band-aid off and deal with the wound.
I eagerly applaud whatever bailouts the federal government can muster. It’s wonderful what they’re doing! Our family, we’re all kind of ecstatic around here watching the budget go out of control. I can’t wait until the dollar’s worthless! I realize the dollar’s going up right now relative to other currencies, but it’s so cool watching this debt bomb convulse out of control. McCain promises this, Obama retaliates with a new promise. Pretty soon we’re all going to have whatever our hearts desire! I see those pictures of Weimar, Germany kids playing in big sandboxes full of worthless currency and I can’t help thinking – “I want that for my children, too!” I tune in to the Obamessiah because he’s like the second coming of Jesus. With him we’re going to have healthcare for everyone (I’m almost 400 lbs., so I ’spect I’ll consume at least my fair share), 95% of middle class Americana will have a lower tax burden (yippee!) and we’re getting us a big Detroit bailout too! My Sweet Jesus (don’t believe a thing about that dear man being Muslim), the future’s so bright I’m going to have to wear shades!
LITTLE GUYS HAVE GOTTEN doubly SCREWED,
first when the big speculators and loan sharks (and yes their little lying frontline workers) on wall street hyped the market, made quick zillions, and left the dumb (but just as greedy) little guys holding the bag,
and when the little guys have been have to pay sky-rocketing prices for essentials, from gas to food.
I hope little and greedy guys who screwed themselves by putting their faith in this “capitalist american dream” cherish this moment!
LOL — Lehman is trying to put all’s it’s bad debt into a new company and keep the winners for itself. The funny things is even after they do this they will still probably go bankrupt.
Just remember the lession from all this these are the same guys we all look to for stock and investment buying advice. Their advice is horrible a two year old child could do better.
I say we all take our money out of the banking system and stock market and mortgage market and bankrupt the lot of them and when your mortgage company tries to take your house away from you laugh at them and tell them to get the money from the US government like Fannie and Freddie did.
Nick in New York made a good point. However, the plan to allow the troubled Wall Street Banks and Brokerages, holding the trillions of dollars of questionable mortgage backed securities, to go to the Fed and trade them in for fiat dollars will create HYPERinflation. To avoid this, Benny and Hank have opted to securitize the bad paper…have them go to the Treasury and trade them in for taxpayer funded Treasuries avoiding having to monetize the trillions of dollars of derivatives. Instead, our children and grandchildren will get to pay interest on this debt. Wall Street Banks and Brokerages get interest bearing assets, taxpayers get mountains of bonfire fodder and hundreds of billions of dollars of future interest payments. I guess the time has come where we have to pick our poison.
some dummies thought they could make quick buck by joining the inventing class, buying the hypes in commodities market after housing bubble popped.
i hope they still love their capitalism,
as they are holding the bag,
after the wall street loan sharks made their zillions off of them and then packed up and left with their money.
fat chance i will PAY THEIR BILL.
Bear should have been allowed to die and Lehman should die also. Both of these investment banks made poor decisions in their mortgage operations and should suffer the consequences, i.e., go bankrupt.
This is beginning to get ridiculous… stop handing out the huge severance packages and hold the powers that be accountable for their poor planning.
LET THEM ALL FALL!! Along with all the ultra greedy executives who created this situation. All of the greed in every one of the US’s big financial institutions is at the heart of our current economic dilemma. The housing market was red hot and loans were shady but everyone jumped on board with both feet to take a ride on that gravy train. Now they are all caught with their pants down and reaping the fallout butt hey want Joe Taxpayer to bail them out. Oh, and all of their equally clueless and greedy friends in the government are completely ok with doing it! It’s not their money so….
What this country needs is a good cleansing of all this unprecedented corporate greed, from A to Z, and let good old fashioned hard work and ethics get things back on the right track! Hey, if it means a boat load of high filutn’ tycoons (and elected officials) end up on skid row – so be it! This might mean some hard times for folks but I think people in this country could use a good dose of that as well to bring them back to reality.
My two cents – for what its worth!
Lehman too big to fail? This idea is absolute BS (and I’m not referring to Bear Stearns) Instead, it should be obvious to anyone with an I.Q. above room temperature that Lehman Brothers is too big to save. The American consumer is done, period, end-of-story. How long will Hank Paulson and Ben Bernanke try to underwrite the entire financial industry on the American Taxpayer’s dime. Next to go is Washington Mutual, Wachovia, and possibly even Merril.
The reasoning that applied to helping Bear die easily no longer applies. Then the hope was to stop the further slide of the mortage sector. With the bailout of Fannie and Freddie, we admit the slide isn’t stopping; it must eventually bottom out. Finding the bottom meaning encouraging corporate death, not helping them live.
I also feel that it is unfair that they bail the banks out. However, if you think at the big pictures it is better for the economy at whole if there is not a blow out. Investment Banking has believe it or not has a very important role in the economy. It provide financing for medcare, infrastructure, housing, and technology. To believe that banker dont produce anything is not truth. The financial products they structure and sell provide the capital for most of the things that we end up using to improve our life (cells, hybrid cars,etc) I really believe that years from now people will see this actions as the better of two evils. Banks made terrible mistakes managing their mortgage default risk and they definetely need to pay for that. However, the economy will deteriorate more if we experience a epidemic of bank foreclosures. If that happend even more innocent people ( white collard workers) would loose their houses and jobs.
Funny how the only people not getting a bail out are the one who did the right thing. Those who worked hard, saved, lived within their means, etc.
They’re seeing massive losses in interest earnings, stock earnings, wages, benefits, home values, retirement savings.
Who is going to bail them out and make them whole for the losses these Ivy Yuk, upscale, know-it-alls created?
I’m sick and tired of paying fo rtheir champagne. A little revolution is a good thing now and again. Too bad the government already took away everyone’s guns!
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So said watching all these short sellers sreaming “let them burn, no bailout”. What if your pension plan has a position in Lehman bonds, or your town or hospital has swaps with Lehman, or some of your firm’s hedges are done with Lehman, what you say? Still no bailout?
I agree with Alex. Let them fail and let Fuld try and get his golden parachute from a bankrupt institution. Maybe Wall Street will care for its own when they are in trouble (belly laughs).
Many will say we are a free market economy and that the government shouldn’t bail out Lehman. This might be true, but if thius large company is allowed to fail, the pain will be felt by everyone in the economy. The pain will be too great. Confidence will be shattered and we’ll suffer too much. A bail out, as unpalatable as it is, is necessary.
Just Say NO!
Where are all of the free market types?
Bear Stern, Freddie, Fannie, now this !!
Keep putting bandaids on the trouble sin this economy and you ensure that when the economy finally recycles itself, things are going to be a hundred times worse.
Time to let the economy cull out the dead-wood and excessive practices.
Let them all fail and let the economy fix itself.
If the economy fails, it only means that it needs fixing.
I don’t want to live through a depression, but how long can we delay the inevitable????
How did we go from Ford telling NYC to drop-dead to now the government bailing out every lying, cheating, dirtbag in the universe????
Enough with the corporate welfare already!!!!
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I don’t like the idea of privatizing profits during the good times and socializing losses during the downturns. I say let the wall street banks and brokerages fail, get the Fed out of “stablizing” the markets (actively propping them up when they start to lose their legs) and let the institutions fail, markets correct. We will hae healthier institutions and markets in the end. If it causes a major economic upheaval, so be it. I’ll take my chances.
How frustrating this bailout thing is.We can do everything and anything for Wall Street and very little for the people of this nation.
Absolutely Amazing !! Congress is clueless because it was their lack of oversight on their OWN rules that got us here.
I guess it is time to start taking a lot of risk and forgeting about the risk/reward model. Heck I’m going to invest in every stupid thing because I know the govt will help me out. It’s a winning model!
Since when did US Citizens begin endorsing, or even worse, expecting the Government through Corporate Fascism to bail out failed companies? They failed, their fraudulent and abusive practices caused them to fail. They never cared for the Consumer, why should we pay to keep them in business?
Enough is enough either we are a capitalist society or we are not. Let capitalism work and let the chips fall on those who took too large of a risk in making bad investments. It is time to make Wall Street accountable for its bad investments and greed.
You are absolutely right, Mr. Lamonica (I can see you wringing your hands back there), another bailout is the only choice. A bailout for Bear, a bailout for Fannie, a bailout for Freddie, a bailout for you, a bailout for me.
WE THE PEOPLE!! must tell our government ENOUGH IS ENOUGH. We can no longer bail out poorly run businesses!!! Where do they draw te line? Next will be Ford and GM. And then the airlines. WE THE PEOPLE!!! ARE OUT OF MONEY!!!!!!!!!! NO MORE BAILOUTS!!
yes, privatize the profits, salaries, bonuses, and capital gains, and then
socialize the debts.
the wh, the congress, fed, and wall street are all in cahoots together.
more NEO-CONS anyone?
For many years, the Repulican free-market fundamentalists have been exorting their anti-regulatory extremism with unabashed zeal; slamming anyone who dares to suggest that we need more government regulation and control over financial markets as a liberal or socialist. Now that this idiotic economic model is imploding, the only option is to dump more than a TRILLION dollars of bad debt on the US taxpayer via bailouts of Bear Stearns, Fannie & Freddie and ???. Add this debt to our already exploding public and private debt, and you have a country well on its way to financial insolvency.
only after all the loan-sharks and speculators who have made zillions cough up their ill-gotten money to the last penny back to the fed government and go to jail for lifetime of hard labor, and
after all the criminals parading as regulatory officials, who colluded in lining their own pocket and robbing the public blind, also lose every penny they have and go to jail for the rest of their life,
and after the dirty reps in the house and senate, who stood to benefit from this criminal enterprise called high financing, get thrown out of power and into prison for lifetime of hard labor.
Caplialism without risk ceases to be capitalism. Let them fail (as they should) and allow the market to cleanse itself of these losers.
Has anyone figured out that the Fed bailing out these guys is like a homeowner with no equity borrowing more money to bail out others who have done exactly the same thing? The Fed is not a bottomless bucket of cash – they are living on borrowed money as well!
Quote ranjit: ‘it is a major major player in the credit and derivatives markets’ and thus too big to fail. Well, Lehman WAS a big player, or do you really think there is anyone left doing business with them?! There is not, Lehman is dead allready, just ex-Goldman Hank Paulson refuse to bury them.
“A foolish consistency is the hobgoblin of simple minds”.
“Two wrongs do not make right”.
The argument “too big to fail” creates a perverse incentive that rewards making a failed enterprise larger.
No corp. should be considered too big to fail. Greed got them here. I believe all of these bail outs are for the good of good old boys
Let them fail. They were one of the greedier and more stupid investment banks on Wall Street. They disregarded their risk models all for the pursuit of the almighty dollar. When the big shots give back all their bonuses and other goodies for the past several years, maybe then we’ll talk. I thought this was supposed to be a ‘laissez-fare’ economy that the Republicans constantly harp about, but now that the ‘big guys’ are failing they can’t run fast enough to have the AMERICAN TAXPAYER bail them out. Looks like all the piggies on Wall Street make out no matter what happens. Sure wish the government would do that for me also.
These Wall St bankers and whiz kids need to join the bread line everyone else.
Why do the tax payers have to bail these jokers out?
Let em eat cake.
They steal our money and when they get caught out they cry like babies for assistance. Giving them a penny is a penny too much.
Another reason why all this banking consolidation is not a good idea.
First it reduces competition and secondly it makes the firms too big too fail!
Citigroup should be the first one to be broken up IMHO.
Also doesn’t Lehman still have access to the Fed Discount Window until Jan 09?
It seems pretty clear that Bernanke and Paulson have been instructed to keep the economic music playing vigorously until the presidential election. Pity that there seem to be 100 people now circling 5 remaining seats in this game of musical chairs. Just this year we have had:
- Bear Stearns Bailout
- Stimulus Checks
- Various ineffective mortgage bailouts
- 9+ Bank failures bailed out by FDIC (and a new one seemingly every weekend)
- Fannie/Freddie Bailout
- Lehman?
- Big 3 Automaker Bailout? (the next shoe to drop)
- Airlines? (gee we just bailed them out in 2002, guess they need more)
I guess our government can change the rules of the game on the fly by having taxpayers keep adding back chairs indefinitely. I have a sinking feeling though that the record player will start to falter right after the election…
We should use tax dollars to bail out the investment bank so the wealthy will not have to take that big of a hit. The ordinary folks who own shares of stocks should pay, but the big boys should be spared and able to continue gettting their 100 million ayear salaries. This is business as usual in Washington these days.
What can we do about this other then make impotent comments on a Web talk-back site and then bend over to take it up the tail pipe?
We can gloat when, as it always does in the long run, “someday” arrives and the entire debt house-of-cards comes fluttering down.
Then we who work can get back to the business of life.
I also think they should let’em fail. Liquidate! Time has come for the Big Fat Rich Cats of Wall Street to share the pain of the rest of the country. The Government is bailing everyone out now a days. That’s NOT the principles this country was founded on.
No bailout should be put together for this company, hell even Bear Sterns should have been allowed to fail – its why we have Free Markets. They made bad decisions, thefore need to pay the piper. Will it cause greater financial dismay? Maybe. Will it be bad for us? Hell no.
It will give companies something to think about when they rebuild themselves after this depression/recession.
One other note, write your Congressman/Senator letting them know how you, the consitutant, feel about the Federal Government bailing private companies out with yourmoney.
If they fail, they fail for a good reason and have zero right to stay in the business, just as anyone else in capitalism! It cant be to privatize profits ans socialize losses! They earn 100k’s a year, should have some left, otherwise sell the car and house, like anyone else has too.
In the end, what does all of this matter? I have written to my Senators, Representative and the White House and they JUST DON”T CARE. Everyone in out political system, from the President, to the Fed is in this for the power and prestige. We have been set up for this through the implementation of the Federal Reserve System back in 1913, through the fascist regimes of Wilson and FDR on up through the current administration. The powers that be understand the basics economics and ignore them for their short-term gains. Our Congress, Executive Branch and the Monster from Jekyll Island (the Fed) are pushing debt and taxes to future generations, while degrading the power of our currency today. We are in huge trouble and it is getting worse.
It’s ridiculous that there’s even an argument here (I mean in the article, it looks like the people posting comments are pretty unified). There is no reason these bailouts should continue to be part of our government policy. I agree with Sen. Jim Bunning that Treasury Secretary Henry Paulson and Fed Chair Ben Bernanke should resign (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alpUsTv3.upI).
I am wondering who gets hurt when one of these big guys goes down though. Seems like it tends to be vague “investors”. I’ve done my share of investing and I don’t remember anyone ever giving me my money back when one of my stocks lost value. I don’t understand how that can be the rationalization for this.
everybody who has commented so far is a DIMWIT…this is the 4th largest US investment bank people. it is a major major player in the credit and derivatives markets. the dislocation from them not being helped would be MAJOR.
they need to fail. we can’t bail everyone out for bad management. it sets up a bad precedent for the future. sometimes they need a little whack on the nose with a newspaper to stop peeing on the floor.
Damn Bush and the republican party and the tepid democrat party for allowing this to happen. As to your question: Yes, but that yes comes with fines punishment to be handed out to the heads of these financial institutions.
“Too big to fail” removes all of the “moral hazard” from these foolhearty corporations. Bailing out failing corporations with the taxpayer’s money is not “Capitalism”. Let them fail and let the market sort out the debris.
To hell with Lehman…LET IT FOLD, AS IT SO RICHLY DESERVES! The Republican anti-regulation fanatics dearly love the “free market” when they are making millions, but when things go into the toilet they know they can depend of the purely fascist Bu$h Regime to transfer the whole stinking debacle to the taxpayers.
If Lehman goes under, so what? If that is the lynchpin that triggers a full blown Hoover style depression, so be it. Maybe then, at long last, the American sheeple will wake up!
Face it china’s socialism evolved, so will capitalism, this can’t be stopped. Bright side of capitalism is growth and prosperity but the dark side is instability and exploitation. IMHO the pressing need at this point of time (and for the near future) is economic and social stability rather than growth.
Brace your self for strict regulation, high taxes, after all we should spend what we have not what other have.
I think we all agree that this pratice of bailing out private companies is just plan insane and wrong. Why should the tax payers an be left holding the bag for the bad behavior of the greedy players? My question to you is what are we to do about this? Do we just contiune to write post about our frustration? I really do not think the government is for the people anymore just the big investors. We are just like a bunch of lambs following the big “sheep” that leads us to the edge of the cliff and let’s us all fall over. Is this the begining and the end of free enterprise and the government set up and fought for 200 years ago?
We are watching the total unwinding of the US economy. Our leaders have led us down a path of total destruction kind of makes you wonder if they weren’t ex Soviet Union deep cover agents bent to get rid of us.
Just remember that so far the government has bailed out Russian and China investors who held US mortgages but has not yet bailed out a single American house going into foreclosure except Senator Dodd’s two multi-million dollar houses Country Wide forgave the loans on.
This is democratcy bailing out communists and letting normal American families become homeless and straving in the streets of American cities.
Shows who just who’s side they are on in all this.
Of course they should be allowed to fail. What really makes me mad is the salaries their executives collected while developing these problems earlier. Who really needs help is Ford and GM where people make a product for a living and work.
This is not capitalism. The federal goverment is nationalizing the banks and mortgage brokers. The same thing is going on in Venezuela under Hugo Chavez except there we call it for what it is, Communism.
It is criminal and should not be allowed.
The fact is the market has spoken. The stock price of Lehman is down 90%. Wake up. They have already failed. a federal government bailout will simply transfer those losses onto the US taxpayer.
If you are a taxpayer, bend over, and be prepared to take it up the tail pipe.
These large corporations have ignored their corporate objectives, and have acted only in the best interest of a few select individuals. If these companies are not allowed to fail, then there can be no recovery. Let the companies fail, and then other stronger players in the market can buy the pieces and restructure the business. All the the bail-out does, is allow the misdeeds of management to get clouded in the mix. When people or institutional investors invest they rely on the information regarding the companies objectives and financial health. All to often, they’re finding out the corporate objectives and management objectives are not the same.
Greg, as a sports fan, I have to say that I always crack up when I see your anti-Wolverine posts. Your last name wouldn’t happen to be Oden, would it? 
Seriously, it appears we don’t often agree about the state of the economy or markets…but at the risk of alienating some Trojans fans out there…I wish your beloved Buckeyes the best of luck against USC this weekend. Glad to see that Beanie is back.
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it happens, if i were to make a bad personal or business decsions why should the goverment bail me out? chances are the would not and I would eat the loss myself. I am sure eveyone has been gatiing well paid and compensated for teh past 18 month when they smelt smoke. I am losing on some of my stocks and 401k portfilios who is saving me? Let them go under for there mistakes,poor judement and greed.
This is insanity Paul. The excuse by Jon Markman on MSN.com was that the Soverign Wealth Funds from China, Kuwait, and Singapore were telling Paulson to bailout FNRA and FRE or else they would stop buying U$ Treasuries! Well so what! FNRA and FRE should have been allowed to fail. BSC should have been allowed to fail. People make poor decisions EVERY DAY! Why should beaurocrats and wealthy managers be bailed out for their poor decisions?? What about the people who bought tech stocks in 1998? Or homes in 2002? What about THEM!!?? If U$ went down, interest rates would go up. WHO CARES?? Interest rates go up and down all the time!! Maybe it would cause people to THINK before acting imprudently!
This is insanity!! Our economy WILL NOT SURVIVE SOCIALISM. There will be major ramifications Paul! The game has changed. The smoke is being removed from the public’s eyes.
Since our Govt has turned to socialism-ATLAS WILL SHRUG.
One other thing: to paraphrase the ND coach, “To heck with Michigan.”
A bailout of Lehman is the absolute wrong move, just as it was for Stearns and F/F. Taxpayer money should never, and I repeat never be used to bailout private entities. It’s poorly applied economics, poor judgment and poor leadership to do so.
The federal government can not save every company. Company boards and stock holders are responsible. Who will save the U.S. when we fail? Companies and nations fail every day. It can be ugly.
Basically the US economy is officially bankrupt. The government is bailing out the investors who brought mortgages from Bear Sterns, Fannie Mae and Freddie Mac. When Paulson and Bernanke say they are not bailing out investors they are lying. Russia and China (the two richest nations in the world, funny how the communists are more captialist then the democrats) insisted that the government back the mortgages they brought from Fannie and Freddie and Paulson asked how high should I jump and gave them billions.
Captialism in the West is now totally dead and has proven a loser. Instead of having the guts to default on our bad debt we are going to force our children to be economic slaves to Russia and China.
It’s a sad day for those who won WWII against the facists merely to lose to the communists 63 years later.
Government has done this before, it will do it again and again. This the a new chapter of capitalism. I hope people realize it.
Once all the people who were getting paid excessively and profits and bonus for moving the company to this position are reclaimed we can look at bailing the company out but quit giving out free passes. The average tax payer or investor does not get this grace or pampering and I’m tired of paying to protect those that were privileged to begin with. Risk, Investing and Managing a business all have rewards when managed well and consequences when ignored or exploited, it is not a heads they win tails they still win and the tax payer pays situation.
This is ridiculous. The Government can not and should not ever back any private company. If they are not run properly, then let them fail. Even when these companies were rapeing (reaping) large returns, they minimized paying their taxes as much as possible. There is no need to help them now. The day has come to pay the piper. LET THEM FAIL!!!!!
Maybe when we come out of the upcoming Depression, the surviving corporations will think twice about making irresponsible, dumb business decisions.
The Fed has already gone too far in arranging for the bailout of Bear Stearns, Fannie Mae and Freddie Mac, and seemingly the SEC and Justice Department do not think there is need for reprecussions against the executives of FNM and FRE to persue them for failing to carry out their fudiciary responsibilities. Now we the US taxpayers are on the hook. And with the Fed floating money to banks like candy to babies, inflating the greenback against real assets, the US standard of living we will leave to our children has already taken a header.
Enough already. Let Wall Street take its own heat and join the ranges of the disenfranchised electorate who will likely “get smart” the weekend before Nov 4.
This whole thing started (at least to my memory) when the government first bailed out Crysler. I heard a lot of “do this and it will never end” then.
If it is (was) genuinely true that these companies are “too big” to be allowed to fail, then companies should not be allowed to get that big.
As has been said in nearly every post here so far today, the government can not POSSIBLY bail out every company that screws itself by sucking out short term gains. (Or other stupid and immoral business practice.)
407 Billion Deficit THIS YEAR (and we all know it really bigger then this). What I want to know is who is going to BAIL OUT the US government?
Of course, Lehman Brothers should be allowed to fail, as should Bear Stearns, because the markets take care of themselves. All hail the invisible hand!
The Govt should never step in since it would the TaxPayers money. In fact the money should come out of the pockets of these high paying executives who made those risky bets. Let them bear the responsibilities for their actions.
If the government continue to patch up those companies that made poor decisions using taxpayers money, then they need to dramatically increase the capital gains tax to offset it.
Since that isn’t going to happen, we should stop these outrageous bail outs
Let them fail already. Do we have to bail out everyone? We’re going down the path that Japan did in the 1990’s when they bailed out & propped up all of their banks, followed by 10+ years of stagnation.
As economist Ken Rogoff suggests, the Fed is starting to put itself at real risk by taking on so much bad debt from these institutions: http://tinyurl.com/6q7cwe
My small company has also been impacted by the mortgage crisis.
Let’s bail out everyone who has been impacted.
STOP RAIDING THE TREASURY!!!!
When does it stop? How much will the government have to own? Someone has to take responsibilty at some point. Why not reclaim the millions paid to the executives before charging the tax payers?
The government should NEVER step in to help keep a private company afloat. This is not the role of the government and rewards the poor decision makers for their stupidity.
Lehman, Bear Stearns, Fannie, Freddie should all have been allowed to fail. The government has opened Pandora’s Box by backstopping these companies and is encouraging more reckless behavior on Wall Street.
This will only end badly, as it cannot prevent the inevitable. Too much debt has been created which cannot be paid back. Ever. Period.
The Fed started down a slippery slope when it bailed out Bear Stearns. Before the “handouts” were given, all management should have had to diclose their net worth so that the taxpayer could form an opinion and give the government time to think.
This is NONSENSE. No single company is too big to fail. The consequences of the failures of large firms are painful, yes, but they are not catastrophic as some would have us believe. The Fed did the wrong thing in setting this precedent and is continuing to perpetrate the problems in the market by letting everyone know that the government will save them if things get bad. The government CAN’T save everyone. How many more companies will fail? How many more will be bailed out? This is absolutely the wrong thing to do when we need to teach fiscal responsibility to the government itself! Stop the bailouts; they’re only making this recession more painful in the long run. Our economy can, and will, survive without this garbage.
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How sad, bail out the rich
and forget the working American. This
whole deck of cards will fall and when China switches to Euros, it’s 1929
all over again.