The world sticks with the U.S.

Re Bernanke and Paulson- These guys are there for their mates and are looking for the easy way out. Gee, they are sure good at sticking on a plaster, but the next day it’s all back to the same problem again.
We ‘plebs’ are told not to worry and that shares are a long term thing. In the long run all will be fine. It’s a pity that these fraudsters aren’t made to hold their shares for a certain time – at least a week – before selling on again. Meanwhile these creeps are creaming off all the profits. This is fraud and the Fed should look at ways to get some of this cream back.
As for liquidity – if a bank has loaned 40+ times the money it has access to, then there is a problem. The money world has gone mad and there has to be a brake applied to this nonsense. No-one should run on credit. It is stupid!!

Nothing has changed.It’s still the same folks running the show,who will turn the same blind eye to the problems infesting Wall Street.Fool me once……

Exactly! Or should you have said ‘Weapons of Mass Deception’. Waiting and deliberation only brings the truth to light. “Sunshine is the best disinfectant” – Justice Lewis Brandeis

Treasury Bonds will stay atractive as long as they are profitable. When interest rates rise, foreign and domestic investors will come for a safe haven. It’s a question of profitability, not market fluctuations or bank filures. Unless the US gets taken over by China a T-bond is a secure investment … period. So investors will pay for the secured investment as long as the yield is desirable … period!

After viewing some of the comments below I think it’s worth it note that this is a BAD time, but not the end of the world. They’ve tried to blame the administration of the 20’s for not acting and causing the great depression, but the damage was (and is now) already done and you can’t fix bad decisions by making another bad decision to throw money at it. The mistakes were already made, and there is no time machine to fix it. All we can do is ride out the effects of credit spending, both on the part of the american people and the banks which lended them the money. Plus the government has done the same to the tune of 3 trillion $$$. You can’t take any of this back and borrowing even more money to fix a problem that came about because of borrowing money is just stupid … period!

We are headed for a shift back to fiscal conservative thoughts, which the lack of created the mess we now reside in. Both my great-grandfathers were bankers who lost everything in the great depression and in a time without the FDIC and they had to personally pay back their customers from the money they had made. They were spit at on the streets and loathed because of the money they had lost. They wanted to regain their dignity by doing the right thing and holding themselves accountable. Where is the spitting now? Oh yeah, the government will bail the banks out this time so the CEOs get to keep their bonuses and taxpayers for years to come will PAY THE BANKS for their mistakes plus the interest on $700B over decades.

So my point is this. Spit on a banker. OK, you don’t have to do that but let them know that THEY need to take the responsibility for losses personally and the government should hold them accountable just the same. Dmand the regulations be put back in place that were enacted during the great depression to prevent this catastrophe.

Deregulation BAD.
Accountability GOOD.

Demand it! I you won’t, who will?

Is this the sequel to “Weapons of Mass Destruction” with the rush to do something RIGHT NOW? The new plot involves Wall Street, a place where high rollers make enough to enjoy the benefits of the Bush tax cut and probably buy and sell most taxpayers.

So the Bush administration has an urgent plan to save the prodigal son as devised by the smart guys who have been there all along and understand all this high finance that plain folks do not.

Sorry but I have had more than enough of the red ink during the last nearly 8 years. What was the homeowner relief bill, if not a solution, that passed a few months ago? I still drive by thousands of trailers stored since Hurricane Katrina on I 59 that I bet were built and sold to the government by millionaire Friends of Bush. Then there were the millions of bad checks that Uncle wrote as the taxpayer rebate to stimulate the economy. What I learned from my father who was a child of the Great Depression, was that you don’t spend money you don’t have, you save money for a rainy day, and you live responsibly. None of that seems to be relevant.

Something relevant–

1 Have widely published accounting reports on the way the last $4B for home owner help was spent

2 open a checking account with the $700B with congress oversight

3 Some factual information on what is being bought for how much and with what risk

More like a managed account that taxpayers see progress and can close the account in a month or two maybe with $400B still left.

Are we buying something or just forgiving debt at the top end while people are still living in their car while their house sits empty with a for sale by bank sign?

Again, can you tell me where the $4B went?

The current proposal for the “Bail Out” is basically a sound plan, EXCEPT WHEN YOU READ SECTION 8!!!! It is obvious that this this is also a POWER GRAB by the Executive Branch. This has happened several times in the past and is a new strategy that enables the Executive Branch of our Government to gain power during times of panic and at the ultimate expense of the American people. Bush is talking about ending partisian differences. What he really means is “Give me the power that I want and I will make it all go away.”. Well, I have to say to President Bush…”Once bitten, twice shy!”. I believe in the seperation of powers provided by the Constitution. Why doesn’t our President???!!!

Don’t care.

Bye. They should understand capitalism. There’ no guarantees.

Still better than other countries.

That’s the price you pay. If you don’t like it, get your own house (country) together.

BYE !

Carolyn Bergen from CT,

You don’t understand. There are many banks that did act prudently. When lehman Bros collapsed, the banks with the money bought the assets that were worth something. The banks with good managers will still be around, and they will still make loans to the people that they think are able to pay.

The governmnet has no money other than the money that they print, or that they take from us. The government doesn’t produce or sell anything. All that money will either come from your paycheck in the form of more taxes, or they will print the money and cause massive inflation. If you think your bills and prices are high now, after this, they will be even higher.

There are TRILLIONS of this toxic paper out there. Read the fine print. The Fed is only limited to $700 billion at one time. They can run up that $700 billion an unlimited number of times. This will allow the corporations to replace their imaginary value with our tax money.

When Lehman Bros went belly up, did anyone in Minesota who didn’t work for Lehman lose theirs? Nope. The world didn’t end. The only people who lost their jobs were the ones who worked for the company. There are still well managed organizations that will take their place.

It doesn’t matter anyway. This thing won’t work. A month ago, the economy was sound, now Armageddon is near. Our leaders are either liars or totally incompetent, either way they shouldn’t be trusted. The economy and pension funds 401ks will still crash, the only difference is that the foreign investors and wealthy elite will save a lot of their cash at the taxpayers’ expense.

Looks like they have much of America fooled…

Think about the unthinkable.

If we as a nation refuse to consider all sides of an issue because we are scared, we are bound to make poor decisions.

We are heading towards the unthinkable at full steam, this whole proposal is an effort to keep our heads in the sand for a little while longer.

None of the underlying issues are being addressed, the housing market is still way overvalued, The crooked bankers still think they did nothing wrong. The election is still 41 days away.

Just say no.

#1. Watch this video about the next banks to fail
http://moneyandmarkets.stream57.com/August6/default.aspx

#2. Go to http://www.thestreet.com
Go to “Portfolio and Tools” in the tool bar
Scroll down to “Banks and Thifts Screener”
Go to “Find a Bank” box and fill in your bank info. Some banks are by partial title, like Bank of America, which is under just a one-word title “BANK.”
See if your bank rates an A or an F.

Same old story-rich get richer and poor get poorer-always leads to government downfall, anarchy, and rebellion -how stupid can the Bush Administration be?

War bond went to help the troops and had a recoupable value-how do you gain illiquid assets with bonds?

You can all be angry until you are blue in the face about this bailout, but so many of you can’t see the forest through the trees. I’m not happy about it either, but if something isn’t done, it’s going to be a huge domino effect on our entire economy. This crisis does not just affect the wealthy. When large companies go under, how many people are going to lose their jobs? Those people are not going to be spending or saving money, that’s for sure, which means other industries will suffer and many more totally unrelated industries will fail. Eventually, YOUR jobs may be lost because nobody has any money to buy what your company sells. Then how will you pay your mortgage and other bills? Get real everyone. This stinks, I agree, but my family is having a hard time making it right now because of this economy and some very large medical bills and we are far from wealthy. If my husband and I lose our jobs, then we won’t be able to pay our own mortgage after awhile. We won’t have ANY health insurance. Don’t kid yourself. Doing nothing will have devastating repurcussions for everybody. Bail ‘em out, but not with the proposed plan. THAT plan is BS. Make ‘em accountable.

Good question-if you deflate the dollar low enough-how do you run a collapsing country?

If the bailout is passed and taxes are not raised by the next administration who will ultimately pay for the bailout???

The only “golden” parachute that should come from this bailout is to the taxpayers. Wall Street executives who created this disater should have their wages cut to minimum hourly wage, or at the very least pay a multi-million dollar fine. It might be a good idea to make a requirement of the bailout their immediate termination without a financial exit package. I recommend lifetime censorship from ever working in the financial markets.

Why are we not hearing from our top economists from our universiteis,etc.? On PBS last night an econmist exlained that a loan that would be paid back with interest would be better than buying the bad paper. Dividends and salaries could be restricted until the loan was repaid. The institutions would then be responsible for collecting the bad paper, not the government.

Hi Ali,
I’m trying to learn as much as I can about money. You are one of the only ones I trust. How is this going to affect people who are looking for school loans? mortgage loans? Even if they have good credit, will money be harder to find?

DO YOU REMEMBER WAR BONDS HOW ABOUT WALL STREET BONDS FOR SALE

let wall street crash NO WELFARE FOR THE RICH

What happened to the five hundered million Euros Lehman Brothers received from Germany?

Hi Ali, why doesn’t the american people know that we are bailing this co. by buying their stocks at premium prices, when any other co. would be buying them at fire sale prices?

1. Why has no one talked about Mcain’s involvement in the Savings and Loan debacle..seems appropriate in this issue.?
2. I listened this am to Ali’s discussion of the cost of the bailout..it was not in keeping with something I heard late yesterday that suggested that the actual price paid for each mortgage would be a calulated future value that may be somewhat greater than the present book value and that this will be a significant additional cost.

Im guessing my Wachovia accounts will be affected?

Ali,
It is truly scarry when the Bush Administration submits a $700B bailout plan insisting on no oversite by Congress or the Courts. Yet Congress has apparently chosen Barney Frank, of all people, to negotiate a compromise. God, Barney Frank?? Is Frank an economist? Does he have the credentials to make such decisions? Is he the best Congress has? Is there anyone in Congress capable of understanding the real issues? The more I think about this, the more frightened I become.

I am disgusted with the proposed $700 billion bailout plan. If my family and I didn’t keep track of our budget and pay our bills on time, we would be on the street. Therefore, let those who created this mess go where I would end up if I didn’t make wise decisions on how to take care of my money. Wall
Street needs to clean up their act and there shouldn’t be any large payoffs to executives of these companies because they chose to do their jobs extremely poorly.

So if I read this question correctly, you are asking that if the proverbial “Gambler’s” are now being asked to bailout the failing “Casino”, then do I think that the ones who fund the Casino will continue to do so in light of its obvious failure? Of course the answer is no. I expect to see foreign US Dollar reserves to be quietly liquidated over the near term and a steady move into Euro-pegged commodities over the long term.

Treasuries have already taken a massive hit since the bailout was announced. I think this portends much higher rates in the future.
http://www.bailoutville.com/forums/f11/treasuries-massacred-25.html

the bail out will never work because of the greedy politicians and the ceos.
instead of the bail out send the head of every house hold a check for $30.000:00 forget the bail out the middle class of america will get the $30,00:00 then start all over and let the chips fall where they may

Has anyone looked into finding common players in both the Savings and Loan of the 80s and this Banking crisis? I think it’s worth looking into….

You want to give assistance now that you have realized that you have taken every penny that regular hard working Americans have.You realized that you can’t get blood from a turnip.Where are the countries that we have so-called given assistance to now?Where is the help from our allies now?Or is that just for when we want to start a war?Where do the common American fit in with the 700billion dollars bailout?Not just home owners but the renters too?Our rent is going up all the time because the owner is trying to save their own family.What about us?

Okay…bailout, buyout, whatever. Either way, the US Gov should own these organizations and EVERY employee at AIG, etc. should get a government GS# and corresponding salary. That’s the way it works in government.

Angry does not come close to describing my feelings. And no, I’m not getting over it.
Read the Ron Paul article for background if you don’t already know the causes of this mess. Instead of more bailouts, we should let the banks bite the bullet, write off the bad paper, and move on. It’s time for (the American) people to suck it up and take the medicine. It will only get worse if we continue down the present path. Americans need to start living below their means, and saving the difference. This bailout may or may not help, we don’t know for sure. If the government insists on printing more money for this problem, then how about instead of a bailout, we go into the banking business. We’ll lend to anyone (with good credit) whatever amount they need, at, say, 10% interest. Then, the banks can either go out of business, or start attracting capital by offering attractive rates to savers, and lower interest rates to credit worthy borrowers. Once the (surviving) banks get their act together, the government can ease out of the banking business…..

Does anyone know where a free market exists? That’s where I’d go regardless of return

Why invest in a system that keeps changing the rules? No rate of interest can compensate for that risk

With amazing speed the treasury and FED have managed to damage the only thing that backs our currency and bonds — confidence

Will investors bail? Who knows, depends which way the monetary & fiscal levers get yanked. And for legislation — the best case would be if the FED can be regulated or eliminated.

Foreign central banks — well they all work together so I’m sure they’ll do OK

Sure seems like management by planned chaos …again

We have a fiat currency bubble burst.

Financial Crisis Fundamental Foundation Flaws and Solution

Congress is tapping into this info today.

On http://coinage.me/

The flaws are articulated in detail as well as the solution which involves a New Global Value Exchange Accounting System they have a list of power questions that media and journalists can ask.

One interesting ironic insight is a small fortune can be made off pennies as a result of the amazing paradox resulting from current market conditions. 1 lb of pennies is worth $6.00 tangible and only $3.00 intangible.

They make an interesting point why shouldn’t the bail out (citizens going into debt) go to pay off the mortgages and then trickle down to those firms needing to be bailed out?

Read the power questions. http://coinage.me/power_questions.htm

How long ago was it that we heard words like “The credit crisis is contained.” from the powers that be?

Now “they” say not to worry, (heard that before), other nations will keep loaning us money. (Buy treasuries.)

After all, our economy is “basically sound”, so those treasuries are a really really safe investment.

The dollar is still the most important currency on the planet can’t let it go down that far, after all.

LMAO

The current mess of derivatives, CDO’s and other “complex” financial instruments look like a conglomerate of check kiting, loan-sharking, equity-skimming, Ponzi scheme, pyramid structure, mult-level-marketing and junk bonds.

So will investors continue to buy US Bonds if Congress creates a bail-out? Define “investors” – other countries’ rich people who won’t invest in their own country, because there is too much risk?

And the conglomerates – the Financial Sector – was always on the lookout for suckers to put up money to subsidize these “instruments”. Having run out of suckers, they now beg the Federal Government for money.

Wall Street is whining for a bailout. What does that brat Phil Gramm have to say about it?

Depends what the rate of return is. My money goes where I perceive the highest rate of return is. I think that’s what most folks do. However, why anyone thinks the Bush administration is capable of coming up with any decent solution to anything is mystifying to me. It sure hasn’t been their track record so far. Past behavior is usually a good indicator of future behavior. At least that’s how the credit industry works for the average consumer! Now that the lousy regulations that precipitated this liquidity crisis (vis a vis the downgrade in credit ratings by the rating companies)are no longer the focus clearly the focus has turned elsewhere. Hopefully the powers that be will remember to fix those regulations as well or we could be right back to square one if the fix being put together doesn’t work.

I think if investors knew that money is actually debt, they would bail out on all investment options.

The banks don’t have anything to back their “paper notes”. That’s all they are. They’re making money because of people paying interest on their debts. See here how money works: http://www.youtube.com/v/qt_GhcQ5EtU&hl

I think it would be hilarious if everyone pulled their money out of the banks at once. All of them would crumble because they have no gold or silver to back their loans. Wasn’t President Kennedy assassinated because he challenged the Federal Reserves? Didn’t he try to print money backed by silver? (the serial numbers are in red, not green like the current money). $2 and $5 bills made it out, but while he was printing the $10s and $20s, he was murdered. The 2 and 5 bills were taken out of circulation.

Yes, I think investors will bail on the bonds. I think if they are smart, they’ll bail on the banks, the buy out firms. Let the failing corporations die…or…do members of Congress have stock in the firms, which means they need to bail them out?

SharkGirl
http://www.facingthesharks.com
A non-lawyer vs. Robins AFB

If I take out a $70,000 loan and “invest” it on 18 at the roulette table, I’m out $70,000. However if you “invest” $700 billion you get a bailout?

I haven’t talked to anyone that supports this.

The impending collapse of the dollar and hyperinflation

The $700 billion bailout plan being proposed by Treasury Secretary Paulson will result, very quickly, in the collapse of the dollar and hyperinflation.

The US economy does not have $700 billion in spare cash to buy up the $700 billion in Treasury notes that need to be issued to finance this bailout. If our economy did have that kind of surplus money, we would not be in this “liquidity crisis” that is locking up our financial system (that’s not my claim, that’s what Paulson, Federal Reserve Chairman Ben Bernanke, and financial analysts are telling us). We will need foreign investors to buy even more of our debt. But already a huge amount of our national debt and private debt is being held by foreigners, including sovereign governments like China. When the Federal Reserve prints up an additional $700 billion in money to be be sold as Treasury notes, the result is a significant devaluing of the dollar. That means the dollars that foreign investors hold will be worth less. But foreign investors aren’t stupid, they can see this coming. To protect themselves they will start selling off dollars before they get devalued. Once the dollar starts dropping, the decline will accelerate, as no one wants to be stuck with dollars as they spiral down. (This is what happened to stocks in financial companies recently, the downward trend scared investors and everyone starting bailing out.) When the dollar is going down, no one wants to be the “last man standing”, the one still holding dollars that are now worth a fraction of what they were after everyone else has dumped theirs. It’s going to be “sell quick or be left holding the bag.” Thus, a collapse of the dollar.

With a collapsed dollar and the Fed still printing money to finance this $700 billion bailout, we end up with hyperinflation.

And consider that even if this $700 billion bailout doesn’t pass Congress, we are likely to still have a declining dollar. The anticipation this coming week that the bailout will pass is likely by itself cause the dumping of the dollar. Secretary of the Treasury Paulson may have set into motion the beginning of the next depression.

You may want to pass this information on to others, as buying gold may be the best way to protect your assets right now.

I don’t believe foreign investors will “bail”, but they will probably not feast with a great appetite.

Interest rates MUST increase in this country to keep TSY bonds attractive, which will have an adverse effect on borrowing money, which will have an adverse effect on housing going forward, thus negating the very intent of the bailout to begin with.

You can try with all your might to lead a consumer to the bank, but you can’t force him to borrow. Credit lending has already tightened, so where does the Government expect that all the “borrowers” on the sidelines just waiting to jump in and buy houses will get their 20% down and be able to pay all the upfront closing costs? Hey, maybe they can borrow the 20% downpayment and roll the closing costs into the mortgage, then….WAIT, isn’t that what got us here to begin with???

They won’t bail out but they will have to increase their rate of new buying to cover our newly issued paper. Rates will go higher, the dollar will continue to fall, inflation will increase (except for home prices) etc., not to mention the price of oil. The amount of money we need to borrow will increase as rates increase just to cover our interest payments.

Foriegn investors will have way more clout and influence on US economic policy and even foriegn policy. If they sense that we will need to increase borrowing becasue of another Iraq let’s say, they will demand higher and higher rates which might force us to reconsider.

With deficts already forecast to be on the increase and our huge unfunded SS, Medicare and Medicaid bills still to be paid for as boomers age, we will not be able to think about being deficit free for another 100 years or more.

Sounds like fun, right.

Thank you Republicans!

The problem we have been having for so long in this currently is trying to borrow our way out of trouble. Greenspan got this going with low interest rates and no regulation on the financial system. The result is the “I want it all and I want it now” culture we have. Younger people buy want they want with credit cards. Older people use their homes as ATM machines. The associated rise in the cost of living has driven most middle class jobs from the country. Now we are starting to see the fallout from this. What happens if this bailout goes through and there is another round of foreclosures (keep in mind the number of ARM’s resetting peaked this past summer)? Does anyone think the financical sector has fully disclosed all the potential bad loans on their books? Do we ask foreign investors for another $700 billion in round two? What we need is for the government to step up to the table and show some leadership. Winning a popularity contest by leaving future generations with a huge bill is not the answer. Once the foreign investment community decides they’ve lent us enough we’ll need to face the music. We should take the pain now to get the cost of living back in line with what the average young family can afford. Time for the “keep up the Jones’s” generation to go extinct. One more thing to point out – interest rates have been low for quite a while and people still aren’t buying so availability of credit isn’t the only issue.

“Bail” is too strong a word.

But continue to purchase?

Not as much as in the past.

if the bailout plan passes in its current form – eventually “yes”. if the plan takes form of out-of-bankruptcy recpitalization of troubled banks – understand cancellation of subordinated debt, preferred and the banks’ common stock and infusion of new capital, there is a chance that we can avoid passing so much loss to the US government, bankrupting the dollar and experiencing hyper-inflation; and avoiding this could mean Tsy rates not skyrocketing into the stratosphere. what the duo of liars (bernanke/paulson) conveniently omit from their testimony is the impact of the bailout proposal on tsy rates. think what that means for mortgage rates and the ultimate bottom for housing prices. either way tsy rates are going up from current levels (with or w/o a bailout). let’s hope the increase won’t be disastrous – that is bank subordinates are not going to be saved through the biggest heist in history

I just did. If this “bailout” passes, we will be beyond broke and the world knows it. Our triple A rating will be dust, our currency devalued.
Why bet on a loser? In the near term, America has nothing to offer to back them up. We will have to re-tool our economy to improve and that will take time.

Not to toot my own horn, but I said yesterday that the Fed will need to raise interest rates if this bailout goes through or we will suffer heavy inflation.

Of course, there are plenty of alternatives to dollars and US Treasuries – like the Euro, the Yen, the Pound, oil, gold, etc. The arrogant attitude that foreign governments will continue to invest in US Treasuries no matter what happens sounds a lot like the attitude 18 months ago that housing prices will continue to appreciate no matter what.