03-28-2008, 06:19 PM | #1 (permalink) | |
Tilted Cat Head
Administrator
Location: Manhattan, NY
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The Fed bailout Bear Stearns, should they bail you out too?
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About 60 homeowners protested in front of Bear Stearns this week. If I was the kind to join in such things, I may have been there too. I definitely agree that the homeowners need more help than the bankers. I don't think that they are without fault since it takes two to tango. For me it is dishonorable the things I've been reading in the media about how people are so underwater that they just mail in the keys to the home and move. They don't even try to work it out in any fashion. They have just given up. I'm not sure how to fix the mess, but if people aren't willing to work on it, then there is little that can be done. I don't think they should bail me out. If I got myself into the situation, it is my fault. I'm the one who is responsible for it and me alone. I signed on the dotted line, I agreed to the bad terms. I would be grateful if they extended some sort of hiatus like a freeze on rates, but the reality to me is that I entered into this thinking that I was going to be able to get something for less than what other people were getting.
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03-28-2008, 07:15 PM | #2 (permalink) |
warrior bodhisattva
Super Moderator
Location: East-central Canada
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We should be looking at this from the right angle. This isn't about government bailing out bankers or homeowners just because they want to help those in need. It's about what will have the most impact on the economy. You don't let huge banks sink overnight. It not only shakes the faith in the economy, but it is a loss of financial capacity in the marketplace and a loss of many jobs.
Homeowners...the same thing. People losing their houses are people not spending money. But which has a more significant impact? Which is government money better spend, dollar for dollar? I don't the figures nor the algorithms, but I'd say keeping banks afloat has a better effect on the economy than individual homeowners. It might seem cold, but economics is often like that.
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Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot |
03-28-2008, 07:16 PM | #3 (permalink) |
Wise-ass Latino
Location: Pretoria (Tshwane), RSA
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When Bear Stearns got into their situation, it was all their fault too. If the government can give an investment bank that played fast and loose with people's money a bailout, I don't see why the government can give a homeowner who didn't fully read the contract a bailout as well.
My attitude would've been different if there was a headline in the Daily News that read "BUSH TO BEAR STEARNS: DROP DEAD" but there wasn't, so what's good for them is good for us.
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03-29-2008, 09:25 AM | #4 (permalink) |
Riding the Ocean Spray
Location: S.E. PA in U Sofa
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This situation is caused by greed; do almost anything for a faster bigger buck. I say they should pay the price and let them suffer. And of course we'll all take part of the suffering because we didn't jump up and scream and holler for it to change before it was too late ...or demand responsible oversight by our regulators/financial/political leaders. Time to vote in somebody who will do the right thing.
PS: I'm sorry I didn't buy Bear Stearns stock when I might have gotten it for a buck or two. |
04-02-2008, 02:23 PM | #5 (permalink) |
Wehret Den Anfängen!
Location: Ontario, Canada
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Bear Sterns stockholders where bought out at 2$ on the 100$ approximetally.
Stockholders are analagous to Homeowners. You can leverage a home and you can leverage stock. In both cases, the owner has last rights to assets, and infinite upside on price increases. So, provide guaranteed loans that allow someone to mass purchase defaulted homes at 2$ on the 100$. Wait, that's a pretty crappy bailout, isn't it? The owners of Bear Sterns got screwed.
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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest. |
04-02-2008, 02:33 PM | #6 (permalink) |
comfortably numb...
Super Moderator
Location: upstate
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if i spent more than i earned, i would freakin' LOVE it if somebody bailed me out when i couldn't make payments...
guess i just gotta live within my means, as i have since day one...
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"We were wrong, terribly wrong. (We) should not have tried to fight a guerrilla war with conventional military tactics against a foe willing to absorb enormous casualties...in a country lacking the fundamental political stability necessary to conduct effective military and pacification operations. It could not be done and it was not done." - Robert S. McNamara ----------------------------------------- "We will take our napalm and flame throwers out of the land that scarcely knows the use of matches... We will leave you your small joys and smaller troubles." - Eugene McCarthy in "Vietnam Message" ----------------------------------------- never wrestle with a pig. you both get dirty; the pig likes it. |
04-02-2008, 02:47 PM | #7 (permalink) |
Super Moderator
Location: essex ma
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predatory lending would have been a problem had there not been reagan-period deregulation of banking. the earlier version of the subprime fiasco, which was called the "savings and loan" crisis should have been a signal that something was seriously wrong--that was brushed aside...i think you can make one argument that the effects of subprime mortgages follow from the ideologically driven incompetence of the us state. so that's one.
another is the same kind of realpolitik that issued in the bear-stearns buyout: this sector of homeowners may be too big to be allowed to just go under without generating political consequences that are potentially unacceptable. maybe the political legitimacy of the neo-liberal state is at stake in it. or maybe the calculation is the obvious one: without some help to the folk who are getting foreclosed, but with help to bear-stearns and other financial institutions, the Interests of the state become a bit too transparent, even for the comfort of the right. i'm not sure that the crisis we are tipping into is driven by this alone, however: most of it seems to be a function of the transnational trafficking in debt as a commodity, which is itself the leading edge of maybe other problems to come as the consequences of the range of new financial instruments the nature of which i don't entirely understand (but i'm working on it) since the reagan period start to surface. this is a multi-pronged cluster fuck--so at bottom, i think most of the moves are political face-saving and ass-covering--system protection in short. none of the moralizing interpretations of borrowers seem relevant. and i don't see their problems as in themselves motives for any state action.
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a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite |
04-02-2008, 04:33 PM | #9 (permalink) |
Pissing in the cornflakes
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Since I wasn't a dumb ass taking on a house I couldn't afford, could I get some free money too anyways?
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04-02-2008, 07:37 PM | #11 (permalink) | |
The sky calls to us ...
Super Moderator
Location: CT
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But we live in the real world. Bear Stearns will get a bailout while we stand here trying to pull ourselves up by our bootstraps. |
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04-03-2008, 04:35 AM | #12 (permalink) |
People in masks cannot be trusted
Location: NYC
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I think we should not bail anyone out this is a capitalist society, they took a gamble and it lost.
That being said the reason I see in this case being different is a fear of a depression. If our banks are not stable people might make a run on them for their money. If that was to happen then our economy would crumble. I do not think this is right, but I think it is a necessary evil and sadly therefore acceptable. The idea is to minimize the damage to our already very fragile economy. |
04-03-2008, 04:51 AM | #13 (permalink) |
Super Moderator
Location: essex ma
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this is just another of the seemingly endless series of situation in which the petit-bourgeois viewpoint says nothing at all about structural problems. this is self-evidently a political matter and not a "market" one.
kinda makes you wonder whether there are any "market" issues, when you get down to it---markets being state/legal creations and so political--bigger markets being therefore political matters in themselves--financial markets first and foremost in this enlightened capitalist society within which human beings are worth less than cash and commodities---when things are operating normally, the political underpinning of markets can disappear into the background (along with the regulatory underpinnings) and so it becomes possible, given an adequately superficial view (no need to say more about neoliberalism) for people to talk in terms of abstract market relations and forces and to moralize about those who win and those who loose as if all of this was necessary and natural---so it is here---but when things get squirrely, the regulatory underpinning and political stakes resurface. the mortgage "bailout", if it comes, will follow from the perceptions of political damage created by the bear-stearns buyout, and not because suddenly the republicans, for example, start actually giving a damn about the regular people who are loosing their homes. but they have to appear to give a damn. pace machiavelli
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a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite Last edited by roachboy; 04-03-2008 at 04:55 AM.. |
04-03-2008, 07:47 AM | #14 (permalink) | |
The sky calls to us ...
Super Moderator
Location: CT
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Nobody will bail out the consumer because they think it's the right thing to do, they'll do it because it keeps them in office. |
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04-03-2008, 07:54 AM | #15 (permalink) | |
Pissing in the cornflakes
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The problem of course the government shouldn't be bailing out anyone in this case, but the Nanny State mentality is such that they have to do SOMETHING. This btw isn't a failure of capitalism or neoliberalism roachboy its just a little socialism to buy votes. SOP.
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Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps. |
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04-03-2008, 08:08 AM | #16 (permalink) | |
Kick Ass Kunoichi
Location: Oregon
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I would like to see common people keep their homes, but I'm not so naive as to believe that this is done out of the goodness of politicians' hearts; they are politicians, after all.
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If I am not better, at least I am different. --Jean-Jacques Rousseau |
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04-03-2008, 08:17 AM | #17 (permalink) |
You had me at hello
Location: DC/Coastal VA
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How many people will take their gummint check and spend it on the mortgage? Almost none, according to George Mason economists, and these are guys who are always in the tank for the GOP.
http://www.gmu.edu/departments/econo...genonsense.htm That dumbass Mike Huckasbee had a good point, why put the country further in the red by borrowing money from China to offput a recession? Better go through it, get it done, and learn the lessons. Elect me, and I promise, 50% fewer people, but everybody on TFP will be on board.
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I think the Apocalypse is happening all around us. We go on eating desserts and watching TV. I know I do. I wish we were more capable of sustained passion and sustained resistance. We should be screaming and what we do is gossip. -Lydia Millet |
04-03-2008, 09:36 AM | #18 (permalink) |
Riding the Ocean Spray
Location: S.E. PA in U Sofa
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I want to take a cheap shot at the "stupid" people who financed houses they couldn't otherwise afford via variable rate mortgages that they GAMBLED would not go up so much that they couldn't afford to pay or they didn't even figure out what that number would look like run on sentence. I've also had the "pleasure" of dealing with ill-motivated mortgage brokers who just wanted to make their quick buck on your financing with no regard to the borrowers' longer term well being; but any consumer who decides to commit so much of their financial resources without understanding the details is a stupid consumer. I hope we at least end up with smarter consumers after this debacle, that's worth something.
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04-03-2008, 06:12 PM | #19 (permalink) | |
Wehret Den Anfängen!
Location: Ontario, Canada
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I suppose that making it the same scale is easier if it ties in, but the moral hazard is an issue.
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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest. |
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04-03-2008, 10:02 PM | #20 (permalink) | |
Location: Canada
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It's a crappy decision, but made in the right direction for the greater good. It's just like the conundrum where if it was wartime, and you were a refugee hiding in a house. 12 people are hiding with you when soldiers raid the house. You're in a well covered up area that is not easily found, but a baby starts crying. If the soldiers find the people, everyone dies, including the baby. You can't quiet or comfort the baby to any degree. The question is, do you kill the child so that 12 lives are saved? Another twist would be if the child wasn't yours - would you have any easier time taking one life to save many? It's not an easy choice, but in the end - the alternative is that everyone dies, including the child. Sometimes the people in charge have to make the difficult decisions.
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04-11-2008, 05:27 PM | #21 (permalink) | |||
Banned
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Arthurdale, in 1933, seemed a better project for the government, than bailing out Bear Stearns. Lehman, et aL:
http://www.nps.gov/archive/elro/glossary/arthurdale.htm When you attempt to resell loans you have on your books <h3>that investors mostly rejected</h3>, doesn't that mean that there was no bid for them...as in worthless crap? Quote:
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04-12-2008, 03:12 PM | #22 (permalink) | |
Tilted Cat Head
Administrator
Location: Manhattan, NY
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Either way, a that point there is a winner and there is a loser.
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I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. |
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bail, bailout, bear, fed, stearns |
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