Bailout & Elections - Tilted Forum Project Discussion Community

Impetuous1 · 10-06-2008, 05:49 AM

Now that all the hurrah is over, I'm just curious on how many were for or against the $700 billion bailout and if you'll let that affect how you will be voting.

I must admit I'm not very knowledgeable about politics, but the bailout has really gotten under my skin. I understand that we're in hard economic times. However, this bailout doesn't seem to be a comprehensive solution and further increases the burden on the taxpayers of America. Why we couldn't just let individual private banks fail is beyond me. I don't understand why there wasn't some sort of commission set up to actually help those individuals who are in foreclosure to assist them. It would have definitely been a much easier pill to swallow had that been the case.

So in my situation, I've taken a look at who voted for the bill and will most likely be voting against them, depending on other circumstances as well.

Here's a link if you're interested.

As for pres, I'm still debating what to do on that.

dksuddeth · 10-06-2008, 06:46 AM

I'm very much against this bailout as the ONLY thing it's guaranteeing is the mortgage and credit companies get to keep their jobs and money. All the trickle down effects will not reach those of us who were smart enough to not get in to a home loan we couldn't afford and the only thing it guarantees me is I get to pay for those peoples ill judgement. My congressman voted no, so i'm still voting for him. My two state senators (cornyn and hutchison) both voted yes and its my guess that cornyn is going to lose his job this election and hutchison may as well give up her intended governers run in 2010.

Rekna · 10-06-2008, 07:44 AM

I'm not a big fan of it myself. We have a major problem and we need a solution to this problem. However, i'm not convinced this bailout is the solution. I liked the first bailout much better. With that been said I'd rather have seen a bailout that was focused on the bottom instead of the top. Something along the lines of letting people apply for mortgage relief. Approved people would then get their mortgage subsidized but would have to pay back the subsidy in the future. Obviously the government wouldn't get back everything they dolled out but would at least get back a lot of it. Also most of the people who are facing foreclosure would be able to avoid it and the banks would get relief on their bad debt in a "tickle up" economics system.

shakran · 10-06-2008, 07:51 AM

I too am opposed to it. I'm rather surprised the anti-socialism republicans voted to socialize banks in times of loss.

What it tells me is . . .well several things really:

1) it's ok for 50 million people to suffer gross economic destruction, or die, due to lack of healthcare, but it's not OK for wall street companies that made bad investments (and that are under the law, single people) to suffer ill effects as a result of their poor decision making driven by greed.

2) Socialism is bad, unless rich people might have to save a few months before buying that Lamborghini.

3) Private profits are A-OK, even if they come at the expense of the common man living on main street, but any losses must be rendered public, also at the expense of the common man living on main street.

jewels · 10-06-2008, 07:58 AM

Who's actually read it? I don't trust the spin out there. Can anyone get through all this quickly? I can read a novel in a few hours, but legalese takes a whole other level of focus.

Read full text of Senate bailout bill - CNNMoney.com

roachboy · 10-06-2008, 08:08 AM

high_jinx · 10-06-2008, 11:16 AM

700 BILLION DOLLARS.

if you split that up and evenly gave 1 share to every taxpaying voting american, it would be about 400, 000 $, it would be taxed so the govt would get a large portion of it back right away, and it would completely pay off the mortgage of 99% of the people in danger of foreclosure right now.

instead we're giving it to a few juggernaut companies.

doesn't make a lick of sense to me.

Rekna · 10-06-2008, 08:49 PM

Your math is off: 400 000 000 000 / 301 139 947 = 1 328.28608

shakran · 10-07-2008, 10:32 AM

HJ's math is fine. 301139947 is the total population of the US. Kids do not pay taxes and therefore would not receive any money under HJ's plan.

smooth · 10-07-2008, 10:45 AM

the whole mess pisses me off

ideologically, I don't believe that pumping money into the upper echelons of business will do much or anything at all for those who are actually struggling to pay their mortgages

economically, I realize that sitting back and watching our fundamental banking structures fail would be academically interesting but not much more

personally, I'm feeling duped in that I wish my wife and I had scraped every dollar we had and put a down payment on a home we weren't sure we could have made the payments on

basically I feel like the only people who are absolutely not receiving any direct benefit are those of us who made wise financial choices

dksuddeth · 10-07-2008, 11:29 AM

Quote:

Originally Posted by smooth

basically I feel like the only people who are absolutely not receiving any direct benefit are those of us who made wise financial choices

+1,000

right there with you smooth. I purposefully avoided the whole low money down get a home you can't afford after the housing market busts period so that I wouldn't be faced with foreclosure and it seems that because of that supposedly wise choice, I get to help pay for those that didn't think things through.

ASU2003 · 10-07-2008, 03:02 PM

I think we should have let all the banks fail. But then, the management of the former banks, would just start new banks and we would be in the same boat.

Quote:

Originally Posted by smooth

basically I feel like the only people who are absolutely not receiving any direct benefit are those of us who made wise financial choices

I really hope this question gets asked tonight at the debates, and I'm pretty sure it will.

aceventura3 · 10-09-2008, 10:07 AM

To me the "bail out" is Washington at its worst. First everyone is against it, but felt they had to vote for it (sounds like the Iraq war vote and the Patriot act vote) People had been talking seriously about Fannie and Freddie since as early as 2003, there was absolutely no need to rush legislation.

Second, consider the source of the bail out plan. He is an investment banker from Goldman Sachs. Is it a surprise that his solution involves bailing out bad decisions made by investment bankers? Is it a surprise that Congress thinks the solution has to come from government? What would be wrong with letting institutions that made bad decision fail? Nothing. there are some institution who did not make bad decisions (like Wells Fargo, Bank of America, Berkshire Hathaway) or companies who recognized the problem early and took steps to mitigate the damage (Citi Bank) these companies are in a position to take advantage of the failings of the others and end up stronger.

Third, they could not even pass the legislation in a pure form, they needed to load it with "pork".

shakran · 10-09-2008, 02:17 PM

well, the argument, ace, is that the institutions that made bad decisions have a lot of people's money wrapped up in them. If they fail, what happens to the innocents who didn't know what these idiots were doing with their money because the idiots wouldn't tell them?

aceventura3 · 10-10-2008, 01:20 PM

Quote:

Originally Posted by shakran

well, the argument, ace, is that the institutions that made bad decisions have a lot of people's money wrapped up in them. If they fail, what happens to the innocents who didn't know what these idiots were doing with their money because the idiots wouldn't tell them?

Innocents???

Greedy perhaps. When I lived in California and the towel guy at my gym started talking about flipping houses, I should have sold everything that day.

People should not invest in things they don't understand. People who invested in companies like AIG and never read the 10K or 10Q reports pretty much paid the price for blindly gambling with their money. Equity investing comes with the understanding that one could loose everything.

smooth · 10-10-2008, 04:46 PM

a lot of people, as in 401K plans and Roth IRAs. not innocent as in people who were flipping houses they couldn't afford.
if you can think of a way to punish the people who were abusing the system without punishing the people who were storing portions of their paychecks in sound investments for retirement and leaving the decisions of where the safest places to do so up to their banks and portfolio managers, then I'd be interested to hear about it.

aceventura3 · 10-11-2008, 02:15 PM

Quote:

Originally Posted by smooth

a lot of people, as in 401K plans and Roth IRAs. not innocent as in people who were flipping houses they couldn't afford.

I never heard of a 401(k) plan that did not offer fixed investment options or a simple money market choice. The botom line is that the closer a person is to retirement the more conservative they need to be, this advise is every where. If you ignore it you do it at your own risk.

Those who have the benefit of time, will do o.k.. First, there has never been a rolling 10 year period where the market lost money. Second, those making contributions are lowering their cost basis in today's market, its like being able to buy and stock (pardon the pun) up when things are on sale.

For example if you invest $1,000 per month and the prices for a fund are like:

Jan- $100
Feb - $150
Mar-$200
APR -$250
etc.
etc.
Dec - $650

at the end of the year you have 43.6 shares at a cost basis of $275.21 per share.

If the pattern was:

Jan - 100
Feb - 50
Mar - 25
APR - 250
etc.
etc.
Dec - 650

at the end of the year you have 91.94 shares at a cost basis of $130.53.

I know this is simplistic but if you go back historically using the S&P 500 (Spiders, symbol SPY) you can plug in some very realistic historic results. Bottom line is consistent investors with time have an advantage and prefer periodic corrections.

P.S. - Don't make fun of me, I like numbers. I already know I am weird, etc,etc,etc.

dksuddeth · 10-17-2008, 10:12 AM

Banks admit bailout will not work

Quote:

So much for that story. A few days ago, when Hank Paulson called the heads of the nine families to Washington and shoved cash down their throats, he announced that the banks would use this new taxpayer cash to lend. They won't, of course. They'll hoard it like a starving family who has just been given a grocery cart full of food.

And after a few days of silence, even the banks are finally admitting that. So it's back to the drawing board for Paulson & Co.

Next steps? Find a way to force the banks to write their assets down to nuclear winter levels, so 1) private investors don't have to worry about getting sandbagged and therefore invest more in the banks, and 2) the banks know they won't be forced to take more multi-billion dollar losses. Only then will the banks begin to lend again. And at that point, the only challenge will be finding people and companies to lend to, in an economy headed straight into the tank.)

NYT: , John Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view.

“We will have the opportunity to redeploy that,” Mr. Thain said of the new capital on a telephone call with analysts. “But at least for the next quarter, it’s just going to be a cushion."...

“I don’t think that the market wants to see that capital being put to work to leverage the business up again,” said Roger Freeman, an analyst at Barclays Capital, which acquired parts of the now-bankrupt Lehman Brothers last month. “My expectation is it’s quarters off, not months off, before you see that capital being put to work.”...

Jamie Dimon, the chairman and chief executive of JPMorgan, said his bank was in a stronger position to use the money than some of its competitors.

“It’s clear that the government would like us to use the capital,” Mr. Dimon said on a conference call with analysts on Wednesday. “If you are a bank that is filling a hole, you obviously can’t do that.”

Who is "a bank that is filling a hole"? Seven of the nine that just got taxpayer money.

Ok, so now that our elected representatives did NOT listen to the american people and gave over 700 billion of OUR money to banks, supposedly to kickstart the credit economy again, and the banks (flush with all that capital) are going to refuse to lend out that money until their economic outlooks appear better, how many people will still remain partisan and vote for their favored party candidate?

Yakk · 10-17-2008, 01:00 PM

400,000$ is way way way off.

Note that if banks fail, that means they aren't marking down their debts. Someone _has_ to mark down bad debts, or the currency system collapses. As a last resort, it is the US government -- or we all take the hit via inflation.

The theory is it is cheaper to bail out the banks than it would be to deal with all of those bad debts.

Of course, the problem _in the first place_ was the banks getting tied up into a situation of being upside down on equity.

Quote:

First, there has never been a rolling 10 year period where the market lost money.

At 100$ per month, at 3% increase in contributions per year, what would be the value of a rolling contribution to the markets right now. Say, indexed on the Dow, with a mere 0.5% friction cost.

You can also do NASDAQ if you like.

And to clarify, do you mean nominal value, or real (factoring in CPA) value? Because if you mean nominal value, over much of the last 50 years you could be losing 5% value per year and still have more nominal dollars at the end...

Derwood · 10-17-2008, 01:58 PM

My math has it more like $5300/taxpayer (based on the # of individual returns filed in 2003)

smooth · 10-17-2008, 02:21 PM

It seems that if things continue like they have for another year, then we will have that rolling 10 year period of losses...unless I misunderstand the claim.

I was under the impression that 2000-01 was hit pretty hard and now we're almost to 2010-11 and I don't see the market as being higher than it was 10 years ago. If it so much as broke even with what it was 2000 then I'd even accept that as marginally better than what it looks like it might actually be come the new year.

mixedsubstance · 10-18-2008, 05:41 PM

I think it was a desperate and quick move that wasn't thoroughly thought through. I don't think it's really going to help out much and be a 'trickle down' effect. And even if it was, it would take the economy as a whole to recover, and that's just too long. I, amongst many others, have been laid off, but I have come to the point in my life where I am not going to keeping trying to find another unsatisfying 9-5 desk job just to have money, because there is NEVER such a thing as Job Security anymore. So, back to school I go, and I am finding means to make money (Unemployment or even working at home).

10-06-2008, 05:49 AM	#1 (permalink)
Impetuous1 Insane Location: Arizona	Bailout & Elections Now that all the hurrah is over, I'm just curious on how many were for or against the $700 billion bailout and if you'll let that affect how you will be voting. I must admit I'm not very knowledgeable about politics, but the bailout has really gotten under my skin. I understand that we're in hard economic times. However, this bailout doesn't seem to be a comprehensive solution and further increases the burden on the taxpayers of America. Why we couldn't just let individual private banks fail is beyond me. I don't understand why there wasn't some sort of commission set up to actually help those individuals who are in foreclosure to assist them. It would have definitely been a much easier pill to swallow had that been the case. So in my situation, I've taken a look at who voted for the bill and will most likely be voting against them, depending on other circumstances as well. Here's a link if you're interested. As for pres, I'm still debating what to do on that. Last edited by Impetuous1; 10-06-2008 at 06:05 AM..

10-06-2008, 06:46 AM	#2 (permalink)
dksuddeth Junkie Location: bedford, tx	I'm very much against this bailout as the ONLY thing it's guaranteeing is the mortgage and credit companies get to keep their jobs and money. All the trickle down effects will not reach those of us who were smart enough to not get in to a home loan we couldn't afford and the only thing it guarantees me is I get to pay for those peoples ill judgement. My congressman voted no, so i'm still voting for him. My two state senators (cornyn and hutchison) both voted yes and its my guess that cornyn is going to lose his job this election and hutchison may as well give up her intended governers run in 2010. __________________ "no amount of force can control a free man, a man whose mind is free. No, not the rack, not fission bombs, not anything. You cannot conquer a free man; the most you can do is kill him."

10-06-2008, 07:58 AM	#5 (permalink)
jewels Eponymous Location: Central Central Florida	Who's actually read it? I don't trust the spin out there. Can anyone get through all this quickly? I can read a novel in a few hours, but legalese takes a whole other level of focus. Read full text of Senate bailout bill - CNNMoney.com __________________ We are always more anxious to be distinguished for a talent which we do not possess, than to be praised for the fifteen which we do possess. Mark Twain

10-06-2008, 08:08 AM	#6 (permalink)
roachboy Super Moderator Location: essex ma	__________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

10-06-2008, 11:16 AM	#7 (permalink)
high_jinx Psycho Location: venice beach, ca	700 BILLION DOLLARS. if you split that up and evenly gave 1 share to every taxpaying voting american, it would be about 400, 000 $, it would be taxed so the govt would get a large portion of it back right away, and it would completely pay off the mortgage of 99% of the people in danger of foreclosure right now. instead we're giving it to a few juggernaut companies. doesn't make a lick of sense to me. __________________ -my phobia drowned while i was gettin down.

10-06-2008, 07:44 AM	#3 (permalink)
Rekna Junkie	I'm not a big fan of it myself. We have a major problem and we need a solution to this problem. However, i'm not convinced this bailout is the solution. I liked the first bailout much better. With that been said I'd rather have seen a bailout that was focused on the bottom instead of the top. Something along the lines of letting people apply for mortgage relief. Approved people would then get their mortgage subsidized but would have to pay back the subsidy in the future. Obviously the government wouldn't get back everything they dolled out but would at least get back a lot of it. Also most of the people who are facing foreclosure would be able to avoid it and the banks would get relief on their bad debt in a "tickle up" economics system.

10-06-2008, 07:51 AM	#4 (permalink)
shakran Tone.	I too am opposed to it. I'm rather surprised the anti-socialism republicans voted to socialize banks in times of loss. What it tells me is . . .well several things really: 1) it's ok for 50 million people to suffer gross economic destruction, or die, due to lack of healthcare, but it's not OK for wall street companies that made bad investments (and that are under the law, single people) to suffer ill effects as a result of their poor decision making driven by greed. 2) Socialism is bad, unless rich people might have to save a few months before buying that Lamborghini. 3) Private profits are A-OK, even if they come at the expense of the common man living on main street, but any losses must be rendered public, also at the expense of the common man living on main street.

10-06-2008, 08:49 PM	#8 (permalink)
Rekna Junkie	Your math is off: 400 000 000 000 / 301 139 947 = 1 328.28608

10-07-2008, 10:32 AM	#9 (permalink)
shakran Tone.	HJ's math is fine. 301139947 is the total population of the US. Kids do not pay taxes and therefore would not receive any money under HJ's plan.

10-07-2008, 10:45 AM	#10 (permalink)
smooth Junkie Location: Right here	the whole mess pisses me off ideologically, I don't believe that pumping money into the upper echelons of business will do much or anything at all for those who are actually struggling to pay their mortgages economically, I realize that sitting back and watching our fundamental banking structures fail would be academically interesting but not much more personally, I'm feeling duped in that I wish my wife and I had scraped every dollar we had and put a down payment on a home we weren't sure we could have made the payments on basically I feel like the only people who are absolutely not receiving any direct benefit are those of us who made wise financial choices __________________ "The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

10-09-2008, 10:07 AM	#13 (permalink)
aceventura3 Junkie Location: Ventura County	To me the "bail out" is Washington at its worst. First everyone is against it, but felt they had to vote for it (sounds like the Iraq war vote and the Patriot act vote) People had been talking seriously about Fannie and Freddie since as early as 2003, there was absolutely no need to rush legislation. Second, consider the source of the bail out plan. He is an investment banker from Goldman Sachs. Is it a surprise that his solution involves bailing out bad decisions made by investment bankers? Is it a surprise that Congress thinks the solution has to come from government? What would be wrong with letting institutions that made bad decision fail? Nothing. there are some institution who did not make bad decisions (like Wells Fargo, Bank of America, Berkshire Hathaway) or companies who recognized the problem early and took steps to mitigate the damage (Citi Bank) these companies are in a position to take advantage of the failings of the others and end up stronger. Third, they could not even pass the legislation in a pure form, they needed to load it with "pork". __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

10-09-2008, 02:17 PM	#14 (permalink)
shakran Tone.	well, the argument, ace, is that the institutions that made bad decisions have a lot of people's money wrapped up in them. If they fail, what happens to the innocents who didn't know what these idiots were doing with their money because the idiots wouldn't tell them?

10-10-2008, 04:46 PM	#16 (permalink)
smooth Junkie Location: Right here	a lot of people, as in 401K plans and Roth IRAs. not innocent as in people who were flipping houses they couldn't afford. if you can think of a way to punish the people who were abusing the system without punishing the people who were storing portions of their paychecks in sound investments for retirement and leaving the decisions of where the safest places to do so up to their banks and portfolio managers, then I'd be interested to hear about it. __________________ "The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

10-17-2008, 01:58 PM	#20 (permalink)
Derwood Who You Crappin? Location: Everywhere and Nowhere	My math has it more like $5300/taxpayer (based on the # of individual returns filed in 2003)

10-17-2008, 02:21 PM	#21 (permalink)
smooth Junkie Location: Right here	It seems that if things continue like they have for another year, then we will have that rolling 10 year period of losses...unless I misunderstand the claim. I was under the impression that 2000-01 was hit pretty hard and now we're almost to 2010-11 and I don't see the market as being higher than it was 10 years ago. If it so much as broke even with what it was 2000 then I'd even accept that as marginally better than what it looks like it might actually be come the new year. __________________ "The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

10-18-2008, 05:41 PM	#22 (permalink)
mixedsubstance Crazy Location: Where the wild things are.	I think it was a desperate and quick move that wasn't thoroughly thought through. I don't think it's really going to help out much and be a 'trickle down' effect. And even if it was, it would take the economy as a whole to recover, and that's just too long. I, amongst many others, have been laid off, but I have come to the point in my life where I am not going to keeping trying to find another unsatisfying 9-5 desk job just to have money, because there is NEVER such a thing as Job Security anymore. So, back to school I go, and I am finding means to make money (Unemployment or even working at home). __________________ Well, isn't that just kick-you-in-the-crotch, spit-on-your-neck fantastic?!? Without energy, there would be nothing.