The bailout is a windfall for the USA

per the Wall Street Journal.

No offense intended but 95% of you posting about this really have no idea what you are talking about. You can read headlines and nothing else. Please try to put your heads around what is in this article.

Bailout a Windfall

Bottom line is the banks will be giving up a huge amount of future profits in exchange for being "saved".

No offense intended, but do you have an opinion, or are you in fact merely parroting what you read in the Journal?

post by disgustedbyhumanity "Bottom line is the banks will be giving up a huge amount of future profits in exchange for being "saved".

Well, I didn't know that it was such a lucrative venture for taxpayers to take on risky and overinflated assets from companies that made unsound investment decisions. Maybe our government can go around the world and buy up all the bad loans and assets in existence, thus this will also be a windfall for us too.




[edit on 26-9-2008 by Gateway]

reply to post by disgustedbyhumanity


you come in here and try to insult most of us that have been following this for more than a day and think your smarter than us.

All you did is find one person that says this couldbe a windfall for the US.

What your not realizing is we have to get from A to B to see any return on buying these toxic assets. in the meantime more banks will fail even with the 700Billion bailout that looks like will not becoming for atleast another week now.

I have an idea instead of parroting an article, read it and understand it yourself before you try to insult anyone

from your source

Taxpayers will get their money back on AIG. My models suggest that Fannie and Freddie, on the other hand, are a gold mine. For $2 billion in cash up front and some $200 billion in loan guarantees so far, the U.S. government now controls $5.4 trillion in mortgages and mortgage guarantees.

what exactly are the variables he used for his model. and from reading the whole article he is banking on the 700billion bailout plan passing with Mr. PAulson having the complete say on how the money is spent. Sorry that won't happen congress is not going to hand him a blank check


looks like your the one that can only read headlines their my friend did you even read the whole article?
[edit on 9/26/2008 by Mercenary2007]

[edit on 9/26/2008 by Mercenary2007]

reply to post by Gateway


It is always profitable to be the vulture investor. That is the role the treasury will be taking. The prices they pay for these assets will make them virtually risk free. These are real homes represented by these assets. Probably the homes of some of your neighbors. I know that my house is down 30% from the top. I live in south florida, one of the worst hit areas. If someone were to buy the loan for 50 cents on the dollar they would be doing pretty well, not that my loan is in question.

Sorry repeat with no reply


[edit on 26-9-2008 by disgustedbyhumanity]

Originally posted by Mercenary2007
reply to post by disgustedbyhumanity

 

you come in here and try to insult most of us that have been following this for more than a day and think your smarter than us.

All you did is find one person that says this couldbe a windfall for the US.

What your not realizing is we have to get from A to B to see any return on buying these toxic assets. in the meantime more banks will fail even with the 700Billion bailout that looks like will not becoming for atleast another week now.

I have an idea instead of parroting an article, read it and understand it yourself before you try to insult anyone

from your source

Taxpayers will get their money back on AIG. My models suggest that Fannie and Freddie, on the other hand, are a gold mine. For $2 billion in cash up front and some $200 billion in loan guarantees so far, the U.S. government now controls $5.4 trillion in mortgages and mortgage guarantees.

what exactly are the variables he used for his model. and from reading the whole article he is banking on the 700billion bailout plan passing with Mr. PAulson having the complete say on how the money is spent. Sorry that won't happen congress is not going to hand him a blank check


looks like your the one that can only read headlines their my friend

did you even read the whole article?
[edit on 9/26/2008 by Mercenary2007]

[edit on 9/26/2008 by Mercenary2007]

reply to post by disgustedbyhumanity


The fact is it's not how much the banks are willing to "not gain".It's the fact the everyone must be accountable for their actions.Big time wheeler dealer wall street tycoons included.
Boo Hoo I spent all my illgotten gains on a summer home in France,would someone please help me pay for my second Rolls. I have real sympathy for the banking bozo's.

Gimmee a break. It has been days since anyone has proposed that Paulson gets complete control with no oversight. Even he say that was not what he intended. You are getting all riled about headlines again.

As for the article's conclusions, it doesn't take a genius to realize that if you buy something for 50 cents that can be sold for 70 cents, you are going to make a bunch of money. If you collect double that amount in interest ove rthe eyars you amke evenmore. If your actions restore the market so that folks will now pay 80 cents, you do even better.

I think it's riskless and have been saying that since the debate on this site began. Ialso think instead of the windfall going to the goverment they should redo the loans to keep folks in their houses. There are plenty of houses on the market already for the vulture investors to pick up. We don't need any more which is exactly what we will have if this bailout doesn't occur. Don't cut off your arm to save your hand.

No bailout will effect you more negatively than you believe. If it doesn't hapopen then let'smee t back ina year and compare notes. Good night.

reply to post by disgustedbyhumanity


I'm sticking with, engineered financial collapse to bring about a new financial order, and a new world order. Goodbye greenback, hello Amero!

The world is a stage.

Originally posted by disgustedbyhumanity
reply to post by Gateway

 

It is always profitable to be the vulture investor.

If you believe that then why not let the market price these assets? The FED is buying these assets pre-market-discounted price, and then going to resell it. If this is junk to begin with, what makes you think when they sell it back into the market it will be bid up?

That is the role the treasury will be taking. The prices they pay for these assets will make them virtually risk free.

No, it's only risk free, to the investment banks the dump these worthless assets on to the taxpayers. Here the taxpayer is taking on RISK, that the market deems TOO RISKY.

These are real homes represented by these assets.

Yes, real assets. But overvalued assets. Don't believe me, take a look around at what's happening in the housing sector. Are homes going up in value or going down?

They are going down, and they will continue to go down because they are overinflated. Prices of these homes were bid-up, and did not reflect the what their intrinsic value is, that is why they have to come down in value. When they come down in value, as it is currently happening and is going to happen in the near future, guess who will be stuck holding the bag?

Probably the homes of some of your neighbors. I know that my house is down 30% from the top. I live in south florida, one of the worst hit areas. If someone were to buy the loan for 50 cents on the dollar they would be doing pretty well, not that my loan is in question.

Yes, but here you are assuming that those prices for the assets will continue to rise. Which I don't think is the case. The reason why houses will continue to decline in value are:

1) The lowered interest rates back in 2002 created a bubble in construction.

2) This massive over construction in the housing sector led to an OVER SUPPLY of homes.

3) The continued foreclosures rates will add more pressure on both existing value of homes and those that are STILL being under construction (of course not too many new homes are created now, but plans to build homes that are currently under construction were drawn up years ago, and just now seeing fruition.)

4) Tighter lending standards have been implemented by banks on mortgages will also put pressure downward as more people find it difficult to purchase a home.

5) Finally, looming inflation, will put pressure on the FED to raise interest rates, this will also curb lending. As interest rates go up, the price of assets go down. Inverse relationship.

[edit on 26-9-2008 by Gateway]

reply to post by disgustedbyhumanity


buy at .40 cents on the dollar and sell for .70 cents on the dollar yeah right do you really believe that?

My friend you are delusional.

More like Paulson will buy them at .60-.80 cents on the dollar and sell them for .40 cents on the dollar. Paulson is the former CEO of Goldman Sachs do you really think he is going to sell them to Banks for a profit to the U.S.? NO he is going to sell them so the bankers Benefit . Again these greedy S.O.B.s get rewarded for their bad deeds.

Like i said the author of the article is banking on Mr. Paulson getting his bail out plan passed as he wrote it with no congressional oversight, no judicial review. He has complete say all deals are final.

The only people i see benefiting from this are the ones that created this mess. they get their books cleaned and a nice bailout bonus so they can start over.

The reason wall street needs this bailout is because their is no market to sell these assets on at the price they want. the old market has said the prices are to high and they must come down. Now the bankers want to set a price (price fix) of the assets. They can't do that. they have to wait until the market sets the price and the terms for the assets but that can't happen until there is a market for them if their ever will be.

If the bailout plan is passed the taxpayers will be straddled with worthless assets that have no real value and are taking all the risks and get none of the profit

Something stinks but i'm not sure if its the bankers or people that think like you do or both

reply to post by disgustedbyhumanity


Well, Bush's ethos is stellar (Dick Cheney hiding in bushes), yes. His logos is a wee-bit shaky, with that whole aggression thing, very anti-social. And his pathos, well, the wolf is always at the door.

So, yes, I agree, his plan must be in the best interests of the nation.

another thing no one has taken into consideration is a run on banks that will start friday when the news hits the MSM that WAMU collapsed. the largest bank failure in U.S. History.

Think people are going to leave their greenbacks in a bank after they learn that news. Hell no there's going to be a run on banks. A run of 16.9 billion just killed WAMU

Let me ask you this.

If your comany was defunked, would you let your company be assumed by the govt. for cash up front? Or would you rather walk away with nothing. There are no future profits. There is a paper trail and a while lot of nothing. how can you buy nothing at a discount and sell it at a profit?

You can't.