Now Wall Street May Shun $700bn Bail-Out, page 1
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Topic started on 6-10-2008 @ 05:56 PM by Keyhole

Now Wall Street May Shun $700bn Bail-Out


www.guardian.co.uk
The bill was passed on Friday afternoon, however, after the inclusion of $149bn of tax breaks and strict rules for participating banks.

But Wall Street analysts, believe the addition of so many terms to the bill might deter potential participants.

One of the least attractive elements is a section designed to curb executive pay at banks that participate in the bail-out package. These include limiting stock-related pay and banning 'golden parachutes' for executives.

'I think this hodge-podge of
(visit the link for the full news article)


reply posted on 6-10-2008 @ 05:58 PM by Keyhole
Here's a quote from the article!

Now Wall Street may shun $700bn bail-out

'I think this hodge-podge of regulations and rules will be enough to put many [chief executives] off participating,' Caldwell said.

Sources close to Goldman Sachs and Merrill Lynch indicated the banks might choose not to participate in the bail-out as there is a growing view on Wall Street that the market may be bottoming out.

Analysts also believe that the mere presence of the government as buyer of last resort will be enough to get credit markets moving again, and that a large number of banks would not need to take part for the legislation to succeed.



Well, Ive got my fingers crossed!



reply posted on 6-10-2008 @ 06:11 PM by Rockpuck
reply to post by Keyhole


WOW.. the arrogance..

I say we take our money back damnit, their stocks are going to hell anyways. Good riddance.


reply posted on 6-10-2008 @ 07:02 PM by RealityisanIllusion
reply to post by Keyhole


I think it might be a good thing that these CEOs have decided maybe they want to handle this on their own so they won't lose any money from their cushy paychecks. That may have been the intention of the Legislative and Executive Branches when the bill was drafted and passed. However, just because the money doesn't get used for the purpose it was intended, doesn't mean that it will go back into the coffers. The money has been appropriated. If it isn't spent bailing out these corporations, it will get spent on bonuses for the members manning the board that were supposed to handle the distribution and regulation of the bailout. When you think of it that way, how likely is it that the developers of this plan were actually thinking about us? I think I might enjoy a $7M bonus right now. Then I could pay my power bill tomorrow. Hey, I might even be able to put gas in my truck.

Edit: To help make sense. Made a grammatical error.

[edit on 6-10-2008 by RealityisanIllusion]

[edit on 6-10-2008 by RealityisanIllusion]



reply posted on 7-10-2008 @ 01:32 AM by burdman30ott6
This isn't great or even good news. Regardless of whether the banks "take the cheese" or not, the traps have already been baited and the precident has been set. Please don't anyone kid themselves into thinking the federal government is going to rip up the IOU to themselves they forged our names on. The $850 Bil will almost certainly be used and then some, any surplus caused by banks refusing to particpate will merely be siphoned off to other outlets the feds can waste the money on. The banks may be the rats the money was originally intended to catch, but the feds will eventually attract some new rodents from some other sector of business who are willing to become nationalized entities in exchange for the money stolen from us.

Face it, the feds have become the Homeboy Shopping Network from "In Living Color." They have a truck loaded with all the money stolen from We the People and they'll just drive around, ocassionally opening the back of the truck up to exchange that stolen money for contractual agreement to become a nationalized corporation. When they hear the sirens (AKA when we start to get wise to what they're doing) they'll close the truck back up, drive a few blocks over, and open themselves back up for some other group of businesses. The fact that the banks are saying "no" right now is probably because the sirens are currently blarring and the American people are eyeballing those golden parachutes. The next time the truck comes into the banking neighborhoods, it will be in the dead of night with no sirens and that golden parachute provision will have magically disappeared or a work around will have been negotiated, and suddenly these banks will happily accept the payout to become nationalized.


reply posted on 7-10-2008 @ 03:03 AM by Rufuz
reply to post by Keyhole


WEll from the information i could get yesterday when the pakage was in full effect was even more downturn, and today dowjones is down again yet another 3%, but in the EU the makets are upp, but still the pakage could not help. atleast oslo and Copenhagen so far today, but i have suspicions to this packed, i mean what we should look on is who is buying upp everyone, i have a strong suspicion that its Rockefeller etc. behind that but, thats just my personal assumption.


reply posted on 7-10-2008 @ 01:07 PM by burdman30ott6
reply to post by Keyhole


I believe it is because once the house has been foreclosed on and sold at auction, even for pennies on the dollar, it leaves the banks' books and is no longer considered a liabillity to them. If they accept lower monthly payments instead, it remains on the books, is considered a high risk liabillity, and suddenly their stock is percieved to be less attractive plus, in the current market, the banks with alot of risky debt holdings on their books are viewed as extremely risky debt themselves and cannot get bank to bank loans to maintain liquidity.

It makes no sense to those of us dealing with a paltry 4 figure monthly budget, but in the world of big business and billion dollar dealings, it benefits the bank more to take a massive one time loss and make the bad debt holding disappear than to break even on the individual debt, but in the process have it hanging on your books like a tiny sword of Damocles.

EDIT: It also bears mentioning that it wouldn't even be possible for us to do something like this even if it did make sense on a personal finance level. Most of these banks have sold debt to other banks, meaning that when they foreclose and take a fraction of the ultimate payout for the property they then turn around and pay that amount to whichever bank they sold the bad debt to (depending, obviously on whether the original contract between the banks was "at risk" or insured). In effect, they claim a form of bankruptcy on that individual debt alone, rather than on all their debt holdings. But then, like magic, *poof* it goes away. Once it has been written off their books it no longer can be used as a measuring stick of that institution's risky holdings. Very, very different from personal debt write offs in which your debts, even after being forgiven by bankruptcy, stay on your "books" (credit report) for at least 7, in many cases 10, years after you've written them off. We are fully and completely held accountable for our personal finances and blunders, especially blunders. The corporate world is not held to the same standard. Lenders in the corporate world don't care how many poor decisions and losses a potential corporate debtor has had in the past, they only care about how many of them currently sit on their books.

[edit on 7-10-2008 by burdman30ott6]
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