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Bailout to be 4 Trillion Now!!

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posted on Oct, 24 2008 @ 12:19 AM
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Everyone is screaming about "increasing credit growth" - including Nouriel Roubini this morning on CNBC. What Nouriel and the rest who are calling for this sort of "tonic" are missing is that you can't increase credit growth into the market until the existing bad debt has been defaulted as the GDP contribution from additional debt load is dangerously close to going negative, and as it approaches zero you get no economic benefit from doing so.

Attempting to issue new credit (debt) into the market at this time is at best of no benefit and at worst counterproductive.

If that ratio goes negative then you are forced to issue new credit (debt) just to cover interest payments, at which point you no longer can get out of the mess without what amounts to a monetary and economic system collapse.

Those in the media who are chuckling at the folks stockpiling beans and rice will be begging for some of that stash if our government doesn't cut this crap out - and soon.

We may be literally days away from a second, far more serious credit and equity market dislocation, this time originating outside the United States.

We cannot prevent this second dislocation from occurring but it is absolutely essential that the government "ring fence" Treasury debt before it occurs.

Government debt must be protected at all costs or we will lose our ability to fund essential services including Social Security and Medicare.

If Congress fails to act (given that Treasury and The Fed have demonstrated they will tie our sovereign debt to the commercial credit markets to the greatest extent possible) and this second dislocation occurs the probability of an economic Depression rises to 80% or more and the odds of the 2003 market lows holding into 2009 and beyond are essentially zero.

As I see no evidence that Congress grasps the serious nature of this threat and has refused to listen to those of us that have gotten this right from the start, including Nouriel Roubini, myself, Anna Schwartz and hundreds of other commentators and economists, you must prepare for this outcome - and remember who's responsible if and when it occurs.




This is excerpt from Karl Denninger's "Fiscal Cat 5 Hurricane Warning". A banker on C2C said it may very well may be $50 trillion or more with the bad derivitives and credit defaults they are about to dump on us.

It's not fear-mongering when they actually have a gun in our face. Stop contributing to the problem-Morgan,Rockefeller,Rothschild banks.

Prepare for what may come and rise up against this tyranny.




posted on Oct, 24 2008 @ 01:31 AM
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Just goes to show you that they are going about this all wrong. All they needed to do was make the underlying debt worth close to full value to not make the derivatives implode. Since most of it is mortgage derivatives causing other derivatives to crash, there is a real simple solution. Drastic, maybe, but not any more drastic then what is going on already.

This is what needs to happen. The goverment needs to take the banks and investment houses out of the primary home mortgage game. To do this they need to form an organization to buy EVERY primary home loan in the USA. All of them. Even force the foriegners to sell. They could get them all for $.90 on the dollar. The banks would then be free of the loans and all the different underlying derivatives would be settled for a very managable amount. They could get them all for $.90 on the dollar or so on average.

So after all the loans have been bought, the goverment then goes to the homeowners and redoes the loan based on current market values, less 10% to restore some equity to the homeowner. Figure that the new loan will be about 70 cents on the dollar on average. The new loan would be at 4% interest. For those who have equity in their homes, then they would just have their outstanding loan reduced to 4% interest.

Right off the bat you are thinking the goverment is losing their asses, but not so fast. A 30 year loan at 4% interest requires repayments of principal and interest of 170% of the original loan. Thus let's take a $100,000 loan. Goverment would buy it for $90,000 or even all $100,000 if thats whats needed. They would reduce it to $70,000, payment would be $377 amonth. Over the life of the loan the homeowner would pay back $120,000 in principal and interest. This would yield a before cost profit to the goverment of $30,000 on this one loan alone.

To sweeten the pot and reduce goverment risk further or even to help start paying off our national debt or to pay back banks for some losses, you could attach some profits on the appreciation of the properties. In the case of the loan above, only allow the homeowner a $10,000 (to enable relocation) profit on any resale up to $110,000. Once the home value exceeds the original loan value + 10% then the homeowner keeps that profit.

All new primary home mortgages also would be handled through this program at a 4% interest rate. Borrowing from the Fed for this program would not make sense unless we could lock in a 1 or 2% long term rate. It wouldmakemore sense to go to a greenback type of currency for this project.

Banks would now be out of the primary mortgage business. They could still do all their other loans including investment property mortgages and the such. It would be the price they would pay for their malfeasance. We need to take the profit out of the financing of primary residences. By taking these loans off their books it would be much easier to instill stricter reserve and leverage rates which is a needed step. Most banks would come through this fine, a few would go belly up. Serves them right.

So basically this adresses almost all the concerns we currently have in the housing market. This plan gets the banks off the hook, lets people stay in their homes at very affordable payments, relieves us of further derivative meltdowns, makes a profit for the goverment over time and also would instantly ressurect the housing market.

Why would people be opposed to such an action? This makes so much sense, Ive posted it over and over, sent it to media and congress repeatedly. Why is noone interested in this typeof plan. It makes pefect sense and the only negative is that it takes away some future bank profits bt stillbails them out in the present.



posted on Oct, 24 2008 @ 01:36 AM
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By the way,I also think that this is what will be going on Jan 21,22. Obama is going to tell the Fed that the US is going to print their own money. Problably only a handful of people would know this if it was true. It must be done in one swift slice of the knife without any knowledge of it escaping before then.

That would be an amazing thing to see. The goverment putting the people before profit.



posted on Oct, 24 2008 @ 01:49 AM
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The way things are looking tonight, Jan 21st will be too late.

Our systemic crash has affected the whole world and at least China just realized..

To Hell with the US Dollar, they are dumping it.

It won't be long now



posted on Oct, 24 2008 @ 03:17 AM
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Get out your check books. The IRS is playing Santa this year and all the days of your lives but all you're getting is raped. It's not just overtaxation you'll have to contend with. You're going to be swamped with homeless, jobless families, communities and all of them with increasing frustration about their utter powerlessness.

This could be taken as a lesson against rampant capitalism. It doesn't work when there's no loyalty to anything except the bottom line. I can't think of a messier situation to be in.

At the end of the day, the *only* thing that's going to save you over there is if you start showing a helluvalotta heart and quickly. As soon as the masses start suffering, you will witness Hell.

And when all the fires die down and you start to rebuild, remember this: Bigger isn't better. Enough is as good as a feast.



posted on Oct, 24 2008 @ 04:26 AM
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My god. Lets just surrender our dollars now. This is a joke. the reason our stock market is goign to go down is because the large market traders arent dumb asses and can see tht the government is panicking.

4 trillion! Why not just sell out country on ebay for F'ingg sakes.

what a night mare.

My recommendations.... Buy silver and gold now while its bing beaten while its down. Or buy thousands of dollars in rice, flour, corn, beans, yeast, and ammo,

Good trade bait soon, or learn how to make your own survival products and sell them in mass to people once this all hits the fan.



posted on Oct, 24 2008 @ 08:33 AM
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do not worry , everything is under control . The idea is to collapse the US$ in order to make room for the Amro - or even possible implement a worldwide currency.
I am myself Romanian - and a few days ago we got an attack from the "outside" the country on our national currency : so it looks like there is an agenda behind all this ..



posted on Oct, 24 2008 @ 08:36 AM
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Nice. And you know, if you took that $4T and divided up to every household in the country (106M) every household would get around $40K. There's economic stimulation for you.



posted on Oct, 24 2008 @ 01:00 PM
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Originally posted by jtma508
Nice. And you know, if you took that $4T and divided up to every household in the country (106M) every household would get around $40K. There's economic stimulation for you.


ya know tho, they're thinking about giving a stimulus. but it will be like 500-700 bucks right? (if we're lucky), so yeppiee I can...ummm.....make an extra car payment, and ummm.... buy an Ipod? from ebay? maybe? lol

what a joke, its like..'lets a appease the masses', 'here throw some of these scraps at them' (whispers - turn up the fluoride to, just to be safe)

In any case..I think its too late, they can't afford what they've already done much less another few 100 billion.



posted on Oct, 24 2008 @ 01:02 PM
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Uh oh, looks like al-qaeda is causing this. Better attack Pakistan, Iran, Georgia, Africa, and Russia.



posted on Oct, 24 2008 @ 02:48 PM
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reply to post by seabisquit
 




Government debt must be protected at all costs or we will lose our ability to fund essential services including Social Security and Medicare.


I have a sneaking suspicion this is near the top of the global corporate fascist elite shadow agenda. Not protecting, but destroying Social Security and Medicare. Going all the way back to the 2000 election, one of the Bush team's primary domestic goals was ending these entitlement programs. They need to hide the massive fraud the federal government has perpetrated against the American people by diverting all the payroll deductions from these programs to their own pockets. They are on the verge of accomplishing that goal. It must not be allowed to happen.



posted on Oct, 24 2008 @ 02:57 PM
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Oh nevermind all that! Americans have other more important things to be concerned with... like, "What is Paris Hilton doing now?" or "Who is going to be booted off of the next America's got talent?" These are the things that matter most, don't ya know?



posted on Oct, 24 2008 @ 07:05 PM
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There is no way the united states will be able to come up with kind of money. The financial system is going to collapse Early next Year!!!



posted on Oct, 25 2008 @ 01:15 AM
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reply to post by Icarus Rising
 


I agree that they have been trying for quite some time to bring the entire US system down for their own benefit.

Catherine Austin Fitts (executive at HUD around 1995-98)was telling us for years they were doing it to us. She specifically warned us that they had successfully pumped and dumped the market for 3-4 Trillion which was sent somewhere overseas in 1998. She now says we are in a planetary pump & dump with no end in site.

China and Russia have been buying up a bunch of gold & silver to get out of the dollar.

The next shoe to drop may be a bank holiday,then hyperinflation like the Weimar Republic. I think the only reason they are thinking of stimulus checks is to be sure Bush will be out of office before SHTF.

[edit on 25-10-2008 by seabisquit]



posted on Oct, 27 2008 @ 12:20 AM
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reply to post by 1011010110
 


Would the dog wagging the tail really surprise you?

Joe Biden, Colin Powell, and G Bush have already warned you.

"This would be easier if it were a dictatorship,and I was the dictator"-G Bush

One word edit in quotes-S

[edit on 27-10-2008 by seabisquit]



posted on Oct, 27 2008 @ 01:31 AM
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the democrats started this with rules they put on banks to get them to loan to the poor and finely the system could not cover all the high risk loans that were failing because the people that got the loans should never have had them in the first place.

the problem is that the government will try to buy up these loans to save these people from defaulting.

what will happen is once many of these people get covered by the government and the banks are able to start making new loans they will take out more loans that they can not afford and want the government to bail them out again.

the democrats are not going to roll back there programs to let the poor buy homes and this plus letting these same poor keep building large credit card debt.

in 5 to 10 years we will have the same problem all over again as the bad credit card debt hits the banks and they start to fail again.

all it will take is a trigger like the high gas prices we had this time started this one.

people want loans and the banks make the loans.
when the payment on the loans and homes reach the level that the people can not pay the monthly loan payments and buy food and gas to get to work like what happened this time the house of card will collapse again.

i saw this years ago and have no credit card or debt and live in a house that has never had a mortgage. i built the house with money i had in the bank and never had a loan.

it took me two years to build the house by hand and when i sell it i will make the cost of building it and the cost of the labor as pure profit.

that is my retirement.
and by doing that i will make more in interest then if my money had been in a bank.



posted on Oct, 27 2008 @ 01:59 AM
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reply to post by seabisquit
 


Like it is a bad thing? There is oversight, after everyone pouted there not be any, so...no worries, eh. Relax. They are working in the best interests tonight or for the world or america or whatever.





posted on Oct, 27 2008 @ 04:27 AM
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reply to post by seabisquit
 



your correct... the $4Trillion has been to unfreeze the banks & lending institutions Credit Creation Machinery... instead of the actual culprit which is the 'Mortgages' themselves.


a mere pittance...$200Bn has beenthrown at Fannie/Freddie,
and trying to lure mortgage paper into that relief system... where the loan could be refinanced, re-assessed, restructured. etc

but that's not what's being addressed by the Fed/Treasury,
they are busy being preoccupied with the 20 or so 'primary dealer' banks...
now reduced to 9 banks worthy of consolidation under the Fed/Treasury 'central bank' system....

what the Fed/Treasury has to do to 'save' some sembelance of a 'system' is to acknowledge that all those ponzi-paper 'bets', disguised as legal bonds & MortgageRelatedSecurities...and accept the Issurers 'Price' on all these +100s of Trillion$ of CDS, CDOs, etc etc.


When, in actuality, none of these inter-bank insurance bets are/were
recognized, regulated, and redeemable, legal debt paper...

all these debt swaps and credit swaps... were most like 'poker chips' at a members only poker game... with each bank raising and counter-raising one another... & using the potential winning 'pot' as the collateral to get more poker chips from the house...to keep the pot growing (its something like $523Trillion large, est)


the Fed/Treasury, is still convincing the public that there is a legal debt out there which needs to be paid...~wrong~
I ask, when does the creation of bogus, debt paper, which has no backing or collateral from the issuing party become an asset? Only when some party recognizes that the debt paper is credible and worthwhile...as the Fed/Treasury is currently doing.

I suggest that credit swaps, debt/interest swaps, counter-party bets, are all worthless intra bank 'tokins'...only duly recorded. legal mortgages on actual physical property, are tangible assets that can be transferred and negotiable...

the multi-Trillion hedging with surreal debt instruments, by the movers-shakers in the finance industry, are in reality...their equivelent to poker chips.
They had their fun amongst themselves.. they all should go back home, with their own losses.
Ripping off the taxpaying public is a criminal act...
but only trying to... is a mere 'conspiracy'



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