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Tracking the $700 Billion Bailout

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posted on Feb, 1 2009 @ 01:33 PM
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Tracking the $700 Billion Bailout


projects.nytimes.com

Hundreds of banks and a handful of insurers and automakers have applied for funds from the Treasury Department as part of the $700 billion Troubled Asset Relief Program. The Treasury Department has transferred capital to the majority of these companies.
Amounts below are in millions. The Texas ratio is a ratio of each bank's nonperforming loans to cash on hand. The higher the number, the worse the bank's health.
(visit the link for the full news article)




posted on Feb, 1 2009 @ 01:33 PM
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Finally we can see who is getting how much. Looks like the president is keeping his promise of clarity. Whether or not this bailout will work is another problem, personally I believe this is a temporary fix.

Printing fiat money and lending practices should work, in theory.
People get debt, use this debt to boost the economy by spending and investing or creating businesses. People work and repay their debt (with interest). There is however one problem economists have not seen coming: globalization and corporate greed.
When they are allowed to relocate abroad to save costs, people are out of jobs and cant repay their debts. In turn banks and credits are failing. Too many industries are in asia and we are losing our buying power. The big crash hasnt come yet, this recession is only a prelude to a bigger mess and a wide change of our way of lives. All this could be averted if firms come back to the US/EU but that's a long shot.

projects.nytimes.com
(visit the link for the full news article)

(edited for lack of proper spelling!)

[edit on 1-2-2009 by TheOracle]



posted on Feb, 1 2009 @ 01:57 PM
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Very well put. A S&F for your efforts. It`s the over bearing amount of credit that was given to everyone, and the high interest rates that has put our world in this situation.



posted on Feb, 1 2009 @ 02:02 PM
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It actually will not matter as we will never know what they did with he money. Everyone will see in time that this effort will do nothing as capitalism has to work itself out naturally through business cycles.



posted on Feb, 1 2009 @ 02:06 PM
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That is the problem with all of it. The money does not matter anymore, it was never anygood from the start, it had no value. It was not backed by anything of value, only the Feds word, and you and I know how much value that has. Not one bit.



posted on Feb, 1 2009 @ 02:08 PM
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Good post OP. S&F

Interestingly some of the smaller banks don't seem to want government ownership and are turning down the bailout money due to the provisions to take it.
www.washingtonpost.com...
www.boston.com...

But consider this just means more money for the really big banks available to them and more government conrol of them. Except it seems there may be no control
www.moneymorning.com...
finance.yahoo.com...

Let no one forget, if you work hard for a living, buy anything, "own" real estate, etc. then you do or will pay taxes. This is OUR money they can't keep track of.



posted on Feb, 1 2009 @ 02:38 PM
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My understanding of globalization is that with the creation of a global market economy, wealth is naturally going to be reallocated to pockets of the globe where commercial competitiveness is highest, regardless of state borders. This new wealth distribution scheme will impose a great challenge to governments, which are attempting to contain wealth for its own citizens. This essentially opens a paradigm shift in the way we see the wealth of individuals around the world. National economic policy, which has for the past few hundred years effectively contained wealth through policies of engineering price stability, subsidization of domestic production, heavy taxation of foreign corporations, immigration laws, the failed decade-long attempt to lower personal income tax rates (epitomized in the Reagan and each of the Bush administrations), manipulating financial markets through the FED's monetary policies, is ultimately going to be be ineffectual in stopping the flow of wealth from to new centers of productivity around the world. Basically, the U.S. government will be entirely incapable of maintaining its citizens' standard for quality of life, and so we will see wealth being naturally redistributed to areas of the globe, which actually deserve it. By examining the world today we can see that the U.S. is being currently subject to immense pressure to increase industrial productivity, and decrease spending and consumption. This isn't a result of poor laws and poor corporate practices. This is the symptom, not the cause, of the arrogance exemplified in nationalistic U.S. governing bodies over the past half century, tracing its roots all the way back to the Potsdam Conference at the end of World War II.

[edit on 1-2-2009 by cognoscente]



posted on Feb, 1 2009 @ 07:35 PM
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reply to post by TheOracle
 


You're wrong. Fiat money will not work. There will always be more debt than money, because of fractional reserve banking. The interest is not created in the system. And, although it is true that it boosts economies, once people's needs are mostly satisfied, unless some new bubble subeconomy can be created, the whole thing crashes down, as the natural contraction of demand leads to people unable to satisfy their purely financial obligations. Not only that but increased productivity due to technological processes means less people need to work to provide the goods for the many. I suspect about 1/4 of all employed people do nothing but shuffle money around, it's a retarded system.

It has it's period of grace, but then it crashes, inevitably. As time goes by the crashes get harder and bigger. Sooner or later there will be a phase change in the economical fractal, and the choice will be between some sort of resource based economy that uses the abundance of nature without artificial scarcity, or feudalism. Something very serious to think about.

Monetarism dosen't even work, period, even with real asset backed currency, although the inequity takes more time to manifest itself. This is because money has gravity. It takes money to make more money, and those with the most money are the ones who have the easiest time expanding their fortunes. This has been a historical constant. Money, at it's core, is a wealth centralization mechanism, sooner or later someone will be the last one to sit at the end of the musical chairs session, and will corner the whole economic process.

Money as a system will only work if people realise the problems it presents, the core of which I've outlined here. If this happens with sufficient clarity in the group mind, then we will be able to make a monetary system with enough checks and balances so that the energy that is money will flow evenly throught the whole economy, benefitting everyone. Untill that happens money will always tend to clog up the economic process by centralization or starve it due to debt related capital contraction. We have not, as societies, learned to properly implement a progressive monetary system designed for the benefit of all. I believe it's possible, but it has not be achieved anywhere that I know of.

[edit on 1-2-2009 by Zepherian]



posted on Feb, 1 2009 @ 09:19 PM
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Our entire perception of our way of life is wrong. The standard it has produced in terms of its expected quality, and the fact that there are those who are so accustomed to this delusion that they are incapable of the realization that their lives, in terms of the industries, which support their lascivious lifestyles, are false, clearly reveals the fundamental error of our society.

There will always be some inefficiency as long as national economic policy has the ability to selectively confer upon its citizens payment, which meets their generally recognized wage expectations, as opposed to the scenario where those citizens are actually subject to the reality of the global labor market (examine the difference between to the propped up labor market in consumer North America against that of migrant workers in industrial China). People need purchasing power in a consumer economy, while businesses need maximum producer flexibility (ability to enforce low wages) in industrial economies, such as China.



Two recent acquisition attempts illustrate this point: CNOOC's, a Chinese oil and gas company, attempted acqusition of Unocal and Dubai Ports World's attempted takeover of security for a number of eastern and southern ports.

On June 23, 2005, CNOOC announced its attempted acquisition of Unocal, an California-based independent oil and gas company. [1] The Chinese company's offer was $18.5 billion, which was roughly $2 billion more than Chevron, the next highest bidder, offered, reflecting a premium of about $1.5 billion over the value of Chevron's offer. [2] CNOOC made an all-cash offer of $67 per share compared to Chevron's lower combined cash and stock offer of $61.26. [3]

Even before the offer was announced, lawmakers in Washington announced that the deal deserved additional scrutiny: "As the world energy landscape shifts, we believe that it is critical to understand the implications for American interests and most especially, the threat posed by China's governmental pursuit of world energy resources. The United States increasingly needs to view meeting its energy requirements within the context of our foreign policy, national security and economic security agenda.'' [4] Even the Secretary of Energy hinted that the deal would receive heightened scrutiny. [5]


There is this gigantic battle between national interest and the inevitable draw toward globalization. Why are we afraid of foreign corporations making a buck in our country? The problem is potential employees are afraid that they will not be payed according to their generally recognized wage expectations, as if for some reason North Americans deserve easier access to consumer products and a higher standard for their quality of living...



These two failed takeovers serve to warn foreign companies looking to invest in "sensitive" areas of the U.S. economy that they must consider more than the economics of the transaction. Even though CNOOC's offer was worth significantly more than the eventual sale price, the delay and the chance that the merger would be rejected were enough to sway institutional shareholders against approval. [23] Asked what lessons he had learned from the failed attempt, CNOOC Chairman Fu Chengyu responded, "We learned we need to be more prudent in terms of public relations and political lobbying when dealing with such a big deal ... the first things you need to go for are public relations and political lobbying. And then if those work out, you turn to talk about the deal." [24] While some have raised concerns that the trouble was stirred up by Chevron in an attempt to scotch the deal [25], the numbers don't seem to bear that out. Only slightly over half had received campaign funds from Chevron in the past two years. [26] Even the letter writer, Rep. Pombo, had only received $13,500 from Chevron, barely a drip in the bucket.


In the long run, foreign corporations will be forced into being sensitized. Ironically, the failure of the foreign corporations provided in this article has given them a chance to reexamine their position during attempts at so-called "corporate takeovers".

We're afraid that their businesses will be operated much as our own businesses are currently being operated in their countries, where assembly-line workers are being payed exceedingly low amounts of money for the harsh nature of their work, only to afford one day's food for one day's labor... Would this be the case if the U.S. government allowed the utter failures of Ford, GM and Chrysler to be purchased by foreign corporations as opposed to being "bailed-out" by non-existent money, whose only promise of materialization is that American taxpayers are going to work tomorrow? What if they don't go to work tomorrow?

These foreign corporations will realize the nature of our citizens wage expectations, and model their operations in the way which maximizes productive efficiency, while appeasing the citizens of this country in terms of their expectations. BMW has proved its ability to conform to whatever country they are running business in.

How is the world going to approach economic equilibrium if our workers won't accept lower pay, and if any attempt to do enforce lower pay is seen as a violation of human rights in the mainstream media? I think we're fundamentally screwed. There is no real basis for economic sustainability in North America, except for that of the exploitation of the world through rigorous national economic policies, which falsely prop up our own citizens at the expense of the world around us.

iblsjournal.typepad.com...

The firms coming back would not solve a thing. There is a reason they are not here in the first place. Our citizens have to realize that wealth should not be an assured reality for successive generations in North America. If such a realization isn't apparent, then we do have to right to protest against the irresponsibility of the financial services sector, against lawmaking and against economic policy in general.

This "recession" is simply the materialization of a long overdue shift to globalization. In the end, once we realize all the bailouts in the world are not going to solve this problem, America will be forced to actually increase competitiveness, instead of printing money and cleverly adjusting monetary policy. If we don't give in to this natural inevitability that is globalization then we can expect this next century to be one rife with global military conflict and war.

The nation-state is going to be faced with severe challenges. How do you contain wealth when it's no longer politically possible, what with the invasive, transnational nature of globalization? Personally, I don't see such a thing as the nation-state existing by the end of my lifetime. So upon which standard do we decide which citizens get what? If we have no nation, who deserves more wealth over whom? Will liberal democracy flourish in a society whose political constituents are composed of a massive array of diverse people and cultures? Will the flowering of liberal democracy spell an end to the exceedingly comfortable lifestyles we enjoy today?

[edit on 1-2-2009 by cognoscente]



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