Government not expected to help more companies

Government not expected to help more companies

biz.yahoo.com

NEW YORK (AP) -- The U.S. government is signaling it won't throw a lifeline to struggling financial companies -- except for mortgage linchpins Fannie Mae and Freddie Mac -- marking a shift to a new and potentially more volatile phase of the credit crisis.

Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses

(visit the link for the full news article)

It is becoming obvious that the government can't and won't back other financial institutions in case of failure. This is disturbing news, is the end of US economy this close? I thought the government would keep at it a little longer, ie subsidize, print more $... I guess not. What do you guys think? Is the end really near now, what is your take on this coming week? Full panic or people are still ignoring this upcoming crisis?

biz.yahoo.com
(visit the link for the full news article)

reply to post by tedpi



Hey dude. I was thinking along the same lines. I posted a thread something like yours.

I was thinking that if inflation gets a grip on the US economy we may as well peel potatoes then go to work.

Two finance Guru's I read have been saying for a while that CHina and India have decoupled from the US economy and that other third world nations are now "real growth" areas!

What a fast world we live in.

Peace!

So much for Bushees proposal to help small business. I guess thats gone down the drain along with our economy.

Quite frankly, Bush's proposal to help businesses out was half baked at best.

It's like having two loans, and all your doing is moving your debt from one to the other.

So I can't say I'm surprised to see the US pull out of helping their businesses, it was inevitable for them to realize just how futile it was.


... yet they're still thinking about broadening that debt with yet another war. Give your head a shake.

The best thing government can do to help companies is to get out of the way. Too many regulations, too many taxes. A company that needs government help doesn't need to be in business.

reply to post by RRconservative


In the capitalist society we live in, I disagree with what you just said in so many ways. We need gov to monitor huge corps and we need them even more to give small business a kick. If we ever fall into huge monopolies which we are leaning toward, we can kiss this nation goodbye, its called communism and it will be then of America as you know it.

I think not bailing out businesses for making bad business decisions is entirely in line with capitalism.

The banks and financial institutions knew they were risky loans. It was a gamble, they took it, and they were hoping to either get the payoff, (the high interest rates) or to sell the loans, or that they would be bailed out.

Capitalism wasnt originally conceived as being "protection for and artificial support of business." It was much more in line with a "survival of the fittest" mentality. If you make bad, risky loans, and you lose the gamble, you arent the fittest.

I think people are still in their own worlds, and won't wake up until it's too late. For it to affect the "American Idol" watching sheep, it has to affect them directly in their quite narrow minded lives. Only then will they care.

As for me, I think I'll listen to Chicken Little and get the heck outta dodge.

reply to post by JediK


It sure has to affect them directly! I'm looking at the markets in asia right now and it seems they have gone up a notch, according to Reuters they are buying the whole Fannie Mae & Freddie Mac credit line rescuing business from the US government.

Asian stocks edged up, the dollar gained and government bonds fell on Monday after Washington proposed an emergency plan to rescue the top U.S. mortgage finance companies, offering to buy shares if necessary. The plan was hatched in an attempt to calm investors after Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) stock both plummeted more than 40 percent last week on spiralling fears that both companies, which are pillars of the housing market, were under capitalised and the credit crisis toppled a fifth U.S. bank.

Reuters Article Quoted

I personally don't think it will play well in the US though and I think we'll have a rough week. We'll see what happens when the market opens here in a few hours.