Monday, March 23, 2009

Another Day, Another Bailout Plan


Plan doesn't help former residents here

Just when you thought Washington was through tossing away our children's financial futures the Treasury Department has come up with another bailout plan. But this one is being warmly received on Wall Street where stocks were up in early reaction.

The idea is to wipe out bank balance sheets of as much a $1 trillion dollars. They call these bad investments "sour assets." And they are believed to be the reason lending institutions have been holding back on loosening credit.

Of course, this moves forward while some rail against consumers who made bad investments - like mortgages they now can't pay - by saying they took a gamble and lost and must, unfortunately, suffer the consequences. I guess the same rules don't apply for the big banks because, while we can as a nation afford to see our neighbors evicted from their homes, we can't afford to let the banks collapse.

This new bailout is being called the Public-Private Investment Program. The idea is to artificially create a market for bad debt. Those sub-prime mortgages that soured for our neighbors? Well the government will conduct auctions between banks to sell them off to keep the lending institutions solvent.

Apparently all this makes good economic sense. Because it's believed that if the banks get on better footing, so will the economy as a whole.

But that's of little consolation to our neighbors who used to live in the abandoned house up the street.

We talk about issues like this and more weekdays at 5 PM New York time on News Talk Online on Paltalk.com

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Photo credit: http://www.flickr.com/photos/iirraa/129603827/

10 comments:

Anonymous said...

This is good old fashioned bank consolodation by members of the federal reserve. It was engineered and worked like a charm in the 30's and now it's being done again, except THIS time we get to pay for it in a more 'in your face' way. At least they were sneaky in the 30's, now they just tell our congress to take a hike when they are called to hearings, rolling their eyes and telling everyone 'you dont understand...'.

We understand all right, we are being ripped off in order to enrich the very bastages who created this credit mess in the first place. And where is the little guy in this bailout scheme? You see their houses in this post, all boarded up. The occupants could be in a tent city now, who knows.

When all is said and done, our government has sold us to a private banking institution called the 'federal reserve', which is about as 'federal' as federal express. Do some homework folks, the federal reserve is a private bank which is owned mostly by foreigners and super rich families. We have to pay them interest on all that money they are printing. They are not bailing us out, they are driving the prices down so owners of soverign wealth funds can step in and 'buy American', as in buying up all that is left of American industry at fire sale prices.

If you are lucky enough to remain employed, you better learn to speak Arabic or Chinese....

Coffee N Cola said...

Gary,

I have mixed thoughts about this all. While I know something must be done, I am not sure that this course of action we are taking will be the right answer.

There are many without homes right now, and their debt is just increasing as they live their day to day lives, thanks to the miracle of credit they will never be able to repay.

I have seen those who simply can't attain a feeble financial state in today's economic world.

It would seem that for some there is no rest with only the wrong answers coming from our government.

Anonymous said...

Well, indirectly the plan will help if it stops the panic on the street. Of course, that is trickle downish stuff, but the amoung of monetary and stimulus is likely to have an effect in the coming months, although I suspect there will be another price oscillation shortly, say October 2010. It still depends on what China and Russia want prior to the G-20 meeting on April 2 though. I would not want to be Iran right now.

Don Rich

Anonymous said...

I M AGREE WITH GARY REPORT and We understand all right, we are being ripped off in order to enrich the very bastages who created this credit mess in the first place.

Anonymous said...

The latest announcement that Helicopter Ben Bernake can print an additional 1.2 trillion out of thin air along with the announcement of a 3rd. The Public Private Investment Plan for another trillion to purchase toxic assets.

This will effectively clear the "Bailout Banks" balance sheets of the toxic assets who created the crisis to being with and who are hoarding that cash so wealthy owners can purchase Americas remaining good assets through Sovereign Wealth Funds for pennies on the dollar.

US trade exports which the IMF reports caused the worlds economy to shrink for the first time in 60 years.

Has the United States been left with ‘no other option’ than to force the massive devaluation of the US Dollar in order to ‘shake lose’ from banks and private investors the hundreds of billions they are currently hoarding? Who are now being blamed for collapsing the economy of the United States where consumer spending accounts for two-thirds of its economy. With this new money comes devaluation of the dollar. Then massive inflation will ensue causing the value of these currently hoarded hundreds of billions of US Dollars to plummet and forcing them to be spent before they become totally worthless.

America last week dispatched former United States Secretaries of State Henry Kissinger (under Nixon), James Baker (under Bush Sr.), Charles Shultz (under Regan), former United States Defense Secretary William Perry (under Clinton), and former US Senator and top defense expert Sam Nunn, who are acknowledging Americas acceptance of a New Global Order. US Treasury Secretary Timothy Geithner has now admitted that he had ordered US Senator Christopher Dodd to include the executive pay provision into the stimulus bill which was, in fact, a loophole allowing these controversial bonuses to be paid out.

Here's are a few examples of how your tax dollars have been spent as a result. 1.) The insurance giant AIG which after receiving over $300 billion in US taxpayer money paid out nearly $218 million in bonuses; 2.) The collapsed stock selling giant Merrill Lynch which after receiving $20 billion in US taxpayer money paid out $3.6 billion in bonuses; and 3.) The collapsed US banking giant Citigroup who after receiving $45 billion in US taxpayer money announced a $10 million redecoration of their executive office suites. 4.) A New Bridge for Microsoft 5.) Leaseholder of WTC is even requesting taxpayer assistance for reconstruction of the 911 site.

Welcome to the Great Gangster Bankster's Heist Part II.

Consumer Kim said...

My kid's college fund is down so low it may not get here to college, but she will still go. My retirement fund may not pay for my Golden years, but I plan to retire someday. My work has decreased a lot, and my husband's job is iffy. But we still are rich because we have our health, a roof over our heads and a loving family. I don't know how to be other than hopeful. Who knows if this current plan is good or not. I am not a finace expert or an economist. But at this point, I have to believe the only place we can go is better than where we've been. Let's see what the market looks like tomorrow. Keep your fingers crossed.

nancy bas mo 3agram said...

The Bailout Plan will work for Wall Street and other business but it’s not going to address the problem. The financial problem we have is too large to cover with a simple “bailout plan”. Sadly, whether we like it or not, the government has to step forward and rebuild our financial structure from the bottom, we should give our government a chance, not keep fighting over this, because we’re not going anywhere with it.

Anonymous said...

And while people are seeing their own financial futures go down the tubes, AIG is being covered by the Obama Administration against a lawsuit from the Thomas Moore Law Center (read about it here: http://www.thomasmore.org/qry/page.taf?id=19 ). The crux of the issue has to do with AIG and Shari'ah financing and AIG monies going to "zakat" or charities, in this case, charities which support terrorist groups (like the Holy Land Foundation, now defunct but found guilty this past year.)

It seems this administration is determined not only to shoot itself in the foot.. but shoot our feet as well.

-LD McClelan

Anonymous said...

Wasn't the first stimulus package made to the banks in order to bail them out of a hole that was in part created by toxic assets? Wasn't it given in the hope that it would get money washing through the system? What went wrong there?

When will the trickle down effect actually begin? How long will it take, and how much more money are the people going to have the burden of in order that the fat cats can maintain their jobs and lifestyles? Seems that the Bankers have used the money to build a big Dam in order that nothing trickles out. What a deception.

Anonymous said...

If this action is that instantly good for Wall St, and makes the DOW investors that happy, that fast, it can't be good for the rest of us. Geithner may be some form of theoretical genius, but he understands nothing about how the real world works, is only playing the same old songs that Paulson and the rest did and has not one creative bone in is body (or brain in his head). Seeveral people are calling for his head (on both sides of the aisle and the press) and I couldn't agree more.

Ivan Hentschel