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Old 11-12-2008, 11:59 PM   #1 (permalink)
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What are they doing with the $700 Billion Bailout?

Treasury Secy Paulson decided to spend the Bailout Billions (close to a Trillion) Dollars in a manner very different from the legislation that was passed.

Who is this guy playing Monopoly with the taxpayer's money?

So, he's not going to buy the bad mortgage paper and sell / refinance the assets now. I never agreed with that nonsense, but that's not the point.

Now it looks like Uncle Sam is going to buy preferred stock in the failing institutions. I'm hating the Socialist activism of a de facto nationalization of failing financial institutions.

Think about this, the government is going to try to oversee more financial institutions. They did so well with Fannie and Freddie.

Paulson is starting to look like a guy with too much OPM (other peoples money) in a strip club and he is liking all the attention he is getting from the dancers. He's handing out our money fast and furious and everyone with their hand out can see "sucker" tattooed on his forehead. There is no mirror in Paulson's world.

This is a scary ride we are on. It's going to be a long ride and it's going to ruin a lot of folks before it is over.

Conserve cash. Pay off excess debt. Buy gold and ammo. Survive.

Your mileage may vary.

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Old 11-13-2008, 12:35 AM   #2 (permalink)
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Re: What are they doing with the $700 Billion Bailout?

Want Some Government Money? Apply Now!

November 12, 2008 1:02 PM


This morning Treasury Secretary Henry Paulson addressed a skeptical press about the latest plans for those 700 billion dollars that were appropriated for the "TARP" -- or Troubled Asset Recovery Program. Now Paulson says Treasury won't buy those "Trouble Assets" -- one of the many metamorphoses this program has had in its young life.

In the meantime, care to apply for some TARP money? Turns out there's a five-page, downloadable document to fill in -- if you're interested...here's the link.

And here's ABC's Dan Arnall on whether there has been, as he puts it, a "Great TARP Bait & Switch".

No Troubled Asset Purchases? Then what are they doing with that $700 billion blank check? They are buying bank stock, not troubled assets. We probably shouldn't call it the TARP anymore. Instead, they are focused on a capital purchase plan (CPP) which is the widely reported $250 billion plan to use taxpayer money to purchase a stake in banks. "By October 26th we had $115 billion out the door to eight large institutions," said Paulson. "In Washington that is a land-speed record from announcing a program to getting funds out the door. We now have approved dozens of additional applications, and investments are being made in approved institutions." When we'll get a list of those dozens of additional applicants which will be getting a piece of the $125 billion in remaining taxpayer case remains to be seen. The original CPP participants were told about the program at a closed-door meeting at Treasury and no minutes have been released on what was said during the meeting.

So, is this the biggest bait and switch in American history? There will certainly be critics who say that Paulson and the Bush Administration were disingenuous when they were selling Congress and the American public on the program back in September. And they’d probably be right. Paulson said today, he knew when the bill was signed the purchase of trouble assets wasn’t the right solution to the problem. But history will judge Hank & Co. on the effectiveness of their response. If the risks to the financial system remain low, the future doesn’t bring bigger bank and financial institution failures, and the recession doesn’t get too deep or last too long, then the quick pivot on this plan will probably go unnoticed.

http://blogs.abcnews.com/theworldnew...ome-gover.html
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Old 11-13-2008, 12:44 AM   #3 (permalink)
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Re: What are they doing with the $700 Billion Bailout?

Financial Crisis

Washington's $5 Trillion Tab

Elizabeth Moyer, 11.12.08, 05:15 PM EST

Fighting the financial crisis has put the U.S. on the hook for some $5 trillion a report says. So far.

For all the fury over Treasury Secretary Henry Paulson's $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government's response to the credit crisis.

According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.

The estimate includes many of the various solutions cooked up by Paulson and his counterparts Ben Bernanke at the Federal Reserve and Sheila Bair at the Federal Deposit Insurance Corp., as the credit crisis continues to plague banks and the broader markets.

The Fed has taken on much of that total, including lending a cumulative $1 trillion in overnight or short-term loans since March to primary dealers through its emergency discount window and making a cumulative $1.8 trillion available through its term auction facility, a series of short-term transactions it began making available twice a month in January. It should be noted that a portion of the funds lent in these programs has been repaid and that the totals represent what has been made available.

The Fed also took on tens of billions in debt, including $29 billion in debt of Bear Stearns, and made $60 billion of credit available to American International Group (nyse: AIG - news - people ). It is committing $22.5 billion to set up a special purpose vehicle to manage some of AIG's residential mortgage-backed securities, and it is financing $30 billion of a second fund to hold $70 billion of multi-sector collaterized debt obligations on which AIG wrote credit default swaps.

Related Quotes

AIG $2.03-0.23 FNM $0.68-0.00 FRE $0.75-0.07

The Treasury, in addition to the $700 billion raised in the Emergency Economic Stabilization Act, agreed to guarantee money market funds against losses up to $50 billion, will inject $40 billion of capital into AIG and is backing the conservatorship of Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ), to the tune of $200 billion.

The FDIC, meanwhile, is guaranteeing $1.5 trillion of senior unsecured bank debt.

Not included in the total are the Fed's long-existing discount window lending to commercial banks, the mortgage modification plan announced by regulators on Tuesday, support for the Federal Home Loan Banks and a myriad of other programs.

Paulson and Bernanke have tried any number of ways to stop the free fall in housing prices and unfreeze the credit markets, with limited success. Rates that banks charge each other for three-month loans have dropped to 2.1% over the corresponding Treasury security, from their high of 4.8% in October. But lending is contracting as banks brace for rising credit costs and corporate borrowers hunker down.

The Treasury has turned its focus from attempting to buy troubled assets from banks, which was the original intent of the October Emergency Economic Stabilization Act, to injecting capital in the form of preferred equity stakes.

It started out with $125 billion worth of investments in eight major U.S. banks and has since expanded the program to an increasingly broad range of financial and nonfinancial companies. And with just $60 billion left of its initial $350 billion authorization under the emergency act, the Treasury faces a growing number of companies--including Detroit's automakers--begging for assistance.

David Hendler, an analyst at CreditSights, says it looks as if government is left holding the bag, and of course that translates into everyone.

"The losses have to be taken, but no one wants to take them," Hendler said at a conference Wednesday, speaking about the banks and their handling of troubled assets. "It seems like the taxpayers are going to be taking a good portion of that."

http://www.forbes.com/home/2008/11/1...12bailout.html
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Old 11-13-2008, 08:25 AM   #4 (permalink)
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Re: What are they doing with the $700 Billion Bailout?

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Originally Posted by Ezliving_Jim View Post
Treasury Secy Paulson decided to spend the Bailout Billions (close to a Trillion) Dollars in a manner very different from the legislation that was passed.

Who is this guy playing Monopoly with the taxpayer's money?

So, he's not going to buy the bad mortgage paper and sell / refinance the assets now. I never agreed with that nonsense, but that's not the point.

Now it looks like Uncle Sam is going to buy preferred stock in the failing institutions. I'm hating the Socialist activism of a de facto nationalization of failing financial institutions.
What is you solution Jim?Don't tell me you think the private sector needs to bail themsleves out?

Look at it from the governments point of view...They allowed "people" to have free reign with the system and the virtue of greed has completely destroyed it.

We the people have done everything possible to show our government that we are incapable of managing these sectors that play a huge part in our economy.

Worldcom,Enron,Fanny/Freddie,all the banks that fell with them,GM,ford,Chrysler...whos' next? Amex is not looking so good these days?

We the people have not instilled any confidence in our govenment that indicates we are capable of less regulation.If antything,we have show them that we need to be governed with socialist or even communist principles.

Jims thinking..I work hard,I pay my taxes and if I get myself into trouble,I bail myself out.Im not going to run to the government for help....Thats good Jim,your doing whats best for eveyone else,i can respect that. Not everyone is as responsible as you,but our government lumps us all into one big pile.

Look at it as guilt by association,now you know how a minority feels.
You keep blaming the wrong people,but maybe you "are" one of those people.Next time you point the finger,make sure your standing in front of a mirror.
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Old 11-13-2008, 08:36 AM   #5 (permalink)
 
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Re: What are they doing with the $700 Billion Bailout?

Can the tanning industry apply for a bailout also? Let's face it, we are the ones "bailing out" everyone...not the government, it's our (tax payers) money!

Who cares if my local exotic car lot can't sell 15 Ferraris this month. Every business is struggling, not just the billion dollar a year ones.

....

Just my two cents...

Last edited by beachbumz; 11-13-2008 at 08:42 AM.
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Old 11-13-2008, 09:56 AM   #6 (permalink)
 
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Re: What are they doing with the $700 Billion Bailout?

I'm thinking of writing a letter to mr barney bend us over frank. Billions of dollars to one company is not fair when they screwed up.
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Old 11-13-2008, 11:20 AM   #7 (permalink)
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Re: What are they doing with the $700 Billion Bailout?

Frank and Dodd have blood on their hands because they forced Fannie and Freddie to make mortgages for people who were a high credit risk and couldn't afford them, in order to encourage low-income home ownership.

This bad mortgage mess didn't happen due to deregulation. It happened because Frank and Dodd and others made it happen. It happened because they ignored warnings that this was going to be a financial problem. It happened because they were paid a lot of money by Fannie and Freddie to let it happen.

Dodd and Frank can not be trusted to fix this. They should be hung.

A side effect was the "housing boom" inflation bubble caused by the increased demand by uncreditworthy home buyers. Residential housing values need to get back to reality.

There is a deregulation problem with letting the hedge funds go wild. Still, these were only traded by professional investment gamblers. The SEC should rein in these products. They can start by increasing margins.

We have to let the free market work. Failure must be allowed. Sorry, GM. You blew it. Sorry GM workers. Your unions screwed you. Move South and build cars in a non-union factory and don't you dare try to unionize it.

Everyone in Congress who votes for The Employee Free Choice Act should be hung.

I was glad to see the USPS laying off workers. At least they are trying to run the Post Office like a real business.

We know a managed economy doesn't work. The biggest and the best who try (Russia) can't get it right.

I hate the idea of nationalizing financial institutions. It is the lowest risk strategy, in my view. It is better for us to have an equity position in an institution we want to succeed than it is to by bad paper at higher than market value just to resell/reprice it at a loss. That was a fuched plan from the jump.

We should have a sunset of no more than 5 years to get the bailout money repaid and the govt ownership of the preferred stock in these institutions sold back at a profit.

Keep in mind, this is not just a US economic problem. We are in a worldwide economic crisis. Many other countries are dealing with their own economic problems. Everyone has skin in this.

The world has to start making better economic decisions. Back to Economics 101. We all have to get economically healthy together.

For now, Congress need to eliminate the tax on capital gains to encourage investment. Government spending needs to be cut.

Government jobs programs need to involve real work. Rebuild our crumbling infrastructure. Teach auto workers how to build roads and bridges.

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Old 11-13-2008, 11:43 AM   #8 (permalink)
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Re: What are they doing with the $700 Billion Bailout?

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We have to let the free market work. Failure must be allowed.

No,it should not.Not if it destroys our economy as a result.

Free markets have only proven one thing....If one had to chose between greed and responsibility.Greed will prevail every time.

We have proven to our government that we cannot function as self regulators.
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Old 11-13-2008, 11:49 AM   #9 (permalink)
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Re: What are they doing with the $700 Billion Bailout?

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No,it should not.Not if it destroys our economy as a result.

Free markets have only proven one thing....If one had to chose between greed and responsibility.Greed will prevail every time.

We have proven to our government that we cannot function as self regulators.
Greed grows the economy. Greed builds wealth. Free markets work.

Contrived markets and managed economies always fail.

Quote:
Frank and Dodd have blood on their hands because they forced Fannie and Freddie to make mortgages for people who were a high credit risk and couldn't afford them, in order to encourage low-income home ownership.

This bad mortgage mess didn't happen due to deregulation. It happened because Frank and Dodd and others made it happen. It happened because they ignored warnings that this was going to be a financial problem. It happened because they were paid a lot of money by Fannie and Freddie to let it happen.

Dodd and Frank can not be trusted to fix this. They should be hung.
Did you miss this part? The mortgage crisis wasn't from deregulation. Congress decided they could ignore basic economic principles and get away with making bad mortgages to people that could never afford to pay them.

Reward is necessary for capital to be put at risk. Those with the money have to be encouraged to invest their money. Reward offsets the risk. Failure must be allowed. The free market and capitalism always works.

Last edited by Ezliving_Jim; 11-13-2008 at 11:55 AM.
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Old 11-13-2008, 12:15 PM   #10 (permalink)
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Re: What are they doing with the $700 Billion Bailout?

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Originally Posted by Ezliving_Jim View Post
Greed grows the economy. Greed builds wealth. Free markets work.

Contrived markets and managed economies always fail.



Did you miss this part? The mortgage crisis wasn't from deregulation. Congress decided they could ignore basic economic principles and get away with making bad mortgages to people that could never afford to pay them.

Reward is necessary for capital to be put at risk. Those with the money have to be encouraged to invest their money. Reward offsets the risk. Failure must be allowed. The free market and capitalism always works.
Greed does nothing but destroy economic growth.

Do you honestly think the mortage crisis is the main reason our economy failed?

You don't think it has anything to to with free trade?

A countries wealth and strength is not based on its assets,but its ability to produce ,manufacture and service.

Look what free trade and the encouragement of has done to the unemployment rate in America?

This is why our economy is failing,If everyone was gainfully employed,how many less people would be losing their holmes,how many people would have been able to avoid foreclosure?

If you cannot see free trade as a contributing factor to our economic status,then theres nothing I can do other than call you an azzhat.

Big companies outsource jobs,receive big tax breaks,provide no means of stimulation to the economy and continue to spend their money abroad.how has this benefitted our economy?
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