[serious] Bailout

[Ogie Oglethorpe]

The government didn't spend any money on the bank bailouts, you ******.

So in essence they did spend an equal amount on covering the mortgages themselves.


Question answered. Thread may be closed.

[KrazyHorse]

the gvt considered buying those mortgages, but didn't. the reason was, markets were in turmoil, and practically executing this operation would have taken months. so they went for the 'bailout' option instead. quick fix.

No, the reason the government went for capital injections was to take advantage of the banks' ability to leverage. 700 billion *10X leverage = 7 trillion

[Ben Kenobi]

Because housing prices were a bubble, and injecting cash into the bubble is a horrible idea?

Housing prices are vastly out of whack, even still with their average appreciation rate over time. Average home price should be close to 3x the average income, but that's not what we see.

[Fake Boris]

The government didn't spend any money on the bank bailouts, you ******.

Didn't they have to print the money?

[Uncle Sparky]

Daily Show: John Oliver Wants To Tell You The Greatest Story of All Time

Gather round, children, for possibly the most heart-warming foreclosure story ever.

Here's what happened: Bank of America tried to foreclose on a couple that didn't have a mortgage with them. The couple took the bank to court, and won. Then the bank didn't pay back the couple's legal fees as ordered by the judge, so the couple brought a moving van and foreclosed on the bank.

http://www.thecomedynetwork.ca/Displayblog.aspx?bpid=a42a6878-597e-4221-bd79-7240c8eb9910

This is from The Daily Show a couple of months ago, and the best op-ed I've seen on the American forclosure crisis.

[KrazyHorse]

Didn't they have to print the money?

No, they issued debt to pay for TARP and related programs, and received financial assets (debt and equity). They have retired various pieces of these programs and received back the initial purchase price (and more) for some parts (mark-to-market, the AIG component is just below breakeven currently). 700 billion for which you receive fungible assets of equal value is not "spending". 700 billion which you give to homeowners is. The US national debt is no bigger for the various bank bailouts than it would have been otherwise, while blowing 700 billion on people who don't/won't pay you back would have increased the US national debt.

The idea that the US taxpayer gave 700 billion to the banks is idiotic, and anybody who asserts they did is a moron.

[KrazyHorse]

dp

[Dinner]

I'm completely shocked that the head economist of Americans for Prosperity (and other wise completely dastardly Koch brother operation; they're even for resegregation) agreed that bankruptcy reform was needed so that mortgages owed dropped down to less then the value of the homes. Bankruptcy court seems to be the best way to do this; I actually agree with AFP in this. When he called for China to be slapped with an excize tax worth the value of how much it is manipulating it's currency over and above the fair market rate I almost creamed my pants. It seems some sections of the right have figured out still more tax cuts won't help the situation and other measures are needed.

[Dinner]

No, the reason the government went for capital injections was to take advantage of the banks' ability to leverage. 700 billion *10X leverage = 7 trillion

Now that is true but due to deregulation banks can leverage 40 to 1 not just 10 to 1.

[Ben Kenobi]

No, they issued debt to pay for TARP and related programs, and received financial assets (debt and equity). They have retired various pieces of these programs and received back the initial purchase price (and more) for some parts (mark-to-market, the AIG component is just below breakeven currently). 700 billion for which you receive fungible assets of equal value is not "spending". 700 billion which you give to homeowners is. The US national debt is no bigger for the various bank bailouts than it would have been otherwise, while blowing 700 billion on people who don't/won't pay you back would have increased the US national debt.

Heh. Which is why the debt to GDP is over 100 percent by now? Spending is spending, KH. Unless the government is willing to retire 'assets', then the 'assets' are just more smoke and mirrors.

[KrazyHorse]

Heh. Which is why the debt to GDP is over 100 percent by now? Spending is spending, KH. Unless the government is willing to retire 'assets', then the 'assets' are just more smoke and mirrors.

You're a ****ing moron, Ben.

[Ben Kenobi]

As you tell me, purportedly bankrupt companies are suddenly 'worth money'.

It's easy to play accounting games like this, KH. If the assets were 'toxic' then how is the government making a profit off of the assets now, when the assets were worthless before?

[giblets]

What, is Ben going to try and argue with KH over financial matters now?

[dannubis]

No. Ben in his blind hatred for anything that is not ultra right christian fundi says something stupid again.

[Ben Kenobi]

No. Ben in his blind hatred for anything that is not ultra right christian fundi says something stupid again.

Uh, attacking the bailout is 'ultra-right?" Wouldn't that make me more of a commie socialist? You know that whole 'corporate welfare' thing?