$700 Billion - To Bail or Not to Bail...That is the question - Page 4 - U2 Feedback

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Old 09-27-2008, 05:53 PM   #46
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Perhaps the banks should continue to buy each other out rather than look to government (taxpayer) intervention.
Banks buying each other is not a solution to the crisis. The acquiring banks get the bad assets along with the good ones. The assets simply get transferred to the balance sheets of the acquiring bank, which does not improve interbank lending/credit availability.
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Old 09-27-2008, 06:12 PM   #47
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Again, I'm not a financial expert...but how does a problem created by too much credit get solved with even more credit?

At some point tomorrow becomes today.
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Old 09-27-2008, 06:16 PM   #48
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Again, I'm not a financial expert...but how does a problem created by too much credit get solved with even more credit?
It's regulated credit unclogging the system of bad assets bought by unregulated credit.
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Old 09-27-2008, 06:17 PM   #49
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Banks buying each other is not a solution to the crisis. The acquiring banks get the bad assets along with the good ones.
Absolutely.

Plus, bank buyouts usually freeze out shareholders of the collapsed banks.
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Old 09-27-2008, 07:30 PM   #50
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It's regulated credit unclogging the system of bad assets bought by unregulated credit.
So far there is no real assurance that it will be regulated credit unclogging the system.
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Old 09-27-2008, 09:08 PM   #51
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So far there is no real assurance that it will be regulated credit unclogging the system.
Given that Paulson's original 3 page bill has grown to 120 pages so far, I think it's safe to assume that regulation will be a big part of the deal.
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Old 09-27-2008, 09:34 PM   #52
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Given that Paulson's original 3 page bill has grown to 120 pages so far, I think it's safe to assume that regulation will be a big part of the deal.
Are you in favour of the bailout?
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Old 09-27-2008, 09:41 PM   #53
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yes
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Old 09-27-2008, 09:46 PM   #54
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Banks buying each other is not a solution to the crisis. The acquiring banks get the bad assets along with the good ones. The assets simply get transferred to the balance sheets of the acquiring bank, which does not improve interbank lending/credit availability.


J P Morgan Chase made out better than bandits buying Washington Mutual

the shareholders got wiped out.


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Executives of JPMorgan Chase & Co. arrived at Washington Mutual's headquarters in Seattle Friday, a day after snapping up the troubled Seattle thrift in a fire sale organized by the federal government.

U.S. regulators closed Washington Mutual Inc. (NYSE: WM) and quickly auctioned off the bulk of its assets after the company hemorrhaged nearly $17 billion in deposits in just over a week and the government determined it could no longer meet its obligations. It was the largest bank failure in U.S. history.

The fate of WaMu’s 43,000 employees remained unclear Friday. In Austin, WaMu is the ninth largest bank by deposit market share.

Darcy Donahoe-Wilmot, a WaMu spokeswoman in Seattle, says no layoff decisions have been made yet and that it’s too early to estimate the number of job cuts.

Washington Mutual shareholders — including Texas private equity firm TPG, which led a $7 billion cash infusion for WaMu — were essentially wiped out as a result of this week’s events. The company’s shares were down to 16 cents in Friday trading, a stunning descent from WaMu’s 52-week high of $36.47.

“In this case the shareholders got zero. It’s ugly,” says Bob Rogowski, banking analyst and managing director of McAdams Wright Ragen Inc. in Seattle.
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Old 09-27-2008, 09:55 PM   #55
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Are you in favour of the bailout?
It depends on if the terms are favorable to the taxpayer somehow, but I'm not in favor of Paulson's blank check request.
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Old 09-28-2008, 01:44 AM   #56
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J P Morgan Chase made out better than bandits buying Washington Mutual

the shareholders got wiped out.
The WM execs made out like bandits - a $38 million severance package and something like $13-18 million for Fishman for only 3 weeks work. JPM stock opened down actually on Friday morning. I'd have to review the quality of WM's balance sheet to determine how well JPM made out. JPM has to also absorb WM's losses.
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Old 09-28-2008, 02:33 PM   #57
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Deal reached on financial markets bailout - Economy in Turmoil - MSNBC.com

Tragedy in the Making in Washington and on Wall Street: The Canadian Solution
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Old 09-28-2008, 04:07 PM   #58
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Big Bad Capitalists? by Mona Charen on National Review Online
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Old 09-28-2008, 04:19 PM   #59
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This is such a confusing mess that I'm sure any side can manipulate it into their favor. How about they just solve it now and blame others later?
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Old 09-28-2008, 04:47 PM   #60
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This is such a confusing mess that I'm sure any side can manipulate it into their favor. How about they just solve it now and blame others later?
It's a political hot potato. The market needs regulation like freedom needs justice. Just because people have freedom doesn't mean they can cause crimes. Crimes need laws and crimes in economics need laws. We shouldn't be forcing poor people to have loans since poor people often can't pay back loans. It's better to save for a downpayment and buy a house when the job situation is better. Otherwise why force the market to supply these mortages? Just get the taxpayer in a less roundabout way to pay for it. But of course when presented that way, tax payers say NO.

It's going to happen on Monday with supposed safeguards so tax payers can get most of the money back. The U.S. is now in debt to the tune of 1 year of GDP. Either spending will have to be cut and frozen for a while or they have to raise taxes. The budget must be balanced. If republicans want lower taxes they have to deal with the debt first. If democrats want more entitlement spending then they have to deal with the debt first. If the people can't pay their own mortgages the taxpayer will. There is no free lunch.

I feel the pain of whoever is going to have to deal with this problem next year.

United States public debt - Wikipedia, the free encyclopedia

The 1940's was higher in percentage of GDP but there was a world war going on then.
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