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More Taxpayer Bailouts...

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  • #16
    Re: More Taxpayer Bailouts...

    Originally posted by cupcake
    Absolutely nothing about the internal economics of the American auto industry suggests that this is possible, given their debt obligations.
    ITA. Time for this gravy train to come to a screeching halt.
    Yup!
    Who uses a machete to cut through red tape
    With fingernails that shine like justice
    And a voice that is dark like tinted glass

    Comment


    • #17
      Re: More Taxpayer Bailouts...

      We need to get out of the big car business and go into engineering. I am only ok if they help out (well if there was money to, and IMO there isn't), if it is mandated they made seriously energy clean cars. If we are to pay up, then they have to sign on the doted line that they are owned by the taxpayer and have to work to our benefit.

      It's unbelievable that America is loosing substantial money not to healthcare reform but to failed businesses, absolutely unbelievable.

      Comment


      • #18
        Re: More Taxpayer Bailouts...

        Originally posted by Color_Me_Sulky

        It's unbelievable that America is loosing substantial money not to healthcare reform but to failed businesses, absolutely unbelievable.

        SOOO TRUE..and it is even worse to hear certain politicians argue vehemently to fund failed businesses while arguing that healthcare is a privilege and the cost to society to help insure the uninsured would be too high.
        ~Mom of 5, married to an ID doc
        ~A Rolling Stone Gathers No Moss

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        • #19
          Re: More Taxpayer Bailouts...

          CNBC is reporting this morning that now AmEx is seeking a $3.5BB "bailout" from the Feds.

          STOP THIS!!!! STOP THIS!!!
          When did it become unacceptable for companies to FAIL? Or become distressed? The economically sustainable way for the "taxpayer" to "prop up" a company is for people to DO BUSINESS with the company--not for people to subsidize it through tax dollars. This is INSANE. AmEx does not provide a service that is so critical to our economy or national security to warrant this.

          Comment


          • #20
            Re: More Taxpayer Bailouts...

            I don't know Abigail, I agree when did this become "our" problem? I'm starting to feel like this and the bank bailouts is more about refusing to say top incomes have been overblown, way inflated, and that the idea that they should take a huge hit and come down to reality - is really what all this is about.

            - car companies: high salaries for non-degree jobs w/high compensation, and huge breaks from
            government - already, GMC said to have spent already allocated money at an alarming
            rate, for what another Yukon model?

            - banks, especially their CEO's: high salaries, high profit for shady business tranasctions

            - AIG, and their parties

            - homes gone to foreclosure, that were bought at an unsustainable price?


            I know I'm cherry picking things to make my point, and things are more complicated than this, but in the Great Depression people lost their stuff because it wasn't sustainable. I think people at the high ticket bracket, and unfortunately those making much less employed by them, have to lose their financial standing because if I can't afford it, I'll be d**ned if I'm gonna pay the price out of my pocket for you to afford it on monopoly money.

            Comment


            • #21
              Re: More Taxpayer Bailouts...

              Most tax payers have been disgusted with this since it was first proposed, and it's so frustrating because we didn't even have that many people running for office who were willing to say that it was wrong. Our two-party system is becoming one-party in the areas where it really matters. If we could just get campaign financing under control, we might actually have more choices, but that's another debate for another time...

              Our whole economy has been based on consumerism - consumer confidence, consumer spending... The money ran out decades ago, so they just kept finding more and more "creative" ways to keep us spending money we didn't have. Now the banks have run out of money to lend, and they're trying to get creative with ways to give them more - reducing required funds on hand, changing accounting methods, etc. When will they finally admit that we can't just spend spend spend without actually having money? What if, instead of lowering interest rates to get people to borrow more (and discourage saving), they raised them? What if the government encouraged saving again, like it did with war bonds? (Granted, those wouldn't go over well at all today, but something might...)

              I think our "crisis" today could end up being very good for our economy in the long run if we let it play out, but politicians run for reelection every 2, 4, or 6 years, and if they can't make the economy look good during that term, they're out. Their next paycheck is more important to them than the long-term stability of our economy. So they keep trying to use band-aids to hold on to severed limbs, and hope that we've forgotten by the next election.

              But, back to cars... Yeah, I agree that the first bailout package just set a precedent that will be really difficult to stop, especially with a democratic congress and president. (Not that the republicans weren't all over it, too, but I imagine they got a lot more backlash from their voters.) Now, if any company can make the argument that they are big enough to harm the economy in any way, they'll be there in Washington with their hands out, just like the financial and automobile industries.
              Laurie
              My team: DH (anesthesiologist), DS (9), DD (8)

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              • #22
                Re: More Taxpayer Bailouts...

                Where's my student loan bailout?
                Wife of Ophthalmologist and Mom to my daughter and two boys.

                Comment


                • #23
                  Re: More Taxpayer Bailouts...

                  Where's my student loan bailout?
                  Amen sister!
                  In my dreams I run with the Kenyans.

                  Comment


                  • #24
                    Re: More Taxpayer Bailouts...

                    This site is an interesting read. They are tracking the bailout (TARP) expenditures/agreements in a blog. It is well done and linked to pertinent filings.

                    http://www.bailoutsleuth.com

                    I think you may have to click on the archives to read. The page I have in my bookmarks stays static until I go to archives. :huh:

                    My current obsession is the insane number of credit default swaps made by players unrelated to the subject of the swap. From what I've read AIG holds 340 billion dollars worth of swaps negotiated this way. These products are simply bets. Pure gambling - no investment involved. I can't imagine why this was allowed and I certainly can't see bailing the suckers out for this. For those who haven't been reading about these, the credit default swap was marketed as a kind of insurance against an investment. You could buy a swap to pay you if an investment you made went bad. The idea was that they removed risk from the market. You buy a bond and a swap to balance out your risk. Theoretically. Of course, some of the institutions selling the swaps may have thought things like Lehman Bros would never fail and underestimated the chance that they'd have to pay out.

                    The credt default swap business flourished....and eventually people would buy swaps on things that they haven't even invested in. So, you could buy a swap to pay you if Lehman Bros went under - even if you didn't own any Lehman Bros. bonds. It is the equivalent of me buying insurance on Nellie's house and me getting paid if it burns down. :huh: How is this anything other than placing a bet? If AIG owes 340 billion dollars to people that bet Lehman would go under (or other companies), that's AIG's error. Why should we pay in to bail out this 63 trillion dollar casino that Wall Street's been running without any oversight or regulation? I'm glad that Cuomo is starting to call them out as "insurance" and trying to make the companies accountable.

                    Bleh.


                    Warning: The bailout sleuth executive compensation posts will make you nuts.
                    Angie
                    Gyn-Onc fellowship survivor - 10 years out of the training years; reluctant suburbanite
                    Mom to DS (18) and DD (15) (and many many pets)

                    "Where are we going - and what am I doing in this handbasket?"

                    Comment


                    • #25
                      Re: More Taxpayer Bailouts...

                      Originally posted by houseelf
                      Where's my student loan bailout?
                      Amen sister!
                      You know what I want? I want my middle-class life bailout. Clearly, I was meant to be rich. I just haven't actually DONE the things to make myself a millionaire. I should be a millionaire several times over.

                      I am definitely as distressed about my reality as any car maker is about its situation. WHERE'S MY BAILOUT?

                      Comment


                      • #26
                        Re: More Taxpayer Bailouts...

                        I'm getting frustrated with these mortgage bailouts that I've heard more and more about the last 2 days. If you're 3 months behind on your mortgage Citigroup, Fannie Mae & Freddie Mac will work with you to lower your monthly payments and/or lower your interest rate and/or extend your mortgage from 30 years to 40. So the people who couldn't afford what they bought in the first place are getting bailed out while people like us who bought what we could afford but are still paying a ridiculous interest rate are stuck b/c we can make our payments - RIDICULOUS!
                        Wife to NSG out of training, mom to 2, 10 & 8, and a beagle with wings.

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                        • #27
                          Re: More Taxpayer Bailouts...

                          The situation with the mortgages has made me simmer too. I did read the terms of the new arrangements today and it made the news somewhat more palatable. Apparently, they will offer reduced payments by increasing the loan term to 40 years instead of 30 OR by forgiving interest on a portion of the established principal of the loan -- and making that lump sum of principal due at the sale of the house. So, it would seem that people that bought a 900K McMansion will still be shelling out 900K for it. The bank will forgo some interest payment or will take their money more slowly. That's better than them giving them the house for less in my eyes. :huh: (I still don't like it, but I can live with it.)

                          I also read that this is not expected to stop the housing slide. Fannie and Freddie hold 31 million of the 53 million mortgages in the U.S. -- but only 20% of the delinquent mortgages. Citi and the other banks that arranged these deals hold an additional 20%. The remaining 60% of delinquent mortgages is held privately and has been sliced/diced so that it isn't a whole mortgage anymore --- it's part of a CDO. There is little agreement on how to handle that mess. Hopefully, helping 40% of potential foreclosures will make some difference?

                          This is a teeny tiny silver lining.......
                          Angie
                          Gyn-Onc fellowship survivor - 10 years out of the training years; reluctant suburbanite
                          Mom to DS (18) and DD (15) (and many many pets)

                          "Where are we going - and what am I doing in this handbasket?"

                          Comment


                          • #28
                            Re: More Taxpayer Bailouts...

                            Hey, Angie, way to pull me back in here with my house as an example! I thought of the credit swaps as more along the lines of that extra "insurance" on my house but without the money to back up the policy. Or that the insurer was insuring more higher than average flammable houses than it had assets to cover.

                            Anyway, I need to catch up on everything that happened today. I still the the US government did need to step in (I know, boo hiss on me) but whether or not that magic amount is $700 billion, I don't know. I'm also not sure what to think of the bailing out of companies to big to fail leading to bigger companies that will surely really be super-duper too big to fail. To me the difference between the cars and the mortgage and credit crisis is that in the credit situation, the government failed to adequately or properly regulate a bunch of stuff. Not so much with the auto-makers and nothing about that bail-out is going to make the US automakers viable because it doesn't address the pension and healthcare obligations (from what I can tell). Letting the auto companies go bankrupt will surely suck for lots and lots of people but not, IMO, the degree to which lack of credit will affect individuals and businesses.

                            Comment


                            • #29
                              Re: More Taxpayer Bailouts...

                              Bloomberg is reporting this morning that Obama plans to ask Congress for $50BB in bailout for the auto industry.

                              That's TWICE what Pelosi is currently pushing for.

                              Super. I can't wait to start subsidizing institutionalized failure... :huh:

                              Comment


                              • #30
                                Re: More Taxpayer Bailouts...

                                It might be too late. Isn't GM supposed to file for bankruptcy before the end of the year? Won't that be before Jan 20th? I have to go read this news. I was kind of hoping this no win decision would fall on Bush before he left office. (I like to duck big problems, personally. )

                                Most economic opinions that I have heard lately seem to be "let them fail - it will be horrible and result in a 2-4% drop in our GDP but that's the only solution". Suck-fest economy. Of course, I was happy when they let Lehman Bros fail but now they say that much of the economic slide we are now experiencing and the bank credit freeze stems from that decision. (Now that "safe" CDS risk like Lehman Bros had to pay out and more could follow.)

                                Moral hazard or deep recession? Lousy choices.
                                Angie
                                Gyn-Onc fellowship survivor - 10 years out of the training years; reluctant suburbanite
                                Mom to DS (18) and DD (15) (and many many pets)

                                "Where are we going - and what am I doing in this handbasket?"

                                Comment

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