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  • Bailout alternatives?

    Originally posted by AMosely View Post
    The alternative is to do nothing and let the markets free fall
    Was going to reply directly, but I didn't want to muddy Magnum's thread too much more ;)

    Anyway, I don't see why it's a paulsen-plan or nothing situation. I just wanted a place for people to throw links/ideas for alternatives to the gov't buying up 700B "worth" of mortgages. So, have your read/heard/seen any alternatives that sounded solid?

  • #2
    Re: Bailout alternatives?

    Yeah. Let the market fix itself. Markets are going to crash hard now (if we do nothing), or even harder later (if we do something). I heard Ron Paul give his $0.02 on the radio yesterday and I think he was spot on with his opinion. Basically he was saying back in the 90's the government didn't trust the free market enough to boost the economy, so they forced the industry to change the rules and give anyone a mortgage. Now the same people who screwed it all up are going to be the doctors to fix things back up! It's like a doctor messing you up and GIVING you cancer. Now the same doc wants to cure you. Would you honestly let him? I wouldn't. I think I'd go to someone else.

    Watch him right here. He's making more sense than anyone I've heard yet...
    http://www.liveleak.com/view?i=b08_1222726124
    "Common sense is not so common." -Voltaire

    Comment


    • #3
      Re: Bailout alternatives?

      Originally posted by War.mongeR1 View Post
      Watch him right here. He's making more sense than anyone I've heard yet...
      http://www.liveleak.com/view?i=b08_1222726124
      It's too bad Ron Paul, bowed out of the race / got snuffed out by the media.
      He knows whats wrong with our current system, and isn't afraid to say it.
      But again, we get to vote for the lesser of 2 evils :-/

      Comment


      • #4
        Re: Bailout alternatives?

        Personally I think Ralph Nader's outlook is more appropriate than Paul's.

        Comment


        • #5
          Re: Bailout alternatives?

          Originally posted by Gambit7 View Post
          Personally I think Ralph Nader's outlook is more appropriate than Paul's.

          whats that...have one suit you got back in the 80s and wear it everyday?
          that sounds like a good idea trooper.
          -Vulcan

          Comment


          • #6
            Re: Bailout alternatives?

            Originally posted by Gambit7 View Post
            Personally I think Ralph Nader's outlook is more appropriate than Paul's.
            And what is his outlook? Links please.
            "Common sense is not so common." -Voltaire

            Comment


            • #7
              Re: Bailout alternatives?

              Originally posted by Trooper View Post
              whats that...have one suit you got back in the 80s and wear it everyday?
              Wait, I thought that was Dennis Kucinich!

              Sorry...OT: The economy has to take a hit. A really big one. We have all been spending money that doesn't really exist for a long time, and buying with money we don't actually have. Even the budget surplus of the Clinton era wasn't really real, it was just on paper and in binary code. We don't HAVE 700 billion. Pretending we do will make the eventual repercussions even more shocking...we don't even own most of our debt right now. We are at the mercy of the rest of the world markets to decide if they want to help us or hurt us, and everyone needs to think about what will happen to the global economy if ours tanks. Americans are certainly not the only ones worried right now.

              The funny thing is, if investors could just be tough and not act in pure self-interest, we could probably weather this storm quite well. Unfortunately, that leaves a huge plum just hanging for the first few (who are unscrupulous enough) to pluck. Were not exactly short on investors without scruples. The tragedy of the commons strikes again!

              Speaking of which, I suppose we have enough natural resources to pay it off, if we rescind every environmental law we have and lay waste to our chunk of continent--it worked for the Russians and Chinese...kind of. :(
              Last edited by Axis of Eeevil; 09-30-2008, 07:30 PM.
              sigpic

              Living proof that "Teamplay ensmartens the idiotest of us!"

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              • #8
                Re: Bailout alternatives?

                Check this out.. Maybe someone who knows Economics can Expound on it..since I cannot give an opinion either way..
                http://www.daveramsey.com/etc/fed_ba...tmlc?ictid=sml

                Here are the Points:

                "The Common Sense Fix

                Years of bad decisions and stupid mistakes have created an economic nightmare in this country,
                but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support
                any congressperson who votes to implement such a policy. Instead, I submit the following three-
                step Common Sense Plan.

                I. INSURANCE
                a. Insure the subprime bonds/mortgages with an underlying FHA-type insurance.
                Government-insured and backed loans would have an instant market all over the
                world, creating immediate and needed liquidity.
                b. In order for a company to accept the government-backed insurance, they must do two
                things:
                1. Rewrite any mortgage that is more than three months delinquent to a
                6% fixed-rate mortgage.
                a. Roll all back payments with no late fees or legal costs into the
                balance. This brings homeowners current and allows them a
                chance to keep their homes.
                b. Cancel all prepayment penalties to encourage refinancing or
                the sale of the property to pay off the bad loan. In the event of
                foreclosure or short sale, the borrower will not be held liable
                for any deficit balance. FHA does this now, and that
                encourages mortgage companies to go the extra mile while
                working with the borrower—again limiting foreclosures and
                ruined lives.
                2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and
                executive team members as long as the company holds these
                government-insured bonds/mortgages. This keeps underperforming
                executives from being paid when they don’t do their jobs.
                c. This backstop will cost less than $50 billion—a small fraction of the current proposal.

                II. MARK TO MARKET
                a. Remove mark to market accounting rules for two years on only subprime Tier III
                bonds/mortgages. This keeps companies from being forced to artificially mark down
                bonds/mortgages below the value of the underlying mortgages and real estate.
                b. This move creates patience in the market and has an immediate stabilizing effect on
                failing and ailing banks—and it costs the taxpayer nothing.

                III. CAPITAL GAINS TAX
                a. Remove the capital gains tax completely. Investors will flood the real estate and stock
                market in search of tax-free profits, creating tremendous—and immediate—liquidity in
                the markets. Again, this costs the taxpayer nothing.
                b. This move will be seen as a lightning rod politically because many will say it is helping
                the rich. The truth is the rich will benefit, but it will be their money that stimulates the
                economy. This will enable all Americans to have more stable jobs and retirement
                investments that go up instead of down.

                This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to
                stand up, speak out, and fix this mess "
                |TG|ARMA Pathfinder
                ..now where did I put my keys?

                Comment


                • #9
                  Re: Bailout alternatives?

                  Get rid of the horrid Sarbanes-Oxley as it has done nothing to prevent this disaster and only adds more red tape and costs. Repeal the "fair housing" laws which force these banks to give loans to people that can not afford them. Get rid of the capital gains taxes. The Illegal Alien factor must be delt with but that is a whole topic by itself but a major part of this problem. Stop printing up all this darn money to pay our debts!!! DRILL DRILL DRILL and whatever else we have to do to meet our enery needs, again this is a piece of the larger puzzel. After all that is said and done, let the market correct itself. That would be a start at least.

                  The best thing the Govt can do is get the hell out of the way.
                  Battlefield Samurai 'Banzaaaiii!!!

                  Comment


                  • #10
                    Re: Bailout alternatives?

                    Nobel Laureate idea.

                    Professor Stiglitz says the current plan needs to be passed but it is a bad plan. It is basically trickle down economics.

                    He suggests

                    1. Infusing capital into the credit market. I think he say this should be done by buying preferred shares of the failing institutions.
                    2. Stopping the flood of foreclosures.
                    3. Dealing with growing unemployment.
                    Iím not racists, I have republican friends. Radio show host.
                    - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                    - "A foolish consistency is the hobgoblin of little minds" - Emerson
                    - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                    - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                    - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                    - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                    Comment


                    • #11
                      Re: Bailout alternatives?

                      Increasing the minimum payments on credit cards would inject some liquidity, wouldn't it?

                      Comment


                      • #12
                        Re: Bailout alternatives?

                        Dave Ramsey's plan that Peardog posted is by far the best plan I've heard thus far. I hope congress is listening.
                        "Common sense is not so common." -Voltaire

                        Comment


                        • #13
                          Re: Bailout alternatives?

                          The capital gains cut goes to EVERYBODY?

                          The problem isn't the stock market, is it? It is the credit market. Right?
                          Iím not racists, I have republican friends. Radio show host.
                          - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                          - "A foolish consistency is the hobgoblin of little minds" - Emerson
                          - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                          - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                          - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                          - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                          Comment


                          • #14
                            Re: Bailout alternatives?

                            Originally posted by El_Gringo_Grande View Post
                            The capital gains cut goes to EVERYBODY?

                            The problem isn't the stock market, is it? It is the credit market. Right?
                            The problem is in our current society they're one in the same. And Wall Street was never originally meant for it to be that way.
                            (Nader's outlook in a nutshell, along with not bailing-out, and not drilling our way out of the problem)

                            Comment


                            • #15
                              Re: Bailout alternatives?

                              I'm sorry but a lot of those plans are just crap. They are aimed at bailing out the people who got us into the mess in the first place.... They are almost as amusing as hearing these idiot politicians (who don't know any more about this stuff then you or I do mind you in most of the cases) go on and on about it acting like they know what's best. Nobody knows what's best, we've never been here before.

                              I'm dead-set against any kind of deal that bails out the stockholders who made bad decisions (which is what the gov't buying these "toxic assets" would do), and I'm against bailing out the bondholders who made bad business decisions by loaning companies with lots of these "toxic assets" money. (which is what purchasing shares in those companies would do.) I'm dead-set against any suspension of mark-to-market, mainly because that only makes the idiots think the problems will go away. They should pair removal of mark-to-market with these "toxic assets" along with removing "mark-to-market" on the colleratal of those assets. (the bad notes, imagine being able to say your home is worth 1 million instead of the 250k the market say's it's worth, it doesnt make those homes actually worth that much, but the books then look like they hold good assets instead of bad ones.)

                              If they really want to solve this problem, you dont throw good money at badly run businesses. They HAVE to fail, because they will anyway, so lets not waste money on them. Whatever plan they go with should have the money "trickle up" from joe six-pack to the buisnesses that weren't effects by this crash up through the system where the companies that survive holding these assets on their books will still get some of the money. Don't forget, for every 1 bad company that has loads of these "toxic assets" on their books, there are probably 2 companies that were smart enough to avoid them. These residental CDO's are just where this starts, not where it ends. Its going to run through the entire CDO market (which supposedly if you include residental, commercial and corperate CDO's, is in the neighborhood of 100 trillion) and that simply cannot be stopped at this point so throwing money into this market will end up probably having the effect of burning it in huge piles.

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