Comments on: MYM Series: Wall Street Bailout Explanation 1 of 4 http://milkyourmoney.com/2008/09/30/mym-series-wall-street-bailout-explanation-1-of-4/ Got Money? Milk the most from it... Fri, 05 Mar 2010 22:34:13 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Best of September 2008 and PrimeTime QuickHits | Prime Time Money http://milkyourmoney.com/2008/09/30/mym-series-wall-street-bailout-explanation-1-of-4/comment-page-1/#comment-1144 Best of September 2008 and PrimeTime QuickHits | Prime Time Money Sun, 05 Oct 2008 21:18:24 +0000 http://milkyourmoney.com/?p=446#comment-1144 [...] MYM Series: Wall Street Bailout Explanation, plus, parts 2, 3, and 4. (@ Milk Your Money) [...] [...] MYM Series: Wall Street Bailout Explanation, plus, parts 2, 3, and 4. (@ Milk Your Money) [...]

]]> By: Joe Manausa - Tallahassee Real Estate http://milkyourmoney.com/2008/09/30/mym-series-wall-street-bailout-explanation-1-of-4/comment-page-1/#comment-1132 Joe Manausa - Tallahassee Real Estate Thu, 02 Oct 2008 21:00:18 +0000 http://milkyourmoney.com/?p=446#comment-1132 Most of the arguments that I have heard against this is that we shouldn't "throw money" at the fat cats on Wall Street. I think the average person doesn't understand the liquidity crisis and how it could cost a large number of people (outside of the banking/real estate/financial sectors) jobs due to the fact that businesses will not have sufficient credit reserves to make payroll. Additionally, most have not considered that if managed correctly, the government stands to make a profit with this as an investment. Buying loans at 40 cents on the dollar and selling later at a profit. It would take a default rate of greater than 80% for the government to lose its investment (even when the loans default, they would need to foreclose and sell the home for less than 40% of the loan amount for the government to lose money). For this reason, Warren Buffett has said this is a great investment for the government. Most of the arguments that I have heard against this is that we shouldn’t “throw money” at the fat cats on Wall Street. I think the average person doesn’t understand the liquidity crisis and how it could cost a large number of people (outside of the banking/real estate/financial sectors) jobs due to the fact that businesses will not have sufficient credit reserves to make payroll. Additionally, most have not considered that if managed correctly, the government stands to make a profit with this as an investment. Buying loans at 40 cents on the dollar and selling later at a profit. It would take a default rate of greater than 80% for the government to lose its investment (even when the loans default, they would need to foreclose and sell the home for less than 40% of the loan amount for the government to lose money). For this reason, Warren Buffett has said this is a great investment for the government.

]]> By: Ben http://milkyourmoney.com/2008/09/30/mym-series-wall-street-bailout-explanation-1-of-4/comment-page-1/#comment-1123 Ben Wed, 01 Oct 2008 19:04:57 +0000 http://milkyourmoney.com/?p=446#comment-1123 Rick, part of me wants to agree with your Darwinistic outlook...let these super-banks crash and burn and new ones (with better regulation) will rise from the ashes and be stronger for it. But lets not forget that those toxic loan packages aren't going to magically go away, they have to get eaten somewhere. I am more in favor of not having taxpayers pick up the tab but then we also see more things crashing coming down the pipeline like derivatives. An extra 2 trillion dollars extra to be exact. We should also remember that this bailout is an infusion of money where its not liquidity that's the issue, but insolvency. Will todays vote give us a jump for consumers to sell off again? Its hard to judge but predictions don't get much easier then this. Of course its all speculation in the long run...Frank would know since he is on the Hill a lot more than I am. Rick, part of me wants to agree with your Darwinistic outlook…let these super-banks crash and burn and new ones (with better regulation) will rise from the ashes and be stronger for it.

But lets not forget that those toxic loan packages aren’t going to magically go away, they have to get eaten somewhere. I am more in favor of not having taxpayers pick up the tab but then we also see more things crashing coming down the pipeline like derivatives. An extra 2 trillion dollars extra to be exact. We should also remember that this bailout is an infusion of money where its not liquidity that’s the issue, but insolvency.

Will todays vote give us a jump for consumers to sell off again? Its hard to judge but predictions don’t get much easier then this. Of course its all speculation in the long run…Frank would know since he is on the Hill a lot more than I am.

]]> By: Frank http://milkyourmoney.com/2008/09/30/mym-series-wall-street-bailout-explanation-1-of-4/comment-page-1/#comment-1122 Frank Wed, 01 Oct 2008 18:32:27 +0000 http://milkyourmoney.com/?p=446#comment-1122 Rick, thanks for commenting. With the majority of U.S. citizens in disagreement with the bailout, I'm surprised more haven't responded like you. Trust me, I don't want to spend 700 billion to get us out of a mess we didn't start. But we as consumers defiantly fueled the crisis by agreeing to bogus loans (I realize not everyone did, but how would we single them out?). I guess this is kind of a fear and panic oriented article, but frankly the markets are in panic and investors are in fear. Unless something is done, I don't see that changing. Something that gets lost in talks about the bailout is the potential for earnings. It's possible, though not the goal, that the U.S. could make money on purchasing these securities in the future. Rick, thanks for commenting. With the majority of U.S. citizens in disagreement with the bailout, I’m surprised more haven’t responded like you. Trust me, I don’t want to spend 700 billion to get us out of a mess we didn’t start. But we as consumers defiantly fueled the crisis by agreeing to bogus loans (I realize not everyone did, but how would we single them out?). I guess this is kind of a fear and panic oriented article, but frankly the markets are in panic and investors are in fear. Unless something is done, I don’t see that changing. Something that gets lost in talks about the bailout is the potential for earnings. It’s possible, though not the goal, that the U.S. could make money on purchasing these securities in the future.

]]> By: Rick Decker http://milkyourmoney.com/2008/09/30/mym-series-wall-street-bailout-explanation-1-of-4/comment-page-1/#comment-1121 Rick Decker Wed, 01 Oct 2008 16:53:28 +0000 http://milkyourmoney.com/?p=446#comment-1121 A fear and panic oriented article. The world will survive with no bailout. how about bailing out the poor or the un-educated or those needing health coverage. It is time to let the chips fall where they may. If some banks fail, others will step in. This crisis is just an extension of the Bush follies of deficit spending on a war that never should have been started. It is just this is a different group of "monied" that we are giving dollars to. NO BAILOUT PERIOD A fear and panic oriented article. The world will survive with no bailout. how about bailing out the poor or the un-educated or those needing health coverage.

It is time to let the chips fall where they may. If some banks fail, others will step in. This crisis is just an extension of the Bush follies of deficit spending on a war that never should have been started. It is just this is a different group of “monied” that we are giving dollars to.

NO BAILOUT PERIOD

]]> By: Frank http://milkyourmoney.com/2008/09/30/mym-series-wall-street-bailout-explanation-1-of-4/comment-page-1/#comment-1119 Frank Wed, 01 Oct 2008 12:55:33 +0000 http://milkyourmoney.com/?p=446#comment-1119 Afterthought Not passing bailout legislation could also: 1) Increase Foreclosures 2) Increase Unemployment 3) Continue the Slide in Housing Prices Afterthought

Not passing bailout legislation could also:
1) Increase Foreclosures
2) Increase Unemployment
3) Continue the Slide in Housing Prices

]]>