Quote:
Originally Posted by 1ntCobra
Well if we don't do the bailout, I hope you have a ton of cash in your mattress. That's the only way you 'll be set for the consequences when all of the credit dries up.
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This "bailout" wouldn't bail out a thimble.
In order to unfreeze the credit markets and make any kind of difference whatsoever, additional capital needs to be added to the markets. Additional capital that the banks can then turn around and lend.
Taking away bad debt from their balance sheets doesn't do squat to add capital, UNLESS the government, for some strange perverted paid-for reason, pays MORE than the value of the debt it is assuming...otherwise it is a straight up swap with no accretive value to the banks whatsoever.
Where the Senate is playing cute is with their gutting of the 'mark-to-market' provisions. That will allow lenders to artificially inflate the value of their worthless debt. Just like that worthless debt was artificially inflated for bundling into instruments to be sold to investors for more than it was really worth.
So all that this newest incarnation of a bail out does is saddle America with not only the projected $700 billion cost of the original (seriously flawed and not well-thought out) plan, but with an additional $100+++ billion in bribes to Congress to vote for this steaming pile of manure. And if it does anything, it will REDUCE the world's confidence in American debt because the whole world will understand that the balance sheets of American lenders are now likely pure fiction and wishful thinking.
This current administration, their drones and enablers in Congress are just pathetic. It's time for a new revolution.
Unfortunately, the general citizenry seems to be representative of our glorious leaders, and vice versa. All I hear about is if the bailout goes through the housing market will take off like a rocket and all will be good again. Can people really not comprehend that the housing market of the last 5 years was a mirage built on bogus assumptions and criminal practices. Do they REALLY think that it's coming back to save the world??
I need an island somewhere...
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