What if there are NO BAILOuTS??

What could’ve/ would’ve happened if the government gave no bailouts to these financial companies? Let’s say what if the entire finance system collapses. What could happen then?

Bump. “What could’ve/ would’ve happened if the government gave no bailouts to these financial companies?” I think this is one of the most important questions, maybe of the generation, and nobody is answering it. “Let’s say what if the entire finance system collapses. What could happen then?” This isn’t so important. I see there is a movie coming out based on Saramago’s ‘Blindness’. The book is pompous (not close to his most pompous) but very exciting about what happens to the world if everyone goes blind suddenly. Seems similar.

If there is no bailout, things go on. The bailout is a scam like global warming (now called climate change since it’s getting colder!). They want to spend our money… Why do you think it’s being rushed so quickly.

what if the bailout happend? some wall st executives can probably continue to party.w buffet and bill gross makes a killing, the dollar dies sooner or later and most americans generally get poorer. with 700 billion being an arbitrary number -the treasury had no data point for this -they came up with a high sounding number to make it sound serious as Forbes.com points out http://broadcatching.wordpress.com/2008/09/25/700-billion-we-just-wanted-to-choose-a-really-large-number/ there is no idea how much it will actually cost 2 trillion seems to be the number bandied about by some, the pessimists are saying 5 trillion. the next generation of americans can claim the dubious honor of being the first to enjoy a lower standard of living than their parents. i thought people cared for their children and made sacrifices for them. this has gotta be the most selfish act in american history.

PtrainerNY Wrote: ------------------------------------------------------- > If there is no bailout, things go on. > > The bailout is a scam like global warming (now > called climate change since it’s getting colder!). > They want to spend our money… > > Why do you think it’s being rushed so quickly. Ohhh bullsh!t. Do you even work in banking or finance? Right now, I know that GE has cut off lines to several franchise companies. I know that farm credit is gone, nobody will accept anything until crops show up. I know that several large facilities are now in amortization, facilities that cater to corporations who lend to corporations or give equipment leases to corporations (small, med, large biz). That means those companies cannot generate any leases for other companies, limiting business. This will begin to contract the economy, quickly. You have no goddamn clue about what’s going on in the debt markets. They are *GONE*. *NOBODY* is lending in any meaningful manner. Overnight CP rates are sky-high because there is no liquidity. It’s easy to sit on your high horse, preaching about this being false, when you really don’t even know what’s going on anywhere.

I know one thing about banking & financie. IT DIDN’T WORK and the government can’t legislate our way out of it. BTW, I follow a farming tech company that is lending. Banks will lend when it makes sense. It’s just not going to be through the same structure the financial world has become comfortable over the last 5 or so years (a blink of the eye)… a sort of blind securitized lending where the lender is the middleman for a debt product and has not skin in the game beyond next quarter’s bonus. To answer the question directly: After a blow up, the cost of capital goes way up. Over time it will come back down. You cannot have the government sign some paper and tell the world what the cost of capital will be (without SERIOUS consequences). We’ve gone through severe credit contractions before and it is always a good thing for investors (like Buffett and Gross as someone mentioned). For businesses and people… I don’t like how many assume they *deserve* credit. As if it’s their right? Throughout history, that has not been the case. Hard to get a loan could be the norm for a while (as it has been in the past)!

i guess, we probably get a into a vicious cycle of credit destruction and deflation, leading into another great depression

NO the bailout will lead to the depression… Otherwise we will have a normal recession followed by a boom.

I have a big problem with the notion that credit is severely tight right now so the gov’t needs to do a bailout. There’s no question that debt markets are pretty f-ed right now. The problem is that gov’t action (or inaction) is at least partly responsible for that. If the bailout doesn’t happen, credit markets get really tight so having cash on-hand is a really smart idea. Interest rates are pretty low right now anyway, so why lend money until you know what’s going on? Add to that all the vilification of leverage, newly discovered attention to balance sheets, gov’t seizures of banks and AIG, and there’s tons of reasons to keep as much cash on the balance sheet as possible.

spierce Wrote: ------------------------------------------------------- > PtrainerNY Wrote: > -------------------------------------------------- > ----- > > If there is no bailout, things go on. > > > > The bailout is a scam like global warming (now > > called climate change since it’s getting > colder!). > > They want to spend our money… > > > > Why do you think it’s being rushed so quickly. > > > Ohhh bullsh!t. Do you even work in banking or > finance? > > Right now, I know that GE has cut off lines to > several franchise companies. I know that farm > credit is gone, nobody will accept anything until > crops show up. I know that several large > facilities are now in amortization, facilities > that cater to corporations who lend to > corporations or give equipment leases to > corporations (small, med, large biz). That means > those companies cannot generate any leases for > other companies, limiting business. This will > begin to contract the economy, quickly. > > You have no goddamn clue about what’s going on in > the debt markets. They are *GONE*. *NOBODY* is > lending in any meaningful manner. Overnight CP > rates are sky-high because there is no liquidity. > > > It’s easy to sit on your high horse, preaching > about this being false, when you really don’t even > know what’s going on anywhere. assuming you are right about a nonexistent debt market,kindly explain why 700 billion will solve this problem miraculously. do you have any data or is it a wild assed guess?. if you have some data kindly supply them to the treasury guys -they confessed to making up the number as they go.

You mean like 700B vs 1T? They are both a ton of money and would provide lots of liquidity to debt markets. I don’t see where spierce claimed it would solve the problem miraculously. Seems to me he was challenging your assertion that it was a scam.

A lot of houses that no one needs were built over the last 5 years. The banks hold the paper but they figured no way in hell would all of them collapse. Guess what? They did. Now the banks are going down and the gov’t is doing what it can to avoid a firesale of remaining assets. Is this fair? No! Me and a zillion other people want some firesale assets! We want the old bankers/system thrown out. We know it will cause some problems in the near term. We don’t want to patch the broken system with tax money.

I’ll stand in line for some of them fire-sale assets.

JoeyDVivre Wrote: ------------------------------------------------------- > I have a big problem with the notion that credit > is severely tight right now so the gov’t needs to > do a bailout. There’s no question that debt > markets are pretty f-ed right now. The problem is > that gov’t action (or inaction) is at least partly > responsible for that. If the bailout doesn’t > happen, credit markets get really tight so having > cash on-hand is a really smart idea. Interest > rates are pretty low right now anyway, so why lend > money until you know what’s going on? Add to that > all the vilification of leverage, newly discovered > attention to balance sheets, gov’t seizures of > banks and AIG, and there’s tons of reasons to keep > as much cash on the balance sheet as possible. Not to mention, those banks that stand to benefit substantially from this bailout…does anyone not think that they are leading the way in holding back credit right now to further enhance the pressures to get this thing through?