Screwed Out of $700 Billion?
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Don't use my parent's money
for this bailout!
Look, these guys with guns who want to take your money ain’t on your side. If Warren Buffett and Bill Gross truly believe that there’s money to be made by buying up these distressed assets from these formerly very rich financials, then buy all means I think they should go for it. But not by cheering on the guys with the guns who want to come to my mom and dad’s house and take the money they’ve saved running their small town veterinary practice for the last 35 years.
Pimco’s got $800 billion in assets. If you, Mr Gross really believe those assets are a great buying opportunity, then dude — take your $800 billion and make the bet! Don’t do it with my parent’s money unless they choose to give it to you.
To summarize these bankers and bureaucrats and politicians position then:
(While holding a gun to your head) “Buy these assets from us. We promise that it’s a great time to buy them.”
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This proposal doesn't address who STARTED this mess!
No one knows whether the Bush administration’s proposed $700 billion bailout plan will solve our current financial crisis, with major companies failing, people losing their homes and banks not wanting to lend money. We also don’t know if the other proposals being touted will work either.
What I don’t like about any of the proposals is that they don’t address what started this whole financial mess – bad loan terms. Basically, this all started with people not being able to pay for their new homes, not being able to make their monthly mortgage payments. Why? They ran into trouble because they bought homes that were beyond their means and because they agreed to fancy loan terms that they eventually couldn’t afford.
My solution – the bailout needs to buy up these mortgage loans directly from consumers and re-write the terms so people can pay their mortgages and they don’t default on their home loans. Thus, the banks won’t be inundated with bad loans. Basically, the government should use that $700 billion to stop the root problem of bad mortgage loans. As for the problem at the bank level, we should allow these firms to set aside these bad assets from their balance sheets – keep them, don’t give them to the government and taxpayers – but allow banks to move on and not get bogged down (fail) from these bad loans.
Everyone is saying these assets will eventually be worth something, once the market for them is back to trading normally. OK, so put them on the back burner then (off balance sheet for companies) and let banks play out their bet.
Where is the wrist slap and how will the instigators ever learn their lesson to keep this from happening again?
We're as taxpayers are stuck in between a gigantic rock and the hardest of places. If we don't rescue Wall Street, we will see our retirement savings continue to dwindle, our home values decrease, banks continue to fail and the possible loss of jobs. It could play out like a story from the 1930's.
But there are big questions about how the rescue plan will work. If Wall Street can't manage this toxic waste, why do we think the government will be able to? Where is the wrist slap and how will the instigators ever learn their lesson to keep this from happening again?
There are MAJOR flaws across the board. But if you laid out the pros and cons of the plan on a piece of paper, in the end, many will see that here's the fundamental question: Is it worth risking some amount of my taxpayer money to ensure my retirement plan, my job, my home and the bank where all my money is all remain safe? It is the prettier of the two very,ugly step sisters we are choosing between.
And the fact remains, both sisters are quite ugly.