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RE: Selective Bailouts

Locus Coeruleus — Tue, 22 Jul 2008 18:07:18 GMT

[quote][b]jerm (7/22/2008)[/b][hr]:laugh: It seems I forgot what I was talking about. Yes it was Indy-Mac. They're all blending into one in my mind it seems :P. If you don't have time to at least check what you said, don't post anything at all... :smackshead:

On the speculating, yep, it is just speculatin'. Who knows? [/quote]

Haha, although really jerm, if Indy-Mac is costing the tax payer a few billion and Freddy and Fannie up the ante by 20 billion or more, does it REALLY matter who the source is? ;)

RE: Selective Bailouts

Locus Coeruleus — Tue, 22 Jul 2008 18:05:01 GMT

double post please delete

RE: Selective Bailouts

jerm — Tue, 22 Jul 2008 15:16:14 GMT

:laugh: It seems I forgot what I was talking about. Yes it was Indy-Mac. They're all blending into one in my mind it seems :P. If you don't have time to at least check what you said, don't post anything at all... :smackshead:

On the speculating, yep, it is just speculatin'. Who knows?

RE: Selective Bailouts

Locus Coeruleus — Tue, 22 Jul 2008 13:30:04 GMT

Were you talking about Indy-Mac or Freddy and Fannie? It seems like you are trying to pull an ol' switch-e-roo on me here! :P

Plus, the headline says it MAY cost 25 billion. People sure do like to speculate a lot, as if it were fact :P

RE: Selective Bailouts

jerm — Tue, 22 Jul 2008 12:22:58 GMT

From p.1:

[quote]So it's not going to be quite 30 billion dollars covered jerm, but however many billion, that's still a load of cash.[/quote]

[url=http://www.bloomberg.com/apps/news?pid=20601087&sid=aAsOifUPPUNU&refer=home]Fannie, Freddie Rescue May Cost Taxpayers $25 Billion, CBO Says[/url]

Okay, so I was off 5 billion but that's within margin of error. :cool:

RE: Selective Bailouts

-M- — Tue, 15 Jul 2008 03:27:24 GMT

Well, the financial industry rhetoric is that it would be all of the above. But then again tobacco industry used to say that smoking was good for you.

RE: Selective Bailouts

Scipio Africanus — Mon, 14 Jul 2008 23:23:07 GMT

So if Freddie or Fannie go out of business, who honestly feels the pain? Tom, Dick and Harry, or just Ronald Fat Cat? Or all the above?

RE: Selective Bailouts

Locus Coeruleus — Mon, 14 Jul 2008 17:10:05 GMT

Thanks for the info, guys.

In related news, I heard Dave Ramsey say today that 90 percent of these forclosures are in Michigan, Florida, California, Phoenix (AZ) and Las Vegas (NV). That doesn't make the situation any better than it is (esp. for those involved), but is interesting if true.....

RE: Selective Bailouts

-M- — Mon, 14 Jul 2008 15:45:48 GMT

They are chartered by governement, but privately owned. Theirs is one of those grey domains, where you dont really know if we live in a Matrix style world or is Capitalism for real.

RE: Selective Bailouts

jerm — Mon, 14 Jul 2008 14:50:01 GMT

I believe they are independent. I think Freddy Mac was created when they gave Fannie Mae some privitization so that there wouldn't be a monopoly. They have shareholders and all that but I think they are beholden to the government in certain ways and they may recieve subsidies from the government as well but I think on paper at least, it's not like the Postal Service. Not sure how it works exactly to be honest.

RE: Selective Bailouts

Locus Coeruleus — Mon, 14 Jul 2008 14:39:36 GMT

But are they quasi-government, kind of like the USPS? Or are....were they completely independent (before this supposed bailout?

RE: Selective Bailouts

jerm — Mon, 14 Jul 2008 14:36:37 GMT

They aren't exactly owned by the government but they were created by the government.

RE: Selective Bailouts

Locus Coeruleus — Mon, 14 Jul 2008 14:26:08 GMT

[quote]Well the bailout of Freddie & Fannie is here[/quote]

But....I thought Freddie and Fannie ARE the government. So now we have the government bailing itself out? :crazy:

RE: Selective Bailouts

-M- — Mon, 14 Jul 2008 08:54:21 GMT

You mean you've never been to such a place in Smallville, USA. Forget those big city chicks, smalltown girls are off the hook. Ye and the ones from the 51st state are pretty wild too ;)

RE: Selective Bailouts

Nuclearcow — Mon, 14 Jul 2008 08:46:51 GMT

When I read the 1st part of your question, I was very much thinking of responding with "strippers" but now you stole my thunder. :P

Though I have never been to such a place. :D

RE: Selective Bailouts

-M- — Mon, 14 Jul 2008 08:32:40 GMT

They may be big, but their purpose is small. Plus what did you do with your stimulus check that uncle Sam mailed out not so long ago. Dont tell me you spent it all on strippers.

RE: Selective Bailouts

Nuclearcow — Mon, 14 Jul 2008 08:30:57 GMT

I don't think you're getting me, -M-, Freddie and Fannie are NOT little guys. They are in fact. Very big guys. :P

RE: Selective Bailouts

-M- — Mon, 14 Jul 2008 07:58:30 GMT

Well the bailout of Freddie & Fannie is here. Among other things this one includes the option of direct funding from treasury, which is going to be pure taxpayer dollars. Take that all you complainers of Government not helping the little guy.

RE: Selective Bailouts

Roadkill — Mon, 14 Jul 2008 05:54:07 GMT

[quote][b]Nuclearcow (7/14/2008)[/b][hr][quote]So again, when did the U.S. become socialist as far as bailing out the big corporations and while ignoring the small guy.[/quote][quote]-Since when did that become socialist?[/quote]Taxpayers paying for a private party's company failing? What is that then if not socialism? Is it closer to pure capitalism if the government bails a private individual out? Democracy or Representation if no one voted for this to occur, but it just starts happening without the people's consent? Without the Presidents, Congresses, or the Supreme Court's consent in some of the cases with the Fed Reserve?

No, its not pure socialism, but when some private individuals can be irresponsible and face little monetary consequences because the tax payers will all chip in for their loss, thats hardly anything else I can think of.[/quote]

-Corporatism.

RE: Selective Bailouts

Nuclearcow — Mon, 14 Jul 2008 03:42:15 GMT

[quote]So again, when did the U.S. become socialist as far as bailing out the big corporations and while ignoring the small guy.[/quote][quote]-Since when did that become socialist?[/quote]Taxpayers paying for a private party's company failing? What is that then if not socialism? Is it closer to pure capitalism if the government bails a private individual out? Democracy or Representation if no one voted for this to occur, but it just starts happening without the people's consent? Without the Presidents, Congresses, or the Supreme Court's consent in some of the cases with the Fed Reserve?

No, its not pure socialism, but when some private individuals can be irresponsible and face little monetary consequences because the tax payers will all chip in for their loss, thats hardly anything else I can think of.

RE: Selective Bailouts

jerm — Sun, 13 Jul 2008 17:38:10 GMT

Nuke, I don't disagree with you one bit. Of course they should both fail, even if it leads to an economic downturn. We keep putting off paying the piper.

RE: Selective Bailouts

Roadkill — Sun, 13 Jul 2008 08:46:46 GMT

[quote][b]Nuclearcow (7/13/2008)[/b][hr]So again, when did the U.S. become socialist as far as bailing out the big corporations and while ignoring the small guy.[/quote]

-Since when did that become socialist?

RE: Selective Bailouts

Nuclearcow — Sun, 13 Jul 2008 02:14:49 GMT

I wasn't referring to the FDIC 'bailing out' IndyMac, which isn't really a bailout as much as its an insurer (FDIC) paying out that which was insured (bank accounts). I was referring more to the likes of Bears Stearns being 'bailed out' by the Federal Reserve (at JP Morgan's benefit). Though, for Fed. Reserve bailouts, you can go at least as far back at 1998 with Long Term Capital Management. I don't know what else and don't feel like researching it. :P My comments were more towards Treasury Secretary Paulson's recent comments last week.

My point is... if I create a small business, say... milking radioactive cows, and my business fails, will the Fed. Reserve bail me out? Of course not. As they shouldn't. The only difference between my business and a huge banking institution, or Congress talking about bailing out Mortgage companies, is the scope of the business and maybe some of it is the wealthy taking care of the wealthy. Which seems to happen with coincidental regularity if its a banking institution, as opposed to Ford, GM, airlines, etc who probably cause MORE harm to the economy than a Bears Stearns failing. Assuming the CEO of Bears-Stearns stays out of prison, hehe, will he be in poverty with the collapse of that corporation, you think? No way. So again, when did the U.S. become socialist as far as bailing out the big corporations and while ignoring the small guy.

Will they in-turn socialize big businesses' gains, or just their losses?

The reasons that Secretary Paulson states are true. Small homeowners as a whole, were irresponsible and took too much risk, and as a capitalist country, we probably *should* let them fail. But.. it should be the same story when private banking or mortgage institutions fail.

Some of the reasons I've heard about Congress talking about bailing out Mortgage companies is because it might drastically increase the costs to buy a house. Which... won't that eliminate much of the smaller guys getting into mortgages they have no business getting into? Which is part of the cause of these corporations failing, along with their own irresponsibility? Supply and demand will take care of the rest. Capitalism works.

If homeowners and mortgage companies were foolish, why bailout the big business and ignore the little guy? To be clear, I think they should let them both fail.

RE: Selective Bailouts

-M- — Sun, 13 Jul 2008 01:18:05 GMT

IndyMac is no bailout case. FDIC is an insurance corp. Banks pay regular premiums to have that $100,000 per account protection. This makes bank runs that occured to IndyMac less likely. So this is not taxpayer money that is bailing anyone out in here. A lot of regular depositors will get their money back, a few rich will get burned, & bank assets (namely the loan portfolio) will get sold at firesale prices. This is redestribution of wealth & that is always good. Well most of the time.

Decisions about loans at any bank are made by average Joes, especially the home loan kind. That average Joe is not any more privy to the matter than you and me. If you wanna talk bail out - talk of the cries for bail out of FreddieMac & FannieMay & that would be a pure case of helping the little guy.

RE: Selective Bailouts

Tosk — Sun, 13 Jul 2008 00:49:31 GMT

[quote]The point I was making is that the government will bail out big banks to help save the economy but the little guy losing his home also hurts the economy.[/quote]

I think that the difference is that the "little guy" learns a valuable lesson about finance and responsibility ... the government never learns anything ... Oh, and they do not pay for the Bailout either for the bank or for the little guy ... you and I pay ... always remember, someone always pays, the government is not someone!

Ps,

I'm up late setting up a new computer and redoing the computer room I'll post a pic and info when I get er done. ;)

RE: Selective Bailouts

jerm — Sat, 12 Jul 2008 22:38:43 GMT

[quote]The reason IndyMac failed was not because people were defaulting on their loans, it was because IndyMac was giving out loans it had no business giving out, if proper due dilligence was done. Let me reiterate:[/quote]

Since you're being picky, though I agree that what you are saying was (at least a large part of) the cause of the defaults, I think I was right :P. IndyMac went out of business because people were defaulting on their loans. People were defaulting on their loans because they had no business getting those loans and IndyMac was irresponsible enough to give them anyway. Add to this the soaring price of oil and, as a result, everything else and perhaps a large percentage of people who probably could have gotten by, didn't. The point I was making is that the government will bail out big banks to help save the economy but the little guy losing his home also hurts the economy. I'm basically throwing weight behind Nuke's point. :cool: Geddit?

RE: Selective Bailouts

Locus Coeruleus — Sat, 12 Jul 2008 13:55:58 GMT

here are the facts on IndyMac.

[url=http://money.cnn.com/2008/07/12/news/companies/indymac_fdic/index.htm?postversion=2008071210]The Rise and Fall of Indy Mac[/url]

[quote]

About 95% of the $19 billion in deposits in the bank are insured, but that leaves $1 billion that was not covered by FDIC guarantees. According to the agency, 10,000 IndyMac customers could lose as much as half of that amount, or $500 million. The agency says the failure will cost the Deposit Insurance Fund between $4 billion and $8 billion, based on preliminary estimates.

[/quote]

[quote]IndyMac, with assets of $32 billion and deposits of $19 billion, is the fifth bank to fail this year.[/quote]

So it's not going to be quite 30 billion dollars covered jerm, but however many billion, that's still a load of cash.

[quote]

IndyMac grew rapidly during the real estate and home building boom. Its specialty was so-called Alt-A loans, those for which home buyers were asked to produce little or no evidence of income or assets other than the house they were buying.

While home prices climbed, Alt-A loans posed few problems for IndyMac. If a buyer wasn't able to afford his payments, the bank got title to a home worth more than the amount owed. The bank was also able to find investors eager to buy pools of those mortgages that had been pulled together into securities backed by the future payments.

But when the housing bubble burst and prices began to fall, losses at IndyMac began to rise. Investors ran away from the mortgage-backed securities, leaving the bank to suffer the loan losses itself and without the funding it needed to make new, safer loans.[/quote]

[quote]The OTS, which oversaw IndyMac, criticized Sen. Charles Schumer, D-N.Y. The OTS claimed that a June 26 letter Schumer wrote to regulators questioning IndyMac's viability prompted a run on the bank in which customers withdrew more than $1.3 billion prompting a liquidity crisis.[/quote]

[quote]"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich in a statement Friday.

Schumer shot back. He said that lax enforcement by OTS was a primary cause of the problems at IndyMac, as well as those of the nation's housing market and economy.

"IndyMac's troubles ... were caused by practices that began and persisted over the last several years, not by anything that happened in the last few days," Schumer said. "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today. Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs."[/quote]

[quote]Then again, the reason IndyMac failed, in addition to Chuck Shummer's help, is because so many people were defaulting on their loans. [/quote]

The reason IndyMac failed was not because people were defaulting on their loans, it was because IndyMac was giving out loans it had no business giving out, if proper due dilligence was done. Let me reiterate:

[quote]IndyMac grew rapidly during the real estate and home building boom. Its specialty was so-called Alt-A loans, those for which [b]home buyers were asked to produce little or no evidence of income or assets[/b] other than the house they were buying.[/quote]

RE: Selective Bailouts

jerm — Sat, 12 Jul 2008 13:23:15 GMT

I was trying to figure out a problem with my computer... ;) [url=http://1bcciv.com/Topic2259919-62-1.aspx]Stupid piece of crap...:hehe:[/url]

I suppose the argument is that if these mega banks fail, it hurts the economy. Right now the economy is teetering and when a bank like IndyMac fails, it hurts even more. When a bank fails, they're insured by the FDIC but only up to $100K. I heard that something like $3 billion is just going to be lost. Who gets stuck with the other $30 billion? The taxpayer. Either taxes have to be raised or the dollar has to be lowered. This hurts the economy even further. Then again, the reason IndyMac failed, in addition to Chuck Shummer's help, is because so many people were defaulting on their loans.

RE: Selective Bailouts

Scipio Africanus — Sat, 12 Jul 2008 07:50:05 GMT

Atlas shrugged.

RE: Selective Bailouts

Nuclearcow — Sat, 12 Jul 2008 05:15:22 GMT

If some Mortgage companies fail, that will hardly crash the economy. Some other banks will buy them up.

Since they are socializing big business' losses, will they socialize their gains? (rhetorical question) :P

Does the U.S. prefer 'capitalism' or 'socialism?' Depends which policy helps the elites at that particular time? :D

RE: Selective Bailouts

-M- — Sat, 12 Jul 2008 05:05:26 GMT

It is the job of the Fed to promote & oversee an orderly & properly functioning financial system in the country. Banks are the arteries of that system & their well being is Fed's direct responsibility. There is no such institution in place for private individuals. It is not just poor folks that make bad financial decisions, rich individuals make them too. Nobody bails them out, when they do so. On the other hand money supply is serious business.

RE: Selective Bailouts

Nuclearcow — Sat, 12 Jul 2008 04:37:50 GMT

When I saw that you replied, I thought, "Wow, he's up late." :P

Tosk too.

I work night shift. Whats your excuse, hehe? :P

RE: Selective Bailouts

jerm — Sat, 12 Jul 2008 04:36:41 GMT

It ain't...

You're up late :P.

Selective Bailouts

Nuclearcow — Sat, 12 Jul 2008 04:10:42 GMT

[url=http://www.ustreas.gov/press/releases/hp1070.htm]US Treasury Secretary, Henry Paulson on July 8th[/url] talking about how the gov't shouldn't bail out homeowners:[quote]Many of today's unusually high number of foreclosures are not preventable. Due to the lax credit and underwriting standards of the past years, some people took out mortgages they can't possibly afford, and they will lose their homes. [b]There is little public policymakers can, or should, do to compensate for untenable financial decisions.[/b] And in the midst of rapid price appreciation, some people bought homes anticipating an immediate profit. Now that their investments have not turned out as they had hoped, these people may walk away, even though they can afford their mortgage payment. [b]These borrowers can and should be living up to their mortgage commitment—government intervention here would be inappropriate.[/b] These two categories of foreclosures—stemming from lax underwriting standards and increased speculation—will remain elevated in the near term.[/quote]Selective bailouts anyone?

If the small people make poor financial decisions, screw them, they made poor decisions and should pay for it. But, ah... Private banks are a different matter.... if the uber-wealthy are going to start taking hits, there should be bailouts. Federal bailouts. In fact, Federal Reserve should just create money out of thin air to bail them out and has already done so. This was without any peep from Congress or the President or the Supreme Court. Pretty powerful decisions they can make on our money, huh?

Why do bankers deserve the bailouts but none to the average dumb citizen? Doesn't almost every point Paulson makes towards homeowners above, apply to banks? Socialize banking industry losses, but nothing towards the people themselves?

Please, someone, explain why this is okay?