Government bailouts

[VigilanteNighthawk]

Well, I haven't really seen any threads about this, so I figured I'd start it. Over the past few months, the Federal Reserve, with the full approval of our government, has been employing various schemes to bailout the financial sector. From backing the buyout of Bear Sterns, to the recent nationalization of Freddie, Fannie, and AIG, and now the proposed $700 billion dumping ground for "toxic" mortgage backed securities. So, how do you feel about these bailouts, and do you think the are necessary? What alternatives do we have? What actions should we as citizens be taking?

[TimeLordX]

This whole mess is mainly the dems fault. Jimmy Carter passed a well-intentioned law that required banks to give out loans to people whom they considered "high-risk". This law was strengthened during the Clinton years (Reno and Garelik even threatened to go after them if they didn't comply). There were attempts to reign in this law over the years but they were all shut down by the dems. Rep. Barney Frank (D-Ma) even went so far as to call concerns over fannie mae et. al. "scare-mongering". Elliot Spitzer, the former govenor of New York, went after some of these guys but got shut down over a prostitution scandal. Greed played a part in this crisis as well. If it were up to me, I'd let these guys go belly up and prosecute the living hell out of their bosses. The ones responsible for this mess are most likely are gonna get away with what they did and the American Taxpayer will have to foot the bill for cleaning it up. I'm for making a buck as much as the next guy, but COME ON! Give us a goddamn break!

[Mollywop]

It's the fault of the banks for bad business practices. But who blames them when we have a government that holds the hands of companies that fuck up and makes taxpayers foot the bill. People who know how to balance credit cards, pay their mortgage payments on time, now have to pay for the faggots that don't. AWESOME :D

[MortifiedPenguins]

There's two views on this that I hold:

The Realist View:

These banks, threw thier own mismanagement, incompetance and bad luck, have wasted a lot of money and have put investment banking into a crisis. Due to the importance they put onto the Capital market and the effect they have, and the fact that the people that feel this effect also vote in the Politicians that enact the regulatioins and controls and who's politcal future rests on a contented people, have basically nationalized these industries.

The Idealist View:

This is capitalism at work, plain and simple. These firms, either through mismanagement, incompetence or market forces that didn't go as predicated, have felt the effect and should suffer for it just as any other member of our capitalist system does. With thier line of business there is a risk and the should feel the effects of it. Likewise the government should, as any every wise government should, should let the market take it's directions and let the invisble hand take it's course.

As we can all see, the realist view will win out.

[kipper456]

At 9/22/08 10:59 PM, MattHarty wrote: It's the fault of the banks for bad business practices. But who blames them when we have a government that holds the hands of companies that fuck up and makes taxpayers foot the bill. People who know how to balance credit cards, pay their mortgage payments on time, now have to pay for the faggots that don't. AWESOME :D

this is EXACTLY correct

the banks were footing out mortgages out sub prime e.g for 95%-105% of the properties value

this means that if the price of the property goes down and the buyers cant pay they declare bankrupsy and the banks lose their money

thats what a house deposit is for

sub prime is much higher risk than giving money to a high risk person who has paid a descent deposit

the banks shouldnt have lent sub prime mortgages out

now the CEO's have vanished with all the immediate money they made

its is not the governments fault

although the federal reserve bank (is that the name of it, im an australian) is partially to blame for irresponsible interest rates