Never mind. We are no longer going to buy troubled assets.

[kentuck]

http://biz.yahoo.com/ap/081112/financial_meltdown.html

Hank Paulson has changed his mind. They will no longer buy the troubled assets as planned. By the time they got the money, most of the banks and financial institutions in trouble were already bought or merged with other banks. But no reason to waste all that money that Congress appropriated, so why not just divvy it up with a few of our favorite banks? That is what has happened. Nothing has been done about the bad mortgages? This is a crime, any way you slice it.

[ixion]

1. yep, a crime... a daylight robbery of historic purportions carried out by BushCo

and unfortunately enabled by the duplicitous dem congress.

[gratuitous]

2. But it had to happen right NOW

And there was no shortage of folks stampeding to get in line to buy this pig in a poke, even some here at DU. It's been eight years like this. How do we not get how this works by now?

[kentuck]

6. The same old card.

Fear. When, in fact, they created the panic. When they came out and said everything was going to hell by this Friday if they did not get the $700 billion dollars, the whole world panicked. They created the panic. On its own, the banks in trouble were bought by other banks and it all worked out as well as it could under the circumstances. But, they decided to keep the money anyway and use it for other purposes.

[redqueen]

3. I saw on the news that container shipping has nearly ground to a halt.

Due to creditors not lending importers / exporters money to have their goods shipped.

So... I'm not so sure that the troubled assets were the only problem that bailout money will address. The credit market is still an enormous problem.

We, like the UK, should have mandated that the banks use the cash, instead of just sitting on it.

[MrCoffee]

5. But weren't the assets the cause of the credit crisis? Wasn't that the whole damn point?

They flat-out lied, and now they have $750,000,000,000.00 free and clear.

[redqueen]

20. That's my understanding, yes.

But regardless of the why, the effects are still causing things to get worse.

[kentuck]

21. They thought it was going to be worse.

By the time WAMU was bought - taken over, the worst of the bad assets was over. But they had the money. What were they supposed to do? Give it back??

[redqueen]

27. No, lend it.

The problem now is businesses are still having trouble getting credit. The credit crisis is still a crisis due to Congress' bungling / complicity.

[kentuck]

28. So why are they having problems getting credit?

I think we are getting close to the answer? The banks say they are ready to lend, right?

[redqueen]

29. I don't know what the banks say.

I know they still appear to be hoarding the money.

[kentuck]

35. Companies borrow money when they need to invest.

We are in a deflationary stage of our economy and business are not investing because individuals are not buying. Therefore, there will be more unemployment with the massive lay-offs. We are already seeing this. The problem is not "credit" per se. It is that companies do not need credit at this time. Because people are not buying as they have in the past. Because they do not have the money to buy with. Year after year of wage freezes and crapping on the labor that they must have to survive, is coming back in full fury.

[redqueen]

37. No, they borrow in order to do a lot more than just invest. (nt)

[kentuck]

42. Like what?

To pay their payroll? Isn't that an investment in their labor?

[redqueen]

45. Whatever.

I'm done. Yes, meeting payroll is one reason companies borrow.

I guess that's an unnecessary investment.

[kentuck]

47. Oh, it's necessary...

Or it would not be on the expense ledger.

[enlightenment]

16. I am a complete idiot at this stuff, but my very limited

understanding is that a big part of the problem was the failure to insist that the banks pass on to their customers some of the relief they received.

I think the banks tried to do the same thing in the UK and the government said no-way - if you don't start lending we'll punish you (or something). But the UK government wrote that provision into their bailout; our government didn't. Apparently all Congress can do is suggest that the banks pass along some of the benefits of their new-found liquidity.

I'm probably totally wrong about all of this, though.

[redqueen]

18. No, you're right.

The UK mandated that the banks lend the money.

Congress failed us once again.

[yy4me]

4. I'd like to know how we can get on the "divvy" list.

We need someone to buy our personal troubled assets.

[kentuck]

8. It would help if you were an employee of Goldman Sachs...

They took care of them right off the bat. One of the first...

[barbtries]

24. even before the bailout

paulson took care of goldman sachs by bailing out AIG. GS was exposed to the tune of i think i read 2 or 3 billion.

ETA - given these facts can there be any doubt that paulson has an unacceptable conflict of interest and should be removed from the treasury department and not allowed anywhere near the markets?

[kentuck]

50. Goldman Sachs was also re-defined...

from an investment band to a traditional bank, so they could qualify for the handout....errr.. bailout.

[Lasher]

7. Hey, why not get new drapes for the White House?

Maybe they could buy a few more aircraft carriers and name them after themselves.

[rurallib]

9. The reason I despise Bush is that they started stealing from day one

To me the whole Iraq War was nothing but a set up for his buddies to rob us and Iraq blind. Which they did in broad daylight and told us they were doing it.
As the election neared I began to wonder if they would pull off yet one more gigantic heist. I expected it to revolve around Iran. I was wrong. This whole bailout thing has been as beautifully set up and executed as the Iraq War.
Paulson runs into congress with a 3-page holdup note. Congress makes some corrections to the spelling and then gives him the money (actually more than he wanted) with basically no strings attached. No doubt the whole $750B will be but a memory by the time the Obama Admin takes over. No doubt given to their pals in the banking and insurance industry. And there will be nothing to show for it.

[Gin]

10. and now American Express will become a bank to get their share of the

heist.

[kentuck]

13. yep...

just like Goldman Sachs did...

[nc4bo]

14. Utter bullisht. I heard about this last night and was horrified. Worse yet,

I don't even know what can be done about it.

Obama's gonna have a world of hurt and pain he'll be inheriting in January.

[kentuck]

15. It is up to our Congress...

They are there to protect the people. They have the authority to do whatever is necessary. They could maybe put a $700 billion dollar tax on the banks until it is paid back?

[redqueen]

25. They do, but there are obviously still too many "centrists" in there. (nt)

[Romulox]

34. The same Congress that pushed this bailout through in closed door negotiations???

:shrug:

[kentuck]

36. Yes.

They fell for the fear card once again. What should they have done when the voices of authority tell them that the entire financial system will collapse by this Friday if nothing is done?? They are Congressmen, not experts on our financial system. As are none of us. But the writing is on the wall.

[kentuck]

12. The only trouble is...

it doesn't matter if the interest rate is zero, people are not going to borrow if they don't have the money to pay the principal. The credit cards are maxed out and it doesn't matter what they do with the credit markets. Eventually the products have to come down to the individual and the individual has no money to buy anymore. Find a way to increase the purchasing power of consumers and they may be on the right track. Try increasing wages and sharing some of the increased productivity of the last decade.

[barbtries]

30. i totally agree with this

"To me the whole Iraq War was nothing but a set up for his buddies to rob us and Iraq blind."

sad thing is i didn't recognize that for so long. i kept thinking it was the oil, it was the neocons and their dreams of empire...not for a split second did i believe that it was for the reasons given by the bushies. but it took me until this year to finally grasp that THIS was always what it was about. "To me the whole Iraq War was nothing but a set up for his buddies to rob us and Iraq blind." in a nutshell, yes.

[kentuck]

44. Or to finally drown the government before they left office...?

Leave not a crumb for the new government.

[AzDar]

11. " Thank God It Passed"...

:puke:

[SammyWinstonJack]

38. No kidding!

:banghead: :puke: :argh:

[wroberts189]

17. Kucinich and Mike Moore ..RIGHT AGAIN n/t

[Mike 03]

19. I'm beginning to agree with you. Initially, I was in favor of this. But it's disintegrated.

How on earth is suspending the purchase of the illiquid assets going to motivate the banks to lend? I don't see how it could! They still have all this catastrophic, highly leveraged debt on their books!

Now he's going to bail out the credit card companies.

You'll notice, American Express was just granted the rights of a Bank, and then they immediately turned around and asked for three point five billion bucks!

[barbtries]

22. thank you.

on another thread i wanted to say paulson should be in prison, but am i right? it looks like a bunch of crooks pulling off the heist of all history from where i sit, but than i'm not an economist. but that's what it looks like to me. the heist of all time.

[kentuck]

23. You don't need a weatherman to know which way the wind blows..

Your instincts are right on.

[Daphne08]

31. Looks that way to me as well. n/t

[kentuck]

26. I have a solution.

Any bank or financial institution that received this money and records a profit in the next quarter or two should have to pay it back with 27% interest, just like they charge the poor suckers that use their credit cards...

[Romulox]

32. Meanwhile, the DU bailout boosters are pulling down the brims of their hats

and hoping that people's memories are short! :eyes:

[redqueen]

39. Why do people have to get so ugly?

I guess I'm on the list of "bailout boosters" and I stand by it. Yes, our bailout was done shoddily, but it seems to me that you lot with your arrogant chest-thumping would rather throw the baby out with the bathwater.

Pardon me for not jumping on the holier-than-thou bandwagon with the rest of you. Most of your "bailout anti-boosters" team I'm just putting on ignore, cause it doesn't seem like a conversation or discussion is desired... just childish "told you so" BS.

[Romulox]

40. You're calling people names and whining that people are "ugly" simultaneously?

Cognitive dissonance much? :hi:

[redqueen]

43. Saying the chest thumping is arrogant is namecalling?

Yeah... nevermind anyway.

[Romulox]

48. Yes it is. Along with calling people "ugly".

At any rate, the proper response when someone has made a horrible mistake in judgment is to own up to it and apologize.

Or, you can call people names, play the victim card, and put whomever doesn't buy it on ignore.

Your call. :hi:

[mhatrw]

53. A little touchy about supporting the Final BushCo Unabashed Looting Act, aren't we?

[kentuck]

46. But why should we dispute our Congress?

They are paid to make these decisions? Why should we know better than they?

[Romulox]

49. You've answered your own question: "They are PAID to make these decisions..."

The technical term for the these kind of payments is a bribe.

Btw, it's very ugly of you to even bring this all up! :sarcasm: :rofl:

[DU GrovelBot]

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[kentuck]

41. OK. Think back to the last bank that was in trouble?

It was a few weeks ago. Was it Washington Mutual?? We know that they first bailed out Bear Stearns but allowed Lehman Brothers to go under. The worst of this crisis was over by the time they got the money from Congress. There was no need to bail out the bad assets - they had already been taken over by the system, JPMorgan and Chase, for example.

Name the banks that were in trouble that they did not have to bail out?? Yet, they had the money if it was needed. Since it appears that it is no longer needed in the sums that were requested, what should they have done with the money given to them by the Congress??

[acmavm]

51. Why is the hell is this bald-headed bastard not sitting in a cell

somewhere??? He's one of the planet's biggest thieves. Not to mention the high lie factor that goes along with every word this piece of shit speaks.

[kentuck]

52. "Behind every great fortune is a great crime.."

and this is a doozy!