The guys who are screaming about "the collapse of the economy!!!!" are the same people who just happen to stand to lose money. Really, think about this - would the bankruptcy of AIG or Freddie Mac affect you in any way? Would it cost you money? Because it's already cost you your tax dollars to bail them out.

Fuck people who don't like paying taxes. It is for the good of the fucking country, it is the single most patriotic thing you do in your everyday life. We have to look out for each other, and this means the poor too.

another whopper. I mean, what the fuck do you know, Nimrod? To be acting with confidence like you know what would happen... and then to try to push your naive point like this.

If AIG and Fannie/Freddie collapsed -- I don't know exactly what would happen. Neither does Redbreegull. And neither do you. What I do know is that its so much more complex than you act like it is. Fannie/Freddie covers the a majority of the home loans in America and AIG, the largest insurance company in the world, makes its business backing loans like those. So if it all went to shit and collapsed, and we have millions of people defaulting on loans and millions of loans that can't be covered by AIG then that paints a seriously bad picture for the entire economy. To sit back and assume it won't affect you is outrageously naive.

But since I am a self admitted nonexpert on this stuff, I have to rely on experts to explain this to me -- I read the news. I read articles. I listen to finance experts on the radio. What do you rely on, Nimrod?

Yeah, I'm pretty sure that's completely wrong.

AIG, Bear Stearns, Fannie Mae, Freddie Mac... are the poor?

I rely on common sense and basic business practices. It is not the role of the government - nor should it be - to bail out companies who make bad business decisions. That's nowhere in the Constitution, now is it?

What fucking good is a government that doesn't take steps to protect its citizens? Like Debaser said, you have no IDEA how the collapse of a financial giant of the scope of AIG would affect people. If the economy crashes it affects EVERYONE. We have 6% unemployment rate. I'm very happy for you that you live such a nice sheltered middle/upper class lifestyle that you can watch the financial institutions of our nation crumble around us and comfortably criticize the government for damage control knowing that it won't affect you, but some people in the world actually give a shit about the bigger picture, so please feel free to suck my dick.

del

You do not understand what these companies do I guess.

A 6 percent unemployment rate is really fucking good, dude. That's not a negative.

Yes. Many of them purchase bad loans given by poor business practices and don't have the cash to back up the "money" they "loaned."

Let another company step in and buy the loans for pennies on the dollar instead of the government backing everyone up.

Why should the government "protect people" from themselves? If you take a loan and then don't or can't repay it, should the state come over and hand you a check for the difference?

We are talking about people who took on loans they knew or should have known they couldn't pay. Try that with a car - it gets repo-ed. You should be held responsible for your mistakes.

The companies knew the loans were bad, the individuals knew they couldn't pay them, but everyone had a pie in the sky vision of housing prices continuing to climb, which was unrealistic.

Sorry, I'm of the opinion that if you make stupid financial decisions, the rest of America is not indebted to help you out of it.

Seriously, that's not good enough. I'm not going to rely on "common sense" to manage the economy.


I don't really disagree there. But there's idealism and then there's reality. Apparently if we let these companies fail, then America may go into a major recession/depression. We won't be thanking our lucky stars on how much money we saved in not bailing them out then.

Recessions happen. They've happened before, and they'll happen again. We can't keep paying off a recession by adding to our debt.

This will only exacerbate the problem as the value of the dollar continues to plummet.

is everyone buying gold? I'm stocking up on canadian maple leafs and american eagles

It's all I've invested in for the past 3 years.

gain some knowledge of the situation:

Why the Fed can't let AIG go under

When Lehman Brothers filed for bankruptcy on Monday, it became the latest but surely not the last victim of the subprime mortgage collapse. Lehman owned more than $600 billion in assets. Financial institutions around the world have already reported more than half a trillion dollars of mortgage-related losses and that figure will most likely double or triple before the crisis exhausts itself.

But there is a bigger potential failure lurking: the American International Group, the insurance giant. It poses a much larger threat to the financial system than Lehman Brothers ever did because it plays an integral role in several key markets: credit derivatives, mortgages, corporate loans and hedge funds.

Late Monday, A.I.G. was downgraded by the major credit rating agencies (which inexplicably still retain an enormous amount of power in the marketplace despite having gutted their credibility with unreliable ratings for mortgage-backed securities during the housing boom). This credit downgrade could require A.I.G. to post billions of dollars of additional collateral for its mortgage derivative contracts.

Fat chance. That’s collateral A.I.G. does not have. There is therefore a substantial possibility that A.I.G. will be unable to meet its obligations and be forced into liquidation. A side effect: Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression.

A.I.G. does business with virtually every financial institution in the world. Most important, it is a central player in the unregulated, Brobdingnagian credit default swap market that is reported to be at least $60 trillion in size.

Nobody knows this market’s real size, or who owes what to whom, because there is no central clearinghouse or regulator for it. Credit default swaps are a type of credit insurance contract in which one party pays another party to protect it from the risk of default on a particular debt instrument. If that debt instrument (a bond, a bank loan, a mortgage) defaults, the insurer compensates the insured for his loss. The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.

As a result, the credit default market is best described as an insurance market where many of the individual trades are undercapitalized. But even worse, many of the insurers are grossly undercapitalized. In one case in the New York courts, the Swiss banking giant UBS is suing a hedge fund that said it would insure nearly $1.5 billion in bonds but was unable to do so. No wonder — the hedge fund had only $200 million in assets.

If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow.

Regulators knew that if Lehman went down, the world wouldn’t end. But Wall Street isn’t remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed.

hey so the fed is gonna buy like a trillion dollars of bad debt apparently

shitty idea huh

(i'm not making up that trillion number, its going to be at least a few hundred billion)

fuck it

I agree to an extent, but I think the aftermath would be long term. It would be worse than the great depression, because this time around we can't afford to have a weakened country, especially with the enemies we have.

On the other hand, I think the bail out is a band aid on a gaping wound. Relying on the government to rescue us is not going to last forever. Congress wouldn't listen to Ron Paul when he laid it all down about this - and they act like they are helpless victims who have no other choice but to bail out when it could have been prevented. It disgusts me that there's no accountability, and we're supposed to trust them to make economical decisions.

FROM 2003: Bush Administration tried to seek regulation to stop Fannie/Freddie, New Agency Proposed to Oversee Freddie Mac and Fannie Mae-Dems Say No


NYT
http://query.nytimes.com/gst/fullpag...prod=permalink


Interesting.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''


More from archives
http://www.google.com/search?hl=en&q...earch&aq=f&oq=

There are plenty.

This is dead on Mike.

Guys, this is way more simple than everyone is making it. When it comes to getting in line for free money, a corporation is going to say anything to get it. Suddenly every industry has some huge national interest (banks, airlines, autos, oil etc...) and needs to be propped up specially "for the sake of the nation." Is anyone willing to see the basic contradiction there? We need to 1) guarantee private profits at the 2) expense of the public for the 3) sake of the public? This is not a logically consistent argument and is appeals to the most base economic fallacies and excuses to enrich the already wealthy at the expense of the poor.

If AIG is "too big to fail" and we prevent a company which acted so ridiculously stupid from bearing any consequences of that stupidity, then we are setting ourselves up for more stupid behaviour in the future. You don't have to be an economist (heck, any school teacher can see it) to know that if you positively reinforce bad behaviour, you will generate more bad behaviour. In other words, you will prevent AIG from failing, but there will be five AIG's later.

Moreover, have any of you seen what this bailout actually does. Bush's friends and Paulson is going to get $700 Billion to spend and the act BANS any court or government oversight of how the money is spent. Are you all so naive as to think that this isn't just an excuse for another Bush power grab?

someone explain to me why the FUCK we are bailing out foreign banks

http://www.politico.com/news/stories/0908/13690.html

.

you can sweep dirt under the rug only as long as there's enough room for it


"the risk of doing nothing..." - that's my Bush!

http://www.infowars.com/?p=4717


Here's what was eye-opening to me about the macro developement of this Lucipherian facade of greed we seem to be in the midst of..

"No one has any idea of the magnitude of the deleveraging ahead or the size of the debts that will have to be written down. That’s because 30 years of deregulation has allowed a parallel financial system to arise in which over $500 trillion dollars in derivatives are traded without any government supervision or accounting."

Out of national interest? Oh wait...