Comments on: $700 Billion Bailout: Power Grab By the Treasury?

By: miranda

miranda — Wed, 01 Oct 2008 23:10:40 +0000

Thanks Francois. I am concerned that even a version of Paulson’s plan is being pushed through.

By: Francois Viljoen

Francois Viljoen — Wed, 01 Oct 2008 21:20:04 +0000

LOL… very well summarized. :)

Sounds a lot like cowboy tactics to me.

By: Stock Market News: $700 Billion Bailout, Auto Industry, Wachovia - Money & Investing - Banks.com

Mon, 29 Sep 2008 15:03:55 +0000

[...] that the bill is expected to pass, Wall Street is showing signs of trepidation. Rather than the three-page proposal by Treasury Secretary Henry Paulson (granting him sweeping powers and ensuring almost no oversight), the document is instead 110 pages [...]

By: miranda

miranda — Sat, 27 Sep 2008 06:05:58 +0000

I agree shakey! There is no way the government can make money on the deal as written. The only CHANCE (and that might even be pushing it) of making money back is through loans.

By: old shakey

old shakey — Fri, 26 Sep 2008 22:09:32 +0000

You say the government will buy these assets at fire sale prices. Is this the same government that buys $600 hammers and $400 toilet seats?

Besides that, this will require the government to hire thousands of new employee and hundreds of managers to push the paperwork around for years and accomplish little or nothing. There is no way an organizataion as big and as inefficient as the U.S. government is going to come out ahead on this deal. Don’t let them kid you. This will cost all of us a bundle.

By: miranda

miranda — Fri, 26 Sep 2008 11:57:27 +0000

Good points, Bransby! I also think it is important to note, as I stated above, that the executive compensation limits are solely for the companies that accept the terms of this bailout.

But the big worry I have here is that the government won’t be able to sell these assets. It’s not a straight up loan like to AIG, and it’s not like Chrysler, where things could easily turn around. We’re talking about taking BAD assets — assets everyone knows are suspect.

By: Bransby

Bransby — Fri, 26 Sep 2008 10:45:02 +0000

Devin, you state that the securitized assets are a hybrid between equity and debt, but isn’t that the problem with them? This “hybrid” really means that nobody knows what’s in them and this is why these insitutions are failing, because the securitization effectively hides bad debts in packages of debt and equity. It is because of lack of confidence in these securitized assets and the quanities involved that there has been a loss of confidence in the markets, to imply that those same securitized assets are a secure form of equity or guarantee for the taxpayer is surely wrong? Also stating that #2 is a slippery slope as other employees might get involved; it does claerly state “executive compensation”, I can’t see how that would ever include eployee wages. The point being that executives of these insitutions deserve no compensation, whereas the employees still deserve to be paid. This is assuming that “wages” and “compensation” are not being deemed the same thing.

By: miranda

miranda — Thu, 25 Sep 2008 19:52:07 +0000

Good points, Brian! I think another problem is that we now think, for some reason, that there should be no downcycle. Our leaders, scared lest a downcycle threaten their election hopes, have been trying to keep growth going — even though there is no way to constantly sustain growth at a rapid pace.

By: Brian

Brian — Thu, 25 Sep 2008 19:33:00 +0000

History always repeat itself. We will recover from this and new greedy CEOs will take over and in 20-50 years there will be another crash and then we will have to bail them out.

The market always goes up and down, the reason why this one look bad is because of inflation. And we keep changing laws based on the current market and then that does not work and we revert the laws to protect the American citizens. The cycle continues.

By: Stock Market News: Optimism Returns Following Bush Speech Last Night - Money & Investing - Banks.com

Thu, 25 Sep 2008 16:06:33 +0000

[...] Yesterday, the stock market was looking somewhat pessimistic. The $700 billion bailout package was hung up in Congress as lawmakers questioned certain aspects — including the power that Treasury Secretary Henry Paulson was asking for. [...]