Gov't Bail out

jeepinmatt said:
Not to be the spoiler here, but check your math. 85bil over 200mill is $425 dollars a piece.

I still think its a much better idea.
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Heh, I wondered if I was the only one thinking, "wth?"

People get excited by all those zeros, just lop off the last 6.

85,000 / 200 = $425 per person.. we got MORE than that in the various tax breaks, the new 10% bracket, etc.

..

Reid, I have to say I think you mighta got on the wrong side of this one, in that... banks do not have ANY money of their own. Or the cash they do, is probably 1% of their total, the rest comes from borrowing it from depositers.

The reserve is just an overnight stop gap and they do have to pay it back (admittedly at 2% right now approx)

Most banks turn around and loan the cash back out to their customers in the form of vehicle loans... OR to businesses / commericial financing.

They have SOME cash tied up into mortgages, but for years they have been sending those loans outside to these other companies and getting that cash back to use for the last paragraph.

To get to the point... the CASH has to come from somewhere.

Average Joe's checking account has maybe a $500 avg balance for the month? $100k mortgage / $500, would mean it would take 200 avg Joe's to put their money in the bank to create enough cash for a single mortgage.

Edited to add.. read the Dave Ramsey article, but the one thing he did not address was the fact that the $700 billion is probably a good investment! In other words he made the point that these houses were still worth MOST of their loan value (if not 100% within a few years).. If the US is "buying" these subprime mortgages for anything less than $1 on $1, we are going to see a return.

Example, they buy JOHNNY's mortgage, which is at $100k. (This was sold as cheap as $22k according to the article sent)... lets assume US buys it for $75k.

Johnny keeps making the payments + paying say 6-8% interest on this... 5 years goes by, housing market has rebounded. Johnny still "owes" the full 100k (less principal paid off)... he sells the house and pays off the $100k.

Us buys it for $75k, gets interest + the extra $25k over the next 5 years...not a bad investment at all!

So WHY are they selling Jonnys loan in the first place? Because they got used to making money on the buying/selling instead of the holding/interest...

Maybe make them HOLD the mortgages to fulfillment...boy that would actually fix quite a bit of the "get rich quick" wall st mentality...match the investments to long term thinking.
 
Why prop up a failing system. let it fall. and rebuild. yeah, we're going to have some tough times, but if our grandparents and greatgrandparents could survive it so can we. or maybe not. i dont really know how to judge how soft society is today.
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I don't either. But I can guarantee you one thing. A full-blown genuine DEPRESSION would damn sure harden it up in a hurry.

I don't know about you but I'd just as soon give that a pass, if it's at all possible.
 
You can sure as hell tell that most people do not know the fundemental difference commercial bank and a savings bank. Comm banks (the fawkers going under) have d/e ratios as high as 15:1 while savings banks cannot go past 4:1 and most will not do that. Hopefully under this legislation those ratios are once again set in stone and will not be removed.
 
1stgenxxx said:
Thats if all goes well....If not then thats a hell of a loss
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US gov't spends 237 Billion a year on Interest right now, so $700 billion is not a "huge" amount of money. (2730 billion was 07 budget)

http://en.wikipedia.org/wiki/Federal_budget_(United_States)

Warren Buffet "``I think the Treasury will pay back the $700 billion and make a considerable amount of money,'' Buffett said, adding that if he had $700 billion on the government's terms to buy distressed assets, he would. ``Unfortunately, I'm tapped out.''

"Buffett's investment decisions are often imitated by mutual funds and individual investors in an attempt to duplicate his success. A 2007 study by Martin, the American University professor, found that using this strategy for 31 years would have delivered annualized returns of about 25 percent, double the return of the S&P 500."

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRef_DUx6AcU&refer=worldwide

Heck, maybe the $700 billion investment will "cure" the SS crisis! :)
 
BigRedB2 said:
I'm not changing my mind about my views on intrest. $122,000 in intrest on a $94,000 loan? if i read my ammortization info from my loan correctly, not only does the bank get back the $94k i borrowed, but they get an additional $122k. 5th grade math tells me thats not right. If a bank is going to charge me 6.5% intrest, they they oughta get $6110.00 when its all said and done. Its rediculous that you think compounded intrest is okay and i cant believe the fleece has been pulled over americans eyes for so long.

.
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So what you are saying is if I gave you a loan $1000 for 6.5 and you took 30 years to pay me back. at the end you would have pay my $1065

so you had my 1000 for 30years. and i got $65 yay:bounce2:

Hey can I barrow 10,000 from you at 6.5%? Then hell I will even give you your interest of $650 up front and I can pay you $27.70 each month for 30years.
 
I'm against the $85,000,000,000 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in

a ''We Deserve It Dividend''.

To make the math simple, let's assume there are 200,000,000

bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman

and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.

My plan is to give $425,000 to every person 18+ as a

'We Deserve It Dividend'.

Of course, it would NOT be tax free.

So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500 in their pocket.

A husband and wife has $595,000.

What would you do with $297,500 to $595,000 in your family?

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads

Put away money for college - it'll be there

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs

Invest in the market - capital drives growth

Pay for your parent's medical insurance - health care improves

Enable Deadbeat Dads to come clean - or else

Remember this is for every adult U S Citizen 18+ including the folks

who lost their jobs at Lehman Brothers and every other company

that is cutting back. And of course, for those serving in our Armed
Forces.

If we're going to re-distribute wealth let's really do it...instead of
trickling out a puny $1000.00 ('vote buy') economic incentive that is
being proposed by one of our candidates for President.

If we're going to do an $85 billion bailout, let's bail out every adult
U S Citizen 18+!

As for AIG - liquidate it.

Sell off its parts.

Let American General go back to being American General.

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can 'never work.'

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion

'We Deserve It Dividend' more than I do the geniuses at AIG or in
Washington DC.

And remember, The Family plan only really costs $59.5 Billion because
$25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.
 
SHINTON said:
Heh, I wondered if I was the only one thinking, "wth?"
People get excited by all those zeros, just lop off the last 6.
85,000 / 200 = $425 per person.. we got MORE than that in the various tax breaks, the new 10% bracket, etc.
..
Reid, I have to say I think you mighta got on the wrong side of this one, in that... banks do not have ANY money of their own. Or the cash they do, is probably 1% of their total, the rest comes from borrowing it from depositers.
The reserve is just an overnight stop gap and they do have to pay it back (admittedly at 2% right now approx)
Most banks turn around and loan the cash back out to their customers in the form of vehicle loans... OR to businesses / commericial financing.
They have SOME cash tied up into mortgages, but for years they have been sending those loans outside to these other companies and getting that cash back to use for the last paragraph.
To get to the point... the CASH has to come from somewhere.
Average Joe's checking account has maybe a $500 avg balance for the month? $100k mortgage / $500, would mean it would take 200 avg Joe's to put their money in the bank to create enough cash for a single mortgage.
Edited to add.. read the Dave Ramsey article, but the one thing he did not address was the fact that the $700 billion is probably a good investment! In other words he made the point that these houses were still worth MOST of their loan value (if not 100% within a few years).. If the US is "buying" these subprime mortgages for anything less than $1 on $1, we are going to see a return.
Example, they buy JOHNNY's mortgage, which is at $100k. (This was sold as cheap as $22k according to the article sent)... lets assume US buys it for $75k.
Johnny keeps making the payments + paying say 6-8% interest on this... 5 years goes by, housing market has rebounded. Johnny still "owes" the full 100k (less principal paid off)... he sells the house and pays off the $100k.
Us buys it for $75k, gets interest + the extra $25k over the next 5 years...not a bad investment at all!
So WHY are they selling Jonnys loan in the first place? Because they got used to making money on the buying/selling instead of the holding/interest...
Maybe make them HOLD the mortgages to fulfillment...boy that would actually fix quite a bit of the "get rich quick" wall st mentality...match the investments to long term thinking.
Click to expand...
One problem with your logic.
A guy on my street is in foreclosure.
He has a 1st, 2nd, 3rd and 4th mortgage that total $420+k....his house is smaller than mine and in worse shape. Mine appraised for 165k.

then there is the issue of expenses involved in reposessing, marketing, selling, etc.

Then when all the homes foreclose value will be driven down even further. The govt will lose its ass on this.

BTW this is the same gov't that it cost $1,485 to issue a single green card.....
 
SHINTON said:
..
Reid, I have to say I think you mighta got on the wrong side of this one, in that... banks do not have ANY money of their own. Or the cash they do, is probably 1% of their total, the rest comes from borrowing it from depositers.
.
Click to expand...

I admit it's an ill formed arguement and i chose a rather poor stance. Just a little sick of someone else (state, local and federal, banks, etc) seeing more of my paycheck than i do. Nothing i can do about it but complain. Lol...and even doing that didnt help, you guys are pretty quick to point out that my complaints are worthless because theres no better solution.


Knowing what i know now (as opposed to when i bought my first house) , i plan to take something along the lines of Gadgets advice. Save money, sell the house i'm in and borrow a MUCH smaller (if any if i can help it) amount and pay the bank much less money. lol, i concede on compound intrest if i can get someone to agree with me that the stock market is just as much unhealthy for america as it is healthy.
 
SkyHiK5 said:
One problem with your logic.
A guy on my street is in foreclosure.
He has a 1st, 2nd, 3rd and 4th mortgage that total $420+k....his house is smaller than mine and in worse shape. Mine appraised for 165k.
then there is the issue of expenses involved in reposessing, marketing, selling, etc.
Then when all the homes foreclose value will be driven down even further. The govt will lose its ass on this.
BTW this is the same gov't that it cost $1,485 to issue a single green card.....
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there something we can agree on!
 
drkelly said:
From the article:
calls coming into GOP offices are 90 to 1 against the plan.
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IME that is a slam dunk that they will do it. Senate/Congress never listen to us. They are there to serve us, as they see best! BTW, I sent a letter to Howard Coble on the Outer Banks and he sent a nice one back saying he had already made up his mind on the issue.
 
drkelly said:
http://www.cnn.com/2008/POLITICS/09/26/campaign.wrap/index.html
From the article:
calls coming into GOP offices are 90 to 1 against the plan.
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yeah - but I could easily argue that there's only 1 really intelligent person who kows what they're doing for every 90 idiots out there!

just because osmething is unpopular dosn't necessarily mean it's a bad idea. Sometimes its just means that most peple don't understand everything involved with the situation.

That's why we have experts.
 
Ray VanBuren said:
I'm against the $85,000,000,000 bailout of AIG.
Instead, I'm in favor of giving $85,000,000,000 to America in
a ''We Deserve It Dividend''.
To make the math simple, let's assume there are 200,000,000
bonafide U.S. Citizens 18+.
Our population is about 301,000,000 +/- counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and up..
So divide 200 million adults 18+ into $85 billon that equals $425,000.
.
Click to expand...


You need to retake math.

85 billion divided by 200 mil = $425
 
CYJKrawler said:
IME that is a slam dunk that they will do it. Senate/Congress never listen to us. They are there to serve us, as they see best! BTW, I sent a letter to Howard Coble on the Outer Banks and he sent a nice one back saying he had already made up his mind on the issue.
Click to expand...

Considering how many of "us" are still forwarding the "We Deserve It Dividend," I don't want Congress or anybody else listening to "us" on monetary policy, period.

People like "us" panic and run to withdraw our deposits at banks like WaMu and get them seized and sold off. People like "us" hear gas is running out and rush to the stations to fill up every tank, milk jug, paint bucket and piss pot we can, and then "we" say "told ya so" when there's no more gas.

This is not a good time for Washington to listen to "us."
 
kdunc said:
Considering how many of "us" are still forwarding the "We Deserve It Dividend," I don't want Congress or anybody else listening to "us" on monetary policy, period.

People like "us" panic and run to withdraw our deposits at banks like WaMu and get them seized and sold off. People like "us" hear gas is running out and rush to the stations to fill up every tank, milk jug, paint bucket and piss pot we can, and then "we" say "told ya so" when there's no more gas.

This is not a good time for Washington to listen to "us."
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Xeleventy billion.

Negative media influence on the public would be a nice thing to get rid of though. It's hard not to stand up for yourself when the apocalypse happens every other week.
 
Caver Dave said:
Correct, and yet the negative media slant said the $85B payola would cost "all taxpayers" approx $2400 each... Don't reckon there's only 35+ million of us supporting the other 300+ million?
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I was wondering that too. only thing I can figure is that they probably aren't considering dependents etc into "taxpayers", maybe just the # of folks who actually file forms. Of 300 mil Americans, a whole lot are kids, students, etc.
But that'd still be a rediculous way to figure it really.
 
kdunc said:
Considering how many of "us" are still forwarding the "We Deserve It Dividend," I don't want Congress or anybody else listening to "us" on monetary policy, period.

People like "us" panic and run to withdraw our deposits at banks like WaMu and get them seized and sold off. People like "us" hear gas is running out and rush to the stations to fill up every tank, milk jug, paint bucket and piss pot we can, and then "we" say "told ya so" when there's no more gas.


This is not a good time for Washington to listen to "us."
Click to expand...


Ding Ding Ding.

Again, I say - you have to trust the experts.
 
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