SRiC Specific: Bailout/Wallstreet Catastrofail Discussion thread
10-02-2008, 12:03 PM
#76
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I work with lending institutions everyday; without some kind of government assistance, even people with good credit will not be able to get loans. No new loans = no movement of money = job loss at every level. I DO NOT want to spend our tax dollars frivolously. I think there needs to be upfront disclosure on who is going to be "bailed out". There needs to be a structure of government repayment that needs to be established before anyone will agree to a bailout.
With the government bailout they're essentially giving taxpayers dollars directly to institutions that at want nothing more than to loan it back to taxpayers with interest. You're cool with that?
10-02-2008, 12:28 PM
#77
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Meaning our tax dollars will be used to bail out foreign countries.
A point that a customer brought up last night.
10-02-2008, 12:58 PM
#78
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The fair market value rule requires banks to report the cost that they could sell a given security for (in this case, amortization backed securities) at the current time. There are currently no buyers in the market willing to take the risk to purchase the mortgage backed securities because they are impossible to accurately value at this time.
so the banks are forced to writedown these securities at effectively a complete loss forcing their stock down. The problem is, people are imagining these security are just made up pieces of paper like stock in a company and that is not that case.... these securities are backed by peoples homes, a physical asset.
the potential upside for taxpayers and the gov is huge. purchase securities for fractions of a cent per dollar as the SEC will have a monopsony on mortgage back securities. so the Gov buys 700b worth of junk securities backed by peoples houses. this removes the pressures on the credit market and eventually allows for accurate upward valuations of the securities.
we could drop in 700b and a year later they could own trillions of dollars in assets and THATS the scary part.
the government could end up making money, lots of money, and effectively owning, your home....
just think our failing social security system could be tied to your own nearly valueless home.
BRiLLIANT
10-02-2008, 01:20 PM
#79
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ok guys; time for a basic lesson in market economics.
The fair market value rule requires banks to report the cost that they could sell a given security for (in this case, amortization backed securities) at the current time. There are currently no buyers in the market willing to take the risk to purchase the mortgage backed securities because they are impossible to accurately value at this time.
so the banks are forced to writedown these securities at effectively a complete loss forcing their stock down. The problem is, people are imagining these security are just made up pieces of paper like stock in a company and that is not that case.... these securities are backed by peoples homes, a physical asset.
the potential upside for taxpayers and the gov is huge. purchase securities for fractions of a cent per dollar as the SEC will have a monopsony on mortgage back securities. so the Gov buys 700b worth of junk securities backed by peoples houses. this removes the pressures on the credit market and eventually allows for accurate upward valuations of the securities.
we could drop in 700b and a year later they could own trillions of dollars in assets and THATS the scary part.
the government could end up making money, lots of money, and effectively owning, your home....
just think our failing social security system could be tied to your own nearly valueless home.
BRiLLIANT
The fair market value rule requires banks to report the cost that they could sell a given security for (in this case, amortization backed securities) at the current time. There are currently no buyers in the market willing to take the risk to purchase the mortgage backed securities because they are impossible to accurately value at this time.
so the banks are forced to writedown these securities at effectively a complete loss forcing their stock down. The problem is, people are imagining these security are just made up pieces of paper like stock in a company and that is not that case.... these securities are backed by peoples homes, a physical asset.
the potential upside for taxpayers and the gov is huge. purchase securities for fractions of a cent per dollar as the SEC will have a monopsony on mortgage back securities. so the Gov buys 700b worth of junk securities backed by peoples houses. this removes the pressures on the credit market and eventually allows for accurate upward valuations of the securities.
we could drop in 700b and a year later they could own trillions of dollars in assets and THATS the scary part.
the government could end up making money, lots of money, and effectively owning, your home....
just think our failing social security system could be tied to your own nearly valueless home.
BRiLLIANT
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