Go John McCain!No bailout. The House GOP I think may have the answer,may be just part of the answer. It’s better than our grandchildren paying off the Billions we just hand over. Giving Wall Street the money to clean up the mess they made is beyond reason. The Conservative House members are on our side and I trust them.

McCain did the right thing. Obama looks like the empty suit he is. He has nothing to offer on this problem..nadda nadda.

Blackhedd — Sorry if you have addressed this, but what is your take on the “foreign bailout” part (both it’s necessity and appropriateness)?

Sorry if you addressed that on another post somewhere.

That’s the lesson from the 30′s.

When everyone is going down, nobody helps anybody else, and in fact works to [mess] everyone else over.

If the markets crash, and credit finally freeze up completely, it’ll be like one of those zombie/disaster movies where all the human survivors turn on each other in a fit of panic and desperation, and they all end up dead.

There’s an advantage to be had in all this, but it won’t come from any of the current international political or business leadership. Unfortunately, it’ll be had somewhere like Iran or Putin’s Russia.

I think it’s unavoidable – this thing is heading for a blowup, and crash. Pres. Obama may end up being the least of our worries (though I have no doubt that he’ll make the situation much, much worse for us).

and so it has been all week since “the sky is falling” so I say lets debate it and see all that is in it.

for your clearly informed analysis. My concern is mostly a speed thing. Whenever legislation is passed during a crisis, the legislation sucks. I know we need to act–you are point that out clearly. But we seem to be rushing headlong into a bill that will provide liquidity to the market that we are being assured will either not cost the taxpayers the $700 billion or maybe even make us money.

But what always happens on quick legislation is that there is an “oh crap” moment when we find out that it is not working out the way that we anticipated.

Must we act quickly without regard to the effectiveness or consequences of our actions? If they are set on leaving on break this weekend, the President is entirely capable of making sure that they come back to session and finish the job.

This is strictly apocryphal, but when once asked if he feared a nuclear war, the Soviet offical responded no.

But, the questioner continued, a full-scale nuclear war between the U.S. and the USSR will leave both nations totally devasted, the cities in ruin, and hundred of millions dead.

Ah yes, the Soviet official replied, but we will control the rubble.

I wonder if there are those in Congress who take the same view, that they’d rather allow a crash because they believe that they would prevail in the elections and be able to direct the rebuilding.

And it would seem that those who want to replace the current capitalistic system with socialism (or something else) would have greater motivation to blow things up, thinking that they will be able to be in charge.

I don’t know the details, but here are the basics:

Change the current mark to market rules from and instant valuation to a 3 year rolling average

Cut corporate taxes

Lend the money at market plus 2%.

What do you think?

Just say no to bailout…. Market will correct it self faster than put a mammoth of new regulations in place… How about for once enforce existing laws and hold people accountable…

I’d make a lot of money as I am holding long dated index puts.

That is, if there was someone to buy them back from me when I wanted to sell.

Then American people get to keep $700 billion!

The problem with this “bailout” is we don’t know which way it is going to go.

The scary part is, it could become a way for the government to buy these bankrupt financial institutions and quasi-nationalize the process.

Yeah…that’s worked well in the past!

If your spouse or friends are having trouble figuring out what is going on and how we got here, please point them to this spot.
I will continue to update this as more information comes in.

Bail Out Score Card

Why?

If we buy the securities as $0.65 per $1 value, it means we inject $1.54 of capital per $1 spent by taxpayers.

It is important that each and every expenditure of taxpayer dollars be used to generate as much as possible in terms of GDP growth, and as much as possible in terms of liquidity and “market wealth”.

If you’d asked me, I’d say either “spend” it on massive tax breaks to encourage capitalization of these investment banks, or “spend” it on massive tax breaks, and maybe even loans/subsidies to infrastructure companies.

I’d rather the government buy nothing at all, but if we are going to be buying or lending $700 billion, I’d rather be buying nuclear power plants, thousands of gigawatts of Solar, fully fund the Pickens Plan, or finally get Fusion up and running.

$700 billion spent on Mortages might buy $1-$1.5 trillion in “value” for the tax payers and the federal treasury, while reducing future unemployment rates by 3-4% (assuming we spike to 10% in 2009-2010).

$700 billion spent on ending our addiction to oil, vastly building out our nuclear power infrastructure, or any other alternative to oil could buy $7-10 trillion in “value” for the US economy, while simultaneously reducing future unemployment rates by 3-4%, and eliminating long-term energy price volatility.

If we’re lucky, the companies involved will also get very good at exporting high-tech energy producing doodads to the rest of the world, but I wouldn’t count on it (government teat and all that jazz).

If we can’t solve this with a capitalistic solution, then why the hell are we as conservatives pretending this isn’t a socialist system. We’ve got 20% of any “profit” from this going to Acorn and friends. Our cities are cesspools of commie/socialist good intentions enslaving people to voter rolls and in return they get crime, failing schools, and unemployment.

If welfare is bad for the poor, then welfare is bad for the rich/former rich.

Everything comes down to personal responsibility. America voted for these clowns so now we’ve got a circus. I don’t think we should compound the problem by selling out principles.

Let’s just rip off the bandaid quickly and get it over with.

Do we want to let the guy who should have seen this coming(he knew) fix it? That’s so dumb. Should we just trust them?

Reid just said they have constituents to take of. Then why don’t they listen? Reid is a fool.

..who elects these people?

If im going down im ordering pizza and tipping some poor kid 5$ like im donald trump..

What’s sad is how this is being portrayed. You see it clearly but unfortunately nobody is talking about what it actually is:

The Paulson plan, on the other hand, would create a channel through which global investors (significantly, including foreign central banks) to shoulder the financial burden of covering the capital losses. By purchasing up to $700 billion in new Treasury debt, they will in effect be assuming the investment risk on the bad assets, although it will look to them like dollar risk.

The investors are going to buy new debt underwritten by the U.S. Government to try and stop all the tires on the economy from blowing out at the same time. That’s why I’m very much in support of the idea and I wish people would get past the class-warfare hors…..

Making these crushing-logic rhetorical statements is a sure way to be sleeping in a box in 2009. The only people who are going to be hurt by inaction at this point are the hundreds of millions of people in the United States who stand to lose if the Market does it The Hard Way by smacking the financial sector into the proverbial lightpole.

Does anyone really, really want to live in that world? No credit, no customers, layoffs, unemployment, negative growth, turmoil. Is that really where you want to spend this Christmas?

The American banks and financial companies that survive will not make the same stupid risks again, at least in the next 50 years, lest they and the rest of America suffer the consequences of foolishness.

The baby boomer generation, as well as the younger generations, need a kick in the pants to wake them up from their wet dreams of entitlement.

I’ve been ambivalent but this approach appeals to me. Does it split the quilt adequately?

Fixing the Paulson Plan

By Douglas Diamond, Steve Kaplan, Anil Kashyap, Raghuram Rajan and Richard Thaler.

Above all else, making it fairer to U.S. taxpayers.

and, to a lesser extent, Sen. McCain for at least injecting some reality into this bailout.

The question for me is whether this is an actual fix or just prolongs the agony. If it is the latter, it would be much better to have that $700 bill or trillion or whatever remain in the Treasury.

In the end, the Democratic faces attached to the rush to judgment are the very ones who caused much of this crisis: Frank and Dodd. They can’t be allowed to come from this unscathed.

So the Republican President of the United States, who presumably has Republican experts on finance are saying we need to act. The leader of the Republican party (John McCain) says we need to act. The Treasury Department says we need to act. The experts on Wall Street say we have to act. The brightest in the GOP say we have to act. Even the House GOP conference says we have to act.

But some posters on here, with no background in economics, finance, liquidity, margin or equity markets-

and who have a tough time composing grammatically correct paragraphs- are claiming there is no reason to do anything.

Hmm, which position is stronger- such a tough call…