This Does Not Have to Cost $700B to $2Tr...

[Gawain 0]

http://www1.daveramsey.com/etc/fed_bailout/economic_cleanup_10887.htmlc

I heard part of this on the radio today, I don't have TV, so if someone has FBC, can they share what they saw of the TV interview about this?

I'm still getting my mind around this, and I encourage you all to do the same. I also encourage you to spread the word once you've read, or listened this and then harass your Congressman and Senator until they get a restraining order on you.

Do not let this get jammed down the throat. The majority of taxes get paid by the top 10%, so this is going to cost them, not most of us. However, this will trickle down on us in the form of less jobs, less investment and more government.

You can also download the podcast here: http://www.daveramsey.com/tdrs/index.cfm/2008/9/23/Fix-the-bailout-with-mark-to-market?ictid=sptlt

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[Amazon 7]

No it does not have to cost this much.. BUT it sure does take our minds off of that excellent little right wing adventure in IRaq that has cost us far more.

[Gawain 0]

You make no sense sometimes.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[quade 4]

Quote

No it does not have to cost this much.. BUT it sure does take our minds off of that excellent little right wing adventure in IRaq that has cost us far more.

Only in blood, not so far in treasure.

quade -
The World's Most Boring Skydiver

[grimmie 186]

We can bail out and have the dollar devalue or not bail out and have Wall Street devalue.

Why can't we lower mortgage rates to 2% until folks can figure out just what needs to be done.

We rushed into Iraq and we are rushing into socialism now.

[TheAnvil 0]

Interesting idea...

I like it far better than running headstrong into socialism.

Vinny the Anvil
Post Traumatic Didn't Make The Lakers Syndrome is REAL
JACKASS POWER!!!!!!

[grimmie 186]

A lot of the defaults have come on the sub prime and balloon payment loans. If all of the mortgage companies lowered their interest rates to 2%, they would still make some money, forclosures would slow and bad loans would be good ones because the borrowers could make their payments.
A $550,000 loan 30yr. fixed would be a $2,090 monthly payment.
I think it would be a way better overall fix. But I only have a 12th grade education from a really lousy public skool so no one wants my idea!

[livendive 8]

I ain't buying it, not even a little bit. I wish I had more time this evening to explain why, but suffice it to say that this smacks of a get-out-of-jail-free card, without even much smoke and mirrors dressing it up.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[jcd11235 0]

I have to say, that was a terrible idea Ramsey has. He essentially wants to use Enron style accounting practices to artificially inflate, or, more accurately, overstate the value of the sub-prime mortgage backed securities, and by extension the companies the invested in them. He overlooks the small detail that Enron collapsed without any help from Sarbanes-Oxley.

One major thing he is missing is that those securities are not producing the income that was anticipated. Simply holding on to them is not an option for many companies. Guaranteeing high risk, upside down mortgages is also a bad idea.

Ramsey's own real estate investments resulted in him walking away from his debt via bankruptcy. The method that he promotes for people to pay down their debts is inefficient, and results in people paying more than if they had used the more mathematically sound method of paying down the highest interest loans first. He's not someone from whom we should be taking financial advice.

Math tutoring available. Only $6! per hour! First lesson: Factorials!

[billvon 3,173]

> He essentially wants to use Enron style accounting practices to artificially
> inflate, or, more accurately, overstate the value of the sub-prime
> mortgage backed securities, and by extension the companies the
> invested in them.

Agreed. Solving this problem by artificially inflating the value of debt instruments is sorta silly. It's like solving the mortgage problem by offering more zero-money-down ARM's. It might even work for a few months - but then we'd have a five trillion dollar bailout to consider instead of a 700 billion bailout.

[rushmc 23]

Quote

I ain't buying it, not even a little bit. I wish I had more time this evening to explain why, but suffice it to say that this smacks of a get-out-of-jail-free card, without even much smoke and mirrors dressing it up.

Blues,
Dave

I think many, if not most, agree with you here in general. I know I do. The debate is and needs to be who and why. If that question is not aswered correctly, we are doomed to repeat.

And it will not be accidental.

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[SpeedRacer 1]

Dear Esteemed and Most Gracious American:



I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.



Yours Faithfully Minister of Treasury Paulson

Speed Racer
--------------------------------------------------

[Gawain 0]

Quote

We can bail out and have the dollar devalue or not bail out and have Wall Street devalue.

Why can't we lower mortgage rates to 2% until folks can figure out just what needs to be done.

There are not only two choices in this, and lowering interest rates to 2% wasn't part of the plan I observed.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[Gawain 0]

Quote

I have to say, that was a terrible idea Ramsey has. He essentially wants to use Enron style accounting practices to artificially inflate, or, more accurately, overstate the value of the sub-prime mortgage backed securities, and by extension the companies the invested in them. He overlooks the small detail that Enron collapsed without any help from Sarbanes-Oxley.

Enron was also breaking several other laws. It was also one company, not 24+ that are currently under investigation. These companies were not restating their values as apparently required by this daily-regulatory-requirement of Sarbanes-Oxley.

Quote

One major thing he is missing is that those securities are not producing the income that was anticipated. Simply holding on to them is not an option for many companies. Guaranteeing high risk, upside down mortgages is also a bad idea.

Why? We save for our retirement through ebbs and flows in economic trends. People buy houses in part, as a long term investment. Simply holding on to these bonds is actually a more appealing option, because some of the details about this "bailout" doesn't make much business sense, or appeal to them.

Quote

Ramsey's own real estate investments resulted in him walking away from his debt via bankruptcy.

Indeed it did some 25+ years ago. He no longer advocates that kind of plan.

Quote

The method that he promotes for people to pay down their debts is inefficient, and results in people paying more than if they had used the more mathematically sound method of paying down the highest interest loans first. He's not someone from whom we should be taking financial advice.

I agree to a point, but I see the value in going "smallest-to-biggest" because it helps develop momentum, which can help a small-income household dig their way out one step at a time. In terms of listening to him, I think he's a far better option than Sen. Dodd, Rep. Frank and these other guys that insist there is no other way out of this than writing a $700B blank check. Once the government is done "helping", this is going to cost TRILLIONS...I am not an accountant, but these guys inside the beltway have run their course. Government intervention is not the answer.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[kallend 2,230]

Quote

Dear Esteemed and Most Gracious American:



I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.



Yours Faithfully Minister of Treasury Paulson

Post of the Month!

...

The only sure way to survive a canopy collision is not to have one.

[Gawain 0]

Quote

Quote

Dear Esteemed and Most Gracious American:




Yours Faithfully Minister of Treasury Paulson

Post of the Month!

We agree on something.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[rushmc 23]

Quote

Dear Esteemed and Most Gracious American:



I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.



Yours Faithfully Minister of Treasury Paulson

It aint Gramm
That is where they are trying to aim it, but it is not him

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Butters 0]

Quote

"All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse." Benjamin Franklin

"That looks dangerous." Leopold Stotch

[pirana 0]

In principle, this really boils down to bail them out, change the rules, and head down the path of protection against future failures; or let the markets rule and the lessons be learned, even if it causes pain, possibly for quite a few people and the economy as a whole.

As a practical matter I don't want to get hurt by this either.

I'm torn, especially when you introduce the related matters of 1) the heads of the firms responsible walking away with multi-million dollar retirements while our debt grows by $1000's per citizen, and 2) heading down such a socialist path and the implications for personal freedoms. (I want my children to have some, including the freedom to fail).

" . . . the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging them and kicking them into obedience." -- Aldous Huxley

[pirana 0]

BTW, isn't $2T something like 10 or 15% of our GDP or net worth, or something like that? And if we print up that much debt doesn't the dollar devalue by that much overnight? And wouldn't such devaluation cause people to dump our currency, possibly starting a downward spiral?

Just wondering.

A serious sized trasnsaction with serious and possibly unpredicatable results.

" . . . the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging them and kicking them into obedience." -- Aldous Huxley

[jcd11235 0]

Quote

Enron was also breaking several other laws. It was also one company, not 24+ that are currently under investigation.

Actually, there were other companies Enron utilized in order to hide losses.

Quote

These companies were not restating their values as apparently required by this daily-regulatory-requirement of Sarbanes-Oxley.

Exactly. And yet, they still failed. So, there is no reason to believe that restating the values of the securities investments at market value will improve the financial outlook of the companies invested in those securities.

Quote

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Guaranteeing high risk, upside down mortgages is also a bad idea.

Why?

The same reason it would be a bad idea for the government to guarantee signature credit lines such as credit cards. Upside down loans do not have sufficient collateral to cover the outstanding balances of the loans.

Quote

We save for our retirement through ebbs and flows in economic trends. People buy houses in part, as a long term investment. Simply holding on to these bonds is actually a more appealing option, because some of the details about this "bailout" doesn't make much business sense, or appeal to them.

Holding the bonds is only an option for companies that do not depend on the income generated from the bonds. When foreclosures exceed anticipated rates, the income generated from mortgage backed securities decreases. Insurance companies, for example, rely on fairly predictable rates of return on their investments in order to pay benefits. Companies buy such securities to generate income, not to sit on for 10-30 years before they can realize any profit.

Quote

Quote

Ramsey's own real estate investments resulted in him walking away from his debt via bankruptcy.

Indeed it did some 25+ years ago. He no longer advocates that kind of plan.

What he is now advocating is allowing companies to deceive their shareholders by inflating the stated values of their investment holdings. That is not sound financial advice by any objective measure.

Quote

Quote

The method that he promotes for people to pay down their debts is inefficient, and results in people paying more than if they had used the more mathematically sound method of paying down the highest interest loans first. He's not someone from whom we should be taking financial advice.

I agree to a point, but I see the value in going "smallest-to-biggest" because it helps develop momentum, which can help a small-income household dig their way out one step at a time.

You can "see" all the value you want, but that doesn't mean it is really there. The mathematics are very simple. His methods costs people more money than necessary. Again, he is not offering sound financial advice by any objective measure.

Quote

In terms of listening to him, I think he's a far better option than Sen. Dodd, Rep. Frank and these other guys that insist there is no other way out of this than writing a $700B blank check.

He certainly has not offered a superior option to the bailout loans.

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Once the government is done "helping", this is going to cost TRILLIONS.

Unless it works, in which case the government (i.e. the citizens of the USA) stand to profit from the investment loans.

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I am not an accountant …

Seriously?

Quote

but these guys inside the beltway have run their course.

Agreed. The trend of widespread deregulation by DC politicians has proven itself to be a bad idea.

Quote

Government intervention is not the answer.

Actually, it is, as unfortunate as that may be. Deregulation has been a major contributor to this financial crisis. Too many corporations have proven themselves unable to act responsibly and ethically without government regulation.

If someone's teenage son is getting too many speeding tickets in his Civic, buying him a Ferrari is not going to improve the situation any.

Math tutoring available. Only $6! per hour! First lesson: Factorials!

[Amazon 7]

Quote

You make no sense sometimes.

Think about it for a while.. perhaps a long while.. and eventually.. you will catch up.

[Gawain 0]

Quote

Quote

You make no sense sometimes.

Think about it for a while.. perhaps a long while.. and eventually.. you will catch up.

No no no...I'm already ahead...yeah...that's it...

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!