WASHINGTON - Warned that time was running short to bolster the distressed economy, congressional Republicans and Democrats reported agreement in principle Thursday on a $700 billion bailout of the financial industry, and said they would present it to the Bush administration in hopes of a vote within days . . . . . . The bipartisan consensus on the general direction of the legislation was reported just hours before President Bush was to host presidential contenders Barack Obama and John McCain and congressional leaders at the White House for discussions on how to clear obstacles to the unpopular rescue plan. http://news.yahoo.com/s/ap/20080925/ap_on_bi_ge/financial_meltdown
Hey we finally agree . . . this is great news. Although the whole topic is not great news. All that happened was an agreement has be met to spend 700 billion dollars (I know it was necessary). Glad I don't have kids, because it will take a couple generations to pay this back.
That statement tells me you don't understand the mechanics of how this bill will work. Go and do some research. If you have any questions, I'll be happy to answer them for you. Edit: I apologize for the arrogant tone of the last two sentences. It just seems that people don't really have an idea of what this bill entails. I don't feel like explaining it, because it will take too long. However, if there are specific questions about the mechanics of the outlay, I'll be happy to try to clear them up.
You are right, I'm not a finance guy and have no idea how the bill works. I really don't have time to research, I just know this whole thing sucks. That we are bailing failed businesses in order to prevent some terrible consequences. Sucks! Edit: I take that back. It's all good maxiep . . . you know much more about this than I do (no sarcasm)
Not of every particular detail of the bill, but the overall concept I understand better than I want to. I spent five years on Wall Street doing CMBS. Not only do I understand the underlying problems with the MBS market, I know the bond math required to slice and dice these loans into tranches. I wouldn't wish that knowledge on my worst enemies--it's incredibly boring.
Let me add, I think both of us are much more middle of the road than our posts make us out to be. It's just on this board, with all the exagerations, it's easy to slip into that state of mind. But this is what is fun, talking politics with sports fans. Hopefully I won't get judged too hard for being extreme in the OT forum.
Did you see my edit. . . sorry bud. I'm guessing you know a lot more about this than the majority of posters and I know that I sometimes get pissed when posters try to tell me something and expalin why I am wrong about the area I have studied for years. And I totally get the statement that someone making a statement just shows they have no idea what they are talking about. I have seen that before. So yes, I don't know about this area . . . will the next generation be paying for this? In less than 100 words please. : )
As I understand it, and correct me if I'm wrong, maxiep, the majority of this debt will get retired over time as the mortgages are paid off. Besides, it's_GO_time, I think you should just man up and send in your $2,800 share of the $700 tril with your next tax payment.
Probably not. We'll be issuing T-Bills to purchase these MBS products from firms where they'll be marked-to-market. Right now the market has frozen because no one can value these products. For example, what if every single house in your neighborhood had to be sold in the next 12 hours? What would the value be? That's what's happened with the credit market. The Government is basically buying every house in the neighborhood at just under expected value and then reselling them over the next few years. The Government will buy these bonds, giving the credit market liquidity and re-creating the MBS market. They'll be sold back to the market over the next few years. In the interim, the Government will receive revenue from these bonds. From analyses I've read and analysts I've spoken with, they think the profit/loss will be +/- $200B. I hope that helps.
They'll get paid off sooner than that as all these MBS products will be put back on the market. If you want a parallel, take a look at the Resolution Trust Corporation, but instead of bad loans and real estate, it's mortgage-backed securities.
I don't agree with his calculations on the market price of these bonds, but otherwise this is a pretty decent explanation of what the ramifications of this bill may be: http://online.wsj.com/article/SB122230704116773989.html
This kind of reminds me also a little of the big $40 bil loan we gave to Mexico (in the mid-90's?). It was a big controversy for a few weeks, but it did the job of shoring up their economy and restraining inflation, and eventually they wound up paying us back. The headline was "We're sending $40 billion to Mexico!" The reality was that it turned out to be a pretty sound decision, and America came out fine on the deal. When we were repaid it barely made page 9 of the newspaper. Obviously, the stakes are a lot different here, and I don't think there's anything close to a guarantee that we'll recoup all that dough, but there's a tendency to hyperventilate over numbers without giving things a little context. I'm glad to see they've reached a compromise, but I don't want them to rush it. This disaster has taken a decade to create--a week or two of careful lawmaking to ensure we get it right is probably worth it. Of course, if they take too long it'll give everybody a chance to insert their favorite piece of pork into the deal.
McCain still not comitted to the debate on friday. WASHINGTON - John McCain's campaign expressed cautious optimism Thursday as congressional Republicans and Democrats agreed in principle on a $700 billion bailout of the financial industry hours before the two presidential candidates were to meet with President Bush on the crisis. Even so, the action didn't appear to be strong enough to convince McCain to attend Friday's scheduled presidential debate. His campaign has said he wouldn't participate unless there was consensus between Congress and the administration, and a spokesman said the afternoon developments had not changed his plans. "There's no deal until there's a deal. We're optimistic but we want to get this thing done," McCain spokesman Brian Rogers said. Obama still wants the face-off to go on, and is slated to travel to the debate site in Mississippi on Friday. http://news.yahoo.com/s/ap/candidates_financial_meltdown As I try to go back to being somewhat normal . . . I don't know what the proper thing is to do here. I do know I want to watch a debate on Friday. Heck i want to see Obama and McCain in Washington working hard today on something other than the debate, get a good night sleep, wake up and be flown to Mississippi and debate by noon. Now that would be good stuff.
So let me get this straight, the Obama camp is up in a tizzy because they want the debate to happen tomorrow instead of sometime next week and they want the Biden-Palin debate to happen a few days later instead of Tuesday? It's not like the debates are going to be canceled or are not going to happen...Seriously I want to know what the big problem is.
Good news for the nation (and world) if this deal gets put through. It sucks that it has come to this, but I prefer a little government intervention if it means we don't end up with soup lines and a frozen economy.
I've been trying to read articles on this, but did I miss one where McCain said he wants to reschedule for the next week? I agree that wouldn't be a big deal. But this is such a game going on and if one side feels they are more ready than the other side, are you suprised they are going to be pushing for it to happen sooner rather than later. to me it is all a game. First, McCain says got to go to Washington and help get a bipartisian bill done. Then when they have reached an agreement in principle, he says well it isn't final yet so we can't do the debates yet. And i guess Obama can be seen as saying screw the economy, I want a piece of McCain now. I do think that Palin shouldn't be running (and I don't think is) from Biden. She should be licking her lipstick chops. If she eats up Biden, or Biden shoots himself in the foot . . . that will reinforce all the excitement of the republican ticket.
I haven't read any articles stating anything but that he'd like to potentially delay the debate. Remember, this is a debate on foreign policy. Given Barack Obama's debating prowess and his knowledge of foreign policy compared to McCain, do you really think McCain is trying to avoid debating Obama on this issue?
Potentially, since this is likely to be McCain's strongest debate based on the topic, he's trying to move this closer to the election to maximize any potential "bounce" in the polls he'd expect. Final debate is on domestic policy, and Obama is going to destroy McCain on that one. If you don't think this whole "postpone the debates" thing is political posturing, you're naive. This is a calculated attempt at a "game changer" from McCain, and it has nothing to do with "what's best for the country" and everything to do with "what's best for John McCain." -Pop
