After The $700,000,000,000 Bailout

Author: Stan Nodvik | Category: Politics, Rants and Raves, Society | 09-22-08
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What do we do?

After the 700 billion plus dollars bailout of Wall Street and the banking community, what can we the people look forward to? Of course, the Feds aren’t calling their solution to their problem a bailout. They are using a surefire Madison Avenue, advertising ploy and calling the “Bailout” by different brand names in order to offset any public outcry. Let’s do a switch on a recent joke: You can put lipstick on the word, bailout, but it’s still a bailout. Moreover, this bailout may mushroom in the dollar amount because now the Fed is also considering a bailout of foreign banks who have “branches” in the U.S. Oh! Good Gawk!

Oh yes, the Feds have to show fairness, maybe by rescuing those homeowners who are unable to pay their mortgages. This is to quiet the say-so’s about their rescuing the Wall Street and the fat-cat bankers and not rescuing the individual taxpayers. Who gets the bread? Who gets the cake?

The fat-cats and their //there’s no other options// spokesmen have stressed how much the little guy will lose and that this bailout is being done for his benefit, too. For him or her to someday get a loan to buy a car, take out a loan to fix up the house or even a loan to go into business. Booo! And there’s also the fed’s claim that only such a huge bailout can save your job! What jobs? Boo! Boo!

And to gutsy up things, the Feds (President Bush included) are saying they’ll get back most, if not all, of the taxpayers “loan” money. Sure, maybe so. I don’t know. Would you buy a house from Uncle Sam, now the world’s largest home real estate agent on the globe? Or maybe you’ll wait to buy a property at a fire-sale auction, and so the Fed gets back pennies on a dollar for the taxpayer.

The “Loan” Pay Backs: Consider this question! Will what’s happened in the past about the Feds paying back money be an indicator? Can one rely on a government who has borrowed vast sums from Social security money and diverted the pay backs elsewhere? Even a child learns early in life that most promises can be lies. Don’t expect much of a pay back to ever pay down the “loan’s” principal.

I admit the above is negative, but the outlook is more bleak and clinically depressing. To be honest, I don’t know whether the Fed’s bailout will ever solve Wall Street’s and Main Street’s problems. I don’t think anyone else really knows either. Nevertheless, forget the finger-pointing. Forget any hero who claims to provide a permanent fix. And there isn’t any use in screaming about congress. But this I do know–

All of us must be brave. Not about the massive bailout loan itself, but it’s the vig on that loan that may kill us. Can the American people be brave? How high will the interest, which our country pays other countries, going to jump? Can we continue to meet the interest payments? Why not? Because of the massive bailout loan amount, added to that the United States owed before the bailout, and don’t forget the unaccounted cost of two wars. Hey, just what kind of life in the United States will be possible if all our government money goes to the vig? You can be certain it won’t be an as-is life. You can pray for a brave new world.

The loan’s interest (like rent) has to be paid on time. Before the huge bailout, I believe we were just paying the interest and nothing on the principal. In time, we will be paying mega-interest amounts. Where will this interest money come from? Increased taxes or drastic, to-the-bone cutbacks? Spending cutbacks of what? Where? Social security? schools? foreign aid? disaster relief? even food stamps? The next president, no matter who he is, may be without any possible options.

The Bottom Line: My point is not so much to frighten the reader, but for the reader to realize that things can be bad and bad things can become worse. We all must be brave and live with it.

BRAVE

noun: [as plural n. ] ( the brave) people who are ready to face and endure danger or pain.

verb: endure or face (unpleasant conditions or
behavior) without showing fear : we had to brave the full heat of the sun.

- The Oxford American Dictionary

–30–

  • In the news today: "U.S. banks set to pay employees at least as much as during pre-crisis days."

    “...Wall Street, helped by improving profits, is on track to pay employees as much as, or even more than, it did in the pre-crisis days. So far this year, the top six U.S. banks have set aside $74 billion to pay their employees, up from $60 billion in the corresponding period last year.” --Washington Post

    Same old, same old. Yes, same old, same old -- this time at taxpayers’ expense.

    --30--
  • The bigger problem is when it all comes down, the cash money may be worth less than the paper its printed on. In all honesty, one would be best with gold coins. At least then you have something that has an intrinsic value and not a representative value.

    [Cerebrl]
  • WHEN BANKS FAIL

    It’s time for me to don my Chicken Little costume and go running into the street, shouting, “The SKY is falling!” That’s because I want you to look up and about to see if something’s amiss.

    Well, there is something amiss. Did you catch the small article by A.P. today about another bank failing? Well, here’s the one I’m talking about:

    “Regulators on Friday shut Bank of Wyoming, marking the 53rd failure this year of a federally insured bank.
    The Federal Deposit Insurance Corp. was appointed receiver of the failed bank, based in Thermopolis, Wyo. It had $70 million in assets and $67 million in deposits as of June 30.”

    On 22 June 2009 the 40h bank failed. That’s 13 failed banks in the last 18 days. Ouch, ouch!

    I have a suggestion for you. You may need an emergency stash fund. Set aside, hidden somewhere in your home, cash. Say, enough for three weeks. Say $50 to $100 per week.

    This is Chicken Little talking, now. You may very well need real money when the bank doors are locked and ATM’s are
    d-o-w-n. Trust me on this!

    --30--
  • The economy meltdown has hit my old college in a strange -- can you believe it? -- way. Washington & Jefferson College (www.washjeff.edu/) in Washington, Pa., is no longer serving breakfast at trustees meetings; instead, it will give trustees passes to the cafeteria. Faculty members there will now have planning sessions over brown-bag lunches instead of dinner at the president’s house.
    --30--
  • Unum
    Hey Stan....the reason the banks can give the money back is because of the new accounting rule that was so graciously given back to the banks...."Mark to Market". Now the banks can just state what they "think" their assets are worth not what they could actually get on the market.

    Now, that would make a bank solvent real quick.

    More fun and games...

    Oh and by the way, I will start believing in government again when there is a move to break apart these banks that are "too big to fail".

    If they are still too big to fail....then when will the next bail out happen? They have us exactly where they want us...it's blackmail any way you look at. I guess they are also "too big to break apart". Hmmmmmm.
  • Today’s news: “10 big banks get OK to repay $68B in bailout money.” Okay, it’s said they don’t want the money if it comes with government oversight/new regulations. Hmmm. But, my question: doesn’t this mean the banks didn’t really NEED the money in the first place? Then why the $700,000,000,000 Bailout? Someone please explain this to me!
    --30--
  • The reason why this bailout did not work and will never work is fear. The economy sucked then, and the economy sucks worse now. The banks need the money for themselves. What are the banks afraid of? The banks fear a run on their bank. A run on the banks that’s nationwide. They fear the public will find out just how bad the economy really is, and what’s happening.

    The banks need to hold onto as much cash as they can in other to handle the situation in case their depositors knock on their doors, demanding all their money back. They are not going to loan out any of this massive bailout money to stimulate the economy as it was planned by the feds. Each bank’s very existence is at risk if it cannot assuage their depositors. They came first.

    The banks must have enough big bucks at ready to stem the tide, enough money to seize up the onslaught of angry customers in order to give the banks enough time that’s needed to show that their individual bank is solid, which their bank would not be if a run on their bank is allowed to continue until every one of their depositors asked for all the bank’s money back.

    In order words, the banks need breathing room. And the more big bucks they have in their vaults, which includes the $700,000,000,000 bailout money, the more breathing room they have. That is why the banks kept the bailout money; they kept it for their own purpose to assure their own existence. This is their fear! They cannot rely on insurance per deposit. FDIC for depositors doesn’t come into effect until after a bank fails and closes its doors.
    --30--
  • The new government plans to bail out anyone and everyone and -- yes! -- just now they even include bailing out God. Properly filled-out application required, of course!
    --30--
  • The fed’s wrong focus. Tons of paper money, including the kitchen sink, have been thrown on whims at the banking industry, and next, probably, tons of money will be thrown at corporations like those that manufacture widgets.

    And still -- Oh woe! Oh woe is the economy! Well, the focus needs to be changed. What needs to be done, I think, is that which Obama wants done, which employs the right focus, on the individual. On Joe Everyman!

    So far the need to restore confidence from the top down has failed. Why? Because confidence in consumer spending is in direct proportion interlinked with Joe Everyman’s security. Not the sense of being secure, but real security which only a regular paycheck can provide. Obama is right on with his plan to provide jobs, at the bottom, for people like Joe Everyman who are presently out of work, as a workforce to rebuild our infrastructure.

    That’s the way to go. That’s the ticket. And the “lame-duck” feds, along with the “lame-duck” congress, and “lame-duck” President should -- it is my opinion -- stop racking up public debt needlessly and stop looking for THE answer, THE cure for our sick economy because they are acclimated to the wrong people in the wrong place with the wrong focus.

    --30--
  • Massive Bank Bailouts Continue without letup. Mostly because each new bank candidate is too big to fail. Question: Is the United States of America too big to fail, if it comes to that? And who would rescue the U.S.A. by providing the money to bail out our country? Heaven forbid, but we can fail, too. Think about it!

    --30--
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