Financial Koolaid antidote inside... now with 100% more reason!!!

From a different thread response. For really smart and wonderful people, the disinformation about this is staggering....

Here is the deal,

they pass the bill, any "bailout" bill, and the money in granny's bank gets murdered by double digit inflation, US bond rating cuts to AA or Aa, and the real money, the rich American, Chinese and foreign investors, pick up a very nice profit when newly sold bonds demand 14-20% interest, and the ones holding at 3% make a killing selling them at 8-10%, gravy all the way up. $1.4 Trillion the Chinese own, so figure 8% plus your money back, just to earn the right to come back in at 14-20%, good deal for them.

The bonds regulate mortgages, so mortgages for the next 20 years will be at 18-20%, commercial credit (what they are trying to save) will be non-existent ANYWAY as the "new" rate will choke most business out, so that is a wash. Take Exxon at 9% net profit. They have to pay 100% more for money, they can't raise prices FAST enough. Oil shock. Not including the $200 per barrel price caused by the devaluation of the American dollar.

This is servitude, austerity, Argentina redux, whatever you want to call it.

Unemployment will abound, and your kids have no future, ala most third world Latin countries.

There is a fixed supply of bonds. Supply and demand.

They DON'T pass it, and our already insolvent banking systems freeze, and all the things everybody here has said.

Unemployment will abound, and your kids *might* have future.

This is the last best hope we have for paying some of our bills off, our creditors want their money back as they are slowing down, and need their OWN stimulus packages. And we will have a Depression either way.

The real question is, do we let the Boomers and Great Granny pay for the mistakes of their tenure in American government, R or D, or do we go through 5- 10 years of everyone being poor to have a shot at a future. The question that will never be answered is "Why are you screwing your grandchildren???"

Either way, the "real" economy goes underground, tax collection drops rapidly, SSI and Medicare become means tested, and your Grandkids hate you. And we are all screwed.

Sorry.

one person says 'fear, fear, fear!!' and it's not going to be so bad if we leave things as is. Then I read things like this and it scares the crap out of me. To bailout or not to bailout... that is the question.

Why put the bailout money into buying up all those derivatives? That doesn't even begin to make any sense to me.

Why not buy up all the mortgages that are in default? If this really is the problem that is driving this supposed meltdown, this would fix it. Wouldn't it? I think there are less than a hundred billion in default mortgages.

If the default mortgages were bought up, and refinanced through the bailout program (something akin to a bankruptcy proceeding where they are offered a payment that they can afford), then doesn't this crisis go away?

Of course it does, except for the assholes holding all this counterfeit equity, they'll be screwn, which is some kind of justice.

Either they counterfeited the securities themselves, knowing they were worthless, or they just didn't care enough about their investors that they didn't exercise good judgement when some fast-talking traders sold them this crap.

This impending crisis, which may or may not be real (I think it's real), may or may not go away, but in any event no one will be able to shift the blame to the folks at the bottom.

This is what is so infuriating about this whole debacle. To hear this whole thing being blamed on the folks who cannot afford to pay. That's has to be complete hoohey.

If that were the case, then buying up the mortgages from the purchasers would guarantee that all of these derivatives would have more than their face value, if they really are what they claim they are. Only (I believe) a collapse would occur anyhow. But I don't think it would be all that bad (breadlines and stuff like the Soviets). The investors would mainly take the biggest hit when their paper turns out to be worthless in spite of everyones mortgages being paid off.

In any event, I would think property values would quit plummeting, then the private financiers would want to get back into the action by buying up all the refinanced stuff.

We have many choices, there are many possibilities, they are just not being presented.

They say, and people accept, that these are the only options and consequences, choose.

Thanks. K and R.

That is one ugly -- er, two ugly scenarios that you paint. I wish I had some magic lipstick...

Recommended... I suppose :-(

There is an alternative to simply borrowing $700 billion. Taxes. Taxes to pay for it. How? Why not a real estate tax or better yet a tax on security transactions? Tax a stock, or bond, or futures contract every time it is bought or sold. I heard on Tom Hartman today that a .25% tax on stock transactions would bring in $160 billion per year.

No borrowing means no inflation. This type of tax would even discourage speculation by making it more costly. It is also a progressive tax in that the richer one is the more likely they are going to be paying this tax.

So sure offer a bailout. A bailout not with strings but with chains. Cap management pay, strict regulatory oversight and investigation into past practices for fraud, an equity stake for the public, provisions for foreclosure relief, and provisions against usury regarding mortgages AND credit cards.

But FUCK GIVING AWAY $700 BILLION!!!!!

Best post in days on this subject, and only 9 replies?

Why don't they directly give $3,000 to each taxpayer if they're so worried about credit and stimulating the economy? Instead they're going to hand this bailout to their criminal buddies, who are going to sail away with their golden parachutes intact.

I really pray Americans aren't this gullible :(