Bailout: It's On

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Relax. Breathe. It's done.

The House of Representatives passed (and President Bush promptly signed) a $700 billion plan that'll bail out the financial system, ushering in what many saw as the economy's only hope of living to see another day.

The passage came just four days after the House voted down the original bill, causing the market to shake in its boots over the thought of having to make it out of this mess cold turkey. Consider, since the House originally voted the bill down:

  • The Dow saw its largest one-day point loss in history.
  • GM (NYSE: GM  ) , Ford (NYSE: F  ) , and Toyota (NYSE: TM  ) reported an obliteration of sales after credit markets ground to a halt.
  • The state of California said it might need to borrow $7 billion from the Treasury to cover day-to-day expenses after credit markets froze up.
  • The country saw its largest monthly job loss in five years.

And consider these two comments:                  

  • "If we don't get [the bailout] solved next week, I may go back to delivering papers."
  • "If we don't do this [bailout], we may not have an economy on Monday."

The first comment came from Warren Buffett, the second from Ben Bernanke two weeks ago.

Buffett became the world's richest man by keeping a cool head under market stress, and Bernanke is someone who chooses his words very, very carefully. In that context, their statements serve to underline the severity of the crisis we're facing.

Opinions are all over the board, but the prevailing thought seems to be that as it became more and more apparent that this is a bailout of the entire financial system -- not just Wall Street executives -- support began to flow in.

So what does this mean for your investments? Well, it means the economy isn't about to completely implode, thank goodness. But that certainly doesn't mean we're out of the woods just yet. Shares of several banks, including Bank of America (NYSE: BAC  ) , JPMorgan Chase (NYSE: JPM  ) , and Goldman Sachs (NYSE: GS  ) -- companies that should benefit from the bailout -- fell on the news ... go figure. Going forward, investors' attention is bound to shift toward the downside risks of the bailout, such as interest rates, inflation, national debt, and moral-hazard risks. The debate over whether Congress should pass the bill is over ... debate over whether it was the right idea isn't.

How do you feel about the plan now that it's a sealed deal? Feel free to chime in on our bailout discussion board, or throw in your two cents in the comment section below.

For related Foolishness:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. JPMorgan Chase and Bank of America are Motley Fool Income Investor recommendations. The Fool has a disclosure policy.

Read/Post Comments (38) | Recommend This Article (14)

Comments from our Foolish Readers

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  • Report this Comment On October 03, 2008, at 3:32 PM, Lynn02 wrote:

    Well, since it's now a done deal, there needs to be something that makes sure this crap doesn't happen again. People are tired of bailout after bailout. I think that was said back in 1930-33.

  • Report this Comment On October 03, 2008, at 3:44 PM, JGBFool wrote:

    Kind of odd that the market got clobbered when the bailout initially failed in the House, and now the market is going down a little more now that the bailout passed. Hmmmm...

  • Report this Comment On October 03, 2008, at 4:14 PM, Hoglum wrote:

    Good thing the SEC is allowing the banks to value the "investments" we're about to make at mark to estimate rather than mark to market. I'm sure taxpayers wouldn't want to buy this stuff at "firesale" prices. I hope I'm wrong, but this seems like a ticket to name their own price.

  • Report this Comment On October 03, 2008, at 4:14 PM, kevp1 wrote:

    JGB, that because the money in the market assumed the bailout would pass, so after it passed and their play was over, they withdrew to keep their profits.

    My question is, who gets in trouble when this Rescue Plan doesn't do anything?

  • Report this Comment On October 03, 2008, at 4:16 PM, theeconomicsguy wrote:

    It is easily explainable why shares of financial stocks fell after the bailout passed. Investors are not totally ignorant. Regardless of the tax cut promises, or that this was the only way, investors realize that this bailout will be financed by higher taxes in the future. And if Obama gets his wish, the rich (people who own stocks) will be the ones that bear a large portion of it. This higher taxation burden makes their investments worth less, so they are willing to pay less to acquire them.

    Also, consider the two quotes above. Buffet invested a significant amount into firms that would benefit from the bailout. Seems he may have had a vested interest in making things seem dire in order to get the bailout to pass. If the bailout did not pass, his investment in these firms would have made him a bit less. And Ben Bernanke said that two weeks ago. Guess what, we still have an economy. And since the House first rejected the plan, not one major bank has failed. Credit markets have tightened somewhat as a result of banks waiting to see if the bailout would pass. They had a lot to gain from it passing, and did the same thing a two year would do. They held their breath and refused to breath until we gave in. If we had waited it out longer, they would eventually passed out and breathing would have resumed.

  • Report this Comment On October 03, 2008, at 4:17 PM, christinsutton wrote:

    With or without the pork, Henry Paulson has motivated most of the women among our group of friends to quit our jobs over the past two weeks... We were only using the second income for "extras" for our families, and Henry Paulson's vulgar bill depressed us so much, we decided that we weren't about to financially support him and his fellow lazy, non-working parasites through income taxes or frivolous purchases. We've also all decided to get rid of our second cars, because with only one wage earner in each of our families, we'll only need one car per household -- and of course then we won't have to waste all that money on gas, car insurance, maintenance and repairs any more. Thankfully, we all discovered a wonderful site called Freecycle.ORG, where we can get (and give away) a lot of good-quality, gently-used children's clothes, games and toys, electronic equipment, building supplies, gardening supplies, household goods -- you name it -- without ever having to spend a cent. Most of us were already bitter about the wars in Iraq and Afghanistan, so we had already been considering withdrawing our (now formerly) considerable income tax contributions for some time now -- to avoid contributing to the displacement and deaths of all those innocent civilians. Henry Paulson's extortion bill was just one too many slaps in the face for us workers -- although this bailout all by itself would have been enough of an insult to motivate us to quit our jobs and cut way back on spending. Besides, it's probably better for our children to have their moms at home instead of in daycare all day long (which, by the way, was another major expense we'll no longer have to worry about). We think all working class families who are able to afford it, should likewise withhold their money from the sociopaths in the finance industry by joining us in cutting back to one income-earner and only one family car. And also, give Freecycle.ORG a try - even if only to clear up your own household clutter.

  • Report this Comment On October 03, 2008, at 5:01 PM, Shadoobie1 wrote:

    We Americans do not like being held up by the throat by people that do not produce tangible real world things. And then proceed to make it harder for us to do so. I think we have taken a full circle from free market excess to socialism. That is what the Regan grandfathered and inspired deregulation movements achieved in the end. A collapse upon collapse. Kingdoms with in kingdoms of financial obfuscation. All extreme movements from the right or left end this way. Guess what happens when you peal back FDR era regulations and get to push people (strong ARM sales) into stupid mortgage agreements? Buyer be wear, Darwin trickle down economics, are not functional nor or they ethical. Ethics being a big word these days it seems. The free market corrections are not palatable when they are this sever. No libertarians in the poor house and none on Wall Street these days. I hope some of you fellow fools correct your off the hook free market thinking after this. Try to imagine that you get really sick in this country . . . do you not also see your financial ruin? Really? Must be nice.

    Someone please answer to me this - If we get to assume free market failures, can we not also assume success to balance it out? If not, then why? Creative people in the room see that Exxon Mobile could as easily be nationalized to provide a counter weight. Energy belongs to us all, it is only because they say they "do it better" in the commercial market that we allow it to be there. . . let us motivate them to return the money we just lent on the condition that we hold the energy sector hostage every year until they do. . . I would like to see wall street and big oil in a divide an conquer scenario but this time it is the people are the one's who are united.

    So, what I propose is we take the hand of Wall street that is around our throats and we clasp it firmly on to the throat of big oil. Let them all sort it out, and when they do, and the House of Representatives'-defined-metrics will be the judge , they can have their markets back with a modernized set of FDR styled regulations. Argue that Fools!

    Capitalistically yours,

  • Report this Comment On October 03, 2008, at 5:23 PM, tumachar wrote:

    Another 700 billion plunged and now everyone says it will not solve the problem... Why were we not told before?

  • Report this Comment On October 03, 2008, at 5:25 PM, ButtSauce wrote:

    Rome is still burning.

  • Report this Comment On October 03, 2008, at 5:26 PM, Tygered wrote:

    What's done is done, but they bloody well better make sure this doesn't happen again.

    I'm too old to go back to selling papers.... do they still have newspapers in this country? Just kidding.

  • Report this Comment On October 03, 2008, at 5:34 PM, Nomun4fun wrote:

    Well, looks like the bail out didn't work. Now what??? Anybody seen my butt? I've lost it and came seem to locate it. The last time I had intact was the last stock purchase I made a few days ago.

  • Report this Comment On October 03, 2008, at 6:11 PM, ButtSauce wrote:

    The great thing is that whatever direction the market heads next week, you won't know what if the fix was responsible. Mister market already thought this was a done deal, so it is already priced into the market. There are voices coming out of the land of the vultures that the SEC is forcing shorts to cover on certain stocks amd it really caught them by surprise. So if we see a lift, it might be caused by the the bail out act but instead a political magic act.

  • Report this Comment On October 03, 2008, at 6:45 PM, pmbarrett wrote:

    Well Fools, welcome to the wonderful world of Socialism. All hail the death of of the free market economy. Now in about a month we can seal the deal and move on to an economy similar to that of Europe. How sad! I'm sure the Founders are spinning in their graves.

    We also were informed today that we lost another 159,000 jobs. But, never fear, the 535 worthless bastards that caused this problem are all still employed. I just hope that the American public has a long enough attention span to vote out anyone that has Incumbent behind their name.


  • Report this Comment On October 03, 2008, at 6:56 PM, thibbist wrote:

    The crisis isn't really about the banks needing to be bailed out. It's about high food prices, high gasoline prices, increases in electricity, heating oil, medical expenses, and on and on and on. We have no money left to buy "stuff" so the economy doesn't grow. If they want to fix things, give the taxpayer a break. Cut government spending on all levels, cut out the cost of the war (that would save $10B a month), cut back on give-aways to other countries. Help - the US is drowning in debt and when foreign investment (i.e. the Chinese) wants their money to invest in a more profitable portion of the world - the government will need more taxes from the working poor to meet these demands. It's not a pretty picture and by the time it is painted, it will be too late. The US is the largest debtor nation in the world today - thank you George Bush & the stupidity of Congress. How do we stop them? How do we protect ourselves? Our government is not for the working poor.

  • Report this Comment On October 03, 2008, at 7:09 PM, chrisjrogers wrote:

    I say we get rid of everyone in Congress and have all new elections.

    Ron Paul can stay.

    As for term limits, one argument against those is that a lame duck can do a lot of damage because he doesn't have to worry about getting re-elected. Not saying they're a bad idea, but it's not a perfect solution.

  • Report this Comment On October 03, 2008, at 7:27 PM, HSAMRUOS wrote:

    First let me give you my C.V.

    I am a main street person, not a stock or investment expert, I am over 50yo,. I use a broker from a National Co.and I work with him not against him nor does he tell me what I must do. I do discuss my portfolio with my broker no less than every two weeks , more often if needed.

    My portfolio is made up of stocks and funds .

    The Market has dropped 29% since its Oct 2007 high of 14400. My portfolio has dropped 19% since Oct 2007 based on this same indicator and time line. The only additional monies put into my port folio have been the earned dividends from the securities.There have been several sales and purchases in that time

    I say that I probably have a fairly solid portfolio because of the "Delta" in the drop.

    My FIRST point is ; I perceive that most people with a portfolio , of large or small value, DO NOT pay attention to their future retirement or nest egg . They leave it to others to make the decisions and than they want to whine it it doesn't go their way.

    My second point is a parallel to the first one , and that is that people do not pay attention to their country, their economy, their future and the way our society is headed it is headed , and who is making the decisions that are taking us down this road.

    We need to stop supporting the politicans and leaders who advocate not holding people , leaders and followers, accountable for their actions, politicans who believe that government owes something to the constitutents who have not contributed or who are not going to contribute. There is no rational reason that "We the People" are required to help anyone. However "We the People" do have, in a county who places human life ahead of all else, a Moral obligation to help those "Truly in need and unable to help themslves" . Life is a risk and so are all things associated with living, and to think and expect that it is someone elses responsibility to assume the blame , cries in the face of the " Survival of the fittest". YOU are not OWED anything , but you will be allowed to earn it

    I point out, in many respects, its been a free ride and the time to "Pay the Piper or Grim Reaper" has probably arrived.

    Good Luck

  • Report this Comment On October 03, 2008, at 8:27 PM, realself wrote:

    To all those screaming about socialism:

    This is what capitalism has wrought. Pure, unbridled capitalism, may I say. I believe in strong regulation, whether a capitalist or socialist economy; I also believe in rewarding the efforts of the talented (where are they?). To restrict the salaries of CEOs sounds like, yes, socialism. Hmmm. So what's wrong with a democratic, partly socialized society? Your police force is socialized, as is your fire dept., infrastructure, school system, court system -need I go on? Let's be real: socialize our health care, thereby helping drug users break the cycle of addiction, thereby eliminating 95% of the crime in our streets; let's socialize education, all of it, from pre K to PHD and tech schools, including all tutoring and prep, thereby creating an educated and much stronger society (no weakest links); and while we're at it let's socialize a small sector of the housing market. No one should have to be homeless; in this country, it's ridiculous.

    I wouldn't advocate Govt. setting everyone's salary cap; just tax the hell out of everyone, progressively-and no looplholes-but give them safe streets you can walk at 4am anywhere, give them free comprehensive health care without hassles, make it possible for them to live their dreams without a superhuman (and perhaps impossible) struggle. We will all be stronger and richer in the end.

    Quality of life, anyone? Seems like a good deal to me.

  • Report this Comment On October 03, 2008, at 9:08 PM, pmbarrett wrote:

    Hello.......Earth to realself. We don't need any of what your selling, but there is a portly little putz in Venasula that might find your ideas interesting.

  • Report this Comment On October 03, 2008, at 11:20 PM, chrisjrogers wrote:

    McCain and Obama both supported this bill. Who the hell are we supposed to vote for?

  • Report this Comment On October 03, 2008, at 11:32 PM, robertf36009 wrote:

    Realself: Greetings. In case you missed it it was a misguided attempt at a socialistic solution to affordable housing for the poor down trodden minorities in 1977 that set us on this course. Look up the community reinvestment act for details. This act brought about the formation of a "nonprofit" organization called ACORN which acted as a advocate for the down trodden poor people to get mortgages by extorting money from banks by means of various threats. By it's self this probably would not have created the disaster we have today. However in 1997 Bill Clinton turbo charged the concept and began REQUIRING Fannie May and Freddie Mac to back more and larger risky loans. Bankers saw an opportunity for big profits with low risk because they could make the most outrageous loans and then sell themas mortgage backed securities forty five days later.Executives at the GSEs made huge bonuses Frank Raines at Fannie May made $90M in three years by using these securities to " Cook the books." add to that the fact that the uptick rule was no longer in effect to prevent naked shorting and the Glass/Steagal act of 1932 had been repealed all that it took was the clever rule change described in this article to make the recipe for disaster complete. So as you can see capitalism didn't fail nor did the market it was those who were in charge of minding the store who were asleep at the switch.

  • Report this Comment On October 04, 2008, at 3:10 AM, MisterRogers wrote:

    Realself, pack your bags and go live in Venezuela. As far as socializing education, just look at "No Child Left Behind". Every educator I've spoken to, most of whom lean liberal, has denounced that program as a pointless burden. If you want to see how the government runs things, go down to the post office or the DMV. I've worked on large government projects, and I can personally tell you that the cost is padded by an order of magnitude. The government will employ legions of people who produce nothing, but have some narrowly defined function in the bureaucracy, like checking your timesheet to make sure you used black ink instead of blue. (That's not a joke, by the way.) When I couldn't afford health insurance, the reason my medical bills were so high is because the government has a law that you can't get an antibiotic without a prescription. Right there, that jacks up the cost of my health care by $70 every time I get a sinus infection. I've been to numerous countries, where you can buy an antibiotic over the counter. You say no one should have to be homeless? What about all the people who aren't willing to work hard for their home? People who don't want to get a job to afford housing, also don't want to work hard to maintain their housing once you give it to them for free. I don't want to live next door to someone who throws their trash on the ground, lets their dogs run wild, and leaves their home in disrepair. Been there. Done that. Never could get the neighbor kicked out. I've seen two kinds of socialist countries in this world: those that work, and those that don't. In those that work (like in Scandinavia), the people are ethnically homogenous and their culture is passive. No one is poor, but guess what? No one is rich, either. Anyone who wants to be rich moves to America, and that creates a brain drain. You're living in a fantasy world if you think socialism could ever work in America.

  • Report this Comment On October 04, 2008, at 9:18 AM, guildersleve wrote:

    There is plenty of blame to go around.

    Low interest rates, easy loans made to people who can't afford them, interest only loans where there is nothing to lose, a country who has learned to live on credit and feel that they deserve the best the material world has to offer NOW and hope for the best in the future. With low interest rates the housing market inflated as demand increased, prices increased. Everyone knows how this happened. We have a boom or bust economy. There were warnings for years but there was no stopping it. Now some people act surprised. Nobody knows what to do. One big problem is that the lesson might not be learned when the government steps in to save the day. There are only hard lessons. We don't learn any other way but from out mistakes. Some people will call for more goverment control now. As if they were not part of the problem.

  • Report this Comment On October 04, 2008, at 11:37 AM, Jerrrymac wrote:

    We should have let the dice roll. No bailout! I see a big snowball rolling down hill here. Sure I'm not in great shape, I could use more cash. Just give every American the money and let it all settle into the hands of a few again. Let me see if I can hang on to mine.

  • Report this Comment On October 04, 2008, at 12:34 PM, pberardi wrote:

    "I wouldn't advocate Govt. setting everyone's salary cap; just tax the hell out of everyone, progressively-and no looplholes-but give them safe streets you can walk at 4am anywhere, give them free comprehensive health care without hassles, make it possible for them to live their"

    Your analysis is not only absurd, it's quite dangerous. First of all, we have a progressive tax system. Things like fire, police and education are the responsibility of state and local governments which tax the citizens of their respective states. NY cannot tax citizens of Ohio for its police department so therefore taxation at the state and local level is inherently kept in check.

    It's called Federalism whereby power is disbursed amongst the 50 states and not one centralized gov't.

    Our constitiution is a document which defines the powers and role of our federal gov't. But it also limits that role in order to preserve individual liberty for the people. Freedom works my friend.

  • Report this Comment On October 04, 2008, at 2:00 PM, websmith1 wrote:

    Pelosi is now saying that she’s not sure if the feds should loan California $7 billion to balance their budget. She is one of the ones responsible for not protecting our borders and she, along with Feinstein, Boxer, McKearny, Menendez, and others are primary proponents of amnesty for illegal aliens. Guess what happens to your revenue when you allow an army of non-taxpaying people to invade your country and states. Hundreds of thousands of taxpaying Californians have been replaced by people who leach off of our social infrastructure and don’t pay their dues. Add to that the 550,000 additional H-1B visas these characters want for people who will send their money out of the country to their families back home and you’ve got another financial disaster.

    Americans are fed up with public servants who’s hearts bleed for bankers and criminals instead of the people who put them in office. There are 263 Congress members and 74 Senators who need to be replaced and the time is drawing near.

  • Report this Comment On October 04, 2008, at 11:44 PM, Tiingall wrote:

    I'm Australian, but I've invested in the USA because I've felt it was - and probably always will be - the powerhouse of the world economy. But I am quite stunned by what you guys have allowed to happen at present. I know it's always hard to see the way forward when you are at the front of the pack; using hindsight and stepping around the leader's mistakes is a lot easier.

    But from what a few Fools have stated, this very major stupidity - and it's horrible consequences for everyone, everywhere in the world - was predictable if people had their blinkers off and they were listening.

    When I studied in the USA some years back I described the social and governmental processes as "institutionlised anarchy". Why? Because people at all levels can't (yes, can't - it's been educated out of them) hear/see/comprehend the subtle signals and act on those before a crisis descends. A social need must evolve into a movement complete with marches, protests and many deaths before the rest of the National can comprehend it.

    Empathy and understanding and wisdom cannot seem to drive change. There must first be drama, violence and personal suffering in some form before people can seem to hear. One perspective or direction dominates and procees at full speed - ignoring the smaller issues and warning signals - until the suppressed and ignored issue or need becomes so significant that it creates a movement, gets launched to the top of everyone's attention, and then it becomes the dominant - and equally deaf and ignorant - priority that exists till the next issue/problem/need get's so bad that it reaches the top. Institutionalised anarchy.

    Whatever idealogy or perspective or practice is on top at the time seems incapable of hearing or listening to the warning signals from other needs in order to avoid yet another crisis.

    This time it's happened in the financial system. When I read some Fool's comments I see just extremes; eg - capitalism vs socialism. The extreme perspectives which create and fuel the institutionalised anarchy. These violent lurches from one extreme to the other will continue if people can't listen, observe or comprehend the warning bells.

    What has driven this disasterous lurch in the financial system? Is it greed - on the part of the leaders who created & promoted these risky loans - and on the part of the loan officers and other staff who were happy to take the commissions and jobs that these scams created in the short-term. The culpability appears to be spread across all levels of society.

    What allowed it to occur? Why were all these people from all walks of life comfortable to operate in an ethical vacuum? Why could they not see the future catastrophic consequences for people at all levels - including themselves - and stand up to say "this is wrong, we should not participate"?

    What's happenend to the moral heart of America? What's happened to business ethics? Where are the business and financial leaders who value integrity, justice and honesty? It seems that by not valueing these qualities, the system - and all the people working there whom we have entrusted to husband our savings - have collapsed; physically, financially, morally and organisationally.

    What say you Fools? What people can we trust with our money in future.

  • Report this Comment On October 05, 2008, at 5:56 AM, redneckdemon wrote:

    Being negative is always easier than being positive. This applies to actions, mindset, philosophy, and so forth. We have an entire country full of people with real idea what is going on who are going to be screaming about "who's to blame, who's responsible, how did this happen?". The answer is that nobody is responsible in America anymore. Its never your fault! Your parents didn't love you enough. Ms. Whatthefeck gave me an F in the 3rd grade. The government is conspiring against me!

    Until our country can collectivly step up and take responsibilty for its own actions/decisions, things like this are going to keep happening, over and over again. Anyone with half a brain can figure out that if they only make 40-50k a year, its not a good freakin idea to move to LA and buy a 250 thousand dollar house, an SUV, a new Honda Civic, and a motorcycle "to save gas". But what do people do? They are to lazy or stupid to use their heads, and figure that "Hey, if there's a problem, it can't be my fault. If this was wrong, they wouldn't let me do it, right?"

    Welcome to 21st century America.

  • Report this Comment On October 05, 2008, at 8:48 AM, macrophyllum wrote:

    The we need to over-turn the Federal Reserve Act so that we can put the power to print money back into the hands of Congress, as it was originally stated in Article 1, section 8 of the Constitution. Without this power, the Fed enslaves the United States Government because they charge us interest to borrow money that we should be allowed to make!

    The Federal Reserve Act of 1913 is the biggest scam in American history (although the bailout is getting right up there). Do the research and you will agree, it was the single most devastating piece of legislation to ever pass in our country.

    We need another JFK, who temporarily restored power for the US Government to print silver-backed US Notes, not, Federal Reserve Notes.

  • Report this Comment On October 05, 2008, at 12:01 PM, sb101cu wrote:


    " Being negative is always easier than being positive. "

    I agree with you 100 %

  • Report this Comment On October 05, 2008, at 1:53 PM, re100presta2 wrote:

    Websmith1: Your qualifications as a journeyman painter come into question when you only use a wide paintbrush for all jobs big or small. What facts do you have to substantiate your statement that illegal aliens do not pay taxes?

    Additionally, in your opinion, what is wrong with sending some financial help to family and people that are deprived - often through no fault of their own -so that they also share and hopefully prosper?

    There are many men, women and children in other parts of the world that have also been displaced from their homes because of natural disasters and their only help is some monetary assistance that friends and relatives so kindly give.

    I'm not implying that there are no bad apples in that group. I've witnessed how some people that receive money sent from relatives here in the U.S.A., also forget that there are others less fortunate than them, even within the same family, and quite often brag about their "rich relatives that work in restaurants and in the agricultural fields in the United States", not knowing that it is not uncommon for these " rich workers" to sometimes do without the bare necessities, just to send a little help.

    But the majority of recipients are very grateful, know the sacrifices being made on their behalf, and try to use it wisely and hopefully prosper and pay it back some day.

    This is not to say that your comment is not valid, I just think that your choice of size of brush is not adequate.

    With all due respect and best regards.

  • Report this Comment On October 05, 2008, at 6:10 PM, redneckdemon wrote:

    "What facts do you have to substantiate your statement that illegal aliens do not pay taxes?"

    Um, think about this for a minute. illlllleeegggallll. If you were a serial killer on the run from the cops, would you send them a christmas card with your return address on it? Broad terms, yes, but come on. If you ain't in the country legally, you sure as hell don't want to draw attention to yourself. And one needs a social security number or it's equivalent to file taxes.

  • Report this Comment On October 05, 2008, at 10:30 PM, blunney wrote:

    OK, let's think a second here. The problem is the banks won't lend each other money, right? Isn't that what Paulson said in front of Congress? So, I guess that means the banks don't trust each other - isn't that why you refuse to lend money, you don't think it will get paid back? Are you with me so far?

    So that must mean Its a Good Idea (tm) for the American taxpayer to GIVE the banks the money they won't LEND to each other. Isn't that what some wise men on a hill recently said?

    And somehow, though nobody can say exactly, this is supposed to turn out just fine. So why am I still confused and mistrustful? Is it just me?

  • Report this Comment On October 05, 2008, at 10:32 PM, blunney wrote:

    By the way, I'm I still supposed to trust these same banks, stocks, etc. with my bi-monthly 401-k contributions? Why? If you figure that one out please, please let the rest of us know...

  • Report this Comment On October 06, 2008, at 3:59 AM, mcdiv wrote:

    Why are people blaming capitalism here?

    Fannie Mae and Freddie Mac were huge contributors to this debacle. They, as government proxies, provided a large market for the bad mortgages sold to the world amid cheers from politicians eager to put every idiot in a home.

    Furthermore, the Federal Reserve, also a government agency, provided the cheap money to fuel this boondoggle.

    Also, bailouts in years past gave everyone expectations of future bailouts if things went bad.

    This is a case of government setting unrealistic conditions that would have never existed under a real capitalist model.

    Government is just as responsible as the private sector for this mess.

    Don't blame capitalism. We never had it.

  • Report this Comment On October 06, 2008, at 11:07 AM, warzinski wrote:

    DOW under 10k.

    Yay, bailout.

    Yay, socialism.

  • Report this Comment On October 06, 2008, at 11:13 AM, greenvillewolf wrote:

    I thought passing the bailout was going to keep the stock market from going down the tubes? Let's see down 455 today and below 9,000.

    Yep, it worked.

  • Report this Comment On October 06, 2008, at 12:37 PM, ashpe wrote:

    If this credit crisis is bringing the world to it's knees, what will happen when 62 trillion dollars worth of Credit Default Swaps (CDS) will hit us?

  • Report this Comment On October 08, 2008, at 3:30 AM, mwong00 wrote:

    The mortgage crisis is created by what? Loans to people who cannot afford the escalating mortgage payments. So we force them out of their homes, and the banks consider the mortgage to be worth what? Zero? Banks go under, property values of nearby homes plummet, jobs are lost, and the American people get stuck with a $800 billion bailout that, by the Fed’s own admission, will not pull the economy out. As a matter of fact, virtually every economist sees further bankruptcies ahead even outside the banking sector.

    Why not let these people stay in their homes, and let them continue making whatever payments they were able to afford in the beginning? Yet, nobody should get a free lunch. The Fed (I mean US taxpayers) can pay the difference of the mortgage, and take partial equity on the value of the house. In other words, if the Fed needs to pay 40% of the new mortgage (based on a 30 year fixed rate), then the Fed takes a 40% equity position on the house when it sells later. The banks become liquid again because there will be no more defaults. The housing market becomes stable again because the glut of empty homes disappears. Our own property values will bounce back to near what they were a year ago because there won’t be For Sale and Foreclose signs everywhere. When the houses are eventually sold, American taxpayers reap the rewards of shared equity, leading to the possibility of reducing taxes in the future.

    But first, Congress must pass a law preventing ANY bank or agency to make the kinds of loans that are unsustainable – the kind that got us where we are today. I just saw an ad on TV today where is offering 97% loans to people with no credit. Their pitch is that you can use it for home improvement ot vacations. I called the company, and they offered me a loan! My crystal ball is that the mess will worsen as more people default using the new bailout money.

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