Fool Poll: Ready for TARP II?

• Report this Comment On January 28, 2009, at 3:17 PM, pondee619 wrote:

  "Unlike previous iterations, the new program could buy toxic assets directly from banks"

  "let's remember why the original plan to purchase assets was scrapped in the first place:"

  So, the NEW plan is is to buy assets from the banks. The ORIGINAL plan was to buy assets from the banks. HUH?

  "It's nearly impossible to price these assets appropriately in a way that relieves banks without burning taxpayers"

  "Will it work? I think it's a step in the right direction..."

  Please tell us why it is a step in the right direction when that step was what was orginally planned but didn't/couldn't work.

  As I remember, the Federal Government was to purchase troubled assets from the Banks. But because of the diffuculty in valuing them correctly The Fed. Gov't. decided to capitalize them instead. Now the new plan is to buy troubled assets from the banks.

  Let's go Dear, this is where we came in.

• Report this Comment On January 28, 2009, at 6:45 PM, chart6813 wrote:

  The current results of the poll are understandable. I am as angry over this as is the rest of America. My first reaction was "Allow them all to come crumbling down". Yet, allowing these institutions to falter all at once would find us drowning in another Great Depression. This will not take care of the hundreds of thousands perhaps millions of fellow Americans out of work and it could be you, it could be me. Nor will it stabilize the real estate market, supply loans to businesses and investors, or provide refinancing for those whose homes remain in jeopardy. Who do you think will ultimately be hamstrung with the results should this occur? Right, non-other than all of us. So, can we really let them falter throwing us into depression or do we take steps to mitigate the damage while providing time to regain balance?

• Report this Comment On January 28, 2009, at 7:16 PM, hickmanbrad wrote:

  The government bail out the banks? What a joke. The government isn't capable of bailing out the government.

• Report this Comment On January 28, 2009, at 8:31 PM, babypoop wrote:

  chart6813 said:

  "allowing these institutions to falter all at once would find us drowning in another Great Depression."

  Were you under the assumption that we aren't headed in that direction now? Breaking up these failures now will head off a greater depression than it needs to be. Yes many would lose their jobs. Jobs would be created when the bond holders recreate smaller banks to replace the big three (BAC, JPM and C) all over the country.

• Report this Comment On January 28, 2009, at 9:38 PM, jerryguru69 wrote:

  Starting to remove MBS from bank balance sheet, along with changing FASB rule 157 might start to unlock institution-to-institution lending. A good start, but as with so much else in life, the devil is in the details. At what price does the "bad bank" or 157 evaluate illiquid MBS? One media source reported that one investment bank sold them for 22¢ on the dollar. Is this fair? Way to low? Can an accounting firm be enlisted to estimate what % of underlying mortgages will perform, and give us a good idea as to real value of an MBS?

• Report this Comment On January 28, 2009, at 11:28 PM, wickcraw wrote:

  Better sooner than later, the banks should be recapitalized with private rather than taxpayer money. Perhaps, if capitalgain taxes on new equity invested in banks were to be abolished for a prolonged period, investors would rush in with the required capital. Sorry, existing stock would not be eligible for this tax break.

• Report this Comment On January 28, 2009, at 11:28 PM, kerg01 wrote:

  This Great Depression crap is just that, crap...

  We may have a Great Depression allright but it will be BECAUSE of all this intervention vice the free market approach we should take. These banks, as well as any other insolvent institutions need to fail... the reason for the credit lockup is pretty simple in my mind.

  No one in the market knows who to trust...can we say Bank of America anyone? Letting the insolvent institutions fail will tell you who you can trust and who you cant. I dont buy that the entire banking system will fail. It is true the largest will likely fail, but this doesnt leave us with the ENTIRE banking system in failure... that will only happen if we drag out the problem until the good banks in the sytem are dragged down into the ruins....

  Maybe Im wrong about that and the large banks would drag the system down, in that case I propose we do the following instead of bailing them out. Set up a 1T fund for the GOOD banks of the system and overcapitalize them. We could also use the fund to protect depositors of these large bad banks while they transition their accounts to a GOOD bank, ie one that isnt begging the taxpayer for money right now. But again I really think the market can figure this out if Govt would stop interfering.

  We will never get out of this until we figure out a couple things.

  1) We have to find out who the bad actors are....this will be obvious once the Govt gets out of the way and stops protecting their "friends" BTW they are not the friends of the taxpayer.

  2) Prices must adjust to reality, ie houses pumped up, stocks pumped up, oil, grains, you name it, it has probably been pumped up.

  Once prices adjust and trust is restored then the velocity of money will return just like every "panic" before 1929.....

• Report this Comment On January 28, 2009, at 11:30 PM, predfern wrote:

  The best thing to do right now is to suspend mark to market. Mark to market has begun a death spiral as foreclosures and home auctions depress prices thereby lowering the value of mortgage-backed securities. Suspending mark to market will relieve stress on banks and corporations.

  http://www.aei.org/publications/filter.all,pubID.28705/pub_d...

  MBSs should have been classified as level 3 assets, but the obscure language of FAS 157 lead to confusion. The SEC gave no guidance on the effect of market conditions on asset values. If level 3 valuations had been permitted, assets could have been valued using discounted cash flow analysis and writedowns could have been avoided. "Companies exist to creat value, not financial reports."

  http://www.aei.org/publications/pubID.28389/pub_detail.asp

• Report this Comment On January 29, 2009, at 7:03 PM, PacificGatePost wrote:

  Should recipients of taxpayer favors continue to send jobs offshore?

  -

  http://pacificgatepost.blogspot.com/2009/01/should-bailout-b...

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  Where are the controls.

• Report this Comment On January 30, 2009, at 7:51 AM, duficity wrote:

  Look, just take all this money and offer refinancing at 3% and eliminate the mortgage interest tax deduction. That way the lesser earners will have an effective 3.25 rate and the 25% bracket will have a 4% rate. At an average rate now of over 6%, this would mean a minimum 2% or $4,000 annual savings on a $200,000.00 mortgage. If people cant afford a mortgage at 3% then they surely do not belong in the house they purchased.

  And while they are at it, why isnt the government also cutting back, like all private industry. Not necessarily layoffs, which would not help, but reduced work weeks like California just did. The key is to get people working and to save their homes. Put another bunch of money into deferred infrastructure that is already planned and designed and can be contracted out immediately. And forget all this Democratic Party happy time spending that is attached to the recent bailout package. This is not the time to piss away money on feel good packages and new entitlements. My god, and extra tax credit of $2500 to people who have 3 kids. Why not $2500 to go get sterilized if you can afford them.

• Report this Comment On February 03, 2009, at 1:46 AM, krazycanuck wrote:

  Bail out the banks so they can pay their execs their fruitful multimillion dollar bonuses and when the CEO (does the "E" stand for "embezzlement"?) get the boot after under performing, they get their golden millions parachute courtesy of the taxpayers! Bail out AIG so they can send their execs on a posh luxurious trip to the Caribbean because they couldn't get it done in Florida or wherever. At the same time, the banks know the can do whatever they want because if it blows up in their face, along come the taxpayers who earn thousands to subsidize the Wall Streeters who make millions. I'm so glad I live in Canada!

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