It's grossly unfair, but it's got to be done

GDB2222

http://uk.news.yahoo.com/rtrs/20080918/tts-uk-markets-global-d1d4700.html

News that U.S. Treasury Secretary Henry Paulson has spoken with Congressional lawmakers about a plan to deal with bad debt similar to the creation of the Resolution Trust Corporation in 1989 that resolved the U.S. savings and loan crisis spurred the late rally.
"If the government can come up with a comprehensive plan that is viewed by the market as a plan that would help in containing the problems in the financial sector in the U.S., that would be seen as a very positive development," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto.

My comments:
This is a plan for the fed to buy up all the toxic assets and stick them in a state-owned vehicle. In effect a bail-out for the banks.

The message is simple: A bank can be allowed to fail, but The Banks cannot. One option was to allow investors to recapitalise the banks, but that wasn't working, or at least it wasn't working fast enough. Furthermore, the policy of nationalising the banks with no compensation for stockholders (ie Fred and Fannie) was not going to encourage more capital raising. So, the only course left is to take all the duff assets off them. It's grossly unfair to the tax-payers who are going to fund all this, but it's got to be done.

Hopefully, if it does go ahead, we may avoid a really deep recession.

Next step is something similar in the UK?

ruggedtoast

Yeah thatll work for sure. Financial crisis cancelled, call Dithering Dad and Pickles to celebrate.

GDB2222

We haven't seen the details yet, but if they are prepared to throw enough money at it it will work.

Cat695

so what your saying is I can get massively in debt without any worries because tax payers (not really the Govement) will bail me out....awesome

dudleyboy

So basically whether we do or whether we don't we're still screwed.

I would like to see some Nick Leeson style punishment being dished out here. Unfortunately it's unlikely to happen because we'd have to build a whole new prison to hold everyone.

Hmm.. I wonder if Barratt are able to diversify...

ad9898_3

GDB2222 wrote: »

http://uk.news.yahoo.com/rtrs/20080918/tts-uk-markets-global-d1d4700.html

News that U.S. Treasury Secretary Henry Paulson has spoken with Congressional lawmakers about a plan to deal with bad debt similar to the creation of the Resolution Trust Corporation in 1989 that resolved the U.S. savings and loan crisis spurred the late rally.
"If the government can come up with a comprehensive plan that is viewed by the market as a plan that would help in containing the problems in the financial sector in the U.S., that would be seen as a very positive development," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto.

My comments:
This is a plan for the fed to buy up all the toxic assets and stick them in a state-owned vehicle. In effect a bail-out for the banks.

The message is simple: A bank can be allowed to fail, but The Banks cannot. One option was to allow investors to recapitalise the banks, but that wasn't working, or at least it wasn't working fast enough. Furthermore, the policy of nationalising the banks with no compensation for stockholders (ie Fred and Fannie) was not going to encourage more capital raising. So, the only course left is to take all the duff assets off them. It's grossly unfair to the tax-payers who are going to fund all this, but it's got to be done.

Hopefully, if it does go ahead, we may avoid a really deep recession.

Next step is something similar in the UK?

I think you're correct in you're assessment, however the US is in a different league financially and maybe able to pull this off and make it work, we are not in that position, borrowing would have to go through the roof ( a normal Labour policy ) to make even a small dent in the situation here. The pound would be worth pittance and inflation to go up significantly and the economy would be in ruins

Oh, hang on a min .... that is what labour governments normally do, so in answer to your question GDB2222, yes they will probably do it.

I'm off to Zimbabwe now for a better life.

wymondham

dudleyboy wrote: »

Hmm.. I wonder if Barratt are able to diversify...

If prices keep falling, then they will have lots of little prisons all over the country!

WTF?_2

GDB2222 wrote: »

http://uk.news.yahoo.com/rtrs/20080918/tts-uk-markets-global-d1d4700.html

News that U.S. Treasury Secretary Henry Paulson has spoken with Congressional lawmakers about a plan to deal with bad debt similar to the creation of the Resolution Trust Corporation in 1989 that resolved the U.S. savings and loan crisis spurred the late rally.
"If the government can come up with a comprehensive plan that is viewed by the market as a plan that would help in containing the problems in the financial sector in the U.S., that would be seen as a very positive development," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto.

My comments:
This is a plan for the fed to buy up all the toxic assets and stick them in a state-owned vehicle. In effect a bail-out for the banks.

The message is simple: A bank can be allowed to fail, but The Banks cannot. One option was to allow investors to recapitalise the banks, but that wasn't working, or at least it wasn't working fast enough. Furthermore, the policy of nationalising the banks with no compensation for stockholders (ie Fred and Fannie) was not going to encourage more capital raising. So, the only course left is to take all the duff assets off them. It's grossly unfair to the tax-payers who are going to fund all this, but it's got to be done.

Hopefully, if it does go ahead, we may avoid a really deep recession.

Next step is something similar in the UK?

Say hello to hyperinflation if this misguided plan goes ahead.

Basically, money will be rendered meaningless. To be in 'credit' then 'debt' must also exist. Once people lose faith in the concept that those little pieces of paper or numbers on a bank balance actually represent something of value, it's Game Over.

This basically would allow banks to ignore all the debt they are in - as a result of creating trillions of lax credit through loony lending and dodgy 'financial instruments' and just 'start again' as if nothing had happened. (Needless to say, that luxury won't be afforded to the common person who will still have to 'pay back' the banks.)

Everything they are coming up with now is just made up on the hoof, powered by sheer desperation as the system, which they allowed to get out of control, breaks down around them.

"Keep the show going for one more day and maybe something will come up" seems to be their motto.

If they start implementing nutcase measures like this it's going to end in total destruction of the financial system.

ultra10

Another day...yet ANOTHER "Rescue Plan" ...

Dithering_Dad

ruggedtoast wrote: »

Yeah thatll work for sure. Financial crisis cancelled, call Dithering Dad and Pickles to celebrate.

Clearly you haven't read anything I've ever written. You idiot.:rotfl:

WTF?_2

ultra10 wrote: »

Another day...yet ANOTHER "Rescue Plan" ...

This is going to be the last rescue plan - if it goes through then the next crisis will be the last under our current monetary system.