So what happens if a bailout deal is not reached?

mr_magoo_5

luvpump wrote: »

This is what will happen !!
http://edition.cnn.com/2008/POLITICS/09/28/bailout.deal/index.html

We really are living in Momentous times !!! And in no way is that Hypebole !

Mind you he would say that considering he has $50 billion on the line!

I think it should go something like,

‘Please bail my greedy @rse out, else I'm screwed!’

Generali

Max_Headroom wrote: »

I keep seeing references on the news (and indeed on sites like this) along the lines of "if a bail out of Wall Street is not forthcoming then the fallout would be unthinkable".

Well what is "the fallout"? What's going to happen if a deal is not reached? Can it really be as bad as all that?

And if they do bail the banks out, how long before they go back to their bad old ways? After all, they know they're underwritten now, they can effectively do what they want now they're officially "too big to fail" surely?

It is a very good question. We still have all the wealth that's been created - if the banks go bust the roads don't get ploughed up and the factories keep churning out cars or asprin or small sharp plastic toys for the Generalissimos to leave for me to step on.

So why are the Americans seemingly so anxious to give a load of money to a bunch of rich people to stop them becoming slightly less rich? They must have a pretty compelling reason because the Aussies are planning to give AU$4,000,000,000 to a bunch of rich bankers too.

It's pretty much what the UK Government is doing with the nationalisation of B&B, something that hasn't been looked at in too much detail: there has been no run on B&B; they are well within their regulatory capital requirements. B&B have however just bought (this week) a load of mortgages from GMAC which are defaulting at a rate of over 5%.

luvpump

moanymoany wrote: »

Looks like the bailout is nearly there - only the i's to dot and the t's to cross.

http://money.cnn.com/2008/09/28/news/economy/Sunday_talks_bailout/index.htm?cnn=yes


I wish I was convinced that it will do more than push back the evil day. :rolleyes:

I have heard several commentators say this is no where near enough !! Even this crazy figure !!

wymondham

PasturesNew wrote: »

If I've got your question right, and my answer, then per capita about $2k, whereas our NR bail out was $3k each to us.

So less than what we're paying for NR.

I suppose this is because there are more of them! Thanks for the info..

Pound

A bit of a derail here but my understanding is that the lack of money in the banking system is as a result of people being unable to pay their morgages. And the reason for that is that the price of houses are going down.

So, the government bails the banks out. But what happens if the price of houses keeps going down further and more mortgages go sour?

Max_Headroom_3

luvpump wrote: »

This is what will happen !!
http://edition.cnn.com/2008/POLITICS/09/28/bailout.deal/index.html

We really are living in Momentous times !!! And in no way is that Hypebole !

But even there it's just vague "ohh it'd be terrible, jobs, businesses, stuff like that, you know, money and whatnot". It's just all so vague.

"We can't underestimate what we face as a threat relative to a fiscal meltdown and the impact it would have on Main Street," he said. "This is about people's jobs. It's about people's savings. It's about people's ability to participate in commerce and send their kids to school and be able to borrow money to run their small businesses."

Call me an old cynic, but I can't help thinking of the Y2K Bug. "Ooohh we need to spend millions of pounds, the world is goinng to end, countless millions of electrical appliances from aircraft to fridge/freezers all packing up as they can't cope with date change to 2000, government must spend millions upon millions sorting out the problem before it happens."

Did anyone ever hear of anything that stopped working on the year 2000 date change cos I sure didn't. All I know is that a major sector (IT) got very rich on the back of it. Something I suspect a lot of bankers are about to get (again).

As someone else in this thread said, the factories and roads and trucks and farms will all still be out there, just because a few banks topple over, so what?

GDB2222

Pound wrote: »

A bit of a derail here but my understanding is that the lack of money in the banking system is as a result of people being unable to pay their morgages. And the reason for that is that the price of houses are going down.

So, the government bails the banks out. But what happens if the price of houses keeps going down further and more mortgages go sour?

Well, that's bound to happen. The thing is, of course, that whilst most houses will drop 30% to 40% from their peak value, that does not mean the lenders will lose 30% to 40% on all their mortgages. Many people will just get on with paying the interest. A lot of the mortgages were taken out before the peak. Also, believe it or not, some people put down a deposit.

There's nothing for the government to do but keep bailing. At some stage, they'll opt for the easy way out and start printing money, pushing up inflation.

GDB2222

Max_Headroom wrote: »

As someone else in this thread said, the factories and roads and trucks and farms will all still be out there, just because a few banks topple over, so what?

A few banks would not be a problem. All the banks would be. The factories can't pay their staff or buy raw materials without banks, etc etc etc. It all just stops working without banks. So, rather than inventing a whole lot of new ones, it's better just to declare the existing ones solvent.

poppy10_2

Max_Headroom wrote: »

I keep seeing references on the news (and indeed on sites like this) along the lines of "if a bail out of Wall Street is not forthcoming then the fallout would be unthinkable".

Well what is "the fallout"? What's going to happen if a deal is not reached? Can it really be as bad as all that?

The world would end if they don't get their 700 billion dollars. Don't question it. Just believe. You want to believe. You are feeling very sleepy.

http://www.youtube.com/watch?v=jTmXHvGZiSY

neverdespairgirl

PasturesNew wrote: »

Blimey, he wrote a book AND set up all those burger restaurants??!

Busy chap. And he needed staff....