what will it do for me? will it help the little person? i do not understand what it will do to help. will it save peoples homes or just give money to banks for make a bad loan? thanks

What the bailout will do depends on what exactly the bailout ends up being. The best scenario for a bailout is not neccessarily a true bailout but allowing enough money to be available for lending institutions to let money and goods to continue to change hands. It would not save most people's homes if they are in jeapardy right now. It would allow money to be available to lend, or to back up lending, so you can go out and borrow money to buy a car, so you could get a small business loan, so a manufacturer could get some credit to bring in parts needed to build the goods he/she manufactures. It allows retail companies to find some credit so they can order next seasons goods, and to continue to pay business and payroll costs during a slow time or slow part of the season. It allows people to stay employed with companies who do not have available cash to meet needs when profits are not being brought in. Keeping financial investment institutions open for business keeps all the rest of us able to get what we need and want to live with. No money available to lend????.....No distribution of goods. But, too much of a bailout cheapens the dollar too much, which slows down investment too. It's a huge circle that goes round and round. The little person needs the big guys to have funds available so the economy keeps moving. This is beyond protecting profits for firms who made bad loans. This is about keeping money out there for use for everyday things we take for granted, let alone for finding money to invest. It would not surprise me if soon they shut down the market to prevent even further fallout. If even for only a few hours.

Addicted, I think you have put your finger on a lot with your post. If the Dow falls dramatically tomorrow, and I believe it will, the market may go into a shutdown for protection. We'll see.

The more I look into the bailout, the more I think we need to let these bastards hang. So much of what they have done goes completely beyond sound banking practices and the good guys are paying the price for it as well.

Joe average also needs to turn off the TV.

+2

AMEN! The television and radio just feed on the fear. Unfortunately people accept opinion on face value as truth. My 401k? My stocks? I am 40 years old- you still have the stocks they just lost value is all. How many people really believe the market won't recover eventually- ten years? Twenty? More? The loss in the market is the largest in history sure but as a percentage the drop is typical cycle. I am not running to the bank.

Even if all the hype and urban myths are completely true; market crashes, zero lending, Chinese flood our economy with hoarded dollars, inflation skyrockets, etc- what can we do about it anyways. I say let the hard times come. We need to pay for the excesses and will prevail. We are nothing more than pawns in this game anyways. Please don't take that as apathy. I'll vote and write my letters sounding my opinion which is exactly why I believe the bailout failed: because both Democrats and Republicans heard the outpouring of public opinion.

So as for my opinion... I don't think the bail out is a good thing at all. I read an email yesterday breaking down the numbers. 300 million people in the U.S. of those that are citizens and over eighteeen round numbers 200 million people divided into 750 billion is $375,000 per person. If that money was given to the people instead woudn't that stimulate the economy, solve the lending issues and the stock market crisis? Not that I think that is a good idea because it would be terrible for inflation but it helps to put the number in perspective.

"So as for my opinion... I don't think the bail out is a good thing at all. I read an email yesterday breaking down the numbers. 300 million people in the U.S. of those that are citizens and over eighteeen round numbers 200 million people divided into 750 billion is $375,000 per person. If that money was given to the people instead woudn't that stimulate the economy, solve the lending issues and the stock market crisis? Not that I think that is a good idea because it would be terrible for inflation but it helps to put the number in perspective."
Show your math. You are off by a few zeros. $700,000,000,000.00 divided by 200,000,000 = $3500.00

"I read an email yesterday breaking down the numbers" do you believe every email you get? If so then I have a friend who is a minister in the goverment of (fill in Aferican nation) and he need your help to send some mony to the U.S. If you help him you will get half. Now all he needs is your bank account numbers and social security number. Really.

Stever- you are pretty smart. I was thinking the same thing. Its our tax money, give it to the people that need it! LIke me:) Did you see the face on some of the people on Wall St once they got the news it wasnt going to pass! How many of them do you think bought a bunch of stocks thinking the bailout would pass and make the values go up and they would get fat payouts. They never learn let them hang!

I do not believe every email I read... if I made an error in my math can I use an excuse that my calculator doesn't carry to the hundred billions?

Other than criticism do you care to offer your opinion and answer this gentleman's question O' Stever of Everett?

Well I went and moved some spare coins from a checking account into a shiny new 1% savings acct. This is my small drop in the bucket to help my local bank. Might not make a difference but oh well. At least I can get it back when I want it. My other investments.... never mind.

The future of reality is seldom as bad as the future of our fears.

Tale of two pebbles

Many years ago in a small Indian village, a farmer had the misfortune of
Owing a large sum of money to a village moneylender. The moneylender, who
Was old and ugly, fancied the farmer's beautiful daughter. So he proposed a
Bargain.

He said he would forgo the farmer's debt if he could marry his daughter.
Both the farmer and his daughter were horrified by the proposal. So the
Cunning money-lender suggested that they let providence decide the matter.
He told them that he would put a black pebble and a white pebble into an
Empty money bag. Then the girl would have to pick one pebble from the bag.

1) If she picked the black pebble, she would become his wife and her
father's debt would be forgiven.

2) If she picked the white pebble she need not marry him and her father's
Debt would still be forgiven.

3) If she refused to pick a pebble, her father would be thrown into jail.

They were standing on a pebble strewn path in the farmer's field. As they
Talked, the moneylender bent over to pick up two pebbles. As he picked them
Up, the sharp-eyed girl noticed that he had picked up two black pebbles and
Put them into the bag. He then asked the girl to pick a pebble from the bag.

Now, imagine that you were standing in the field. What would you have done
If you were the girl? If you had to advise her, what would you have told
Her?

Careful analysis would produce three possibilities:

1. The girl should refuse to take a pebble.
2. The girl should show that there were two black pebbles in the bag and
Expose the money-lender as a cheat.
3. The girl should pick a black pebble and sacrifice herself in order to
Save her father from his debt and imprisonment.

Take a moment to ponder over the story. The above story is used with the
Hope that it will make us appreciate the difference between lateral and
Logical thinking. The girl's dilemma cannot be solved with traditional
Logical thinking. Think of the consequences if she chooses the above logical
Answers.

What would you recommend to the Girl to do?

Well, here is what she did ....

The girl put her hand into the moneybag and drew out a pebble. Without
Looking at it, she fumbled and let it fall onto the pebble-strewn path where
It immediately became lost among all the other pebbles.

'Oh, how clumsy of me,' she said. 'But never mind, if you look into the bag
For the one that is left, you will be able to tell which pebble I picked.'

Since the remaining pebble is black, it must be assumed that she had picked
The white one. And since the money-lender dared not admit his dishonesty,
The girl changed what seemed an impossible situation into an extremely
advantageous one.

MORAL OF THE STORY?

May God grant us the wisdom to think outside the box.

Exactly JLH. First thing I've ever agreed with you on.

How's about $700billion passed out to all people with a mortage?

keep paying attention.

Then Joe Dickweed who got a subprime loan on a house he can't afford will get a check. And the schmucks who were saving for a down payment, or already payed off a mortgage, will get a devalued dollar.
I say let the system bleed. I really don't care if people can't get 72-month financing on a new Hummer anymore. Let lending standards get tight. It's not a bad thing if lenders will only give money to people who have a high probability of paying it back.

EXACTLY. as someone who has been diligently trying to save money for a down payment on a house(that's been postponed since the daily zero is kicking us to the curb soon), i have no sympathy on those involved in subprime ARMs. all it's done is drive up housing prices, cause a lot of urban sprawl and hurt our country.

You get my vote.

+4

Alternate answer:

Take out both pebbles, expose the bastard, then shoot him inthe back of the head in the field. Oh yeah, check his pockets for any cash as well.

I'm tired of people dancing around the obvious (our politicians) - we are being ripped-off and no one will come right out and say it.

Well I'll try. Is it good for you. If you are some other large financial institution that made big mistakes in buying up those failing subprime loans and not reselling them then yes it is good for you. If you are average Joe sixpack that has a fixed mortage and aren't up to your neck in debt then no it isn't good for you as long as you aren't planning on retiring in the near future (less than 10 years) and living off your 401K. If you are retiring soon and your retirement plan is a 401K and it is stock based then the bail out may be good for you at least in the short term. There will be an uptick in the stock market following the announcement of the bail out plan passing. Weather or not the bail out plan actually fixes the problem is yet to be seen but the uptick in the stock market will be your chance to divest yourself of your stocks and invest in bonds. This is playing out like the stock market crash in the late 20's and early 30's. Investor confidence was restored just before the final down ward spiral. Thoes that managed to get out saved some coin.

Here's an amusing/chilling article from Glen Beck on our possible future

http://www.cnn.com/2008/POLITICS/10/01/beck.future/index.html

Let them go chapter 11 IMHO. Let the share holders and execs pay for it instead of taxpayers. If you look at the current bill now its so full of earmarks and other [censored] to get it signed its no wonder no one trusts washington!

Lots of banks out there that never got involved in this crap, like my bank. Clients might whine when I require them to have a stake of ownership in a com'l property, equipment, etc, and when they do I refer them to the front page of their favorite newspaper.

So many of those a-hole lenders completely disregarded sound banking practices, and they deserve to hang for that, financially.

Owning stock is a gamble--- if you choose the wrong institutions to invest in why should I pay??

Dogfish....
I haven't read all the prior posts so excuse me if this has been covered. I heard some people on the tube that seemed to understand the situation stating that a bail-out will prolong the tight money situation and if the market was allowed to run it's course, the market should correct itself in about 2 years.

Any thoughts on that point?

The current bill is now over 100 pages long. They threw in everything including the kitchen sink to make the turd smell like a rose. Bend over and take it like a man. Thanks G.W for confirming that you are the worst Presiden EVER. Just in case we had any dobuts. Feeding us a crap sandwich
http://michellemalkin.com/2008/10/01/the-senate-votes-crap-sandwich-20/

Lets be honest here...the main reason for this bail out is to not scare away the foreign investor. The foreign investors are crucial to Wall street. If they lose big monies in their investments here, they will put their dollars in other countries. I believe I heard that 40% of the liquety in Wall street is foreign money.

Got Pork! Somebody needs to go to

(This letter was sent to Congress on Wed Sept 24 2008 regarding the Treasury plan as outlined on that date. It does not reflect all signatories views on subesquent plans or modifications of the bill)

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.



Signed (updated at 9/27/2008 6:00PM CT)

Acemoglu Daron (Massachussets Institute of Technology)
Ackerberg Daniel (UCLA)
Adler Michael (Columbia University)
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