Can someone smarter than me explain this whole situation. Why do I need to bail corporate assholes out of debt? Why should my tax dollars pay for overspending idiots who can't afford their mortgage payments? I pay my own bills, don't you think everyone else should too?
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I asked Kelley Leffler (who is a CPA) to explain it to me on the way to the ballgame last week.
I still don't understand.
Perhaps we need a GNO with a power point presentation.
Since we are one week away from buying our house I am more than a little concerned.
I totally feel your frustrations. I don't think anyone really understands what's going on. I try to look at the big picture of what our economy could be like w/o a bail out... but still, it's not like any of us our living extravagantly... we live w/in our means... which is exactly what others should do! I can't really blame the banks for trying to make a buck off of home loans... the home buyers shouldn't have bitten off more than they could chew.
Anyway... I'm totaly confused really on all of it. I hear that the bill includes some things I was concerned about like that the big CEO's not make $ off of this deal... but Congress didn't pass the bill today.
If you guys find someone to walk us through it w/ a Power Point presentation - I'd be game for going!
I ditto on the corporate assholes not needing my hard earned money to pay for their mansions, probably not to mention their mistress' mansion.
It really boils down to the fact that the economy will freeze up - no more loans for businesses or people, which means jobs cut, no new cars or houses, etc. Basically really, really bad. I'm definitely not a math genius, as my sister is, but I listen to talk radio 2 hours a day while I'm driving:)
I also hear the market could work itself out without this, but it would take at least a year or more.
Well in a nutshell as I understand it, lots of banks lent money to lots of people to buy houses they couldn't really afford, now termed 'sub-prime' mortgages.
Those banks then did some sneaky things like bundling those dodgy mortgages in bigger investment packages and selling them on as 'safe' good quality mortgages to the big boy banks who fell for it hook, line, and sinker.
And then people started defaulting on their mortgages cause they couldn't really afford them, house drop in value and get reposssed.
This puts the banks in a sticky situation. They've lent a ton of their customers money into these mortgages. This money has essentially vanished as these defaulting mortgages stop paying, unless the banks can re-sell these repo homes which in the current climate is difficult.
Freddi Mac and Fannie May got caught big time in this, they effectively own half the U.S mortgage market, trillions of dollars.
So you end up with banks with a very bad balance book, and literally no cash because they lent it to people to buy houses.
So although you personally can afford your mortgage, you still may get caught out if your savings happen to be with a bank that has lent it all in sub-prime mortgages...if they go bust.
And now the government wants to use $700B of U.S taxpayers money to basically buy all these bad mortgages off the banks, so giving them lots of cash, and getting rid of their bad investments.
I should clarify....
Every savings/checking account that is insured (in the US anyway) by the FDIC is safe (up to 100,000/250,000 for a joint account) regardless of whether the bank remains solvent
so, our money is safe wether the bail out bills pass or not
I'm all for a power point presentation because I don't know what the hell is going on.
Amber is smart.
But the Bailout plan is meant to help those people with 401K's and other retirement accounts who have money invested in these big companies. Unless you have money invested in these big companies, you really won't benefit from the bail-out.
What the f. Are you telling me that I bought a modest home and 2 very used cars and now I am going to have to give money to help idiots who over spent. Maybe our government should take that 700billion and send all the greedy bastards who want to "keep up with the Jones's" to a class on how to budget. F**K people, it isn't hard.
This is what is wrong with out society, someone is always wanting to be bailed out. No one wants to face up to their mistakes. How is this going to teach anyone anything.
So, here is my next question. If the 700 billion hadn't passed, how would I have been effected? Could Frank and Frannie have bought my mortgage from Chase?
This is how out of the wall street loop I am, I thought they were candy makers. HAHAHAHAHAHAHAHAHAH:}
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