basketball409 asked:


I am getting confused on the difference between an economic bailout or a subsidy put in place by the government. I know that both are sometimes given money but I don’t know much else. Any guidance would be greatly appreciated!
Thank you “little kid” but I would love some help from someone educated!

Bryan

dobbinscorey asked:


So who is in? How would we go about it? would anyone build a website for it. This will probably mean trading out most everybody. They are in ridiculous support of the bailout despite America’s disapproval.
Wow nice response. Please check out some of my other questions.

Jennifer

Mike P. Kulej asked:


 

Everybody who even perfunctory follows the news must have heard about the string of terrible financial developments in the United States. More and more investment and banking companies are going bankrupt or are being threatened by spreading credit crisis. This is a spillover effect from excessive lending practices during a prolonged housing bull market, which came to an end as a “bursting bubble” over a year ago.

Now more and more companies find themselves in possession of securities tied directly to mortgages issued during that time. With more and more houses going into foreclosures and loosing value, an increasing number financial instruments are rapidly becoming non performing, or outright worthless. Companies holding them are experiencing losses going into billions of dollars. Some of them are becoming insolvent.

Such was the case with Washington Mutual, which was seized by federal authorities and sold at a bargain price to JP Morgan Chase. Washington Mutual set a sad record, becoming the biggest bank to ever fail in USA. But not the only one lately. So far the crisis has claimed 12 banks, investment banks and even insurance companies, like the industry giant American Insurance Group.

To date US Treasury managed to avoid real disaster by stepping and taking over failing institutions or facilitating financing to keep them alive, by lending money to other companies for purchase of weakened rivals. Intervention has cost Treasury hundreds of billions of dollars, including $25 billion to bailout Bear Sterns, $100 billions each for Fannie Mae and Freddie Mac, $85 billion for AIG. This list goes on and on.

Now FED is asking congress for additional $700 billions in order to bail out entire financial industry, by establishing a market for mortgage backed securities. Federal authorities would purchase instrument from most at risk firms. That would set some kind of pricing guidelines for all other such securities, making it possible for all holders of such notes to start trading in them again, potentially lowering risk of owning them.

Nobody really knows if this is going to be enough, but the price of such action will be staggering. With the money already spent and the funds requested, the total bill will surely top $1 trillion dollar by a wide margin. This would signal new wave of borrowing by Treasury, which would last for years and push the total debt level into record and uncharted level.

Dollar lost value while all this was unfolding, and is likely to continue slide until congress works out details of this massive funds infusion. After that it will take some time to see if the steps FED is taking are having desired effect. US dollar will probably stay under pressure during this time. One might expect this to continue through the reminder of 2008.

In order to finance rising level of debt, we can expect to see interest rates rise on USD, which would make Treasury paper more attractive. Combined with economic slow down in the rest of the world, this might prove very bullish for dollar going into 2009. This will only be the case if the interest increases are done in a slow, measured pace and not due to some market panic. This particular scenario is compatible with very long term dollar charts.

We should be watching with interest what comes out of the chambers of congress. Once the funding is granted, it will be up to the financial authorities to prove it is money well spent. If it works even half as well as promised, we should see steady appreciation of Dollar in 2009 and perhaps a little longer.



Juanita

loselose asked:


I own a large amount of mutual funds 200k +. I really want to take them all out since i’ve lost a lot of $$ already. But i kinda of want to wait for the bailout to pass to see where the market is going, but i am also afraid it will just keep dropping regardless the bill get passed or not. Should i sell or should i hold?

Emily

Sam L asked:


Government bailout means injecting the money into a company. By bailing out, does it mean the government would get more share?

For example, government injected 85m to AIG, so now government is a larger shareholder of the AIG?

Gordon

caldude1010101 asked:


The major oil companies have reported over $100 billion in net profit over the last 3 years and easily have the cash to bailout the big 3 by buying up a lot of their worthless stock.

And lets face it, the major oil companies are the ones who were pulling the strings of the Big 3 to keep cars running on gasoline while Japanese automakers shot decades ahead in R&D for hybrid and electric cars.

Gladys

John S White asked:


 

BANK IN AMERICA-BAILOUT?

 

Are Your Investments at Risk?

 

Is your bank account earning less than 1%?

 

Has your "fund manager" been arrested lately? 

This last question may seem funny, but in today’s economic climate, the sad answer may be "yes".

 

You may be losing sleep every night because you are worried about your investments.  They are not in your control and you can’t do anything about it.  Fear seems to be the natural feeling that is joined at the hip with the word "investing" today.  You can’t avoid it.  Your future and your family’s future may be riding on the paper, which is never the money, you have given to complete strangers.  That should scare anyone.

 

Wouldn’t you like to remain calm times of bailouts and talks of nationalization.  Wouldn’t you like to know that the money you have saved is safe from the ups and downs of the market?  If you had a choice, would you put your money where the whims of the idiots on Wall Street wouldn’t affect it? Or in your possession as Gold and Silver coinage.

 

Financial peace of mind seems such an unreal expectation today.  But do you realize that all the gloom and doom in the news lately has concerned "paper money" bailouts to nationalization.  No one is talking about "the gold crisis" or the "silver crisis", are they?

 

Let me ask you another question.  Would you like the peace of mind that comes from your money being "REAL"?  Let me explain the answer by providing some little known facts.   The paper money in your pocket today is just a "Promissory Note" from the Federal Reserve, which is a private corporation.  Paper money cannot hold its value.  The governments of the world can produce as many, or as few, as they want-see Zimbabwe one trillion dollar note. Use Gold and Silver coinage as a bailout.

 

What changes the "value" of paper currently in circulation?  Not the economy.  Not the stock market.  The paper themselves print more=more is less.  The Gold and Silver coinager never change in value.  An ounce of gold or silver today is going to be worth an ounce of gold or silver tomorrow and forever.  What changes is the amount paper bills you have to use to buy the ounce of precious metals.

 

True peace of mind comes from owning "REAL" money-Gold and Silver coinage.  By owning Gold or Silver coins you have the ability and the right to go anywhere – in any country - and spend it, even if your fund manager is in jail, or your local bank is nationalized even in America.  They cannot take the value of it away from you.

 

Take back the control of your money.  Don’t risk your future with paper as money.  Power and financial freedom come to those with the right knowledge and tools.  You can find out how to buy and sell gold  and silver coins without the built in the risk that naturally comes with fluctuating interest rates, market ups and downs, and poor decisions made on Wall Street that change the value of the paper bill. 

 

John White has a website where you can learn about coin purchases.  Get rid of the scary and nagging fear that comes with "no control".   Learn to eliminate the risk that comes with investing in the traditional places.  Get your FREE "The Money Book"

 

Go to:  http://neverthemoney.com 

 



Andrea

104inc.com asked:


Got an extra $5,000 to spend?

Yep, that is how much you and every American will be paying for the government bailout.  This does include your children.  Luckily, it doesn’t include your cats, dogs, and fish.  This year’s bailout includes the following items:  $700 billion proposed Wall Street bailout; $85 billion for AIG; $200 billion for Fannie Mae and Freddie Mac; $150 billion stimulus package (your $600/person rebate check); $438 billion projected Federal deficit; and a small $29 billion bailout for Bear Stearns.   Makes you glad you got that rebate check earlier this year, doesn’t it?

The scary part is that this number will probably grow.  The Treasury Department is really just asking for a blank check and they won’t have any accountability to Congress or anyone else.  There is the potential to include more than problem mortgages in this package.  Car loans, student loans, and credit card debt could all be included in this package.  This $700 billion Wall Street bailout could grow to over $2.5 trillion dollars.

Just in case you were curious, this won’t help only American banks - it will also help foreign banks.  Pretty nice of the US taxpayer to help the world.  Though, I guess we did help create the problem.

It was all about trying to take advantage of the system.  The investment banks came up with inventive ways of repackaging debt.  The rating agencies went along with something they obviously didn’t understand.  Then, we didn’t think and went along with their greed.  Why?  Because we are just as bad as Wall Street is.

Some people bought houses with “neg am” loans.  What a concept – you can make a payment, but it doesn’t have to even cover your interest payment - just go deeper in debt.  The other cool idea was tapping into your new found “equity” in your home.  Just refinance or take out a home equity loan, take out some cash, and go deeper in debt.  Well, at least you got to buy a Gucci bag and a jet ski.  Hope it was worth it.

Yell and scream at Wall Street and the government all you want, but we are just as much to blame.

Luckily, www.104inc.com isn’t going to be asking you to help them out.  Go check out their website to get away from this mess.





Roberta

Jose Roncal asked:


It’s only been a few weeks since Congress signed off on Treasury Secretary Henry Paulson’s big $700 billion bailout plan—the Troubled Asset Relief Program (TARP).  What exactly do we have to show for it?  Nobody knows. What’s more, we now face a complex financial logjam that’s every bit as messy as the original fiasco.  And the situation is all the more hazardous because Paulson keeps waffling.

As you recall, the original plan was to buy $700 billion in toxic securities—spoilage from defaulted home mortgages that kicked off the financial meltdown.  Simply put, taxpayers would buy $700 billion worth of assets nobody else would touch, ostensibly to get frozen credit markets back in motion.  But the toxic-loan plan never got off the ground.  It couldn’t move far or fast enough to bring the immediate relief Paulson promised.

Instead, Treasury announced it had devised a new plan aimed at thawing out the frozen credit markets.  The new plan: Put money directly into big banks by enacting a little-known clause in Sec. 113, (e )(1) of the TARP legislation, which economists are calling the “Stock Injection Alternative.”

Paulson promised that stock injection effectively served to “rescue”  the banks, but instead of owning shaky assets, the government—the taxpayers—would become preferred shareholders of the banks themselves.  That means the taxpayer would be promised a return (since preferred shares pay interest), and those owning common shares would take the first hits. Thus, taxpayers would be more protected and less likely to lose money.

Amid this back-and-forth maneuvering, people started whispering that perhaps Paulson didn’t really know what to do. First he’d claimed that buying toxic mortgage-based investments from troubled banks, particularly those whose failure might undermine the domestic or global financial systems, was the only conceivable solution to bank failures.  And he tenaciously opposed any congressional suggestions that could modify his plan. 

Then after the first $350 billion had been released, he unexpectedly switched gears into what some believed was too broad and too vague a direction.

Paulson had already spent $85 billion to bail out insurance giant, AIG.  But even after a congressional hearing and scandalous admission about the company’s lavish corporate resort boondoggle, AIG still had the audacity to come back to the money trough and lap up another $40 billion.

If there is anyone in the Treasury keeping track of where all these dollars are going, they aren’t letting on. In fact, the money banks have received has done little to thaw out credit for U.S. businesses or consumers.  Banks appear to be more willing to lend to each other, judging by a drop in the LIBOR rate.  But the no-strings nature of the bailout has led some to use the money in ways Congress may not have intended. For example, PNC Bank, headquartered in Pittsburgh, PA, used part of its allotted cash to acquire Centurion branches in its market area.

Credit cars and auto loans next in line

In a further drift away from Congressional intent, Paulson announced he wanted to extend the bailout program to non-bank credit markets like those holding credit card receivables, auto loans and student loans. American Express has, with a sprinkle of Treasury pixie dust, been deemed a bank, thus qualified to feed at the trough with the others.  Companies like GMAC, the lending arm of General Motors, and other carmakers’ lending units, are standing in line as well.

In the original bailout plan Paulson asked for overarching Czar-like authority to move money around, without being subject to review by any court or administrative agency. His initial “just trust me” proposal didn’t fly. Congress assured the public that any plan they approved would have built-in oversight.

But by early November, not only had the White House failed to nominate a special inspector general to head up oversight efforts, Congress had yet to appoint any members to a five-person congressional oversight panel. In fact, a comprehensive plan seems non-existent.

A lot of money had been blowing out the door, but no one had bothered to consult with Congress about any of the details. Finally lawmakers stepped up to the plate.

On November 18, Paulson faced harsh questioning by members of the House Financial Services Committee where he shared the table with Fed Chairman Ben Bernanke. In addition to sharp criticism of mishandling matters, pointed questions reminded everyone that some TARP money was to have helped homeowners faced with foreclosure, an idea strongly supported by FDIC Chairman Sheila Bair.

Paulson argued that TARP was meant to stabilize financial markets and the flow of credit, not serve as a panacea for all our economic difficulties. And, he brushed aside questions about future plans by saying he had no intentions of doling out the second half of the $700 billion program — let the Obama administration deal with it, he said.

A secret $2 trillion deal

Back in mid-October, the Federal Deposit Insurance Corporation announced a new $2 trillion three-year program—the Temporary Liquidity Guarantee Program.  The program was meant to strengthen confidence and encourage liquidity in the banking system. This guarantee is in addition to the $250 billion preferred stock purchase plan we already mentioned. 

Perhaps you might be curious about the details surrounding that $2 trillion deal, a little transparency perhaps?  Well, never mind.  Federal Reserve Chairman Ben S. Bernanke said the central bank would not disclose any details of these loans of taxpayer funds because doing so would “stigmatize banks needing the money.”

The American taxpayers deserve a coherent explanation about what has happened with all the money spent so far, like who’s getting what, how much and why.  They were promised oversight and transparency, but Bernanke’s statement it’s yet another example of a whole country being left in the dark with no real answers.

Now more than ever Americans need confidence that their government is making smart decisions as they sort through this financial fiasco. The best way to instill confidence is for Congress to do what it said it would do: ensure strict oversight of the bailout process.  They would do well to start at the beginning by keeping a closer eye on Paulson, a man who seems hell-bent on making up the rules as he goes along.

Perhaps the entire bailout fiasco was summed up best during the congressional hearings when Gary Ackerman (R-NY) looked Paulson in the eye and said, “You seem to be flying a $700 billion plane by the seat of your pants.  It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq.”

This is far from being the final chapter of the story.  You can find updates at our website: www.financialspeculation.com.



Dora

Jayson Hunter asked:


The average American often times feels that eating healthy is too expensive. Fast food and foods loaded with fat and sugar tend to be inexpensive and always at hand. I have created a Nutritional bailout plan to help you through these tough economic times with some tips for healthy and affordable eating.

Too many people think they can’t afford to eat healthy, especially during this Economic Crisis. That’s why I want as many people as possible to know about these tips for eating healthy.

The following healthy eating tips will help any American lose weight fast during this Economic Crisis:

1 - Choose seasonal fruits to save on grocery bill costs with your grocery bill. Out of season fruits can add a good chunk to any food bill. This is real easy to do. If you are the one doing the shopping just watch the prices of the fruits and you will see the prices jump on fruits once they are no longer ‘in season”. The reason for this is because they now have to ship the fruit in from other parts of the country rather than getting the fruit from a local grower. This adds considerable cost to the fruit.

2 - Buy in bulk and freeze what isn’t needed. This is easy to do with meats. When buying ten chicken breasts it lowers the cost per pound of chicken. The chicken that is not going to be eaten in the next few days you can freeze and then thaw what is needed for next meal when necessary. Same idea works for beef and hamburger. Most stores offer these “family” packs where you can buy 6 or more chicken breasts or 4 pounds of hamburger, etc. Once you get it home just break it up into individual Ziploc bags. For example put 2 chicken breasts in a Ziploc bag. For the hamburger or ground beef break it up into 1 pound sections since those are the most commonly used quantities.

You can save a good chunk of change every month if you just buy in bulk and spend a little bit of time to preserve it to be used at a later time when it is convenient.

3 - Pay attention to sales. Many times, eating healthy can be easily accomplished just by focusing on special offers and coupons. Too many people ignore sales and coupons or don’t take advantage of them. Did you know that there are websites devoted to just letting you know of the latest sales and coupons for stores all across the country. People literally save hundreds of dollars a month by taking advantage of these sales and coupons. You can save a minimum of $10 on average every time you go grocery shopping just by taking advantage the coupons. Add in the sale items and you are looking at more than $20 of savings every time you go grocery shopping.

Right now everyone is a little worried about the economy and some may even be panicking in regards to what is happening with the economy. Take a step back and a deep breath and just analyze your situation. Most people do not need to panic and all you have to do is cut a few corners, watch your spending habits and you will find that this downturn in the economy won’t affect you quite so bad.



Renee

basketball409 asked:


I am getting confused on the difference between an economic bailout or a subsidy put in place by the government. I know that both are sometimes given money but I don’t know much else. Any guidance would be greatly appreciated!
Thank you “little kid” but I would love some help from someone educated!

Bryan

dobbinscorey asked:


So who is in? How would we go about it? would anyone build a website for it. This will probably mean trading out most everybody. They are in ridiculous support of the bailout despite America’s disapproval.
Wow nice response. Please check out some of my other questions.

Jennifer

Mike P. Kulej asked:


 

Everybody who even perfunctory follows the news must have heard about the string of terrible financial developments in the United States. More and more investment and banking companies are going bankrupt or are being threatened by spreading credit crisis. This is a spillover effect from excessive lending practices during a prolonged housing bull market, which came to an end as a “bursting bubble” over a year ago.

Now more and more companies find themselves in possession of securities tied directly to mortgages issued during that time. With more and more houses going into foreclosures and loosing value, an increasing number financial instruments are rapidly becoming non performing, or outright worthless. Companies holding them are experiencing losses going into billions of dollars. Some of them are becoming insolvent.

Such was the case with Washington Mutual, which was seized by federal authorities and sold at a bargain price to JP Morgan Chase. Washington Mutual set a sad record, becoming the biggest bank to ever fail in USA. But not the only one lately. So far the crisis has claimed 12 banks, investment banks and even insurance companies, like the industry giant American Insurance Group.

To date US Treasury managed to avoid real disaster by stepping and taking over failing institutions or facilitating financing to keep them alive, by lending money to other companies for purchase of weakened rivals. Intervention has cost Treasury hundreds of billions of dollars, including $25 billion to bailout Bear Sterns, $100 billions each for Fannie Mae and Freddie Mac, $85 billion for AIG. This list goes on and on.

Now FED is asking congress for additional $700 billions in order to bail out entire financial industry, by establishing a market for mortgage backed securities. Federal authorities would purchase instrument from most at risk firms. That would set some kind of pricing guidelines for all other such securities, making it possible for all holders of such notes to start trading in them again, potentially lowering risk of owning them.

Nobody really knows if this is going to be enough, but the price of such action will be staggering. With the money already spent and the funds requested, the total bill will surely top $1 trillion dollar by a wide margin. This would signal new wave of borrowing by Treasury, which would last for years and push the total debt level into record and uncharted level.

Dollar lost value while all this was unfolding, and is likely to continue slide until congress works out details of this massive funds infusion. After that it will take some time to see if the steps FED is taking are having desired effect. US dollar will probably stay under pressure during this time. One might expect this to continue through the reminder of 2008.

In order to finance rising level of debt, we can expect to see interest rates rise on USD, which would make Treasury paper more attractive. Combined with economic slow down in the rest of the world, this might prove very bullish for dollar going into 2009. This will only be the case if the interest increases are done in a slow, measured pace and not due to some market panic. This particular scenario is compatible with very long term dollar charts.

We should be watching with interest what comes out of the chambers of congress. Once the funding is granted, it will be up to the financial authorities to prove it is money well spent. If it works even half as well as promised, we should see steady appreciation of Dollar in 2009 and perhaps a little longer.



Juanita

loselose asked:


I own a large amount of mutual funds 200k +. I really want to take them all out since i’ve lost a lot of $$ already. But i kinda of want to wait for the bailout to pass to see where the market is going, but i am also afraid it will just keep dropping regardless the bill get passed or not. Should i sell or should i hold?

Emily

Sam L asked:


Government bailout means injecting the money into a company. By bailing out, does it mean the government would get more share?

For example, government injected 85m to AIG, so now government is a larger shareholder of the AIG?

Gordon

caldude1010101 asked:


The major oil companies have reported over $100 billion in net profit over the last 3 years and easily have the cash to bailout the big 3 by buying up a lot of their worthless stock.

And lets face it, the major oil companies are the ones who were pulling the strings of the Big 3 to keep cars running on gasoline while Japanese automakers shot decades ahead in R&D for hybrid and electric cars.

Gladys

John S White asked:


 

BANK IN AMERICA-BAILOUT?

 

Are Your Investments at Risk?

 

Is your bank account earning less than 1%?

 

Has your "fund manager" been arrested lately? 

This last question may seem funny, but in today’s economic climate, the sad answer may be "yes".

 

You may be losing sleep every night because you are worried about your investments.  They are not in your control and you can’t do anything about it.  Fear seems to be the natural feeling that is joined at the hip with the word "investing" today.  You can’t avoid it.  Your future and your family’s future may be riding on the paper, which is never the money, you have given to complete strangers.  That should scare anyone.

 

Wouldn’t you like to remain calm times of bailouts and talks of nationalization.  Wouldn’t you like to know that the money you have saved is safe from the ups and downs of the market?  If you had a choice, would you put your money where the whims of the idiots on Wall Street wouldn’t affect it? Or in your possession as Gold and Silver coinage.

 

Financial peace of mind seems such an unreal expectation today.  But do you realize that all the gloom and doom in the news lately has concerned "paper money" bailouts to nationalization.  No one is talking about "the gold crisis" or the "silver crisis", are they?

 

Let me ask you another question.  Would you like the peace of mind that comes from your money being "REAL"?  Let me explain the answer by providing some little known facts.   The paper money in your pocket today is just a "Promissory Note" from the Federal Reserve, which is a private corporation.  Paper money cannot hold its value.  The governments of the world can produce as many, or as few, as they want-see Zimbabwe one trillion dollar note. Use Gold and Silver coinage as a bailout.

 

What changes the "value" of paper currently in circulation?  Not the economy.  Not the stock market.  The paper themselves print more=more is less.  The Gold and Silver coinager never change in value.  An ounce of gold or silver today is going to be worth an ounce of gold or silver tomorrow and forever.  What changes is the amount paper bills you have to use to buy the ounce of precious metals.

 

True peace of mind comes from owning "REAL" money-Gold and Silver coinage.  By owning Gold or Silver coins you have the ability and the right to go anywhere – in any country - and spend it, even if your fund manager is in jail, or your local bank is nationalized even in America.  They cannot take the value of it away from you.

 

Take back the control of your money.  Don’t risk your future with paper as money.  Power and financial freedom come to those with the right knowledge and tools.  You can find out how to buy and sell gold  and silver coins without the built in the risk that naturally comes with fluctuating interest rates, market ups and downs, and poor decisions made on Wall Street that change the value of the paper bill. 

 

John White has a website where you can learn about coin purchases.  Get rid of the scary and nagging fear that comes with "no control".   Learn to eliminate the risk that comes with investing in the traditional places.  Get your FREE "The Money Book"

 

Go to:  http://neverthemoney.com 

 



Andrea

104inc.com asked:


Got an extra $5,000 to spend?

Yep, that is how much you and every American will be paying for the government bailout.  This does include your children.  Luckily, it doesn’t include your cats, dogs, and fish.  This year’s bailout includes the following items:  $700 billion proposed Wall Street bailout; $85 billion for AIG; $200 billion for Fannie Mae and Freddie Mac; $150 billion stimulus package (your $600/person rebate check); $438 billion projected Federal deficit; and a small $29 billion bailout for Bear Stearns.   Makes you glad you got that rebate check earlier this year, doesn’t it?

The scary part is that this number will probably grow.  The Treasury Department is really just asking for a blank check and they won’t have any accountability to Congress or anyone else.  There is the potential to include more than problem mortgages in this package.  Car loans, student loans, and credit card debt could all be included in this package.  This $700 billion Wall Street bailout could grow to over $2.5 trillion dollars.

Just in case you were curious, this won’t help only American banks - it will also help foreign banks.  Pretty nice of the US taxpayer to help the world.  Though, I guess we did help create the problem.

It was all about trying to take advantage of the system.  The investment banks came up with inventive ways of repackaging debt.  The rating agencies went along with something they obviously didn’t understand.  Then, we didn’t think and went along with their greed.  Why?  Because we are just as bad as Wall Street is.

Some people bought houses with “neg am” loans.  What a concept – you can make a payment, but it doesn’t have to even cover your interest payment - just go deeper in debt.  The other cool idea was tapping into your new found “equity” in your home.  Just refinance or take out a home equity loan, take out some cash, and go deeper in debt.  Well, at least you got to buy a Gucci bag and a jet ski.  Hope it was worth it.

Yell and scream at Wall Street and the government all you want, but we are just as much to blame.

Luckily, www.104inc.com isn’t going to be asking you to help them out.  Go check out their website to get away from this mess.





Roberta

Jose Roncal asked:


It’s only been a few weeks since Congress signed off on Treasury Secretary Henry Paulson’s big $700 billion bailout plan—the Troubled Asset Relief Program (TARP).  What exactly do we have to show for it?  Nobody knows. What’s more, we now face a complex financial logjam that’s every bit as messy as the original fiasco.  And the situation is all the more hazardous because Paulson keeps waffling.

As you recall, the original plan was to buy $700 billion in toxic securities—spoilage from defaulted home mortgages that kicked off the financial meltdown.  Simply put, taxpayers would buy $700 billion worth of assets nobody else would touch, ostensibly to get frozen credit markets back in motion.  But the toxic-loan plan never got off the ground.  It couldn’t move far or fast enough to bring the immediate relief Paulson promised.

Instead, Treasury announced it had devised a new plan aimed at thawing out the frozen credit markets.  The new plan: Put money directly into big banks by enacting a little-known clause in Sec. 113, (e )(1) of the TARP legislation, which economists are calling the “Stock Injection Alternative.”

Paulson promised that stock injection effectively served to “rescue”  the banks, but instead of owning shaky assets, the government—the taxpayers—would become preferred shareholders of the banks themselves.  That means the taxpayer would be promised a return (since preferred shares pay interest), and those owning common shares would take the first hits. Thus, taxpayers would be more protected and less likely to lose money.

Amid this back-and-forth maneuvering, people started whispering that perhaps Paulson didn’t really know what to do. First he’d claimed that buying toxic mortgage-based investments from troubled banks, particularly those whose failure might undermine the domestic or global financial systems, was the only conceivable solution to bank failures.  And he tenaciously opposed any congressional suggestions that could modify his plan. 

Then after the first $350 billion had been released, he unexpectedly switched gears into what some believed was too broad and too vague a direction.

Paulson had already spent $85 billion to bail out insurance giant, AIG.  But even after a congressional hearing and scandalous admission about the company’s lavish corporate resort boondoggle, AIG still had the audacity to come back to the money trough and lap up another $40 billion.

If there is anyone in the Treasury keeping track of where all these dollars are going, they aren’t letting on. In fact, the money banks have received has done little to thaw out credit for U.S. businesses or consumers.  Banks appear to be more willing to lend to each other, judging by a drop in the LIBOR rate.  But the no-strings nature of the bailout has led some to use the money in ways Congress may not have intended. For example, PNC Bank, headquartered in Pittsburgh, PA, used part of its allotted cash to acquire Centurion branches in its market area.

Credit cars and auto loans next in line

In a further drift away from Congressional intent, Paulson announced he wanted to extend the bailout program to non-bank credit markets like those holding credit card receivables, auto loans and student loans. American Express has, with a sprinkle of Treasury pixie dust, been deemed a bank, thus qualified to feed at the trough with the others.  Companies like GMAC, the lending arm of General Motors, and other carmakers’ lending units, are standing in line as well.

In the original bailout plan Paulson asked for overarching Czar-like authority to move money around, without being subject to review by any court or administrative agency. His initial “just trust me” proposal didn’t fly. Congress assured the public that any plan they approved would have built-in oversight.

But by early November, not only had the White House failed to nominate a special inspector general to head up oversight efforts, Congress had yet to appoint any members to a five-person congressional oversight panel. In fact, a comprehensive plan seems non-existent.

A lot of money had been blowing out the door, but no one had bothered to consult with Congress about any of the details. Finally lawmakers stepped up to the plate.

On November 18, Paulson faced harsh questioning by members of the House Financial Services Committee where he shared the table with Fed Chairman Ben Bernanke. In addition to sharp criticism of mishandling matters, pointed questions reminded everyone that some TARP money was to have helped homeowners faced with foreclosure, an idea strongly supported by FDIC Chairman Sheila Bair.

Paulson argued that TARP was meant to stabilize financial markets and the flow of credit, not serve as a panacea for all our economic difficulties. And, he brushed aside questions about future plans by saying he had no intentions of doling out the second half of the $700 billion program — let the Obama administration deal with it, he said.

A secret $2 trillion deal

Back in mid-October, the Federal Deposit Insurance Corporation announced a new $2 trillion three-year program—the Temporary Liquidity Guarantee Program.  The program was meant to strengthen confidence and encourage liquidity in the banking system. This guarantee is in addition to the $250 billion preferred stock purchase plan we already mentioned. 

Perhaps you might be curious about the details surrounding that $2 trillion deal, a little transparency perhaps?  Well, never mind.  Federal Reserve Chairman Ben S. Bernanke said the central bank would not disclose any details of these loans of taxpayer funds because doing so would “stigmatize banks needing the money.”

The American taxpayers deserve a coherent explanation about what has happened with all the money spent so far, like who’s getting what, how much and why.  They were promised oversight and transparency, but Bernanke’s statement it’s yet another example of a whole country being left in the dark with no real answers.

Now more than ever Americans need confidence that their government is making smart decisions as they sort through this financial fiasco. The best way to instill confidence is for Congress to do what it said it would do: ensure strict oversight of the bailout process.  They would do well to start at the beginning by keeping a closer eye on Paulson, a man who seems hell-bent on making up the rules as he goes along.

Perhaps the entire bailout fiasco was summed up best during the congressional hearings when Gary Ackerman (R-NY) looked Paulson in the eye and said, “You seem to be flying a $700 billion plane by the seat of your pants.  It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq.”

This is far from being the final chapter of the story.  You can find updates at our website: www.financialspeculation.com.



Dora

Jayson Hunter asked:


The average American often times feels that eating healthy is too expensive. Fast food and foods loaded with fat and sugar tend to be inexpensive and always at hand. I have created a Nutritional bailout plan to help you through these tough economic times with some tips for healthy and affordable eating.

Too many people think they can’t afford to eat healthy, especially during this Economic Crisis. That’s why I want as many people as possible to know about these tips for eating healthy.

The following healthy eating tips will help any American lose weight fast during this Economic Crisis:

1 - Choose seasonal fruits to save on grocery bill costs with your grocery bill. Out of season fruits can add a good chunk to any food bill. This is real easy to do. If you are the one doing the shopping just watch the prices of the fruits and you will see the prices jump on fruits once they are no longer ‘in season”. The reason for this is because they now have to ship the fruit in from other parts of the country rather than getting the fruit from a local grower. This adds considerable cost to the fruit.

2 - Buy in bulk and freeze what isn’t needed. This is easy to do with meats. When buying ten chicken breasts it lowers the cost per pound of chicken. The chicken that is not going to be eaten in the next few days you can freeze and then thaw what is needed for next meal when necessary. Same idea works for beef and hamburger. Most stores offer these “family” packs where you can buy 6 or more chicken breasts or 4 pounds of hamburger, etc. Once you get it home just break it up into individual Ziploc bags. For example put 2 chicken breasts in a Ziploc bag. For the hamburger or ground beef break it up into 1 pound sections since those are the most commonly used quantities.

You can save a good chunk of change every month if you just buy in bulk and spend a little bit of time to preserve it to be used at a later time when it is convenient.

3 - Pay attention to sales. Many times, eating healthy can be easily accomplished just by focusing on special offers and coupons. Too many people ignore sales and coupons or don’t take advantage of them. Did you know that there are websites devoted to just letting you know of the latest sales and coupons for stores all across the country. People literally save hundreds of dollars a month by taking advantage of these sales and coupons. You can save a minimum of $10 on average every time you go grocery shopping just by taking advantage the coupons. Add in the sale items and you are looking at more than $20 of savings every time you go grocery shopping.

Right now everyone is a little worried about the economy and some may even be panicking in regards to what is happening with the economy. Take a step back and a deep breath and just analyze your situation. Most people do not need to panic and all you have to do is cut a few corners, watch your spending habits and you will find that this downturn in the economy won’t affect you quite so bad.



Renee

basketball409 asked:


I am getting confused on the difference between an economic bailout or a subsidy put in place by the government. I know that both are sometimes given money but I don’t know much else. Any guidance would be greatly appreciated!
Thank you “little kid” but I would love some help from someone educated!

Bryan

dobbinscorey asked:


So who is in? How would we go about it? would anyone build a website for it. This will probably mean trading out most everybody. They are in ridiculous support of the bailout despite America’s disapproval.
Wow nice response. Please check out some of my other questions.

Jennifer

Mike P. Kulej asked:


 

Everybody who even perfunctory follows the news must have heard about the string of terrible financial developments in the United States. More and more investment and banking companies are going bankrupt or are being threatened by spreading credit crisis. This is a spillover effect from excessive lending practices during a prolonged housing bull market, which came to an end as a “bursting bubble” over a year ago.

Now more and more companies find themselves in possession of securities tied directly to mortgages issued during that time. With more and more houses going into foreclosures and loosing value, an increasing number financial instruments are rapidly becoming non performing, or outright worthless. Companies holding them are experiencing losses going into billions of dollars. Some of them are becoming insolvent.

Such was the case with Washington Mutual, which was seized by federal authorities and sold at a bargain price to JP Morgan Chase. Washington Mutual set a sad record, becoming the biggest bank to ever fail in USA. But not the only one lately. So far the crisis has claimed 12 banks, investment banks and even insurance companies, like the industry giant American Insurance Group.

To date US Treasury managed to avoid real disaster by stepping and taking over failing institutions or facilitating financing to keep them alive, by lending money to other companies for purchase of weakened rivals. Intervention has cost Treasury hundreds of billions of dollars, including $25 billion to bailout Bear Sterns, $100 billions each for Fannie Mae and Freddie Mac, $85 billion for AIG. This list goes on and on.

Now FED is asking congress for additional $700 billions in order to bail out entire financial industry, by establishing a market for mortgage backed securities. Federal authorities would purchase instrument from most at risk firms. That would set some kind of pricing guidelines for all other such securities, making it possible for all holders of such notes to start trading in them again, potentially lowering risk of owning them.

Nobody really knows if this is going to be enough, but the price of such action will be staggering. With the money already spent and the funds requested, the total bill will surely top $1 trillion dollar by a wide margin. This would signal new wave of borrowing by Treasury, which would last for years and push the total debt level into record and uncharted level.

Dollar lost value while all this was unfolding, and is likely to continue slide until congress works out details of this massive funds infusion. After that it will take some time to see if the steps FED is taking are having desired effect. US dollar will probably stay under pressure during this time. One might expect this to continue through the reminder of 2008.

In order to finance rising level of debt, we can expect to see interest rates rise on USD, which would make Treasury paper more attractive. Combined with economic slow down in the rest of the world, this might prove very bullish for dollar going into 2009. This will only be the case if the interest increases are done in a slow, measured pace and not due to some market panic. This particular scenario is compatible with very long term dollar charts.

We should be watching with interest what comes out of the chambers of congress. Once the funding is granted, it will be up to the financial authorities to prove it is money well spent. If it works even half as well as promised, we should see steady appreciation of Dollar in 2009 and perhaps a little longer.



Juanita

loselose asked:


I own a large amount of mutual funds 200k +. I really want to take them all out since i’ve lost a lot of $$ already. But i kinda of want to wait for the bailout to pass to see where the market is going, but i am also afraid it will just keep dropping regardless the bill get passed or not. Should i sell or should i hold?

Emily

Sam L asked:


Government bailout means injecting the money into a company. By bailing out, does it mean the government would get more share?

For example, government injected 85m to AIG, so now government is a larger shareholder of the AIG?

Gordon

caldude1010101 asked:


The major oil companies have reported over $100 billion in net profit over the last 3 years and easily have the cash to bailout the big 3 by buying up a lot of their worthless stock.

And lets face it, the major oil companies are the ones who were pulling the strings of the Big 3 to keep cars running on gasoline while Japanese automakers shot decades ahead in R&D for hybrid and electric cars.

Gladys

John S White asked:


 

BANK IN AMERICA-BAILOUT?

 

Are Your Investments at Risk?

 

Is your bank account earning less than 1%?

 

Has your "fund manager" been arrested lately? 

This last question may seem funny, but in today’s economic climate, the sad answer may be "yes".

 

You may be losing sleep every night because you are worried about your investments.  They are not in your control and you can’t do anything about it.  Fear seems to be the natural feeling that is joined at the hip with the word "investing" today.  You can’t avoid it.  Your future and your family’s future may be riding on the paper, which is never the money, you have given to complete strangers.  That should scare anyone.

 

Wouldn’t you like to remain calm times of bailouts and talks of nationalization.  Wouldn’t you like to know that the money you have saved is safe from the ups and downs of the market?  If you had a choice, would you put your money where the whims of the idiots on Wall Street wouldn’t affect it? Or in your possession as Gold and Silver coinage.

 

Financial peace of mind seems such an unreal expectation today.  But do you realize that all the gloom and doom in the news lately has concerned "paper money" bailouts to nationalization.  No one is talking about "the gold crisis" or the "silver crisis", are they?

 

Let me ask you another question.  Would you like the peace of mind that comes from your money being "REAL"?  Let me explain the answer by providing some little known facts.   The paper money in your pocket today is just a "Promissory Note" from the Federal Reserve, which is a private corporation.  Paper money cannot hold its value.  The governments of the world can produce as many, or as few, as they want-see Zimbabwe one trillion dollar note. Use Gold and Silver coinage as a bailout.

 

What changes the "value" of paper currently in circulation?  Not the economy.  Not the stock market.  The paper themselves print more=more is less.  The Gold and Silver coinager never change in value.  An ounce of gold or silver today is going to be worth an ounce of gold or silver tomorrow and forever.  What changes is the amount paper bills you have to use to buy the ounce of precious metals.

 

True peace of mind comes from owning "REAL" money-Gold and Silver coinage.  By owning Gold or Silver coins you have the ability and the right to go anywhere – in any country - and spend it, even if your fund manager is in jail, or your local bank is nationalized even in America.  They cannot take the value of it away from you.

 

Take back the control of your money.  Don’t risk your future with paper as money.  Power and financial freedom come to those with the right knowledge and tools.  You can find out how to buy and sell gold  and silver coins without the built in the risk that naturally comes with fluctuating interest rates, market ups and downs, and poor decisions made on Wall Street that change the value of the paper bill. 

 

John White has a website where you can learn about coin purchases.  Get rid of the scary and nagging fear that comes with "no control".   Learn to eliminate the risk that comes with investing in the traditional places.  Get your FREE "The Money Book"

 

Go to:  http://neverthemoney.com 

 



Andrea

104inc.com asked:


Got an extra $5,000 to spend?

Yep, that is how much you and every American will be paying for the government bailout.  This does include your children.  Luckily, it doesn’t include your cats, dogs, and fish.  This year’s bailout includes the following items:  $700 billion proposed Wall Street bailout; $85 billion for AIG; $200 billion for Fannie Mae and Freddie Mac; $150 billion stimulus package (your $600/person rebate check); $438 billion projected Federal deficit; and a small $29 billion bailout for Bear Stearns.   Makes you glad you got that rebate check earlier this year, doesn’t it?

The scary part is that this number will probably grow.  The Treasury Department is really just asking for a blank check and they won’t have any accountability to Congress or anyone else.  There is the potential to include more than problem mortgages in this package.  Car loans, student loans, and credit card debt could all be included in this package.  This $700 billion Wall Street bailout could grow to over $2.5 trillion dollars.

Just in case you were curious, this won’t help only American banks - it will also help foreign banks.  Pretty nice of the US taxpayer to help the world.  Though, I guess we did help create the problem.

It was all about trying to take advantage of the system.  The investment banks came up with inventive ways of repackaging debt.  The rating agencies went along with something they obviously didn’t understand.  Then, we didn’t think and went along with their greed.  Why?  Because we are just as bad as Wall Street is.

Some people bought houses with “neg am” loans.  What a concept – you can make a payment, but it doesn’t have to even cover your interest payment - just go deeper in debt.  The other cool idea was tapping into your new found “equity” in your home.  Just refinance or take out a home equity loan, take out some cash, and go deeper in debt.  Well, at least you got to buy a Gucci bag and a jet ski.  Hope it was worth it.

Yell and scream at Wall Street and the government all you want, but we are just as much to blame.

Luckily, www.104inc.com isn’t going to be asking you to help them out.  Go check out their website to get away from this mess.





Roberta

Jose Roncal asked:


It’s only been a few weeks since Congress signed off on Treasury Secretary Henry Paulson’s big $700 billion bailout plan—the Troubled Asset Relief Program (TARP).  What exactly do we have to show for it?  Nobody knows. What’s more, we now face a complex financial logjam that’s every bit as messy as the original fiasco.  And the situation is all the more hazardous because Paulson keeps waffling.

As you recall, the original plan was to buy $700 billion in toxic securities—spoilage from defaulted home mortgages that kicked off the financial meltdown.  Simply put, taxpayers would buy $700 billion worth of assets nobody else would touch, ostensibly to get frozen credit markets back in motion.  But the toxic-loan plan never got off the ground.  It couldn’t move far or fast enough to bring the immediate relief Paulson promised.

Instead, Treasury announced it had devised a new plan aimed at thawing out the frozen credit markets.  The new plan: Put money directly into big banks by enacting a little-known clause in Sec. 113, (e )(1) of the TARP legislation, which economists are calling the “Stock Injection Alternative.”

Paulson promised that stock injection effectively served to “rescue”  the banks, but instead of owning shaky assets, the government—the taxpayers—would become preferred shareholders of the banks themselves.  That means the taxpayer would be promised a return (since preferred shares pay interest), and those owning common shares would take the first hits. Thus, taxpayers would be more protected and less likely to lose money.

Amid this back-and-forth maneuvering, people started whispering that perhaps Paulson didn’t really know what to do. First he’d claimed that buying toxic mortgage-based investments from troubled banks, particularly those whose failure might undermine the domestic or global financial systems, was the only conceivable solution to bank failures.  And he tenaciously opposed any congressional suggestions that could modify his plan. 

Then after the first $350 billion had been released, he unexpectedly switched gears into what some believed was too broad and too vague a direction.

Paulson had already spent $85 billion to bail out insurance giant, AIG.  But even after a congressional hearing and scandalous admission about the company’s lavish corporate resort boondoggle, AIG still had the audacity to come back to the money trough and lap up another $40 billion.

If there is anyone in the Treasury keeping track of where all these dollars are going, they aren’t letting on. In fact, the money banks have received has done little to thaw out credit for U.S. businesses or consumers.  Banks appear to be more willing to lend to each other, judging by a drop in the LIBOR rate.  But the no-strings nature of the bailout has led some to use the money in ways Congress may not have intended. For example, PNC Bank, headquartered in Pittsburgh, PA, used part of its allotted cash to acquire Centurion branches in its market area.

Credit cars and auto loans next in line

In a further drift away from Congressional intent, Paulson announced he wanted to extend the bailout program to non-bank credit markets like those holding credit card receivables, auto loans and student loans. American Express has, with a sprinkle of Treasury pixie dust, been deemed a bank, thus qualified to feed at the trough with the others.  Companies like GMAC, the lending arm of General Motors, and other carmakers’ lending units, are standing in line as well.

In the original bailout plan Paulson asked for overarching Czar-like authority to move money around, without being subject to review by any court or administrative agency. His initial “just trust me” proposal didn’t fly. Congress assured the public that any plan they approved would have built-in oversight.

But by early November, not only had the White House failed to nominate a special inspector general to head up oversight efforts, Congress had yet to appoint any members to a five-person congressional oversight panel. In fact, a comprehensive plan seems non-existent.

A lot of money had been blowing out the door, but no one had bothered to consult with Congress about any of the details. Finally lawmakers stepped up to the plate.

On November 18, Paulson faced harsh questioning by members of the House Financial Services Committee where he shared the table with Fed Chairman Ben Bernanke. In addition to sharp criticism of mishandling matters, pointed questions reminded everyone that some TARP money was to have helped homeowners faced with foreclosure, an idea strongly supported by FDIC Chairman Sheila Bair.

Paulson argued that TARP was meant to stabilize financial markets and the flow of credit, not serve as a panacea for all our economic difficulties. And, he brushed aside questions about future plans by saying he had no intentions of doling out the second half of the $700 billion program — let the Obama administration deal with it, he said.

A secret $2 trillion deal

Back in mid-October, the Federal Deposit Insurance Corporation announced a new $2 trillion three-year program—the Temporary Liquidity Guarantee Program.  The program was meant to strengthen confidence and encourage liquidity in the banking system. This guarantee is in addition to the $250 billion preferred stock purchase plan we already mentioned. 

Perhaps you might be curious about the details surrounding that $2 trillion deal, a little transparency perhaps?  Well, never mind.  Federal Reserve Chairman Ben S. Bernanke said the central bank would not disclose any details of these loans of taxpayer funds because doing so would “stigmatize banks needing the money.”

The American taxpayers deserve a coherent explanation about what has happened with all the money spent so far, like who’s getting what, how much and why.  They were promised oversight and transparency, but Bernanke’s statement it’s yet another example of a whole country being left in the dark with no real answers.

Now more than ever Americans need confidence that their government is making smart decisions as they sort through this financial fiasco. The best way to instill confidence is for Congress to do what it said it would do: ensure strict oversight of the bailout process.  They would do well to start at the beginning by keeping a closer eye on Paulson, a man who seems hell-bent on making up the rules as he goes along.

Perhaps the entire bailout fiasco was summed up best during the congressional hearings when Gary Ackerman (R-NY) looked Paulson in the eye and said, “You seem to be flying a $700 billion plane by the seat of your pants.  It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq.”

This is far from being the final chapter of the story.  You can find updates at our website: www.financialspeculation.com.



Dora

Jayson Hunter asked:


The average American often times feels that eating healthy is too expensive. Fast food and foods loaded with fat and sugar tend to be inexpensive and always at hand. I have created a Nutritional bailout plan to help you through these tough economic times with some tips for healthy and affordable eating.

Too many people think they can’t afford to eat healthy, especially during this Economic Crisis. That’s why I want as many people as possible to know about these tips for eating healthy.

The following healthy eating tips will help any American lose weight fast during this Economic Crisis:

1 - Choose seasonal fruits to save on grocery bill costs with your grocery bill. Out of season fruits can add a good chunk to any food bill. This is real easy to do. If you are the one doing the shopping just watch the prices of the fruits and you will see the prices jump on fruits once they are no longer ‘in season”. The reason for this is because they now have to ship the fruit in from other parts of the country rather than getting the fruit from a local grower. This adds considerable cost to the fruit.

2 - Buy in bulk and freeze what isn’t needed. This is easy to do with meats. When buying ten chicken breasts it lowers the cost per pound of chicken. The chicken that is not going to be eaten in the next few days you can freeze and then thaw what is needed for next meal when necessary. Same idea works for beef and hamburger. Most stores offer these “family” packs where you can buy 6 or more chicken breasts or 4 pounds of hamburger, etc. Once you get it home just break it up into individual Ziploc bags. For example put 2 chicken breasts in a Ziploc bag. For the hamburger or ground beef break it up into 1 pound sections since those are the most commonly used quantities.

You can save a good chunk of change every month if you just buy in bulk and spend a little bit of time to preserve it to be used at a later time when it is convenient.

3 - Pay attention to sales. Many times, eating healthy can be easily accomplished just by focusing on special offers and coupons. Too many people ignore sales and coupons or don’t take advantage of them. Did you know that there are websites devoted to just letting you know of the latest sales and coupons for stores all across the country. People literally save hundreds of dollars a month by taking advantage of these sales and coupons. You can save a minimum of $10 on average every time you go grocery shopping just by taking advantage the coupons. Add in the sale items and you are looking at more than $20 of savings every time you go grocery shopping.

Right now everyone is a little worried about the economy and some may even be panicking in regards to what is happening with the economy. Take a step back and a deep breath and just analyze your situation. Most people do not need to panic and all you have to do is cut a few corners, watch your spending habits and you will find that this downturn in the economy won’t affect you quite so bad.



Renee

basketball409 asked:


I am getting confused on the difference between an economic bailout or a subsidy put in place by the government. I know that both are sometimes given money but I don’t know much else. Any guidance would be greatly appreciated!
Thank you “little kid” but I would love some help from someone educated!

Bryan

dobbinscorey asked:


So who is in? How would we go about it? would anyone build a website for it. This will probably mean trading out most everybody. They are in ridiculous support of the bailout despite America’s disapproval.
Wow nice response. Please check out some of my other questions.

Jennifer

Mike P. Kulej asked:


 

Everybody who even perfunctory follows the news must have heard about the string of terrible financial developments in the United States. More and more investment and banking companies are going bankrupt or are being threatened by spreading credit crisis. This is a spillover effect from excessive lending practices during a prolonged housing bull market, which came to an end as a “bursting bubble” over a year ago.

Now more and more companies find themselves in possession of securities tied directly to mortgages issued during that time. With more and more houses going into foreclosures and loosing value, an increasing number financial instruments are rapidly becoming non performing, or outright worthless. Companies holding them are experiencing losses going into billions of dollars. Some of them are becoming insolvent.

Such was the case with Washington Mutual, which was seized by federal authorities and sold at a bargain price to JP Morgan Chase. Washington Mutual set a sad record, becoming the biggest bank to ever fail in USA. But not the only one lately. So far the crisis has claimed 12 banks, investment banks and even insurance companies, like the industry giant American Insurance Group.

To date US Treasury managed to avoid real disaster by stepping and taking over failing institutions or facilitating financing to keep them alive, by lending money to other companies for purchase of weakened rivals. Intervention has cost Treasury hundreds of billions of dollars, including $25 billion to bailout Bear Sterns, $100 billions each for Fannie Mae and Freddie Mac, $85 billion for AIG. This list goes on and on.

Now FED is asking congress for additional $700 billions in order to bail out entire financial industry, by establishing a market for mortgage backed securities. Federal authorities would purchase instrument from most at risk firms. That would set some kind of pricing guidelines for all other such securities, making it possible for all holders of such notes to start trading in them again, potentially lowering risk of owning them.

Nobody really knows if this is going to be enough, but the price of such action will be staggering. With the money already spent and the funds requested, the total bill will surely top $1 trillion dollar by a wide margin. This would signal new wave of borrowing by Treasury, which would last for years and push the total debt level into record and uncharted level.

Dollar lost value while all this was unfolding, and is likely to continue slide until congress works out details of this massive funds infusion. After that it will take some time to see if the steps FED is taking are having desired effect. US dollar will probably stay under pressure during this time. One might expect this to continue through the reminder of 2008.

In order to finance rising level of debt, we can expect to see interest rates rise on USD, which would make Treasury paper more attractive. Combined with economic slow down in the rest of the world, this might prove very bullish for dollar going into 2009. This will only be the case if the interest increases are done in a slow, measured pace and not due to some market panic. This particular scenario is compatible with very long term dollar charts.

We should be watching with interest what comes out of the chambers of congress. Once the funding is granted, it will be up to the financial authorities to prove it is money well spent. If it works even half as well as promised, we should see steady appreciation of Dollar in 2009 and perhaps a little longer.



Juanita

loselose asked:


I own a large amount of mutual funds 200k +. I really want to take them all out since i’ve lost a lot of $$ already. But i kinda of want to wait for the bailout to pass to see where the market is going, but i am also afraid it will just keep dropping regardless the bill get passed or not. Should i sell or should i hold?

Emily

Sam L asked:


Government bailout means injecting the money into a company. By bailing out, does it mean the government would get more share?

For example, government injected 85m to AIG, so now government is a larger shareholder of the AIG?

Gordon

caldude1010101 asked:


The major oil companies have reported over $100 billion in net profit over the last 3 years and easily have the cash to bailout the big 3 by buying up a lot of their worthless stock.

And lets face it, the major oil companies are the ones who were pulling the strings of the Big 3 to keep cars running on gasoline while Japanese automakers shot decades ahead in R&D for hybrid and electric cars.

Gladys

John S White asked:


 

BANK IN AMERICA-BAILOUT?

 

Are Your Investments at Risk?

 

Is your bank account earning less than 1%?

 

Has your "fund manager" been arrested lately? 

This last question may seem funny, but in today’s economic climate, the sad answer may be "yes".

 

You may be losing sleep every night because you are worried about your investments.  They are not in your control and you can’t do anything about it.  Fear seems to be the natural feeling that is joined at the hip with the word "investing" today.  You can’t avoid it.  Your future and your family’s future may be riding on the paper, which is never the money, you have given to complete strangers.  That should scare anyone.

 

Wouldn’t you like to remain calm times of bailouts and talks of nationalization.  Wouldn’t you like to know that the money you have saved is safe from the ups and downs of the market?  If you had a choice, would you put your money where the whims of the idiots on Wall Street wouldn’t affect it? Or in your possession as Gold and Silver coinage.

 

Financial peace of mind seems such an unreal expectation today.  But do you realize that all the gloom and doom in the news lately has concerned "paper money" bailouts to nationalization.  No one is talking about "the gold crisis" or the "silver crisis", are they?

 

Let me ask you another question.  Would you like the peace of mind that comes from your money being "REAL"?  Let me explain the answer by providing some little known facts.   The paper money in your pocket today is just a "Promissory Note" from the Federal Reserve, which is a private corporation.  Paper money cannot hold its value.  The governments of the world can produce as many, or as few, as they want-see Zimbabwe one trillion dollar note. Use Gold and Silver coinage as a bailout.

 

What changes the "value" of paper currently in circulation?  Not the economy.  Not the stock market.  The paper themselves print more=more is less.  The Gold and Silver coinager never change in value.  An ounce of gold or silver today is going to be worth an ounce of gold or silver tomorrow and forever.  What changes is the amount paper bills you have to use to buy the ounce of precious metals.

 

True peace of mind comes from owning "REAL" money-Gold and Silver coinage.  By owning Gold or Silver coins you have the ability and the right to go anywhere – in any country - and spend it, even if your fund manager is in jail, or your local bank is nationalized even in America.  They cannot take the value of it away from you.

 

Take back the control of your money.  Don’t risk your future with paper as money.  Power and financial freedom come to those with the right knowledge and tools.  You can find out how to buy and sell gold  and silver coins without the built in the risk that naturally comes with fluctuating interest rates, market ups and downs, and poor decisions made on Wall Street that change the value of the paper bill. 

 

John White has a website where you can learn about coin purchases.  Get rid of the scary and nagging fear that comes with "no control".   Learn to eliminate the risk that comes with investing in the traditional places.  Get your FREE "The Money Book"

 

Go to:  http://neverthemoney.com 

 



Andrea

104inc.com asked:


Got an extra $5,000 to spend?

Yep, that is how much you and every American will be paying for the government bailout.  This does include your children.  Luckily, it doesn’t include your cats, dogs, and fish.  This year’s bailout includes the following items:  $700 billion proposed Wall Street bailout; $85 billion for AIG; $200 billion for Fannie Mae and Freddie Mac; $150 billion stimulus package (your $600/person rebate check); $438 billion projected Federal deficit; and a small $29 billion bailout for Bear Stearns.   Makes you glad you got that rebate check earlier this year, doesn’t it?

The scary part is that this number will probably grow.  The Treasury Department is really just asking for a blank check and they won’t have any accountability to Congress or anyone else.  There is the potential to include more than problem mortgages in this package.  Car loans, student loans, and credit card debt could all be included in this package.  This $700 billion Wall Street bailout could grow to over $2.5 trillion dollars.

Just in case you were curious, this won’t help only American banks - it will also help foreign banks.  Pretty nice of the US taxpayer to help the world.  Though, I guess we did help create the problem.

It was all about trying to take advantage of the system.  The investment banks came up with inventive ways of repackaging debt.  The rating agencies went along with something they obviously didn’t understand.  Then, we didn’t think and went along with their greed.  Why?  Because we are just as bad as Wall Street is.

Some people bought houses with “neg am” loans.  What a concept – you can make a payment, but it doesn’t have to even cover your interest payment - just go deeper in debt.  The other cool idea was tapping into your new found “equity” in your home.  Just refinance or take out a home equity loan, take out some cash, and go deeper in debt.  Well, at least you got to buy a Gucci bag and a jet ski.  Hope it was worth it.

Yell and scream at Wall Street and the government all you want, but we are just as much to blame.

Luckily, www.104inc.com isn’t going to be asking you to help them out.  Go check out their website to get away from this mess.





Roberta

Jose Roncal asked:


It’s only been a few weeks since Congress signed off on Treasury Secretary Henry Paulson’s big $700 billion bailout plan—the Troubled Asset Relief Program (TARP).  What exactly do we have to show for it?  Nobody knows. What’s more, we now face a complex financial logjam that’s every bit as messy as the original fiasco.  And the situation is all the more hazardous because Paulson keeps waffling.

As you recall, the original plan was to buy $700 billion in toxic securities—spoilage from defaulted home mortgages that kicked off the financial meltdown.  Simply put, taxpayers would buy $700 billion worth of assets nobody else would touch, ostensibly to get frozen credit markets back in motion.  But the toxic-loan plan never got off the ground.  It couldn’t move far or fast enough to bring the immediate relief Paulson promised.

Instead, Treasury announced it had devised a new plan aimed at thawing out the frozen credit markets.  The new plan: Put money directly into big banks by enacting a little-known clause in Sec. 113, (e )(1) of the TARP legislation, which economists are calling the “Stock Injection Alternative.”

Paulson promised that stock injection effectively served to “rescue”  the banks, but instead of owning shaky assets, the government—the taxpayers—would become preferred shareholders of the banks themselves.  That means the taxpayer would be promised a return (since preferred shares pay interest), and those owning common shares would take the first hits. Thus, taxpayers would be more protected and less likely to lose money.

Amid this back-and-forth maneuvering, people started whispering that perhaps Paulson didn’t really know what to do. First he’d claimed that buying toxic mortgage-based investments from troubled banks, particularly those whose failure might undermine the domestic or global financial systems, was the only conceivable solution to bank failures.  And he tenaciously opposed any congressional suggestions that could modify his plan. 

Then after the first $350 billion had been released, he unexpectedly switched gears into what some believed was too broad and too vague a direction.

Paulson had already spent $85 billion to bail out insurance giant, AIG.  But even after a congressional hearing and scandalous admission about the company’s lavish corporate resort boondoggle, AIG still had the audacity to come back to the money trough and lap up another $40 billion.

If there is anyone in the Treasury keeping track of where all these dollars are going, they aren’t letting on. In fact, the money banks have received has done little to thaw out credit for U.S. businesses or consumers.  Banks appear to be more willing to lend to each other, judging by a drop in the LIBOR rate.  But the no-strings nature of the bailout has led some to use the money in ways Congress may not have intended. For example, PNC Bank, headquartered in Pittsburgh, PA, used part of its allotted cash to acquire Centurion branches in its market area.

Credit cars and auto loans next in line

In a further drift away from Congressional intent, Paulson announced he wanted to extend the bailout program to non-bank credit markets like those holding credit card receivables, auto loans and student loans. American Express has, with a sprinkle of Treasury pixie dust, been deemed a bank, thus qualified to feed at the trough with the others.  Companies like GMAC, the lending arm of General Motors, and other carmakers’ lending units, are standing in line as well.

In the original bailout plan Paulson asked for overarching Czar-like authority to move money around, without being subject to review by any court or administrative agency. His initial “just trust me” proposal didn’t fly. Congress assured the public that any plan they approved would have built-in oversight.

But by early November, not only had the White House failed to nominate a special inspector general to head up oversight efforts, Congress had yet to appoint any members to a five-person congressional oversight panel. In fact, a comprehensive plan seems non-existent.

A lot of money had been blowing out the door, but no one had bothered to consult with Congress about any of the details. Finally lawmakers stepped up to the plate.

On November 18, Paulson faced harsh questioning by members of the House Financial Services Committee where he shared the table with Fed Chairman Ben Bernanke. In addition to sharp criticism of mishandling matters, pointed questions reminded everyone that some TARP money was to have helped homeowners faced with foreclosure, an idea strongly supported by FDIC Chairman Sheila Bair.

Paulson argued that TARP was meant to stabilize financial markets and the flow of credit, not serve as a panacea for all our economic difficulties. And, he brushed aside questions about future plans by saying he had no intentions of doling out the second half of the $700 billion program — let the Obama administration deal with it, he said.

A secret $2 trillion deal

Back in mid-October, the Federal Deposit Insurance Corporation announced a new $2 trillion three-year program—the Temporary Liquidity Guarantee Program.  The program was meant to strengthen confidence and encourage liquidity in the banking system. This guarantee is in addition to the $250 billion preferred stock purchase plan we already mentioned. 

Perhaps you might be curious about the details surrounding that $2 trillion deal, a little transparency perhaps?  Well, never mind.  Federal Reserve Chairman Ben S. Bernanke said the central bank would not disclose any details of these loans of taxpayer funds because doing so would “stigmatize banks needing the money.”

The American taxpayers deserve a coherent explanation about what has happened with all the money spent so far, like who’s getting what, how much and why.  They were promised oversight and transparency, but Bernanke’s statement it’s yet another example of a whole country being left in the dark with no real answers.

Now more than ever Americans need confidence that their government is making smart decisions as they sort through this financial fiasco. The best way to instill confidence is for Congress to do what it said it would do: ensure strict oversight of the bailout process.  They would do well to start at the beginning by keeping a closer eye on Paulson, a man who seems hell-bent on making up the rules as he goes along.

Perhaps the entire bailout fiasco was summed up best during the congressional hearings when Gary Ackerman (R-NY) looked Paulson in the eye and said, “You seem to be flying a $700 billion plane by the seat of your pants.  It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq.”

This is far from being the final chapter of the story.  You can find updates at our website: www.financialspeculation.com.



Dora

Jayson Hunter asked:


The average American often times feels that eating healthy is too expensive. Fast food and foods loaded with fat and sugar tend to be inexpensive and always at hand. I have created a Nutritional bailout plan to help you through these tough economic times with some tips for healthy and affordable eating.

Too many people think they can’t afford to eat healthy, especially during this Economic Crisis. That’s why I want as many people as possible to know about these tips for eating healthy.

The following healthy eating tips will help any American lose weight fast during this Economic Crisis:

1 - Choose seasonal fruits to save on grocery bill costs with your grocery bill. Out of season fruits can add a good chunk to any food bill. This is real easy to do. If you are the one doing the shopping just watch the prices of the fruits and you will see the prices jump on fruits once they are no longer ‘in season”. The reason for this is because they now have to ship the fruit in from other parts of the country rather than getting the fruit from a local grower. This adds considerable cost to the fruit.

2 - Buy in bulk and freeze what isn’t needed. This is easy to do with meats. When buying ten chicken breasts it lowers the cost per pound of chicken. The chicken that is not going to be eaten in the next few days you can freeze and then thaw what is needed for next meal when necessary. Same idea works for beef and hamburger. Most stores offer these “family” packs where you can buy 6 or more chicken breasts or 4 pounds of hamburger, etc. Once you get it home just break it up into individual Ziploc bags. For example put 2 chicken breasts in a Ziploc bag. For the hamburger or ground beef break it up into 1 pound sections since those are the most commonly used quantities.

You can save a good chunk of change every month if you just buy in bulk and spend a little bit of time to preserve it to be used at a later time when it is convenient.

3 - Pay attention to sales. Many times, eating healthy can be easily accomplished just by focusing on special offers and coupons. Too many people ignore sales and coupons or don’t take advantage of them. Did you know that there are websites devoted to just letting you know of the latest sales and coupons for stores all across the country. People literally save hundreds of dollars a month by taking advantage of these sales and coupons. You can save a minimum of $10 on average every time you go grocery shopping just by taking advantage the coupons. Add in the sale items and you are looking at more than $20 of savings every time you go grocery shopping.

Right now everyone is a little worried about the economy and some may even be panicking in regards to what is happening with the economy. Take a step back and a deep breath and just analyze your situation. Most people do not need to panic and all you have to do is cut a few corners, watch your spending habits and you will find that this downturn in the economy won’t affect you quite so bad.



Renee

basketball409 asked:


I am getting confused on the difference between an economic bailout or a subsidy put in place by the government. I know that both are sometimes given money but I don’t know much else. Any guidance would be greatly appreciated!
Thank you “little kid” but I would love some help from someone educated!

Bryan

dobbinscorey asked:


So who is in? How would we go about it? would anyone build a website for it. This will probably mean trading out most everybody. They are in ridiculous support of the bailout despite America’s disapproval.
Wow nice response. Please check out some of my other questions.

Jennifer

Mike P. Kulej asked:


 

Everybody who even perfunctory follows the news must have heard about the string of terrible financial developments in the United States. More and more investment and banking companies are going bankrupt or are being threatened by spreading credit crisis. This is a spillover effect from excessive lending practices during a prolonged housing bull market, which came to an end as a “bursting bubble” over a year ago.

Now more and more companies find themselves in possession of securities tied directly to mortgages issued during that time. With more and more houses going into foreclosures and loosing value, an increasing number financial instruments are rapidly becoming non performing, or outright worthless. Companies holding them are experiencing losses going into billions of dollars. Some of them are becoming insolvent.

Such was the case with Washington Mutual, which was seized by federal authorities and sold at a bargain price to JP Morgan Chase. Washington Mutual set a sad record, becoming the biggest bank to ever fail in USA. But not the only one lately. So far the crisis has claimed 12 banks, investment banks and even insurance companies, like the industry giant American Insurance Group.

To date US Treasury managed to avoid real disaster by stepping and taking over failing institutions or facilitating financing to keep them alive, by lending money to other companies for purchase of weakened rivals. Intervention has cost Treasury hundreds of billions of dollars, including $25 billion to bailout Bear Sterns, $100 billions each for Fannie Mae and Freddie Mac, $85 billion for AIG. This list goes on and on.

Now FED is asking congress for additional $700 billions in order to bail out entire financial industry, by establishing a market for mortgage backed securities. Federal authorities would purchase instrument from most at risk firms. That would set some kind of pricing guidelines for all other such securities, making it possible for all holders of such notes to start trading in them again, potentially lowering risk of owning them.

Nobody really knows if this is going to be enough, but the price of such action will be staggering. With the money already spent and the funds requested, the total bill will surely top $1 trillion dollar by a wide margin. This would signal new wave of borrowing by Treasury, which would last for years and push the total debt level into record and uncharted level.

Dollar lost value while all this was unfolding, and is likely to continue slide until congress works out details of this massive funds infusion. After that it will take some time to see if the steps FED is taking are having desired effect. US dollar will probably stay under pressure during this time. One might expect this to continue through the reminder of 2008.

In order to finance rising level of debt, we can expect to see interest rates rise on USD, which would make Treasury paper more attractive. Combined with economic slow down in the rest of the world, this might prove very bullish for dollar going into 2009. This will only be the case if the interest increases are done in a slow, measured pace and not due to some market panic. This particular scenario is compatible with very long term dollar charts.

We should be watching with interest what comes out of the chambers of congress. Once the funding is granted, it will be up to the financial authorities to prove it is money well spent. If it works even half as well as promised, we should see steady appreciation of Dollar in 2009 and perhaps a little longer.



Juanita

loselose asked:


I own a large amount of mutual funds 200k +. I really want to take them all out since i’ve lost a lot of $$ already. But i kinda of want to wait for the bailout to pass to see where the market is going, but i am also afraid it will just keep dropping regardless the bill get passed or not. Should i sell or should i hold?

Emily

Sam L asked:


Government bailout means injecting the money into a company. By bailing out, does it mean the government would get more share?

For example, government injected 85m to AIG, so now government is a larger shareholder of the AIG?

Gordon

caldude1010101 asked:


The major oil companies have reported over $100 billion in net profit over the last 3 years and easily have the cash to bailout the big 3 by buying up a lot of their worthless stock.

And lets face it, the major oil companies are the ones who were pulling the strings of the Big 3 to keep cars running on gasoline while Japanese automakers shot decades ahead in R&D for hybrid and electric cars.

Gladys

John S White asked:


 

BANK IN AMERICA-BAILOUT?

 

Are Your Investments at Risk?

 

Is your bank account earning less than 1%?

 

Has your "fund manager" been arrested lately? 

This last question may seem funny, but in today’s economic climate, the sad answer may be "yes".

 

You may be losing sleep every night because you are worried about your investments.  They are not in your control and you can’t do anything about it.  Fear seems to be the natural feeling that is joined at the hip with the word "investing" today.  You can’t avoid it.  Your future and your family’s future may be riding on the paper, which is never the money, you have given to complete strangers.  That should scare anyone.

 

Wouldn’t you like to remain calm times of bailouts and talks of nationalization.  Wouldn’t you like to know that the money you have saved is safe from the ups and downs of the market?  If you had a choice, would you put your money where the whims of the idiots on Wall Street wouldn’t affect it? Or in your possession as Gold and Silver coinage.

 

Financial peace of mind seems such an unreal expectation today.  But do you realize that all the gloom and doom in the news lately has concerned "paper money" bailouts to nationalization.  No one is talking about "the gold crisis" or the "silver crisis", are they?

 

Let me ask you another question.  Would you like the peace of mind that comes from your money being "REAL"?  Let me explain the answer by providing some little known facts.   The paper money in your pocket today is just a "Promissory Note" from the Federal Reserve, which is a private corporation.  Paper money cannot hold its value.  The governments of the world can produce as many, or as few, as they want-see Zimbabwe one trillion dollar note. Use Gold and Silver coinage as a bailout.

 

What changes the "value" of paper currently in circulation?  Not the economy.  Not the stock market.  The paper themselves print more=more is less.  The Gold and Silver coinager never change in value.  An ounce of gold or silver today is going to be worth an ounce of gold or silver tomorrow and forever.  What changes is the amount paper bills you have to use to buy the ounce of precious metals.

 

True peace of mind comes from owning "REAL" money-Gold and Silver coinage.  By owning Gold or Silver coins you have the ability and the right to go anywhere – in any country - and spend it, even if your fund manager is in jail, or your local bank is nationalized even in America.  They cannot take the value of it away from you.

 

Take back the control of your money.  Don’t risk your future with paper as money.  Power and financial freedom come to those with the right knowledge and tools.  You can find out how to buy and sell gold  and silver coins without the built in the risk that naturally comes with fluctuating interest rates, market ups and downs, and poor decisions made on Wall Street that change the value of the paper bill. 

 

John White has a website where you can learn about coin purchases.  Get rid of the scary and nagging fear that comes with "no control".   Learn to eliminate the risk that comes with investing in the traditional places.  Get your FREE "The Money Book"

 

Go to:  http://neverthemoney.com 

 



Andrea

104inc.com asked:


Got an extra $5,000 to spend?

Yep, that is how much you and every American will be paying for the government bailout.  This does include your children.  Luckily, it doesn’t include your cats, dogs, and fish.  This year’s bailout includes the following items:  $700 billion proposed Wall Street bailout; $85 billion for AIG; $200 billion for Fannie Mae and Freddie Mac; $150 billion stimulus package (your $600/person rebate check); $438 billion projected Federal deficit; and a small $29 billion bailout for Bear Stearns.   Makes you glad you got that rebate check earlier this year, doesn’t it?

The scary part is that this number will probably grow.  The Treasury Department is really just asking for a blank check and they won’t have any accountability to Congress or anyone else.  There is the potential to include more than problem mortgages in this package.  Car loans, student loans, and credit card debt could all be included in this package.  This $700 billion Wall Street bailout could grow to over $2.5 trillion dollars.

Just in case you were curious, this won’t help only American banks - it will also help foreign banks.  Pretty nice of the US taxpayer to help the world.  Though, I guess we did help create the problem.

It was all about trying to take advantage of the system.  The investment banks came up with inventive ways of repackaging debt.  The rating agencies went along with something they obviously didn’t understand.  Then, we didn’t think and went along with their greed.  Why?  Because we are just as bad as Wall Street is.

Some people bought houses with “neg am” loans.  What a concept – you can make a payment, but it doesn’t have to even cover your interest payment - just go deeper in debt.  The other cool idea was tapping into your new found “equity” in your home.  Just refinance or take out a home equity loan, take out some cash, and go deeper in debt.  Well, at least you got to buy a Gucci bag and a jet ski.  Hope it was worth it.

Yell and scream at Wall Street and the government all you want, but we are just as much to blame.

Luckily, www.104inc.com isn’t going to be asking you to help them out.  Go check out their website to get away from this mess.





Roberta

Jose Roncal asked:


It’s only been a few weeks since Congress signed off on Treasury Secretary Henry Paulson’s big $700 billion bailout plan—the Troubled Asset Relief Program (TARP).  What exactly do we have to show for it?  Nobody knows. What’s more, we now face a complex financial logjam that’s every bit as messy as the original fiasco.  And the situation is all the more hazardous because Paulson keeps waffling.

As you recall, the original plan was to buy $700 billion in toxic securities—spoilage from defaulted home mortgages that kicked off the financial meltdown.  Simply put, taxpayers would buy $700 billion worth of assets nobody else would touch, ostensibly to get frozen credit markets back in motion.  But the toxic-loan plan never got off the ground.  It couldn’t move far or fast enough to bring the immediate relief Paulson promised.

Instead, Treasury announced it had devised a new plan aimed at thawing out the frozen credit markets.  The new plan: Put money directly into big banks by enacting a little-known clause in Sec. 113, (e )(1) of the TARP legislation, which economists are calling the “Stock Injection Alternative.”

Paulson promised that stock injection effectively served to “rescue”  the banks, but instead of owning shaky assets, the government—the taxpayers—would become preferred shareholders of the banks themselves.  That means the taxpayer would be promised a return (since preferred shares pay interest), and those owning common shares would take the first hits. Thus, taxpayers would be more protected and less likely to lose money.

Amid this back-and-forth maneuvering, people started whispering that perhaps Paulson didn’t really know what to do. First he’d claimed that buying toxic mortgage-based investments from troubled banks, particularly those whose failure might undermine the domestic or global financial systems, was the only conceivable solution to bank failures.  And he tenaciously opposed any congressional suggestions that could modify his plan. 

Then after the first $350 billion had been released, he unexpectedly switched gears into what some believed was too broad and too vague a direction.

Paulson had already spent $85 billion to bail out insurance giant, AIG.  But even after a congressional hearing and scandalous admission about the company’s lavish corporate resort boondoggle, AIG still had the audacity to come back to the money trough and lap up another $40 billion.

If there is anyone in the Treasury keeping track of where all these dollars are going, they aren’t letting on. In fact, the money banks have received has done little to thaw out credit for U.S. businesses or consumers.  Banks appear to be more willing to lend to each other, judging by a drop in the LIBOR rate.  But the no-strings nature of the bailout has led some to use the money in ways Congress may not have intended. For example, PNC Bank, headquartered in Pittsburgh, PA, used part of its allotted cash to acquire Centurion branches in its market area.

Credit cars and auto loans next in line

In a further drift away from Congressional intent, Paulson announced he wanted to extend the bailout program to non-bank credit markets like those holding credit card receivables, auto loans and student loans. American Express has, with a sprinkle of Treasury pixie dust, been deemed a bank, thus qualified to feed at the trough with the others.  Companies like GMAC, the lending arm of General Motors, and other carmakers’ lending units, are standing in line as well.

In the original bailout plan Paulson asked for overarching Czar-like authority to move money around, without being subject to review by any court or administrative agency. His initial “just trust me” proposal didn’t fly. Congress assured the public that any plan they approved would have built-in oversight.

But by early November, not only had the White House failed to nominate a special inspector general to head up oversight efforts, Congress had yet to appoint any members to a five-person congressional oversight panel. In fact, a comprehensive plan seems non-existent.

A lot of money had been blowing out the door, but no one had bothered to consult with Congress about any of the details. Finally lawmakers stepped up to the plate.

On November 18, Paulson faced harsh questioning by members of the House Financial Services Committee where he shared the table with Fed Chairman Ben Bernanke. In addition to sharp criticism of mishandling matters, pointed questions reminded everyone that some TARP money was to have helped homeowners faced with foreclosure, an idea strongly supported by FDIC Chairman Sheila Bair.

Paulson argued that TARP was meant to stabilize financial markets and the flow of credit, not serve as a panacea for all our economic difficulties. And, he brushed aside questions about future plans by saying he had no intentions of doling out the second half of the $700 billion program — let the Obama administration deal with it, he said.

A secret $2 trillion deal

Back in mid-October, the Federal Deposit Insurance Corporation announced a new $2 trillion three-year program—the Temporary Liquidity Guarantee Program.  The program was meant to strengthen confidence and encourage liquidity in the banking system. This guarantee is in addition to the $250 billion preferred stock purchase plan we already mentioned. 

Perhaps you might be curious about the details surrounding that $2 trillion deal, a little transparency perhaps?  Well, never mind.  Federal Reserve Chairman Ben S. Bernanke said the central bank would not disclose any details of these loans of taxpayer funds because doing so would “stigmatize banks needing the money.”

The American taxpayers deserve a coherent explanation about what has happened with all the money spent so far, like who’s getting what, how much and why.  They were promised oversight and transparency, but Bernanke’s statement it’s yet another example of a whole country being left in the dark with no real answers.

Now more than ever Americans need confidence that their government is making smart decisions as they sort through this financial fiasco. The best way to instill confidence is for Congress to do what it said it would do: ensure strict oversight of the bailout process.  They would do well to start at the beginning by keeping a closer eye on Paulson, a man who seems hell-bent on making up the rules as he goes along.

Perhaps the entire bailout fiasco was summed up best during the congressional hearings when Gary Ackerman (R-NY) looked Paulson in the eye and said, “You seem to be flying a $700 billion plane by the seat of your pants.  It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq.”

This is far from being the final chapter of the story.  You can find updates at our website: www.financialspeculation.com.



Dora

Jayson Hunter asked:


The average American often times feels that eating healthy is too expensive. Fast food and foods loaded with fat and sugar tend to be inexpensive and always at hand. I have created a Nutritional bailout plan to help you through these tough economic times with some tips for healthy and affordable eating.

Too many people think they can’t afford to eat healthy, especially during this Economic Crisis. That’s why I want as many people as possible to know about these tips for eating healthy.

The following healthy eating tips will help any American lose weight fast during this Economic Crisis:

1 - Choose seasonal fruits to save on grocery bill costs with your grocery bill. Out of season fruits can add a good chunk to any food bill. This is real easy to do. If you are the one doing the shopping just watch the prices of the fruits and you will see the prices jump on fruits once they are no longer ‘in season”. The reason for this is because they now have to ship the fruit in from other parts of the country rather than getting the fruit from a local grower. This adds considerable cost to the fruit.

2 - Buy in bulk and freeze what isn’t needed. This is easy to do with meats. When buying ten chicken breasts it lowers the cost per pound of chicken. The chicken that is not going to be eaten in the next few days you can freeze and then thaw what is needed for next meal when necessary. Same idea works for beef and hamburger. Most stores offer these “family” packs where you can buy 6 or more chicken breasts or 4 pounds of hamburger, etc. Once you get it home just break it up into individual Ziploc bags. For example put 2 chicken breasts in a Ziploc bag. For the hamburger or ground beef break it up into 1 pound sections since those are the most commonly used quantities.

You can save a good chunk of change every month if you just buy in bulk and spend a little bit of time to preserve it to be used at a later time when it is convenient.

3 - Pay attention to sales. Many times, eating healthy can be easily accomplished just by focusing on special offers and coupons. Too many people ignore sales and coupons or don’t take advantage of them. Did you know that there are websites devoted to just letting you know of the latest sales and coupons for stores all across the country. People literally save hundreds of dollars a month by taking advantage of these sales and coupons. You can save a minimum of $10 on average every time you go grocery shopping just by taking advantage the coupons. Add in the sale items and you are looking at more than $20 of savings every time you go grocery shopping.

Right now everyone is a little worried about the economy and some may even be panicking in regards to what is happening with the economy. Take a step back and a deep breath and just analyze your situation. Most people do not need to panic and all you have to do is cut a few corners, watch your spending habits and you will find that this downturn in the economy won’t affect you quite so bad.



Renee