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Government Bailout?

By
Real Estate Agent with Wilkinson & Associates

With the $700 billion proposed bail out for Wall Street, I am amazed at the arrogance of some of the top officials in congress who think that this is suppose to help the average American.  It is like letting the fox in the hen house, again.  The banks who made these loans and the investors who bought these portfolios are the ones who need to be raising the capital to stay afloat.  If I get overloaded in debt, I don't see any government program to help me out.  No, I have to get a second job and pay my debt down like everybody else.

Why aren't the people responsible for making these loans held accountable?  The investor's who bought these loans were not guaranteed to make any money, so why should we make sure they are making a profit now?  Let's hold the banks responsible.  If there was wrongdoing, then somebody should be going to jail.  If I defraud someone, I am held responsible.  Why shouldn't they?  The banks should have had a clue when they offer no doc loans with absolutely no verification, and putting people into ARM's and not realizing that they will probably fail based on the fact that they were qualified on the first year rate.  Duh, what did you expect?  And the banks just can't seem to understand why we as Realtors don't want them in real estate.  That is one of the reasons we went into a depression in the late 1920's.

If the government is going to bail out anybody, it needs to be the American public, not the investors.  Investors take a risk when they buy stock, just like the rest of us.  If I buy stock and it tanks, then that is the risk I take.  Why should the governement bail them out and not us?  Why don't they take that $700 billion and divide it out equally to the American taxpayers whose money it is to begin with.  If the government is there to serve us, then let them send us the $700 billion and let us decide where to spend it, since it is our money.

 

Comments(4)

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Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

I have gotten about 3 emails about splitting the money amongst us.  Sounds like a great idea to me. 

Oct 01, 2008 01:54 AM
Aslan Realty Advisors, LLC
Fort Myers, FL
Staying a step ahead with Pride!

Your post speaks to the horrible misconceptions some people have about the Bailout, and is greatly disturbing me, it seems that people want to blame Wall Street for all the ills of the market, and I appreciate that feeling, BUT....

I also appreicate that Lehman Brothers, and Bears Stearns are now nonexistent, and Goldman Sachs and Morgan Stanley are fighting to stay alive.

The blame for this mess is not the "Big Guys" fault alone, Wall Street created financial securities, specifically secondary markets in asset backed securities, that allowed Americans to live the American dream. Buying new cars, going to Disney Land, investing in multiple homes in which they had NO business doing(and sometimes exagerating their incomes on loan applications-which is criminal). Wall Street created securities, they bought them and sold them, held them for investment and traded them for fee. That's all they did. Meanwhile, as a result, the every day Joe and Jane were able to own their first home and a new car too.

A few points from my perspective on the ongoing events, and who should share in the blame for the need for a "Bail Out":

1. The Failed Vote was Not Bailing Out Wall Street. REPEAT: We were not bailing out Wall Street!. But if we were, they would deserve as much as the Main Street banks we really are saving. Washington Mutual is not located on Wall Street, nor is Wachovia. National City is no where near Wall Street.

2. Standard & Poor's and Moody's? We rely on them to analyze securities, and one should ask did they negligently label too many of them as investment grade? When the housing values were soaring, it didn't matter, but it surely did as the housing bubble popped. Thank them for some of the problems.

3. Mortgage Brokers(Sorry, there are many of you that are my friends, but you know that not everyone holds themselves to the same ethical standard so please don't take offense). Who created liar loans? The market for the most part has taken care of the problem brokers, but part of the blame can be attributed to loan products that were simply unnatural and fell into the category of too good to be true. Also, some of the banks that originated these loans took on great risk for the sake of greed. Greedy men working for those banks originated bad loans, and sought Wall Street's help to package them and sell them since they could be rated investment grade and dumped onto others.

4. Society(US) People just like you and me made these mistakes, and people like me and you allowed it to happen by not staying informed with the goings on of our society and by not seeking to improve upon it.

5. The Treasury plan from Paulsen needs work, the plan did not address the need to recapitalize badly undercapitalized financial institutions. Nor did the plan include an HOLC-style program to reduce across the board the debt burden of the distressed household sector. Our leaders need to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. For everyone from traders, investors and banks to the average American, the latest development in the TARP means one thing-The Treasury has failed to restore confidence in the financial markets and it could be some time before there is stabilization.

 

The next 10 days will be very interesting, likely a worldwide market cataclysm such as we have not yet seen.  

The bailout was for $700 Billion dollars, and the over 1 Trillion dollar loss in the market equates to more than $300 Billion dollars then the amount of the Bailout LOST in Just ONE DAY!

In closing, Please take time to consider that volatility in the financial markets benefits no one.

Oct 01, 2008 01:59 AM
Greg Flanagan
SCSold.com Real Estate - Charleston, SC
Owner/BIC SCSOLD LLC

Chuck I believe you and I are in the minority here at Active Rain. This community cotinues to bury their collective heads in the sand and ignore the fact that this is not a great deal. I had exactly 1 comment on a $425 per person. Like the attitude of the letter though. Keep up the fight.

Best~ Greg

Oct 01, 2008 02:04 AM
Greg Flanagan
SCSold.com Real Estate - Charleston, SC
Owner/BIC SCSOLD LLC

Paige let me say first and foremost i appreciate your opinion but I don't agree with it. You pointed out:

"The blame for this mess is not the "Big Guys" fault alone, Wall Street created financial securities, specifically secondary markets in asset backed securities, that allowed Americans to live the American dream. Buying new cars, going to Disney Land, investing in multiple homes in which they had NO business doing(and sometimes exagerating their incomes on loan applications-which is criminal). Wall Street created securities, they bought them and sold them, held them for investment and traded them for fee. That's all they did. Meanwhile, as a result, the every day Joe and Jane were able to own their first home and a new car too."

I agree with the statement. I also agree that the government, through FHA loosened lending guidelines which allowed the Wall Street guys to peddle weak securities. When the Ponzi scheme started to collapse Wall Street jumped ship and told the banks to deal with it. Banks live on deposits the more deposits in, the more they can lend. With the short selling (less coming in, but more going out) this created an imbalance, which contributed to the collapse.

The blame is on the GSE's  for lowering lending standards, the regional banks for not keeping their books balanced and investments reasonably sound AND THE AMERICAN PEOPLE for living beyond their means and living on credit.

Let the economy reset. It'll hurt, we'll be fine. You may not be able to buy a new car for a few years but hey, whta's wrong with the old one?

Thanks for listening.  

 

Oct 01, 2008 02:20 AM