The Bailout

**Lemur** · 11-30-2008, 16:12

Originally Posted by Ironside

Wasn't the bailout at 700 milliards (billions for you Americans) + an extra 100 in pork?

That was one bailout package. It does not include the AIG bailout or the Citigroup bailout, among other things.

**LittleGrizzly** · 11-30-2008, 17:45

I heard a figure on the BBC claiming the final bailout cost for the financial sector alone could come to 8 trillon, that was all the various packages plus some other that where being discussed but not implemented yet...

By the looks on that graph i would reccomend a much bigger version of the marshall plan worldwide (with other rich countrys paying) a huge increase in NASA funding, and simply use the rest to loan to people from the goverment at fixed rates, maybe use some of the money to help reinvent failing car industry's for example, then in a few years maybe banks can step up and start lending money again.... this is probably unworkable but it sounds great in my head...

**Fisherking** · 11-30-2008, 18:53

What a huge mess! We are having deflation, but with government stepping in look for some spin like deflationary-inflation… like the stag-flation of Jimmy Carter’s time.

What is more is that up to 20% of the money goes for bonuses for the top management that created the mess. I think that money would be best spent on jailing the lot of them.

During the Great Depression everyone crashed except Italy. Their dictator of the time called in all the bankers and said…you get the money you need to stay afloat but you tell everyone we are doing fine…no problems, you understand! Italy did fine. Everyone else floundered. Italy was no better off financially than anyone else but people thought they were. It is most perception. That being so…we are shooting our selves in the foot with the whole mess and unless the government does something about the pirates in the Federal Reserve it is not going to get any better. They are bailing out their buddies and the same with the US treasury…talk about a revolving door!

Nationalize the Federal Reserve and have the Government print the money. Perception! Get privet bankers out of the equation, and make the treasury account for where the money is going…secret deals are

…just a license to steal!

**Seamus Fermanagh** · 12-01-2008, 02:03

Conflation of issues:

Poor Credit regulation/Congress actively encouraging sub-prime mortgages.

Wall Street firms package sub-primes as a new "agressive growth" investment.

Mortgage value bubble starts to deflate, undercutting the "growth" expected.

Oil Price "push" hammers industry spending and encourages USA (and others) to pull back on private discretionary spending.

Foreclosure rates accelerate, Mortgage debt/credit crisis intensify.

Government "bailout" efforts not only include the 750bn bailout (+100b in pork) on top of the bailouts for Bear-Stearns and AIG (c. 300b), but also include the 3 Trillion in bonds floated over the last 8 weeks (The goal has been to flood the system with money and prevent runs on banks from ever occurring. Bank failures have not even come close to the failure percentages of the 1930s -- though the conditions for bank failure haven't been as ripe at any other times since).

This is the first time in a long time we've experienced reduction in bond value/yield at the same time as stocks have taken such a hit. There's been something of a rally in the last week from "Santa" and we can expect a bit more since Black Friday was 7% up over last year's, but it's a long way back to the highs of October 2007.

Gold is improving, but not by leaps and bounds.

Deflation is a distince possibility, and only moderate period of significant inflation can prevent it.

Sucks all around.

**Papewaio** · 12-01-2008, 06:19

It would have been better spent on capital works.

The next Hoover Dam, a bigger NASA, more blankets and fresh water in the 3rd world... all of them aimed at generating a demand for infrastructure, knowledge and goodwill and all of them providing jobs... stimulate the economy by giving people money directly is welfare. What has happened is the biggest corporate welfare project in history, and they are still taking home bonuses!

**Vladimir** · 12-01-2008, 18:42

Bigger NASA? Hell yea! Do you hear of these problems on Mars? Didn’t think so.

But no, seriously, get me the

out of here.

**Seamus Fermanagh** · 12-01-2008, 21:24

Despite the best Thanksgiving weekend spending in several years, the market dropped again today. Its that kind of cycle.

**naut** · 12-04-2008, 15:23

Originally Posted by Papewaio

It would have been better spent on capital works.

The next Hoover Dam, a bigger NASA, more blankets and fresh water in the 3rd world... all of them aimed at generating a demand for infrastructure, knowledge and goodwill and all of them providing jobs... stimulate the economy by giving people money directly is welfare. What has happened is the biggest corporate welfare project in history, and they are still taking home bonuses!

I couldn't agree more.