Thoughts on Paulson and the $700billion "switcherooo"?

[Deff Gordon]

anyone?

i know buying any of the bad assets weren't letting lenders get money out...

at least it didn't seem to do anything.


Paulson's Bailout: A "$700 Billion Switcheroo"?

Treasury Secretary Henry Paulson's announced changes to the $700 financial bailout plan -- to focus on shoring up financial institutions that offer consumer credit rather than purchasing troubled assets -- led all three network newscasts last night, and are featured on the front pages of today's major newspapers. The story is being reported in stark terms: ABC World News referred to "a dramatic change in course"; NBC Nightly News called it "a $700 billion switcheroo"; a "bombshell announcement," said Fox News Special Report. Bloomberg News, meanwhile, reports the Secretary "may encounter resistance from Congress for the remaining $350 billion after using most of the first half to buy bank stakes."

[PETA]

was listening to a Congressman last night talk about this - like I said last night not terribly clear on the details - but his main point was that the legislation was intentionally written to give Paulsen a lot of leaway

[Deff Gordon]

well... it seems (to me at least) that the banks weren't lending any money. so this new method is more like... go to the source. buy them and get the money changing hands again. that overly simplistic view makes sense.

[zerojunkie]

or they could do what chase is going to do with it's hand out...buy more banks.

[shaggy]

Originally Posted by Deff Gordon

well... it seems (to me at least) that the banks weren't lending any money. so this new method is more like... go to the source. buy them and get the money changing hands again. that overly simplistic view makes sense.

The problem Paulson had was no mechanism to force the banks to lend money with the injection the government was giving them. They had no way to force the lending of money.

I feel bad for Paulson, he is in way over his head. He could be a sucessful retiree from Goldman Sachs, and now he is put in an impossible position...imagine the pressure of failure he is dealing with (thinking about the possibility of this bailout fails).

I find it interesting that this bailout was "necessary to save complete failure" when (I am no financial expert) it appears we are experiencing complete failure. Small businesses and their Acct. receiveables are hurting, and subsequently, these small businesses are going in arrears with their payables. Then, they must cut costs because they cannot get loans....huge layoffs, bankruptcies from the largest companies dow tothe smallest....to me, free market capitalism is this "run your business well, your shareholders prosper, run it into the ground, you fail (as well they should for being reckless) and someone comes by, picks up these pieces, uses some innovation and takes the failures place. Such as the big three...the companies failed, so they should so just that, go out of business. I respectfully disagree with those who say that without the bailout would be worse, I am not buying it, because everything IS a disaster.

I also find it humorous that both Republicans and Democrats are preaching socialistic economic views....

And one last thought, it is ironic that the treasury department just turned down a request to allow significant portions of consumer credit card debt to be forgiven, this, the same department in charge of the bailout.

I agree that you run up your bills, it is your fault (although the economy is partially to blame, but people, live within your means!), but why not allow the bailout to encompass the whole spectrum???