Where to now for the 'bailout'?

[white_goodman]

when the lower house pass/approve sydney time?

 

[Kauri]

when the lower house pass/approve sydney time?

The House of Representatives is expected to vote on the revised TARP between 16:30GMT and 18:00GMT today. The House voted 228-205 against the original TARP on Monday (the Dow closed down 7% on Monday). Cheers
...........Kauri

 

[white_goodman]

The House of Representatives is expected to vote on the revised TARP between 16:30GMT and 18:00GMT today. The House voted 228-205 against the original TARP on Monday (the Dow closed down 7% on Monday). Cheers
...........Kauri

so whats that roughly in sydney time?

 

[Kauri]

so whats that roughly in sydney time?

now.... 8.22 perth.... shows GMT etc....

Cheers
.................Kauri

 

[Bushman]

** Newsflash** Moral hazard has now been extended to the US home owner themselves!!

McCain has promised to bail out the American homeowners themselves in the Great Debate. It is to be called McCain Resurgence Plan. They just love a good surge those Republicans.

That decides it. I am going out there, finding the most overvalued house I can find, mortgage it up to the hilt (because I know that what is good policy in the US will become good policy in Oz) and know that good 'ol 'BIG GOVERNMENT' will bail me out if the house price falls.

Oh fruit....


From The Age:

The Republican hopeful said the US government would promptly snap up bad home loans if he became president.

``People are no longer able to afford their mortgage payments,'' said McCain as he laid out what he billed as an original proposal for addressing the grassroots impact of the Wall Street credit crisis.

``As president of the United States, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes, at the diminished value of those homes,'' he said.

Doing so would enable struggling homeowners to meet their mortgage payments and stay in their homes, he said.

``Is it expensive? Yes,'' he said. ``But we all know, my friends, that until we stabilise home values in America, we're never going to start turning around and creating jobs and fixing our economy.

``We've got to give some trust and confidence back to America. I know how to do that, my friends, and it's my proposal. It's not Senator Obama's proposal. It's not President Bush's proposal. I know how to get America working again.''

In a statement issued minutes after McCain spoke, his campaign said the McCain Resurgence Plan - as it branded the proposal - would purchase mortgages directly from homeowners and mortgage lenders and replace them with fixed-rate mortgages.

Such mortgages would enable families to stay in their homes, it said.
``By purchasing the existing, failing mortgages, the McCain Resurgence Plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets,'' it said.

``The direct cost of this plan would be roughly $US300 billion ($A423.13 billion) because the purchase of mortgages would relieve homeowners of 'negative equity' in some homes,'' it said.

 

[rub92me]

** Newsflash** Moral hazard has now been extended to the US home owner themselves!!
From The Age:

The Republican hopeful said the US government would promptly snap up bad home loans if he became president.

``People are no longer able to afford their mortgage payments,'' said McCain as he laid out what he billed as an original proposal for addressing the grassroots impact of the Wall Street credit crisis.

``As president of the United States, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes, at the diminished value of those homes,'' he said.

Doing so would enable struggling homeowners to meet their mortgage payments and stay in their homes, he said.

``Is it expensive? Yes,'' he said. ``But we all know, my friends, that until we stabilise home values in America, we're never going to start turning around and creating jobs and fixing our economy.

``We've got to give some trust and confidence back to America. I know how to do that, my friends, and it's my proposal. It's not Senator Obama's proposal. It's not President Bush's proposal. I know how to get America working again.''

In a statement issued minutes after McCain spoke, his campaign said the McCain Resurgence Plan - as it branded the proposal - would purchase mortgages directly from homeowners and mortgage lenders and replace them with fixed-rate mortgages.

Such mortgages would enable families to stay in their homes, it said.
``By purchasing the existing, failing mortgages, the McCain Resurgence Plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets,'' it said.

``The direct cost of this plan would be roughly $US300 billion ($A423.13 billion) because the purchase of mortgages would relieve homeowners of 'negative equity' in some homes,'' it said.

But, but, but. That was my idea!!

Great questions and contributions so far. My question is: why are they spending so much money to try and sponge up the toxic derivative mess; wouldn't that money be far better utilised in buying up the underlying assets, which would drive up their price?
Say the total derivative value at risk is 500 trillion dollars. This value may be 1,000 times more than the underlying assets on which this pyramid was built.
Wouldn't it be far more effective to try and drive up the price of the underlying assets by 10% for starters?

The world is in real trouble now if they start listening to my ideas :

 

[Bushman]

But, but, but. That was my idea!!

The world is in real trouble now if they start listening to my ideas :

lol. I know what you mean. I also really, really hope old man river does not get his hands on the lever of treasury. what a ridiculous idea.

PS: rumours of the Fed taking an equity stake in the banks keep circulating. This is according to unnamed sources at the bank. Scuttlebutt - or is this step three in the 'shock and awe' campaign?

They will give it their best the Fed. I feel this will create a false bottom now for the market until the US reporting season once more scares the crud out of the punters in late Jan/early Feb. That might be when the poop infects the US-dollar itself. Then it might finally be time to start that 'The calf has been born; it will be a bull in two years' thread.

 

[moXJO]

Whats the go with the Arab and Asian backing for the US.Anyone got a rundown yet?

 

[Bushman]

Kevin07 is adding to his 'bailout' credentials by the day - $10.4b to be given to the old, poor and young to be spent on houses, rent and the like.

For the good 'ol middle class tax lackeys like myself, there will be nix as per usual. Guess I am expected to 'muddle my way through' this one.

From The Age:
'The Federal Government will pump $10.4 billion into the economy in a bid to prevent the economy sliding into a recession.

Prime Minister Kevin Rudd and Treasurer Wayne Swan unveiled the emergency spending plan, which includes $4.8 billion for pensions, $3.9 billion for low-income families, $1.5 billion for first-home buyers.'

PS: as predicted, the Yanks are taking $250b equity stake in the banks.

 

[Bushman]

Who gets the Fed's equity 'injections'? Apparently it is:
Citi $25b
JP Morgan $25b
Bank of America $12.5b
Merril Lynch $12.5b
Goldman Sach $10b
Morgan Stanley $10b
State Street Bank $3b
Bank of NY $3b

http://www.marketwatch.com/news/sto...x?guid={9C59F5E0-73C7-4AC8-93CD-88E01998974E}

Poor old Dicky Fuld, of Lehman Bros, must be crying in his $500m USD (or is that $250mUS). If only they had kept the wolves at the door for one more month hey.

 

[kransky]

Kevin07 is adding to his 'bailout' credentials by the day - $10.4b to be given to the old, poor and young to be spent on houses, rent and the like.

For the good 'ol middle class tax lackeys like myself, there will be nix as per usual. Guess I am expected to 'muddle my way through' this one.

From The Age:
'The Federal Government will pump $10.4 billion into the economy in a bid to prevent the economy sliding into a recession.

Prime Minister Kevin Rudd and Treasurer Wayne Swan unveiled the emergency spending plan, which includes $4.8 billion for pensions, $3.9 billion for low-income families, $1.5 billion for first-home buyers.'

PS: as predicted, the Yanks are taking $250b equity stake in the banks.

Its pathetic imo.. throw money at consumers. that's a great policy. It sh!ts me to think how much infrastructure you could build with 10Bn. The money should be saved and used on capital projects WHEN the recession is in full swing..

 

[Bushman]

Finally, at glacial pace, the LIBOR is coming down! Printing presses might be able to start slowing down. So the bailout is starting to work but at what long-term cost to the USD? The economy first, the currency second hey.

'Three-month dollar Libor fell to 4.41875% from a 4.5025% rate on Thursday. That's down 40 basis points, or 0.4 of a percentage point, from last Friday and the lowest level since Oct. 8. It's also the first weekly decline for three-month Libor since early July. '

 

[Glen48]

Can any explain the expected results of the $500 Trillion CDS's and who is likely to pay?

 

[noirua]

IMG have accepted a €10 billion loan from the Dutch Government.

 

[Bushman]

Can any explain the expected results of the $500 Trillion CDS's and who is likely to pay?

1. Your number is 10 times too high.
2. Derivatives is a zero sum game so no need for tax payer money.
3. From what I have read, the Lehman Bros unwinding is going reasonably well.

However it might claim a few extra individual scalps - hedgies and the like. Maybe to commodity free fall we are seeing is the result of the CDS positions?

Some claim it already claimed AIG. If Ford and GM go under then it could be a real party.

Hey that is the beauty of a completely unregulated CDS derivative market that has sprung up in the last decade or so - no-one know how it will unwind.

 

[noirua]

South Korea has offered US$100 billion to bail out its Banks. US$30 billion has been injected into its Banks.

 

[deadset]

Who actually paid for the bailout ?
Was it solely the US government ? I would presume so, but I'm not sure.

 

[derty]

In the US, strictly speaking it will be the future US taxpayers who will be paying for this.

But in reality the question is will it ever be paid for? Or will it just be added onto the mountain of debt constantly accumulating?

 

[Bushman]

Why not i guess? However I am assuming this one is frimly a 'tongue-in-cheek' request.

From The Age:


US p*rn moguls' plea for government reliefJanuary 8, 2009 - 11:36AM

Two p*rn moguls including Hustler magazine founder Larry Flynt are seeking a five-billion-dollar bailout from Washington, arguing that the limp US economy has thrown cold water on the adult entertainment industry.

Flynt and "Girls Gone Wild" video series creator Joe Francis asked the newly convened 111th Congress "to rejuvenate the sexual appetite of America" in a bailout move similar to the one set aside for US auto manufacturers.

"Congress seems willing to help shore up our nation's most important businesses, (and) we feel we deserve the same consideration," Francis said in a statement.

Flynt said people were "too depressed to be sexually active."

"This is very unhealthy as a nation. Americans can do without cars and such, but they cannot do without sex."

AFP

 

[Aussiejeff]

[size=+1]Biotech sector calls for rescue package[/size]

Australia's biotech sector is pushing for a $600 million rescue package needed, it says, to ensure its 1,200 companies survive the global economic slow-down.

18.03.2009

Industry group AusBiotech says a quarter of the companies, which include fledgling pharmaceutical and medical supplies companies, do not have cash to operate beyond June.

Others are facing pressure to move offshore as governments, including in Singapore, offer incentives while local sources of private funding dry up.

AusBiotech says the Rudd government must move to show its support.

A move on Wednesday to allow access to an $83 million fund was a fraction of what was needed.

"It's a drop in the ocean, it's obviously doing something but it's a drop in the ocean," said AusBiotech chair Dr Deborah Rathjen.

"What we're really looking for here is not a bail-out, but really an invigoration of investment and enthusiasm by the government ... in the growth of new industries for Australia."

http://www.thebull.com.au/articles_detail.php?id=1174

NOT a bailout? Smells like one to me.

Well, I think the gummint should bailout small "investors" to prop up their share trading.

Say, $50 Billion guys 'n gals? Why not? Everyone else is starting to put their hands out....