It has nothing to do with the fact that they are financial companies.Originally Posted by apb
THE financial instruments that are in trouble STILL have value.....LOTS of VALUE. When house X was purchased last year for 500k. THERE is something that MADE it worth 500k. Even though the market devalued it, and now the market says it is worth 400k, it still holds VALUE. Maybe, JUST Maybe, it is still really worth 500k or maybe 550k or 600k.
The mortgages are not simply sold 1 at a time, rather Mega Banks, purchased bundled mortgages..............some good, some bad. MOST GOOD.
When the housing market started going belly up, and people STOPPED paying their SILLY loans.......you know balloons, or Variables that shot up an extra 2 or 3 percent, when the person was ALREADY paying WAY MORE THAN they could afford.........those mortgages went BAD. AND they will STILL STAY BAD.
THEN banks, in an effort to make some of the money back started selling the mortgages or homes for CUT RATE PRICES.........so now that 1/2 million dollar house is only worth 300k or 400k. BUT you know what.......it is STILL WORTH 1/2 MILLION. THIS is where the bailout may actually help the government.
If the Bailout actually is used to purchase the bundled instruments, and to prop up banks that purchased these bundled instruments, the government stands to make a TON of money.......Maybe DOUBLE their investment.
While I HATE the bailout, if the AMERICAN TAXPAYER can see a return on this investment in the next 12 18 months, then it was worth it.
Now, with regards to the BIG 3. We're giving the money to MEET PAYROLL, and to pay pensions, etc, etc..............NO WAY do we EVER GET IT BACK.
They say it is a loan, but in reality, if the go belly up, we LOSE IT ALL........TOTAL BS. LET them FAIL, and file bankruptcy.......
Once the FILE bankruptcy, give the WORKERS an additional incentive to stay around through bankruptcy, WITHOUT the UNIONS...........that may actually be a better use of 35 BILLION, instead of giving it to a bunch of LOSERS who think they can run a company..........
BTW.......the LOSER in charge of GM very nearly put Home Depot out of business.......BEFORE the fired his BUTT.
Later,
Geo
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