The bailout plan gets worse and worse

MommyToAshley wrote: I have been against the bail-out of banks from the beginning. It has opened a lot of doorways, and this is just the beginnning. Insurance companies are now wanting to be bailed out. http://www.washingtonpost.com/wp-dyn/conte...8102401715.html

I also heard mumurs that auto makers are wanting to know why they aren't being bailed out now too.

Whatever happened to companies and people being responsible for their own actions?

cameragirl21 replied: Wish someone would bail me out if I made some bad decisions financially....
Sorry but I have no sympathy for banks...they shouldn't have lent money to people whom they knew would not be in a position to buy as much house as they were seeking.
I know someone who is in foreclosure on a house that she owes 275k on and it's now only worth 200k. She is also a single mom of 2. She currently makes 35k a year and says she can't afford the payments but tells me that when she bought the house she was making 45k. How can someone who makes 45k think she can afford 275k in mortgage and how in the #$%#$^%$ did the banks think that she could do that? This makes me so angry as she is now losing a house she never really owned and the banks want to be bailed out for this?

punkeemunkee'smom replied: It (the bailout) is not what a free enterprise society is based on! There will always be people with money and they WILL stop the market slide eventually by buying stocks when they reach a low that the rich feel they can make money on either way....The Bailout was a BAD idea! It irriatates me to no end!

msoulz replied: The "big three" are getting $25 billion. I don't believe it is enough for a bailout but it is a nice chunk of taxpayer change.

I think we hold equal blame with the financial institutions for the mortgage issue. Be it greed, keeping up with the Jonses, or whatever we lapped up the hooey they sold us about how much we could afford to pay with that tiny little rate that adjusted up quickly instead of us deciding what we could afford. And we bought into the GREAT idea of mortgaging 100% - 120% of the value of our homes because real estate values ALWAYS go up!!

My rudimentary understanding is the trouble with allowing the financial markets to tank is they take the cash with them. If cash is in short supply, interest rates go up, businesses can't afford to borrow and can't pay their employees, they fail, more jobs are lost. It's a very bad cycle with many people who truly are innocent in the whole thing getting burned.

So IMHO we should all be angry with our government for legislation that allowed the banks and such to give those awful loans (to promote homeownership) and at ourselves for spending way more than we earn. And the banks who set stupid policies and compensation packagest that reward their people for talking ignorant people into debt that puts them over their heads.

Of course my rant does not consider folks who have financial troubles due to job losses or other unforeseen hardships - that is part of any economy.

Sorry for the hijack - hopping off my soapbox now . . .

lisar replied:
The company I work for is in trouble and I dont see anyone helping us, so I agree they made the decisions to use all that money so why do we have to help them.

MommyToAshley replied:
I agree to some extent. We should be angry that there weren't more regulations in place. But, yet, people should be responsible for their own decisions. I would have loved to have a $500,000 home. But, instead, I live a fairly moderate life, without a lot of extras -- we are financially responsible and don't live beyond our means. And, yes it angers me that my tax dollars are going to bail out those (individuals and companies) that didn't make the same sort of decisions.

The same goes for these banks. The banks promoted these loans purely out of greed -- they should fail. If we had not gone through with the bail-out, there probably would been even more credit avialable now. There would have been some buy-outs and there probably would have only been one or two major banks, but we would not be in the situation we are in now where the government has interests in our banks. I don't believe the economy would have crumbled, I think that was a scare tactic to pass legislation. It may have taken some time to recover, but we wouldn't have been in the mess we are in now. And, we wouldn't be giving money to the same people that got us in this mess in the first place.

Like you, my rant doesn't include those that have lost jobs. There are and should be programs in place to help those folks.

msoulz replied:

I have to say, it did seem to suddenly appear out of nowhere. But it is an election year which means several things - no one wants to talk about bad stuff unless they absolutely have to. Lame ducks don't necessarily want to hurt the next guy running for office. And the current senators and representatives want to end the session so they can go home and campaign to keep their cushy jobs. So I wonder how much of that played into the timing of this "crisis"?

But I do know the cost of lending is increasing even for those with good credit as the LIBOR rate has been near or higher than prime. That messes up the spread for the banks. And banks I think are cautious lending to each other. So the theory of the money supply "drying up" I believe may be a sound one.

It is a mess for sure.

MommyToAshley replied:
You're right -- I guess we never really will know for sure what would have happened. We just know things are a mess now. I just hope going forward that there is some accountability that goes along with all the money.

I think I am mostly annoyed because I would love to move into a different area before the next school year. Both DH and I have excellent credit and could probably get the loan, but I doubt that we could sell our existing home and we surely can't afford two mortgages.

msoulz replied: Yes, accountability, absolutely!

And I hear you - we too live below our means, have excellent credit, and that pretty much gets you nowhere these days. But oh well, I am so thankful that we live the way that we do because if one of us loses a job we will be OK. I guess that is my reward - hopefully one I will not have to collect upon though.

gr33n3y3z replied: I have no sympathy for any of them
They got themselves into now get yourself out of it

See they opened a huge can of worms dang idiots

luvmykids replied: I don't agree with the bailout one bit. Nobody bailed us out when our company went under. It was our own mistake to let someone else "run" it and trust them with it, so whether we actually made all the bad decisions that led to the downfall or not, it was still our responsibility.

I will say one thing about homeowners though....I don't think it's fair to make a blanket statement about homeowners in trouble. I know many who bought less house than they could comfortably afford, put money down, didn't refinance the heck out of it, etc and are in trouble now because of other factors. I know the majority of folks in trouble may have asked for it in some way or another, but not all of them did. It's amazing how fast your savings goes when there is a surprise job loss or any other number of financial "devastations".

Hillbilly Housewife replied: Thing about banks... they lend out money they don't actually have, which is a way for them to make money.

But if they don't actually get paid back, then they actually lose out on the money they didn't even have in the first place.

or if everyone takes a large chunk of their money out, then the banks no longer have the money to pay out the funds that they thought they would get back, funds they didn't have in the first place.

It's stupid, really, and no wonder that they need help. if they don't GET the help, then not only are the banks screwed, but everyone who has money in those banks are screwed as well... if those banks go down, they're going down with the money they have in them, YOUR money.

Nina J replied:
I have been hearing of a US recession and possible global recession since the beginning of the year.

I don't think it was sudden. There were significant warnings.