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Originally posted by SignyM:
SOME home loans were unaffordable. They got bundled up into CDOs and sold to BankA A, who used them as assets and 20X leveraged that money to InvestmentFirmB, who used THAT as an asset and 35X leveraged it to BankC. Meanwhile, InsuranceCompanyD sold insurances on those CDOs to BankA and InvestmentFirmB, and 35X leveraged THAT money to InvestmentFirmD!

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Originally posted by SignyM:
FWIW, I was invited to a tea party, by a left-wing group. Too bad I had to work that day.

I see three sides to this argument:

1) Status quo. Continue on the course BUSH started, and bail out the big banks, insurances, and corporations. Go even further into debt.

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Was against that, from the start

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2) Get pissed off about taxes and "big government", stop ALL stimulous spending. Let banks, insurances, businesses, and improvident people all fail.

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Was FOR that, from the start

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3) Require that government spending be redirected to people not corporations. Stop shoveling money to the rich.

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Why should there be ANY new spending ? Seems to me , that's the main problem. NO NEW SPENDING!

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Originally posted by SignyM:
I have the same question!

I think the current approach is horse-puckies. (And that's an insult to horse-puckies everywhere.) Tell me where I'm wrong in my understanding: SOME home loans were unaffordable. They got bundled up into CDOs and sold to BankA, who used them as assets and 20X leveraged that money to InvestmentFirmB, who used THAT as an asset and 35X leveraged it to BankC. Meanwhile, InsuranceCompanyD sold insurances on those CDOs to BankA and InvestmentFirmB, and 35X leveraged THAT money to InvestmentFirmD!

Now, those few original bad loans, which may have poisoned $10million, has suddenly leveraged into a $50 TRILLION dollar problem!

WOULDN'T IT HAVE BEEN FAR CHEAPER TO RENEGOTIATE THE ORIGINAL BAD MORTGAGES, EVEN WITH GOVERNMENT SUPPORT?

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It's the end of the world as we know it, and I feel fine.

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2) Get pissed off about taxes and "big government", stop ALL stimulous spending. Let banks, insurances, businesses, and improvident people all fail.
Was FOR that, from the start

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3) Require that government spending be redirected to people not corporations. Stop shoveling money to the rich.


Why should there be ANY new spending ? Seems to me , that's the main problem. NO NEW SPENDING!

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Originally posted by SignyM:
Kwicko, it would have been far cheaper even if the government had simply BOUGHT the goddamn loans from the banks at 85% value and renegotiated with owners themselves. By the time they're done trying to fill in all of the (leveraged) losses which have been multiplied and remultiplied through the system they will have spent an order of magnitude more money than the original problem!

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It's the end of the world as we know it, and I feel fine.

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Originally posted by Kwicko:
Well, yeah... I'll grant you that, Signy. The only reason I even bring it up as an idea is because to a - ahem - certain bunch of people around here, buying the loans "for the homeowners" is going to sound an awful lot like "socialism". Never mind that the loans would be bought, then renegotiated, and they would be paid back - or at least their REAL adjusted value would be paid. All some people would hear is the "buying the loans from the banks" part of it, and they'll never go for it.

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