So about this U.S bailout.
 

We in Canada are about to start tossing money at everything that moves too.
I was just wondering with half the bailout money in the U.S handed out does anyone know a single actual person that has been helped by the first 350 billion.
Not making a statement either for or against it I would just like to know if anyone knows of an actual house, job or person that has actually been helped.

"job or person that has actually been helped"......
I am bookmarking this too see the answer too

Uhmm from what I understand... None of it has helped.
Money has not reached families in Foreclosure or to assist in fixing anything so far.

From what I understand alot of the money is going to banking employee's offshore in Citi Group, while there was an attempted acquisition of a corporate french jet.

Know any people with savings in the bank or a private pension?

I just read an article that said Canada is in great shape.

http://www.newsweek.com/id/183670

I'm envious

I have 5 people in my family that lost pensions already and one faces foreclosure and another is upside down in home value mortgage payments.

Unfortunately, people confuse economic theory with fact in these discussions... hence the wildly different views and opinions and failure to agree.

The short answer is this:

1) The Congressional Budget Office estimated that they over paid for bank assets by almost 80 Billion dollars.

2) The original intent of the money was to buy bad assets from banks so that banks could continue lending and get the credit market moving again...

once the bailout was approved... the money was not used for that purpose and the majority of money that banks did receive was just sat on (and rightfully so) as they also wait to see how things play out since no conditions were attached to the money to dictate how it was to be used.

3) one could argue about indirect affects and that banks do much more than retail banking/loans and it was important to keep them afloat for a variety of reasons.. but in terms of direct, tangible benefit to individuals - there was/is none.

and here we are... banks want another 350,000,000,000.00 and Obama the Messiah is rushing a bill through as absolutely fast as he can again to spend over 1 Trillion dollars using the same rhetoric as was used to pass the bailout - "if we don't do this now... we all die and if you oppose it or want to debate it, you're an asshole"

... and the same people calling bush an asshole for spending and budget deficits which was the result of two wars and 9/11 for 4 years just can't wait to print and spend 1 trillion more dollars.

People are retarded and the entire system would be much better off in the long run had everything just been allowed to crash and burn and reset itself based on reality and actual consequences.

you can't be upside down in a mortgage if you buy a property that's within your means to begin with!

:2 cents:

Now imagine what it would have been like if banks would've starting collapsing one after the other.

sure- several wall street fat cats split up $18 billion of the bail out money amonsgt themselves.

Well what I meant is the homes they bought are no where near what they bought em for.

No, it wouldn't.

Because, you know... the economy wouldn't just reset. Numerous healthy companies would've gone bankrupt had the banks fallen. Tens of millions of people would have lost their jobs.

The result would have been complete chaos. And by chaos, I mean the violent kind.

Some great answers so far, but It seems to me the only thing that can be said in favor of the bailout is that it would far worse if the money was not thrown at it.
I dont see that as tangible proof of the package working so far.

Yes you can. Being upside down has nothing to do with being able to afford the payments, it has to do with the value of the home.

Exactly. That's the thing I'm thinking alot of people don't get.

This isn't SIM-Economy or some other video game....these are people's lives we're talking about here. Every 1/10 of a percentage point in the unemployment number represents "X" number of hungry kids or people forced into homelessness etc.
The idea that the government should do nothing because that's what someone's "philosophy" says is both callous and unrealistic.

Alot of rich republicans in gated communities would be watching their neighborhoods burn down right now if we had done what they really wanted. :2 cents:

Really? you mean like the Great Depression? Violent chaos? The economy/financial markets didn't reset and the US didn't then go on to continue to prosper and thrive?

Sure you can. I have a friend that bought a house for 270K. He could afford the payments and put around 30K down when he bought it. Over the last three years the house has lost about 40K in value because many of his neighbors were people that bought houses they couldn't afford and then had to sell them or have them foreclosed on. All the for sale houses dropped the value of his house by around 40K. So he is now upside down in it. Not by much, but he is upside down.

Whoa. Go buy a few history books, right now.

i misread it and wasn't thinking.. i understand what "upside down" means in terms of for sale value vs equity. didn't think so many people would step up to correct me :)

but the thing that is irritating me most about the whole mortgage thing is people believing they are entitled to live in properties that they should have never been allowed to buy to begin with and are demanding that my tax dollars pay their bills.

He's not interested in the truth, he's interested in being right.

You'll figure that out soon enough if you continue in the futile exercise that is debating him.

Well, if he's interested in being right, a good start would be for him not to say utterly stupid things. I mean, his view of the Great Depression, its effects and how it ended should be enough reason to jail his high school history teacher.

Although, I suspect he might've been homeschooled...

giving 150 billion to a company worth 15 billion never helps. but people dont care. they think it "saved jobs". they are just to stupid to realized what just happened and it will be too late when they finally wake up.

How they lost it?

i guess you are assuming that dumping 1 trillion dollars we don't have into a wide range of miscellaneous bullshit is going to somehow make a massive difference faster than the economy could recover on its own, you might see things differently. history has nothing to do with today, today's global economy, today's global financial markets. if we were a still a world full of button factories and shoe factories it would be different.. that's not the case anymore.... or if you want to argue that WWII - where endless dollars was pumped DIRECTLY into factories/production is somehow comparable to today's plan, you might want to rethink that as well.

it can also be argued that the "Great Society" did a great deal more harm in the long run.

otherwise, i was simply saying that economies recover... pure and simple.. you are arguing about the cost vs benefit which you can't argue because you really don't know any more than i do. but at the end of the day, people still consume and will consume - there will be jobs and there will be an economy and it will recover just as it does from any recession.

since "truth" in this case means "agreeing with me no matter how idiotic i am or my arguments are because what i believe is the absolute truth" - i would have to agree with you in this case no matter how idiotic you are.

you see?... compromise.

i feel better!

I don't mean being right in the sense that you or I would mean that. I mean he'll be right whether he is or not, and will defend an indefensible position in the face of overwhelming evidence.
When it comes to debate, his opinion is Davy Crockett and the facts are the Mexicans.

Like the people who are out there saying that this mortgage crisis was caused by Democrats wanting poor people to own homes....or that the financial mess is because of too much government regulation, not a lack of regulation....and that FDR's policies didn't help us get out of the depression, they actually prolonged the depression.
I guess they either have to say that, or admit that they've been wrong all this time, and the latter just doesn't seem to be an option. :2 cents:

I agree 100%. You have a lot of people who purchased homes that were way out of their price range and didn't look ahead. When the interest rates went back to normal they were screwed and they took a lot of other people down with them. I read that about 25% of the homes that were being foreclosed on were second homes. So I think a lot of people bought another house figuring they would flip it and resell it or rent it and get rich and they weren't thinking.

In a town next to mine they had some pretty big growth and over the last 6-7 years built two huge new housing complexes. One of them had houses that started at 300K and went to around 350K. A friend of mine bought one of the 300K houses and the entire first phase sold out before they even had it built. When phase two came around they raised the prices. Same houses, same area but now they were 375K and 425K and most of them sold out before they had them built. Now you drive through there and literally every third house if for sale or has a foreclosure sign on it. My buddy got screwed in all of it. He got divorced right after he bought the house. As per the settlement he had 2 years to either sell the house and split the profit with his ex-wife or if he kept the house he had to pay her half of the equity value of the house when the divorce was drawn up. At the time of the divorce the house was worth close to 350K. Two years later it was worth about 270K. He tried to sell it, but couldn't get an offer above 250K so he had to refinance and dump every cent he had in savings in order to pay the ex her 25K and he was told by the bank the reason for his house's decline in value is the number of for sale and foreclosed on homes in his neighborhood.

And that's my cue for leaving this thread, since there obviously is absolutely no point in discussing this issue with you.

See what I mean Libertine?

Since you challenged his version of history, he wouldn't admit to being wrong about the violence and chaos of the Great Depression or that he was wrong that the market reset itself and recovered on it's own.....instead he changed the subject to how things are different today and then went off on a bunch of different tangents.....all the while never admitting he was wrong before or that he didn't know what he was talking about.

My suggestion is, if you have some time to kill, try pissing into a fan or spitting into the wind, those activities will be more productive uses of your time.

When are people going to get it. THIS has NOTHING to do with people buying houses they couldn't afford. Sure it was a very small fraction of the problem. If you have houses increasing 10% a year and wages stagnant where do yo think that ends up? The real problem is and was derivatives/CDO/CDS. There are 1.4 quadrillion in derivatives floating around the world. This is the problem. None of these extremely rich folks/companies want to eat their loses so they are taking everyone else down.

A lot of truth here. A friend of mine and I were talking about this the other day. I had read that the average wage in the US is $16 per hour. The average house in the US costs 180K (obviously both can vary dramatically depending on where you live, this is the national average.) At that rate the average wager earner cannot afford the average house. No good can come of that.

I won't be surprised to see the entire house market deflate and stay down for years to come.

So my guess is no one really knows an actual person who has had their job, house, investments or anything else saved.
I know that this is not the big picture debate of should have, could have, or who did what and when.
But still there must be one actual person who can say the bailout saved me.
Other then Wall street bankers.

I own a small construction company. In 2007 I had 15 people working for me and a couple of other companies subing from me. I am down to 4 people and no subs. This year is going to be worse then ever.

The great depression lasted for ten long years.

Were it not for WWII the conventional wisdom is that it would have lasted a hell of a lot longer.

And, while we're on the subject of WWII, consider if you will that had the depression been shorter and/or milder it's quite possible that there never would have been a WWII. Hitler barely had enough support to come to power as it was and Japan's aggression in Asia was (in their eyes) about gaining enough natural resources to become economically self-sufficient and thereby depression proof.

Trust me, if the world sinks into another great depression what follows will be damn ugly.

Perhaps even as ugly as it got during the last one :(

I honestly don't know anyone that has been directly impacted by any kind of bailout. I don't know anyone who's job or house was saved. I do know some people that have been hurt by the recession, but nobody that has been helped in any way by a bailout.

There's a new film out for you Canadians but US MX people and well anyone really should watch it.

The Nation's Deathbed
https://youtube.com/view_play_lis...69FEA670120275

Til your means drop out from underneath your feet thanks to the economy. I'm living that little nightmare right now. I made the smartest decision I could make, except that it was founded on the economy not taking a tremendous nosedive that would even affect my industry (the domain industry) and the fundamental "truth" I had always been told that "real estate is the best investment you can make". Yea, how about going down 40% in less than 2 years after buying on an already down market? After putting 20% down only to watch that money vanish into thin air?

Is Obama or any of these bailouts going to help people like me? Nope. I didn't get suckered into a shitty loan nor could I not afford my house when I bought it, and I'm a white mid-20's aged male, so I'm probably fucked but we'll see!

And to answer the OP, no - I haven't heard a shred of anything done with that money whatsoever. $350 BILLION...enough to make 350,000 people millionaires. Or if you look at all the govt spending/bailing out overall throughout all this, I think someone had mentioned in another thread that 90% of mortgages could have been paid off. It's just insane, and they're not going to stop with this until the dollar bill is worth so little that we'll all be wiping our asses with them.

yes, FDR in fact didnt save US economy, it was war, with US being a big supplier of goods to the rest of countries during war.

but what makes you think the GD2 isnt on the way to repeat? all those stimulus plans ?

so stimulus isnt probably going to help at all in the long term, if banks arent restructured.

cause what they are doing nowadays with banks is to make sure the recession/depression will be long.
the current bank system is full of zoombies pretending to be still alive by accounting tricks - thats the fact I have from non-mainstream bank analysts (who sucessfully targeted dozens of already failed companies months or even year before they failed) and who are 99% ahead of regular economist analysts

Wow! Good for them. :)

I hear that Ken Lay had to pay for his own A/C in hell. This whole economy is shit.

the TRUTH is that nothing should have been done, no bailouts of anybody any industry - where on god's green earth is it written or decreed that because you are born on the soil of a country named the United States that you deserve and are owed the affluence to own a single dwelling home, two cars and all the shit you see at the mall? it's not - but that is the mindset of a big majority, this sense of entitlement that if they float through life and are willing to make the supreme sacrifice of working 40 hours a week they deserve 'the American Dream'.

the only way to change that thinking is to understand that dream isn't guaranteed or owed, don't fucking drop out of school at 17 and start knocking up chicks and littering the world with more losers, marrying and divorcing and expecting some mighty corporation like General Motors to reward your failure with a job that pays 30 dollars an hour for doing work a trained monkey might be able to do and certainly a robot can.

Tough times build character, you'd see people whipping themselves into shape, teaching themselves and learning new skills, becoming entrepreneurs, corporations more on the ball, more innovative, if what should happen - happened.

Corporations need to be held accountable, Joe SixPack needs to be held accountable, politicians need to be held accountable, Wall Street held accountable - racking up trillions of dollars of more debt certainly isn't gonna fix shit - because it will do nothing to solve the fundamental problems that drove the economy off the cliff.

Nobody wants to take the bad tasting medicine. They want a Messiah to fix it all up. Obama surely isn't that and nothing is going to be fixed.

And I'm not a right wing oriented person really. I've never bought any of the rhetoric and blackmail coming from the rich that taxes and government regulation will stifle growth and investment - where are they going to run off to? Canada? Europe? :1orglaugh
They need to pay their fair share - why there's still no flat tax is beyond me. But to blame this whole catastrophe on Wall St, the corporations, the rich - no way. There's 50 million or so morons out there who deserve their fair share of the blame.

People won't starve, there will be roofs over their heads - they just won't have a 52" HD TV, cellphones for their themselves and their kids, restaurant meals - boo fucking hoo -

I knew kids growing up who never ate in a restaurant until they were living on their own and making a living. Their families got by on what the old man earned. And the old man was always inevitably some dude who dropped out of high school, got married young and had a bunch of kids and all he was qualified to do was some retail salesman job or low level office job. The lucky ones got decent paying factory work.

Mutt, thank you for that awesome response. Good point regarding the "entitlement mentality." This is what permeated BOTH the Republicans' and Democrats' turns in dealing with this problem. Greenspan, under GW Bush, supposedly "managed" the Dot Bust bubble. He ended up creating a larger bubble. It burst now, so Paulson tried to "manage" the economy again with the first round of bailouts and that didn't work. Now it's the Democrats' turn to talk about managing the economy and get it out of this hole.

The truth is, Greenspan's 'fix' for the 1987 Wall Street short term meltdown cemented the notion that through active government maneuvers, the economy can be 'managed.' All the talk of "soft landing" or "managed recovery" proliferated. People began to lose sight of the fact that, yes... there is such a thing as a business cycle and it's okay--that's how the market corrects itself. People get greedy. They get owned. Market corrects itself. This government 'management' of the business cycle (and the extreme HUBRIS this represents) is really the HEIGHT of that entitlement mentality you described below.

I think at least at this point we are in better shape in Canada due mostly due to the fact we have been paying down our debt for the last ten years and the fact that our housing loans and banks are very heavilly regulated by the goverment so no sub prime mess or bank collapse.
However on the job front we had the largest one month job loss in 32 years in January.
Personally I worked at Nortel Networks for many years before the teck wreck my department alone went from 6600 people to 129 the company as a whole went from 106,000 to 26,000 now they are in barnkruptcy and I guess I was lucky to get out with a good severence package at the time as the employees are now considered unsecured creditors and may get nothing.
We are now following the U.S lead due to a week minority conservative parliment being driven by those who think the sky is falling.
I can only assume our bailout will be as effective as the U.S plan
Can you imagine if all that money was used to pay off our morgages or at least help those with high interest, cap credit card interest to something less obscene?
Or even offer employers in hard hot sectors tax advantages in the form of payroll tax to keep an employee around, might have saved a few at least.

I forgot Mutt,
Fantastic post a great read and perspective.

Buying a house at the top of a historic bubble because someone told you that "real estate never loses value", that "your home is the best investment you'll ever make", or because your neighbor was making a fortune flipping condos or because the real estate stand at B&N had 3 whole sections devoted to making a fortune in real estate is the mistake of one person only. The buyer. You have to do your own research in the purchasing of any asset whether it is a home, a stock, a bond or an oil future. if Cramer recommends a stock and you buy it and lose money whose fault is that? Some people will research well and others won't. Some will succeed and others won't.

I remember being involved in a great debate on GFY in May of 2005 on whether real estate was in a bubble and would burst. Some believed it would, some not. It's interesting to read the debate in retrospect though. People were sure able to come up with a lot of rationalized reasons for why real estate was NOT in a bubble.
http://www.gofuckyourself.com/showthread.php?t=470170

I know some people who think the 401k system is broke because their 401ks depreciated by 50%! Instead of viewing the current crisis as an opportunity (Remember Warren Buffett's recent article "Buy American. I am!") they are viewing it as a failure of the system. All markets have 50% bear markets at some point. This is a historic opportunity. I think that difference in attitude probably goes a long way toward predicting future results. Those who see opportunity vs those who see permanent armageddon.

The 401k and the housing market beliefs bring up an interesting point. What many people are doing is stating a preference for a market that never declines in value. What would such a world look like? Housing prices always increasing at the rate of inflation and the stock market always increasing at maybe 7% per year. But that takes away ALL the great opportunities. The best time to buy stocks is when they are undervalued based upon their future cash flows. That is most likely to happen at the bottom of a stock market. The best real estate is a function of both time and place. Housing booms and busts bring opportunities too . me? I prefer the real world of booms and busts.

Let's put it this way.

If we get a repeat of GD1, odds are that we'll get a repeat of some, if not all, of the other shit that went with it.

In 1945 there was something like 72 million fewer people walking on the face of the earth than there was in 1935.

Methinks it might be a good idea to do anything, and everything, we can to avoid a GD2.

As far as the Great Depression. GDP and unemployment bottomed in 1933 and rose thereafter - other than a comparatively smaller recession again in 38 which went nowhere near the bottom in 33.
See chart. http://www.housingbubblebust.com/GDP/Depression.html

1934 saw a 7.7% rise in GNP. 1935 brought an 8.1% rise. 1936 brought a record 14.1% rise. This all happened before WW II.

too much to read

of course, I am not pro GD2 because I simply fear WW3.
But my critics are based on bank system, which is must thing to do and the sooner the better, exactly as the IMF head wrote:

"Its managing director, Dominique Strauss-Kahn, warned: "If there's not a restructuring of the banking system, all the money you can put into [monetary and fiscal] stimulus will just go into a black hole.""v"

and politics are doing their sure, that bank system isnt going to be restructured in the right way, since it would have to bring down all their (biggest) sponsoring entities aka WallStreet banks.

the right thing is to clean the bank system and if its not done, then the best outcome could be repeat of Japan "lost decade" or the worst outcome aka GD2.

at least thats what the smartests (who predicted current crises) blogging economists are writting.