BAILOUT [strike]STRUCK DOWN[/strike] PASSED DOW PLUMMETING!

Holy shit, do you have any IDEA what this will do to your economy? This is not the time to be cheering because your tax dollars are safe, because it WILL come back to bite you in the ass. Yes, the banks have been acting like kids who got their hands on daddies credit card for the first time, but you should be beyond laughing at them, because you're now dealing with preventing the downfall of the ENTIRE economy, not just the financial section. It's the Great Depression all over again (you know, when your government couldn't agree how to help out of fear of some financial socialism, leading to the collapse of the entire system).

How ya doing, buddy?

Don't think that it'll happen Deni, seeing as politicians lack the spine to make decisions that actually matter (just look at the crisis in Belgium, that started a year and a half ago), especially with an election coming up. I would have expected that everyone would get the seriousness of the situation by now, but the current situation shows that I'm still a bit too naive.

There's nowhere I can't reach.

Originally Posted by Zephyrin

I, for one, want this crisis to stay in the market. I DO NOT want to see the ripple effects. I didn't see this kinda hubbub from you guys over the stimulus package, which was aimed at low class citizens, and as we can now recall, didn't help a motherfucking thing. But it did cost 150 billion or more.

Has anybody figured out if we're just going to print the money we're loaning (decreasing the value of our dollar), or borrow it all from China?

Ripple effects will be inevitable, seeing as basically everything in an economy depends on banks, the only question is how severe they will be (and with no rescue plans the effects will only get worse). The problem is that these effects aren't immediately visible, it takes time to see the full impact of bankruptcies and lower liquidity on other companies who may not seem to be directly involved, but who will get hit nonetheless.

As for where the money comes from, I don't know the details of the US rescue plan, but we had a similar crisis with two banks in the Benelux over the past weekend. The governments of the Netherlands, Belgium and Luxembourg decided to inject 17,6 billion euro (which may not seem like a lot to Americans, but is a shitload of money for tiny countries). We actually reviewed the case for Belgium, which will be taking up the majority of the money.

-30% will come from the Federal government, but will not affect the budget, since the government takes a loan at the Federal Investment Company (an institution created for these purposes, that is funded by using money that were set aside as a buffer against conjectural difficulties).

-20% will come from the Flemish, Brussels and Wallon government (three of the regions that Belgium's divided in, don't ask me to explain). They will get the money with a similar construction to the Federal government.

-20% will come from municipal councils, who will not use tax payers money for this, but funds generated out of their participation in public companies, like Suez (biggest gas company in Belgium)

-The rest will be provided by institutional shareholders.

As you can see, the impact on tax payers money will be minimized, and spread over several years, to reduce the shock. This is for a specific case though, so I don't know how the US government planned to fund it, but I guess that it would be a similar construction.

Originally Posted by Sassafrass

Where did you read that?

Shin, what did you want us to do? I mean, the alternative was to let the government bail out the banks for their stupid mistakes and let the American people pay for those mistakes?

I'm curious what you think of the alternative, had the bill passed. Not because I want to argue, but because you're more versed in this all than I am.

Both ways you look at it, it's a shit situation. I wish it didn't have to affect the rest of the world.

That is incredibly short-sighted of you Sass, it WILL have an effect on the tax payers money, and the only way to reduce the impact is to come up with a resolution like the rescue plan as fast as possible to minimize the impact, since waiting will only cause more troubles, not just for banks but for the entire economy, and future rescue plans will only get more expensive and riskier. Yes, the banks are at fault here (although not completely, but that's a different discussion), but just saying that they got in to this mess on their own means that they have to get out of it on their own is just stupid, because it should be clear to everyone who has watched the crisis over the past year or so that they CAN'T get out on their own.

As for what would have happened if the bill had passed, this is only a guess, but the markets would have calmed down, even remaining stable for a couple of days, before they would start to sink again (You can't prevent this, since the crisis goes way deeper than just a couple of bad debts that need to be cleared). But in the meantime, not just the banks, but a lot of other companies would have gotten some leeway, and they would taken the opportunities to guard themselves against further trouble. It would have helped to show people that something was being done, and it would have served as reassurance for people involved in financial markets.

This thing is sticky, and I don't like it. I don't appreciate it.