October 1st, 2008
03:53 PM GMT
Share this on:

HONG KONG, China – "A non-perfect plan is better than no plan at all." So said International Monetary Fund chief Dominique Strauss-Khan in a recent interview. He was talking about the amended and reworked bailout plan going before the U.S. Senate.

But even if the plan is perfection itself, and the credit markets start trusting and loving each other again, we are not out of the woods. Not by a long shot. We then come to the next depressing piece of news: the real economy.

Take a look at this number. It was lost in the hullaballoo of the Dow's rise and bailout hopes yesterday. U.S. house prices in July were 16.3 percent lower than they were in July of last year. And house prices are also falling faster. The much-watched Case-Shiller home index, released by Standard and Poor's, reported the price of a home in the 20-city nationwide index fell 0.9 percent in July, compared with an 0.5 percent fall in June.

Overall prices are are now about 20 percent down from their peak in July 2006. And the really bad news is that many economists now say the fall may not stop until mid-2010.

That could be as much as another 20 months of falling home values, assuming the financial crisis is solved sooner rather than later. And that's the problem. The millions of U.S. homeowners were the backbone of the consumer spending boom that led U.S. economic growth. They're now AWOL. They aren't spending because not only is the value of their biggest asset disappearing before their eyes, they are also worrying increasingly about their jobs and their mortgage rate. Who's going to buy a new car with that in the back of their mind?

And there's no one else to pick up the spending mantle. We've seen the government attempt to kick-start the economy with a tax rebate a little earlier this year. That boost lasted all of a few weeks.

So bring on the bailout. It's just the start of a long and painful road to get the world's biggest economy back on track.



soundoff (52 Responses)
  1. Ana Maria Mello

    There is a saying in the USA that says "those who dance must pay the fiddler". It seems to me that now a lot of people are asking folks who were nowhere near the dance (a vast majority) to share the fiddler's bill. Although I am not particularly knowleageble about US financial ways, I have always heard that weathy people had many shelters not to pay taxes, so , if that is true, I expect a lot of people who did not dance and do not have enough to have shelters and other stuff will pay the bill all on their own.
    I am sure we will all suffer without a bail out, a lot of it in third world countries like mine, but I for one, prefer to sweat a bit and just re-arrange ourselves with true economics (meaning productivity over just paper especulation) than forever be gambling on saving plans to keep the so called "international peace"

    October 1, 2008 at 4:33 pm |
  2. Margaret from Fl

    I experience this political mess as extremely depressing. The American People gave their response but that is never good enough. Is this a democracy?

    You can't rename a bad bill and add on more expenses to make it into a good bill. This is an issue of not obtaining more feasible options and a panel of experts to address the issues rather then another bill to rise up our debt and destroy the economy.

    It's the American way. We are afraid of intellectuals so we elect intellectal pygmies that proprogate fear and panic when things go sour. No one mentions that the expense of a war that was started upon lies may be at the beginning of this problem

    I was an instructor in Honduras in 1975 and I can now say that the U.S. utilization and instigation of panic and fear is a far superior then the sub machine guns that was prominent on every city corner there.

    We are definitely suffering from a crisis of intelligent leadership in both parties.....
    .

    October 1, 2008 at 4:46 pm |
  3. d. griffith

    We do have a plan, it is called Non-Bailout-Plan. The road is going to be painful either way. So, It is best to save money not wast it on a bailout.

    October 1, 2008 at 5:31 pm |
  4. Patrick of Ohio

    Seeing as housing prices might continue their drop into 2010 I think it is time we realize buying up bad properties and other assets hoping to sell them might be a worse idea than doing nothing at all. I think we do need a bailout, but it needs to be better. I know we can do better because we're America and we can do great things. It seems to me if we're going to buy up mortgages we need to do it when they're near their lowest so we don't risk losing more money. Ron Paul, who predicted much of this mess, thinks we should liquidize the assets and drive the prices down, and it's about time we take Ron Paul seriously because he foresaw this, and might foresee a soultion. I think this might be a good idea. Perhaps if we dropped the prices and then bought them up we would see an even more significant and safe gain. Regardless of if we wait and bailout or bail them out now, our government still has ignored a fundamental issue of this crisis. That fundamental is accountability. It is high time we hold these failed businessmen accountable for their decision, and if we choose to balout their businesses we should make sure that those that failed us lose their jobs. Many of us have lost jobs and businesses due to the credit crunch, but when it comes to the banks and lenders, they are the direct source of this. Eliminate them and provide huge provisions against predatory lending so that these people don't do this again to us. Investigate them and if nesssecary throw them in prison. It's kind of a slap in the face that the government is willing to put us all into the greatest financial crisis of our time but willing to allow these business executive scumbags in their million dollar jobs. If you want the people's support, don't insult them like that, do what's right and terminate and replace the failed leaders of these bailout businesses. Maybe give the ones struggling the most some extended time or debt relief while you're at it.

    October 1, 2008 at 5:56 pm |
  5. David White

    The bailout is unfortunately NOT going to improve the condition of an average American. Bail-out or NO Bail-out is NOT the real question. The real questions are:
    "How long can you squeeze middle class before they say NO MORE?"
    OR
    "How long the US Power Pool is going to favor a select few?"

    I hope NOT TOO LONG.

    Otherwise, an absolute disaster in the short term.

    October 1, 2008 at 6:00 pm |
  6. Jimmy Vazquez

    Here's a new angle on the financial mess.Let all the business who are in trouble due to greed,poor decisions,etc.. FAIL. ie: get what they deserve.. Pass the appropiations bill for about 1/2 the $700B. Take that money and boost Social Security benefits for those of us who lose IRA funds and whose retirement plans get into financial because their investments lose value. This will get the bucks to those who have done nothing wrong and prevent the big business greed mongers from further screwing the American working man...

    October 1, 2008 at 6:14 pm |
  7. Tom Schrecker

    I suppose that it is correct to first of all try to stop the economic crisis from getting totally out of control. However, I feel that not nearly enough comment is being made about the real cause of the problem, which is not so much Wall Street greed but lack of regulation. In my opinion much of what has happened could have been largely avoided with just two regulations. First, a sensible limit on the percentage of mortgage loans – 60% at most in my view.. Second, that packaged derivatives, for which it is not possible to determine the underlying value, should not be permitted. A number of further regulations are obvious even to a layman but I suspect I've more than used up my space!

    October 1, 2008 at 6:16 pm |
  8. bob Willard

    Why not have an income tax, that has no deductions. Starting with a worker age 16 and ending with retirement. The Internal revenue people would have an easier job, and the rich would end up paying their appropriate tax. Presently the very rich have lawyers that use the tax laws to reduce their taxes to nearly nil. The poor and middle earners can't afford this lawyer help and pay full tax.

    I don't suggest that Company Tax on Capital pay taxes differently than now, but that the high income company executives pay a tax on any and all income they receive in a year with no possible deductions. That could lower the taxes for the lower income people.

    Next, the payments into Social Security have a limit per year. Most workers pay for the full year on their income. I propose that there is no cut off in paying into this fund. You earn you pay into Social Security.

    bw

    October 1, 2008 at 6:47 pm |
  9. Nick - Cary, North Carolina

    You and most other pundits do not seem to get it. The problem is not providing a bailout. The problem is handing over $700,000,000,000 to an administration that I would not allow to walk my dog. I could easily see them using all the money and making the situation worse.

    October 1, 2008 at 6:53 pm |
  10. Marty

    Wouldn't a good plan be to gather all the wealthy people in america who have millions of dollars, donate their money instead of trying to get the tax payer's who have nothing to pay for this bailout.

    October 1, 2008 at 6:54 pm |
  11. Robert

    The rescue effort should be kept out of the presidential race. Why has the Bush / Bernanke team been waiting for so long and telling things are okay?

    October 1, 2008 at 7:07 pm |
  12. ivan

    Ok, Mr Warren Buffet suggests recapitalizing bank and investement companies.. The Paulson Plan is based on a 700 Billion "budget".. I know the idea i am about to share may sound naive but am just wondering WHY could it not work.. I am simply looking for the reason that may not be put in place.. So there is the idea:
    Why cannot the US Govt inject /give 50,000 USD (amount could be actually even higher, jst an example here) to each US household, money that would be placed in a ad hoc bank account. This amount should be then split in two equal parts : 25,000 should be INVESTED in equities (whether only financial institutions or any listed company is to be defined) at the household's choice. The other half should be spent by the household either in the housing industry ( initial capital investment for the purchase of a flat or house) or over maximum of 12 months on any kind of purchase.
    As for the return on that "help" from the US Govt, the dividends on all those invested shares will be directly paid back through those same accounts to the Govt, until full paiment has been accomplished. Obviously it will cover only half the total initial amount and therefore dividend paiment may take pretty a long time, but i guess there are enough brilliant analysts who may be able to figure out the time frame needed for such reimbursment (based on historical ROI or dividend paiments of listed companies) .. This way, this is not a press print creating inflation. And it may tacle the two sides of the economy, consumtion / investment and production / supply ..
    And i am was carefull to use the household word rather that individual or person.. I have no clue as to the number of US households, but even if we take total population and multiply it by just the 50,000 i was refering to, we are still far away from those 700 billion bill..
    So.. just wondering.. Thanks for any answers that may not be sarcastic ..

    October 1, 2008 at 7:28 pm |
  13. Steve Black

    History has a way of repeating itself. The Great Depression of the '20s – '30s was due to a number of factors similar to what we are seeing today. Can someone in the US please open the history books and check the solutions adopted in those days? The $700b bailout is clearly not the solution. It will end up piling up more problems for the new government coming after George Bush.

    October 1, 2008 at 7:30 pm |
  14. ivan

    i just realized i missed a 0 in my calculations... so i guess i have the answer to my question..
    or the idea should be with 5,000 USD which is not great

    October 1, 2008 at 7:36 pm |
  15. frank

    This a plan that sounds like giving a shop-a-holic with bad credit a centurion card.

    Stockmarket rices and falls all based on hope.Hope is now a strategy.
    Yet I wonder who is buying these stocks. Stock sell-of. Well, who is buying and why?It seems to me there is still alot of money out there, with willing investors, who believe this thing will blow over.

    October 1, 2008 at 7:45 pm |
  16. Stephan Jaeckel

    A not perfect plan is better than no plan at all? Where is the deviding line between a bad plan and a not perfect plan? What is the difference betwen not perfect and bad? Who can tell?

    Fact is that no one asking for the bail-out today can tell how much shorter the crisies will be with the 700 billion bailout nor can they say what the difference will be between injecting 700 or 500 or 200 or 1000 trillion US-Dollars. No one asking for the bailout can even guarentee that the 700 billion will be enough or smoothen the crisies. No guarentee that they won't come back asking for more!

    Just as much as it was claimed that the US financial industry is as strong and healthy as is the whole economy it is now claimed by the same people that both can not survive without a bailout.

    The common thing about all of this is the lack of certainty not because the economy is unpredictable but because those acting are unable to tell a good economy from a bad one, can not estimate the effects of what they did or want to do. In addition they are unwilling to list criteria that would allow to measure the success of their actions, most noteably the 700 billion bailout.

    They claim it will stop share prices dropping and bring on new money to lend. For how long? Wall Street does go up and down and 700 billion are nothing compared to the money that flows around the world daily. Governments have too little money to influence the tides and truns of todays financial markets.

    What should be done? Ride the waves no matter how high. Keep your pockets closed so that you can spend and grow after the storm is over because that is the only sure thing: The storm will fade!

    Don't spend money when you do not know what you are going to get for it especially when you talk about spending 700 billion US taxpayer dollars. With US-Voters most likely allowing Congress only one big and bold move in this crisies this move should be only done after laws where changed and the the money will be spent under a new regulatory framework for consolidation and as an ignition for a new phase of growth,

    October 1, 2008 at 8:01 pm |
  17. mark

    Why should we be responsible for the bad decisions of others? They decided to own a home. Whether they understood what they were doing or not, they made the decision. No one ever buys intending to lose money. Does anyone think that if all those people made money they would send it to the rest of us who are being asked to bail them out? Some were crooks, some were stupid, some were greedy and all should be accountable for their actions. I have waited to buy a house because, seeing what I thought as madness and greed, I knew that the day of reckoning would come. Why should I pay?

    October 1, 2008 at 9:31 pm |
  18. ron

    Bob Willard makes a hell of a lot of sense - I have been for a flat income tax for at least 35 years - NO deductions - a straight out tax of say, 15% or so - that would be good for those under $60,000 per year and make the tax freeloaders have to pay their fair share

    October 1, 2008 at 9:51 pm |
  19. Jennifer

    American bravery, where it is ? Bring the "golden history" into the stars again and this is small money you are talking here.
    U.S can gain higher interest, real profit of the America.

    October 1, 2008 at 10:14 pm |
  20. omyword

    Please listen to the audio of a secret meeting between the Treasury Department and financial industry insiders. Read David Sirota (http://action.credomobile.com/sirota/2008/10/strategy_memo_turning_a_wall_s.html) and read Naked Capitalism (http://www.nakedcapitalism.com/2008/09/mussolini-style-corporatism-in-action.html) and write to your representatives fast. We do not want this bailout bill to pass. Please protest loudly. Tell your friends.

    Download the bit torrent recording of secret meeting conference call (http://thepiratebay.org/torrent/4418763) and listen to the Treasury Department and financial industry insiders talk about how the additions to the bill that the Democrats "fought for" are just shams (CEO pay caps, metering out the $700 billion in smaller chunks, etc.). They can ALL be ignored or worked around.

    Then watch the video at http://www.nextnewdeal.com

    October 1, 2008 at 10:18 pm |
  21. Mohd

    We (i.e. the rest of the world) are done paying for your (i.e. USA) mistakes. You are not gonna party with our money no more, if you don't get your act together and fix what you have broken, NOW. Otherwise, you won't need to stock up on toilet paper for a long time when we get done with returning all those dollars to you!

    October 1, 2008 at 10:20 pm |
  22. Nikki

    This bill, papered over with tax cuts to buy Republican votes, or otherwise is a hand out to institutions that should go bankrupt. They have failed. They should not be rescued by my money and continue on their merry way.

    I completely agree with Nick and Cary, when will the media stop focusing on how congress is going to put syrup on what is a mud sundae to make it palatable and recognize the people Congress is supposed to represent do NOT want it. They never wanted it and they will not support it.

    Where are the reports about the American government completely ignoring the people they are supposed to be representing and doing whatever the heck they want? That is not government by consent. That is tyranny.

    October 1, 2008 at 11:59 pm |
  23. Robert

    Well, I don't think it was congress so much as the bill not being ear-marked for the right places. I am not at all for writing a blank check but, I do agree that something needs to be done. Things need to be restructured. I did not agree to give a manager from McDonald's a loan to buy a $500,000.00 house. This hits me just as much or more than others because I am in construction. People flooding the market by flipping houses. There is a program on TV called flip this house. There is a problem with people wanting more than they can handle. What I would like to know is where are the people that are supposed to be in place telling them they can't have it because there income will not support it. I read a write up today that was put out by a man in the 90's. He had the fore-sight to see this coming. I would like to know where was the ones that was supposed to be watching for the signs, the warnings that had to be there. Which ones turned there heads while all this was taken place. They are the ones that should be held accountable. As for the problem at hand. I think money should go to the people and what I mean by that is to the banks willing to open there books and only after there is no sign of mismanagement then restructured the dept and then restructured the bank. All these managers and bank examiners living high on the hog need to be taken back a step or two. All the ones that has taken an incentive from all this bad dept that they put in place need to be held accountable. Most of that bad dept can be restructured on paper. I am all for drilling for oil in our own back-yard then putting my tax dollars in some foreigner's pocket. Put that money to work over here by creating more jobs. Lets think about ourselves for once and the people that work hard in this country and pay out there hard earned money. Lets make this nation work for us for a change.

    Yours Truly
    Tax payer

    October 2, 2008 at 12:08 am |
  24. W C Freed

    Bring on the bailout? That is the WORST thing we can do for the economy.

    Of course since the US is basically bankrupt and the savings rate is around zero (if not negative) all this money will have to be borrowed from China, Japan et al. So we will once again be expanding the debt (and credit) and printing money to "pay" for it (causing your 401K to be eroded even further by inflation). Yet the problem itself is caused by excessive credit primarily fueled by "subprime" mortgages and "home equity loans" used to buy SUVs and other useful consumer items.

    The market is now attempting to stem the credit expansion by making credit more expensive (see the Libor rate) which is what markets do when they get out of balance (spenders vs. savers in this case). We need to cut back credit expansion and spending and live within our means because WE HAVE NO OTHER CHOICE in the long run and the sooner we start the more quickly we can restabilize and begin healthy growth. The "bailout" is a move in exactly the wrong direction.

    Of course it's no surprise that housing prices and consumer spending are contracting, they were wildly overinflated after 5 years of these shenanigans. I was always amazed that people making $50,000 per year were able to "afford" $750,000 houses when my wife and I (both working) were able to afford about 1/3 of that after 30 years of working and saving. The truth was, of course, that they couldn't "afford" it, it was all a Ponzi scheme.

    Nothing the government can do will prop up the housing market (or the "mortgage backed securities" derivatives). They can no more keep that house at $750,000 than they could keep apple prices at $10 per pound by fiat; no one will buy because they (now) know the asset is not worth that much.

    We need to let the banks that bet their future on these schemes go down and write off the debt (i.e., they are bankrupt). There are plenty of sound financial institutions (my local bank is one) that did not get into the subprime game and they are perfectly capable of continuing and making loans to service the economy as long as they are not prevented from doing so by the failing banks effect on the credit market.

    WAKE UP AMERICA! The bailout is just like playing poker in Las Vegas, you don't throw good money after bad on a losing hand.

    October 2, 2008 at 12:46 am |
  25. russ

    What a nice job of semantics changing "the bailout plan" to "rescue package", of course it's the same plan just a new name.

    CNN has been a puppet for this plan and keeps telling the watchers how much they need it, well, maybe it's CNN owners that need it.

    October 2, 2008 at 1:00 am |
  26. Matt R

    The saddest thing of all, to me, is that if this 'rescue plan' – that's what we are all supposed to call it now instead of a 'bailout' because 'bailout' is too negative – will, when combined with deficit spending for the Iraq War, hurricane relief and other causes, raise the US national debt to over $10 trillion dollars. When President Bush started in office 8 years ago it was $5.7 trillion. That debt will be paid by all of us, our children, our children's children and their children as well. We cannot keep spending money we don't have.

    October 2, 2008 at 1:37 am |
  27. mazen khoury

    What is America's credit limmit?

    October 2, 2008 at 2:03 am |
  28. Tracy T

    i am embarrassed by the lack of spine that the US government is showing. The proposed bailout (and I like the fact they are not trying to cover this up, it is a bailout) is a band-aid applied to a compound fracture.

    In Kevin Phillip's book Bad money, he documents how the Mortgage Backed Securities effectively amounts to a Ponzi scheme: Let's take a dollar here, shove it around and poof! you have five now! This is just one part of the problem. For our own part, we Americans shared in the house price rise gluttony that has fueled this economic boom. As Depression era children, my parents always said if you can't afford it, then you can't have it. Which is precisely what has happened.

    I would rather we struggle through this now, than leave this mess to my children and grandchildren.

    October 2, 2008 at 2:06 am |
  29. Dustin

    I don't understand. They are saying that this "bail out" is to help people with less than perfect credit to get loans.

    But is that the same problem that caused these companies to meet their demise?

    October 2, 2008 at 2:09 am |
  30. Eric Fisk

    Shame of the U.S.! We are nothing but one big "bubble" after another.

    -Eric Fisk
    American

    October 2, 2008 at 2:10 am |
  31. Ryan

    I can only say I am not surprise that the Senate pass the bailout bill, since the Senate is more in bed with all the lobbyists than the House. Especially with only 34 seats up for re-election this November, they feel they can justify this without suffering any consequences.

    I hope the House will do the right thing and vote down this new but same old bailout that people 'really' don't want. I do pray that the House member listen to what the people in their district tell them and not be pressured into all these negotiations and political bribes.

    I also notice they are really twisting their comments and numbers to say that people are all of sudden concern about Wall St. and want this bailout. I simply DO NOT believe this is true. They mentioned that the people calling their congress rep. are all of a sudden shifting in favor of bailout after the day of big stock market drop; however did the same people call back after the market had a record gain on the following day?! This is the same market manipulating the system to get what they want: FREE TAX MONEY FOR THEIR OWN POCKET.

    Either way, I hope the House member will have the ethic and decency to vote for what the people put them there 'really' want. I definitely will not vote for any member that voted for this bailout, and I encourage others who do not want this bailout to vote these corrupt officials out of office. This will at least show that there is at least some hope left in America, and that maybe people's voice can be heard.

    October 2, 2008 at 2:59 am |
  32. Rick Foerster

    Upon review of the Senete bill passage and it's "sound-bite" ammendments, I am concerned about the "golden parachute " clauses. To me it says that if senior corporate officers didn't lie or mislead about the current losses and their horrific business decisions, that they can be paid what ever they can get their board room friends to give them.. If you lie about making bad financial decisions, it is then and only then that you are criminally negligent.
    Whats wrong with this picture?

    October 2, 2008 at 3:28 am |
  33. Adam Todd

    As I understand it, the aim of the bailout plan is to free financial institutions from the high-risk investments that have caused the recent dramatic collapse of financial giants and reassure both investors and the public that further collapses are unlikely.

    The underlying cause of this crisis seems to be the increased rate of foreclosure seen across the country. Instead of purchasing these high-risk investments, could it not be possible for the federal government to reduce the rate of foreclosure?

    Could the federal government, for example, use the money for the proposed bailout to guarantee a fixed interest rate for home mortgages. The government could then agree to pay the difference in interest up to a certain percentage for a defined number of years.

    This might help struggling Americans keeps their homes in addition to reducing the risk to our financial institutions.

    October 2, 2008 at 4:56 am |
  34. Lisa

    The crash is coming. This bailout will not stop what's coming. Instead of having a crash this week, we'll just postpone it until next week with an extra $700 billion in debt that will have to be paid back by your great-great-grandchildren. Let's take our medicine and get it over with.

    October 2, 2008 at 5:31 am |
  35. Stephen McKenna

    It appears those who are screaming for the bailout are the very same people that created this mess to begin with.Those people wanted deregulation and a freewheeling market economy.They sown,now they ought to reap.I see no real reason to bail these people out.The US economy wont fail because of the failures of investment banks,the world wont end if the greedy brokers dont get their parachute.The bailout ought to be for those homeowners facing forclosure because they cant afford the interest payments,not some Wall st fat cat that will still be rich when all is said and done.

    And its high time the US consumer realizes you cant live on credit,it is time for people to burn their credit cards,switch to debit cards,and only buy what you can afford.Its time to break the addiction to credit.Its time for lenders to stop lending to those who will not be able to repay the loans.It time for people to stop spending and start saving.

    October 2, 2008 at 5:46 am |
  36. Charles

    All the House seats up for re-election – the House votes against the BOB (Bail out Bill)
    One third of the Senate seats up for re-election – onre third of the Senate votes against BOB, the rest for it.
    I was always led to understand that US Congressmen & women are there to represent the will of their constituents, not look after their own interests. The attitude of the vast majority of US citizens towards BOB is quite clear, so why not listen to them?

    I am in South Africa, and the perspective given by distance of the US Senate and House of Representatives is that of a bunch of hypocrites.

    October 2, 2008 at 5:48 am |
  37. Carol, So Cal

    I have not yet heard one commentator "get it." I'm about sick of hearing how this had to pass because we had to "do something."

    YES! We need to something – but not THIS. Craft a response, don't throw a knee-jerk response of $700B that we don't know will work.

    Do not let our senators and congressmen get away with this LIE – can't they THINK? Here's an idea:

    #1 – Suspend Mark to Market – Chris Cox can do it with a wave of his pen.
    #2 – Raise FDIC insurance to 250K
    #3 – Extend FHA type insurance over sub-prime loans, lowering their risk and increasing the chance for them to once again become marketable investments. Even if 10% (very high) defaulted, it would be $70B, 10% of what is now being proposed.
    #4 – Every institution that wants this insurance over their subprimes should be required to renegotiate their held mortgages that are deliquient – 5%, fixed, bringing all current. There – we hold Wall St. accountable for helping Main St.

    October 2, 2008 at 5:52 am |
  38. Roxann

    Excuse me? Does any not see what all caused this? Most the people who are losing their homes are those who should have never been given keys in the first place. It's called GREED people. It wasn't just the lenders/banks who did all this though they did a big part to aid the destruction of. If they hadn't made it easier to get into houses then you all would be screaming how the government is allowing the banks to keep the common American from owning a home. When in reality the common American lives in the here and now. Credit cards, loans, refinance to buy a new car every year and clear credit cards just to charge them up again. We all thought it was easy and could balance all the minimum payments. But 80% didn't understand that when interest goes up so do EMI's and then refinanced again and again till there was nothing left to suck dry. Yes we should let those companies suffer and be held responsible for not restricting people from taking out far more then they could afford. But not passing this bail out will only cause more damage. Stop looking just in front of your mirror and see there is a world outside your door that yes you too have affected. Vote yes but with more details and rules. It's our money that is going to save ourselves in this American mess due to our greed. So might as well now start making our self more aware and educated in what money we have to send out to fix what we help break.

    October 2, 2008 at 7:14 am |
  39. Peter Kramer

    The longer the tax payer waits with picking up the tab, the higher that tab will be. While blaming others, the tax payer is going to vote against anyone who would make them pick up the tab and, hence, the US will be in every deeper trouble even if costly wars were stopped immediately.

    October 2, 2008 at 10:54 am |
  40. Jo Marr

    I am amazed that Ben, Paul & George, seemingly qualified, brilliant minds, the latter notwithstanding, those in charge of the financial system and the country, did not see this coming, or did see it and did not speak out until it was glaringly obvious they had to. If I were an American, I would demand these people step down immediately and go into exile. I'm confused, but maybe someone can clarify, what is it exactly these people do in their positions? When global giants fall overnight, and they don't see it coming, how is this plausible? And the American people are to believe the powers that be are completely blindsided by this? I ask again, what do these people do in their job roles? McCain was not wrong when he said he would fire them on the spot. If you hire a security guard to watch your store and he falls asleep on his shift, do you keep him on, or do you give him a rescue plan in the form of a coffee machine, so he can actually see the store being robbed?

    October 2, 2008 at 11:25 am |
  41. d. griffith

    The Senate proved that stealing is legal. I wonder where is Robin Hood? I hope the House believe in equality. Main Street have to bail the water from their sinking boats without $700B, so should Elite Street bail the water from their sinking yachts without $700B.

    October 2, 2008 at 12:29 pm |
  42. bob wolff

    take a 200k mortage @8%. That nets 528k over 30yrs. Lets say the real estate market drops 25%. If you say 5mil mortgages will default (i heard this on CNN). I'll be nice and say they all resell at the lower price. So 150k @8% nets 396k (these are rough estimates). You lose 132k per mortage. The loss to the real estate would be 50k times 5mil which is 250billion. However, the loss to the financial institutions is 132k times 5mil for 660billion!!!!!. They aren't lending because they can't determine the actual prices for the homes, and their losses are staggering no matter what. How is buying their securities going to offset these losses? (it can't) How would the gov't decide the actual market value of the mortgages, they're not worth zero, but they [the financial institutions] already borrowed against the original values of the mortgages. So it not that the house is worth zero, its the loss thats there thats the problem. Am I missing something or did the gov't and CNN just get a big case of the stupids???

    October 2, 2008 at 12:45 pm |
  43. Sushant Gupta ,SG Analytics

    These events in US are being very closely followed by Emerging economies and specially the ones which have been resisting financial deregulation like India. It is almost perverse logic that the politics in such countries is getting a new lease of reasoning to defend their slow reforms and deregulations in the financial sector.

    While it is a perfectly valid to moot the idea of increased regulation in US to prevent excesses, these events should not be used by the 'wise politicians' of countries like India to justify increased regulations of even status quo.

    October 2, 2008 at 1:55 pm |
  44. Teleatha C Hailey

    Ok, we voted this issue down once, does Congress really believe we want this new revised bill as well? Come on, there was no real changes made to the bailout plan, there was just some sweeteners added to make it palatable. However, I dont think it was. yes, the FDIC insurance increase is a good thing, but ... why on earth would we want a tax break to make arrows for children out of wood, and tax breaks for the movie and TV Production? How about some better regulations on the money market? How about regulations on short selling? How about better protection for our pensions? How about some changes to better protect our mortages and homes? Does congress really believe issuing 700 billion dollars to ease the financial pain will solve the US economy problems? This plan does not help the everyday person, it will only bail out the rich business man and wall street, the one who has a lot of money invested, who truthfully, can afford losses, not the person who has very little to invest and is living pay day to payday just to make ends meet and are trying to keep their homes. Where are their tax breaks, where is their relief?
    Where is their changes? They lose, they lose everything, the rich man only loses money, these others lose their lives. We need relief for the everyday person, the people that really need it. People need to speak up! Who makes up the bulk of the USA? The common everyday hardworking, person! but we let the rich make the rules, I dont hear any congress person, president, CEO's, company presidents, senate people or other rich people stepping up to the plate to reduce their bonuses and pay to help out the situation. NO, they want the average US citizen to pay for the problem of the economy and this bailout.

    October 2, 2008 at 2:59 pm |
  45. frayedcat

    "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, AND THE MONEY POWER OF THE COUNTRY WILL ENDEAVOR TO PROLONG ITS REIGN BY OWRKING UPON THE PREJUDICES OF THE PEOPLE, until the wealth is aggregated in a few hands, and the Republic is destroyed."
    Abraham Lincoln

    October 2, 2008 at 4:03 pm |
  46. Uma in Liverpool, UK

    *rude words* I am sick to death of trying to explain to Americans, why this 'Rescue Plan' is urgently necessary.

    The rest of the world can see it. Some of you can see it.

    We're out-shouted by the Free-Market Fundamentalists (when did capitalism become a faith-statement?) shrilly screaming 'NO BAILOUT' without the first idea what will happen - is already happening - to the US, and global economies.

    I can't even say 'on your own heads be it, then', because that's not how it will play out.

    October 2, 2008 at 5:56 pm |
  47. Darwin

    Oh my God! I have just come away from a spanish posting board because of the drivel laden nonsense, only to find it is worse here. What a load of poetic licence packed rubbish. How can any of you begin to assume that you know what you are talking about. You all sound like a bunch of winging lefties that ate a piece of the cake but delude yourself that you didn't enjoy it, so you're not guilty.

    Credit is only bad when mis-managed, in the same way a train or a plane crash caused by human error is bad – so what do you do, eliminate planes 'n' trains from our way of life? No, we need them. The same with credit. Credit, when handled correctly, promotes wealth. Wealth, when handled correctly, promotes well being. Well being promotes peace. For those of you who are not really into that scene, your ideals shall be respected- but don't pontificate. Man's race against the odds and the elements has endured long enough to ensure that new technologies and medicine prevail through his eagerness to advance – it's all part of our evolution. Credit has been a very useful tool in more ways than one , it is essential, as it has been for many hundreds of years and you don't cut it off just because of human idiocy.

    Get this bill through, then let's talk about the 'human error' later and kick out the scallywags who abused the system (perhaps we ought to point a finger or two at all those wonderful (ex?) home owners who bought a $500'000 home on a $30'000 per annum income. Who is to blame in a case like this? The Stupid lender, or the lying borrower?
    Correct, both.

    It's not the system, it's the people, but we'll get round to that. Let's get stringent, not stingy.

    Oh, and one more thing, some of the people you see on news bulletins parading the streets with placards saying no to the bill, haven't paid a dollar in taxes in all their life – I know that for a fact.

    Get the bill through. In the worrds of, Del Boy, "You know it makes sense!"

    October 2, 2008 at 9:51 pm |
  48. Jose Crisanto

    Have you noticed how much bias is the coverage of Palin by CNN. I used to think that CNN had a strong commitment to inform us of the general facts based on principles and values. Now it seems that all of your correspondents and journalists , are so evidently for Obama, that are even willing to risk your own journalistic criteria and objectivity by informing only on the "questionable" side of every aspect of Palin's life. Obviously, It appears that CNN wants to make her look bad and would love to influence the image of the candidate and force good marketing on the other side. It makes me sad to have to read CNN. Now I question every news and article while before I used to trust CNN. Not any more. Not any longer. During these last months the media in general has implemented a silence conspiracy to trick Palin every time and opportunity you have an interview , in all out effort to put your preferred candidate in the White House. You may have an specific agenda that suits your preferences but you have no right to call your company independent and objective . It seems, from my must humble opinion that you are loosing your credibility in the must Rather style.

    October 2, 2008 at 11:08 pm |
  49. Eric Johnson City,TN

    I think the road to no where is on both patries, republican and democrats. You ask why? I say for not passing the Fair Tax. Fair- is equal treatment. Give us the Fair Tax and we the working class will rebuild the economy for the politicians who can't get it done. Let the citizens give it a whirl, pass the Fair Tax! It will almost fix the economy overnight. If you don't know what I am talking about read the book the Fair Tax Book by (R) John Linder and Neal Boortz! It's real and will get the job done. I've heard Ireland has a simular tax system and it works very well for them. What in the world do we have to lose!?!?Our so called leaders have already screwed us up, let the people of the U.S. take a shot in fixing it, the government has too much authority anyway.
    Get out of our way and let us fix it!!
    Sincerely, Eric from Johnson City,TN

    October 7, 2008 at 6:21 pm |
  50. Harold

    JOBS...that is what this is really all about. Why can't the average American pay his or her mortgage? Because factories and jobs are all offshore now, or are moving in that direction as we speak. What we really need are policies that reward the creation of AMERICAN jobs, both manufacturing and service, not financial rewards for companies that reduce costs by shipping their factories and jobs overseas.

    October 7, 2008 at 7:27 pm |
  51. Eric Johnson City,TN

    The answer to Jose, yes CNN is bias against republicans. If you want an honest news media go to Fox News, unbias leaders in news. They give everyone a fair shake. Better yet watch Bill Oreilly at night he's really great on the issues, only on fox news!!!!!!!!!

    October 7, 2008 at 7:48 pm |
  52. John Powell

    SHORT SELLERS-BURN!
    Unfortunately human greed has once again shown its ugly head. Short selling was the main cause of yesterdays stock market route. What's insane is that the very people who will suffer as the market continues to implode, are the same people who are sabotaging their own economy. Shame on them. They deserve to burn.

    October 10, 2008 at 2:05 am |

Post a comment


 

CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.

About Business 360

CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.

 
 
Powered by WordPress.com VIP