banks not giving an inch.Follow

Moreover, they aren't loaning the cash they have been given for that express purpose. The banks have been hoarding it to keep themselves solvent. What a way to run a railroad...

Totem

Hey stupid, the Fed cut rates to 1%, not 1.5%.

While I'm not a huge fan of the bailout, it's not because there is one, but because we haven't really fixed the problems that caused the financial industry to get into this mess in the first place. That's another issue though...



Except that the wind only blows maybe a few times a century, and the rest of the time the scarecrow does it's job at keeping the crows away from the crops.

Of course you prop it back up when it tips over. Because the cost to do so is vastly less than the cost for not doing so. Even your own analogy disproves your point...

The point is, it needs a solid foundation so it *won't* fall down. Like lashing it to a fencepost driven several feet into the ground.

Maybe your just a bad risk. If they hadn't loaned to you in the first place, we wouldn't be in this mess.

Or even better, dig a hole, fill it with cement and plant it in there. Then use wire in stead of bailing twine to lash it to the post.


Wait... are we still talking about banks?

if the banks fail, the fed insurance will take care of over 90 percent of consumers. most consumers dont have in access of 250k sitting in any bank any way. and most people that do have diversified enough to not loose everything.

like taking your finger out of a bucket of water. no hole.

as far as the auto industry, all three of our big auto makers already have their own finance company. they will still sell autos. they will just have to service the laon themselves. and being they OWN the product to begine with, its just paper assets untill the payments are made. no cash up front to pay out on the loan.

home losns will hit the auction block and some other financial institution will snatch them up. again, no loss.

personal loans will dry up, so will credit cards. both those losses would be good for consumers.

then local banks, locally financed, will start popping up just like it was the 70s again, and within 5 years, you would not even notice they were gone.

LET THEM FALL. 90 percent of us wouldnt notice. but the other 10 would, and thats why its imperative WE MUST SAVE THEM. God forbid bill gates has to sell his house.

Would that 10% be unemployment?

Surely a sign of a healthy economy. Everything would be fine!

Economic ruin makes for strange bedfellows, I guess, Amb. What has, is, and will happen isn't a them or me issue, it's an us issue. We can argue the merits of who was at fault after everything gets fixed.

Totem

Yes, it actually does seem that way doesn't it.



91 Republicans voted for the bill, 108 voted against. Not quite 2:1. That's actually just about split down the middle. One could say that at least the majority of the Democratic party seems to be able to agree with each other on issues.



So am I.




How much more ******' vast can it get? Also, lower taxes, from my very limited understanding of the way things work, would make it a little harder to be fiscally responsible as there wouldn't be as much money to use. If I'm wrong, then disregard that last sentence.

Can anyone tell me what the US currency is based on? Whats the solid foundation that makes it worth more than just paper?

Please don't tell me its houses.

Dubya's a Democrat? Who knew!

Ok, I'm not talking about the federal rescue package here, whether you approve or disapprove about that doesn't affect what I'm about to say.

Banks used to have a certain margin in which they would make their profits, sort of using the difference between the fed rate and the rate they charged their customers. It was a little more tricky than that, because in a country like the USA, where people don't have as much in savings deposits as they do in loans and credit that they take out, that means the USA banks have to borrow money from each other and overseas banks in order to then loan it on to their customers the general public.

With the collapse of Fanny and Freddie and a few dozen other banks around the world, worldwide banks have stopped lending money to EACH OTHER. They don't trust other banks not to fall over, taking their money with them. This is the "credit freeze" that is hurting the economies of nations world-wide at the moment.

Lets take a typical store, a supermarket or hardware. What they usually do, because profits are so much smaller than costs and turnover as a whole is they buy all their stock and pay their staff wages month by month on credit, and then pay the credit off next month with the income they took for the month. If banks don't lend money to each other, then American and Australian banks literally don't have enough money each to give out to every business that depends on it, from the pool of money they have deposited with them. (American and Australian businesses are running on money that ultimately is on loan from China and Japan.)

Banks have decided each other are much MUCH higher risks at the moment to lend to each other, so if they are lending at all, they have majorly jacked up the interest rates at which they'll part with cash. (they've decided they have to factor-in not getting their money back at all from some banks they lend out to.) This means that at the moment, American and Australian banks' costs have suddenly skyrocketed. This is a real phenomenon, no matter how we got here. The relationship between the Fed rate, and the banks' loan rates to the public, has undergone a sudden and dramatic squeeze.

In Australia the executive government has no power over the Federal Reserve, which has only one government law applying to it: "Set rates so as to keep the national rate of inflation between 2%-4% per year." Our government also has no legal say in the retail rates all our other banks set. However in practise our government can often influence how much the retail rate moves when the Fed rate moves, from sheer moral pressure via what the government says to the press.

In this case, recently our Fed cut rates by a full 1 percentage point, in response to the economic crisis, and all our banks kept 0.80% of that cut, only passing on 0.20% of the cut, with the full blessing and support of our government, who were at pains to explain to the public that the banks' costs have risen dramatically, and that it was completely reasonable and expected for the banks to keep the cut to themselves in this instance. That there was no question that keeping this particular cut would increase bank profits at all, let alone increase profits one iota at the expense of anyone else in Australia.

Edited, Oct 31st 2008 11:51am by Aripyanfar