Body & Soul8 mins ago
The $700bn smash and grab by the rich
Have the rich just staged the biggest smash and grab raid in history?
They have been handed $700bn with no strings attached, of US taxpayer money. They have been operating a pyramid selling scheme, and now it is collapsing, Joe Public is having to pay for the mess.
The bailout effectively wipes out their bad debts. They can continue to pay themselves multi million dollar salaries and bonuses, financed by the taxpayer.
Lehman Brothers went bust after posting a $3.9bn loss. Last year it paid its executives and traders $8.7bn in bonuses. Under the bailout, such malfeasance is now underwritten by the taxpayer and the instead of going bust, it is business as usual.
The rich have been given blank cheques funded by $700bn of taxpayers money.
How do they get away with it?
They have been handed $700bn with no strings attached, of US taxpayer money. They have been operating a pyramid selling scheme, and now it is collapsing, Joe Public is having to pay for the mess.
The bailout effectively wipes out their bad debts. They can continue to pay themselves multi million dollar salaries and bonuses, financed by the taxpayer.
Lehman Brothers went bust after posting a $3.9bn loss. Last year it paid its executives and traders $8.7bn in bonuses. Under the bailout, such malfeasance is now underwritten by the taxpayer and the instead of going bust, it is business as usual.
The rich have been given blank cheques funded by $700bn of taxpayers money.
How do they get away with it?
Answers
Best Answer
No best answer has yet been selected by Gromit. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.
They are getting "away" with it because of the implications of what it will do to us.
If the banking system fails there will be now borrowing, therefore no growth. No growth = Less jobs. Less jobs mean less expendable income. Less expendable income means less trade. Less trade means business fails. Business fails = People lose jobs. Lost Jobs mean evictions and repsessions.
There is no doubt that the banks have failed us big time and they without doubt need regulation and a kick in the k*****rs, but the rammifications are far beyond them.
By the By they are not getting it for nothing it all has to be paid back its an insurance policy.
Its worth remembering that most of the banking system is actualy secure, even Northern Rock was/is viable as it assests out stripped its debts, but again the fat cat speculators brought it down, this is where an awful lot of todays troubles lie.
If the banking system fails there will be now borrowing, therefore no growth. No growth = Less jobs. Less jobs mean less expendable income. Less expendable income means less trade. Less trade means business fails. Business fails = People lose jobs. Lost Jobs mean evictions and repsessions.
There is no doubt that the banks have failed us big time and they without doubt need regulation and a kick in the k*****rs, but the rammifications are far beyond them.
By the By they are not getting it for nothing it all has to be paid back its an insurance policy.
Its worth remembering that most of the banking system is actualy secure, even Northern Rock was/is viable as it assests out stripped its debts, but again the fat cat speculators brought it down, this is where an awful lot of todays troubles lie.
Maybe if you gave the $10,000 that it is costing each US taxpayer to fund the $700bn handout, back to the taxpayer instead of to the people who created the mess in the first place, then that would stimulate the economy, secure jobs, avoid mortgage debts and built the economy from the bottom instead from the top.
it hasn't happened yet, it still has to go back to the House of Representatives, which already threw out a similar bill this week.
http://news.bbc.co.uk/1/hi/world/americas/7647 764.stm
Despite what that says, it isn't a global crisis. It's chiefly a US/UK crisis due to Anglo business practices. As I recall, a Belgian bank recently got into trouble and a German one did last year, but in general Europe and Japan don't seem much bothered by the whole thing. Damn the interfering European superstate, demanding that businesses behave responsibly...
http://news.bbc.co.uk/1/hi/world/americas/7647 764.stm
Despite what that says, it isn't a global crisis. It's chiefly a US/UK crisis due to Anglo business practices. As I recall, a Belgian bank recently got into trouble and a German one did last year, but in general Europe and Japan don't seem much bothered by the whole thing. Damn the interfering European superstate, demanding that businesses behave responsibly...
Jno you mean apart from the six european banks that had to be rescued this week?
The Russian stock exchange closing - Huge falls in stocks in Japane etc.
The fact that every central bank in europe has injected money into the system we have a global economy.
Gromit what would you do with the $10k by the way it wouldn't change anything and it would increase inflation.
The Russian stock exchange closing - Huge falls in stocks in Japane etc.
The fact that every central bank in europe has injected money into the system we have a global economy.
Gromit what would you do with the $10k by the way it wouldn't change anything and it would increase inflation.
I think the $700 billion dollars represents a few thousand bucks per American.
If you did that banks would continue to fail.
Rolling them up would involve liquidating assets which along with the fact that banks are big customers of many organisations would cause the failure of thousands of businesses.
How many business do you know that do not owe banks or sell to them?
A few thousand pay out to Joe Soap would not fix that,.
This rescue plan abolishes golden parachutes and sets limits on executive pay.
It cannot recover past payouts but it will stop new ones.
They got away with it because every time someone like Gordon Brown got up and criticised city practices people screamed
"Nanny State"
"Hands off the Free Market"
"Don't shackle the city with Regulations"
Boris Johnson is still saying it!
There is a simple question coming up
"Can you trust the Tories to impose effective regulation on the City?"
If you did that banks would continue to fail.
Rolling them up would involve liquidating assets which along with the fact that banks are big customers of many organisations would cause the failure of thousands of businesses.
How many business do you know that do not owe banks or sell to them?
A few thousand pay out to Joe Soap would not fix that,.
This rescue plan abolishes golden parachutes and sets limits on executive pay.
It cannot recover past payouts but it will stop new ones.
They got away with it because every time someone like Gordon Brown got up and criticised city practices people screamed
"Nanny State"
"Hands off the Free Market"
"Don't shackle the city with Regulations"
Boris Johnson is still saying it!
There is a simple question coming up
"Can you trust the Tories to impose effective regulation on the City?"
fair point about Europe, Dave, but the problem is still basically a US one that has infected businesses that have got involved there (not sure about Fortis, I think they just got into a mess with bad decisions generally). Japan's problems, as far as I can tell, are to do with the strains of high oil and food costs, and Russia's derive in part from the war in Georgia, which had foreign investors pulling out. These aren't directly related to the credit crunch, though of course it's hard to isolate individual economic factors.
The US banks sold mortgages to people who could not afford them, then spread those risky investments around the world.
The $10K could be given as a mortgage break for every taxpayer, or a rent subsidy to those who do not have a mortgage. The banks would be guaranteed against debts from mortgage defaulters and that would bring stability and confidence back to the market. The taxpayers would have money in their pockets to buy goods and services and push the economy out of stagnation and recession. Jobs, investment and trade would increase.
The bailout has no guarantee it will work. Buying bad debts is a very poor investment for the taxpayer. It might save some Corporations (that probably do not deserve to be saved) but at the expense of many small businesses, jobs and the taxpayer.
The $10K could be given as a mortgage break for every taxpayer, or a rent subsidy to those who do not have a mortgage. The banks would be guaranteed against debts from mortgage defaulters and that would bring stability and confidence back to the market. The taxpayers would have money in their pockets to buy goods and services and push the economy out of stagnation and recession. Jobs, investment and trade would increase.
The bailout has no guarantee it will work. Buying bad debts is a very poor investment for the taxpayer. It might save some Corporations (that probably do not deserve to be saved) but at the expense of many small businesses, jobs and the taxpayer.
Gromit you really must get your head out of your ar5e. The money is not being given most of it will be retained all it is doing is bolstering public confidence. The answer I gave in another question applies here too:
I can't believe how many numpties miss the point here. If a high st bank collapses and the savings are lost, that's it! Game over. We all rush to the other banks to get our money so we can put it under the bed, the banks ain't got it people! in fact on good day they ain't got 5% of it! Wholesale banking collapse, we are back in caves. Forget the �35K guarentee, the government would have to declare a state of emergency, troops on the streets to manage our decline into collapse. This cannot be overstated if the people do not have confidence in the where their money is, end of. That's why no governement will allow a bank that takes deposits of the masses to go t1ts up, too dangerous, worse than a nuclear bomb, far worse.
I can't believe how many numpties miss the point here. If a high st bank collapses and the savings are lost, that's it! Game over. We all rush to the other banks to get our money so we can put it under the bed, the banks ain't got it people! in fact on good day they ain't got 5% of it! Wholesale banking collapse, we are back in caves. Forget the �35K guarentee, the government would have to declare a state of emergency, troops on the streets to manage our decline into collapse. This cannot be overstated if the people do not have confidence in the where their money is, end of. That's why no governement will allow a bank that takes deposits of the masses to go t1ts up, too dangerous, worse than a nuclear bomb, far worse.
It's the guaranteeing banks against the bad debts that's costing $700 Billion!
Doing that and giving money to the "tax payer" would cost $1400 Billion
Or do you mean that giving the money to the taxpayer would in itself protect banks against bad debts?
Obviously it wouldn't as large amounts would be given to people who are never going to default.
The problem is a run on the shares of banks - a lack of confidence in investors in them (If only they were building societies!)
You have to guarantee they'll still be here next week - If people think they will fail as businesses (despite depositors being safeguarded) their share value will continue to fall and they will not be able to borrow money wholesale to lend it retail.
This is why Osbourne is talking cr@p when he talks about safeguarding depositors but not guaranteeing banks.
It won't fix the problem, banks still wouldn'd be able to borrow money wholesale, people and businesses therefore won't be able to borrow retail and everything dries up.
You can bail out banks or nationalise them pretty simple choice really
Doing that and giving money to the "tax payer" would cost $1400 Billion
Or do you mean that giving the money to the taxpayer would in itself protect banks against bad debts?
Obviously it wouldn't as large amounts would be given to people who are never going to default.
The problem is a run on the shares of banks - a lack of confidence in investors in them (If only they were building societies!)
You have to guarantee they'll still be here next week - If people think they will fail as businesses (despite depositors being safeguarded) their share value will continue to fall and they will not be able to borrow money wholesale to lend it retail.
This is why Osbourne is talking cr@p when he talks about safeguarding depositors but not guaranteeing banks.
It won't fix the problem, banks still wouldn'd be able to borrow money wholesale, people and businesses therefore won't be able to borrow retail and everything dries up.
You can bail out banks or nationalise them pretty simple choice really
Jno I don't think you understand how this started.
I can't be bothered to go through the whole thing BUT US banks lent money to people who had no means of actualy repaying it ( No I don't know why) to lend the money they borrowed off the big US banks who in turn went to the world banks. Its common practice and in normal times no problem.
However when the money couldn't be repaid the problems started.
It is the rapacious greed of the banks and the mercenary traders across THE WORLD who have done it but if we don't support the finance system its exactly what Jake says.
The people of America really need to understand the implications its not fat cat US its all of us.
I can't be bothered to go through the whole thing BUT US banks lent money to people who had no means of actualy repaying it ( No I don't know why) to lend the money they borrowed off the big US banks who in turn went to the world banks. Its common practice and in normal times no problem.
However when the money couldn't be repaid the problems started.
It is the rapacious greed of the banks and the mercenary traders across THE WORLD who have done it but if we don't support the finance system its exactly what Jake says.
The people of America really need to understand the implications its not fat cat US its all of us.
R1Geezer
My question was about the US buying 'Toxic loans' (bad debts) with US taxpayers money.
Your answer is about the UK Government guaranteeing savings.
I wholeheartedly agree with and understand the UK Government guaranteeing the savings of the public.
I do not agree with the US position of rewarding the people who caused the problem by paying for their greed and dodgy deals.
Geezer, As per usual you are quick with your insults but very slow at understanding the question.
My question was about the US buying 'Toxic loans' (bad debts) with US taxpayers money.
Your answer is about the UK Government guaranteeing savings.
I wholeheartedly agree with and understand the UK Government guaranteeing the savings of the public.
I do not agree with the US position of rewarding the people who caused the problem by paying for their greed and dodgy deals.
Geezer, As per usual you are quick with your insults but very slow at understanding the question.
Have you not read any of the above? no money is being given to the "rich", you really need to get that chip off your lefty shoulder. My response is about the UK but it equally applies everywhere. I understand the question fully both the actual text and the one written between the lines. Your question makes sweeping un true statements as if they are fact based on your own flawed reasoning and ideology. The basic problem Gromit is that you are an anti western loony lefty who would no doubt welcome global financial catastrophy just so you can say "capitalism didn't work, let's start again with socialism". I can just see you going to the cheif and moaning that someone has a bigger cave than you! The tax payer is not funding anything, all they are doing is acting like a bodyguard protecting the banks from the big bully speculator market. Like I said get your head out of your ar5se and try joined up thinking for a change.
-- answer removed --
This is worth a read...
15 Reasons to Bailout Homeowners Over Banks
http://www.topix.net/content/prweb/2008/09/15- reasons-to-bailout-homeowners-over-banks
Bailing out homeowners will immediately reinstate up to 80% of the $500 billion already 'written off' by Wall St. as 'toxic loans.'
(Recoup lost value by refinancing homeowners rather than bailing out banks. Gov't puts in $500 billion and instantly gets back $500 billion in new market value. Better return than bank bailout)
15 Reasons to Bailout Homeowners Over Banks
http://www.topix.net/content/prweb/2008/09/15- reasons-to-bailout-homeowners-over-banks
Bailing out homeowners will immediately reinstate up to 80% of the $500 billion already 'written off' by Wall St. as 'toxic loans.'
(Recoup lost value by refinancing homeowners rather than bailing out banks. Gov't puts in $500 billion and instantly gets back $500 billion in new market value. Better return than bank bailout)
Dave, I do understand about subprime mortgages. (As to why the lending happened, as far as I know the borrowers mostly did have the means of repaying it initially but then lost their jobs in the downturn.) My point is that the systemic problem is in the US and UK. In theory, in a global financial system, they would lay the risks off all round the world, and the whole world would suffer; but this isn't actually what's happened. Some European banks have been tainted, but no single European country seems to be suffering anything like as much grief - except the UK. But other countries' economic problems (such as Japan and Russia, which you quoted) are mainly their own.
Please understand this its quite clear and is included openly in the US proposed legislation.
THE MONEY HAS TO BE REPAID. In the US not until 2010 BUT - IT HAS TO BE REPAID. Net cost to any tax payer nothing.
In Britain in the first six months of trading after being taken over Northern Rock paid back (including assest sales) �6BN dont take my word for it, this is the internet , look it up.
THE MONEY HAS TO BE REPAID. In the US not until 2010 BUT - IT HAS TO BE REPAID. Net cost to any tax payer nothing.
In Britain in the first six months of trading after being taken over Northern Rock paid back (including assest sales) �6BN dont take my word for it, this is the internet , look it up.
Jno rubbish i'm sorry to be rude but you don't know what your talking about.
There is a global economy - The sub-prime was lent to people without jobs-
6 european banks had to be saved. LOOK IT UP
European central banks are pumping in money, why are they doing it if it doesn't affect them?
Stop believing what the media are feeding you and read it.
There is a global economy - The sub-prime was lent to people without jobs-
6 european banks had to be saved. LOOK IT UP
European central banks are pumping in money, why are they doing it if it doesn't affect them?
Stop believing what the media are feeding you and read it.
Latest Posts
ChatterBank10 mins ago
Quizzes & Puzzles11 mins ago
Quizzes & Puzzles15 mins ago
Quizzes & Puzzles18 mins ago
Related Questions
Sorry, we can't find any related questions. Try using the search bar at the top of the page to search for some keywords, or choose a topic and submit your own question.