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The Greatest Depression
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[QUOTE]Originally posted by glassman: [QB] it's not that simple Lock. China is sitting on over 2 trillion in cash reserves, mostly US dollars... they would have gone on a shopping spree... i will grant you that bailing out these co's sux. They deserve to fail, but it would have taken out the entire economy in one year... They had five years of GDP tied up in this mess.... The govt had to stop the dominoes tipping asap. when you begin to look at how the BK's would work? hte people that are actaully responsible would have gotten their huge paychecks and retired. Heck they make on average about 5 million per year. They don't even need thier last paychecks. The people that would be hurt are the mid and lower level peopel who live basically paycheck to paycheck. We save thier jobs so we would not have to pay their unemployment. this is the only reason i am so against such huge short-term pyachecks to CEO nad other top level managemetn, we literally insulate them for the "real world" by rewarding them immedaitely and richly... Even if you give them restricted shares of stock? They sell them in futures market.... The market that the commodites and futures exchange was so dead set on not regualting... we will recoup most of the money used in thebailout. As i recall? the bailouts were aproved with theintent of buying up bad mortgages and holding htem. but Paulson and Bush decided to buy prefered stock in the co's that held th ebad paper instead... they needed the cash because they were using "funny" accounting to inflate their asset values.. once the funny accounting was outlawed with a law change? they were left unable to borrow against their assets to keep afloat.... not only that, but too many people had been doing this funny accounting and nobody trusted each other anymore, the bailed out co's could show that they had real $$ to borrow against with the bailouts... i was becoming concerned in 04 and 05 when i read that the avg margin on the stock market was a few points above what it had been in '29. It was about 14X. During the crash? When i found that the investment banks were as high 50X on their margin to trade in CDSes and other mortgage instruments? I was flabbergaste. They were literlly lending moeny they didn't have at all. They were going to the Fed and gettingit and using the same colateral 50 times..... I've never ben able to find how much AIG actaully insured in the mortgage market, but if they had failed? It would not have just cost jobs thru out the economy, it would also have costed alot of (innocent) peoples life savings i agree they need to be dissolved IN A TIMELY and SAFE (economically) manner, but now? The Govt cannot seem to get any laws passed toward that end. Heck the GOP even tried to block new financial regulation on them so they cannot do it again in 5 years... [/QB][/QUOTE]
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