Understanding the bailout.

The nation 's economic crisis is drawing comparisons to the Great Depression.Mortgage failures,Bank closings .Rising unemployment ,Investor panic.

The roots of the problem are easy to trace.Too many people were allowed ,and even encourage to buy homes they couldn't afford.Lawmakers have agreed on the major components of a $700 billion rescue plan designed to prevent a severe recession.

Question:Do we need a bailout package?

Answer:Most economists say yes.The massive number of mortgage defaults have left many banks without cash ,and the flow of credit has slowed drastically .Advocates of the bailout say it would help restore liquidity,accelerating the flow of credit and boosting spending by consumers and business.

Critics of a bailout say Wall street should have to clean up its own mess,and rescuing firms that overextended themeselves sends the wrong message,That may be true ,but doing nothing could cause a financial free fall that hurts everyone.

Questions:Where there other options besides bailout legislation?

Answer:Yes, but for every solution there's a downside..Examples of other options include a ban on short selling (which rewards investors who bet on a down market.Many economists say that wouldn't be enough in the long term.

Printing more money ,but that would devalue the dollar and lead to inflation.Sending individual homeowner a chek to help them pay off their mortgages ,but there's no way to know what their homes are worth now, and there are questions about whether it is fair to bail out homebuyers who may have acted irresponsibly.

What will a bailout mean for taxpayer?

Bailout legislation will increase the federal deficit.That will stick the federal government with bigger interest payment that eventually will require either higher taxes or cuts in government services.

In the short term ,a bailout will almost certainly mean the next president will have to put his fiscal priorities on hold -whether it's tax cuts or more domestic spending.

Could the government recoup any of the $700 billion?

Economist say taxpayers should be able to recoup most of the money when the government backed loans are sold on the market.

This is from Garnett news service.

Now what can we do to ensure that we do not loose our money?Treasury bill my friends.I know they do not pay too much interest ,but at least you're not going to loose your life savings.It will take discipline for this economy to recuperate.No matter who is the next president of the United States ,buckle up my friends; we're heading for a rough landing;if not a crash.

The rats under the leadership of John Mac Cain abandonned Goerges Bush's ship this afternoon before the wreck.What John mac cain can say now after he has abandonned his campaign to rally his rats in Washington.He has supported the drunk Captain Georges bush so long that he does not know what to say anymore.Thinking that the republicans in Congress were voting for the bailout he wanted to take credit ,now the bailout has failed he wants to blame Senator Obama.

He was John Mac Cain and Georges Bush who put us in this situation in the first place.At a time of war where the country is spending 10 billion dollars every month in Iraq;At a time when americans are paying more for oil and gasoline every day,Georges Bush decreased the taxes for the rich.How could the economy survive such mismanagement?I am not an economist .but I do not think one needs to be Adam Smith to understand the idiosyncrasies of this republican administration that John Mac Cain supported 90%.

It is unbelievable that this election is still undecided one month before the date.I do not believe that the middle class and the poor americans can still vote for John mac cain .

Comment est financé le plan Paulson ?

Le plan de sauvetage américain sera financé par le Trésor, donc par le contribuable. Les sommes seront octroyées en trois étapes : 250 milliards de dollars seront immédiatement accordés au Trésor suivis de 100 milliards octroyés, si nécessaire, à la demande du président, puis 350 milliards sujets à un nouveau vote du Congrès. Deux comités externes surveilleront la manière dont sont dépensées ces sommes.


TIRE DU JOURNAL LEMONDE

A quoi serviront ces 700 milliards de dollars ?

Le Trésor veut débarrasser les banques de leurs actifs "toxiques" à l'origine de la crise. En éliminant le "ver dans le fruit", il compte ainsi restaurer la confiance dans le système financier. En échange de cette action il obtiendra des titres de propriété dans les banques aidées. Si les institutions financières se redressent, le Trésor touchera les bénéfices, voire revendra à profit ses titres. L'Etat sera aussi tenu d'assouplir les modalités des prêts rachetés pour soulager les emprunteurs propriétaires de maisons menacées de saisies.

A quel prix seront rachetés les actifs "toxiques" des banques ?

Le Trésor s'empare de titres dont personne ne veut. Afin de recréer artificiellement un marché, il utilisera un système d'enchère inversé en invitant les banques à participer à ces différentes enchères.

Quelles sont les institutions financières susceptibles d'être sauvées ?

Les banques américaines, mais aussi des collectivités locales, des fonds de pension et des petites banques commerciales, pourront profiter de l'offre. Les banques étrangères qui disposent de filiales aux Etats-Unis seront aussi acceptées. En revanche, les fonds spéculatifs devraient être exclus du programme.

Pourquoi sauver Wall Street en priorité ?

En sauvant Wall Street, l'Etat espère s'attaquer à la racine du problème afin de relancer l'économie. Lorsque les banques sont fragilisées, elles ne sont plus en mesure d'octroyer des crédits aux particuliers et aux entreprises. Avec ce plan, "il s'agit de sauver toute l'Amérique, s'assurer qu'il y aura encore des crédits automobiles des prêts étudiants…", explique le sénateur républicain Judd Gregg.

Le plan suffira-t-il à sauver l'économie américaine ?

Pour la plupart des économistes, ce plan ne résoudra sans doute pas l'ensemble des problèmes. Pour Nouriel Roubini, professeur à l'Université de New York et l'un des premiers à avoir prédit une crise d'une telle ampleur, la récession est déjà là, mais "l'enjeu est d'éviter une crise du type de celle traversée par le Japon dans les années 1990, qui a anéanti pendant dix ans le secteur financier. Si le plan est à 100 % efficace, la récession américaine durera deux ans", estime-t-il.



Claire Gatinois

Le but de ce plan est de donner de l'argent a des petits amis avant la fin du mandat de Bush.

Le secretaire d'Etat aux Finances, Paulson, possede encore des actions de Goldman Sachs qui valent encore 500 millions de dollars (du moins la semaine derniere). Cela explique pourquoi il n'a rien fait pour sauver Lehman Brothers, concurrent de Goldman Sachs.

De plus, la responsabilite d'etablir comment se fait le "remboursement" revient a la prochaine administration. On a ouvert une boite de Pandore et comme le disait le president iranien en entrevue la semaine derniere (avec Larry King si je ne me trompe) on assiste aux premiers soubresauts de la chute de l'empire americain, malheureusement, c'est le peuple qui en fera les frais comme d'habitude.

Yo di chat ki chode pè dlo fret se pa manti non.Depi kelke jou mwen retire kom nan maket la ,men lè mwen tande ke Kongrè vle ba gwo zouzoun 700 bilyon dola pou pemet ekonomi ya pa efronde;yè swa map di pito mwen mete youn ti lajan nan J P Morgan ak bank of America.maten yan mwen leve byen bonè ,se bon dye ki fè mwen te pran youn ti jof poum te gade ki jan maket la louvri ;lèm gade ke maket komanse en bess mwen di kite mwen tann pi ta. se konsa mwen tap gade televisyon epi mwen tande ke kongrè ya pa aprouve plan Bush la.menm lè ya se degringolad ki komanse ,Personn pa konnen kote bagay saa ap fini.

Nou pèdi youn bon ti kob men sim pat retire lajan 401 k mwen yan depi lane dernye mwen te ka pèdi plis toujou.Moun ki ap koute mesye ki pran poz konen yo ke yo rele financial adviser yo moun sa yo pa beswen konnen si wap pèdi lajan ou pa se komisyon yo ki enpotan pou yo.Sam finn pa reyalise nan ekonomi saa se youn paket borgne ki ap gide youn paket aveg.Se mesye CEO bank envestisman yo ki finn pran tout lajan yo.Ou pa wè Paulson te mande pou se li sel ki pou kontwole 700 bilyon dola a.Neg sa yo te pral tou separe lajan saa antre yo.nap pale koryptyon bor isit la li fet youn ti jan pi sofistike.Youn bank tankou Washington Mutual ap kriye bankwout epi ou tande konbyen milyon dola ke CEO a tap touche.konpayi yo pa ka peye dividann epi chak ane ou tande ke apwentman PDG yo ap ogmante.Se youn gang organise.Board of Directors pa genyen oken kontwol sou chef execkitigf konpayi yo ;se youn mafya organise.neg la te CEO nan youn konpayi li retrete epi ou tande li se manb board of Directors la. Se grate do m ma grate pa w. sak pi ba ki ap travay di se yo ki ap kofre.

Ouvri je nou klè bagay saa make san wi.anpil moun ka kriye wi.Pye kout pran devan papa mwen reitre kom nan jwet poker saa.Se met jwet yo ki pran tout lajan ki sou tab la.nan bagay saa si nou pa ouvri je nou nou genyen pou nou travay jis nou fout genyen 70 lane si nou pa entelijan.

Sak pi red anvan Washington Mutual te kriye bankwout la J P Morgan te ofri pou li achte aktyon bank la a youn meyè pri se PDG ya li menm ki te bloke transaktyon jodya JP Morgan achte aktyon a 3/4 sa li te ofri bank la. epi se PDG saa ki soti ak tout lajan saa.Genyen youn gwoup moun ki tap sikile nan Wall Street ki te di non pou bailout la ;yo te di se Fout CEO yo nan prison.Se pa manti moun sayo merite bon jan menot vre.Mwen fout pèdi tout ekonomi mwen fè pou ane saa.

Brian Bethune, U.S. economist with Global Insight, faults government officials for using opaque terms like “downside risk to growth” to explain the problems, instead of using blunter, more obvious terms that people can understand, like “recession.” He also thinks the government hasn’t been forthright enough about how other problems, such as high oil prices, are adding to the country’s financial woes.

“They’re not communicating clearly … and as a result people don’t understand why this is a crisis and why we need emergency legislation,” Bethune said.

He should add the cost of the war in Iraq that John Mac cain wants to perpetuate.The deregulation of the banking industry and financial institutions.John Mac Cain is one of the authors of this crisis.The Taxe cut for the rich that he wants to continue.If there were a vaudoo economik parade John mac cain would be the great priest.

""The massive number of mortgage defaults have left many banks without cash""

Banks don't have that much cash in general. If bank had cash there wouldn't be no krash. lol

Ahhhhhh.Seriously though.I have asked this question some time ago:"Is economy a science or an art?"Some believe it is both.I agree.,for I do not understand the logic of this bailout.The United Sates have a budget deficit ;a commercial unbalance with China;The government is spending billions of dollars every month for a useless war;we're paying more for oil than at any time in modern history.Yet, the Bush administration wants us to borrow more money to give to the fat pigs on Wall Street;Why?Is it true that these mismanaged institutions are essential to the economy? Can a hungry cat watch a glass of milk?Is Secretary Paulson,the right man at the right place?

I applaud the Congressmen and Congresswomen who refused to adopt this measure without any debate to find out if this is the right solution.I was listening to Congressman Deconcinich last night on MSNBC.This guy is one of the better politicians of this country.He said why should we bailout the fat pigs on Wall Srett and leave the poor people who can not pay their mortgage in this terrible situation?Wouldn't it better to save the poor people first?