[ReverseEngineer]

$this->bbcode_second_pass_quote('Jotapay', '
')
This is a strange time we live in. If you can borrow money for a wild idea to make a quick buck, you could potentially become rich while this lasts. Banks have unlimited cash to lend for it for the time being.

[TheDude]

Well that's evil.

Tip of the Hat to ya, Hank.



Hasn't shown up in any news items yet.

$this->bbcode_second_pass_quote('', 'S')o there it is, banks no longer have to keep even a small amount of peoples bank accounts available as cash. They don’t have to fail, they can just say they are out of cash today. Your money is still there, FDIC does not kick in, but they just stop giving out money.

[Dreamtwister]

They were dancing pretty close to 0% already, weren't they?

[Cid_Yama]

They've been running negative un-borrowed reserves for nearly a year now. The only thing they've had in the vault is a pile of IOUs to the Fed.

[DantesPeak]

I came upon this myself after reviewing the recently passed TARP bill (TROUBLED ASSETS RELIEF PROGRAM). I am somewhat surprised that I haven't seen word about this anywhere else, but check this out:
$this->bbcode_second_pass_quote('', 'S')EC. 103. CONSIDERATIONS. (8) protecting the retirement security of Americans by purchasing troubled assets held by or on behalf of an eligible retirement plan described in clause

(iii), (iv), (v), or (vi) of section 402(c)(8)(B) of the Internal Revenue Code of 1986, except that such authority shall not extend to any compensation arrangements subject to section 409A of such Code; and (9) the utility of purchasing other real estate owned and instruments backed by mortgages on multifamily properties.

[TreeFarmer]

Apparently if your retirement money is in these types of funds it is safe. I bet the politicians have to protect retirement money or face not getting re-elected.

On the other hand, if you own stock in one of these companies it is probably worthless.

TF

[smallpoxgirl]

This gem was tucked into the third paragraph of a Bloomberg article: "The S&P 500 Financials Index slid to a 12-year low as the Treasury scrapped plans to buy mortgage assets and shifted focus to consumer credit." Bloomberg
I'm sorry. Say what? Wasn't the economy supposed to collapse if we don't buy $750 billion in mortgage backed derivatives? Grocery stores were all going to close. Martial law was going to be imposed. Now we've completely scrapped it just like that? Am I missing something here? Somebody clue me in.

[hironegro]

Because Americans are irrational and fat!

[Kristjan]

Paulson and The Treasury decided they no longer want to buy the troubled assets but were going for stakes in the troubled enterprises.
$this->bbcode_second_pass_quote('', 'P')aulson said the government's $700 billion financial rescue package won't purchase troubled assets from banks as originally planned. He said that plan would have taken too much time, and that the Treasury instead will rely on buying stakes in banks and encouraging them to resume more normal lending.

[RSFB]

Allow me to play devil's advocate here. What the Fed is doing is essentially giving money to the banks. Isn't that as good or better than buying their junk assets?

If the banks are well capitalized, their balance sheets won't look as bad which is the same effect as buying junk from them would have.

[the48thronin]

$this->bbcode_second_pass_quote('smallpoxgirl', 'T')his gem was tucked into the third paragraph of a Bloomberg article: "The S&P 500 Financials Index slid to a 12-year low as the Treasury scrapped plans to buy mortgage assets and shifted focus to consumer credit." Bloomberg

I'm sorry. Say what? Wasn't the economy supposed to collapse if we don't buy $750 billion in mortgage backed derivatives? Grocery stores were all going to close. Martial law was going to be imposed. Now we've completely scrapped it just like that?

Am I missing something here? Somebody clue me in.

[Sixstrings]

Ya know.. when this bill was being pushed through, I recall hearing how it was written so that Paulson could in practice do whatever he wants with the money, change plans on a dime, whatever.

TARP stands for Troubled Asset Recovery Program.. so now the money isn't going to be used for troubled assets at all. Mmkay.

I feel like we're in Ancient Rome, where a Dictator has been appointed to do as he pleases.. in this case, Treasury and the Fed.

[heroineworshipper]

Serves U right for voting for a bigger government in 2004. Now forget about the $700 billion & focus on the new $1.4 trillion ice cream relief plan, soon to be renamed the "heroineworshipper retirement plan" as soon as you pass it.

[Sixstrings]

$this->bbcode_second_pass_quote('', 'C')LEVELAND: A financially ailing Ohio school district has joined the ranks of banks and automakers clamoring for a portion of the $700 billion economic bailout package. Olmsted Falls Superintendent Todd Hoadley said Tuesday that if automakers and cities like Philadelphia, Atlanta and Phoenix can ask for TARP money, schools should be able to follow suit.

"I feel a moral obligation to our taxpayers to make this attempt," said Hoadley, who requested $100 million from the Treasury department last week. "This is a legitimate request. I'll be frankly disappointed if something positive doesn't come out of this."The district has buckled under rising enrollment and strained finances, with some schools forced to convert maintenance closets into classrooms.

Treasury Secretary Henry Paulson has said the Troubled Asset Relief Program, known as TARP, was meant to stabilize financial institutions. Paulson told Hoadley the same thing when the district submitted the request directly to him last week.

The request was also sent to the Federal Reserve Bank of Cleveland.

http://www.ohio.com/news/break_news/35394239.html

[seldom_seen]

Their best bet would be to do what Goldman Sachs and American Express did and become a commercial bank. Then the gettin' gets good.

First Bank of Ohio Public Shool District?

Federal Bank of Seldom Seen?

Get some!

[ReverseEngineer]

With every Industry, City and State currently underwater due to the inability to raise any money on the credit markets, obviously every Tom, Dick and Harry is lining up at the Federal Trough for a Bailout now. Our friends in Ohio are just the first ones to ask for some of the Billions besides the Banks and the Automakers. Of course the Banks MUST be saved, not Schools! Much more important that AIG Executives are Retained with Christmas Bonuses then keeping the schools open. LOL.

Seriously, once this bankruptcy is finished the bottom line here is that EVERYTHING is going to be Nationalized, we are becoming a Socialist State by default. LITERALLY by default. In order to keep from devolving into complete anarchy, each of the systems that runs a society as large as this one has to be reorganized, in order of priority.

Priority #1 is obviously Food Production and Distribution. This is almost certainly the first system to go off the grid of general commerce as the monetary system fails. By next year, I would expect some internal system of food credits and energy credits for food producers to be put in place, to make sure crops get planted and the food production apparatus doesn't grind to a complete halt immediately. This will result in shortages by next year, but I don't think starvation in this country in the next year, except in some pockets of poverty.

Priority #2 is actually Child Care and Education. Unless you have someplace to warehouse the kids until they are old enough to work, you cannot free up their parents to become laborers in whatever make work program you devise, whether it is rebuilding infrastructure, building windmills or moving people back into rural areas to become farm laborers instead of Starbucks Barristas.

So, in actuality, School systems will in some way be brought off the general economy (for as long as it lasts) and socialized separately, possibly using the same Credits program that will be instituted for food production and distribution.

If some type of internal USA economy that focuses around the basics of life gets put in place, it could slow the spin down here, and we would not face immediate starvation, just shortages and hardship. Rebuilding an economy based on some type of industry and trade with others would come only after we stabilize the internal needs of subsistence. Whether our Goobermint is capable of this or not remains an open question. If they are not, we would devolve down very quickly into anarchy.

If the Federal Goobermint does not get its act together quick enough, it will fall to the States to try to do this, and then if they fail each individual community will have to do it. In my head, I plan for what we might do in our community to cover Priorities #1 and #2 without any assistance from either the Federal Goobermint or the State. I'm hopeful that it doesn't devolve down to that level too fast, but if it does, I have a Plan in my head I think can work. If it gets bad enough, I will talk to my friends about it, and we will see if they are ready to listen then. Only time will tell.

Reverse Engineer

[Sixstrings]

ReverseEngineer
$this->bbcode_second_pass_quote('', 'P')riority #1 is obviously Food Production and Distribution.

[TommyJefferson]

$this->bbcode_second_pass_quote('ReverseEngineer', '.')..the bottom line here is that EVERYTHING is going to be Nationalized, we are becoming a Socialist State by default. LITERALLY by default.

[pup55]

Let's talk about how they got into this mess in the first place.

They were not totally stupid. They realized that their school system had grown, their existing stuff was on the old side, and they would have to spend some money to put kids into classrooms and fix up what they had.

So, they had two choices: go to the public, and ask them for more money, or take the cowards way out and rely on borrowing to do the job.

So, being elected officials, there was only one clear choice. Borrowing. The community was growing for awhile, so they figured that it would be no problem to float some loans, and they would pay it back later with an expanded tax base.... all of these new homes in the area.. more tax revenue, no brainer.

Except, of course, that the growth dried up.

So the problem, PO viewers, was that they expected the future to be like the past.

[Jotapay]

Does Paulie have a tit for me to suckle on too? I'm a good 'merikun and want my bailout too.