$700,000,000,000.00 Bailout

[Tamiya1/10 382]

That is how many "0" in 700 billion. If the mortage, say is around $125,000.00 - $150,000.00? that will cover 5.6million + - properties and will that be enough?

Mortgage back loans or securities were the safest in the investment world and yet the Americans muck it up and yet no one or groups are held accountable for the mess.

We are heading into uncertain time.

[ryanbored 3]

I should so get into banking. Charge loads of fees, pay yourself massive bonuses and when it all goes pear-shaped get bailed out by the Government.

Ideal.

Win-win. And the best part, like you said, is the complete lack of accountability.

[highflyer 73]

Dumb Americans oops

[WillyChang 1814]

I should so get into banking. Charge loads of fees, pay yourself massive bonuses and when it all goes pear-shaped get bailed out by the Government.

Ideal.

Win-win. And the best part, like you said, is the complete lack of accountability.

that is the so-called "moral hazard" issue

[ryanbored 3]

Yeah, My morals would really come into play when thinking what to spend my 350,000 bonnus on [$720,000 ish, the average bonus in London stock exchange, source: my mate down the pub!]

[Blacque Jacque 4]

that is the so-called "moral hazard" issue

Hmmmm, no issue there, no morals..............no hazard

[Tamiya1/10 382]

Yeah, My morals would really come into play when thinking what to spend my 350,000 bonnus on [$720,000 ish, the average bonus in London stock exchange, source: my mate down the pub!]

That is why we smucks play with 1/10 scale while the investment banker or trader plays with 1:1 scale and we fly sardine class while they fiy business or first class / likely their own private jet.

[Tamiya1/10 382]

Well the bail out was voted down and the stock market is on its way down. I guess President Bush will try again.

The up side to all this, provide you have cash, is you can cheaply snap up properties in the US and else where. Sorry for the loss of investors since mortgage back securities were deemed to be safe and people invest in them for their old age at relatively low risk.

[ryanbored 3]

I piled everything into our flat so next year can buy a nice little house. I can see the 45k ish equity dissapearing in front of my eyes...

[WillyChang 1814]

UK realestate isn't going too well is it... what with 1000s of finance job layoffs and all.

[Blacque Jacque 4]

UK realestate isn't going too well is it... what with 1000s of finance job layoffs and all.

Tell me about it.

Fortunately neither I or my partner work in real estate or the building industry, but we've been trying to sell our house since March !!

[ChrisB 0]

Sadly though we will all pay in the end for this - letting it all run its course is not really an option, and the governments (US and others) know it... the collateral fall out damage to wider industry / commerce, jobs and the economy is just too great a risk to let things carry on as they are imho.

I think the best we can hope for is that whatever taxpayers cash goes into sorting out this mess is on a loan basis only, (even if a very long one), so ensuring none of the irresponsible lenders that created this sorry mess get off scott free. If nothing else hopefully there will be a worldwide rewriting of the financial regulation systems at the very least after this to make people and companies in the financial sector more accountable for their actions.

Have to say one thing I read today that seemed grossly unfair was the fact that the few remaining true building societies in the UK, (i.e. the ones run as true mutuals with no shareholders), will also be hit with a very large chunk of the bail out bill for this. This is despite them having stuck to responsible lending and not demutalising to become banks in the 90's to take advantage of the looser lending regs that apply to banks - how stupid is that . Hit the responsible lenders to bail out the fly by nights.....

I know a lot of people are hoping that the irresponsible idiots that took the large bonuses at everyone elses expense will suffer now.... but sadly the truth is likely very different. Most of them that have been working in the city for more than a couple of years will have already banked years of huge bonuses... easily enough so they won't have to worry even if things get bad. So they can't get work for a year or two... big deal... the mortgage is already paid, and they are probably sitting on a few hundred K in savings / investments. Joe Average is the one who is going to feel the squeeze imho.

Still if economic conditions continue to deteriorate, it might flush a few bargain vintage Tamiya's out of the woodwork . So if you do have a bit of spare cash, it could be a good time for getting a good deal!!

[WillyChang 1814]

... Hit the responsible lenders to bail out the fly by nights.....

= MORAL HAZARD mentioned earlier

And it won't solve the issue either, its just a big bandaid - might not even be big enough.

Banks are like any other business, if you offer incentives for staff to mazimise lending = profits

then you'll have to get as close as possible to the risky credit borderline between a deal or no-deal.

A prime creditrisk who can afford it confortably is usually in no need to borrow money.

and a less-prime creditrisk needs to borrow but usually can't afford to.

The prime fella knows he's a good risk and can push rates as low as the market will offer him

whereas the less-prime borrower will be a much harder sell to achieve credit dept signoff.

Add that to the bubbling real estate prices and banks lending 107-110% of property value

even ppl with no collateral can buy houses... as long as they don't lose their income source/s.

Still if economic conditions continue to deteriorate, it might flush a few bargain vintage Tamiya's out of the woodwork . So if you do have a bit of spare cash, it could be a good time for getting a good deal!!

do you find many RCs at foreclosure garage sales?

or banks don't care, just send everything to the tip

If you had spare cash, go buy the whole house in good locations instead.

[taliesin 260]

Can't help myself - I have to put in my American two cents worth. Which is about the value of my dollar bill right now, or perhaps 10 shares of [insert name of investment here].

We are so cheesed off about this because many normal folks have seen this coming for ages because common sense packed up and fled the house long ago. Our Congress is useless and our Corporate Leadership are a pack of jackals. Don't even get me started on our Illustrious Leader. Or Bankers, Wall Street CEOs, Insurance Gits, Oil Whores, you get the picture.

Most Americans have been getting soaked for awhile now, while those that least need the money just make tons more of it, and now some puke in a suit is trying to sell us on a right proper dunking? Give me a break.

Sorry part is, many people just don't get it and even fewer care. Pain doesn't hurt when its somebody else's, so they won't worry about it until they are in agony and then wonder why nobody cares about their screams of pain. Ow, I just lost $44,000 in the market, Ow! You had $44k and you are whinging??? Get the rope....

Unfortunately, I think it has to become even more of a total nightmare before anybody really cares enough to turn off the "reality tv" and start living in the real "reality"; you know, the one where you lose your home, can't afford the bills, can't borrow money, and now you have to explain to the kids that you can't afford college for them, and then you lose your job and can't get another one. Oh yeah, and your bank failed, but that doesn't matter because you couldn't afford the $10 a gallon gas to drive your uninsured auto to the going out of business store to look at the prescription drugs that you can't afford to buy because you don't have any health insurance, and oddly enough you NEED your kidneys, so that's right out the window. At least you can still...cry?

Too many people thought it can't happen here, so let's just keep the credit party rolling. Well, the party's almost over, so the last one standing just turn out the lights. And get ready for a long dark winter.

And if anybody thinks this band-aid bailout will work, well, a tourniquet might slow the bleeding down, maybe, but it won't cure the problem. Why are we talking about salvaging the virus that infected the entire country? Why are we going to save those people/companies/banks/investment houses/insurance companies that put us in this mess anyway? Because it will wreck the economy if we don't? Seriously? Look around, honey child, that bus done wrecked already. And you're handing me the bill, while the guy who got paid $13 million for 3 weeks work [Fannie May CEO, I think] laughs all the way to the bank; you know, the one that isn't in danger because him and his cronies own it?

I've got a better idea. Let the jerks who made all the money fix it. They can afford it. Me? It took me a year to find a stinking job with a doctorate degree and a dang good resume, and I make marginally more than I did 10 years ago, but now I owe a king's ransom for student loans. And the jobs that were "guaranteed" when I started? They're gone. My lifestyle was better in 1990 than it is now, and it was modest and sensible then. Now I just feel doomed.

Nobody wants to admit that perhaps our idiotic lifestyle over the last 20-40 years might come with a price tag. Let alone think about what that price might be. And here's the kick in the head; even if you haven't agreed, there's been virtually no way to avoid getting sucked in. If you can't beat 'em, join 'em, because why should somebody who is doing everything wrong get to live large while you get handed the bill?

Yeah, I think we're screwed. Sorry to say, it might take a lot of you chaps around the world down too. It just makes me so mad that some of us have tried for years to live a sane lifestyle while the rest of the country went barking mad, and even so, we're gonna get screwed too. Grrrrrrr. And now, some idiots who caused the worst of the damage start spewing about how we all have to make some and sacrifices? I'm willing to sacrifice some of my time to feed a few CEOs through a chipper/shredder feet first. Slowly. Does that count?

Now I'm going to go read a Tamiya catalog and calm down. I have promised to not watch the news anymore this week because it's just depressing me. So now I can leaf through some of the Tamiya goodness from yesteryear and pretend I don't hear some Fat Ba...... in a toga playing a fiddle. Is that smoke I smell? Naw....

[taliesin 260]

Wow, I can pitch a pretty good rant when I get all revved up.

[Tamiya1/10 382]

Lets face it, we are all greedy to a certain extend. Just look at the size of some TC members' collection. And I am just as greedy as the next guy. The moment we have ownership of anything, we are under pressure to keep it, maintain it and buy more of it. Most some investors don't have the know how, the time or want to use the time to learn and rely on their banker or fund managers to look after them. Let face it if your investment is less than $1 million, you are not going to get some high power investor looking after you and you have to do it youself.

Once you have financial obligiations, for most people the job is very important and if your boss tells you to do it, you will do it provided is not illegal, else you are out of a job.

The way I see it, the US government did not pass the bail out first time around is to gauge the public reaction, after all is $700 billion with a B and politicians are no dummies.

Some people in the States buying homes are just as guilty even when they know they don't qualify. Home ownership is not god given right like the right to bear arms in the States. I guess bankers are expect to generate new mortgage loans each week, month, quarterly and they did whatever it take to make the numbers and now the fall out is coming home.

If your are a parent, have kid(s), working and still have a mortgage, the current situation is serious.

[ryanbored 3]

18 months ago I paid 80p for a litre of fuel, and everyone was kicking off cos it was going up 2p every copule of weeks (sometimes more) and getting close to the 1 mark. It's now nearly 7 a gallon in some places ($13ish ). I earn my living from selling cars- In September I sold 4 cars. Last year for the same month I sold 15.

Panic is setting in!

[ChrisB 0]

do you find many RCs at foreclosure garage sales?

or banks don't care, just send everything to the tip

If you had spare cash, go buy the whole house in good locations instead.

True enough - I guess I meant that if the tough times are going to be here for a while then maybe people will have to give up some of the luxuries.

If people have less disposable income, they may have to look to selling up some of the "luxury" items they have to be able to buy other things they want. I know for example that I tend to go through "phases" with my hobbies, and they change over the years. These days with the likes of ebay its a good way to get cash for stuff you no longer use......

I just think that if you are after that shiny new "toy", but your disposable income is down due to the current economic climate, well maybe you might decide that you don't really need those 2 NIB Hiluxes, or the 3 mint scorchers, or the shelf queen Wild One, and by putting them on ebay you can generate the cash for the shiny new toy you desperately want that way

For sure if you are in the situation of having little or no debt and spare cash the next 12 months will most likely be a great time to buy pretty much anything (property, investements, collectibles) as the demand will be low and so the prices should be cheap. As long as you are not hoping to make a quick profit and can hang on until the upturn, you should be set.

[Tamiya1/10 382]

Now that the $700billion bail out passed by Congress and signed, yet the stock market is heading south from the States to Europe, with Asia in a mixed position dispite interest cut all around, are we heading in a world wide recession or worst depression?

Cash is King but is your job secured or have enough funds to last you through the end of the tunnel?

Before I thought the market will go down because of the baby boomers cashing in, never in my wildest imagination the cause will be by sub-prime mortgages and the dominal effect will have around the world. I guess the American free spending or credit spending finally comes home and the piper got to be paid.

I am in construction related business so it will have an effect on job or no job.

[Swarm 242]

America sneezes and we all catch the cold

Something not right with this picture US dollar crashes and we all crash even though our market is sort of stable at the moment maybe I should have listened more in economics class at school