Hi Trippin Ninja,
Yes, you're absolutely right. The original draft said that. However we must assume that somebody noticed the small print and has sorted that out, for example it's been reported of an agreement to free the funds stage by stage as opposed to all at once.
One of the things that people need to be aware of is that there will/needs to be a retraction of the credit market after the bail out plan is put into place.
You can't bail out a company buying bad loans, just for these companies to return making bad loans. Tere needs to be new restrictions as to who can receive a loan from their bank or mortgage company, wich makes credit harder to get, and consequently less credit available, thus the market should shrink which will hit the bottom line of these big companies.
The government needs to think about what these companies will do once their bottom line goes south. Are they wanting this bail out to take the money and run or are they wanting the bail out to sound out their books and learn to work with less money?
Either wy, the American taxpayer will foot the bill for the bail out, many taxpayers will not be able to get credit once the bail out happens and nobody knows if they will have to re-bail out any companies because of the shrinking market? It's a risky thing to do. Once you leave the flood gates ajar...
Best regards,
Steve
Quote:
Originally Posted by Trippin Ninja
This bailout itself doesn't stop at 700 billion.
Paulson’s draft bailout plans says: “The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.”
As Chris Martenson writes, “This means that $700 billion is NOT the cost of this dangerous legislation, it is only the amount that can be outstanding at any one time. After, say, $100 billion of bad mortgages are disposed of, another $100 billion can be bought. In short, these four little words assure that there is NO LIMIT to the potential size of this bailout. This means that $700 billion is a rolling amount, not a ceiling.”
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