US Announces New USD 1,5 T Bail-out Plan
The new US Treasury Secretary Timothy Geithner announced that the new plan would allow the US government to successfully deal with the crisis by unfreezing the credit market to boost a renewed granting of loans to businesses and private individuals.
Under the plan, the size of a key Federal Reserve lending program will be expanded to USD 1 T from USD 200 B to allow granting of loans not only to consumers and small business, but to the troubled real estate sector.
In addition, the establishment of a public-private investment fund of USD 500 B to absorb banks' "toxic" assets was also announced Tuesday.
President Obama said Monday that Geithner's plan would be a template for "restoring market confidence," adding it was too early to say whether the USD 700 B bank bail-out plan, officially called the Troubled Asset Relief Program (TARP), will need more funds. Tarp was passed by President Bush in October of 2008.
Meanwhile, President Obama's wider economic stimulus plan passed a crucial stage in the Senate Tuesday, the Bulgarian information agency BGNES reports.
The Senate has voted with 61 for and 36 against to discontinue the debates and vote on the plan. This is expected to cost an additional USD 800 B.
At the end of January, the House of Representatives approved its version of the package, worth USD 825 B, without any Republican support. The two different versions of the bill will have to be reconciled in a joint House-Senate committee before facing a final vote.
The majority of the 41 Republican senators continue to disapprove the plan. Republicans insist on more tax relief and less spending. They also complain that some projects would do little to stimulate the economy or create jobs. Democrats say the spending Republicans are calling wasteful amounts to a tiny percentage of the overall package.
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For once I like your theory on what will happen - borrwoing vs. printing.
Very interesting... and SO FAR seems to be correct.
I'm a currecny trader and keep noticing that the dollar keeps it strength while EVRYONE thinks for the crash + the fact that very few think the treasury bonds will go back up after this recent break down..
Very good theory!
My dearest NELLIE,
Sorry but it seems you did not take any Investment courses.
Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaall the speculation on
WALL STREET does NOT have anything to do with the real markret value of a
The investors are speaking of BOOK VALUE of a stock.
It is true that in USA companies are obliged to issue a q uater's statement
but it only reflects the Equities and Liabilities.
All other assets like properties(e.g. GM owns plenty of real estae...flats fot it's
workers),mashinery and who knows what else...may some Jets or yaghts..
it is not in these audits.
The USA TRASURY will avoid to PRINT MORE money ,beacuse as you said it will
lead to deflation of the $$$$$$$.
Week dollar actually is good for the export but NOT good for IMPORT and USA is importing a looooooooooooooooooooooooooooooooot of products.
Therefore the TREASURY will borrow money from other nations.
It would be a good idea for banks to pay back TARP $'s. That way, they don't have to provide credit lines to dead beats and can charge high interest rates to compensate for high risk people.
I want to see banks give back the billions of TARP dollars they were ASKED to take, and tell Mr. Barney Frank and those other fcuking retards to go fcuk themselves. Banks are corporations that should looks after their shareholders first and have zero responsibility to look after the idiot scum that over-borrowed and are now claiming that they were somehow duped into borrowing against home values that could, low and behold, fall as well as rise. Where were these fcukers when the bubble was going up? Spending the money on flat-screens, vacations and big black arse dildos no doubt!
Don't forget that money is just paper and treasury has stepped up productio0n of dollars. Therefore, the value of the dollar will be diluted and it will drop like a bomb.
Also don't forget that this money everyone thinks disappeared did not grow legs and run away, assets simply got devalued. For example - if you had a house worth 500,000 and you had stocks and investments worth 500,000, you had a million dollars. Against that million in assets, you could borrow up to a million. After the housing bubble burst, your house is worth only 250,000 and after the stock market went down, your stock is worth only 250,000 now. You lost half of your net worth in a couple of months. Now you can only borrow up to 500,000. That's what happened to companies too. The US lost half of its net worth. Actually, the whole world lost half of its net worth. It was paper money, or money on paper only, it was not real money in your savings account.
DO NOT BELIEVE WHAT THE MEDIA IS SAYING!
The LOANS(this are loans and NOT presents) to the financial institutions will be
financed by China,AUE,Kuwait,Oman,Bahrain or other oil reach countries.
The USA Government will borrow these monies and pass it to the banks.
THIS IS DONE AS THE USA GOVERNMENT WANTS TO BACK THE BANKS
AND RESORE THE INVESTORS CONFIDENCE IN THE FINANCE INDUSTRY.
The USA Government will receive PREFFERED STOCK in the banks,to wich it
Being owner of PREFFERED stock means in case of bankruptcy the TREASURY will be
satissfied from the remaining assets.
Three decades ago the Treasury also financed the BIG THREE car manufacturer
in Detroit...the money was well
ell spent.The CAR manufacturer paid these loans back+dividents+increased
value of the stock.
The bail-out (how the median presents it) are simply LOANS!
In order to get these money USA Government has to borrow heavily as I said
either from the SUVEREIGN FUNDS of the GULF States or another country with plenty of cash...
The Americans still don't understand the things; It is wrong to organize societies on credits; At the end, lenders prostitute theirselves, and sell the bad deals to the rest of the world, assuming that governments (tax payers) will cover the losses Their personal fortunes are protected through their political influence; The "free market without corrections" clearly failed, because of a lack of ethics and self-control;
It would be far better in the present situation that all banks get temporary nationlized, management prosecuted, put responible for their acts, losses recovered where possible, wait a couple of years for new ethics in loan-strategy, and then privatize the things to a new generation of bankers, within a framework of global laws;
I'm affraid Obama can not tackle the bank-lobby;
Today the Fortis shareholders decided to keep the bank nationalized; Probably a wize decision.
That plan is a joke. All the smart people are saying that you can't spend your way or borrow your way out of this recession, because too much borrowing and debt is what caused it in the first place.
Or maybe the market is coming around to the harsh realization that its not so easy to fix the general mess created by years of essentially false prosperity, all fueled by a housing bubble. Let me say also that I recommend getting out of the NY area to really understand the depth of the problem. I was on the west coast of FL a few mos ago and can tell you that the housing situation is ugly beyond belief.