TPS

It's the very nature of a profit-driven system. Financial institutions make money by making loans. When those who meet the "sound criteria" run out, well..let's just start loosening the criteria. Financial institutions are the ones who create the credit, and they set the criteria. Btw, how does one define too much debt? And if one knows how to define it, then shouldn't one know when they've issued too much?

Aren't finance companies supposed to evaluate one's credit rating? yes, our consumer-driven economy and narcotic demand for credit play a role, but ultimately the banks (and other FIs) are supposed to "draw the line."

It's Paulson's job to let Congress know the extent of the crisis, and work with them to craft a solution, but he did not present it that way. He, bush and bernanke essentially "threatened congress" to accept his three-page proposal last week, else all hell would break loose. Fortunately they weren't able pull a "patriot act" on congress this time. Not sure who started a thread about her inexerience. I started one though about what a complete idiot she is...

thanks. I wish people would give up on this dems vs reps blame BS--both parties take money from the industry and both parties are accomplices, but much of the blame lies squarely on Wall Street. One of the reasons I asked you if you thought this $700 bil. bailout would solve the crisis is something they point out: To me, it really is the trillions of dollars CDSs that represent the rest of the iceberg, and until that gets sorted out, we haven't resolved the crisis.

Lots of wrenching fists and gnashing of teeth about the failed bailout vote. And wow, the markets lost over $1 trillion in equity; so where'd it go? This was not the best package that could be put together, and Paulson should take the blame for the way he (initially) presented it: "Give me $700 billion, no questions asked; else we're doomed! We're doomed, I tell ya..." That pissed a lot of people off and congress heard from "the poor ignorant masses." It's about damned time the American public got pissed off about something and moved the congress! That said, there will be a bailout bill, and hopefully it won't be so wall street-centric. And the markets will rally. The process of cleansing the system will take some time, and we will probably experience more crises. But we will survive this week, so enjoy a cocktail or two as the Bills get to 5 and 0....

You're right, they gave it to Goldman Sachs... AIG bailout

you're assuming people are building in those markets now--I don't think that's the case. Haven't new builds been shrinking? Prices are falling because people are being forced to sell unable to make payments or banks have taken the assets and trying to sell.

That doesn't resolve the problems that current homeowners face, which is the root cause. Read about a program in Philadelphia that requires lenders and borrowers to meet in courts and try to resolve delinquencies and bankruptcies. Something like half to 2/3s get resolved: borrowers get terms they can live with, and it's cheaper than going to bankruptcy court for the banks.

Maybe that's the plan...

I heard someone on cspan touting this plan too, and when he said $450,000, I cringed like I was watching a Sarah Palin interview...

I wonder if it's Goldman's turn to buy a large bank on the cheap?

Every election. Btw, being an idiot doesn't disqualify one from becoming president or vice president of the U.S.

Makes Dan Quayle look intelligent. First: I have not voted for either major party in the presidential election since 1992. Second, after watching her interviews, I have to throw my 1 cent in on this: you've got to be smoking crack if you defend this idiot. No wonder McCain is going to make sure there is no VP debate--she is a !@#$ing dolt! Christ! I understand most of you vote your party lines, but anyone who tries to defend her is a total party hack. Hey, if she (errr...he) wins, maybe AD will be the next Treasury Secretary...

Here's an interesting perspective. banks made bad bets?

I think the more important question is if it's a "clear majority of registered voters." What percentage of the poorest 50% actually vote relative the top 50%?

Of course, that is how the system has always worked--the weak are weeded out in downturns. I know this is no typical downturn (it's the "perfect storm" of downturns), and I have not argued against this latest phase of bailing out Wall Street; I just don't think it is the be all end all either--I do believe you need to do something to stop the downward spiral in real estate, otherwise those assets that aren't purchased and look good now, won't be later. As I said, each time the bandaid gets bigger. Do you think this will end it?

There's no doubt that credit is tight and it is trickling down to main street, that is how credit crunches work. So I'm not denying that reality. However, your original article/example seems to be more a consequence of GM's reliance on truck and SUV sales back-firing in a slowing economy with $4/gal gas. As that article states, many dealers will go out of business since they don't sell what consumers now demand. I simply disagree with your assesment on that ONE. The 'Big Three" are paying the consequences of relying on sales of gas-guzzlers when $4/gal gas prices hit in the middle of a credit crunch. So you get a double whammy--falling sales and inability to raise funds.

The article states that "bad auto loans" were responsible. Once they started having problems with their loans, GMAC pulled out last summer. As it further states, GM's sales are down some 2 million cars, and that the number of dealerships will decline. His problems were NOT caused by lack of credit. Could he have survived if GMAC stayed in? I highly doubt it.

On the flip side of that coin, why would banks extend (mortgage) credit in markets where housing prices are still falling? No one knows if a mere $700 billion is enough to bail out Wall STreet. In each case the bailout Bandaid gets bigger and bigger. As long as housing prices continue to fall, and delinquencies and foreclosures increase, you haven't solved the root of the crisis. Despite the attempts to blame democrats, republicans, lax lending standards, or the push for increased homeownership, the blame for this crisis lays at the foot of Wall Street.

His "credit problems" are a function of his inability to sell trucks and SUVs. It's a bit disingenuous to blame this on the credit crisis.

Isn't it about getting the "toxic stuff" off of the balance sheets? And I raise that issue because of this: DBank

How will anyone outside of Paulson know whether he's buying securities that actually have mortgages explicitly tied to them or not? For example, if he buys the worst of the tranches from a packaged CMO and the higher rated tranches are still out there, then who actually has claim on the underlying mortgages backing all of the tranches? Will the government be stuck with something it can't ever sell?

Didn't you get your refund from the last time govt did this? Isn't that what happened when "the govt made money" on the last bail out?

SHTF? Should I short them?

I agree. I would add a few more culprits though. For one, the ratings agencies were complicit in their very generous risk models so the asset-backed securities could get their top ratings; then the monolines jumping in on insuring the nonn-AAA. As in every bubble, everyone wanted a piece of the action...