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Old 11-12-2008, 12:29 PM   #1
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Paulson: Troubled assets won't be purchased - Economy in Turmoil

WASHINGTON - Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.

Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.

He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.

Paulson said that 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.

“This market, which is vital for lending and growth, has for all practical purposes ground to a halt,” Paulson said.

The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was “not the most effective way” to use the $700 billion bailout package, he said.

The announcement marked a major shift for the administration which had talked only about purchasing troubled assets as it lobbied Congress to pass the massive bailout bill.

Paulson said the administration is exploring other options, including possibly injecting more capital into banks on a matching basis, in which government funds would be supplied to banks that were able to raise money on their own.

The bailout money also should be used to support efforts to keep mortgage borrowers from losing their homes because of soaring default levels, he said.

A proposal to have part of the bailout funds used to guarantee mortgages that have been reworked to reduce monthly payments for borrowers is an approach the administration continues to discuss, but Paulson did not announce that it would be adopted. Federal Deposit Insurance Corp. Chairman Sheila Bair has pushed for that approach.

Speaking of the first-ever summit of leaders of the Group of 20 major industrial and developing countries, Paulson said this weekend’s meeting needs to focus first on how to repair the financial system as a way to bolster the global economy.

Paulson praised a new set of guidelines issued Wednesday by the Federal Reserve and other bank regulators, saying that they addressed a crucial issue of making sure that banks continue to lend at adequate level.
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Old 11-12-2008, 12:32 PM   #2
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President-elect Obama, when he met with President Bush at the White House on Monday, urged Bush to support aid for struggling automakers and Democrats in Congress have begun drafting legislation that would give General Motors, Ford and Chrysler access to $25 billion of the rescue funds.
Funny, when I was listening to CSPAN radio a few weeks ago and heard Barrack and others plead Congress to pass the bailout bill, there was no mention of bailout for everyone in the world...

...this is like in Star Wars when the Senate votes to establish the Galactic Empire.
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Old 11-12-2008, 12:46 PM   #3
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Old 11-12-2008, 12:55 PM   #4
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Fire up those printing presses, money needs to be printed.
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Old 11-12-2008, 12:56 PM   #5
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at the pictures

everything else is just sad
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Old 11-12-2008, 01:03 PM   #6
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Old 11-12-2008, 01:29 PM   #7
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anyone got "connections"? lol
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Old 11-12-2008, 01:58 PM   #8
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Why would the bailout be different than anything else the Gov't does? Everyone has their fingers in the pie. With the tremendous waste in any gov't action I figure 700 billion spent by the Gov't is equal in effect to around 200-300 billion if it were spent smartly by private industry.

Personally I thought the bailout was rushed in the 1st place. After ramming it through, taking a closer look at the best way to spend the money is great! Not that I trust that is what is happening.

The #1 problem was bad loans. Loans to people who didn't qualify, loans taking advantage of ignorance, loans that never should have existed ( interest only/ 110% of value/ most arms/ etc. ) no proof of income loans, loan friendly appraisals and all the other BS that went into this problem. The biggest impact for that money would be slowing down foreclosures, forcing banks to convert high interest arms and construction loans to reasonable fixed rates and trying to stabilize the housing market. Stabilize housing and the other problem industries will benefit. If housing hadn't taken everything into the crapper and wall street wasn't allowed to run oil to $120 a barrel we wouldn't be seeing 1/3 of the problem we have now.

To fix the problem we need a Wall street crack down, Banking crackdown and start helping regular people.

So much for my 2 cents. Like I actually know anything....
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Old 11-12-2008, 02:21 PM   #9
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the credit default swaps are what really brought the house down. The dumbest system you could imagine. One thing goes down and everyone follows.
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Old 11-12-2008, 02:27 PM   #10
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President-elect Obama, when he met with President Bush at the White House on Monday, urged Bush to support aid for struggling automakers and Democrats in Congress have begun drafting legislation that would give General Motors, Ford and Chrysler access to $25 billion of the rescue funds.



I think that every Obama supporter that has an Obama sticker on a foreign car should be forced to go out and buy an American car. Then if the auto industry still has problems then maybe the Govt should step in.
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Old 11-12-2008, 03:04 PM   #11
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I think that we should start our own mt.net political section. I'm sure this is the site that the majority of political correspondents refer to when writing up articles about pressing issues.
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Old 11-12-2008, 03:15 PM   #12
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Hey! We can spout political opinions and nonsense with the best of them! If the economy wasn't in the crapper and we hadn't just had a huge swing in political leaning there would be very little discussion here. We all need a place to vent, MT.net might as well be that place now and then. Makes as much sense as anywhere else. We all have the common interest of making our little girly cars faster but can't spend all out time here discussing performance issues. why not bounce politics around if we don't have other threads to contribute to?
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Old 11-12-2008, 03:25 PM   #13
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Originally Posted by levnubhin View Post
I think that every Obama supporter that has an Obama sticker on a foreign car should be forced to go out and buy an American car. Then if the auto industry still has problems then maybe the Govt should step in.
foreign doesn't mean "not made in the USA", just like doestic doesn't mean "not made outside the USA".

toyota pickups? made in california.

recent pontiac GTO? australia.
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Old 11-12-2008, 03:32 PM   #14
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I'd love to propose something like adding a tarrif to any vehicle not made in the US, but realistically Honda and Toyota makes thousands of cars here yearly while the big 3 are continually shifting their manufacturing to Mexico and elsewhere.

In other countries, they do add huge import taxes to foreign vehicles, ranging from 50% of the vehicle's value and more.
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Old 11-12-2008, 03:37 PM   #15
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Lot's of Ford, Chevy, Chrysler products are made in Canada, Mexico, etc. Parts come from everywhere.

Of course the US auto industry is in trouble. The hourly cost per man hour is the highest in the world. Porsche doesn't pay as well. Why in the hell does each man hour of UAW labor cost $73 in wages, benefits, insurance, taxes, etc? How can you compete when labor is so much less in developed nations like Japan or the EU? Not even factoring in 2nd world production like Korea and Mexico.
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Old 11-12-2008, 03:38 PM   #16
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Quote:
Originally Posted by y8s View Post
foreign doesn't mean "not made in the USA", just like doestic doesn't mean "not made outside the USA".

toyota pickups? made in california.

recent pontiac GTO? australia.

Where do the profits go?
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Old 11-12-2008, 03:49 PM   #17
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profits may go offshore, but many thousands of US workers are employed.
the alternative could be that no US workers are employed and all proceeds go offshore. Which is better?
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Old 11-12-2008, 03:50 PM   #18
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Where do the profits go?
Shouldn't you be more concerned with who gets the job assembling them? Who gives a **** if a Japanese company is making all the profits as long as they are employing an American work force?
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Old 11-12-2008, 03:56 PM   #19
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Shouldn't you be more concerned with who gets the job assembling them? Who gives a **** if a Japanese company is making all the profits as long as they are employing an American work force?
So you dont think that it would be better if we could get the profits as well and jobs back here in the US?
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Old 11-12-2008, 03:58 PM   #20
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Quote:
Originally Posted by Ben View Post
profits may go offshore, but many thousands of US workers are employed.
the alternative could be that no US workers are employed and all proceeds go offshore. Which is better?

The better alternative would be to have the cars produced here and have the profits here as well. Im not saying that Japanese cars should stop being made here but I believe that The big 3 should have the strong hold here.
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