# Fed to the fiscally sane: drop dead **URL:** \ **Category:** The BBQ Pit\ **Created:** [September 19, 2008, 1:55pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310 "2008-09-19T13:55:36Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [September 19, 2008, 4:51pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/21 "2008-09-19T16:51:16Z")
> [@jk1245](#): > > Short sellers are the brakes on the engine. Without a downward pressure, stock prices would keep escalating (until they crashed). In order to find a true price, you need forces pushing up and down. Eh? Sellers are downward pressure. ---
**Author:** ![DoctorJ](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctorj/32/2904_2.png) [@DoctorJ](https://boards.straightdope.com/u/DoctorJ)\ **Post date:** [September 19, 2008, 4:57pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/22 "2008-09-19T16:57:43Z")
> [@](#): > > I don’t get that… I don’t understand how it was ever ok to sell shares you didn’t own, speculating that you could buy them later at a lower price for a net gain. I’m not knowledgeable enough about financing or stocks (which I’m trying to change). I admit that. Can someone possibly explain how anyone (other than the folks betting on failure and possibly spreading premature rumors of a company demise to encourage that failure) could have thought that was a good idea? They just had a good story about this on _This American Life_. They explained that in a regular short sale, you’re actually borrowing the shares from someone else (for a fee) to sell, and you return them when you buy them back. That makes sense to me. A _naked_ short sale is when you short a stock without bothering to borrow it first. It’s not quite kosher, but it happens due to slack and non-enforcement in the transfer process. As to who thinks it’s a good idea, pretty much nobody. I’m sure somebody here knows more about all this than I do. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [September 19, 2008, 5:01pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/23 "2008-09-19T17:01:59Z")
> [@Cervaise](#): > > I can sort of understand sharing the losses, even if I don’t like it. What I want to know is, when do we get to share the profits? But you already have! Certainly, the civic mindedness of these companies compeled them to offer financial support to the political party that most embodies the free entreprenuerial spirit that fosters such a climate of bold, innovative creativity! And what political party has worked _tirelessly_ to ensure that the snares of needless regulation are stifled, who has worked harder to keep the vigor of our free market system safe from such petty interference? And yet, where is the gratitude? Where? ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [September 19, 2008, 5:13pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/24 "2008-09-19T17:13:32Z")
> [@elucidator](#): > > But you already have! Certainly, the civic mindedness of these companies compeled them to offer financial support to the political party that most embodies the free entreprenuerial spirit that fosters such a climate of bold, innovative creativity! And what political party has worked _tirelessly_ to ensure that the snares of needless regulation are stifled, who has worked harder to keep the vigor of our free market system safe from such petty interference? > > And yet, where is the gratitude? Where? Contrary to your snark, financial services companies spread the joy among politicians of all stripes. ---
**Author:** ![Happy\_Fun\_Ball](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/happy_fun_ball/32/17664_2.png) [@Happy\_Fun\_Ball](https://boards.straightdope.com/u/Happy_Fun_Ball)\ **Post date:** [September 19, 2008, 5:29pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/25 "2008-09-19T17:29:29Z")
Correct me if I am wrong, but couldn’t the feds have rescued the corporate giants by bailing out the people who are defaulting on their mortgages? These people could have kept their houses, the banks would not be hurting as fewer would be defaulting on their loans, and everybody would be happy, yes? I mean if we are going to bail out those that made bad risks, why not the little guy instead of big private corporations? Is the government hoping that the bailout will trickle down? ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [September 19, 2008, 5:47pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/26 "2008-09-19T17:47:50Z")
> [@Eyer8](#): > > Correct me if I am wrong, but couldn’t the feds have rescued the corporate giants by bailing out the people who are defaulting on their mortgages? These people could have kept their houses, the banks would not be hurting as fewer would be defaulting on their loans, and everybody would be happy, yes? I mean if we are going to bail out those that made bad risks, why not the little guy instead of big private corporations? Is the government hoping that the bailout will trickle down? No, it’s just that would have cost much, much more money. The government isn’t guarranteeing every nickel and dime. It’s backing the financial services companies so they can meet their obligations. Hopefully, they wil recover and can wipe the bad debt of the books in sunnier economic times. It’s kind of like bank runs. They bak may well be able to cover the loss in the long run. If everyone withdraws in the short, or for another reason it has to pay its debts back NOW, then it can’t raise long-term cash. Of course, this is over-simplified, since we’re talking about very complex and weird securities rather than simple deposits here, but that’s the gist. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 19, 2008, 5:54pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/27 "2008-09-19T17:54:16Z")
These bailouts will do more than delay the inevitable. It won’t work. This is just printing more magic money that does nothing to help the underlying problems. Over extended credit, inflated housing prices, a keep up with the Jones even when I cannot afford it mentality. Fucking politicians think to solve anything throw money at it. America needs to grab its collective cajones and hunker down, the storm will come we can delay it, but it has to happen before we can recover. And it doesn’t have to be a Great Depression just a Depression would do, but if we keep using big brother in ways that not even big brother can afford soon his pockets will be even emptier and when the shit hits he will be broke. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 19, 2008, 5:56pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/28 "2008-09-19T17:56:48Z")
> [@Ludovic](#): > > In 2002, I bought a condo well below what I could “afford” because I knew that if the market hit a downturn I wouldn’t get any help from the government. I guess I was wrong and I should have bought that $300K house anyway. > > I didn’t invest in Fannie Mae and Freddie Mac bonds because the paltry .5% return advantage wouldn’t pay for putting all eggs into one basket and the risk from overvalued real estate coming crashing down, but apparently I shoulld have because there’s no real danger. (The Fed is now Steve Erwin?) > > I also apparently should have started up a huge insurance business and failed. No. I should have REALLY failed, because apparently our government is rewarding people for really really failing. (Just moderately failing, you’re on your own.) EPIC BAIL! > > The government is also planning on purchasing failing home loans, further rewarding stupid banks. Did they reward stupid dotcoms? If I knew they would come to my rescue, as a programmer I certainly would have quit my steady job in government contracting to reap huge rewards in the dotcoms with NO RISK! > > I might be wrong on this last one, but judging from the returns on my Money Market Mutual fund with Vanguard (a paltry 2%,) I don’t believe they were investing in AIG or short term subprime loans. But apparently, I should have really been investing in the ones that are returning 4% or higher, because if you fall below $1 a share, the Fed will bail them out anyway! > > I’m a fiscal moderate and if you want to elect European Socialists then please let’s do so and see what happens. But this IS socialism without elections. The fed did it with your money. The money gurus are saying there has to be huge tax increases to pay for about 2 trillion bucks in bailouts. So you are rescuing them. That should make you feel better. There are still; about 5 million homes in foreclosure. They will take the banks down again if they are not addressed. The people have to stay in their homes and make payments or this whole dog and pony show is about nothing. ---
**Author:** ![Sinaijon](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Sinaijon](https://boards.straightdope.com/u/Sinaijon)\ **Post date:** [September 19, 2008, 6:09pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/29 "2008-09-19T18:09:47Z")
> [@elucidator](#): > > And yet, where is the gratitude? Where? Frank Raines (CEO of Freddie Mac, 1999-2004, when it was taking on all the shit loans) certainly has Obama’s gratitude, being rewarded as a financial advisor. Go Obama! Lets run the entire country like Freddie Mac! ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 19, 2008, 6:13pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/30 "2008-09-19T18:13:46Z")
> [@gonzomax](#): > > The fed did it with your money. The money gurus are saying there has to be huge tax increases to pay for about 2 trillion bucks in bailouts. So you are rescuing them. That should make you feel better. > There are still; about 5 million homes in foreclosure. They will take the banks down again if they are not addressed. The people have to stay in their homes and make payments or this whole dog and pony show is about nothing. Fuck that, if they cannot afford the home find a nice rental. The only way the housing market will recover is when the artificially high prices go away. And if you have a glut of homes on the market the price will get in line with the base price. You know how many tens of thousands if not millions of people would be better of renting? If it wasn’t for that stupid bullshit “American Dream” pressure we would not be in this shit. Renting is almost looked on like being a pauper or something when in reality if you’re paying a mortgage you can be renting with that same money and end up on the winning end of life. What about credit card debtors? Should we reach into our pocket and bail them out too? How about auto loans? You draw the line I want to know where exactly it is. If you have a bad interest rate, sucks but it happens deal with it, if “liar loan” describes you, tough shit. I can see some call for holding the interest rate on the loans steady, but to bailout even more with money we do not have is utter stupidity. Just as stupid as the rest of these stupid bailouts. We have the FDIC that should be the extent of our bailouts when the banks fail the people with the money in it don’t. If you lose your job, and the bank takes back your home, that is sad. And believe me if it is happening to someone on here, or IRL and I could help I would. Charity is fine, and helping when we can is also fine, but the government just cannot help everyone we do not have the money. Gah eventually other nations will have to stop buying out debt. :smack: ---
**Author:** ![The\_Hamster\_King](https://avatars.discourse-cdn.com/v4/letter/t/8edcca/32.png) [@The\_Hamster\_King](https://boards.straightdope.com/u/The_Hamster_King)\ **Post date:** [September 19, 2008, 6:17pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/31 "2008-09-19T18:17:41Z")
> [@Cervaise](#): > > What I want to know is, when do we get to share the profits? Soak the rich, baby. That’s how we get it back. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 19, 2008, 6:18pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/32 "2008-09-19T18:18:31Z")
> [@Sinaijon](#): > > Frank Raines (CEO of Freddie Mac, 1999-2004, when it was taking on all the shit loans) certainly has Obama’s gratitude, being rewarded as a financial advisor. > > Go Obama! Lets run the entire country like Freddie Mac! I hope you’re fucking kidding? Considering Mr.RemoveRegulation Gramm is McCain’s economical adviser. Trying to assign blame to either party is ludicrous both parties should share the nations scorn. Personally I think both candidates are ignorant when it comes to the economy, judging by the remarks they have made since this happened anyway. What was that, a problem somewhere? Lets throw money at it, that will fix it! ---
**Author:** ![The\_Hamster\_King](https://avatars.discourse-cdn.com/v4/letter/t/8edcca/32.png) [@The\_Hamster\_King](https://boards.straightdope.com/u/The_Hamster_King)\ **Post date:** [September 19, 2008, 6:21pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/33 "2008-09-19T18:21:22Z")
> [@Sinaijon](#): > > Frank Raines (CEO of Freddie Mac, 1999-2004, when it was taking on all the shit loans) certainly has Obama’s gratitude, being rewarded as a financial advisor. [Frank Raines is not one of Obama’s advisors.](http://ap.google.com/article/ALeqM5hC9O6sRspcMU1TS3H0CLrE2IWu-gD939NBFO0) ---
**Author:** ![Chefguy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chefguy/32/138_2.png) [@Chefguy](https://boards.straightdope.com/u/Chefguy)\ **Post date:** [September 19, 2008, 6:21pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/34 "2008-09-19T18:21:49Z")
> [@Sinaijon](#): > > Frank Raines (CEO of Freddie Mac, 1999-2004, when it was taking on all the shit loans) certainly has Obama’s gratitude, being rewarded as a financial advisor. > > Go Obama! Lets run the entire country like Freddie Mac! So Rains visits Obama headquarters and talks to an underling for an hour, never meets with Obama, and suddenly he’s his financial advisor? It’s total bullshit. You need to get your news from somewhere besides Fox or Worldnet Daily, or at least stop printing lies here. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 19, 2008, 6:31pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/35 "2008-09-19T18:31:00Z")
> [@Chefguy](#): > > So Rains visits Obama headquarters and talks to an underling for an hour, never meets with Obama, and suddenly he’s his financial advisor? It’s total bullshit. You need to get your news from somewhere besides Fox or Worldnet Daily, or at least stop printing lies here. But Robert Rubin is an adviser to him, and he is not the least bit shady. :dubious: > [@](#): > > Mr. Rubin joined Citigroup. Of note, the supermerger between Travelers Group and Citicorp was facilitated by the repeal of the Glass Steagall Act (Gramm-Leach-Bliley Act). This legislation was passed under the Clinton administration, days before Rubin’s resignation. > **[Robert Rubin](https://en.wikipedia.org/wiki/Robert_Edward_Rubin)** > > Robert Edward Rubin (born August 29, 1938) is an American retired banking executive, lawyer, and former government official. He served as the 70th United States secretary of the treasury during the Clinton administration. Before his government service, he spent 26 years at Goldman Sachs, eventually serving as a member of the board and co-chairman from 1990 to 1992. > Rubin is credited as a force behind Clinton-era economic prosperity, including the 1993 Deficit Reduction Act and Balanced Budget ... I understand calling him out, the poster above did too, but the matter remains neither party is above the fray. ---
**Author:** ![Merijeek](https://avatars.discourse-cdn.com/v4/letter/m/f05b48/32.png) [@Merijeek](https://boards.straightdope.com/u/Merijeek)\ **Post date:** [September 19, 2008, 6:44pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/36 "2008-09-19T18:44:10Z")
> [@Eyer8](#): > > Correct me if I am wrong, but couldn’t the feds have rescued the corporate giants by bailing out the people who are defaulting on their mortgages? These people could have kept their houses, the banks would not be hurting as fewer would be defaulting on their loans, and everybody would be happy, yes? I mean if we are going to bail out those that made bad risks, why not the little guy instead of big private corporations? Is the government hoping that the bailout will trickle down? Go back to France, commie! -Joe ---
**Author:** ![Sinaijon](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Sinaijon](https://boards.straightdope.com/u/Sinaijon)\ **Post date:** [September 19, 2008, 7:12pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/37 "2008-09-19T19:12:42Z")
> [@Chefguy](#): > > So Rains visits Obama headquarters and talks to an underling for an hour, never meets with Obama, and suddenly he’s his financial advisor? It’s total bullshit. You need to get your news from somewhere besides Fox or Worldnet Daily, or at least stop printing lies here. I guess you would include the Washington Post in that list as well? ---
**Author:** ![kidchameleon](https://avatars.discourse-cdn.com/v4/letter/k/898d66/32.png) [@kidchameleon](https://boards.straightdope.com/u/kidchameleon)\ **Post date:** [September 19, 2008, 7:15pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/38 "2008-09-19T19:15:40Z")
> [@Really\_Not\_All\_That\_Bright](#): > > I have a differenct problem with it, though- mine is simply that the government is expected to do this stuff but industry is expected to do nothing in return. If we’re bailing out AIG, it shouldn’t just be a bailout; the taxpayers are effectively injecting capital in order to keep the company afloat. When private investors do that, they get stock. Why is it that when the rank and file do it, they get shafted? > > If the government owned interest in major financials it would act as a big woolly blanket thrown over the economy; sure, growth would slow down a bit, but we wouldn’t have shit like this every eight years. Reading an article in USA Today this week, they mentioned that during the Chrysler bail out, the US did get stock. Once they paid the loan back, the government actually made money on the deal. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [September 19, 2008, 8:21pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/39 "2008-09-19T20:21:16Z")
> [@kidchameleon](#): > > Reading an article in USA Today this week, they mentioned that during the Chrysler > bail out, the US did get stock. Once they paid the loan back, the government actually made money on the deal. And in the case of Chrysler, the government got the tax revenues from the workers who still had their high paying jobs, as well as the stock. Had Chrysler gone tits up, its quite possible that those workers wouldn’t have been working for some time, thus not paying taxes, and that when they _did_ find employment, it would have been at a much lower rate of pay. No one should be surprised at the government doing bailouts. For one reason, what politician is going to have the cojones to stand up and say that they were responsible for the loss of hundreds of thousands (or even millions) of jobs? Additionally, we **need** to keep certain companies afloat for reasons of national security. Sure, the taxpayers would save lots of money if we had the Chinese build our weapon systems, but I don’t think that would a very good idea. ---
**Author:** ![Chefguy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chefguy/32/138_2.png) [@Chefguy](https://boards.straightdope.com/u/Chefguy)\ **Post date:** [September 19, 2008, 9:12pm UTC](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310/40 "2008-09-19T21:12:48Z")
> [@Sinaijon](#): > > I guess you would include the Washington Post in that list as well? Would you care to link to the article or just expect us to believe whatever you have to say? By the way, Raines himself denies it. [Previous page](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310.md?page=1) [Next page](https://boards.straightdope.com/t/fed-to-the-fiscally-sane-drop-dead/464310.md?page=3)