View Full Version : Wall St. bail out?
09-24-2008, 04:44 PM
Has anyone been watching the news on this Wall St. bail out?
One side of me would just love to see these businesses that were over leveraged to the tune of 60 - 1, simply cease to exist. I'd like to see any small business owner be able to operate with such debt. Who would even be able to get a loan of $60 for every $1 you put up for collateral? No one could except these Wall St. people who live in another dimension when it comes to business law.
On the other hand after watching Warren Buffett's view that if the government doesn't step in, we are going to have a huge mess on our hands.
It amazed me how small business seems to constantly get screwed by the government and big business gets handouts.
What is your view on it?
09-25-2008, 12:53 AM
I have closely studied the financial upheaval for the last several months.
My degree is Finance. It is odd to see the exact concepts we studied in school come to play in real life. When we discussed loose money policy, my professors pounded their desks saying that government infusions of cash do nothing to solve the problems if the underlying flaws are not corrected.
I am sure you watched the news tonight (Wednesday). The fearmongering is at almost unprecedented levels. I guess they have to turn up the volume a bit when trying to sell us a $700 Billion (some say as much as $2 Trillion) bill. When I hear the words "total financial collapse" and when I am told that this measure is needed immediately and without scrutiny, I wonder if I am being told this situation is worse than it actually is. I also wonder who stands to gain at the tax payers expense. Have any guesses?
Liquidity and cash flow are vitally important to businesses. However, American entrepreneurialism is much more ingenious than our politicians give it credit for.
I believe in capitalism and in capitalism businesses fail. This is just a fact of life. The path toward socialism is a slippery one and I hate to see us sliding in that direction.
It is a good discussion and I would love to read more of your thoughts.
09-25-2008, 01:09 PM
It seems to me that there is a huge disconnect between small business and (wall street/washington). In fact between everyone and (wall st/washington).
Starting a successful small business in this country is amazingly difficult. Then add to it no one tries to help you. Our medical insurance situation is atrocious. These large wall street entities get government assistance when they fail but there are no tax breaks for new start up businesses.
I think the house market and the college educational system has gotten so very out of control because of easy credit. Home prices need to come down. The cost of higher education needs to come down.
We are saddling young people with so much debt that this entire generation is going to be in debt for their entire lives. The federal government has it set up so you can't get out of your student loan debt by filing for bankruptcy. If you could and many students defaulted, it would force the schools to lower their tuition if they wanted less defaults.
So you get out of college heavily in debt and then you sign up for a 7 year interest only mortgage with an adjustable rate that will jump up to the point where you won't be able to pay it in a few years. You go out buy a car and get into deeper debt and then what's the chances that you will be in the mood to start a business? Slim to none.
I am all for education but it must be affordable. In fact every library around the country should be able to lend you material to get any degree you want. Without any fee at all. We need an educated, debt free society.
09-26-2008, 11:27 AM
You know....I heard President Bush blame the Home Market for this $12.1 Trillion deficit. When in fact it is because this Country has been in war for the last 8 years. I guess no Politician will ever admit that they are wrong and that they have failed the American people. It makes me sick to my stomach to see our Country in this mess and we all have to come to the conclusion that our Government sucks.
To blame the Banking Markets, Home Markets for this deficit is crazy!!!
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