Deal reached in US financial crisis [Update- NOT Passed]

[the_only_turek_fan]

http://cnews.canoe.ca/CNEWS/World/20...906161-ap.html

Maybe it can be moved into the massive election thread, or it can have a thread of its own...will let the powers to be handle that.

WASHINGTON - Key legislators who struck a post-midnight deal on a $700 billion bailout for the financial industry predicted Sunday it would pass Congress, putting in place the largest government intervention in markets since the Great Depression.

$700B is a lot of money.

[the_only_turek_fan]

One question that I have and its kinda silly, but where will the 700B come from? Is it just tax money stored in a reserve fund? Or will they borrow from a world bank and then have future tax dollars pay off loan?

Either way, will Americans see a significant tax hike?

[HOOT]

Originally Posted by the_only_turek_fan

$700B is a lot of money.

That's $90,252,707.58 per CP member!!!

[missdpuck]

Thanks for posting this as there is so much info out there it's mindboggling. BTW the IRS is at my door as we speak ...but seriously it's funny as the IRS is supposedly beefing up its staff.

[HotHotHeat]

Originally Posted by the_only_turek_fan

One question that I have and its kinda silly, but where will the 700B come from? Is it just tax money stored in a reserve fund? Or will they borrow from a world bank and then have future tax dollars pay off loan?

Either way, will Americans see a significant tax hike?

Essentially this money doesn't 'exist' anywhere. It will be created to give to these banks and then added to the US debt. Which I believe is around $14 trillion now. U-S-A! U-S-A!

[JiriHrdina]

Originally Posted by the_only_turek_fan

One question that I have and its kinda silly, but where will the 700B come from? Is it just tax money stored in a reserve fund? Or will they borrow from a world bank and then have future tax dollars pay off loan?

The US will borrow it from other countries, including China.

Or maybe they'll just slap the whole thing on their credit card so at least they get the airmiles for it.

[missdpuck]

As a taxpayer I demand my share of those airmiles. See ya Norm! So eastern Canada is in Kyle's path?

[Displaced Flames fan]

Originally Posted by HotHotHeat

Essentially this money doesn't 'exist' anywhere. It will be created to give to these banks and then added to the US debt. Which I believe is around $14 trillion now. U-S-A! U-S-A!

But it is not unsecured debt.

Nice touch at the end there....so you.

[nickerjones]

ehhh it doesnt exist but for some reason i believe i heard it will del with the govt buying stocks and bad mortgages and banking that they can resell them at a higher price in the future when everything settles..... The kicker is if they cant , the american tax payers foot the bill ......

[HotHotHeat]

Originally Posted by Displaced Flames fan

But it is not unsecured debt.

Nice touch at the end there....so you.

It's not as if I'm blaming you for years of irresponsible spending. U-S-A gov't! just didn't have the same ring...Thanks for labeling me a hater though.

[missdpuck]

Biden speaking in Michigan now....

[Displaced Flames fan]

Originally Posted by HotHotHeat

It's not as if I'm blaming you for years of irresponsible spending. U-S-A gov't! just didn't have the same ring...Thanks for labeling me a hater though.

Oh please.

You've made it clear for months now!

[Bagor]

So ... if I'm right in interpreting the answers to this thread, they're basically doing the same as the Zim government and are essentially diluting the economy. Should we expect the $US to drop in the next while? (not suggesting it's anywhere as bad as the $Zim)

http://forum.calgarypuck.com/showthr...ght=economists

Questions:

Anyone speculate as to how much?
Will it drag the loonie down with it?
If it doesn't does it make sense to buy a chunk of $US at the drop?

[missdpuck]

Wait till Asian markets open at 6PM EST. They've been discussing this on MSNBC and it is alot of info to sift through..all frightening for world markets.

[HotHotHeat]

Originally Posted by Bagor

So ... if I'm right in interpreting the answers to this thread, they're basically doing the same as the Zim government and are essentially diluting the economy. Should we expect the $US to drop in the next while? (not suggesting it's anywhere as bad as the $Zim)

http://forum.calgarypuck.com/showthr...ght=economists

Questions:

Anyone speculate as to how much?
Will it drag the loonie down with it?
If it doesn't does it make sense to buy a chunk of $US at the drop?

It's impossible to have a guess as to what it will do, either way. As you point out, history would suggest that it will drop, but the US seems to have ways of avoiding currency collapses.

If it does drop, Canada will begin to look for other trading partners. It's already being done with China (huge new port being opened in BC) and other developing Asian countries. Our dollar is coupled to commodities, obviously, so as long as there's a thirst for oil, pot-ash, and mining deposits Canada will be alright. Not saying it wont fluctuate.

Don't touch US currency with a 10 foot pole, IMO. Anyone out there saying it's a good time to buy anything do with with the US, be it real estate, currency or stocks is being overly optimistic. A lot of what you'd read from sites like Seeking Alpha, Bloomberg and even the Economist are way to narrow minded to be trusted in a situation like this. It's become evident they still see stocks as entities detached from other US economic problems.

Keep in mind this bailout (errr rescue plan) isn't fixing the problem, it's putting a band-aid over it.

[Phanuthier]

Originally Posted by JiriHrdina

The US will borrow it from other countries, including China.

Or maybe they'll just slap the whole thing on their credit card so at least they get the airmiles for it.

Sorry Jiri, I'm confused. For the US to borrow from China et al, China has to agree to buy this debt (i.e. T-Bills). Is that actually happening, i.e. is China buying T-Bills?

Or are they simply just printing cash?

[missdpuck]

Agreed HHH. Just watching on MSNBC is frightening ..lots of wishful thinking IMHO. I don't know anything about your (Canadian) economy but this defienitely makes me want to learn .

[Phanuthier]

Originally Posted by HotHotHeat

If it does drop, Canada will begin to look for other trading partners. It's already being done with China (huge new port being opened in BC) and other developing Asian countries. Our dollar is coupled to commodities, obviously, so as long as there's a thirst for oil, pot-ash, and mining deposits Canada will be alright. Not saying it wont fluctuate.

Which port is that?

[missdpuck]

Sen Gregg just said "My gut tells me (this bill) will make money for US taxpayers." Hmmm.

[Slava]

I haven't seen the details of the deal (its a day off and I just don't care to get in depth on this today!). But the deal should strengthen things in the USA. Whether you agree or disagree with the bailout, something had to be done to fix things for the long-term.

I am not a big Hank Paulson supporter, but seriously to get this completed is masterful. He is employed by a lame-duck republican president, with a democrat congress in the middle of an election. No one wants to support Bush (politically speaking) and the democrats don't want to get behind something that could be a disaster as well. To get something of this size completed in that situation is frankly extremely impressive.

I would expect the market ramifications of NOT getting a deal done here were going to be much, much worse than this deal will be.