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Thread: Bailouts could cost U.S. $23 trillion

  1. #11
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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by Kernel Sanders View Post
    This number isn't what the US government could possibly have to pay out, it's a tally of the worth of every asset in the entire financial system. Anybody who takes this seriously is just grasping at whatever they can find to support a position they already hold
    It is a very serious number. That is what the "worst case" for the bank bailouts looks like.

    Keep in mind that the rationale behind derivatives and securitization is in essence a belief that, because the worst case is an unlikely case, it can be ignored.

    Until, of course, the worst case happens--which, because it was ignored, is several orders of magnitude larger than it would have been otherwise.

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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by celticlord View Post
    It is a very serious number. That is what the "worst case" for the bank bailouts looks like.

    Keep in mind that the rationale behind derivatives and securitization is in essence a belief that, because the worst case is an unlikely case, it can be ignored.

    Until, of course, the worst case happens--which, because it was ignored, is several orders of magnitude larger than it would have been otherwise.
    This is just one of the assumptions

    It assumes that every bank in America fails, with not a single asset worth even a penny.
    The only way I could see this happening is all out nuclear war or the Apocalypse, and in either case we'd have a bit more to worry about than bailing out banks

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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by Kernel Sanders View Post
    The only way I could see this happening is all out nuclear war or the Apocalypse, and in either case we'd have a bit more to worry about than bailing out banks
    Hyperinflation could do it.

    China and Japan dumping their dollar denominated holdings could do it.

    Any scenario that demolishes the value of the dollar precipitates exactly such a crisis. Does not require nuclear war or the Second Coming.

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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by Reverend_Hellh0und View Post
    100% agree. I abhorred Bush's spending and during the bailouts, I was shocked about how NOT DIFFERENT he was from Obama or McCain......


    We are not on a good path here.
    We haven't been on a good path for quite some time. This all started with Clinton, he really started things rolling. Bush made them worse, and Obama is running with the ball now. We haven't had any responsible form of government for a good long while now. Clinton, Bush, Obama....peas in a pod.
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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by celticlord View Post
    Hyperinflation could do it.

    China and Japan dumping their dollar denominated holdings could do it.

    Any scenario that demolishes the value of the dollar precipitates exactly such a crisis. Does not require nuclear war or the Second Coming.
    Could close every single bank in the US, reduce every single asset of every single bank to zero, cause every single mortgage to slip into default, and cause every single mortgaged home's value to drop to zero? If that ever happened our economy would be so thoroughly and completely shot that we wouldn't be worrying about TARP what with the every nation on Earth breaking into revolution and all

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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by Dr_Patrick View Post


    Good lord!

    I don't know why the Obama Administration seems to think that the US has a bottomless pocket book. I don't see how this could possibly end good and what's worse is that a lot of the people cheering this most likely either have little to no understanding about the possible ramifications or they just don't care.
    Quote Originally Posted by Reverend_Hellh0und View Post
    You do know that Obama has been under the guise of "Catching the rich" been going after off shore accounts......


    Do you think, that this is a set up, to afford no American reprive from future opressive taxes... Of course this is speculation of near conpiritorical manner, but I do wonder sometimes.
    You both do realize the bailouts were enacted under Bush and not Obama right? Don't let logic stop you from blaming Obama for Bush's policies though.
    Last edited by Gibberish; 07-21-09 at 05:13 PM.
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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by Kernel Sanders View Post
    Could close every single bank in the US, reduce every single asset of every single bank to zero, cause every single mortgage to slip into default, and cause every single mortgaged home's value to drop to zero? If that ever happened our economy would be so thoroughly and completely shot that we wouldn't be worrying about TARP what with the every nation on Earth breaking into revolution and all
    You are correct that TARP would cease to be the focus of everyone's attention.

    However, given the inflationary pressures of TARP's money-creating mechanisms, failiure to consider the potentials for hyperinflation distressingly tend to increase the probability of hyperinflation.

    If we worry about TARP and the worst case now, we have an opportunity to avoid that worst case. If we ignore the worst case for too long, we guarantee its occurrence.

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    Re: Bailouts could cost U.S. $23 trillion

    Worst case scenario is far worse than $23 trillion IMHO. From July 2008 until March 2009, it was estimated by plenty of analysts that the loss in net worth was between $10-$25 trillion. Hyperinflation would be devastating to say the least but....

    Given the current level of debt, the size of the deficit, and "crashing dollar" sentiment, the demand for treasuries (specifically long term) has been quite amazing.

    In the later part of the 21st century, there were extremely rare (or non existent) Euro auctions where the bid to cover was over 2. Some might site the safety of the US dollar, and i tend to agree. Hyperinflation is highly unlikely given the global stakes in the dollar.

    IMHO though, so who know's. I thought oil was going to hit $100 by September
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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by Ikari View Post
    We haven't been on a good path for quite some time. This all started with Clinton, he really started things rolling. Bush made them worse, and Obama is running with the ball now. We haven't had any responsible form of government for a good long while now. Clinton, Bush, Obama....peas in a pod.
    It amazes me how many people are still tricked by fake lines in the sand and the network news.
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    Re: Bailouts could cost U.S. $23 trillion

    Quote Originally Posted by Ikari View Post
    We haven't been on a good path for quite some time. This all started with Clinton, he really started things rolling. Bush made them worse, and Obama is running with the ball now. We haven't had any responsible form of government for a good long while now. Clinton, Bush, Obama....peas in a pod.



    For the thing I greatly feared has come upon me. And what I dreaded has happened to me, I am not at ease, nor am I quiet; I have no rest, for trouble comes. - Job 3:25,26
    Let evil swiftly befall those who have wrongly condemned us

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