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I think the bailout is a complete fleecing of honest hardworking American taxpayers; but in order for the honest hardworking American taxpayer to keep his job and keep his 401K from being worth toilet paper, the fed must agree to the bailout. The prediction if accurate is a comparison to the Great Depression; where everything tanked and people were standing in soup lines by the thousands. I really don't think we want that to be re-lived in this day and age. It might humble us and in the long run make us stronger, or it might be something that the USA would never recover from. Countries like China and the middle east are on the rise in power and wealth; we need to keep our economy strong to stay on top. Fundamentally the US economy is strong; but this mortgage/bank/liquidity problem is a cancer that needs to be cut out before it kills the rest of the market.
I also think the market(s) should form a fund to pay back the government; as the gov is acting as an insurance agent for the entire US economy. A short term raise in the capital gains tax could help cover the payback; with large contributions (with interest) to companies who took relief from the Fed. I know; Gingrich says drop the Cap Gains tax to zero. But if we let everything go down the tubes first; what will be left to rebuild?
Everyone who has a substantial amount in their 401K or IRA should review their insurance coverages in the event their financial institution fails. The insurance that is provided -may- not cover you for your cash holdings; if there is mass failure be aware that the SIPC is only a non-profit corporation not like the FDIC (federally backed).
The Fed needs to close the loophole on the lending practices and it needs to stop the short term investors in the Real Estate market (penalize short-term capital gains on real estate to the effect of 90% penalty on a short term gain). The home flippers put the RE market into a feeding frenzy and that is the source of all of this crazy inflation of value and short term low-interest (teaser) loans. It only works when the price of homes are increasing; at some point the non-flippers stop buying because they are priced out and everything corrects. This time the flippers decided to walk away with huge profits and leave the banks holding the bag.
We're There Gang!!! The US market WILL have some form of crash if the bank industry fails!!
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