What Businesses to Bail Out?

[litekepr]

I was watching Glenn Beck (CNN Conservative Talk Show - http://www.cnn.com/CNN/Programs/glenn.beck/) and he was discussing an interesting topic. The US government has been bailing out very large companies with staggering debt, but when is the last time you heard anything about the government riding to the rescue of small businesses that were in trouble?

Shri

[RussellWebb]

Hi Shri -

The only small businesses that will receive any protection at all will be those with insider connections. In this business climate you can forget about fair play.

Why did the big mortgage giants Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, and Federal Home Loan Mortgage Corporation (FHLMC) , commonly known as Freddie Mac, get the protection of a bail out?

The answers aren't simple, but here's what I've discovered... These two companies are deeply connected in the governement sector - with tentacles going everywhere. They have been a hotbed of corruption for years where billions of dollars are funneled through and squirreled away by corrupt politicians and organizations. When you have this kind of insider activity, you need to protect your own. Aside from that the bulk of investors (not necessarily corrupt) are from China and Japan and it would be a very bad idea to allow these institutions to collapse. The Asians have invested heavily in supporting our lifestyle and lending money to our government. This government bailout is really about protecting these investors.

In the end, the Federal Reserve can't keep bailing companies out, but you can safely bet that those that are protected will be the insiders.

BTW, does anybody here know that the Federal Reserve is actually a privately owned company run by a group of international banking families? These families control our money supply lock, stock, and barrel. Wouldn't it be nice to have your own printing press? It's like a money tree that keeps on giving... in essence there's a whole lot of money being printed these days to bail out these failing companies.

[ideasuniversity]

I believe they are bailing out large companies they have interest in, though I may be wrong

[litekepr]

Very true - I agree that only certain businesses will be "rescued". Sad for the American public that its the companies who are billions+ in trouble. It has certainly been a bad week in the US financial world. I was even watching special coverage of an overseas financial market last night. Lots of ripples through the financial community. Its sad that nothing is in place to actual oversee and truly regulate the financial industry. To many people refuse to be accountable and they leave the rest of us holding the bag.

Shri

[mbrand2222]

Shri, I agree. Just within my own little circle of family and friends there have been at least 4 people who have filed for bankruptsy. Who do they think gets stuck paying off their debts? Do they think they just go up in smoke never to be heard about again? I know times are tough, but people don't want and /or aren't willing to change their lifestyles to reflect the tough times. And I'm not just pointing fingers at others......I can't get my own husband to understand the depth of the problems our economy has only begun to feel. When you see ONE bank being rescued by the feds for a cool 85 billion dollars, you better believe there's a problem. We, as a nation, are not being responsible and I think our founders would flip in their graves if they knew the mess we were in.

[litekepr]

Shri, I agree. Just within my own little circle of family and friends there have been at least 4 people who have filed for bankruptsy. Who do they think gets stuck paying off their debts? Do they think they just go up in smoke never to be heard about again? I know times are tough, but people don't want and /or aren't willing to change their lifestyles to reflect the tough times. And I'm not just pointing fingers at others......I can't get my own husband to understand the depth of the problems our economy has only begun to feel. When you see ONE bank being rescued by the feds for a cool 85 billion dollars, you better believe there's a problem. We, as a nation, are not being responsible and I think our founders would flip in their graves if they knew the mess we were in.

I was just reading your reply and shaking my head about how much worse things have gotten in less than a week. I was watching a current events show this evening and the people being interviewed were trying to make the point that people need to realize things have changed and the "American way of life" is changing before our eyes. I have the thrifty mentality and am happy with just what I need to get by with very little frills, but I have family members who are going to have a really rough time.

What do you think about this latest bailout????

Something that really irks me is that these businesses are totally screwed up and the CEO's etc still expect huge bonuses. Bonuses are like tips -- THEY SHOULD BE EARNED. If the taxpayers of this country have to bail the business out with billions of dollars, then NO ONE in the company deserves a bonus. What a mess and I'm concerned its not over yet. Thank goodness I have a mortgage that is really reasonable

Shri

Shri

[mbrand2222]

I think someone needs to take responsibility for it. They had to KNOW that people with no down payments were USUALLY people who over-spent or just couldn't save. ( I actually took a mortgage with no down payment, but I used my savings to update the house and I never used more than 20% of my income as a monthly payment.) They had to see it coming and just had immediate monetary gratification in mind when they created these type of loans....or allowed them to be created. I don't know what the answer is, but I do know it's time to start pinching pennies even if it doesn't seem like it right now, because our personal financial status' could change as quickly as you can say, "Sorry, but I have to close the business today." I just say a lot of prayers and try to keep a good attitude. I should probably quit talking about it because it gets me down. I guess I just want people to realize what's happening, prepare for the worst and hope for the best.

[litekepr]

I think someone needs to take responsibility for it. They had to KNOW that people with no down payments were USUALLY people who over-spent or just couldn't save. ( I actually took a mortgage with no down payment, but I used my savings to update the house and I never used more than 20% of my income as a monthly payment.) They had to see it coming and just had immediate monetary gratification in mind when they created these type of loans....or allowed them to be created. I don't know what the answer is, but I do know it's time to start pinching pennies even if it doesn't seem like it right now, because our personal financial status' could change as quickly as you can say, "Sorry, but I have to close the business today." I just say a lot of prayers and try to keep a good attitude. I should probably quit talking about it because it gets me down. I guess I just want people to realize what's happening, prepare for the worst and hope for the best.

If the people in charge knew anything at all (were qualified for the jobs they held), they had to know what was coming. That need for instant gratification is coming back to bite people in a really big way. Unfortunately, even the people who aren't over extended are going to pay. Its also amazing how many people got into loans without grasping the terms. Before I signed the loan documents on my house - I went through every page and asked a million questions. Too many ugly ways for loans to cause trouble if you don't understand the terms.

Shri

[mbrand2222]

I agree.

[sajis@yahoo.com]

A year after the government bailed out the big banks , the big automakers and one very big insurance company , the Obama administration seems to have finally gotten around to helping small business.

In his weekly address on Saturday , the president shined the spotlight on small business owners and their struggle to get the credit they need to help get their businesses back on their feet.

“These are the very taxpayers who stood by America’s banks in a crisis,” Obama said, “and now it’s time for our banks to stand by creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs.”

Unfortunately , that’s easier said than done. It was one thing for the government to buy up stacks of bad debt and pump billions of dollars of liquidity into the financial system. It’s quite another to persuade a bank to lend money to a small business that, even in good times, may have a tough time making a go of it.

That’s why it’s going to take more than browbeating banks and super-sizing SBA loans to get America’s small businesses off the respirator and out of the emergency room. It’s going to take revenue–sales generated by customers armed with paychecks, credit cards and home-equity credit lines who feel confident enough to start buying again. But with gun-shy banks and credit-card companies cutting consumer credit to the bone, small businesses are going to have a tough time making sales to customers who have to dig into their wallets and come up with cash. And with double-digit unemployment predicted to continue for many years to come, paychecks will also be in short supply.............

[mbrand2222]

That's the tough thing. People are really hanging onto their money right now, in fear that they may lose their job. No one is secure and it's going to be one of our biggest challenges ever to get through this crisis. All the money Obama sank into the system to get things moving and 10 months later we are still losing jobs. There's got to be a better way.