If it's a Liquidity Problem, why doesn't the Gov guarantee loans to the banks?

[SnoopDog]

If banks are are afraid to loan money, all the Gov has to do is to take the $700 Billion and set up a Bank Loan Guarantee program. The banks would have money to loan and the problem is solved. Right?

No, the real problem is the rich fat cats got caught with bad investments that the Bush Administration allowed to happen and now we are forced to take those bad investments off their hands. So we the US Gov are sitting with bad mortgages, houses are still being foreclosed upon, nobody is even buying homes because nobody has INCOME, and there is no foreseeable means to turn this country around (because we don't make anything anymore, we export our jobs, and we import cheaper labor for work here).

And we have the President, the Republican leadership, and especially the Democrat leadership (and Obama and McCain) telling us we need to bail out the fat cats so that everything will be back to normal?

Bull Shit. And look at all the manipulation - every TV news cast is soooo on this 'rescue'. Ya, it really is a rescue now that I think about it - we are rescuing the investment firms for their bad assets. You don't think THEY have the power to say - 'Ah, hold up some of the funds going to the banks" so we can persuade the stupid public.

I offered a valid solution - the US Gov lends money to the banks. Problem solved. No, with $700 billion at stake - a whole bunch of rich people and people who MAKE the Laws, are going to get their cut...

I'm sorry - I am so fucking pissed at the whole fucking thing...

[Fresh_Start]

1. the fed released $600 billion to keep liquidity up

but that doesn't solve the problem that the banks don't want to issue credit

[FreakinDJ]

2. The problems are from deregulation

part of the problem is "Foreign Invest" pulled the plug on Wall St

Why....

Because Wall St. is "Fundamentally Broken"

[wtmusic]

3. The government could get stuck for a lot more than $700B

although in principle I agree.

What they should do is beef up FDIC so that depositors are protected, then hire (briefly) an army of accountants to do quick and dirty audits of the banks.

Once the banks are deemed liquid, the Fed could offer loans factoring in the cost of the audit and with a lending cap based on proven assets. If the banks fail, the FDIC is depositors' safety net...no net for the banks themselves.

[BrklynLiberal]

4. Skip the middleman..let the govt loan out the money to those that need to borrow to survive.

[Hassin Bin Sober]

10. Sure. It shouldn't take more than a couple years to set up THAT infrastructure.

[SnoopDog]

5. So am I right or wrong on this...?

Is it true they are saying it is a liquidity/credit crisis?

Don't you think 'the Fed' and 'the Gov' have contingencies for this?

Sorry, my gut is saying that Everyone in Leadership, including our Democrats, are in on this heist.

"When you have eliminated the impossible, whatever remains, however improbable, must be the truth." - thanks Mr. Holmes...

[Name removed]

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[MindMatter]

7. If there is a credit crisis, why did I hear three ads from 3 different companies

tonight on the radio inside of 30 minutes, each trying to get me to take a mortgage from them?

There is no credit crisis. Banks have plenty of money to lend. And if they don't the Fed will just give them some more.

There is a BANK PROFIT crisis.

[TexasObserver]

8. There is a crisis for the banks that made stupid decisions.

They should fail, and that is what the bailout remedy should be.

[MindMatter]

11. Or the ones that haven't been exposed yet

That's undoubtedly what I'm hearing on my radio. These are guys who are basically con men -- pushing people into crappy loans that are way overpriced and the borrower can't repay. But our system has allowed these conmen to write the loan the then slip the paper to the next greater fool. Evidently that game still works or else they wouldn't be spending the money for radio spots.

[avaistheone1]

9. I received an offer from Toyota to buy a car today which said

to come on down whether I had good credit, bad credit or no credit.

Looks like Toyota doesn't have a problem with money and credit.

[ContinentalOp]

12. I've asked this question here too.

And nobody has had a real answer. :shrug:

Particularly the people who are in favor of the bailout. They just respond with nonsense and change the subject. Very interesting if you ask me.