wait shaved are you seriously married

by the way stock market went way back up today.

Ugh I have to make a report for Speech/Debate on whether or not this bailout was necessary.

I was talking to my girlfriend's dad, who is a strong conservative, and he said something to the effect that the gov't should've loaned the money to the failing companies, to make sure we make a profit. Obviously, there's some risk involved, but the interest rates would cover the risk. Thought that was an interesting idea, except for the fact that the same company committees would continue to make the same mistakes, and I was under the impression that a bailout involved a change in that company's administration. (Like with the recent bail-outs of the companies, selling them to more 'responsible' companies, who change company policy, hopefully).

While he does argue that these banks shouldn't have been giving loans to these people in the first place, he puts some blame on Barney Frank, the chairman of the Financial Service Committee in the House of Representatives, the reason being very hazy (read: I was not paying attention). He said something about Barney Frank pushing legislature that greatly empowered sub-prime lending. If any of you guys can point me in the right direction, you would be awesome and a statue would be erected in your glory.

I'd like to know a little more about how this works.

1.) Where is the evidence that points towards a "2nd great depression" if we don't bail out these companies?
2.) Is this $700 billion dollar bailout plan necessary for the average American?
3.) I understand that banks have been making stupid loans to people in terms of housing. How and why is the housing market affected if we decide not to use this bail out plan?
4.) How is the stock market related to this, and does it have any connection to the $700 billion dollar bailout plan?

I've read through the 'dadchat' but it's not very satisfying in terms of proof. Do any of you recommend an economic layman's site (don't care if it's a blog as long as it has decent evidence) that I can read and look up on this further?

1) There is no evidence that America, or any other global economy, will face a 2nd Great Depression. Read: this will not happen. Ever. We did not have the mass printing TOOLS in the 1930s. We did not have SECURITY FUNDS in the 1930s. We never expected anything like this to happen PRIOR to the 1930s.

2) The $700 billion bailout plan is not necessary for the average American. No, it is necessary for the WORLD. While it is true that Japan and China have massive reserves of everything, and are much more intelligent and better prepared than we are, they will still fall flat on their face if our economic situation continues. If we do not bail out the idiots at Wall Street, you can expect 20-25% of Americans to lose their jobs within 6 weeks. Time to save up.

3) The housing market is not really dependent on the bail-out plan. The ARMS loans are one of the primary REASONS that Wall Street NEEDS a bail-out plan. However, in theory, you can expect the housing market to regulate if the government decides to inject money back into Wall Street. You can also expect huge regulatory plans and limitations for Wall Street investment brokers and banks. Which, in the end, is a good thing.

4) This is my favorite question to answer in debate and politics at my jobs. You see, I'm a Democrat. Now, although I state that eagerly and openly, I don't agree with every single policy that Dems believe in. However, one of the main policies that a certain Democrat Financial Advisor has been toting for a while is to limit Wall Street Cowboy Brokers.

What is a Wall Street Cowboy Broker, you ask?

Let's pretend you're a Wall Street Broker. You are trying to sell me some shares of Apple, Inc. (The computer and iPod company) So I go ahead and buy $1000 worth of Apple, Inc. share, and maybe I come out with 3% of the company. So now, you have $1000, and you want to make your money too. So you buy $1000 of Apple, Inc. and you leverage it 5:1. A modest risk: When Apple goes up a point (+.01) the original investment goes up $5. Your client makes $1, your company makes $1, and you make $3. Multiply and quantify that over clientelle, average point gains per day, and separate shares that your clients own, and you can make a decent living.

Now, a Wall Street Cowboy Broker thinks that 5:1 leverage is too small. They are looking for the big bust--they are only looking for a couple of points upwards anyway. A good 25-30 points is enough for them to top our average yearly salary. The average---AVERAGE---leverage for a Cowboy Broker in 2006 was 69:1. 69 to fucking 1. So when these stocks skyrocketed in the course of a week, these brokers found themselves instant millionaires.

And when they faltered, failed, and ultimately dropped, their company was short millions of dollars. Which resulted in loans from banks to cover existing capital with current clients. Which resulted in a loan bubble, so to speak:

Wall Street owes clients money.
Wall Street loans from bank.
Wall Street owes bank money.
Clients, scared for their lives and assets, decide to go on a massive selling rampage.
Wall Street pays client owed money.
Wall Street STILL OWES BANK MONEY.

This is basically what you are seeing today. Welcome to the Republican life--as long as no one sees it, it didn't happen. But we saw it, didn't we?

5.) The money that was used to bail out Fannie Mae and Freddie Mac -- will that be reflected in the bailout plan?
6.) Why shouldn't we let stupid companies' stupid decisions take their toll? Wouldn't small businesses pick up where the bigger ones left off and continue to grow because they won't make the same stupid decisions?

5) Actually, the money that was used for the prior two bail-out plans are completely different. One of them represents the faltering housing market, and the other one represents the commercial anking industry. This final bail-out represents all of Wall Street, including larger investment banks and smaller capital companies.

6) Here is my solution for a proposed bail-out plan, which would encompass only this final $700 billion. Obama's economic advisor will probably come up with something similar to this, so seriously--vote for Obama. If you care about your paychecks, and you DONT want to see these companies squirm and wriggle away for what they did, vote for Obama:

First, we loan Wall Street the proposed $700 billion dollars. Key word here is loan. This is to ensure trust in the New York Stock Exchange (NYSE) so people don't go in a selling frenzy and destroy our economy.

Now, the sad part is that the average taxpayer will end up paying slightly more taxes. However, in terms of take-home pay, we won't notice it as much as we will with McCains policy. We may be perhaps $10 shorter per annum for about two years, as opposed to with McCains, where we may see as much as $100 less in our take-home pay per week ($200 less per bi-weekly, etc) (Based on an average $35,000 yearly income)

However, the ones who will truly pay for this bailout is the top 3%. Those are the UHNW Individuals, those with over $1 billion dollars in liquid assets. Now, for those of you who wouldn't consider this fair, well, consider this:

1) The top 3% individuals in terms of liquid assets own 85-90% of the worlds cash flow. This includes corporate bigwigs such as Bill Gates. So the other 97%? That's us---trailing behind them, picking up the 10% that they drop.

2) Out of the top 3% Ultra-High-Net-Worth Individuals (UHNW Individuals), approximately 80%---4 out of 5 of the top three percent richest individuals, who own EVERYTHING---are Wall Street Executives.

Holy crap, isnt that a suprise? So guess who Obama thinks should pay for that?

Somebody sum it up, I don't think I have the time/patience to honestly read all of that.