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Nickelless
Administrator
USA
5580 Posts |
 Posted - 09/15/2008 : 18:44:53
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Saw this online earlier...
By LARRY MARGASAK
Associated Press Writer
Bear Stearns got one. Lehman Brothers didn't. Life can seem unfair in the world of government bailouts. But decisions about who gets help from the government are based on circumstances and pressure generated by the political or financial crisis of the moment.
An overriding factor explains why The Bear Stearns Cos. Inc. won and Lehman Brothers Holdings Inc. lost: speed.
Bear Stearns suffered a sudden, massive heart attack that could have roiled a shocked and surprised financial industry. Until its collapse earlier this year, it was among the largest global investment banks and brokerage firms. The Bush administration felt immediate surgery was needed to prevent a meltdown.
Lehman Brothers was showing coronary symptoms for months, and there was time for the financial world to react. No surprise. No government triage.
Looking back, firms and industries bailed out by the government won help for many reasons: potential job losses, a wipeout of lifetime savings, the lifeline provided by airlines and the health of the financial system.
For example:
_After the Sept. 11, 2001, terrorist attacks, Americans still had to fly. Congress authorized $5 billion in cash to help shore up the airline industry, following up with $10 billion in loan guarantees.
_Jobs were at stake when Chrysler received loan guarantees in 1979 near the end of the Carter administration. The president and lawmakers in states with auto plants helped push through a package of $1.5 billion in loan guarantees while demanding concessions from labor unions and lenders.
_The government took control recently of the giant mortgage finance companies Fannie Mae and Freddie Mac to stabilize the housing market and prevent chaos in the nation's financial system. The key factor was that companies own or guarantee about $5 trillion in mortgage loans, about half the nation's total.
_The savings and loan industry was bailed out in the late 1980s. The U.S. financial system wouldn't have collapsed, but political pressure escalated from lawmakers whose constituents were losing their life's savings. President George H.W. Bush in 1989 authorized spending $166 billion over 10 years to close and merge insolvent savings and loan institutions.
_The effect on financial institutions led to the government brokering a $3.6 billion private bailout in the 1998 collapse of the Long-Term Capital Management hedge fund. But no government money was involved.
Other bailout recipients have included Lockheed Aircraft in 1971 and Continental Illinois bank in 1984.
"Bear Stearns took everybody by surprise; it looked like an imminent meltdown and you had to act quickly," said Alice Rivlin, vice chair of the Federal Reserve System's Board of Governors from 1996 to 1999. "Lehman had a lot of time to think about this. It had access to Fed liquidity pools and hadn't used them. It didn't look like a disorderly route. It looked like the process could be managed in an orderly way."
Another key difference between financial firm bailouts and those of other industries: jobs.
In the case of Chrysler, "It was a question of preserving jobs," Rivlin said. "Nobody has been worried about bailing out financial institutions to preserve jobs, although a lot of jobs are at stake."
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Edited by - Nickelless on 09/15/2008 18:45:28 |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 09/15/2008 : 20:53:19
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The author is a GOP party TOOL. (Remember, I'm a CONSERVATIVE, NOT A REPUBLICAN).
IMNSHO, Wake up folks, our elected officials DO NOT RUN OUR COUNTRY! GOLDMAN SACHS RUNS THE COUNTRY! Henry Paulson, Ben Bernanke, John Corzine, Robert Rubin, Stephen Friedman, and God only knows how many other GOLDMAN SACHS ALUMNI HAVE SEIZED CONTROL OF THE NATIONS FINANCES!
WHY? TO WHAT END? AND HOW WILL IT EFFECT YOU?
If you think I'm full of BS, do a little research on your own.
God Bless you all, God Bless America, and, Jack...Out. |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 09/17/2008 : 17:37:19
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God bless us all!!!
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 09/17/2008 : 17:47:17
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Please pardon my earlier rant. I'm just beside myself with recent events. Don't get me wrong, I believe everything I said, it's just not polite for me to SHOUT at fellow forum members.
A further though on my assertions. GWB is simply too stupid to have planned this himself. I don't think he's a bad guy, just way over his head, and frankly, gauging how his speaking skills have gone from sad to pathetic, I think he suffered a nervous breakdown about two years ago.
BTW, where is waldo? |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 09/17/2008 : 18:10:45
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Deleware, Juan McAmnesty works for the Big Boys too. We are just pawns in "The Grand Chess Game."
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 09/18/2008 : 18:04:21
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quote:
Originally posted by starwarsgeek171
Deleware, Juan McAmnesty works for the Big Boys too. We are just pawns in "The Grand Chess Game."
Yeah, I know..... Maybe I'll just take my meager pawn piece, drop out of the game, flip'm the bird, and not play their game anymore....
But more likely, I'll vote for Juan and continue to live among the sheeple (for the time being), but as Yogi Bear used to say, "Don't worry Boo-boo, I'm smarter than the average (sheeple) bear!" 
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 09/18/2008 : 18:14:35
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| I'm truly sure that you are, as can be discerned from your writings. You'll be fine. |
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Some firms get bailouts, some don’t. Unfair?
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