What Happens AFTER the Bailout Bill Passes? Put On Your Seatbelts...LINK

[Blackhatjack]

Sobering, well thought out predictions that likely will come true....


http://www.huffingtonpost.com/henry-blodget/bailout-a-done-deal-so-wh_b_130820.html

"Now that the government has been terrified into rubber-stamping the Wall Street bailout, what happens now? I wish the news were better, but in opinion, here's the most likely scenario:

* Hank Paulson & Co. survey the banking industry and decide who will stay and who will go. JP Morgan, Citi, Wells Fargo, and Bank of America will stay. Goldman will probably stay. Morgan Stanley might stay. Everyone else in trouble could go. The government doesn't need to save all banks. It just needs to save some.

* Within a month or two, Paulson buys $250 billion of crap assets. He pays more than market value, but not an egregious amount more (because the public will be watching these early rounds). Over the next six months, he buys $700 billion of assets...and then he--or his successor--asks Congress for more money.

* Confidence improves modestly, but banks continue to hoard capital and credit markets stay tight. Loans stay expensive and hard to get. This keeps pressure on the economy.

* The credit crunch filters through to consumers: Credit cards, home equity loans, mortgages, car loans, etc., get more expensive, putting more pressure on consumers and forcing them to cut back further.

* The economic news continues to get worse: American consumers continue to pull back, housing continues to fall (as of July, the year over year declines were still accelerating), companies begin to cut back, which leads to layoffs--which puts more pressure on consumers."

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[Skink]

1. Then Phil Graham takes office.

[sandnsea]

2. They only get $250 billion

and then have to go back to Congress. And this is not expected to completely fix the economy, as Obama just said in fact, it is just to keep it from collapsing today.

[Eric J in MN]

5. The president can approve the next $100 billion with no Congressional action.

Then if Congress wants to stop the last $350 billon, they would have to pass a bill which can be vetoed.

[Bubbha Jo]

3. Tis better to have a seatbelt in a car with a route than

to be in a convertable going over a cliff....

It's not going to be a bed of roses getting out of this mess. The bail out won't fix it all but it's a start...

Cindi

[chicagoexpat]

4. Yeah, medicine tastes lousy, don't it?

But the kiddies & the RW maggots all had their say a coupla days ago

It's time for the grown ups to start fixing things, and it's not gonna be easy