Stocks rallied despite the bailout failure.

This morning CNN lead with “Stocks rallied Tuesday, with the Dow jumping 485 points on bets that Congress will pass a version of the government’s $700 billion package”.  No they didn’t.  Stocks rallied despite the bailouts defeat because investors got good deals on stock in companies that never should have been effected by this fear mongering administration.

Pundits supporting this bill don’t seem to realize this economy will keep running despite the “credit freeze” they explain as the end of the world.  If banks aren’t making money off loans then tough patooty.  I could care less.  And so could many Americans and businesses that don’t want the debt they’re hocking anyway.  To date I have not heard one solid explanation from all of these economic pundits or analysts detailing exactly how this “credit freeze” is going to hurt main street as badly as they hope to make you think.  People won’t be able to run up credit cards this Christmas?  Oh no, that will certainly be the end of us all.  And what about all those companies they say need small business loans to make payroll?  Say goodbye.  If you can’t make payroll without a loan the going out of business sign needs to be out front.  I certainly don’t want my children paying off this bailout so you can make payroll for your failing endeavor.

And then there’s the suggestion that giving banks this money will make them lend again.  News flash: people don’t have money to pay off debt.  They certainly don’t need any new debt they can’t pay.  So most banks will get rid of dirty assets in the bailout and use this cushion to bolster their spread sheets to tantalize new wealthy investors towards their share value.  A lot of us on Main Street don’t have these precious portfolios to worry about that your pinpointing as a concern for us.  We just need bigger paychecks damn it.

Banks are starting to realize that without interest revenue they are little more than a storage vault for our money and even Anna, a banker who comments on this site, said they are a “necessary evil”.  So far we’ve decided not to give this necessary evil a blank check and let them deal with their own demise.  And believe it or not the bread lines have not started forming.

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Anna
15 years ago

Where is your compassion? There are thousands of people right here in North Carolina who have lost their jobs as well as a good portion of their 401K due to the recent failure of Wachovia. Wachovia contributed a lot to our area, and we all will see the effects of their downfall. There is a lot more going on here than banks making bad loans to people who cannot afford to pay them back. Most of those people probably could afford to pay them back and had every intention of doing so until they were hit with high gas price, higher food prices, higher everything prices. Are you blaming that on the banks too?? Yes, within almost every business or organizations there will be a few bad apples whose greed and immorality bleeds through. But there are also people who are decent, who try to do what is right, who come to work every day and do a great job who are going to hurt with everything that is going on. You mention the businesses who have to borrow money. There are farmers out there who depend on loans every single year to grow their crops and then pay the loans back once the crops are harvested. It’s called cash flow. It is not because their business is failing and they can’t make payroll, or because they don’t know how to run a business. A credit freeze will definitely affect you and me in the long run, whether WE are the ones borrowing money or not!! It is not about running up credit cards at Christmas…it is so much more!

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