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Originally Posted by smutnut
I understand your theory. It's simply enough and that's the scare tactics they lose. But if you don't have the cash (or at least the promised cash) you shouldn't have the shit in the first place.
That aside, explain to me exactly why you would lose your home or car with exact procedure, step 1 and step 2, or rather how this bail out is going to allow you to keep them?
You don't actually think they're not going to want their monthly payments now do you? And you do realize unless you do what we do and operate you're own thing, you're probably losing your job anyway.
Also people with money will always loan to good investments and private investors because that's how they make money and that's actually free enterprise - private investments. Problem is there aren't many now.
So forgetting how it would have hurt, how does it now help anything - exactly how?
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It injects liquidity into the markets and removes toxic debt from the banks balance sheets thus freeing up capital and allowing them to start lending again.
Tell me which way Libor rates have been going since governments intervened?
They might not have returned to normal yet but rates are a hell of a lot better then if governments had done nothing and they continued to rise. What bizarro world do you live in where banks stop lending to each other but yet still lend to your average person?
As to how you would lose your home; its pretty simple. Your mortgage comes due but no one will refinance. Good credit; tough shit. You can't pay off the mortgage and the bank forecloses. You lose the home.
Of course if you could afford to take out a mortgage amortized over 5 years or less you might be in luck. Ask your friends and family if they have the financial capacity to pay of their mortgage in the next 5 years? I'm pretty confident the majority of responses will be a resounding NO.
You wish to buy a car but banks aren't lending money because they don't have any ergo you don't get the loan so you don't get the car. Pretty basic.
I won't even get into what those scenarios end up doing to the economy and employment.
Again you don't seem to grasp what is happening.