The Great Bailout Fraud – Where Has All the Money Gone?

What precipitated the financial crisis still engulfing the world was a severe shortage of cash by leading banks. This article will try to shed a little light on what has actually happened, as opposed to what we are told by the media.

The lending frenzy of the last few years culminated in the lending of large sums of money by banks and mortgage institutions to down-and-outers and no-hopers with no chance of ever repaying the money. Part of the reason they did this may be put down to political pressure from politicians who saw this as a chance to increase their own popularity with down-and-out voters.

Another reason may be that the original lenders made some initial profit from each deal and then sold the toxic debts as part of a "package" of debts that included some that were not so toxic. They sold them to all kinds of financial institutions, including overseas banks, hedge funds, and pension funds. The racket could therefore be carried on for much longer than if the original lenders had to deal themselves with the toxic nature of the loans, and face the consequences.

Because of this shuffling around of thousands and thousands of mortgage accounts, the fact that the overwhelming majority of them were falling further and further behind with the monthly payments was lost, as focus was kept on the perceived value of each package as it was traded from one financial institution to another.

By the time the extent and severity of the problem became apparent it was far too late. Finance houses and banks had carried on lending their fictitious money, based on the assumed value of these so-called assets, and had thus made the problem ten or twenty times worse. Don't forget Merrill Lynch had lent over 30 times its entire capital base in toxic loans. That doesn't count the loans that weren't toxic. That was undoubtedly because the more of these loan packages they bought, somehow the greater their capital base became and the more they were able to carry on lending. "Every loan creates a deposit", right?

It was therefore only a matter of time before the inverted pyramid collapsed. When it did, the problem was world-wide. But it was not just the USA that had lent to bad debtors. The same thing had been going on in the UK, and many other Western countries (though it's nice to be able to blame the "US sub-prime mortgage market" for the crisis). As we all now know, the entire international banking system has had to be bailed out with loans and buy-outs totaling at least a trillion dollars ($ 750 billion in the USA and $ 250 billion in the UK alone).

Has this bailout helped people recover their repossessed homes? Has it helped lift the threat of repossession from millions of families? Evidently not. In the UK, half a million families face the threat of being evicted from their homes, at the rate of 120 a day. With …

Small Business Loan Update – Stimulus Bill Helps Bailout Businesses If They Cannot Pay Loans

As we continue to sift dutifully through the over 1,000 pages of the stimulus bill (American Recovery and Reinvestment Act of 2009), there is one provision that is not getting much attention, but could be very helpful to small businesses. If you are a small business and have received an SBA loan from your local banker, but are having trouble making payments, you can get a "stabilization loan". That's right; Finally some bailout money goes into the hands of the small business owner, instead of going down the proverbial deep hole of the stock market or large banks. But don't get too excited. It is limited to very specific instances and is not available for vast majority of business owners.

There are some news articles that boldly claim the SBA will now provide relief if you have an existing business loan and are having trouble making the payments. This is not a true statement and needs to be clarified. As seen in more detail in this article, this is wrong because it applies to troubled loans made in the future, not existing ones.

Here is how it works. Assume you were one of the lucky few that find a bank to make a SBA loan. You proceed on your merry way but run into tough economic times and find it hard to repay. Remember these are not conventional loans but loans from an SBA licensed lender that are guaranteed for default by the US government through the SBA (depending upon the loan, between 50% and 90%). Under the new stimulus bill, the SBA might come to your rescue. You will be able to get a new loan which will pay-off the existing balance on extremely favorable terms, buying more time to revitalize your business and get back in the saddle. Sound too good to be true? Well, you be the judge. Here are some of the features:

1. Does not apply to SBA loans taken out before the stimulus bill. As to non-SBA loans, they can be before or after the bill's enactment.

2. Does it apply to SBA guaranteed loans or non-SBA conventional loans as well? We don't know for sure. This statute simply says it applies to a "small business concern that meets the eligibility standards and section 7 (a) of the Small Business Act" (Section 506 (c) of the new Act). That contains pages and pages of requirements which could apply to both types of loans. Based on some of the preliminary reports from the SBA, it appears it applies to both SBA and non-SBA loans.

3. These monies are subject to availability in the funding of Congress. Some think the way we are going with our Federal bailout, we are going be out of money before the economy we are trying to save.

4. You don't get these monies unless you are a viable business. Boy, you can drive a truck through that phrase. Our friends at the SBA will determine if you are "viable" (imagine …

Piagi Comments of the Irish Central Banks Bailout

Recent news saw Ireland’s central Bank lower its forecast for economic growth this year. Whilst making an announcement for the government to make greater cuts than had previously been planned in an effort to reduce its record budget deficit.

The Irish economy, as measured by GDP (gross domestic product), will only expand 0.2 percent this year instead of 0.8 percent which had been forecast in back July. The Dublin-based central bank announced today, It lowered its growth forecast for next year to 2.4 percent from 2.8 percent.

last week the government unveiled measures to inject Further cash 3 Billion Euros into Anglo Irish Bank Corp, bringing the banking bailout to as much as 50 billion Euros ($68 billion) and pushing the budget deficit to 32 percent of GDP this year. This brings growing concern that Ireland won’t be able to deal with the mounting fiscal burden without external aid & pushed its borrowing costs to a record high last month.

“Against the background of sharply increased concerns about fiscal sustainability, the main priority” is that the 2011 budget “credibly demonstrates the first step of a reprogrammed tighter fiscal plan,” the central bank said. This means a “larger adjustment” than the 3 billion Euros in savings the government had previously planned.

‘Strike a Balance’

Finance Minister Brian Lenihan plans to publish a four-year plan next month to reassure investors that Ireland has a “credible” plan to cut its deficit to below the European Union limit of 3 percent of GDP in 2014. The Sunday Tribune newspaper reported yesterday that the 2011 budget could aim for savings of as much as 4.5 billion Euros.

The government’s plan “seeks to strike a balance between the need to bring the public finances onto a sustainable footing and limiting the risk that a very rapid adjustment would affect the economy’s prospects for recovery,” the central bank said.

The yield spread between Irish 10-year debt and that of Germany, Europe’s benchmark, was at 406 basis points today after widening to a record 454 basis points on Sept. 29.

Irish GDP fell 1.2 percent in the second quarter as consumers cut spending and import growth outweighed an increase in exports. The economy has continued to show signs of weakness, with construction remaining in a recession in August and manufacturing contracting in September.

“The continuing weakness of investment remains a considerable drag on growth,” the central bank said. “The risks to this outlook are tilted to the downside.”

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Current Economic Crisis (Bailout Or Buyout)

Lately, it seems as if we are living through history every day. Not since the Great Depression has the United States seen such turmoil in the financial markets. What started in the subprime mortgage industry has now bled over into Wall Street.

When investment houses that have been around since the Civil War close their doors, it's a sure sign that something's gone terribly wrong. First Bear Stearns, then Lehman Brothers and then Merrill Lynch and Washington Mutual.

We all can't help but be a little rattled by what's going on. But while I and others have been pointing out that the markets are only going through a "correction", you may be asking, "Denise, how much of a correction do we need to make?"

Obviously, a big one. Too much money lent to too many people who couldn't afford to pay it back is a surefire recipe for disaster. Now it's time to pay the price.

Some analysts are even comparing what's going on now to the stock market crash of 1929. However, there is one major difference between then and now-we aren't even close to being in the same economic hole our great grandparents fell into back then.

Case in point: The $ 700 billion bailout (or is it a buyout?) Being debated by lawmakers as of this writing is a giant sum of money, the equivalent of which was not available in 1929.

Today, we are better prepared to handle such challenges as they arise-partly because we've learned from history. When the Great Depression began, there was no backup. The US Government was in a much more "hands-off" position than today.

While some like to argue it's a good thing for government to stay out of the free market, the new and upcoming legislation promises to bring at least some security back to the United States economy. The time for argument from political principle is over. Something has to be done-and thankfully our leaders are finally stepping up to actually do something about it. The question is will these leaders help the problem or add to it, only time will tell. As of this writing they still have not been able to get it together.

After four (or more) years of unsupervised lending, exotic loans, predatory practices, and the ensuing subprime mortgage meltdown, the government is finally taking measures to step in before it all spirals into oblivion.

Of course many are asking why Treasury Secretary Hank Paulson and Fed chair Ben Bernanke didn't do something before this mess happened. While it's true that nobody could predict how bad the fallout would be, it's clear that when banks start handing mortgages out like candy, something is amiss.

Two to three years ago, every time I heard a mortgage ad on the radio touting low numbers for adjustable rates, I winced. I wondered how long this could last. During the boom, it seemed like we could never run out. Now we're suffering from a huge reality check.

So what …

A Bailout to Eliminate Credit Card Debt

It seems like everyday now that we learn about a government sponsored bailout of another major corporation. Many smaller businesses, as well as individual people, are left asking where is their bailout from the unscrupulous lending practices of the banks and credit card companies.

In recent years, consumers have been encouraged to use their credit cards for everyday purchases, including groceries, fast food meals, and even the morning cup of coffee on the way to work. All of these purchases, plus the interest and fees added on, have only built up a vast pile of debt for the average cardholder.

This is not much different than the debt built up by corporations, who now have their hand out, asking for help. And the government seems very willing to provide that help, at the long-term expense of the American taxpayer.

There is however, a bailout of sorts for personal credit card debt. This is not a government program, no taxpayer dollars are used, and you will not hear about it on the nightly news. In fact, there is actually no money involved in this bailout. Through debt elimination, a person can legally and completely discharge 100% of their debts from credit cards and personal loans. All without a new loan, subsidy, or government takeover.

For someone with too much debt, a personal bailout could be the difference between bankruptcy, and financial stability. Yet no agency or congressional handout is available for the average consumer. Instead, individuals need to take some initiative and go help themselves, without seeking a stimulus package that will probably never come.

Secured debts such as mortgages and auto loans, do not qualify for an elimination program. Yet without the burden of the monthly credit card payments, money would be available to pay for housing, transportation, and other obligations. Keeping people in their homes and driving their cars is imperative to improving the economy.

There are many options when it comes to debt relief. Not every program is a good fit for all people. Most people believe that negotiating or settling debt is the fastest way to pay them off. A debt elimination program is not a settlement program, nor is it a form of bankruptcy. It also will not sting your credit report for the next 7 to 10 years.

For anybody looking at this option, it is important that some time be dedicated to understand how and why the debt can be relieved. It is not difficult to grasp this concept, nor is this information an obscure secret. It is just information that is not given to us from our normal sources of news. The right information can set a person free from the bondage that the banks have put us into.

By taking personal control of your life and your debt, you will initiate your own personal bailout. A presidential order is not needed to accomplish it, and the taxpayer is not burdened with extra future debt.

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Government Debt Elimination – Advantages and Disadvantages of Government Bailout Programs

Government debt elimination seems the most suitable option for people who are tired of pending bills. However, do you know that you should measure the advantages as well as disadvantages of this option? You are making a mistake if you are only looking at the brighter side. Have a glance at the negative factors as well. At the moment, you cannot pay your actual bills because of financial complications. You have to pay according to your financial scalability. What are the pros and cons of government debt elimination? Let’s look at the details explained in the following points.

Advantages of government debt bailout programs

The following can be termed as the pros of government debt elimination

1. This method not only reduces your credit card bills but reduces them legitimately. There are no illegitimate factors attached with the debt settlement procedure.

2. You can forget about the sum that has been reduced. The credit card company can never claim the erased sum of money from you.

3. Government debt elimination does not result in minor discounts. These are major reductions. Most loan takers reduce their dues by half or even more.

4. You can find the best settlement organizations to represent you. These firms do the necessary paperwork and communicate with the credit card organization.

Disadvantages of the government debt bailout programs

Now let’s have a look at the dark side. Some disadvantages of government debt bailout plans are apparent while most of them are hidden. For instance, illegitimacy is a common issue. We often see debtors complaining about it. It is not a wise move to trust any company. You cannot believe blindly on what you are being told. Hence finding a legal organization is a tough ask.

Another disadvantage is the lack of commitment. Most relief firms do not fulfill the promises which are made when a deal is about to be signed. Their attitude changes when the customer starts paying them. This does not mean that legal firms do not exist. Some companies have been performing well for a long period of time. These companies are listed with TASC (The Association of Settlement Companies)

Exaggeration is yet another problem. Companies providing help through government debt elimination are not truthful. They trap the clients by providing exaggerated information. You can avoid this problem by confirming all the information. In this way, you will know about the actual status of the firm.

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