Why are we bailing out banks who knowingly made questionable loans?

Question

...and this is coming from someone who works at a bank that will benefit from this.

Answer 1

Hmmmm So has Neil "SIilverado Savings and Loan" Bush been selling mortgages lately?

Answer 2

If you work in a bank then you must very well know why.
Read a dollar bill. What does it say on the top?
Federal Reserve Note.
What backs up Federal Reserve Notes?
The assets of the private banking system in the USA.
What is part of the assets of private banks?
Mortgage securities.
What is happening to mortgage securities?
Private banks are taking hundreds of billions of dollars in loses.
How is this effecting the banks?
The asset values of the banks are declining.
How is this effecting Federal Reserve Notes?
They are becoming worth less.
How is that effecting you at the moment?
It's costing you more for imports like oil.
What is the possible future effect?
Large international hedge funds and foreign governments will start dumping dollars on the international currency market to trade for a more stable currency.
What effect will this have?
The value of Federal Reserve Notes will drop even more.
What effect will this have?
Foreign investors will be less likely to invest in any US currency based investments.
What effect will this have?
There will be no capital available for business to borrow.
What effect will this have?
The US economy will come to a grinding hault.
What effect will this have?
Most Americans will lose their jobs.

Is that enough for you?

edit:
This banking problems over shadows every other problem or issues facing America at the moment. Our economy can not function without capital to drive it. Moreso than 9/11, it is the biggest problem that the Bush administration has faced since in office. I don't have too much faith in his ability to handle it.

Answer 3

The answers to this question make me sick!!!!
The reason they are bailing out the banks is to protect our economy from going into a recession. And to all of you who said that it is alright to bail out the rich instead of the poor. Take a look at the welfare check stub that you just cashed, and the stub in your moms hand, and the one in your grannies hand. You dont even consider that bailing out because you actually think you are entitled to that money for doing nothing other than Making babies out of wedlock and shooting each other on the street. The lower class is nothing but a financial drain on the economy it has nothing to do with the rich getting handouts. It has to do with a break down in our moral fabric and the age of entitlement. If the rich get a tax break or a grant it is so their business will stay in business to employ other people and continue to pay taxes so you can get you Mountain Dew and Doritos with your food stamps and sell your wick stamps for cigarette money. Before you start bashing another class you need to understand how an economy works and you don't do it by watching springer on your flat screen inside of your government housing.

Answer 4

When are we going to do something? Well, we just elected a President who thinks, along with the democrat congress, that we ought to throw another $ trillion at the problem, on top of the $800 billion already thrown down the bail out black hole. So I guess as long as we individually live beyond our means and collectively elect people who confiscate and throw our money around like drunken sailors we can't really complain too much.

Answer 5

The housing market has been in a slump for years now. Banks have been losing money and yes I would say they made questionable loans so they could see a bigger profit margin. If the banks go under you know what the repurcussions of that would be. So the government is actually forced to keep bailing them out.

Answer 6

The answer is easy. Sure, we can question the moral validity of it. However, the fact remains that we are in the midst of the most serious real estate downturn of our lifetime. If we sit back and simply say, you deserve what you've got coming to you, I think this could force our entire system into a massive recession, the likes of which I hope never occurs. Going forward, I have to believe that lending has firmed up quite a bit from those wild no money down days.

Answer 7

Because the government is the reason for a lot of the problem. The Democrats made laws and passed them thru requiring banks to meet certain racial and demographic quotas. Thus, people living in rough economically fickle neighborhoods applied for loans they knew the could get approved, and then could not afford because they did not take insurance, rising prices, and taxes into account. Banks were penalized if they did not meet certain quotas based on demographics and race, and now the government is covering their mistakes by bailing out the mess.
Funny how you never hear it this way in the media.

Answer 8

I am pretty sure they are temporarily bailing out people who can't pay rising interest rates on their mortgages. THis way, they will have more money in their pockets and more money to spend at WalMart to keep the economy going. Get it?

Answer 9

We are doing it because banks run this country. The bank I am refering to is the Federal Reserve. That isnt a government agency, it is a private business. Banks made the loans, because they knew they were safe, because the US government will make sure they are safe. Its all a business scam, and we are falling for it again.

Answer 10

They say if we don't now it will quadruple and lead to a disaster.
I don't know who to believe anymore. Everyone that gets help should be sent to 'fiscal responsibility' school. I have to pay MY mortgage!